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I think a remaining problem with Bitcoin is that people think it somehow owes them free money, as detailed by this post. (While that may have been true in the e

I think a remaining problem with Bitcoin is that people think it somehow owes them free money, as detailed by this post. (While that may have been true in the early GPU and CPU mining days, now to venture down that road requires serious investment for diminishing returns.) The further away the currency gets from this way of thinking, the more stable and accepted it'll become.

brador 13y ago
Stable? It will crash and rise and crash and rise. Once we get faster tradability we'll start to see flash crashes. That's when the fun begins.
- jebus989 13y ago
  As an established currency we can only assume it'll become as largely uninteresting as the others (major economic events aside). Of course, we need the infrastructure and diversification of exchanges etc. etc. I for one will be pretty disappointed if in a few years people can still make money shorting BTC and DDoS'ing exchange front-ends.
  - brador 13y ago
    A flash crash will be caused by panic selling. And it will happen soon after average joe gets a way to sell his bitcoins into traditional currency, reliably, within an hour or a day. And it will be unstoppable. The current stability/rise is from a reluctance to sell, which dissapears fast when markets are falling. This is why Bitcoin is essentially a pyramid scheme. People are gonna get burnt. The Vancouver ATM shows the authorities still don't know what they're dealing with and how to apply the laws already in place in this area.
    - asciimo 13y ago
      How did "average joe" purchase the the bitcoins that he is unable to sell? When this hypothetical selloff occurs, who will buy his bitcoins? How is this hypothetical selloff different than those that have already occurred in the bitcoin markets? Why will it be unstoppable? Please explain the "current stability" of bitcoin that you referenced. How is bitcoin like a pyramid scheme (http://en.wikipedia.org/wiki/Pyramid_scheme http://en.wikipedia.org/wiki/Pyramid_scheme)? What are the laws that the Vancouver ATM is circumventing? Thank you in advance.
      - betterunix 13y ago
        "How did "average joe" purchase the the bitcoins that he is unable to sell?" The same way he purchased stock he could not sell of. Time elapsed between the buying and the selling. "When this hypothetical selloff occurs, who will buy his bitcoins?" Who buys stock during a sell-off? There will be people who believe that Bitcoin will rise again, and who see a chance to profit from that.
    - xixi77 13y ago
      "slow boom, fast crash" is pretty much a property of any financial investment of any kind. Most assuredly, it will be the case with bitcoins as well. It hasn't destroyed stocks, it hasn't destroyed bonds (which not very easy to sell btw, but crash just fine), it won't destroy bitcoin either. It's exactly the opposite -- it's lack of an ability to quickly turn bitcoins into regular currency, and slowness of transaction processing, that has a chance of dooming the whole enterprise. As it stands, these are constraints on growth, and an incentive to develop and use alternatives. BTW, the "flash crash" term is usually used to refer to transitory liquidity events followed by equally fast recoveries, rather than regular busts after which price tends to stay depressed for a while, which seems to be what you are talking about here.
    - BTCatFidorBank 13y ago
      Hi Brador, here i can give more infos on that: Our partnerplatform Bitcoin.de will enable near-relatime trading & settlement of Bitcoins for German customers. And with realtime, we are talking about seconds to max. a few minutes. Regards from Munich, Florian
- vbuterin 13y ago
  Umm, we see flash crashes already. What else would you call the drop from $350 to $310 here: http://bitcoincharts.com/charts/bitstampUSD#rg5zig15-minzczsg2013-11-07zeg2013-11-09ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/bitstampUSD#rg5zig15-minzczs... ?
  - brador 13y ago
    I'd call that a correction not a crash.
TomGullen 13y ago
How does my post detail that bitcoin owes people free money? I'm just trying to push for a more level playing field.
- jebus989 13y ago
  From what I gather you're attempting a high-volume, low-margin resale "business" and you want to currency to be on a level playing field with forex? Because then you're dealing with more efficient markets (hence won't get free money) and will have to leverage your kidneys just to bring home a few satoshis.
  - TomGullen 13y ago
    Interesting you mention forex. We get paid commission via Steam each month in USD. Using our banks forex, it costs us a lot in crappy non competitive spreads. Using Bitcoin, we save literal thousands. We don't actually use Bitcoin for this process because transfer wise is competitive in comparison. But if transfer wise didn't exist, we'd definitely do it that way. Low level forex might have razor sharp margins, but consumer forex is a fixed rip-off industry. Another reason I support bitcoin. Free markets should be driving prices down and exist in competitive markets. Consumer forex does not exist in a market with these conditions. Bitcoin is a good mechanism some startups could use to introduce more competition and introduce significantly more value for consumers.
    - jebus989 13y ago
      Sorry I think there's been some confusion. Forex refers to the currencies exchange markets, not swapping holiday money at a bureau de change or doing the same through your bank. (As an aside it's pretty straightforward to open a USD account in the UK.) While HN is great and all it sounds like you need to consult an accountant.
lcampbell 13y ago
Looking further into it, it seems pretty much any forex in the UK is subject to VAT[1]. Even though Bitcoin is classified as a single-purpose voucher, I suspect it comes out to being the same amount of taxes (from the perspective of running an exchange). (EDIT: completely wrong, heh) -- [1] http://www.hmrc.gov.uk/manuals/vatfinmanual/vatfin2740.htm http://www.hmrc.gov.uk/manuals/vatfinmanual/vatfin2740.htm
- robinhouston 13y ago
  “Foreign exchange transactions are normally exempt supplies.” [1] [1] http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000111#P84_9183 http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPort...
  - deleted 13y ago
    [deleted]
DanBC 13y ago
> I think a remaining problem with Bitcoin is that people think it somehow owes them free money, as detailed by this post That's not the impression I got from the post. I understood the OP to be asking for fair, equal, footing for dealing bitcoin as with other money. Financial services in the UK tend to be VAT free. Bitcoins have been given a classification which means VAT, at 20%, is payable. Perhaps OP should check what other EU bitcoin vendors pay in VAT. Or maybe set up complex routes of bitcoins from tax havens to the customers, ala Starbucks etc.
- notahacker 13y ago
  Wouldn't fair, equal footing for dealing with Bitcoin involve paying £5000 to apply to register with the FSA and dealing with the same and money laundering regulations that financial services firms have to? Here's 145 pages to get you started on some of the rules you might have to follow as a provider of VAT-exempt "e-money" instead of "single purpose vouchers" http://www.fsa.gov.uk/pubs/international/approach_emoney.pdf http://www.fsa.gov.uk/pubs/international/approach_emoney.pdf These are in turn a lot less onerous than some of those those for exchangers and remitters of currency...
  - TomGullen 13y ago
    Sure. Was perfectly willing to register for MLR if it was necessary, and so would be happy to pay £5k or any other fees in the process. That's a small startup cost.

brador 13y ago

Stable? It will crash and rise and crash and rise. Once we get faster tradability we'll start to see flash crashes. That's when the fun begins.

jebus989 13y ago
As an established currency we can only assume it'll become as largely uninteresting as the others (major economic events aside). Of course, we need the infrastructure and diversification of exchanges etc. etc. I for one will be pretty disappointed if in a few years people can still make money shorting BTC and DDoS'ing exchange front-ends.
- brador 13y ago
  A flash crash will be caused by panic selling. And it will happen soon after average joe gets a way to sell his bitcoins into traditional currency, reliably, within an hour or a day. And it will be unstoppable. The current stability/rise is from a reluctance to sell, which dissapears fast when markets are falling. This is why Bitcoin is essentially a pyramid scheme. People are gonna get burnt. The Vancouver ATM shows the authorities still don't know what they're dealing with and how to apply the laws already in place in this area.
  - asciimo 13y ago
    How did "average joe" purchase the the bitcoins that he is unable to sell? When this hypothetical selloff occurs, who will buy his bitcoins? How is this hypothetical selloff different than those that have already occurred in the bitcoin markets? Why will it be unstoppable? Please explain the "current stability" of bitcoin that you referenced. How is bitcoin like a pyramid scheme (http://en.wikipedia.org/wiki/Pyramid_scheme http://en.wikipedia.org/wiki/Pyramid_scheme)? What are the laws that the Vancouver ATM is circumventing? Thank you in advance.
    - betterunix 13y ago
      "How did "average joe" purchase the the bitcoins that he is unable to sell?" The same way he purchased stock he could not sell of. Time elapsed between the buying and the selling. "When this hypothetical selloff occurs, who will buy his bitcoins?" Who buys stock during a sell-off? There will be people who believe that Bitcoin will rise again, and who see a chance to profit from that.
  - xixi77 13y ago
    "slow boom, fast crash" is pretty much a property of any financial investment of any kind. Most assuredly, it will be the case with bitcoins as well. It hasn't destroyed stocks, it hasn't destroyed bonds (which not very easy to sell btw, but crash just fine), it won't destroy bitcoin either. It's exactly the opposite -- it's lack of an ability to quickly turn bitcoins into regular currency, and slowness of transaction processing, that has a chance of dooming the whole enterprise. As it stands, these are constraints on growth, and an incentive to develop and use alternatives. BTW, the "flash crash" term is usually used to refer to transitory liquidity events followed by equally fast recoveries, rather than regular busts after which price tends to stay depressed for a while, which seems to be what you are talking about here.
  - BTCatFidorBank 13y ago
    Hi Brador, here i can give more infos on that: Our partnerplatform Bitcoin.de will enable near-relatime trading & settlement of Bitcoins for German customers. And with realtime, we are talking about seconds to max. a few minutes. Regards from Munich, Florian
vbuterin 13y ago
Umm, we see flash crashes already. What else would you call the drop from $350 to $310 here: http://bitcoincharts.com/charts/bitstampUSD#rg5zig15-minzczsg2013-11-07zeg2013-11-09ztgSzm1g10zm2g25 http://bitcoincharts.com/charts/bitstampUSD#rg5zig15-minzczs... ?
- brador 13y ago
  I'd call that a correction not a crash.

TomGullen 13y ago

How does my post detail that bitcoin owes people free money? I'm just trying to push for a more level playing field.

jebus989 13y ago
From what I gather you're attempting a high-volume, low-margin resale "business" and you want to currency to be on a level playing field with forex? Because then you're dealing with more efficient markets (hence won't get free money) and will have to leverage your kidneys just to bring home a few satoshis.
- TomGullen 13y ago
  Interesting you mention forex. We get paid commission via Steam each month in USD. Using our banks forex, it costs us a lot in crappy non competitive spreads. Using Bitcoin, we save literal thousands. We don't actually use Bitcoin for this process because transfer wise is competitive in comparison. But if transfer wise didn't exist, we'd definitely do it that way. Low level forex might have razor sharp margins, but consumer forex is a fixed rip-off industry. Another reason I support bitcoin. Free markets should be driving prices down and exist in competitive markets. Consumer forex does not exist in a market with these conditions. Bitcoin is a good mechanism some startups could use to introduce more competition and introduce significantly more value for consumers.
  - jebus989 13y ago
    Sorry I think there's been some confusion. Forex refers to the currencies exchange markets, not swapping holiday money at a bureau de change or doing the same through your bank. (As an aside it's pretty straightforward to open a USD account in the UK.) While HN is great and all it sounds like you need to consult an accountant.

lcampbell 13y ago

Looking further into it, it seems pretty much any forex in the UK is subject to VAT[1]. Even though Bitcoin is classified as a single-purpose voucher, I suspect it comes out to being the same amount of taxes (from the perspective of running an exchange). (EDIT: completely wrong, heh) -- [1] http://www.hmrc.gov.uk/manuals/vatfinmanual/vatfin2740.htm http://www.hmrc.gov.uk/manuals/vatfinmanual/vatfin2740.htm

robinhouston 13y ago
“Foreign exchange transactions are normally exempt supplies.” [1] [1] http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000111#P84_9183 http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPort...
- deleted 13y ago
  [deleted]

DanBC 13y ago

> I think a remaining problem with Bitcoin is that people think it somehow owes them free money, as detailed by this post That's not the impression I got from the post. I understood the OP to be asking for fair, equal, footing for dealing bitcoin as with other money. Financial services in the UK tend to be VAT free. Bitcoins have been given a classification which means VAT, at 20%, is payable. Perhaps OP should check what other EU bitcoin vendors pay in VAT. Or maybe set up complex routes of bitcoins from tax havens to the customers, ala Starbucks etc.

notahacker 13y ago
Wouldn't fair, equal footing for dealing with Bitcoin involve paying £5000 to apply to register with the FSA and dealing with the same and money laundering regulations that financial services firms have to? Here's 145 pages to get you started on some of the rules you might have to follow as a provider of VAT-exempt "e-money" instead of "single purpose vouchers" http://www.fsa.gov.uk/pubs/international/approach_emoney.pdf http://www.fsa.gov.uk/pubs/international/approach_emoney.pdf These are in turn a lot less onerous than some of those those for exchangers and remitters of currency...
- TomGullen 13y ago
  Sure. Was perfectly willing to register for MLR if it was necessary, and so would be happy to pay £5k or any other fees in the process. That's a small startup cost.