Anyone use them, looking for a quick run down on mining, buying and using them. ie, where/what/how do I start?

Don’t go near them with a barge pole. Complete con.

didn’t the bitcoin exchange get hacked recently creating chaos and devaluing them massively?

Don’t go near them with a barge pole. Complete con.

In what way?

Maybe not a con, but its inflation-proof claims are based on a discredited monetarist position, and it’s a very unsable currency.

Have a read of this;

http://www.slate.com/articles/news_and_politics/view_from_chicago/2013/04/bitcoin_is_a_ponzi_scheme_the_internet_currency_will_collapse.html

there’s an awful lot of other people saying that it’s doomed to fail in time. I guess as a short term investment it might be ok but it’s such a volatile market you need to be prepared to take high risks.

I am not talking about using it as an investment, but more of a payment method.

edit: and I think pretty much every accusation thrown at bitcoin seams to apply equally to “real” currencies 😉

If you can’t scratch a window with it…

If you’re looking at mining them then it’s more than just buying a few and immediately using them to pay for something?

The biggest problem is there is so few of them about – it creates the volatile market that seems to characterise them.

Mining is pretty much pointless considering even if you own a few high end PC’s – the stress it puts on parts and electricity costs will probably put your profit to around the zero mark

You could join a mining pool if you wish but then you still need a fairly decent PC to make any contribution and thus get any BTC back.

So right now you;re best to consider buying low and selling high, or buying now and hoping it stays stable.

It’s perfectly usable to buy things with if you move over a few hundred or so £’s.

I bought into the pipedream initially but since I don’t have much need to buy things anonymously/without trace it was kind of a bit of a circle jerk thing – it’s a great idea but doesn’t really have much practical use (some may say “yet”)

Some BTC fundamentalists will defend it to the death and claim how “when the world goes into financial ruin” they will be laughing etc, but try not to get swept up into it.

Some points they make are true, the dollar and pound are just as vulnerable to the things that effect BTC.

The only thing I do know, is a few select people over the world have made ALOT of $$$ out of BTC.

I read this a while back and it seemed to make reasonable sense to me, from a payment methodology point of view.

But on the other hand trying to find understandable information on the mining, exchange and control of the ‘currency’ all seems to be on either the “it’s a ponzi scheme rip off” or “look at all this free money it’s too good to be true” spectrum of point of view.

RM.

But you CAN buy beer with them!

Ponzi scheme. Very sophisticated but still a Ponzi scheme. In theory it could hold its value for eternity and become a valid currency / payment mechanism but as there is nothing underlying the value then it has no base level and any big run on it would wipe it out.

“look at all this free money it’s too good to be true”

It’s not exactly free money.

You need to invest in hardware to mine and the electricity to run the hardware.

As more BTC is mined, the difficulty of the mining goes up.

Thus, so does the cost of the hardware and the running costs.

(Can you see the parallels they’ve made here)

What gives it it’s value is the fact a number of people have agreed to exchange goods for the currency.

The same as USD, or GBP.

If we all turned around tomorrow and decided we didn’t want to exchange our goods and services for GBP it too would become worthless.

So the No.1 thing that gives the currency its value is the amount of people willing to use it as payment. (Or another view, the number of goods and services you can buy with the currency.).

In a laymans sort of terms. I’m not a professor in economics by a long shot but that’s my rough understanding.

What is kind of funny is around 5 years or more ago when no one bar a small circle of geeks were using BTC, and you couldn’t use it to buy pizza, people would throw around 1000’s of BTC as a almost joke. It was worth literally nothing.

but as there is nothing underlying the value

A bit like USB and GBP, you mean?

Since the gold standard was abolished the only thing giving those currencies value is the fact we all agree they have value.

Yeah but there’s far more people using major currencies as..well… currency.. isn’t there?

What I don’t understand is why it’s claimed to be inflation proof, if there’s a limited supply?

I bought 50 bitcoins for £6ea about a year ago.

They are now worth about £60 each. 1000% profit in a year if I decide to sell them or use them. People kept telling me they were a ponzy scheme a year ago. They are now somewhat bemused.

I think the whole point with a Ponzi scheme is that you have to keep talking up the value of the thing and the unfeasibly high profits that early adopters have made 😉

I use them all the time. They’re not a “con” they’re just an alternative currency, albeit a very volatile one. If you just want to spend them there’s no problem, speculatory use is inadvisabel.

ahhh at last someone who actually uses them, could you give me a quick rundown of how and where you buy them and use them, how you keep them etc

i use either mt-gox or btc-e to buy them. they are online exhanges. funding the exchange is the hard part, you can’t just use a credit card or paypal. although i think you can do a bank transfer to mt-gox (the cost of an overseas transfer put me off for the small amounts i usually buy).

i keep them in a wallet on my computer. there are also online wallets (if you trust them!).

I bought 50 bitcoins for £6ea about a year ago.

They are now worth about £60 each. 1000% profit in a year
900%?
RM.

900%?

Fair point.

Blockchain is a decent online wallet which offers offline paper wallet integration if you wish – I’ve now moved my BTC there instead of running the client on my PC.

I don’t own many any more so don’t mind about not keeping them in a paper wallet but if you own more than 1 or 2 paper is the way forward.

they are getting popular;

http://www.politico.com/story/2013/06/michael-mancil-brown-indicted-fraud-extortion-93487.html#.UcwmNeX5MxY.twitter

Brown allegedly in a letter to the firm demanded $1 million in Bitcoin

Wired magazine bought a Bitcon miner

But you CAN buy beer with them!

Au contraire

Wired magazine bought a Bitcon miner

So we’re destroying the private key used by our Bitcon wallet. That leaves our growing pile of Bitcoin lucre locked away in a digital vault for all eternity

This makes me sad 🙁

Problem with bitcoin seems to be the sudden surge in value has resulted in people bringing in serious amounts of dedicated hardware (intergrated mining units rather than more traditional GPU arrays) and the amount of power coming on line makes it unlikely anyone not buying this kind of kit will make money in the longer run. You’re laughing if you build the kit however.

edit: and I think pretty much every accusation thrown at bitcoin seams to apply equally to “real” currencies

Yeah, true, but it is much less accepted than mainstream currencies, which means it’s also much more susceptible to crises of confidence. And, y’know, half of the Bitcoin “attraction” is supposed to be that it’s not like real currencies.

I bought 50 bitcoins for £6ea about a year ago.

They are now worth about £60 each. 1000% profit in a year if I decide to sell them or use them. People kept telling me they were a ponzy scheme a year ago. They are now somewhat bemused.

Yep, that’s a volatile currency alright!

I don’t think Bitcoin is a Ponzi scheme (because it’s not fraudulent), I just don’t think it’s a terribly wise investment. You wouldn’t pile all your money into PayPal credit or into those local barter currencies.