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Offline spoon

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Re: Ask Rushy about Bitcoins.
« Reply #60 on: January 30, 2014, 02:42:15 AM »
Bank interest is normally below the inflation threshold regardless, so chances are your savings are losing value despite gaining in numeric volume.
Source?
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Offline Rushy

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Re: Ask Rushy about Bitcoins.
« Reply #61 on: January 30, 2014, 03:48:58 AM »
Bank interest is normally below the inflation threshold regardless, so chances are your savings are losing value despite gaining in numeric volume.
Source?

https://www.wellsfargo.com/savings-cds/

http://www.us.hsbc.com/1/2/home/personal-banking/savings-accounts

https://www.chase.com/savings/savings-account#!chasesavingtabs:chasesavingstab2


Just to name a few, all offer an average of 0.01%, with their "high yield" savings being around 0.05%. Inflation in a good year for any fiat currency is 1% and can sometimes be as high as 5%. Please, please point me to a bank with a savings account >1% while having less than $150,000 in savings. I will thank you, hell, I might even pay you.

With fiat currencies your savings are guaranteed to lose value.

Offline spank86

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Re: Ask Rushy about Bitcoins.
« Reply #62 on: January 30, 2014, 01:55:26 PM »

Unless of course you can point me to the bit that shows where money supply is regulated and by whom ...

this is all getting very flat earthy  ;D

If someone did regulate the federal reserve, say the Um-bongo corporation, wouldn't you next simply ask who regulates them?


Bank interest is normally below the inflation threshold regardless, so chances are your savings are losing value despite gaining in numeric volume.
Source?

The last 30 years of reality?

Savings on normal accounts have almost never got close to inflation.

They might however have risen in value compared to other currencies so a current account in sterling may have beaten American inflation if transferred back and this is the point where bitcoin could be more profitable than normal banking.
« Last Edit: January 30, 2014, 01:59:32 PM by spank86 »

Re: Ask Rushy about Bitcoins.
« Reply #63 on: January 30, 2014, 04:19:30 PM »
"Being your own bank" doesn't sound like an advantage because your savings wouldn't accumulate interest.

Bank interest is normally below the inflation threshold regardless, so chances are your savings are losing value despite gaining in numeric volume.

This is patently untrue. Over the history of banking, the interest rates paid on savings has been above the inflation rate. You're biasing yourself due to the trend over the past 25 years.
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Offline markjo

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Re: Ask Rushy about Bitcoins.
« Reply #64 on: January 30, 2014, 04:39:18 PM »
Do you see that trend changing anytime soon? 
Abandon hope all ye who press enter here.

Science is what happens when preconception meets verification.

If you can't demonstrate it, then you shouldn't believe it.

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Re: Ask Rushy about Bitcoins.
« Reply #65 on: January 30, 2014, 05:09:48 PM »
Money ain't grow on trees, son.

Re: Ask Rushy about Bitcoins.
« Reply #66 on: January 30, 2014, 08:35:10 PM »
Please, please point me to a bank with a savings account >1% while having less than $150,000 in savings. I will thank you, hell, I might even pay you.

https://www.commbank.com.au/personal/accounts/savings-accounts/netbank-saver.html

As a bonus, there's no fees, they pay 2.5% interest compounded daily.
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Re: Ask Rushy about Bitcoins.
« Reply #67 on: January 30, 2014, 10:14:57 PM »
How is the amount of the transaction fee decided?

By everyone else's transactions fees. If everyone happens to be paying $100, you'll have to pay it too. Luckily everyone on the planet are greedy, and normally pay less than a penny.

I can be a bit more specific than that though. Bitcoin has a major disadvantage of only being able to process a maximum a 7 transactions a second (or otherwise notated as a maximum block size of 1MB). Transactions take up space in a block and transaction fees are how transactions "fight" their way into a block. Miners want money, so they pick people with the highest transaction fees. What this means is if too many people are making transactions and you have a very small fee or none at all (yes, you can choose to send bitcoins with a fee of 0) then you might not make it into a block and your transaction floats in purgatory forever (the network later rejects it entirely, you won't lose you money this way).

There is no way around this, unfortunately. It is a issue currently being discussed. Currently the only way to allow more transactions is to increase block size, in which the blockchain will start getting big, as in a few terabytes in less than a year, which is seen as detrimental to Bitcoin's status as "decentralized."

The sort of good news is that Bitcoin hasn't come close to approaching 7 transactions a second. In November 2013 it saw 3 per second.

So if nobody used any transaction fees, then it would just be first come/first served? If there is currently more transaction space than there are transactions, why would anyone bother with a transaction fee?
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Offline Rushy

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Re: Ask Rushy about Bitcoins.
« Reply #68 on: January 30, 2014, 10:25:04 PM »
This is patently untrue. Over the history of banking, the interest rates paid on savings has been above the inflation rate. You're biasing yourself due to the trend over the past 25 years.

Can't tell if serious.

https://www.commbank.com.au/personal/accounts/savings-accounts/netbank-saver.html

As a bonus, there's no fees, they pay 2.5% interest compounded daily.

Oh, so you are serious. Well, first off, I was quite obviously referencing US banks (or banks that operate in the US). You are referencing an AU bank that uses AUD. So let's take a look at AUD's inflation.

http://www.tradingeconomics.com/australia/inflation-cpi

No wonder that bank pays such a high interest rate, AUD has a pretty ridiculous inflation rate at 2.7% last quarter. Oops. Looks like your money still lost value. Even when inflation is at 2.2% you get the equivalent value increase of 0.3%. One quarter it was at 5%! I wouldn't dare put my savings in AUD.

So if nobody used any transaction fees, then it would just be first come/first served? If there is currently more transaction space than there are transactions, why would anyone bother with a transaction fee?

Yes and no. Miners can decide whether to include transactions with no fees in their blocks, and a lot choose not to.

Re: Ask Rushy about Bitcoins.
« Reply #69 on: January 30, 2014, 11:29:37 PM »
How many Bitcoins are from money laundering operations?

Thork

Re: Ask Rushy about Bitcoins.
« Reply #70 on: January 30, 2014, 11:38:53 PM »
Is the popularity of bitcoin responsible for the crash in gold prices recently, as libertarians look to invest in something they see as not manipulated?

Could bitcoin actually be a FED decoy so they can buy all the gold up cheap whilst you are all messing around with something that doesn't exist?

Re: Ask Rushy about Bitcoins.
« Reply #71 on: January 30, 2014, 11:40:31 PM »
Yes and no. Miners can decide whether to include transactions with no fees in their blocks, and a lot choose not to.

So if there were no transactions available with fees, would those miners just get no blocks at all?
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Re: Ask Rushy about Bitcoins.
« Reply #72 on: January 31, 2014, 12:01:06 AM »
You don't save money using a netbank saver, you use a term deposit. Interest rates are really low, but a term deposit should yield you around 3-4% p.a.

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Offline Rushy

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Re: Ask Rushy about Bitcoins.
« Reply #73 on: January 31, 2014, 01:39:04 AM »
How many Bitcoins are from money laundering operations?

This question doesn't make sense. The literal answer is that all bitcoins are a result of mining. Perhaps you could rephrase it?

So if there were no transactions available with fees, would those miners just get no blocks at all?

No, they could still get blocks, they could simply refuse to place transactions in them.

This brings me to an interesting prisoner's dilemma with Bitcoin. You can mine empty blocks, effectively stopping the network. If the miners purposely damage the network they in turn can't spend their own bitcoins on anything. If a miner has enough power to damage the network, then it stands to reason they have enough power to continue supporting it. Chances are, they gain more from supporting it than they do trying to damage it, which so far has prevented large scale attacks on the network.

Is the popularity of bitcoin responsible for the crash in gold prices recently, as libertarians look to invest in something they see as not manipulated?

I don't see how. Bitcoin is still too small to have seen any capital flight from gold solely because of it. Did it contribute? Maybe, but there's no point in me just speculating that.

Could bitcoin actually be a FED decoy so they can buy all the gold up cheap whilst you are all messing around with something that doesn't exist?

It exists in the same physical world that gold exists. I can't help you if you think you're in the matrix or something, though.

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Offline Lord Dave

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Re: Ask Rushy about Bitcoins.
« Reply #74 on: January 31, 2014, 01:58:38 AM »
How do you mine empty blocks?

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Offline Rushy

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Re: Ask Rushy about Bitcoins.
« Reply #75 on: January 31, 2014, 02:22:13 AM »
How do you mine empty blocks?

Set your miner to not to add any transactions it picks up from the network. Each miner changes these settings differently and obviously the default settings is to include as many as can fit in the block with a priority to higher fee transactions.

Also, you'll have to be solo mining, as pools aren't stupid enough to mine empty blocks. I hope you're an eccentric millionaire, because you'd have to spend about $50 million on equipment just to own a small percentage of the network and have a chance of attacking it. Cointerra alone is shipping about $40 million of equipment and that's only 15% of the network.

Re: Ask Rushy about Bitcoins.
« Reply #76 on: January 31, 2014, 11:16:18 AM »
How many Bitcoins are from money laundering operations?

This question doesn't make sense. The literal answer is that all bitcoins are a result of mining. Perhaps you could rephrase it?

Can you tell me how you exchange currencies into Bitcoins?

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Offline Lord Dave

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Re: Ask Rushy about Bitcoins.
« Reply #77 on: January 31, 2014, 11:18:17 AM »
I still don't understand how that would even cause a problem.
Does the bitcoin masters send transaction processing to random pools/individuals and thus if that pool isnt doing anything with transactions, the transaction is resent elsewhere after a timeout period?

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Offline Снупс

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Re: Ask Rushy about Bitcoins.
« Reply #78 on: January 31, 2014, 05:53:57 PM »
I realize this is a naïve and probably dumb question, but bear with me and humour me if you can because I'm a noob. This article (yes, I know, Cracked and whatnot) lists some of the downsides of bitcoins, and I'm mostly curious about #3 and #2.

Namely, for #3, what's stopping people from doing that? Is there a downside they'd suffer or something?

For #2—this one's mostly curiosity—how would you even go about figuring out taxes from bitcoins? Is it literally just converting what you spent to what bitcoins were worth at the time you spent it, or...?

Again, probably stupid questions, but I don't know much about bitcoins.
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Offline Rama Set

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Re: Ask Rushy about Bitcoins.
« Reply #79 on: January 31, 2014, 06:33:30 PM »
For #2-You are talking about a capital gains/loss on currency transactions.  It should be analogous to trading in any other foreign currency.  You would have an unrealized gain/loss, which is the difference between the value of bitcoin you hold at market value and what you paid for it (book value).  The realized gain/loss in what you pay tax on and is the same calculation on unrealized gain/loss, but only for net bitcoins converted to your native currency.

You could set up a business or corportation to handle your bitcoin and then be able to write off transaction fees, miners, and electrical bills plus all other related expenses.