Does anyone actually use Bitcoin to pay for things?

The TCD professor was none other than Brian Lucey. That's the genius who suggested Anglo should sell their deposit book of €30bn for €25bn pay back their NAMA bonds of €20bn and hand the €5bn profit back to the taxpayer. He didn't realise that deposits are a liability and NAMA bonds are an asset Hearing the good prof call bitcoin a bubble caused me pause but just for a second, this time he has it right.
 
Yep Duke, I know there was a q mark over the prof. but didn't quite recall the circumstances as to why! Either way, I think this crypto business is a classic Dutch tulip bubble in disguise. It worries me tho to hear people who seem quite reasonable, bet the house on them. I'm all for a calculated risk, provided it doesn't involve me losing my shirt on it.
 
I have heard of people remortgaging their homes to buy Bitcoin.

They did well if they did it over 6 months ago and sold out, but not good if they are doing it now or if they did it when it was $20k.

Brendan
 
Agreed Brendan, one fellah today was talking about funding early retirement. He had, up to this point, invested €1,000 or so in the darn things. I think people can talk themselves into anything. What's frightening is the psychological 'pull' to, imo, gamble like this. The other chap had his own business and had put everything into bitcoin. Scary stuff.
 
TheBigShort said:
Ah yes, and the pizza guy, the taxi driver etc...urban myth tends to spread fast with mania.
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But so do manic decisions.

I heard of it second hand, so the bank was not mentioned. But come to think of it, it's unlikely any Irish bank would give such a remortgage unless he was claiming it was for house refurbishing.

Brendan
 
Brendan Burgess said:
I heard of it second hand, so the bank was not mentioned. But come to think of it, it's unlikely any Irish bank would give such a remortgage unless he was claiming it was for house refurbishing.
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Ah c'mon, don't tell the banks haven't learnt their lessons? Don't tell me they are still lending out large amounts of money on the back of 'refurbishing' loan applications?

Is it that easy to con a bank?
 
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This thread has meandered a bit.

As far as I can tell, there are three primary groups who buy Bitcoin:
  • Those wishing to launder money and/or commit illegal trade
  • Those speculating on the value of Bitcoin itself
  • Those wishing to get money out of their country (despot, socialist states where the vast majority of people are poor anyway)
I would very much welcome some solid links showing people in large numbers using Bitcoin to do what most people do on a daily basis with a currency........"buy stuff"
 
DeclanDublin said:
It worries me tho to hear people who seem quite reasonable, bet the house on them.
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People who borrow to buy crypto (or any other high risk asset class or currency) are not reasonable. I've just cashed out after a 4275% gain and I've only ever had one form of financing (my mortgage).

Brendan Burgess said:
I have heard of people remortgaging their homes to buy Bitcoin.
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These are the exceptions - and of course, it makes for better copy - so they'll be the ones they wheel out for interviews like this, articles on the subject, etc.

There was a modest level of 'buying stuff' happening until bitcoin became a victim of it's own success and hit a scaling problem (resulting in high tx times and costs). It's back to the drawing board. Do you believe in giving innovation a fighting chance?

This technology is not the finished article. You can smother innovation - or allow it to take it's course and see what comes of it. Which is the more enlightened path....
 
tecate said:
This technology is not the finished article. You can smother innovation - or allow it to take it's course and see what comes of it. Which is the more enlightened path....
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I think this is an important point that alot of detractors fail to grasp. Bitcoin has potential to be used widely. No-one is declaring it is the done deal. There are outlandish claims that it will replace cash, gold etc.
Because peoples groceries are not priced in bitcoin some people think it is worthless.

Outside of bitcoin, it is fascinating to listen to tech heads and the confidence they have in future technologies that are gearing to disrupt the order of today.
I cant say I understand all of what they are talking about, but Im left in little doubt that technological advances are hurtling our way that will fundamentally alter the way we go about our business.
Bitcoin may, or may not, be part of that. For now, I suspect it will.
 
tecate said:
There was a modest level of 'buying stuff' happening until bitcoin became a victim of it's own success and hit a scaling problem (resulting in high tx times and costs).
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I'm not being smart, but do you have a source for that? My understanding is that this scaling problem has been caused by the huge demand in Bitcoins for capital appreciation purposes rather than for buying stuff.

tecate said:
Do you believe in giving innovation a fighting chance?
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Of course. I work in the IT sector....innovation puts bread on the table round my place!

tecate said:
This technology is not the finished article. You can smother innovation - or allow it to take it's course and see what comes of it. Which is the more enlightened path....
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I totally agree and I am not against Bitcoin per se. I do see some potential for Bitcoin and its uptake will likely increase over time. The difficulty I have is in reconciling this potential against the current price, which I don't believe anyone has been able to justify. Why has the value of Bitcoin gone up over 10 times in a year? Where's this sudden potential? It should be really obvious to justify this growth in value.
 
Firefly said:
Why has the value of Bitcoin gone up over 10 times in a year? Where's this sudden potential? It should be really obvious to justify this growth in value.
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Subjective Theory of Value.
The reason the price went parabolic is due to people entering a space that has a finite supply.
 
Firefly said:
I'm not being smart, but do you have a source for that? My understanding is that this scaling problem has been caused by the huge demand in Bitcoins for capital appreciation purposes rather than for buying stuff.
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I don't think we are arguing here at all. I fully acknowledge that there was very little day to day 'buying stuff' going on. However, it's a process and it was grinding out a slow progression. That got destroyed when transaction times and costs became an issue - so the tiny bit of momentum it had made resulted in it going back the way (many that were offering the opportunity to pay via bitcoin have reversed that decision). Had there not been a scaling issue, I'd imagine BTC would have made greater inroads since then in that respect. That's all I'm saying.

Firefly said:
I totally agree and I am not against Bitcoin per se. I do see some potential for Bitcoin and its uptake will likely increase over time.
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We're on the same page then....although it may be another crypto. I - and others - here have been going on about Lightning Network. If that doesn't come through in a timely fashion or if it is flawed, that could spell the end for bitcoin. There's a lot riding on it - and it's a concern as nobody really knows if it will make the grade. That said, if that occurs, then another crypto will come in and fill the void.

Nobody knows how to price it (except Brendan ) but I guess it's a combination of what people perceive it's value to be and the fact that it's finite. What gives gold the value it has?...and yes, I know that you can say that it can be used for a handful of things but at the end of the day it's public sentiment and perception. Tulip bulbs is what someone usually shouts at this point. However, I disagree that it has no intrinsic value - it has a set of characteristics that gives it some intrinsic value.
Of course, the value of gold has been established since the year dot but everything starts somewhere. I guess as a store of value, I still see that it can work over time - and yes, it's understating it to say that its imperfect in this regard due to the crazy volatility. However, there is a rationale that suggests that over the fullness of time, this will dissipate.

I suppose there is a concern in the way it surged before Christmas. I was away on holiday for 3 weeks. Before I left, most people hadn't heard of Bitcoin. When I came back, everyone had heard of it (even if they didn't understand it). I wasn't tuned in to what was at play during that time that lead to that surge - but I suppose I have reconsidered my position a little and believe that these were people with little genuine understanding and therefore belief in BTC ...so that made those newcomers fickle.
For those who looked at it as a currency, it's being traded on a possibility of it being able to function - as it currently can't scale in a functional way in that respect. I'm not sure if the fickle set have the patience to wait around for a solution - and on the flip side, there may be technical difficulties in delivering that solution in any event.

I guess that's why I moved from being a 'Hodl-er' to closing out my position (at least for the moment)....that and concern I have about the whole Tether situation.
 
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Hi,

For what it's worth, I think quite a few of the people behind Bitcoin have lost their initial focus (or perhaps just moved on altogether) with regards to using it as a day to day payment mechanism.

There are a few popular "alternative currencies" offering transactions at far lower fees and partnering up with various large companies to progress their business plans. As things stand, these alternative currencies look far more likely to be future payment mechanisms and particularly for small size, or high volume, transactions, than Bitcoin does.

Convenient and efficient methods of payment are still a little bit of a stumbling block for all of the currencies though and that needs to be attended to, otherwise I can't see anyone being able to pay for a pint, or their supermarket goods with a cypto currency.
 
Hi,

I have what must surely be a very basic question. Say I agree to pay someone in Bitcoin for a job (presumably I have an app or something). If I make the payment in error and it goes to someone else's account, how is this rectified? In normal banking I think the back could reverse the transaction. What happens with Bitcoin though? Also, say I do pay into the correct account. What's stopping the person I am paying telling me that he didn't get the funds? How can I prove it?

Not knocking Bitcoin at all, just wondering how it hangs together.

Thanks.
 

That's fair enough. I am not trying to knock Bitcoin / Blockchain at all (but it must come across that way). I really just have no expertise in this area and trying to pick holes in its suitability as a medium of exchange. For what it's worth, I think the technology is here to stay. I also think a few things could happen, creating a perfect storm where all of a sudden lots of people start using some crypto to buy things (once the current mining inefficiencies are ironed out). For those who are interested it will be very tempting to think about avoiding tax. How many people who have made gains from Bitcoin do you think will voluntarily make a tax return on their profit, especially if the profit is only something like 10-20k?

For those dependent on taxes (people on the dole, retired people and public servants) and for public services generally, governments could face a mounting battle trying to get their share of tax. I think this is a bigger worry than any perception of inflation via QE..
 
Firefly said:
If I make the payment in error and it goes to someone else's account, how is this rectified? In normal banking I think the back could reverse the transaction. What happens with Bitcoin though?
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The Bitcoin stays where you sent it, there is no mechanism for reversing errors. If you were able to identify the person you sent it to (very unlikely unless you have access to nation state level tools), you could ask them to return it, but they would be under no obligation to do so.

Firefly said:
Also, say I do pay into the correct account. What's stopping the person I am paying telling me that he didn't get the funds? How can I prove it?
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As the ledger is public, everyone will be able to see that you have transferred the bitcoin to the other party. So proving they received it is not an issue. Your ability to enforce such a contract through the courts might be hampered by lack of legal recognition of Bitcoin as a currency.
 

Will the other party be listed though with their name, address, company details etc., or will it be just an account?
 
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