Bitcoin

81

Gold and bitcoins are very similar on the issue that is most important to me… central bank debasement of currency. But gold has a huge advantage over bitcoins… a 6,000 year history.

For gold to go to $50K/ounce would mean we’re suffering from hyper-inflation. I believe this scenario less likely than Amazon announcing that they are going to accept bitcoins.

So the downside to buying a bitcoin or an ounce of gold is capped at $900-$1,200. The upside on both is about $50K IMHO, but with there being more likely of a scenario for bitcoins to get there first.

82

And how old is a bitcoin?

83

About as old in ratio to the age of the U.S. dollar as is the U.S. dollar is old in ratio to the use of gold as money.

Meaning if you are worried bitcoins haven’t been in use very long relative to the dollar… you should also be worried that the dollar hasn’t been in use very long relative to gold.

84

Which is why I plan to eventually trade bitcoins for dollars for gold.

85

A $$$ doesn’t fluctuate wildly over a course of a few days.

86

Correct, it is steady… steadily going down, down, down (lost 97% in 100 years)… heading right to zero.

87

You are so full of shomething I would rather not mention.:roll:

88

Interpret the chart any way you want, I won’t add commentary this time:

purchasing-power-dollar.jpg

89

Bit coin lost over 50% of its “value” over a period of 20 days recently.

You are comparing apples and a dung pile:roll:

90

That only means something meaningful if there are more 20-day periods where it lost than 20-day periods where it gained. There are way more 20 day periods where bitcons gained than lost.

This is true for bitcoins.

This is true for gold.

This is not true for U.S. dollars. The U.S. dollar has way more 20-day periods where it lost than 20-day periods where it gained.

91

That is aboslutely without meaning Nick.

No one mentions up days compared to down days.

Show me where that ever happened to the US Currency.(50% loss over a 20 day period)

92

You are focusing on 1/2 of one of the least important of two factors.

Try this: Imagine a boy is playing with a YoYo while walking on a staircase. The YoYo relative to us is what matters. So what is more important? The distance the YoYo drops when the YoYo is going down (the length of the string in the YoYo) … or… whether the boy is walking up or down the stairs?

With the U.S. dollar, the YoYo string is short (low volatility), but for 100 years, the boy has been steadily walking down the stairs (see chart attached).

With bitcoins, the string is long (high volatility), but the boy is walking up the stairs.

93

It is what it is Nick

A fool and his money are soon parted still applies.

You did say one thing correctly.

Its a bet.

In is NOT and investment.

94

I’ve changed that quote for the next 500 years. You should attribute the new quote to me :wink: and here it is:

“A fool and his purchasing power are soon parted” - Nick Gromicko

95

You would have bought tulips too no doubt. :roll:

96

I like my quote so much, I’ve added it to my message board signature line.

97

In First Day With Bitcoin, Overstock Does $126,000 in Sales

Less than 30 minutes after online retailer Overstock.com started accepting payments in bitcoin](http://www.wired.com/business/2014/01/overstock-bitcoin-live/), Jason Steele used the digital currency to buy a new case for his smartphone.
Steele — a 32-year-old computer programmer from Atlanta who has been using bitcoin since March of last year — wanted to see if Overstock’s new system actually worked, but he was also interested in, well, fighting the good fight. Overstock is the first major online retailer to accept the digital currency, and Steele was doing his part to help push this new-age technology even further into the mainstream, so that it becomes a viable alternative to fiat currencies like the dollar and the euro and the yen.
“It’s a concept that could take off, and should take off, for a lot of reasons,” he says. “I want wider adoption. I want more businesses to use it.”
‘It’s a concept that could take off, and should take off, for a lot of reasons. I want wider adoption. I want more businesses to use it’
[RIGHT] [RIGHT]— Jason Steele[/RIGHT]
[/RIGHT]
Steele is not alone. In its first 22 hours accepting the digital currency, Overstock tells us, it accepted 800 orders in bitcoin, and they were worth a total of about $126,000. The company nabbed $5,000 in bitcoin orders in the first 30 minutes alone, and about $10,000 in the first two hours. That’s not an enormous haul, but judging from the company’s yearly revenue, it could be as much as 4 percent of its average daily sales, and it shows there’s a vibrant bitcoin community that’s interested not only in using the digital currency as an investment, but in actually spending it. That will be crucial to the future of this still very young technology.
Certainly, some just wanted to try out the new Overstock system. Others wanted to show the company how pleased they were that it had made the move. But all were uploading real funds, and many are interested in regularly spending their bitcoins, not just hoarding them in the hopes that their value with continue to rise.
Ben Doernberg, a 24-year from New York City, bought a screen projector for his cell phone just after Overstock flipped the bitcoin switch. “I wanted to express my appreciation to them for stepping up,” he says. “[And] I thought I might be the first one to buy from them, which would be cool.” But he aims to spend his bitcoin more often, having invested in the digital currency since May of last year.
“So far I have not regularly bought stuff with bitcoin, although I am beginning to change that behavior,” he says. “The increasing price of bitcoin is definitely an obstacle to purchasing bitcoin, but a temporary one.” As he points out, more merchants will have to follow Overstock’s lead in order for people like him to become regular spenders, but that’s already happening.
The bitcoin system is operated by a network of computers that spans the globe, and no central authority has the power to control it. It’s a currency — and a means of easily exchanging money over the net — that’s controlled by the people. After the value of a bitcoin topped $1,000 on popular online exchanges this fall, the digital currency has attracted a huge amount of interest, not only among individuals but businesses.
Coinbase, the San Francisco startup that processes Overstock’s bitcoin transactions, says it is also serving 19,000 other businesses, and another went live today: eZanga](http://www.ezanga.com/), a Delware outfit that helps people and companies place ads across the internet. eZanga is not only accepting payments from advertisers in bitcoin, it’s using the digital currency to pay the sites where it places ads.
“We have publishers all over the world who can do this,” says eZanga CEO Rich Kahn. “It’s an easier medium they can use to get payments faster.” Part of the strength of bitcoin is that lets anyone move money across borders without paying expensive credit card or wire transfer or currency exchange fees. That’s one of the reasons Jason Steele is high on bitcoin. It will make it easier and cheaper for him to travel overseas.
Overstock declined to tell us how its first day of bitcoin purchases compared to its overall daily take. But the point is a healthy number of people are well and truly behind the digital currency. One customer even bought a $2,700, 13-piece set of patio furniture](http://www.businessinsider.com/overstockcom-is-now-officially-accepting-bitcoin-2014-1?op=1). That’s not an empty statement. And neither was that phone-case purchase from Jason Steele. Late last night, he went back to Overstock and bought a chair with bitcoin too.

Cade Metz is the editor of Wired Enterprise. Got a NEWS TIP related to this story – or to anything else in the world of big tech? Please e-mail him: cade_metz at wired.com

98

I forget what I paid exactly, around $77.00.

Best investment I ever made, and I still have half my position left.

With the technology out there today the ability to follow (virtually excuse the pun) every move of every company and currency regardless if its virtual or material, there really isn’t a way to lose, unless you’re not paying attention.

When I get rid of the rest they will go to buy gold and silver.

My next adventure is following Nanotrading, another great money maker too short your positions. Check into it if you’re looking to make substantial gains in very short periods of time.

99

Dale writes:

Me too.

For me, all trades are for the ultimate purpose of accumulating gold. And I only go into dollars to buy something. The U.S. dollar should be treated like a cold shower, just something to get in and out of quickly.

100

Bitcoins: more guidance from the CRA

[RIGHT][http://d2dzik4ii1e1u6.cloudfront.net/images/lexology/author/675/W75/H100/20130412091855/Timothy_Fitzsimmons.jpg

[COLOR=#3E3D40]Author page »](http://www.lexology.com/675/author/Timothy_Fitzsimmons/)[/RIGHT]
Tax authorities around the world continue to wrestle with the tax issues arising from the use and sale of Bitcoin currency. Sweden recently announced that it will treat Bitcoin as an asset, and Finland has stated that it will treat Bitcoin as a commodity. China has placed restrictions on the use of Bitcoin. Generally, the price fluctuations and uncertainties around the use and sale of Bitcoins seemed to have generated more questions than answers.
In Canada, the use of Bitcoin currency appears to be gaining popularity- Bitcoin ATMs have popped up in several cities, and various retailers and even some charities are accepting Bitcoins for payments or donations. However, the Canadian government apparently does not consider it a currency. The [FONT=inherit]Canadian taximplications of Bitcoin transactions have been consider by the CRA and tax professionals, and now the CRA has published some additional guidance on the subject.[/FONT]
In CRA Document No. 2013-0514701I7 “Bitcoins” (December 23, 2013), the CRA summarized its views on how certain transactions involving the use or sale of Bitcoins may be taxed under the Income [FONT=inherit]Tax Act and Excise Tax Act.[/FONT]
[FONT=inherit]Buying and Selling Goods or Services in Exchange for Bitcoins[/FONT]
The CRA stated that the use of Bitcoins to purchase goods or services would be treated as a form of barter transaction (see, for example, Interpretation Bulletin IT-490 “Barter Transactions” (July 5, 1992)). The CRA’s view is that each party to a barter transaction has received something that is equal to the value of whatever is given up. For Canadian tax purposes, if a [FONT=inherit]business sells goods or services in exchange for Bitcoins, that business must report its income from the transaction in Canadian dollars (i.e., the fair market value of the Bitcoins at the time of the sale). GST/HST would be applicable on the fair market value of the Bitcoins that were used to pay for the goods or services.[/FONT]
[FONT=inherit]Donation of Bitcoins[/FONT]
The CRA stated that, if Bitcoins are transferred to a qualified donee, the fair market value of the Bitcoins at the time of the donation must be used in determining the value of the gift for tax purposes (see also CRA Pamphlet P113 “Gifts and Income Tax”). The determination of the fair market value is a question of fact.
Buying and Selling Bitcoins
The CRA stated that the trading or sale of Bitcoins like a commodity (i.e., speculating on the changes in the value of Bitcoins) may result in a gain or loss on account of income or capital. This determination can only be made on a case-by-case basis and on the specifics facts of each situation (see, for example, Interpretation Bulletin IT-479R “Transactions in Securities” (February 29, 1984)). Generally, the [FONT=inherit]income tax consequences relating to the tax treatment of gains or losses arising from the purchase and sale of Bitcoins would be the same as for transactions involving other types of commodities.[/FONT]