Bitcoins/Litecoins/Virtual Currencies

Who says you have to keep your money in an exchange? I sure as hell don't. Anybody who keeps all of their coins in an exchange or online wallet service is a fool.

You can transfer over some USD from your bank, buy coins, then send them to your wallet 10 seconds after you buy. Then you can burn the wallet.dat file to a CD, copy it to a thumb drive, and print out a paper wallet then delete wallet.dat from your machine and not have to worry about it. An off-site backup would also be wise in case of a housefire.

I also made a small truecrypt container and just moved wallet.dat into that. Some of the clients have built-in encryption, but copying it to offline data storage only you have physical access to means no password to remember. (you can do both if not lazy, obviously)

Bitcoin is only insecure for the dumb; granted most people are dumb.

Also keep in mind that since moving bitcoins around is so very trivial, once you turn dollars to bitcoins, you can send those coins anywhere effortlessly and usually without fees; which means if one exchange is being stubborn about converting them into dollars, you can simply move them to some place that is more accommodating easily.

Man I am still kicking myself in the ass for not sticking with mining back in 2009. Was going to get all set up to run it but money was tight, recently married, 2 new kids, and couldn't afford to spend more on electricity on some magic coin that was only tradeable for handmade scarves and weird shit like that. Who knew I guess.

I'm guessing it's worthless at this point to mine, but again, same thing was said in 2009, and I would now be a multimillionare had I ignored the naysayers. I am positive that digital currencies are the way of the future and are still a good investment, it's just a matter of which one. I may also invest into Bitcoin during this bubble bust when it hit's the bottom. Anyways, so which is the one to get into mining now days if I am just going to use my home PC and don't want to invest in mining machines? Litecoin? Dogecoin? Or is it still best to stick with Bitcoin? What are the projections? Dogecoin sounds interesting, but I worry about how seriously a coin named after a dog and bad grammar, will be taken and if big money investors would ever invest in it because of this.

Rangoth_sl said:

I guess this proves I know shit about the market but I just don't get it. I mean the idea of crypto-currency I get...and I mostly even get bitcoin as far as what it is and wants to be....

What's confusing to me is all this volatility. In general over the last few years it seemed to be growing in acceptance(not talking about market value), but if vendors or those accepting bitcoins as payment start to jump ship over all this flucatuation would it not become completely worthless? Or at least just a closed loop circle trading? I never really read the entire history of it but it seems like the only thing that allowed it to get this far was the fact that a huge drug market sprung up allowing for the purchase of actual goods.

Now in reality I do not think it's going away and in time it probably will stabilize and become accepted but fucking A if these exchanges don't get shit under control no legit business are going to want to participate.

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Two major contributors to volatility:

1) Bitcoin is SMALL. The BTC market cap is nothing compared to what you typically think of as a commodity.
2) Primarily held by speculators and traders who want to be on the favorable end of market velocity. Any hint of price fluctuation and more people will move because these people are daytrading. This isn't to say that there aren't many with long positions, but I suspect the demographic of BTC is skewed much more to daytraders than gold is.

EDIT: Companies already exist to limit exposure to volatility (BitPay). I think as we see more competition in this space and more good news, we will continue to have favorable adoption. Compare Bitpay at 1% to credit cards at 2-3% plus the non-negligible risk of chargebacks which up until now has been considerd a cost of doing business. I've never been a business owner but I see a lot of people comment on how reducing their cost by 2-3 percent would DOUBLE their margins.

I feel that the major fucking problem with Bitcoin right now is that its too damn hard for the average consumer. My feverent hope is that we start to see back-end payment processor incorporation. Please GoogleWallet, please. I'd like to be able to send digital cash to my buddy in California but as it stands, unless he wants to become smart on how to go about securing and using his BTC... its not there yet. That being said, I fucking hate the Paypal system even if I don't pay fees -- and Western Union just feels archaic.

Cad_sl said:

So from your description, if the exchange keeps a "backup copy" of your bitcoin without your permission, could they at some point decide to spend your bitcoin?

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That isn't how it works -- the exchange can keep a backup copy of the public/private key that were HOLDING your bitcoin. Once the transaction moves that BTC to a different public/private key pair, only the person(s) with the private key can use that coin.

Tuco_sl said:

Another big problem is that as a purchaser I feel like paypal and credit card companies will always have my back over the seller. If I pay for something and don't get it there are ways I can fuck that guy over that I wouldn't have with BTC.

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True -- and unless a store passes on their savings to you (3 percent cash back, for example) then they definitely aren't competitive with a credit card. But this is a scenario where you typically do not need digital cash. You just need digital wealth.

Eidal_sl said:

volatility:

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The volatility is insane because:

1. The coins have no value. Worthless, zilch. Nada.
2. Bitcoin market participants are dumb. Comprised of the financially illiterate who don't understand and have no background in speculation, currencies or economics.

might get a dead cat bounce around here to about 500 though

Don't bet on it.

We are seeing a typical dead cat no-bounce right now.

I don't know if there is going to be a knock-on for someone else but I honestly think BTC is dead at this point. Too much bad shit at the very worst time.

EDIT: It should be noted that I am a bear's bear and only rarely make any money. What I do make is generally salted well with tears and that keeps me happy.

rinthe_sl said:

The volatility is insane because:

1. The coins have no value. Worthless, zilch. Nada.
2. Bitcoin market participants are dumb. Comprised of the financially illiterate who don't understand and have no background in speculation, currencies or economics.

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1. False -- how can you say BTC have no value if someone else will give me things I want for them? This is nearly the same degree of utility as USD (except I can't pay my taxes or settle debts with BTC).
2. Bittertroll? Explain this more thoroughly if you're willing; I"m genuinely interested in hearing your counterarguments.

For the record, I'm not beholden to or enamored with Bitcoin. However, I absolutely think that cryptocurrency as a whole is here to stay. It is entirely possible that interest in BTC dies out and people move on to new coins with a better fundamental design. Your stubborn insistence that "they have no value" shows a lack of creativity and imagination.

An open ledger for a payment system that is impossible to falsify.

I can pay you in a method that the world can verify AND in near-complete anonymity.

In the early 90s, people ranting/raving about e-mail were probably just as annoying as Bitcoin users today. Who the fuck would go buy an expensive computer to send an email when you could just fax it or mail it. I remember my father constantly having to help my grandparents troubleshoot issues with their ISP, with their Ethernet home network (which was ludicrously expensive to setup)... E-mail wasn't worthless, but the technological and infrastructure development to accommodate e-mail for the masses just wasn't there... and people didn't have the imagination to envision its utility.

Can someone help me understand how BTC, or any other online currency is better than me using USD to buy something online?

Price is down to $250 on mtgox, if you could actually get coins out of there, you could make a killing selling on another exchange. Btc-e and campbx are still in the $600's

The bitcoin market consists of technologically savvy people who don't have a finance background. Participants are young, therefore inexperienced with markets. How many kids getting into bitcoin were trading the tech bubble? Not many. Being young and tech savvy, another problem they have is they overestimate the value of their thoughts on the bitcoin market and are prone to hubris.

They don't understand basic economic concepts, such ashttp://en.wikipedia.org/wiki/Intrinsic_value_(finance)). Like you're email analogy.

As I've said before, the payment system has value, but that has nothing to do with the price that a bitcoin should trade at. I think cryptocurrency has a future, but not until the currency is backed by something, be it gold, goverments, or whatever. When a currency has no intrinsic value, it's worthless.

Eidal_sl said:

1. False -- how can you say BTC have no value if someone else will give me things I want for them? This is nearly the same degree of utility as USD (except I can't pay my taxes or settle debts with BTC).
2. Bittertroll? Explain this more thoroughly if you're willing; I"m genuinely interested in hearing your counterarguments.

For the record, I'm not beholden to or enamored with Bitcoin. However, I absolutely think that cryptocurrency as a whole is here to stay. It is entirely possible that interest in BTC dies out and people move on to new coins with a better fundamental design. Your stubborn insistence that "they have no value" shows a lack of creativity and imagination.

An open ledger for a payment system that is impossible to falsify.

I can pay you in a method that the world can verify AND in near-complete anonymity.

In the early 90s, people ranting/raving about e-mail were probably just as annoying as Bitcoin users today. Who the fuck would go buy an expensive computer to send an email when you could just fax it or mail it. I remember my father constantly having to help my grandparents troubleshoot issues with their ISP, with their Ethernet home network (which was ludicrously expensive to setup)... E-mail wasn't worthless, but the technological and infrastructure development to accommodate e-mail for the masses just wasn't there... and people didn't have the imagination to envision its utility.

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Tuco_sl said:

If you could get coins out of there the price would instantly jump to match other exchanges.

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True but as far as I know you can still deposit money there. Just need to be willing to sit on the coins until they sort out their technical issues

Tuco_sl said:

Yep. It's a bet on mtgox more so than BTC. I would never make that bet when nobody else is. Anytime someone comes up to you and says, "Hey, if you give me $50 now I'll give you $100 in a couple weeks" I'd suggest running!

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Yeah that seems at least fairly risky.