
Virgin Galactic to accept Bitcoin [video] - nightTrevors
http://www.cnbc.com/id/101220710
======
cs702
It seems that with every passing day, another prominent institution or
business starts accepting Bitcoin for payment, Virgin Galactic being the
latest example. In just a few years, Bitcoin has gone from experiment to
global phenomenon.

I wouldn't be surprised if in coming years at least some bitcoin users start
measuring their wealth in bitcoins, and therefore also evaluating exchange
rates, not in terms of how many US dollars, euros, etc. they can buy with a
bitcoin, but _the other way around_ : what is the cost, in bitcoins, of a
single dollar, euro, etc.?

Looking at exchange rates in this manner changes people's perspective on
volatility, which is always a _relative_ measure. For example, since the
beginning of this year, the price of a US dollar has _declined by more than
98%_ , from BTC 0.074 to just over BTC 0.001, which makes the dollar look
extremely volatile!

\--

PS. I'm NOT saying the dollar is extremely volatile! I'm also NOT saying that
Bitcoin is more stable! What I'm saying is that if and as Bitcoin adopters
start measuring their wealth in bitcoins, their perspective on what is and
isn't volatile will change, as demonstrated by my example.

\--

Edits: expanded second and third paragraphs; added PS.

~~~
grey-area
_Since the beginning of this year, the price of a US dollar has declined by
more than 98%, from BTC 0.074 to just over BTC 0.001!_

Consider the last month:

2013-11-01 212.87 USD = 1 BTC

2013-11-22 733.71 USD = 1 BTC

If you think Bitcoin is a great investment and can sell your BTC to get other
assets in at a high point, this is a good thing, though slightly worrying
because of the boom and bust pattern and extreme volatility.

If you think Bitcoin is a stable currency, this is a terrible thing. I'm not
even sure what the implications would be if buying raw materials one day cost
more than selling a finished product the next due to rapid deflation, but it
surely wouldn't be much better than rapid inflation which we have seen in
other currencies.

Like a loaf of bread which is 1.6 trillion Zimbabwe dollars, one which cost
0.0000000001 Bitcoins would not be desirable either if that figure keeps
changing rapidly and the next day becomes 0.00000000001 etc. Any extreme
fluctuations in price are really undesirable for a currency, and I do think
this mechanism of ratcheting up the difficulty of mining and an ever-
increasing value is really damaging for Bitcoin's credibility as a currency,
though presumably it was designed to boost adoption by encouraging people to
see it as investment first, currency second.

I like the idea of a currency which doesn't allow politicians to introduce
inflation, but perhaps we should have one which has a finite set of tokens _on
setup_ , and doesn't attempt to also attract people as some sort of investment
with mining etc. - is that side of Bitcoin even useful except to turn it into
a sort of pyramid scheme where early adopters are rewarded disproportionately?

[EDIT I am aware of the proposed 21m Bitcoin limit, which they're about half
way to reaching, that's why I said _on setup_ , which Bitcoin doesn't have]

~~~
triptychs
Just to comment on this part:

>I like the idea of a currency which doesn't allow politicians to introduce
inflation, but perhaps we should have one which has a finite set of tokens on
setup, and doesn't attempt to also attract people as some sort of investment
with mining etc.

I'm sure someone will correct me, but as I understand it this is how Ripple[0]
works. From my recollection (I haven't checked in on how Ripple has been
progressing over the past 6-8 months or so), Ripple's currency (XRP) are
established with a finite supply and all XRP is in reserve, not requiring any
"mining" or similar. Also, it looks like Ripple is kind of an exchange as
well? It seems to be able to cross-process payments between USD, EUR, BTC,
LTC, XRP, and more (I believe most international currencies are supported
currently)[1]. It's interesting but, like I said earlier, I'm not sure if I
fully understand it.

[0] [https://ripple.com/](https://ripple.com/) [1] [https://ripple.com/guide-
to-currency-trading-on-the-ripple-n...](https://ripple.com/guide-to-currency-
trading-on-the-ripple-network/)

~~~
grey-area
Thanks for the link, that looks interesting (as a currency). From their FAQ
they look like a Bitcoin inspired currency which tries to define all the parts
necessary for independent digital payments:

Payment Network (with protocol)

Exchange

Currency

All in one place. The advantage to that if you trust them of course is that
you can expect the exchange/payment processor isn't a buggy webapp sitting on
an insecure VPS with multiple ways to be hacked (I hope!). If you don't trust
them it's even more scary than bitcoin though.

I wish alternatives to Bitcoin got half the attention Bitcoin has been getting
on HN over the last few months - a currency is not a success because it
constantly shoots up in value, quite the reverse.

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scott_meade
"she paid in bitcoin, which was transferred into actual dollars "so there's a
fixed price ... [and] we can actually pay her money back, if she changes her
mind"

Seems no different than if the buyer had sold her Bitcoin and paid Virgin
Galactic in cash. The real trick will be when they can accept Bitcoin, keep
the Bitcoin, and make any refunds and adjustments in Bitcoin.

~~~
qnr
Let's say you accept bitcoin but immediately convert it to USD. In future one
of your suppliers also decides to accept bitcoin. Now you can pay your
supplier directly without the USD conversion step. This wouldn't have happened
without you actually deciding to accept bitcoin in the first place.

I don't see any other way to bootstrap a new currency.

~~~
wmf
If you hold BTC for any amount of time between when you get paid by the
customer and when you pay the supplier you're taking a huge risk.

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grey-area
When businesses actually price products or services in a digital currency as
opposed to accepting it, we'll know it has arrived and is ready to rival
national currencies.

~~~
user24
Agree. All these companies "accepting" bitcoin are actually just accepting USD
and "converting" bitcoin.

~~~
fat0wl
Totally agreed -- they pretend to support the platform for the hipster cred &
expanded market, but I'm sure the corporate policy is "Bitcoin arrives.
Bitcoin is immediately placed on exchange".

I'd be surprised if corporations would gamble so dangerously by keeping a
Bitcoin store. As long as they price against USD and convert immediately, they
can only suffer limited losses from price swings.

~~~
aianus
They don't suffer any losses from price swings. Pretty much everyone uses a
third party payment processor that guarantees that when the retailer charges a
bitcoin customer $100 they get $100 less fees directly into their bank
account.

~~~
fat0wl
ahhhh genius. of course. make it the problem of somebody who's trying to prop
it up or actually believes in the exchange rate ;)

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oleganza
Another way to invest in Bitcoin when exchanges are not very liquid: accept
BTC at the current rate and boost the value and awareness by making a bold
move.

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runako
Finally, a service that can be denominated in integral Bitcoin values.

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napolux
Just marketing IMHO. You say you'll accept bitcoins and then you'll have 10s
of articles talking about your company.

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Angostura
Sounds to me as if Mr Branson has a bunch of Bitcoin and would like to cash-in
early next week.

~~~
fat0wl
yeah the fact that the Bitcoin scam is spreading raises eyebrows. Companies
want to accept it to sound futuristic but they should really be shutting it
down.

Notice how none of the tech-giants want to get involved with it. Bitcoin isn't
for the technologically advanced who are "being rewarded for being sooooo
smart and adopting early", it's a scammer platform.

I heard a suggestion for a gold-backed digital currency once. That makes much
more sense to me. Instead of getting into magic bean territory with monstrous
gains/losses, just put 100k into gold, design a system with 100k "eGoldcoin"
or whatever u wanna call it then just trade the coins. The platform would
never tank because people know roughly what it's worth. It would be way less
exciting, well... because it's sane.

~~~
gst
> The platform would never tank because people know roughly what it's worth.

So what exactly is the worth of one ounce of gold? The current market price?
Or another price? What's the difference to Bitcoin in regards to pricing?

~~~
fat0wl
Eh I'll be honest I'm not sure exactly how the gold standard works but I'm
pretty sure it's priced individually against many currencies, whereas
Bitcoin's whole pricing system is fantastical.

I'm pretty sure Bitcoin just takes it's sticker price (whatever it's currently
been bid upto) and then does a bunch of arbitrary currency conversions.

Again, I THINK this, do not know... but i THINK if you took the amount of gold
and multiplied by its USD price to arrive at some figure of how much the "gold
pool" is worth (bitcoiners do this all the time) gold traders would laugh
their asses off at you. The medium needs to be tightly interwoven into
individual economies through usage and growth/settling.

Bitcoin is like this thing that is sitting out in the ether totally untested
and people are making random claims about how much its worth, supported only
by bidding wars in trading.

~~~
mrb
_" I'm pretty sure it's priced individually against many currencies"_

No, it is not "priced". Nobody sets an "official price" for gold. Every actor
in the market who sells and buys gold is free to set his own price, via "asks"
and "bids" in the market. This is what gst highlighted for you: Bitcoin
functions exactly like gold, their value fluctuates freely on international
and national markets via trading, and nothing else.

 _" if you took the amount of gold and multiplied by its USD price to arrive
at some figure of how much the "gold pool" is worth gold traders would laugh
their asses off at you"_

Actually, no. Analysts do this all the time. Google for "gold reserves". Here
is the latest data from the World Bank:
[http://data.worldbank.org/indicator/FI.RES.TOTL.CD](http://data.worldbank.org/indicator/FI.RES.TOTL.CD)

~~~
fat0wl
What I meant by priced individually isn't that a price is "set" I meant people
buy & sell gold in a number of currencies, such that each has an exchange rate
that isn't interpreted by conversion to a fiat currency then checking the
exchange rate for that.

I don't know too much about gold though so I'll let the convo go. To be honest
I think CreditCards are where it's at & the small fees involved are to provide
consumer protection so I don't mind.

If Bitcoin reaches a comparable infrastructure I'm sure they'll be charging
fees for everything too (the exchange services already do, no?).

~~~
mrb
_" such that each has an exchange rate that isn't interpreted by conversion to
a fiat currency then checking the exchange rate for that"_

Actually, it _is_ interpreted by comparing gold's price with exchange rates.
When gold is, say, underpriced in yen on chinese markets when compared to its
price in US dollar on american markets, this creates a condition where
"arbitrage" is possible. So people who see this buy it up on the chinese
market and resell it on the american market, making a profit. This naturally
re-aligns the price of gold in various markets with exchange rates. The exact
same thing is done by Bitcoin traders, and forex traders, and commodities
traders, etc.

~~~
fat0wl
eh it's hard for me to keep going with this argument because Bitcoin's pricing
is so made up, but i'll try.

I wasn't saying gold doesn't have an exchange rate. I was saying it DOES have
one for EACH currency (allowing this arbitrage scenario) and that's part of
what makes it strong. My impression of Bitcoin was that they simply price it
in Yen or USD or whatever is their best market, then convert from THAT
currency into whatever other currencies they want through the real-world
exchange rates of existing currencies, in order to display it with a unified
favorable price.

However, these arguments aren't even worth it really since the price is so
varied from exchange to exchange that let's face it -- the numbers are pretty
much all distorted BS regardless of how the prices are determined. All they
represent is real-time bids. It's like watching a big eBay auction on nothing
and claiming the true value of the item is evidenced by the current bid.

~~~
mrb
_" My impression of Bitcoin was that they simply price it in Yen or USD..."_

No, exactly like gold, Bitcoin does have an exchange rate for each currency.
Again, there is zero difference between how gold is traded and how Bitcoin is
traded. It's all multiple independent exchanges, with their own asks and bids.

If, by your argument, "this is what makes gold strong", then this is what
makes Bitcoin strong as well. Both are traded in the same ways. I am unsure
why you think there is some difference.

~~~
fat0wl
Ohhhhhhhh I give up. If you think Bitcoin is the same as gold.... have a nice
life.

I have a long comment history you can look through if you want to understand
why I think it's a scheme. USD is strong as a currency because its stable.
Bitcoin is a speculative trading platform, nothing more nothing less. There's
real value in it today because a ton of people have just decided to invest in
something they don't fully understand.

If you have invested in Bitcoin I understand your interest in making it seem
viable.

~~~
mrb
I am saying they are _traded_ in the exact same way as each other. Clearly you
did not know how their trading worked so I explained.

I have traded commodities, and bitcoin, for multiple years. I know this stuff.

------
shocks
$250,000 for a flight. That puts it at about 333 BTC right now.

~~~
base698
As someone who owned about that many at my peak, that hurts so bad.

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ChikkaChiChi
Metaphorically this is fantastic. What better way to pay for a barely
controlled rapid ascent and descent than with a highly unstable 'currency'!

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knodi
the problem is getting BTC in the US. You have to a P2P sale which most likely
at some point will lead to you getting scammed. The banks need to offer a
currency exchange from USD to BTC. And then bitcoins are going to really take
off.

~~~
nilkn
If you're in the US, it's easy to buy BTC through Coinbase.

~~~
knodi
For a heavy fee and long weight times.

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pkallberg
This is a great marketing stunt!

