[Prof Morearty]

I've read several explanations of the bitcoin and haven't been able to fathom much.  I am going to pose a simple and specific question in the hope of getting an answer I can understand.

Suppose I am in the business of selling, for example, DVDs featuring busty babes.  Let's assume that I produce and finance these DVDs myself, pay the models and technicians, obtain model releases, declare my profits to the IRS, and do everything necessary to make this legal.  I intend to charge about $15 per DVD and want to receive payment in bitcoins --at a recent rate, that would be one-thousandth of a bitcoin (one bitmill?) per DVD. 

I sell two thousand DVDs at one bitmill each, that's 2000 bitmills = two bitcoins.

First question: how do I receive payment: some kind of electronic transfer, I guess, but how?
Second question: how do I redeem my two bitcoins to get $30000?  And what does the person or firm that performs this transfer do with those bitcoins?

I'm not in business and don't expect to be, I'm just curious.  Thanks for any help.  Please keep it simple 

[andrat2000]

I've read several explanations of the bitcoin and haven't been able to fathom much.  I am going to pose a simple and specific question in the hope of getting an answer I can understand.

Suppose I am in the business of selling, for example, DVDs featuring busty babes.  Let's assume that I produce and finance these DVDs myself, pay the models and technicians, obtain model releases, declare my profits to the IRS, and do everything necessary to make this legal.  I intend to charge about $15 per DVD and want to receive payment in bitcoins --at a recent rate, that would be one-thousandth of a bitcoin (one bitmill?) per DVD. 

I sell two thousand DVDs at one bitmill each, that's 2000 bitmills = two bitcoins.

First question: how do I receive payment: some kind of electronic transfer, I guess, but how?
Second question: how do I redeem my two bitcoins to get $30000?  And what does the person or firm that performs this transfer do with those bitcoins?

I'm not in business and don't expect to be, I'm just curious.  Thanks for any help.  Please keep it simple 

Organize a bitcoin wallet. Store them yourself not in a online wallet. Maybe even on a PC you don't use for anything else, to prevent easy infections with malware etc. to prevent hacking. Make sure you never loose that file, means make back it up several times. And even store a copy outside. Become a member on a bitcoin marketplace to sell them. Expect really high transaction fees. Declare your income at (if you are German) tax authorities. Even declare it when you didn't  change them into real world money, it is income. German taxes treat electronical money as currency, means all holding rules for curency applies.

[andrat2000]

And why do I say have the wallet on a seperate equipment.
A smaller competitive forum of the BEA causes frequent attempts to intrusion. This isn't the first one. They have it quite frequent. Right now today e.g. this:

################
#Kategorie: Angriffsschutz
Datum/Uhrzeit,Risiko,Aktivität,Status,Empfohlene Aktion,Name der IPS-Warnung,Standardaktionen,Durchgeführte Aktion,Angreifender Computer,Angreifer-URL,Zieladresse,Quelladresse,Beschreibung des Datenverkehrs
13.12.2017 09:32:01,Hoch,Ein Eindringversuch von ... wurde blockiert.,Blockiert,Keine Aktion erforderlich,Web Attack: JSCoinminer Download 6,Keine Aktion erforderlich,Keine Aktion erforderlich

#######################

I removed the identifyable information of that other forum. The reason why they have it? They use advertisements and advertisements are causing this threats.

And then bigger news portals and webstite owners wonder why more and more people install advertisement supressing plug-in.

[TheZookie007]

As simply as I can put it:

First question: how do I receive payment: some kind of electronic transfer, I guess, but how?

You create a "digital cryptocurrency wallet" (perhaps on a Bitcoin trading service like Coinbase, or even better on a physical cryptocurrency wallet) and give people the wallet's account information. The analogy is you open a checking account at a bank, you tell people your bank's routing number and account number, and they can directly send you money; or they cut you a check, which you can deposit in your account.

Second question: how do I redeem my two bitcoins to get $30000?  And what does the person or firm that performs this transfer do with those bitcoins?

The simplest way is to go to a Bitcoin ATM, and withdraw the equivalent in whatever local currency you like.

Does that make sense?

[Prof Morearty]

Thank you both for the explanations.  Some things are a bit clearer to me now.  However, I reiterate, I am not in business and do not expect to be dealing in bitcoins.  I'm just curious.  I do find it fascinating that there exist ATMs where I could enter bitcoins and receive cash.
Let me state what I believe about bitcoins and you can tell me where I'm wrong (or perhaps sometimes right).  The bitcoin is fiat money, an artificial currency which flourishes as long as a sufficient number of people believe in it.  People accept payment in bitcoins because they are confident they can transfer them to others in exchange for goods and services or national currencies.  If confidence began to fade the whole shebang could crash: in short, the bitcoin market would be shown to be a bubble. 
OK so far?  Or hopelessly misguided?  Thank you for taking the trouble to answer.

µ

[rtpoe]

I believe you've got it.

It is like other unbacked fiat currencies in use (like the US Dollar which is really only backed by the good faith and trust of the US government), but unlike them, there's no regulation by an independent, outside agency. If the dollar collapses, there are regulators and agencies that step in to limit the damage. If Bitcoin collapses......

[TheZookie007]

Bitcoin or any other individual "digital fiat" currency may collapse (possible, but doubtful), but I think that the technology behind it and every other cyrptocurrency (the blockchain) is one of the most important technological innovations in the banking system in centuries, and I don't think it's going to disappear. A major difference between cryptocurrencies and fiat currencies is the absolute transparency of the operations. Via the blockchain everyone is aware of the entire trail of transactions, and counterfeiting is near-impossible. That's a game changer.

[andrat2000]

A few other things.

Bitcoin (and other cryptocurrencies) are private money. In human history since the invent of money, there was quite some experience with private money. In summary it never really worked for a long time.

The other thing is. The blockchain. Every transaction done is stored it the blockchain. As far as I know we are now at 200GB or more, that needs encrpyted and vise versa and shared among many instances. This requires a lot of power and it is slow. And it still grows.

Transactions need to be confirmed through above mechanism (and more). Since it is slow your transaction might not be confirmed in time. Especially since if you want to have an transaction done you have to add a royalty on top of it. But you never know how much is appropriate. If you have to less your transaction won't be confirmed. Or only after a long delay.

This opens a big door for loss for private persons.
Now imagine the up and down of the currency! If you want to sell to prevent too much loss. But your transaction doesn't get confirmed because your royalty is too low. Guess who will be the winner and who the loser in that transaction?

Good for those who invested early and can at some point just sell. And don't wait too long. It is speculation.

[Cutter]

I read a article from a reporter who, so he could accurately explain bitcoins, for a short time frame put some money in it.

He ended up loosing money on it.  Like any stock or commodity, bitcoin is only worth what you are willing to pay for it and what you can get someone else to pay for it. He advised staying away from them.

There are several people who got in during the early days of it and they have a paper or electronic worth of millions.  However if you do not have the actual CASH you don't have anything.  Some of these individuals have stated that they do not intend to sell their bitcoins (shares). 

Now if/when the price people are willing to pay for a bitcoin drops, your valued amount goes down.  The price topped at $19,000.  This past week what others were willing to pay dropped to just over $12,000. 

What will these paper millionaires do if the price drops to $5 because something else comes along that is better and easier to deal with?

My own personal feeling toward bitcoin is to stay away from it.

 

[TheZookie007]

I read a article from a reporter who, so he could accurately explain bitcoins, for a short time frame put some money in it.

He ended up loosing money on it.  Like any stock or commodity, bitcoin is only worth what you are willing to pay for it and what you can get someone else to pay for it. He advised staying away from them.

The thing is, in the short term, any commodity can experience a loss of value. Real estate, gold, oil, even Bitcoin. But most sensible people don't day-trade with BTC, they have a "buy and hold" strategy with it.

I wouldn't put a blanket "stay away from it" statement out there. What I would say is, if you do go into BTC or any other cryptocurrency, don't invest money that you are afraid to lose or that you couldn't live without, and play the long game. No day-trading, buy and HODL, and you can't make any gains if you ain't in the game.

[andrat2000]

I read a article from a reporter who, so he could accurately explain bitcoins, for a short time frame put some money in it.

He ended up loosing money on it.  Like any stock or commodity, bitcoin is only worth what you are willing to pay for it and what you can get someone else to pay for it. He advised staying away from them.

The thing is, in the short term, any commodity can experience a loss of value. Real estate, gold, oil, even Bitcoin. But most sensible people don't day-trade with BTC, they have a "buy and hold" strategy with it.

I wouldn't put a blanket "stay away from it" statement out there. What I would say is, if you do go into BTC or any other cryptocurrency, don't invest money that you are afraid to lose or that you couldn't live without, and play the long game. No day-trading, buy and HODL, and you can't make any gains if you ain't in the game.

That's the problem with bitcoins. If you want to just hold them. There is nothing else behind them, then what other people want to pay for them. With stocks you at least have the accrued dividend. You have nothing with bitcoin.

I would only recommend BTC for speculation, but then remember the problems getting your transactions confirmed. In times with losses and thus high sell and buy frequency your stop loss order might not be executed. This would be a desaster.

Though if I would be a service provider I would for sur partially accept BTC as payment method. We all know that other competing forum in Europe. They allowed BTC for many years as payment method for a special part of their forum. One of the co-owner got a few BTC that way. I know it because I stumbled once across a thread somewhere else where people tried to hint down their stolen (hacked) BTC's. The money some hackers payed access to that forum and the BTC ended up in possession of that forum co-owner. Now some think he was the hacker, but actually he is just the receipient. Nothing else.

[rtpoe]

Here's a great article on all the issues with cryptocurrencies:

"Ten years in, nobody has come up with a use for blockchain" by Kai Stinchcombe

http://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100

"Everyone says the blockchain, the technology underpinning cryptocurrencies such as bitcoin, is going to change EVERYTHING. And yet, after years of tireless effort and billions of dollars invested, nobody has actually come up with a use for the blockchain—besides currency speculation and illegal transactions.

"Each purported use case — from payments to legal documents, from escrow to voting systems—amounts to a set of contortions to add a distributed, encrypted, anonymous ledger where none was needed. What if there isn’t actually any use for a distributed ledger at all? What if, ten years after it was invented, the reason nobody has adopted a distributed ledger at scale is because nobody wants it?"

He basically looks at all the purported advantages of a cryptocurrency, and finds that there's something already well-established that does the same thing for much less.

Want to make payments without a middleman? Use cash. Want to make payments online? Visa can handle some sixty thousand transactions a second, compared to Bitcoin's historical rate of seven. And the power requirements for those seven transactions are estimated at 35 times what Visa needs. Scale up Bitcoin to where it handles the same overall volume as Visa, and it would need the electric output of the entire world. Sure, Visa skims a tiny percentage of the transaction - but for that, you get things like fraud protection, buyer and seller verification, and the ability to get a refund.

"In the end, the advantages of the existing human and software systems surrounding transactions — from verifying identity with a driver’s license to calling and clarifying the statements made in a credit disputed transaction to automatically billing your credit card for a newspaper subscription — outweigh the purported benefits, as well as hidden costs, of irrevocable, automated execution. Blockchain enthusiasts often act as if the hard part is getting money from A to B or keeping a record of what happened. In each case, moving money and recording the transaction is actually the cheap, easy, highly-automated part of a much more complex system."

How to prove "one person, one vote" without any blockchain nonsense:

[Cutter]

Plus don't loose or forget your password to it.

No password = No money.

And it seems several people forgot their passwords and can't get to their accounts.

[andrat2000]

Plus don't loose or forget your password to it.

No password = No money.

And it seems several people forgot their passwords and can't get to their accounts.

Or stored their wallet on an external device (stick or hdd) and lost it.

[TheZookie007]

Or stored their wallet on an external device (stick or hdd) and lost it.

Or, even worse, got it carted away by the local garbageman...all US$75 million worth.