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Bitcoin



Bitcoin

Postby PJK » Fri Apr 12, 2013 4:51 pm

Anywhere here familiar with it? It is a virtual currency. Was worth $7 per coin a couple years ago, and just recently was up over $270. You can trade it like a real currency (Forex trading). I know someone who bought $25,000 worth at $100, and sold at over $200 recently.

Interesting market. Wikipedia it to read more.
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Re: Bitcoin

Postby johnkelly730 » Tue Apr 16, 2013 3:32 pm

Wikipedia left me a little confused. What is the driving force behind the value? Computer power?
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Re: Bitcoin

Postby PJK » Wed Apr 17, 2013 9:35 am

The value I think is simply a supply and demand. It is like any asset, if they offer to sell it for $90 and it sells, it is worth $90. If someone else tries for $95 and it sells, the value goes up.

I don't fully understand the mining part of it though. Only 21M will ever exist. It will be interesting to see where it goes.
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Re: Bitcoin

Postby johnkelly730 » Wed Apr 17, 2013 2:11 pm

Surely there is something making the bitcoin valuable. In the same way that everybody can turn their Paypal money into paper money. Or the same way that paper money is supposedly a place holder for gold. If somebody just made it up with nothing behind it, sooner or later it will go back to where it came from.
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Re: Bitcoin

Postby PJK » Fri Apr 19, 2013 1:50 pm

johnkelly730 wrote:Surely there is something making the bitcoin valuable. In the same way that everybody can turn their Paypal money into paper money. Or the same way that paper money is supposedly a place holder for gold. If somebody just made it up with nothing behind it, sooner or later it will go back to where it came from.

https://en.bitcoin.it/wiki/FAQ#Where_do ... Bitcoin.3F

That does bring up an interesting point, since in reality, the USD is not backed by gold. Originally it was, but it hardly is anymore. As far I know, the GBP is still backed by gold, in the sense you can go into a place and trade your GBP for gold. You can't do that with USD I don't think.
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Re: Bitcoin

Postby johnkelly730 » Tue Apr 23, 2013 8:15 pm

I always thought that the US dollar was backed by the gold owned by the Federal Reserve in places like Fort Knox. Printing more money without getting more gold caused inflation.
The bitcoins having value "because they are useful and because they are scarce" is a strange and iffy concept to me since they were apparently created out of nothing except an idea.
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Re: Bitcoin

Postby PJK » Wed Apr 24, 2013 10:44 am

johnkelly730 wrote:I always thought that the US dollar was backed by the gold owned by the Federal Reserve in places like Fort Knox. Printing more money without getting more gold caused inflation.
The bitcoins having value "because they are useful and because they are scarce" is a strange and iffy concept to me since they were apparently created out of nothing except an idea.

It is a very interesting topic. The "value" of a dollar isn't so much backed by gold though - can we trade a dollar for gold? AFAIK, the gov't doesn't allow this. I've also heard conspiracies that the gov't is buying as much gold as possible atm. How it compares relative to other currencies greatly influences its value since the money is spent on a lot of imported goods. Something interesting to think about: who pays for the cost of printing money itself? Where does that money come from?

The whole bitcoin deal I don't understand. Apparently it is similar to gold, where you have something that is finite, and people buy and sell it, and the value fluctuates based off supply and demand. I don't quite understand how it got it's value in the first place though. Here is an article by Forbes on it a bit:
http://www.forbes.com/sites/steveforbes ... not-money/
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