what the hell are bitcoins and how do you make money from them?
has anyone dealt with them yet or know anything about them?

Joffa?

Joffa :lol:

Bitcoins are a dumb as hell virtual currency used in online barter systems for various (frequently less than legal- see: silk road) goods or services. It is possible to obtain bitcoins through dedicated system processing used to solve problems (usually based on transactions), the first valid result is awarded the currency. Some set up large (for private use) data centers dedicated to this task.

In practice, bitcoins are economically volatile and it is difficult to successfully make money from them.

hmm thanks for the info bud, however have you seen what they are worth at the moment?
they seem to have doubled in just two weeks?

They are worthless unless you are specifically needing them.

One of the bars I used to work in used to use this system :lol:

Bitcoins at this point are being used as a value store or safe haven from Fiat paper currencies...whether they have long term viablility depends on whether we end up with a system of competing currencies. This is not entirely out of the question as the current system has already collapsed...its just being propped up by "extraordinary measures" from central banks. Ie buying their own bonds lol...the simplified analogy is like using your credit card to pay your personal loans.

The current fiat paper system has been in its death throws since 1913...100 years in would be poetic for a 'Real Crash' as Schiff puts it...it has not been backed by anything since the end of Bretton Woods in the 70s. We are reaching an end point with the effects of this...



Edited by blacka: 19/3/2013 09:54:51 AM

Wikileaks used Bitcoins pretty successfully when their funds were cut off by the U.S government

Was better back when it wasn't so public known about.

Nowdays the difficulty is so high it isn't worth it.

-PB

http://seekingalpha.com/instablog/7761841-patrik-korda/1616371-bitcoin-bubble-2-0

Interesting critique of bitcoin from an Austrian perspective...

Sitting at $150.
Was $43 a few weeks back....

http://www.businessweek.com/articles/2013-03-28/bitcoin-may-be-the-global-economys-last-safe-haven

Pretty good, balanced explanation of bitcoin from of all places the establishment bloomberg businessweek...

The current system is working great bro. You obviously have no clue how it works though; it isn't "propped up" by the central bank; it's created, maintained and completely controlled by the central bank, which is simply an arm of government. That's why it's called a government monopoly currency; it is issued by the government. The RBA here creates our national currency and destroys it; every day in fact. It makes sure there's enough cash in the system for the economy's requirements.


As for open market operations (buying and selling financial instruments, especially govt bonds), your analogy is stupid and makes no sense. A simple and accurate analogy is this: you have your own currency used in your household called blackadollas. Like ppl in the real world, your family likes to save and invest a bit of their income in an interest-bearing asset (all income is in blackadollas and is earnt from doing chores and shit in the house for others) and of course if one person in the family wants to save and invest then another person has to borrow and spend those savings. Like in the real world, not all of what your family desires to save is borrowed by other family members which means you, the "government", have to borrow and spend the remainder, or there will be a family recession (ie spending would be less than income). You borrow their savings and provide them with the financial asset they desire, which takes the form of a blackabond.

Whenever you have to decrease the base interest rate in the family economy, you of course must increase the blackadolla supply (interest rates are the price of borrowing), so you print a bunch of notes on your pc then inject them into the family economy by buying back some of those blackabonds you earlier sold. There is now more money in the economy to lend and interest rates decrease from this supply increase.

Edited by Hoff: 7/4/2013 10:53:23 PM

bitcoins are the future black market currency, or at least some derivative of bitcoins. the current blackmarket currency is physical cash because it doesnt leave a trail, at least until it is deposited at a bank and becomes electronic. We are quickly moving to a cashless society; these days cash is a pain and only used when the eftpos machine at the shop is down or u wanna pay a mate such that they can avoid tax on it. Drugs and other illegal shit however are still gonna be illegal for the foreseeable future, and bitcoins are perfect because they offer anonymity and the supply of coins is decentralised; no central authority manages the coin supply but instead it just increases slowly over time until it hits a max of 21 million coins. Basically it's gold but virtual and anonymous, which I guess is why they call the creation process "bitcoin mining". Coins are bought and sold easily with real cash through a bitcoin dealer.

Of course there needs to be an internet black market to use them on and there is: the Silk Road, which is basically ebay (no auctions tho) for drugs, only it is anonymous and only uses bit coins. Even has a seller review system. Bitches be buyin drugs and havin em at their door the next day via express post. It's the way of the future, unless the government were to commit to searching domestic post for drugs which would take an incredible amount of resources and wouldn't be worth the bother.

:lol:

OKAY...well looking ahead, which most keynesian do not do beyond a very short term, political cycle time frame...currency war anyone...lets get back to that in a decade or so...currency wars, trade wars, hot wars...or so the scenario goes...

I mean gee i guess im getting a little carried away with the virtual collapse of the US banking system and the subsequent govt/fed intervention which was the only thing the stave off complete disaster. And all that garbage sitting on the fed's books. When a central bank is the only entity buying a govts treasuries, do u not think they have a problem? Especially in light of what that affords politicians in not dealing with long term liability issues and current lack of fiscal discipline.

We must be getting our information from very different sources. The wonders of the digital age!



Central banks are an arm of government i completely agree with that. Funny how they maintain the facade of being "independent" LOL...

What we have is not anything like what u could call a system of "Sound Money"...or have i been reading too many Austrian school economists. No such thing in these days of central bank controlled, supported and propped up economies...or created, maintained and completely controlled if u prefer. Tomato, tomato...

To throw a little Peter Schiff in here..."Governments love inflation. It's a way for them to take money from the people without the people realizing they took it..." In Crash Proof he sums up well the govt motive for using and also hiding inflation. As well as the "bogus deflation threat".

So yes, government hand in hand with central banksters.

There's a reason why socialist 'thinkers' have been so adamant about the role of central banking in the drift to socialism. Control the money supply, control the economy...eventually u no longer have any free markets ....totalitarianism here we come...

It really comes down to a fundamentally different view of how economies and business cycles develop. Recessions are a natural and required part of an economy. The problem we have now is individuals, businesses and govt are so over leveraged with debt that they are unable to manage there way through these natural cycles. So we end up with the entirely unnatural scenario u describe in the rest of your post.

Our system is broke/broken as we no longer even need savings or real capital to fund legitimate economic expansions. Everything is at the fingertips of the modern central banking lever pullers. Never mind the constant unintended consequences of these artificial booms...asset price booms and busts, inflation/purchasing power theft which hits the middle class/working poor.

Back to Schiff..."this flies in the face of modern economic thinking that regards the business cycle as the inevitable result of some flaw in the capitalist system and sees the government's role as mitigating or preventing recessions.... Economists today view the apparent overinvestment occuring during booms as mistakes made by businesses, but they don't examine why those mistakes were made. As Mises saw it, businesses were not recklessly overinvesting, but were simply responding to false economic signals being sent as a result of inflation. For that reason Mises called such mistakes malinvestments."

Now most mainstream economists would say Mises, Hayek, Rothbard have "lost" and are irrelevant. But given the way the economy has unravelled over the last century, the work of these guys will come further to the forefront looking forward. Its really hard to see how the system u describe and that the orthodoxy cling to, can continue to function when u look forward. Its really just piling more shite/debt on to more shite/debt. How can more of the same be the solution to an overindebted public and private sector? Surely we are headed for a massive shift in thinking in economics?