Bitcoin: tax haven of the future

[AdamSmith]

Compelling.

http://m.politico.com/iphone/story/0813/95420.html

[Guest NCBored]

Interesting concept but it seems a bit risky at the present time.

[RA1]

I am not sure I understand the entire concept. Is this bartering but with a different philosophy about the "coin of the realm"? Is there a "futures market" on the coins? If not, surely there will be soon, if it continues to be successful.

Best regards,

RA1

[Guest NCBored]

I am not sure I understand the entire concept. Is this bartering but with a different philosophy about the "coin of the realm"? Is there a "futures market" on the coins? If not, surely there will be soon, if it continues to be successful.

Best regards,

RA1

The 'value' (exchange rate) of the coins has varied wildly, for reasons not entirely clear to me.

[AdamSmith]

The Wikipedia entry is fascinating, if not effortlessly elucidative:

http://en.m.wikipedia.org/wiki/Bitcoin

[Guest NCBored]

The Wikipedia entry is fascinating, if not effortlessly elucidative:

http://en.m.wikipedia.org/wiki/Bitcoin

I read that article, and I still don't understand some key concepts:

1. When you buy bitcoins, what happens to the US dollars I buy them with? I assume there's a 'real' bank account somewhere holding that $?

2. What determines the value of a bitcoin at any point in time?

[RA1]

Agree with your questions.

Best regards,

RA1

[AdamSmith]

I don't understand it either.

Should I ever get in position to need a tax haven, I will have to see into it.

[RA1]

Is Tax Haven anywhere near New Haven? I hear those folks in CT need more than one haven.

Best regards,

RA1

[Guest Hoover42]

This resource might help

http://bitcoin.org/en/

Intro video:

[Guest NCBored]

This resource might help

http://bitcoin.org/en/

Intro video:

Thanks, but this makes it seem that bitcoins are created out of nothing, with no intrinsic value. (Of course, some might argue that is true of US currency today too.)

[Guest Hoover42]

Thanks, but this makes it seem that bitcoins are created out of nothing, with no intrinsic value. (Of course, some might argue that is true of US currency today too.)

They are created by hard work. However, the work is done by computer and not by hand.

Bitcoins have value in that each coin had to be produced by the hard work of someone's computer, and that computer had to be powered, and the power had to be paid for with real-world currency. So the owner of the computer is trading real-world currency for bitcoins,

[Guest NCBored]

They are created by hard work. However, the work is done by computer and not by hand.

Bitcoins have value in that each coin had to be produced by the hard work of someone's computer, and that computer had to be powered, and the power had to be paid for with real-world currency. So the owner of the computer is trading real-world currency for bitcoins,

Thanks for clarifying. The Wikipedia article says that too, but in less simple terms. I see that the process has limits built into it - a finite limit on the total number of coins that can be made.

I'm still not clear in how the exchange rate/value of coins is determined & why it has fluctuated so wildly. Wikipedia says that many exchanges have ceased to exist.

[Guest Hoover42]

From what I've read, I think the exchange rate is set by comparing pending buy and sell orders and taking the average between the lowest selling price and highest buying price The rate fluctuates, in part, because there aren't that many people or businesses that are willing to trade in bitcoins. Outside of speculators, people exchange bitcoins for cash to buy things that cannot be purchased with bitcoins. Where this is true, volatility should go down once bitcoins are more widely offered and accepted.

[Guest NCBored]

From what I've read, I think the exchange rate is set by comparing pending buy and sell orders and taking the average between the lowest selling price and highest buying price The rate fluctuates, in part, because there aren't that many people or businesses that are willing to trade in bitcoins. Outside of speculators, people exchange bitcoins for cash to buy things that cannot be purchased with bitcoins. Where this is true, volatility should go down once bitcoins are more widely offered and accepted.

Thanks, Hoover!

[Guest NCBored]

If you get tired of just sitting on your bitcoins...you can now use them to sit on something else.

http://www.xbiz.com/news/169470

[lookin]

The Economist's explanation says that 'mining' bitcoins becomes progressively harder over time, and that the maximum number that can ever be created is 21 million.

In a related story, the founder of an on-line drug site was nabbed today in a San Francisco branch library. Silk Road did $1.2 billion worth of anonymous drug sales and earned Ross Ulbricht $80 million in commissions, all off it in bitcoins.

The story of how the FBI tracked him down is pretty interesting. Sadly, big money brings big problems and the entrepreneurial cutie tried to set up two murders of folks who threatened to blow the whistle.

Ordinarily I'd consider doing him, if it weren't for the hits he tried to set up and the fact that he probably won't look so good when he gets out of prison.

[AdamSmith]

Guardian's explanation of how bitcoin works:

http://www.theguardian.com/technology/2013/oct/04/bitcoin-what-you-need-to-know-silk-road

[Guest zipperzone]

I can't see how I would ever want or need to use them. The whole idea sounds like loony tunes to me.

[AdamSmith]

I can't see how I would ever want or need to use them. The whole idea sounds like loony tunes to me.

You clearly do not buy enough illicit goods.

[TampaYankee]

I suspect the Treasury in conjunction with the NSA will find a way to wrinkle their panties. :0

[AdamSmith]

The Secret Service may have a writ to get in on this too. The biggest part of their mission is not protecting high pols' necks but rather protecting the value of US currency by ferreting out counterfeiting around the globe. Will be interesting to see if they adjudge Bitcoin relevant to that mission in any way.