If you haven't heard about Bitcoin yet then you really should pay attention to this because in the long run it could make you a lot of money. Before we get into the whys and hows and what it means for photographers though, you need to know what it is in the first place. Bitcoin is a decentralized digital currency designed around the idea of using cryptography to control the creation and transfer of money, instead of relying on central authorities. All transactions are sent easily through the internet in peer-to-peer transactions without need to rely on or trust in third parties. There are little to no transaction fees and all transactions are irreversible which means that chargebacks become a thing of the past.
However, it is still a very volatile currency and as such still suffers large swings in value.
What does this mean for you as a photographer? Well, for one it is another way to accept payments and set yourself apart from the competition.
More important than that though is the fact that their value continues to go up on average. I've written a lot in the past about how a photographer could find financial freedom and this is yet another option. There aren't many other ways to see the kind of returns that working with Bitcoin can generate. 1 BTC was worth around $200 a few weeks ago. Today it would have a value around
$750 $1100. That means that the shoot that paid in Bitcoin a few weeks ago now made nearly four six times as much revenue.
Of course it could have easily gone the other direction, that's a given. Which is why I am not recommending putting all of your eggs in this basket. However, if you are willing to take a risk, this could be a very good option for you as time goes on. Most speculators seem to agree that in time a single Bitcoin could be worth $10,000 or more. Personally I believe we will see each coin reach a value of at least $1,000 by the end of this year (edit: turns out I was right). So it may be a decent idea to look into applying for a merchant account that can operate in this currency like BitPay which can accept the currency and immediately deposit USD into your bank.
With the fact that more and more merchants are adopting this as a way of taking payments and senate hearings regarding regulation, all signs point to cryptocurrencies being here to stay. We, as business owners, need to pay attention. Ultimately the point is about giving people more ways to pay you. It doesn't matter so much if you invest in anything, but opening up to a new form of payment can certainly set you apart from the competition.
I make it a point to speak from experience when I write anything here, so over the last month I have done exactly what I am suggesting here before I recommended it to you. Unfortunately in that time the value of Bitcoin has gone up a substantial amount so I apologize for taking so long to talk about this with you. However, I believe we are still at a time where the value will continue to rise despite the fact that it now costs more to purchase a single unit.
That is the reason that my recommendation to you is not to invest more than you would be willing to lose (as with any investment), but to consider getting as involved as you can even if it just means being willing to take them as a form of payment. I think most people wish they had invested in Apple or Google when they could have gotten in cheap. Despite the fact that entry is now around $750 all signs point to this still being a low amount in the long run. If that is still too high then I would suggest looking at alternate currencies like Litecoin that are still low enough to buy volume without breaking the bank. One Litecoin (LTC) is still under $10.
How do you go about buying Bitcoin if that's what you choose to do? Well, it has been tricky in the past but currently the best way to do so is via a service called Coinbase. If you wish to buy LTC or another currency you will need to go through an exchange like BTC-E or Crypto-trade which can be a bit more complicated if you aren't familiar with currency trading. Since that subject is far beyond the scope of this article I advise you to do your research before you do anything. There is a tremendous amount of information out there about Cryptocurrency, as well as an equal amount of myth.
Above all, understand that any investment is a risk and in the end your decision is your responsibility. Be brave, but be smart.
What the hell is this speculation bullshit? Whatever happened to working hard and saving your money instead of putting it into something that only has perceived value? Fast money only leads to fast ruin or as my economics teacher once put it: "Pigs only get slaughtered". Ridiculous....
Tell us how you really feel.
and what about owning stocks? one rumour on wall street and bye bye 'real value'...
USD is based on perceived value as well. You think the US has all their USD backed up in gold? They don't and even if they did, what is the value of gold? That's all perceived value as well as its practical use is only a very small fraction of the current price (because of speculation)
But that perceived value is created by legal assurances and commonly agreed upon rules (including democratically forming a new government if we don't like the legal assurances). Bitcoin's perceived value appears to be based on.... assurances from the internet? Photobloggers?
Using a currency without legal guarantee of acceptance anywhere by anyone.... yeah, I will get right on that.
"It is true that bitcoins have no intrinsic value, in the numismatic sense, in other words, value in any realm outside of being used as a medium of exchange.
However, while some tangible commodities do have intrinsic value, that value is generally much less than its trading price. Consider for example that gold, if it were not used as an inflation-proof store of value, but rather only for its industrial uses, would certainly not be worth what it is today, since the industrial requirements for gold are far smaller than the available supply thereof.
While historically intrinsic value, as well as other attributes like divisibility, fungibility, scarcity, durability, helped establish certain commodities as mediums of exchange, it is certainly not a prerequisite. While bitcoins lack 'intrinsic value' in this sense, they make up for it in spades by possessing the other qualities necessary to make it a good medium of exchange, equal to or better than commodity money.
Another way to think about this is to consider the value of bitcoin the global network, rather than each bitcoin in isolation. The value of an individual telephone is derived from the network it is connected to. If there was no phone network, a telephone would be useless. Similarly the value of an individual bitcoin derives from the global network of bitcoin-enabled merchants, exchanges, wallets, etc... Just like a phone is necessary to transmit vocal information through the network, a bitcoin is necessary to transmit economic information through the network.
Value is ultimately determined by what people are willing to trade for - by supply and demand."
Perceived value, which is what the Bitcoin website that you copied and
pasted here is talking about, is exactly the point that I was trying to
make.Government currency comes with certain legal guarantees. Among them that they have some value— that they have to be accepted by everyone in that jurisdiction. Bitcoin has no guarantee of any value.
One of the main reasons that government currency is also valued is because governments make sure there is a demand for it by accepting it for taxes, fines, government fees, tariffs, etc. They also supply that currency to pay their bills. Bitcoin has no large organization, institution, or even loosely affiliated group that can keep the circulation going if problems arise in the "supply and demand" chain, such as people suddenly deciding it has no value (How's that beanie baby collection going, btw?).
I live in an evidenced based world, and there isn't enough evidence that Bitcoin is stable enough to be valuable.... despite your scammy sounding assurances that in the long run I could make a lot of money (Is that money in Bitcoin currency, monopoly money, or real take-it-to-the-grocery-store money?)
I made no such assurances. There is risk in any investment including forex trading. In fact, what I said was for you to do your own research and make your own decisions. I don't much care what you decide, my job is to provide information that I believe is relevant to the photographic community. While not photo specific there is tremendous value in understanding how to make your revenue work for you and any truly successful business owner would agree.
There is fundamentally no major difference in investing here or in stocks. Anything can tank anytime.
Oh, I don't think you are a scammer. You have nothing to really gain by touting Bitcoin. If anything, I think you are buying into the prospect of something shiny, new and revolutionary.... or so the hype would have you believe.
There is a long history of private and alternative currency (the most known example is probably the savings stamp). None of them lasted, and the reasons I have listed above are some of the main reasons.
You did make an outright statement that I could make a lot of money. Assurance might have been too strong of a word, but what word would you like me to use? Advised? Informed? Doesn't really matter to me. The results are the same. Bitcoin's value is based on the hype created by articles such as these and (to be a little harsh) a grade school understanding of economics.
I just wrote a long response but it seemed to have not gone up. It basically said that there is more to it that hype (such as with stamps, beanie babies or tulip mania).
It is frictionless to xfer money, if stored properly is 100% safe from other people taking it (ie greek banks). It is finite in amount, unlike USD and their quantitative easing efforts of recent. I could go on, but I think because of that it is very different from using beanie babies or any other such 'hyped' product as a comparison. No it doesn't have any intrinsic value, but given that the USD is probably only backed by 1% or so of its value in the intrinsic value of gold (probably a massive exaggeration) i'd be willing to take the risk of losing my last 1% of backed currency while you can keep it.
That being said I'm not about to transfer my life savings into bitcoin when it's price is still so unstable.
Including the US dollar
You're right, however as long as people see the advantages of using bitcoin over using USD or any other govt backed currency then there will be value in it. For example, storing bitcoins properly, can be far safer than storing it in a bank (Greece anyone?). Also the frictionless transfer of money that is on par with cash in terms of lack of fees etc in transferring money but can be done digitally across the globe and the fact that they are finite in number makes me believe that my confidence in bitcoins holding their value holds far more grounds than that of say... a beanie baby and given recent world events and reckless spending by govts across the globe, coupled with the large amount of 'quantitative easing' makes it for me, and many other people, seem like a good idea.
Still think that the fact that govt money is 'backed by intrinsic value' is scaring you away from using bitcoin? Well then I'd be happy to lose the last 1% of my bitcoins, while you can keep the last 1% of your intrinsically backed value of your USD, because that's about all you're going to keep if things get to that stage.
However, I would agree that the price, while it has steadied dramatically in the last year or so, is still too unstable for me to be transferring my life savings into ;)
Intrinsic value is only part of my point. Regulation (not just in the legal sense) is the other part. There are no 100% guarantees with any currency, but what is to stop Bitcoin from just changing all their own rules overnight. They have no constituency, no one to answer to. This has been one of the biggest hurdles that the EU has had to overcome. The separation of currency and government is really untenable.
All of your concerns are addressed in the myths link I posted in the article. Every concern you've addressed thus far is in there.
My concerns are not addressed in that section.
There is nothing legally binding in anything there. The "Bitcoin" community is not a legal constabulary or constituent base and therefore, Bitcoin has no enforceable rules.
The same power we have against governments that break promises and abuse power.
Okay, worst case scenario... who do I overthrow? Who is the president of Bitcoin and where does he live? How do I vote him out of office? Or have him arrested for breaking Bitcoin laws? What police force and court oversees those laws?
I can vote out parliamentarians and presidents. I can sue my government. I can appeal to the supreme courts to protect me under the law. And worst case... I stage a coup. As limited as my individual powers are, I have them with a government. What powers do I have over Bitcoin?
some heavy illusions there...how did you handle the 2008 crash? have you sued any of the banksters that took your money, took some more of your money in bonuses and took even more of your money for bail outs? all courtesy of their buddies in government which you voted in...
still waiting to overthrow that nobel prize winning murderer...
You've actually proven my point. I can vote them out because of the way they handled it. I can lobby my representative for more action and changes to the laws. I can sue the banks
You are suggesting that my government did poorly (something I wouldn't argue), but I can change it. I have recourse. With Bitcoin there is no government at all.
change them to what? more cronies? I think you're putting way too much trust in the system...
have you ever tried to sue a government? hmmm...I wonder how that would turn out?
Cynicism is ugly and useless. People sue governments all the time. Elections change systems, though often not overnight. But, don't just take my word for it, actually study the history.
History shows that governments go through phases of corruption, yet there is always a government on the other side of that phase— sometimes the same one, sometimes not; sometimes better, sometimes not. They right themselves through the power of the constituency: sometimes through voting, sometimes through violent overthrow. Government, as a form, is necessary though.
Bitcoin adheres to no government. Constituency has NO power in Bitcoin.
I'ts almost 2014 and after Obama you still believe that democracy works? After all the wars, TSA, bailouts, drones killing inoccents? Elections do not change systems (CIA does :-)))) ). It just puts different thieves in power so the agenda can be served.
you said, it...Bitcoin adheres to no government and that's the beauty of it...
Reality is ugly, cynicism is just a way to describe it...
You are completely missing his point, in a really obvious way. You keep pointing out mistakes the government has made, but that doesn't mean it can't be changed. Like he said: sue the government, vote them out, impeach them, stage a coup, etc. If Bitcoin makes the SAME mistakes, what can we do? There is no courts to make a legal case, there is government to overthrow. It's really not complicated to understand what he is saying.
I know what he's trying to say. I'm not that dumb. I am only pointig out that he's being lulled into believing this idea of having a government to sue actually means something...you have so much examples of it even in your most recent history, not to mention world history...has any of the STOLEN money from 2008 manufactured crisis been returned to the tax payers (you)? Bernanke sat in front of the senate hearing, grinning in their faces, refusing to disclose where the trillions of tax payers money went and you still speak of being able to sue the government? I rest my case.
So what happens when something with Bitcoin happens and you have no place to go? There has to be somebody running it and they are not connected to anything. Just because I haven't got the money that was essentially stolen from me back, but that doesn't mean there are no ramifications or I cannot take action against it. You clearly don't understand. I rest my case.
so, why didn't you take any action?
There is nobody 'running it'. Please research the matter further.
Btw, these guys got ****ed by the thieves in the finance industry and are allowing bitcoin now...
The whole reason people trust bitcoin is because there is no government or group of people that have power over it!! That's the beauty and safety of it and it's why people trust it, not why people shouldn't trust it.
And what happens when Bitcoin decides to change their rules and you have no choice but to adhere to it and have no value in your Bitcoin anymore? You answer to those running it, and they are the law, judge, and jury.
I'm sorry but you really don't at all understand bitcoin. Nobody can 'change bitcoins rules', if they did, it would be called litecoin or something other than bitcoin but it wouldn't be a bitcoin. There is nobody 'running it' I need to make that very clear. You really need to do some research on the matter yourself. It's not like a conventional system where a government or organization prints off/creates the bitcoins and then distributes them.
Really? You personally can just get up and change everything that's screwed up with our current monetary system? You personally can just vote to fire someone? You're being pretty lazy and selfish just sitting around all this time then. What I think you meant, is that a large group of intelligent people can get together, and over time, decide to change things. If those people wanted to, they could decide that they were fed up with a small group of the greedy and wealthy deciding interest rates, late fees, who money can and can't be transferred to, and how you're allowed to use it. They could decide, "Hey lets just have our own system since our pleas are being ignored. The system refuses to hear us or change, so lets create our own system that no one controls, and stop playing their game." Oh wait... that's bitcoin.
" that no one controls". That would only be true if no one ever had to write the original code, or maintain the system as it stands, or no one had the ability to manipulate it as a commodity. Someone, somewhere has some control over Bitcoin. It may not be exploited, yet, but it will be.
The 2008 financial crisis was caused by massive worldwide de-regulation of financial systems, not the other way around. Iceland, Greece, the U.S. all faltered because there were too few checks on the large free market monetary institutions. Bitcoin is the epitome of that, not the solution to it. No one has exploited it successfully yet, but they will.
The only consistent argument for bitcoin is either speculation on its future value or myopic frustration over historically recent economic issues. Someone below posted an article about Bitcoin in Germany and I will quote it again here:
"The truth is, I really want to believe in it." -- Bitcoin user on why he uses it.
there is no one person or group of people that 'maintain the system as it stands'. It is open source, every single person who uses bitcoin is responsible for its 'upkeep' and it's all done in a 100% transparent manner so that nothing can go wrong. If you think that there is a body controlling bitcoin you need to go back to the drawing board and read up on bitcoin before you start making judgements about it because you're a little confused.
Hahaha! You actually think your vote counts. That's cute.
Makes me think of what you have to go through in the EU. Yikes.
I think you're a little confused. The whole point is there is nobody to 'overthrow'. There is no 'president' of bitcoin. What the hell is a 'bitcoin law'? You don't have 'power over bitcoin' bitcoin is not an entity its a piece of open source software.
I want to like your comment... but doing so made me sad because it's true.
The fact that you're referring to bitcoin as "they", shows you have absolutely no understanding of the subject.
"They" is the acceptable pronoun of an implied personification for organization institutional governments (or any other humanized institution/organization). Governments are made of people and formed and maintained by the governed. As a citizen I am part of only one government (as a constituent/government) and if I were referring to that government specifically, I would use the pronoun "we".
I also use "they" to talk of the generic elected (or accepted) governmental entity (ie congressman, president, member of parliament, dictator for life, etc.)
I used 'I' in an expansive sense as a representation of the role of the governed or the constituent. I could have just as readily used "we", but the audience could be global and it could cause confusion as to which government I was referring to (I was referring to all governments). Also, it could be misconceived that I held a distinctly nationalistic or isolationist view of the rest of the world.
I hope this clears up any pronoun confusion you might be having.
I didn't read most of that last one because it seemed to have no substance. Probably just another pompous internet know-it-all jerking himself off.
Anyway, you were saying "they" as if there was an organization in control and manipulating the system (as there is now with fiat currencies). You're incorrect, so my original point is valid. But, since you do seem to know for a fact that an open source program is currently being manipulated somehow, or can be easily by the creator, and have possibly identified who it is, maybe you'd like to share the details? You shouldn't even be saying anything actually, since you could profit from this knowledge greatly. I'd also be interested to know how a system designed to be transparent and uncontrolled is worse than the system we have now which I see as less real, and is constantly being manipulated to screw people over.
Ironically, I was thinking the same about you.
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!! *deep breath HAHAHAHAHAHAHA!!!!! Oh Jim you're so clever. I could just give you butterfly kisses all day.
Well bitcoin isn't regulated by anyone and that's the strength not the weakness. Nobody can just 'change the rules' like you are inferring. It's not like governments who 'change the rules' all the time to the detriment of the people.
So anyone can make up a currency is what you are essentially saying?
Of course they can but a good currency isn't just made up. The beauty of bitcoins is somebody isn't creating them and handing them out, if that were the case nobody (with any level of intelligence) would trust them. Bitcoin is different. No one person creates bitcoins, somebody basically created a piece of software which shows people how to create/find bitcoins themselves. You can create bitcoins yourself if you want to.
So your argument is that the dollar is good because people are forced to use it, and Bitcoin is bad because people choose to use it?
The dollar has no guarantee of value either. What happens if China decides to sell their entire hoard of US dollars? Or every other nation for that matter? What happens if the world decides it no longer wants the dollar to be used as the reserve currency? It's value would plummet and there is nothing the government could do about it. Zimbabwe and Venezuela also "guaranteed" that their currencies would have value. There is no law anywhere stating that the FED can't print as much money as they damn well please.
On an individual basis, value is a creation of the mind. On a societal basis, value is a creation of agreement. So long as a portion of the population agree that bitcoin has value, then to them, it does. And this portion of the population is showing only one single trend, and that is upward at an alarming rate.
So how about when you need to make a currency exchange? If the entire world doesn't accept that it's currency, then it has no value. If I can't change Bitcoin into USD, RMB, EU, etc., or vis versa, then it really has no value. It has no backing by a governing body and is not attached to any specific place. Yes, it has value because people have to use it. It would be great to use Euros here, but I can't, I have to use the USD. What happens when a place doesn't accept Bitcoin and I can't convert it to whatever monetary unit is used?
You say 'when' but most people who use bitcoins believe that will never happen and most people who claim there will be a stage when this happens can't explain why it will happen.