Today it costs $1200 (300 loaves of bread) to extract 1 ounce of gold from the earth. That leaves you with nothing to put on the bread.
Did you sell any bit coins at the top Nick?
Did you buy any when it went below $500?
No, I’m not into them (but not opposed to them either). Chris is. He bought a pile of them at $17 and hasn’t sold any. He’s not a trader either, I think he is just holding the position in case they go to $10K a bitcoin (a real possibility). I do own 1/2 a mining machine with him though.
There have been strong analogies made between bitcoins and gold, but it is getting more and more difficult to find each additional ounce of gold. In Africa, they are down so deep that if the A.C. system goes out, the temperature would climb to 150 degrees in a few minutes. As Linas pointed out, gold is selling for about the cost of mining right now, so I’m back to being a buyer.
The cost of “mining” a bitcoin is also very high.
I just don’t have the same feeling about bitcoins and I can’t explain why. Same reason I don’t do ETFs I guess.
bit coin excepted here
What we don’t know is how quickly vendors turn those bitcoins into a real currency.
5 minutes perhaps?
315
http://torontostar.newspaperdirect.com/epaper/viewer.aspx
*· **26 Dec 2013 *
*· *Toronto Star
*· **CLEA BENSON BLOOMBERG *
**Poll shows Bitcoin still playing a bit part in U.S. **
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Majority of Americans don’t know what virtual currency is
Some Americans think Bitcoin is an Xbox game.
Others think it might be an iPhone app.
The majority have no idea it’s a virtual currency they can use to buy everything from T-shirts to Tesla Motors sedans, according to a Bloomberg National Poll.
Only 42 per cent of Americans who responded to the Dec. 6 to 9 telephone survey correctly identified Bitcoin, which has gained more than 80-fold in value this year as its popularity expands.
“I’m not sure what the value of it is, and what I’d be able to exchange it for,” said Olga Ruff, 62, of Dallas, who correctly identified Bitcoin.
Ruff said she’s unlikely to start accepting it for the small jewelry business she operates out of her home:
“What use would it be for me?” Individual Bitcoins, which exist as software and aren’t regulated by any country or banking authority, are accepted at businesses ranging from a Lamborghini dealership in Costa Mesa, Calif., to a Peruvian food truck in Washington.
Still, the currency’s use is far from widespread even among those who know what it is.
“I don’t necessarily know if it’s something I would think about using to make purchases,” said poll respondent Jeremy Labadie, 32, of New York, in a follow-up interview. Labadie, who works on Internet security technology and is familiar with Bitcoin, said he has considered buying some as an investment.
Introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto, Bitcoin gained credibility after law enforcement and securities agencies said in recent U.S. Senate hearings that it could be a legitimate means of exchange.
Bitcoins reached a high of $1,132 on Dec. 4, a rally that gathered steam after regulators in October shut down the Silk Road Hidden website, where people could obtain guns, drugs and other illicit goods using Bitcoins.
That generated optimism that the digital money would become more widely used for legal purposes.
Asked to choose from a list, 6 per cent of those polled say they think Bitcoin is an Xbox game, while another 6 per cent say it’s an iPhone app.
Forty-six per cent say they have no idea what it is.
The telephone survey of 1,004 Americans has a margin of error of plus or minus 3.1 percentage points and was conducted by Des Moines, Iowa-based Selzer & Co.
Some respondents, such as John Berg, 62, of Inver Grove Heights, Minn., heard about the virtual currency through news coverage of its use in crimes.
“There was someone who was using it for something illegal, and it took the FBI a long time to sort it out,” he says.
U.S. regulators are beginning to consider oversight of virtual currencies. Securities and Exchange Commission Chairman Mary Jo White issued a letter in August suggesting that virtual currencies could be considered securities subject to her agency’s regulation, “depending on the particular facts and circumstances at issue.”
Securities providing returns based on virtual currencies probably would be subject to SEC regulation, she said.
In the poll, almost half of those familiar with Bitcoin, say it should continue to be unregulated.
“The government’s involved in too much,” Berg says.
Americans under the age of 35 are most likely to know what Bitcoin is and most likely to say it should remain outside of government supervision.
“With all new systems, they need time to develop, and regulation can come later,” said Matthew Gouaux, 35, an employee-benefits lawyer in San Francisco.
“It seems like something to watch and see how it goes
Which is why it isn’t in a bubble yet. A bubble is when everyone knows about something and is trying to get in. That’s when to get out.
Hot off the (Inman) press… http://www.inman.com/2014/01/02/bitcoin-now-accepted-by-bond-new-york/?utm_source=20140102&utm_medium=email&utm_campaign=newsflash
Imagine if Amazon.com starts accepting them.
Real estate brokerage Bond New York now accepts Bitcoin
NYC firm says digital currency eliminates or reduces processing fees
Teke Wiggin****Staff Writer
Jan 2, 2014
Bitcoin](http://www.shutterstock.com/pic.mhtml?id=141354994) image via Shutterstock.
In what may be a first for a traditional real estate firm, Manhattan-based brokerage Bond New York](http://www.bondnewyork.com/) has announced it will now accept Bitcoin as payment for real estate transactions.
“Bitcoin is a convenient and inexpensive way for our customers to transfer money, so we see it as a win-win situation which will impact the real estate industry,” said Noah Freedman, co-founder of Bond New York.
The brokerage said in a statement that it believes it’s the first brokerage to accept Bitcoin, and named a number of benefits for making the move. Echoing other Bitcoin adopters, the brokerage cited reduced or nonexistent processing fees as one draw of the currency.
Bond New York said the currency also offered security undergirded by “military-grade cryptography,” “identify protection” and “fast international payments,” plus it “works anywhere, anytime.”
online poll](http://www.opinionstage.com/online-poll?o=pl35e8)[FONT=inherit]by Opinion Stage[/FONT]
In embracing the electronic cash, the brokerage joins a group in the real estate space that appears to be so far comprised only of tech firms.
In August, property management software provider Rentulations](http://www.inman.com/2013/08/30/now-you-can-pay-your-rent-in-bitcoin/) claimed to be the first company with immediate plans to accept Bitcoin.
And last month, rental listings site RentHop announced it also would accept the electronic cash](http://www.inman.com/2013/12/16/bitcoin-now-accepted-by-renthop/), even dangling a significant discount to those who pay in Bitcoin to list properties on its site based on the exchange rate at the time.
Reflecting an enthusiasm for the currency that seems to pervade the tech space, RentHop is apparently so pumped about Bitcoin that it’s even overlaid Bitcoin’s symbol onto its company logo.
Chris Toppino, co-founder of rental payment platform RentShare, recently said](http://www.inman.com/2013/12/31/look-for-new-companies-to-keep-shaking-things-up-in-2014-with-more-partnerships-conversations-and-interactions/3/) a top item on his wish list for 2014 was to buy and rent with Bitcoin, seeming to hint towards another company’s plans to accept Bitcoin.
For all its purported benefits, Bitcoin has a glaring chink in its armor: The currency is known to fluctuate wildly.
For example, when RentHop announced it would accept Bitcoin on Dec. 16, one Bitcoin was worth $760, according to RentHop.
Two days later, after the Chinese Bitcoin exchange BTC China announced it wasn’t accepting deposits for the immediate future, the value of one Bitcoin reportedly had plummeted to a low of $422](http://allthingsd.com/20131230/that-giant-bitcoin-crash-in-the-wake-of-china-restrictions-it-never-happened/).
That poses a risk to companies, particularly if they keep the amount of bitcoin they charge for a service constant, instead of pegging it to a fixed dollar price.
RentHop wants to keep the exact amount of bitcoins it charges customers constant, and it promises to, unless Bitcoin’s dollar value changes by more than 30 percent.
Which happened two days after it announced it would accept Bitcoin. (Bitcoin’s value fell by as much as 44 percent.)
“At the end of the day, these hiccups will happen,” said RentHop Co-Founder Lawrence Zhou when asked about the temporary crash in value last month. “BTC [Bitcoin] is very new, and the regulatory environment is still getting flushed out.
As there is more infrastructure (both on the processing and the number of people accepting it) and global penetration, the magnitude of these moves should decrease.”
Since the steep drop last month, Bitcoin’s value has since recovered to about the level it stood at when RentHop announced it would accept the currency.
Despite Bitcoin’s erratic record, businesses are increasingly transacting with it.
At the least, jumping onto the Bitcoin bandwagon offers companies bragging rights, and at least for now, potential media exposure.
That may change if Bitcoin goes mainstream.
A federal judge ruled in August](http://arstechnica.com/tech-policy/2013/08/federal-judge-bitcoin-a-currency-can-be-regulated-under-american-law/) that Bitcoin “is a currency or form of money,” and during congressional hearings in November, lawmakers and regulators seemed sympathetic to arguments that the government needs to be careful to avoid hampering the digital currency’s growth.
Venture capital firm Andressen Horowitz recently made the largest bet yet on the digital currency, investing $25 million in Coinbase](http://www.wired.com/wiredenterprise/2013/12/silicon-valley-bitcoi/), a firm that helps consumers and merchants use Bitcoin, Wired reported.
United States: Regulating Bitcoins: CFTC vs. SEC?
Last Updated: January 2 2014
Article by Todd P. Zerega](http://www.mondaq.com/content/author.asp?article_id=283878&author_id=1049450) and Thomas H. Watterson
Reed Smith](http://www.mondaq.com/content/company.asp?article_id=283878&company_id=19893)
In the past year, Bitcoin has exploded into the public limelight and in the process gained the attention of U.S. regulators.
A full discussion of Bitcoin could make up an entire book (for a thorough discussion, see FT Alphaville’s BitcoinMania series here](http://ftalphaville.ft.com/tag/bitcoinmania/)).
For the purposes of this post, Bitcoin is a peer to peer digital currency.
Bitcoins may be traded on online exchanges for conventional currencies, U.S. dollars, or used to purchase goods and services from vendors accepting payment in Bitcoins.
Bitcoin has also gained traction as an investment, and a registration statement for a Bitcoin ETF was filed with the SEC in July and amended in October. (Form S-1 available here](http://www.sec.gov/Archives/edgar/data/1579346/000119312513393903/d562329ds1a.htm))
Federal regulators in the United States have generally not issued specific guidance on Bitcoin’s status.
The Financial Crimes Enforcement Network (the Treasury bureau responsible for regulating currency market participants) required exchangers and
administrators of digital currencies, such as Bitcoin, to register as money services businesses.
However, other federal regulators have not issued any guidance on the treatment of Bitcoins, including the use of Bitcoins as an investment.
Below, we compare the potential power of the two primary regulators over investments (the SEC and the CFTC) to regulate Bitcoins.
The comparison is based on previous statements regarding Bitcoins from commissioners on the CFTC and the SEC.
SEC.
SEC Chairman Mary Jo White issued a letter about virtual currencies in response to a Senate hearing about Bitcoin held in November.
In her testimony, Chairman White left the issue of whether Bitcoins, themselves, were securities to specific facts and circumstances regarding a particular use of Bitcoins.
However, Chairman White explicitly stated that interests in entities owning Bitcoins would be securities subject to SEC regulation.
A clear example of SEC authority comes from an SEC enforcement action this summer arising out of a Ponzi scheme centered around a Bitcoin trust (press release here](http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539730583)). Whether Bitcoin itself would be a security would be a more difficult analysis.
The strongest regulatory hook for deeming Bitcoin to be a security may be categorizing it a an “investment contract.”
As taught in securities regulation courses, an investment contract is any contract, transaction, or scheme involving:
(1) an investment of money; (2) in a common enterprise; (3) with the expectation that profits will be derived from the efforts of another person.
Applying these prongs of the definition of an Investment Contract to Bitcoins could lead to the following analysis:
-
If someone is purchasing Bitcoins as a speculative investment and intending to profit off of a future sale of those Bitcoins, -
then that purchase would be an investment of money. -
Some uses of Bitcoin may not be an investment of money (such as using Bitcoins to purchase a good). -
However, people are certainly speculating on the price of Bitcoins, as can be seen by the emergence of Bitcoin investment vehicles. -
An investment of money in Bitcoin could have "commonality" from multiple sources. -
The "investors" in Bitcoin share in the appreciation or depreciation of Bitcoin. -
Moreover, the "investors" in Bitcoin share in the benefits of Bitcoin's programming and cryptography, which are essential to the ability to sell Bitcoins in the future. -
The "mining," programming and cryptography inherent in Bitcoins could be the efforts of another person. -
When looking at the efforts of another person, some cases have found that those efforts can come prior to the investment. - (See SEC v. Mutual Benefits Corp. 408 F.3d 737 (11th Cir. 2005)). In addition, the efforts of those mining
- Bitcoins are essential to the creation of “block chains” which are necessary for the function of Bitcoins.
Given the above, could or would the SEC attempt to classify a speculative investment in Bitcoins as a security?
CFTC.
In May, CFTC Commissioner Bart Chilton announced his belief that Bitcoins would come under CFTC supervision in an interview on CNBC
and in statements to the Financial Times. (Interview here](http://video.cnbc.com/gallery/?video=3000166533), FT Article here).
When pressed about his reasoning, Commissioner Chilton implied that investing in Bitcoins could come under CFTC jurisdiction as being a commodity
for future delivery.
More clearly, the CFTC would have a colorable claim to regulate derivative products of Bitcoins (i.e., Bitcoin futures, swaps, rolling spot Bitcoin transactions, etc.).
However, the market for those products remains small and outside of the United States.
The CFTC regulates forex pools and has brought a series of enforcement actions against fraud and Ponzi schemes relating to retail forex transactions and forex pools.
Bitcoin pools or trusts, such as the trust from the SEC enforcement action noted, above would have very similar attributes to a forex pool.
It remains to be seen to what extent the SEC, the CFTC or both will end up regulating Bitcoins and whether a turn war will break out among the regulators over Bitcoins.
I just bought some more bitcoins and the order took 4 days to process. So if it takes 4 days to trade dollars for bitcoins, I suspect it will take at least 4 days to trade bitcoins for dollars.
And your potential for getting royally screwed while waiting is huge.
That’s why it is a poor substitute for money.
Even if bitcoins dropped to zero, my downside is capped at $900/bitcoin. I think the upside is $50,000.00/bitcoin if someone like Amazon.com announces they are going to start accepting them. It’s a bet, but one where the odds are simply too much in my favor.
Better hurry fellas.
$50k from $1k
sweet. :sarcasm:
What could possibly go wrong?
Excellent question. You could lose $900 for each bitcoin you buy if bitcoins go to zero, but your loss is capped. I like the downside vs upside ratio.
So your imagination counts as “potential” gain?
Why stop at $50 k?
Come on Nick.
You are investing using the Greater Fool theory.
Good luck.
At least gold has some value.