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Bank of America report: Bitcoin could become a 'major means of payment'

By Shawn Knight
Dec 5, 2013
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  1. Bank of America issued the company’s first research report on virtual currency Bitcoin today with the conclusion being overwhelmingly positive. Analysts said Bitcoin has the potential to become a major means of payment for ecommerce and a serious competitor to...

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    cliffordcooley likes this.
  2. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 5,981   +1,488

    Not until the value of Bitcoin stabilizes. And even then, I'm not sure I want any part of Bitcoin. Only under a guarantee that Bitcoins will never be lost or stolen will I except Bitcoins.
  3. ikesmasher

    ikesmasher TS Evangelist Posts: 1,915   +363

    I wouldn't do anything with bitcoin until they are all mined and in circulation and stable.
  4. tonylukac

    tonylukac TS Maniac Posts: 876   +22

    Did you know that they change the money in China all the time? They say it's to prevent counterfeiting. Cash money actually becomes worthless every so often.
  5. VitalyT

    VitalyT TS Evangelist Posts: 1,818   +543

    It reads - we are going to hype the prices up a bit more before letting you all fall on your a$$ naked...
  6. wcbert

    wcbert TS Rookie Posts: 71

    This all sounds like the Tulip mania of the 1600s and to say "we never seen this before" is really saying you never seen a "bubble" before. History repeats itself.
  7. davislane1

    davislane1 TS Guru Posts: 1,313   +480

    Tulip mania, Kipper und Wipper, Dot-com, real-estate... Values always go up, until they don't.

    Now, if there's a way to short Bitcoins...
  8. Skandranonsg

    Skandranonsg TS Rookie

    Well, unless the entire bitcoin network gets shut down, then you can have a near-perfectly secure bitcoin wallet. You simply need to encrypt it and keep the password to yourself. There are only three ways someone can steal money from that wallet.

    1. They acquire the password.
    2. They decrypt it. (Mathematically improbable)
    3. They control over half of the processing power of the bitcoin network for a significant amount of time. (Also incredible improbable)

    In fact, I'd wager that bitcoins are the number one most secure currency in the world.
  9. Blue Falcon

    Blue Falcon TS Enthusiast Posts: 148   +41

    What some of you don't understand is that there is still a way to take advantage of bitcoins without any major risk. You can buy 2-3 R9 290s and start Litecoin mining. Then exchange LTC into BTC and sell BTC. If the value of BTC stays at today's level, in 1.5 months all of those AMD cards will be paid for and then you are into pure profit territory. If the value of BTC collapses to $1, you can just resell the videocards.

    Let's use some absurd scenario that the chance of Bitcoins going to $1 is 90% and 10% chance it stays at these levels and all 3 R9 290s pay for themselves ($1,200 value).

    Expected Return = 0.9 x $1 + 0.1 x $1200 = $120.90

    Therefore, it still makes sense to buy GPUs for scrypt mining; and almost no one believes the value of them will collapse to $1 in 1 month. It is no surprise that all R9 280X/290/290X and HD7950/7970 series of cards are sold out at most stores in US/Canada.

    Whether Bitcoins will become a legitimate currency over time is difficult to predict but what can be concluded is that for the last four years, it made absolutely no sense to ignore bitcoins since with them every single GPU upgrade on the AMD side was paid for by the GPU itself. I don't think there will be a time in the GPU history where we'll be able to get free GPU upgrades but even now it still exists. It's really hard to consider dropping $1,400 on GTX780 Ti SLI for instance when three R9 290s are paid for in 1.5 months of scrypt mining.
  10. Blue Falcon

    Blue Falcon TS Enthusiast Posts: 148   +41

    @ cliffordcooley

    You obviously have done no research into bitcoins at all. There are many legitimate services that allow you to transfer coins from your wallet into their account. After, you sell the coins on the exchange and transfer $USD into your bank account.

    https://www.cavirtex.com/home

    You've literally missed out on thousands of dollars from mining over the last 4 years and the risk was almost non-existent since GPU hardware can be sold readily with very little loss in resale value. Most of us already use the GPU for games anyway.
  11. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 5,981   +1,488

    Research? No!

    I don't have to do a research to see how unstable Bit-coins are. And it doesn't take a genius to figure out Bit-coins can be stolen or lost. We are just now getting to the point where Bit-coins are recognized as a currency, which can lead to pressing charges for theft. That is if you know and can prove who the thief is.

    If wallets are not personally linked to the owner, anyone can access them if they learn or can break the key. This makes keeping the key a major issue, especially if it is so complex the owner could never memorize it. Devices fail and accidents happen, making no guarantees storing the key will be completely safe. Untraceable currency is a bad idea, period! But then when did a bad idea, stop anyone from progressing forward?

    I will leave the Bit-coin Empire to those who love placing value in casino game jackpots. Seriously! How could anyone put their paycheck in a bank, not knowing if the following day the value would be 20% or 120%?
     
  12. Blue Falcon

    Blue Falcon TS Enthusiast Posts: 148   +41

    @ cliffordcooley,

    The bitcoins are locked in your encrypted wallet on your computer. Do you know how difficult it is for someone to find your specific computer out of millions of PCs online (How would the hacker know it is you that has 1000 bitcoins on your comp?) and specifically hack your computer and the key? I have been mining for >4 years now and have not had any loss of coins. Not only that, I spread the coins across several wallets which reduces risk in case anything happens. This is no different than keeping real world currency across 4-5 banks. As you are aware, your bank's insurance probably only covers $100-250K of your cash balance in case of default. Therefore, just like wealthy people spread their money across banks, so can the user with various bitcoin wallets.

    Again, you keep talking about how it's unsafe but there is no risk involved. So your argument is illogical. No one puts their own $ in any bank account. The GPU creates money, which means it costs the owner nothing because even if you somehow lose the coins, the GPU can be used for games or resold. Also, I already showed using mathematics that even if there is a 90% chance that the value will collapse to $1, statistically speaking it still makes sense to mine since the payoff is so huge. Anyway, there is really no point in arguing with you since you already made up your mind.

    Even if your computer fails, there is a back up of the wallet allowing you to restore it any time.

    http://electrum.org/

    You did 0 research on this topic and your posts on the subject are too uninformed. I am trying to help you to make $ and get free GPU upgrades but it seems I am just wasting time.
  13. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 5,981   +1,488

    Not true! People put money in the bank everyday, people even invest in Bitcoins.
    Thats because you keep coming at me from a mining angle. An angle of which I have often associated with freely allowing Mal-ware to run. But that is not the topic, the topic is using Bitcoins as a mayor form of payment. Paying someone in Bitcoins has nothing to do with Mining them. But then the system is so unstable, you would be taking a chance at loosing value if not cash in immediately. You keep trying to invalidate my concerns, but yet you avoid looking at why I have concerns.


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