Bitspend is a hosting company that has invested a lot of extra rack space into mining equipment. They see the giant bubble brewing and have realized that bitcoin needs some legs to stand on. If bitcoin survives, Bitspend's mining operation makes a huge profit. If it crashes, they lose a lot. So giving people an easy way to use bitcoin as an actual currency rather than a speculative investment has a huge long term benefit for them.
Whether my theory is true or not, I think many other heavy mining operations would benefit through similar services. If there are any other big miners out there, I hope you see the value you can add to your investment by doing things like bitspend.
Assuming, of course, that trends continue.
Who of any of us are breaking laws? My understanding of US standards is that hacking foreigners on foreign lands generally doesn't constitute a crime, and most jurisdictions don't seem to treat virtual goods like wow gold as actual theft.
Seems like a rocky and lawless world out there for crypto currencies, especially with so many russians / eastern europeans involved in bitcoin.
I have trouble believing I'd get very far calling up the FBI to report a bitcoin theft.
Basically, petty crimes are not important. Especially to the FBI. Whether Bitcoin or USD, they don't care.
(Relevant internet meme: honey badger.)
"[The] FBI's Regional Crimes Task Force in Chicago reviewed the Chicago police sergeant's video and determined with "100-percent certainty" that Miller picked up the puck."
Newegg has something of useful value (like a hard drive). Both BTC and USD have no useful value in this sense. The actual item 1 USD is simply a piece of cotton-paper with ink on it. A BTC is a mathematical hash. Nobody major with useful objects accepts BTCs. They accept USDs.
I would think that most people trading Bitcoins are just trading it. The price goes up and up because everyone is just buying and buying so they can sell before it goes back down. At some point, enough people are going to randomly decide they're done and sell at the same time, and the transfer price will go all the way to (near) zero. I haven't seen many people actively trying to make a real economy out of it. That's why I have no confidence in Bitcoin.
In light this, I find bitcoin espoused as 'opening up new markets' a bit of an odd statement.
the value is determined by average investor time window and whether or not the network is growing slower or faster than a certain rate determined by that time window.
people buy gold with the intention of later selling it to someone who also wants to buy it so they can sell it later. why does anyone bother? because there is demand for transporting value over time. gold supply is low, the investment window is long, and the number of people who wish to store value for a later date is increasing.
the investment window for bitcoin is unknown.
This is true today I guess. When everyone is trying to sell bitcoins it might not be so easy.
... thanks to speculation.
If the market adjusts and people start heading for the exits, bitcoin will become highly illiquid.
When the IRS throws their hat into the ring it's going to get serious, both in terms of positive PR for bitcoin and risk. That will happen once there's a full service economy in the currency i.e. ability to reliably: earn, spend, exchange, borrow, lend and save. 99% of this activity will be off the IRS radar and thus will be off their books.
I agree with you though, the whole Bitcoin thing is getting very interesting.
P.S. would the down-voters explain? It's not like I know everything about tax law, I was simply asking a question. :)
I am not a lawyer or a CPA and the above is just a theory, not advice.
(it is similar to the situation with barter, in the U.S. it is taxable and the IRS will expect you to put a dollar value on the income and be able to defend the valuations you use)
Guy wins free donuts and is issued a $237 tax bill.
That's true, but all those Bitcoins are getting converted into dollars/euro/yen/etc. at some point, so that's when the IRS (or tax agency) collects its due.
Its like stocks. You pay capital gains taxes on stock when you cash them out dollars. I'd expect you would have to pay some sort of tax when you cash your Bitcoin out for dollars too.
PS: The IRS has made an exception for currency's earned in games unless real world goods exchange hands.
click HERE to buy in dollars. and HERE to buy in bitcoins
Note that I didn't check the Newegg BTC prices. I'm only applying what I've seen so far and expecting nothing different from bitspend/Newegg.
I just wish they also did clothes, books, maybe amazon.com or something.
- make bitspend a place for users to buy bitcoins
- make bitspend a place for users to cash out bitcoins
- build a reputation and move into ebay and amazon payments (can you become some type of power buyer or affiliate)
- collect testimonials
- provide a bookmarklet or plugin so users can browse the shopping sites transparently but pay on bitspend
- a person could have an item they want to buy for say $30, instead of paying with bitcoins, they pay $100, and then get $70 change in bitcoins
That being said, they aren't the only option: other exchanges are cropping up, and bitcoin-otc is also available.
I started that process purely for the fun of some small-time speculation, but the whole hassle of the process made me realize why Bitcoin is important.
I'd drop at least one "really"; you just need a decent AMD GPU. The relatively wimpy one in my iMac can generate 0.1 BTC/day, which at current exchange rates is a few dollars. It would be easy to do 5x better than that with a PC tower, without going nuts with a dedicated mining rig.
The site's still in beta, though, but the devs hang out (and are responsive!) in the Canadian bitcoin irc channel, #bitcoin-cad on freenode.