Weekend Open Forum: Your thoughts on virtual currencies

By Shawn Knight
Dec 27, 2013
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  1. Crypto currencies like Bitcoin have been populating the news for the better part of 2013 as their popularity and value continue to increase. It’s way too early to know if Bitcoin and other top virtual currencies will ultimately have a...

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  2. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 5,808   +1,431

    Virtual currency is the future, but I won't participate until the ball stops bouncing.
  3. Julio Franco

    Julio Franco TechSpot Editor Posts: 6,520   +311

    It's like playing roulette though in hindsight it must have been tons more fun when a bitcoin was worth cents opposed to hundreds of dollars.
    Wendig0 likes this.
  4. davislane1

    davislane1 TechSpot Guru Posts: 1,251   +458

    Bitcoin and other virtual currencies will exist as long as there is a market for them. Popular criticism that they aren't "real" or aren't gov't backed (and therefore have no real value) is trivial. Other people have assigned them value and it will retain that value until the crypto market dries up.

    Long term, I can see them surviving as an asset until someone figures out how to counterfeit them. Gov't bans might have an impact on their value, but I can only see decisive gov't action in the wake of the weakening of an official currency.

    As for holding positions in virtual currencies... I have no interest in them. I prefer assets that are predictably manipulated. Because Bitcoin isn't a toy of the Fed and financial institutions, it's less predictable (and therefore less profitable) than other, less risky assets. The reward/risk simply isn't there.
  5. treetops

    treetops TechSpot Evangelist Posts: 1,658   +57

    At least the USA dollar has some gold to back it up these are just pixels? But if people are willing to give you stuff for something worth nothing who am I to argue...
    Julio Franco likes this.
  6. veLa

    veLa TechSpot Booster Posts: 500   +76

    I think it was cool how you could use bitcoins to buy drugs on the intent.
  7. R3DP3NGUIN

    R3DP3NGUIN TechSpot Enthusiast Posts: 154

    Its been a long time since the US dollar was worth anything. Its just paper with a funny picture on it. I'm pretty sure it was JFK that was the last president to bring in a currency actually backed by a commodity, of course he died not long after.

    Bitcoin is interesting, may be highly volatile, but at least there is no funny business called interest rates.
  8. davislane1

    davislane1 TechSpot Guru Posts: 1,251   +458

    That would be factually incorrect. USD hasn't had gold backing since the 1960s. Fiat is every bit as "worthless" as Bitcoin -- it just has a bigger market.
    Wendig0 and R3DP3NGUIN like this.
  9. R3DP3NGUIN

    R3DP3NGUIN TechSpot Enthusiast Posts: 154

    Thanks for correcting I knew I was way off, I agree with your comment completely, infact I would love to see the USD actually be backed by Gold/Silver again, I suppose it wouldn't make the bankers making trillions very happy though.
  10. Hasbean

    Hasbean Newcomer, in training Posts: 53   +9

    I do believe you are incorrect with those statements. The US dollar has no standard assigned and is therefore not backed by any material of value.

    Any currency, by definition has value, it is what someone will give you for it that determines that value.
    R3DP3NGUIN likes this.
  11. AnonymousSurfer

    AnonymousSurfer TechSpot Enthusiast Posts: 312   +12

    I don't believe that all currencies will eventually end up being virtual currencies but I do believe that they will be heavily used in the future. They will never be the main source of currency for countries because pushing towards an international currency pushed our countries more and more towards economic dependence on one another. I know currently we depend on each other a lot, but under one virtual currency the fall of one country would directly hurt every other country using the same currency.
     
  12. I find it hilarious how stupid greedy people line up for every scam that somebody thinks of. These virtual currencies (starting with Bitcoin, now expanding to other something-coins) are just that - somebody comes up with an algorithm that grants the inventor a huge advantage. He uses this advantage to "mine" up few thousand of (then worthless) "coins". As "mining" becomes progressively more difficult and as *****s begin to pick up on the idea, value is assigned to those worthless zeroes and ones and the inventor can cash in on other people's stupidity and greed. 1000 coins obtained for free and sold for $1000+ apiece ? Yes please, at least until the *****s find some other scam to lose their money on. It's no different than Forex/Ponzi scams, all you need is a good idea and some time - as P.T. Barnum said, there is a sucker born every minute.

    Anyone who has read the Hitchhiker's Guide to the Galaxy will recall the spaceship full of useless *****s (hair stylists and whatnot) who got evicted from their population under a pretense of impending planetary disaster and sent to another planet on a spaceship... Those *****s collecting tree leaves and using them as a "currency" were that book's equivalent of Bitcoin/Litecoin/Dogecoin/etc. "miners" and "users".

    Gotta go now, I just came up with this great now virtual currency which you should start buying for real money and/or goods. Stay tuned and keep your wallets ready!
  13. misor

    misor TechSpot Addict Posts: 988   +147

    If steam wallet counts as virtual currency, then thumbs down.

    as for bitcoin, never interested in it aside from reading its ups and downs.
  14. All currency is virtual! The coins and paper we carry in our pockets are just ways of convincing us that it's a real commodity!

    Banks illegally lend money they don't have and then charge interest on it! It's called fractal reserve banking. Bitcoin is being used as propaganda by the media to brainwash us into the idea of achieving a single global "virtual" currency. Debt is unreal, just a figure on a computer. Hitting delete eradicates debt. It's that simple!!

    No currency = no greed, no crime, no rich, no poor, all equal!

    Humanity now more than ever needs a world without currency. Would you choose to live in a consumerist hell with corporations and banks controlling us and robbing us blind and politicians sanctioning in favor of their every move or should we rid ourselves of this diseased monetary system we live in and take back control of our lives?
  15. Well it's kind of true that all virtual currency are as worth(less) as you make them to be. If you go back in time a bit you realize that commodity was replaced by money to solve supply and demand problem (where there was too much of one thing and too little of other - therefore different value). Nowadays fiat currency is backed by absolutely nothing. There is only massive printing that provokes inflation. One single currency would provoke only a greater inequality. Where there is more diversity things in general go better. We would have to rethink entire concept of good exchange. This one of today is a disaster and virtual currency would be even greater one
  16. Skidmarksdeluxe

    Skidmarksdeluxe TechSpot Evangelist Posts: 2,921   +724

    I haven't given any thought to virtual currency whatsoever yet.
  17. Cycloid Torus

    Cycloid Torus TechSpot Booster Posts: 174   +38

    If you are willing to put any significant portion of your assets in a currency based in "mega-flops", I think I have some shares in a South Seas trading company or some nice rare tulip bulbs from Holland which may be of interest to you.
  18. ET3D

    ET3D TechSpot Paladin Posts: 968   +30

    In retrospect, I'm sorry I didn't take mining more seriously when it was easy.

    I never expected the Bitcoin to amount to anything, although I think the basic idea is good. Mining is a bit of an issue, but mining could become better once all coins have been mined, and it only offers transaction fees. The idea of a decentralised coin which rewards those who provide the processing is good, IMO, though I'll have to see how that stabilises.

    The main problems I see now are the bitcoin mining arms race, with people producing machines for it, creating farms for it, etc., and the huge number of alternate coins, which people hope to mine early and have them become more valuable in time. I think that the market can't really sustain such a big number of coins, and most of them will likely die.

    And by the way, contrary to what Cycloid Torus thinks, I think that bitcoins are a good investment, and will only rise in price. Personally I'm too conservative financially to invest in them, but I know people who already made some money from them, and I think they still have a way to go, and even people who buy at the current value will make a lot of money in the long run. I can't see the coin going back into obscurity.
    Last edited: Dec 29, 2013
  19. Cycloid Torus

    Cycloid Torus TechSpot Booster Posts: 174   +38

    "We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first."
    - Charles Mackay, 1841 http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds

    My favorite fad is "Pet Rock" ( http://en.wikipedia.org/wiki/Pet_Rock ). The inventor became a millionaire. A 'revival' is planned.
  20. treetops

    treetops TechSpot Evangelist Posts: 1,658   +57

    Uh we do still have gold backing up our currency but we don't add new gold for newly printed money so the value of the dollar goes down every year. But that is way better then bit coin that has nothing at all backing up their money. Ever hear of Fort Knox?

    In 2004 we had 261.7 million ounces
    Last edited: Dec 29, 2013
  21. cliffordcooley

    cliffordcooley TechSpot Paladin Posts: 5,808   +1,431

    And the value of gold is based on what? We don't need the middle man.
  22. davislane1

    davislane1 TechSpot Guru Posts: 1,251   +458

    @treetops Having a gold reserve is not the same as having a commodity-backed currency. The only practical relation fiat has to gold is that gold can be used as a benchmark to track the purchase power of given fiat. Beyond that, fiat is the exact same thing as Monopoly money.
  23. bob333

    bob333 Newcomer, in training Posts: 30

    Yes, I've heard of Fort Knox, thanks to the movie Die Hard 3 Vengeance.
    davislane1 likes this.
  24. captaincranky

    captaincranky TechSpot Addict Posts: 10,538   +858

    Methinks you've been playing with "virtual currency", longer than you think. Accordingly, we'll add you to the list of people you just pronounced, "wrong". (It's only fair really). The US went off "the gold standard" in 1914 : http://en.wikipedia.org/wiki/Gold_standard.

    However, in 1963 (? if memory serves), we went off the silver standard as well. So, the paper money issued in 1963, was the last that declared itself, "silver certificate". Which simply means that you can't go into a bank nowadays and summarily demand to exchange your paper bills for either metal.

    There's some good news and bad news here. Since there's fluctuation in the price of precious metals, they can't alter the value of currency in circulation with peaks or dips in their market value. Theoretically, you could speculate in gold with paper money. OTOH, gold is far from abundant, and we humans place great value on scarcity. The bad news is, you can alter the value of currency lower, by simply printing as much of it as you feel like. In essence, all currencies are "virtual" which aren't backed by trade in value for precious metals. And alchemists through the ages have come to the sad, hard earned discovery, you simply can't "print" gold. (I think the only common material worth more than gold by weight today, is ink for our printers). So, maybe those ancient sorcerers should have done more with pigments. Well, pigments other than lead. We all know how well that turned out...:eek:

    The currency of a nation however, is backed by it's GDP. So, any nation's currency is merely an avatar used for comparative value, when exchanges of goods and services are made. It's really just an abstract representation of the barter system.

    If two fools want to get together and decide that a "bitcoin" is worth a kilo of smack, more power to them. At least until the fed swoops in and puts the kibosh on the festivities.

    As far as how I feel about virtual virtual currency such as bitcoin, I think if people are silly enough to spend "real" money, in pursuits a frivolous as "Second Life", I'll stay away as far as possibly from it.

    A little late to the party aren't we there Bob?

    Robbing Fort Knox is almost a hackneyed plot line. Gosh, in fact, that was the plot to the James Bond Movie, "Goldfinger" which was released in 1964.

    (I believe they were simply going to irradiate the gold to render it useless for 20.000 or so years. Which incidentally, "N.C.I.S. Los Angeles" (CBS) ripped part of that basic plot off for a show recently). I tell you, it's a virtual crime wave.

    Here's the thing, I can very easily see a government cracking down on Bitcoin, if if becomes a threat to the currency of the realm. But, it already is a threat, to the collecting of income taxes. So remember, income tax evasion, was the only thing that the fed could pin on Al Capone, and it sent him to prison.
    Last edited: Dec 30, 2013
  25. ET3D

    ET3D TechSpot Paladin Posts: 968   +30

    My favourite fad is democracy. I hope a revival is planned. :)

    Anyway, I don't think that bitcoins can be compared to any particular fashion. They're a concept, not an object. Bitcoins by themselves might die, but it's likely that the concept will continue, or get refined.

    Regardless, I think it's currently a good investment.

    Edit: A good article by Charlie Stross about the evils of bitcoin. Still, it does say that it's the coin's nature to rise in value, which is why it's a good investment. Still, I think it's best for speculators. It's possible to make a lot of money in a market with such variations. (It's also possible to lose it, of course. :))

    Edit 2: The comments are more interesting and insightful than the article.
    Last edited: Dec 30, 2013


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