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  1. #1
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    What's a Bitcoin and why would you want one?




    TOP STORY

    What's a Bitcoin and why would you want one?


    By Woody Leonhard

    You might have heard in recent weeks about Bitcoin millionaires — people who raked in vast sums of real money riding this relatively new form of currency.

    Bitcoins offer both a fascinating, new approach to money and many potential pitfalls. Here's what you should know about this online phenomenon.

    The full text of this column is posted at windowssecrets.com/top-story/whats-a-bitcoin-and-why-would-you-want-one/ (paid content, opens in a new window/tab).

    Columnists typically cannot reply to comments here, but do incorporate the best tips into future columns.

  2. #2
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    I read your full column concerning "Bitcoin".
    You do seem to be kind of promoting such abstract values?
    The whole thing is flim-flam and when the likes of Woody Leonhard climbs aboard such things as "Bitcoin", and takes so much trouble and time to explain the details of a scam/flim-flam like "Bitcoin" then it is time for me to jump off of WindowsSecrets, cancel my longstanding *PAID FOR* subscription, and wish for the days of "LangaList" to return.
    Goodbye, WindowsSecrets, paid for - and I mean that most sincerely.

  3. #3
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    Quote Originally Posted by WmJay View Post
    I read your full column concerning "Bitcoin".
    You do seem to be kind of promoting such abstract values?
    The whole thing is flim-flam and when the likes of Woody Leonhard climbs aboard such things as "Bitcoin", and takes so much trouble and time to explain the details of a scam/flim-flam like "Bitcoin" then it is time for me to jump off of WindowsSecrets, cancel my longstanding *PAID FOR* subscription, and wish for the days of "LangaList" to return.
    Goodbye, WindowsSecrets, paid for - and I mean that most sincerely.
    Overreact much?! The whole point of the article was to explain what it is and exactly why it's so volatile and dangerous. I thought it was great!
    Last edited by ruirib; 2013-05-02 at 02:58. Reason: Edited to comply with Lounge rules

  4. #4
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    Quote Originally Posted by WmJay View Post
    I read your full column concerning "Bitcoin".
    You do seem to be kind of promoting such abstract values?
    The whole thing is flim-flam and when the likes of Woody Leonhard climbs aboard such things as "Bitcoin", and takes so much trouble and time to explain the details of a scam/flim-flam like "Bitcoin" then it is time for me to jump off of WindowsSecrets, cancel my longstanding *PAID FOR* subscription, and wish for the days of "LangaList" to return.
    Goodbye, WindowsSecrets, paid for - and I mean that most sincerely.
    The role of Windows Secrets is to inform, educate and help its readers on computing technology matters. Bitcoin is a trending subject in the technology area and the article does not promote it at all. Instead, it tries to provide a balanced overview of what bitcoin is, what are its main issues and why some people would want to use it.

    Explaining what something is doesn't mean you endorse it. In this case, the article tried to inform people on a subject that is showing up more frequently. If you do read websites on technology, you realize that the term bitcoin is showing up quite often. It's better to be informed on something than being ignorant about it, even if all you want is to be able to decide you just want to steer clear of the subject, and that's what the Windows Secrets newsletter is about.

    Finally, about the promotion of such matters, the author has been pretty clear on where he stands, regarding eventual bitcoin purchases. If that is an endorsement, then I confess I must have never seen one.
    Rui
    -------
    R4

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    This is a fairly balanced article but rather too negative in terms of the association with criminality, however it provides a concise overview for those who may be wondering what this bitcoin noise is all about. The OP may be living out in the backwoods somewhere, but that's fine, but please don't assume that others are not interested in this subject.

    My personal opinion on bitcoin is that perhaps it may all come to nothing, especially as those who control our currencies will not want to be outdone by this new kid on the block over whom they have no control; they are probably the ones behind the recent DoSS attack rather than "criminal gangs". I have placed a punt of $100 on bitcoin and it is something i am able to lose in the worst case scenario but i am intrigued about the upside. I see bitcoin as a kind of digital gold and silver, far more practical than carrying bullion around, and something that will be quickly embraced by the youth of today and eventually we oldies will too, a bit like Facebook.
    Last edited by cavehomme; 2013-05-02 at 05:07.

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    "Like cash, Bitcoin transactions are untraceable." This is false.
    They are anonymous but they are hardly untraceable, every single person who downloads the block chain has a copy of your transaction saying what address the bitcoins were sent to, and where they came from. (Including where that address acquired them in the first place) So all it takes is finding out who one person in the chain of ownership is, then you can put pressure on them to find out who they sent those coins to (or recieved those coins from) and so forth. This is how many of the hackers were caught. They tried to spend their bitcoins and no one respects a thief.

    So though you can use them for illicit purposes, you are taking a much greater risk than if you use straight up cash.

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    I (no encryption or database expert) wonder if some of the Bitcoin magic might be used to create a gun registration system that would allow registration and tracking of guns, while guaranteeing the anonymity of gun owners. To satisfy criminal investigation needs, a specific gun's ownership history might be acessible only in response to a conventional search warrant.

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    Actually another very plausible explanation for the crash, if you think about it, - actually the run up and the crash - is that this bubble and crash were engineered by those who have the most to lose from its success. These are the large/ huge (private) banks controlled by the governments/ elites, including of course the various central banks, the US Federal Reserve via its proxies (Morgan Stanley, Goldman Sachs et al).

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    Woody,
    It seems the initial responses are mostly aimed at one person’s response. Hopefully a question or 2 about your article will be appropriate here.
    I could have missed what I am about to address and if so please accept my apologies.
    Bitcoin seems an interesting concept but if I wanted to purchase them do you need a credit card? If so wouldn't that impact on the secrecy?
    Also, if you pay in good old American greenbacks, where are they kept or who keeps them?
    Finally, I purchase some Bitcoin with my greenbacks and later want my greenbacks, back, how is that handled?
    It would seem that this could be another currency that could be 'played' like the other currencies of the world. Can you spell FOREX?
    Other than addressing these type of questions, you article was informative.
    Thanks.

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    I'm surprised you didn't talk about mining bitcoins. For readers of Windows Secrets who are more inclined to be interested in the compter aspects of bitcoins, mining them, the computing power needed to solve bitcoin problems to get them and the special computer setups offered for sale to mine bitcoins, would be of interest.

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    Thanks for the article (and the history lesson!)! I had heard of Bitcoins a year or so ago. I looked into the concept briefly, thinking it was something else entirely. I'm no investment whiz kid by any stretch of the imagination but I'm pretty darn good with math. The more I read, the more I developed the beginnings of a potent migraine so I dropped my research and walked away.

    Thanks to you I have a much better understanding of this "currency". Guess that's why they pay you the big bucks, right? Thanks again!

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    Bitcoin IS money no matter what some people might claim. However right now the volatility makes it a not very good form of money. (great for speculation, not so great for transactions over the course of time)

    I see Bitcoin as a possibility for implementing micro-payments. It is my understanding that overhead costs of conventional payment methods make micro-payments uneconomical. Bitcoin should be streamlined enough to allow micro-payments for profit.

    However one aspect of commerce I do not see discussed much in relation to Bitcoin is arbitration. What do you do if you pay in Bitcoin and you do not get satisfaction? Traditional credit cards allow for some leverage in disputes and even PayPal has some slight protections. Bitcoin is like cash, once it has left your hands, what recourse do you have?

    In theory Bitcoin transactions can be traced but I don't hear much about dispute resolution.

    If you want to do legal business, you need legal recourse and following right behind that, you need to allow for taxes. Those parts do not seem to me to be worked out yet.

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    Quel coïncidence! I am writing a column for the Korea Monitor titled “Of Bitcoins and Bubbles” which is an expansion of a short paper I wrote for an April 10 meeting of a History Book Club in Rockville, Maryland. (The book under discussion was Kindleberger’s “Manias, Panics and Crashes”.) The first third of my column is similar to your article; the latter two-thirds will associate bitcoins with contemporary economic bubbles including the next one that I see approaching. I delighted seeing that our minds run the same paths regarding the bitcoin scam – which, incidentally, is attracting the drug trade money-launderers as well as Russians and others fleeing the defunct Cyprian banks.

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    "The system works because the currency used remains relatively stable." I would state it as, the system works because the currency used is trusted by everybody; it is trusted by everybody because it is stable.

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    The 'haircut' in the Cypriot banks was mainly to get cash from Russian mafia who had huge deposits in those banks. They were the people who got their money out in a hurry, since in usual bureaucratic fashion, while Cypriots themselves couldn't get much cash out after the announcement, the Cypriot bank branches in other countries had no restrictions. So the Russians got their money out and your bitcoin theory may be right since that money had to go somewhere, somehow.
    Not too many Cypriots have the kind of bank balances to have to worry about the final decision which had a fairly large minimum balance.

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