Does it really matter now if the "central banks" down play Bitcoin?

[srockhard]

I read in the WSJ today that Canada's central bank decided that Bitcoin is "not legal tender". In my opinion I can't see that it really matters what they say because they can't turn bitcoin off. I mean isn't it like if they said they didn't consider email to be "not legal mail" LOL. Bitcoin is also NOT legal tender in China and we watched BTC value drop for a week or two then rise back to over $1000/BTC.

...btw I bought a new bed on Overstock.com this morning and paid with bitcoin. I'll soon be sleeping soundly with dreams of BTC.

[nexcom28]

Overstock looks really expensive.

[kane]

To me the potential threat is if more and more countries and banks start acting the same way. Right now the value of the bitcoin is based on its ability to be converted into actual cash that you can spend anywhere. If all banks stopped allowing bitcoin purchases or sales (an example would be how US banks can't approve transactions from online casinos) then people would no longer be able to take the bitcoin and turn it into actual cash.Without that ability I could see its value going down and its role being diminished.

Right now the appeal of it is that it continues to go up in value. If you buy $5,000 worth of bitcoins today they might be worth $7,000 a month from now. If 1 bitcoin was only worth 1 bitcoin and never changed value because you couldn't convert it into cash it would lose its appeal and its usefulness.

[NALEM]

Originally Posted by kane

To me the potential threat is if more and more countries and banks start acting the same way. Right now the value of the bitcoin is based on its ability to be converted into actual cash that you can spend anywhere. If all banks stopped allowing bitcoin purchases or sales (an example would be how US banks can't approve transactions from online casinos) then people would no longer be able to take the bitcoin and turn it into actual cash.Without that ability I could see its value going down and its role being diminished.

Right now the appeal of it is that it continues to go up in value. If you buy $5,000 worth of bitcoins today they might be worth $7,000 a month from now.

Well stated.

Anonymity is also very attractive feature.

[srockhard]

Originally Posted by kane

To me the potential threat is if more and more countries and banks start acting the same way. Right now the value of the bitcoin is based on its ability to be converted into actual cash that you can spend anywhere. If all banks stopped allowing bitcoin purchases or sales (an example would be how US banks can't approve transactions from online casinos) then people would no longer be able to take the bitcoin and turn it into actual cash.Without that ability I could see its value going down and its role being diminished.

Right now the appeal of it is that it continues to go up in value. If you buy $5,000 worth of bitcoins today they might be worth $7,000 a month from now. If 1 bitcoin was only worth 1 bitcoin and never changed value because you couldn't convert it into cash it would lose its appeal and its usefulness.

The rarity of Bitcoin is a strong point because there are only 21,000,000 bitcoins. That is about 1 btc for every 300 people on the earth...compared to gold which there is about 377 million pounds of above ground (and still more below ground) which actually could provide every person on the earth with just under an ounce (about .88 ounce) if my calculations are correct. Combine all that with the fact that it grows everday as an accepted form of payment online and if I'm not mistaken the number of people buying goods online is still growing everyday aswell ;)

[mineistaken]

Originally Posted by nexcom28

Overstock looks really expensive.

but..but.. you can pay in bitcoin.

[mineistaken]

Originally Posted by srockhard

The rarity of Bitcoin is a strong point because there are only 21,000,000 bitcoins. That is about 1 btc for every 300 people on the earth...

This is completely irrelevant. Its just denomination. 1 btc per 300 people, 0.1 btc per 30, 0.01 per 3 and so on.
It can be 21,000,000 coins at 1000$ each or 210,000,000 at 100$ each and it would be exactly the same.

Your saying would be relevant only if you could not split bitcoins, but its not the case, you can move by decimal points anytime.

[srockhard]

Originally Posted by mineistaken

This is completely irrelevant. Its just denomination. 1 btc per 300 people, 0.1 btc per 30, 0.01 per 3 and so on.
It can be 21,000,000 coins at 1000$ each or 210,000,000 at 100$ each and it would be exactly the same.

Your saying would be relevant only if you could not split bitcoins, but its not the case, you can move by decimal points anytime.

oh really? So I could have given overstock .12 bitcoin this morning and it would have been the same as the 1.2?

[kane]

Originally Posted by srockhard

The rarity of Bitcoin is a strong point because there are only 21,000,000 bitcoins. That is about 1 btc for every 300 people on the earth...compared to gold which there is about 377 million pounds of above ground (and still more below ground) which actually could provide every person on the earth with just under an ounce (about .88 ounce) if my calculations are correct. Combine all that with the fact that it grows everday as an accepted form of payment online and if I'm not mistaken the number of people buying goods online is still growing everyday aswell ;)

The limited number of them helps in the value, but the value is still determined by the ability to turn the bitcoin into cash.

If there was no way turn bitcoins into cash (of any kind worldwide) than a bitcoin is only worth a bitcoin. The limited amount of them might cause them to still go up in value, but they would only be usable by people who were willing to take them as currency.

The reason you were able to buy a bed from Overstock with bitcoins is because Overstock is likely going to turn those bitcoins into cash. If their only option was to then use those bitcoins elsewhere to buy other products they may not be so willing to take it.

Think of it like a token system. If you ran a store and one day a guy came in and said, "I want to buy these items, but I will pay using these tokens." You might ask him what good the tokens are. "If he said, "You can cash the tokens in at any bank for cash and they go up in value." You may be willing to take the tokens. If he said, "The tokens can be used at other stores to buy stuff, but they have no real cash value." They may not be as appealing to you.

[Due]

Originally Posted by srockhard

oh really? So I could have given overstock .12 bitcoin this morning and it would have been the same as the 1.2?

Yes if they where split it would. If you had 5 coins left they would turn into 50.
The value would remain the same.
The current value if the Bitcoin is a huge drawback. I suspect a lot of merchants will have issues with working with the asking if decimals required in order to sell example a $5 product due to how many ecommerce / accounting systems would round it down to a zero.