gollum
 
Sat 13 Apr, 2013 11:46 am
If a person purchases bitcoins by paying with U.S. dollars, who receives the dollars?

How does a person cash out of bitcoins? Who provides the U.S. dollars?
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Type: Question • Score: 6 • Views: 52,863 • Replies: 195
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Ragman
 
  2  
Sat 13 Apr, 2013 11:58 am
@gollum,
http://en.wikipedia.org/wiki/Bitcoin

"Although it is considered by supporters to be a digital currency, virtual currency, or "payment scheme", it is often traded as an investment and accused of being a form of investment fraud known as a Ponzi scheme.

On this subject, a report by the European Central Bank, using the U.S. Securities and Exchange Commission's definition of a Ponzi scheme, found that the use of bitcoins shares some characteristics with Ponzi schemes, but also has characteristics of its own which contradict several common aspects of Ponzi schemes.

In contrast, The Bitcoin Project describes bitcoin exclusively as an "experimental digital currency" and does not refer to it as an investment. Like many things considered to be investments, Bitcoins are also subject to theft."
cicerone imposter
 
  1  
Sat 13 Apr, 2013 03:38 pm
@Ragman,
I was wondering which is worth more? The bridge in Montana or bitcoins?
Mr. Green Mr. Green Mr. Green Drunk Drunk Drunk Drunk Question Question Question Idea
BillRM
 
  0  
Sat 13 Apr, 2013 03:58 pm
@cicerone imposter,
Right now you can get hundreds of dollars for every bitcoin you wish to exchange so by the free market it have that kind of value.

The value in fact had been increasing at the same time gold had been decreasing for example.

People in fact are selling thousands of dollars of computers design to do one thing mining bitcoins.

Footnote some people had been raided by the police due to them using so must electric running their bitcoins computer mining gear that the police was of the opinion they was growing pot instead!!!!!!

cicerone imposter
 
  1  
Sat 13 Apr, 2013 05:05 pm
@BillRM,
Who's buying and who's selling?

Ever hear of monopoly money? Everybody understood that it was not worth the paper it was printed on; it was a game.

Bitcoins are of similar value, except some people like to use "real" money in exchange for monopoly money. DUMB.
maxdancona
 
  2  
Sat 13 Apr, 2013 06:05 pm
@gollum,
Same as anything elese, if you buy bitcoins, the person who you are buying them from get's the money. If you sell bitcoins, the person buying them provides the U.S. dollars.

The real question you are asking is where the original value comes from. Bitcoins are "mined". They are mathematical functions that are hard to solve (i.e. take a lot of computing power). When someone finds a new solution, they have a new bitcoin.

The genius part of bitcoin is that there are a finite number of possible solutions that will result in bitcoin. And for each one that is found, the next one takes even more time to find (i.e. it takes more computer processing power).

This ensures that as the more and more people are added to the bitcoin economy the rate at which bitcoin are added to the economy gets slower and slower, meaning that bitcoin keep their value.
0 Replies
 
maxdancona
 
  3  
Sat 13 Apr, 2013 06:07 pm
@cicerone imposter,
Why are US dollars worth any more than bitcoins? The value of bitcoin comes from the same place that US dollars get value, they are valuable because people accept that they are valuable.

Bitcoin removes the government from the equation... but other than that it is not substantially different than any other currency. Whether removing the government from currency is a good thing or not is a matter of opinion.

... but that is the real point of bitcoin.
cicerone imposter
 
  1  
Sat 13 Apr, 2013 06:12 pm
@maxdancona,
US currency is accepted by most trading partners, and many countries use the US currency as their own.

Try spending bitcoins in any shop in the US.
BillRM
 
  0  
Sat 13 Apr, 2013 06:22 pm
@cicerone imposter,
Quote:
Ever hear of monopoly money? Everybody understood that it was not worth the paper it was printed on; it was a game.


LOL bitcoins have the same level of backing as the US dollars IE whatever value people are willing to assign to it in terms of real life goods and services..

US currency or anY currency for that matter are all in the same boat
BillRM
 
  0  
Sat 13 Apr, 2013 06:29 pm
@cicerone imposter,
Quote:
Try spending bitcoins in any shop in the US.


Bitcoins are new however there are already many places on the net that you can order goods using bitcoins alone and you can turn bitcoins into other currencies as desire.

As far as brick and mortar US shops give it time for now it is no harder to spend then any other foreign currencies.


0 Replies
 
cicerone imposter
 
  1  
Sat 13 Apr, 2013 06:31 pm
@BillRM,
You don't understand macro-economics.

Any currencies worth can be determined by the exchange rates of those currency at any one time in the open market place.

Nobody has established the "base value" of bitcoins. That belongs to the speculators, not who value the US dollar or other international currency accepted by most countries.

It started at US$13, but now it's worth almost US$100. Says who?
It's not even a ponzi scheme. It's buying a bridge that doesn't exist.
BillRM
 
  0  
Sat 13 Apr, 2013 06:35 pm
@cicerone imposter,
Quote:
Any currencies worth can be determined by the exchange rates of those currency at any one time in the open market place.


True and so can online bitcoins exchanges that give 24 hours seven days a week exchange rates in term of EU and US dollars and other currencies.
0 Replies
 
BillRM
 
  0  
Sat 13 Apr, 2013 07:10 pm
Below is a link to one of the biggest bitcoins exchanges.

https://mtgox.com/
cicerone imposter
 
  1  
Sat 13 Apr, 2013 07:32 pm
@BillRM,
What the ad says,
Quote:
Mt.Gox is the world's most established Bitcoin exchange. You can quickly and securely trade bitcoins with other people around the world with your local currency!


Q: How many businesses accept bitcoins to purchase goods and services?

cicerone imposter
 
  1  
Sat 13 Apr, 2013 07:36 pm
@cicerone imposter,
From economist.com.
Quote:
A Bit expensive
Mar 19th 2013, 15:18 by Economist.com

Bitcoin's record price looks like a bubble

NOT MANY fund-managers have heard of Bitcoin, let alone put any of their clients’ money in it. But over the past few months, the world’s first “crypto-currency” has become one of the world’s hottest investments. Since September, when The Economist last wrote about it, the price of a unit of Bitcoin as recorded by Mt Gox, a popular Bitcoin exchange, has soared. Unlike other online currencies—such as the new Amazon Coins—the supply of Bitcoin is not determined by any central issuing authority. Instead, new coins are generated according to a predetermined formula by thousands of computers solving complex mathematical problems. As more coins are generated, these problems get ever more complex, increasing the cost of computing power necessary to generate them, and so setting a floor underneath the price. Mimicking gold, the currency is designed to be deflationary. However, there is every reason to think that the current Bitcoin boom will shortly bust. As the chart shows, online interest in the currency has spiked in recent months. Though an increasing number of legitimate businesses are adopting the currency—one Finnish software developer has offered to pay its employees in Bitcoin—it still has relatively few users. Its primary commercial use is probably to buy drugs from Silk Road, a sort of pirate eBay hidden in the “deep web”. This suggests that the new users are buying Bitcoin as an investment, not as a means of exchange. For any currency to thrive it needs users, not just speculators.


Buyers beware.
0 Replies
 
BillRM
 
  1  
Sat 13 Apr, 2013 08:22 pm
@cicerone imposter,
Quote:
How many businesses accept bitcoins to purchase goods and services?


Will I am not an expect on bitcoins as of yet I do not own any however I do know that a lot of sites of the net will sell your goods and services for bitcoins.

Use any search engine to find them using such terms as hotels bitcoins for example.

For a currency that only been around for a few years it level of accepted is not bad at all.

It not at the level of the US dollars yet however you can convert bitcoins into US dollars or EU dollars or gold for that matter 24/7 365 days.

The numbers of sites are growing everyday also that is more then willing to accept bitcoins.

Hell you can even get your teeth repair in LV using bitcoins fro example!!!!!


Quote:
Vegas Budget Dental

Posted April 2nd, 2013 by Tuxavant & filed under Bitcoin Accepted Here, Local Business.

General and Cosmetic Dentistry, Braces, Implants, Root Canals, Laser, Zoom, Invisalign. 5% discount if payments made in Bitcoin. Full disclosure of all pricing up front!



cicerone imposter
 
  1  
Sat 13 Apr, 2013 08:28 pm
@BillRM,
It'll never reach the level of the US dollar of which there are $1.8 trillion in world circulation.

The bitcoin has no established value; it's all speculation. Anyone who accepts bitcoin is only gambling on its value.

However, seeing how much gold is based on speculation, I wouldn't be surprised at the value of bitcoin fluctuating at even greater values from one day to the next. Total gold value now exceeds $2.8 trillion. At least gold has some practical value in jewelry and industry, but not much else.
BillRM
 
  0  
Sat 13 Apr, 2013 08:42 pm
@cicerone imposter,
Quote:
The bitcoin has no established value; it's all speculation. Anyone who accepts bitcoin is only gambling on its value


LOL and US dollars have value for the same reason that bitcoins does in that people are willing to accept it as having value.

Second somehow when the US was only a few years old I do not off hand think that the total worth of the US money supply was anywhere near the two billion dollars
that bitcoins had now reached in the first few years of it existence. .

Quote:
At least gold has some practical value in jewelry and industry, but not much else.


An the practical value of US paper money is what?
cicerone imposter
 
  1  
Sat 13 Apr, 2013 09:27 pm
@BillRM,
That's correct; most of the countries in this world - and its people accept that the US dollar has value. Petro has been traded using the US currency world-wide. Must have value.
maxdancona
 
  3  
Sat 13 Apr, 2013 09:33 pm
@cicerone imposter,
So Cicerone, if most of the people in most of the countries in the world accept that bitcoin has value then bitcoin has value?

If you agree with that, then you are most of the way there. Then we are just arguing about the point at which bitcoin gains enough acceptance to have real value.
0 Replies
 
 

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