I'm trying to understand the appeal of the Bitcoin. It seems like a giant seedy scam to me

[LynneSin]

It all started with this article from Rolling Stone magazine:

http://www.rollingstone.com/culture/news/silk-road-inside-the-21st-century-drug-bazaar-20111110

and this article:

http://www.rollingstone.com/culture/news/dead-end-on-silk-road-internet-crime-kingpin-ross-ulbrichts-big-fall-20140204

It seems like there is something shady about these bitcoins. Like it's a way to shop for illegal drugs, child porn and weapons on a shady underground internet. And it seems like the currency of choice is the bitcoin - some made up currency that is created by people 'mining' for coins by having their computers solve difficult math problems.

I mean I know our current currency system has it's issues but I feel like whether I put my money in a bank or in a sock hidden under my mattress that in the end I would have my money. It's something tangible that I feel and I know there is some agency controlled by the government that ensures that the value of it doesn't decrease too much.

With the bitcoin, in a nutshell, I have bits and bytes. And investment that I would hope somehow manages to hold it's value overtime but there is no way I could take that bitcoin savings out of a bank and hold that currency in my hands. And in the end where would I spend that money unless I was some creep looking to buy illegal drugs, child porn and/or weapons. Sure it's creepy to know that perhaps there's a list out there that showed I charged a pack of Trojan condoms to my debit card back in 1997. But I am highly suspect that there isn't some agency out there that is tracking the use of bitcoins and sees just exactly what I could be buying on this deep dark internet.

So someone explain to me why in god's name would I want to invest all my money in computer bits and bytes. Or even worse spend thousands of dollars to have the proper computer equipment that would allow it to run 24x7 to calculate complicated math problems just so I could earn a bitcoin (would run someone about 5k to get the right equipment, my i7 Asus Laptop wouldn't cut the cake).

I smell a bigass scam but that's just me.

[Tommy_Carcetti]

1. Come on now, it's easy.

People were upset at the economic effect of lax regulations on the banking industry during the great recession. They also had a skepticism of the US dollar, which they felt was insufficiently backed by a debt based system.

So what did they do?

They created a new, intangible, virtual "currency" with absolutely no regulations where the value of said "money" is entirely controlled by unknown entities.

Problem solved. You're welcome.

Bitcoin's got what plants crave! It's got electrolytes!

[arcane1]

4. But what are electrolytes?

They're what plants crave!

I'm with the OP, I don't have a clue what is going on with bitcoins, how they get their value, what to do with them once you have them, etc.

[Kelvin Mace]

8. Here you go

a primer on the underlying economic theory of bitcoin:

https://en.wikipedia.org/wiki/Tulip_mania

[arcane1]

16. Ah, that explains the "tulip" reference in an earlier post.

Thanks! I think I'm caught up now

[Tommy_Carcetti]

17. One of my favorite movie scenes of all time.

[unblock]

2. you forget that it was *porn* that paved the way to web commercial viability

there was once a time, shortly after this "world wide web" thing came out, that businesses were saying, "what kind of customer would put their credit card information on the ether"?

businesses where interested but very hesitant to "go online" because they didn't think it would fly with the public, that it wouldn't be secure.

well, if there's one way to make a man put caution aside and risk financial ruin, it's to show him some nekkid curves. sure enough, porn proved that businesses could safely make money on the web.

after that, everyone seems to have jumped on.

[LynneSin]

3. I'm not talking about the regular web, I'm talking about things like the Silk Road

Which you need a special browser to access and can buy all sorts of crazy stuff on it.

[unblock]

9. i mean, the web was once "seedy", too.

so sure, right *now*, maybe bitcoin users are drug dealers, child porn purveyors, and, worse, libertarians.

but eventually plenty of legitimate people and businesses will be using it, and the "seedy" part will be just a small fraction.



or it will collapse entirely, who knows.

[LynneSin]

18. But in the end you actually got something for the porn you bought

With bitcoins you get a concept that has financial value but that value exists only in the minds that believe ini.

[CFLDem]

5. Its appealing because its trendy

to certain suckers.

[Kelvin Mace]

6. It's just like real money except

1) No commodity, person, agency or government is backing it.

2) If your paper money ever becomes worthless as a medium of financial exchange, it can still be used for grocery lists, phone messages or in extremis, toilet paper. Bitcoin has none of this secondary utility.

[upaloopa]

12. You are joking right? If my paper money goes bad I can

always trust some body hiding in the dark to care for my interests.

[Xolodno]

7. Also a way to avoid taxes perhaps......

I find it interesting how this pops up after governments start cracking down on people who offshore their money to Switzerland and the Cayman Islands.

[Kelvin Mace]

19. I have a giant tub of popcorn

set aside to eat while watching the story unfold when the first person loses a hundred million trying to dodge taxes.

In any financial transaction of this type there is a sucker. If you can't spot him and physically lay hands on him, your it.

[Xolodno]

20. Sadly...I don't think thats how it will happen...

These guys are already in a club to help each other. But rather, they will rob those of lesser means....and then boast about how they scammed....excuse me..."pulled out of an investment at the peak".

[MicaelS]

13. There's a deep Libertarian streak in the

Computer hardware / software world. Not just those who make the products, but the hardcore end users. Bitcoin and Litecoin appeal to these people. As to why read

Bitcoins, Tulips and Libertarians .

Bitcoin Proves The Libertarian Idea Of Paradise Would Be Hell On Earth

About 44% of the online crypto-currency's users self-identify as Libertarians.

They love the fact that it's not controlled by a government or central bank — so no online Fed can "print" more of it and inflate our way out of trouble. They love that it's decentralized; it's the currency of The People, not The Man. They love that it's "mined," a bit like gold, because that makes it a bit like the gold standard, which libertarians think real currencies ought to be tied to. They love that Bitcoin isn't taxed, so you can hide your income from the government if you want to. They love the way its value reflects pure supply and demand, and not a value forced into the system by regulation or monopoly. And they love that it's fairly lawless — it's difficult to enforce rules (other than the rules of the market) when everyone in the market is anonymous.

So the Bitcoin experience gives us a glimpse of Libertarian paradise: What life would be like with as little government interference as possible, in a market free of burdensome laws and taxes.

[wandy]

14. I have no Idea why anyone would get involved with this considering...........

Considering todays "state of the Art" Malware/Addware/Spyware.
Recently I cleaned up a customers laptop. There were three, Three, count them THREE different KeyLoggers on the darned thing.
What a KeyLogger does is that every keystroke you make is logged and then sent out "somewhere".
If you order something and enter your credit card number, it goes to the people you are ordering from AND "somewhere".

IMHO, keeping one's "bank account" on a PC is one very bad idea.
Yes, I know, its encrypted.

Like rules, encryption and copy protect were made to be broken.
Just ask the NSA.
And the NSA are likely rank amateurs.

[MineralMan]

15. It's the currency of a black market, generally.

It's untraceable and gets used a lot to hide transactions. That's why its of interest to taxing authorities. It's also used for illegal transactions, which makes it of interest to law enforcement.

It's not something that interests me, personally, at all.