Trading BTC (bitcoin) for Achaea Credits

Kasos

I saw a few credit trading threads here, so hopefully this one is all right.

In any event, if there are any other Achaeans with an interest in cryptocurrencies that would like to trade their excess credits for bitcoin, please get in touch with me.

Achilles

I would, inbox me

Sarapis

Interesting. I've actually been considering having IRE accept btc lately, as I'm pretty interested in it. We pay a lot of money every year to Visa/Mastercard/Paypal to facilitate transactions, and Bitcoin is a potential new payment avenue that has nominally lower fees. I'll consider it more strongly given your post!

Kasos

Achilles said:

I would, inbox me

I'll be in touch.

Sarapis said:

Interesting. I've actually been considering having IRE accept btc lately, as I'm pretty interested in it. We pay a lot of money every year to Visa/Mastercard/Paypal to facilitate transactions, and Bitcoin is a potential new payment avenue that has nominally lower fees. I'll consider it more strongly given your post!

I'm so glad to hear you say that. 'Nominally lower fees' is right - I have to use CC transactions and PP for my business too, so I understand all of the headaches that come along with them. I got into bitcoin as a hobby more than anything (it has a truly fascinating subculture), and now I try to use them to make payments whenever possible. I look forward to buying official credits with bitcoin!

Sarapis

Well, I say nominally lower because while CCs and Paypal transactions have headaches, so does bitcoin, and bitcoin also offers customers absolutely no protection against being ripped off. With credit cards, customers know that Visa/Mastercard are protecting them and that if they get ripped off they'll get their money back. That's huge. I would never buy, for instance, a camera online using btc because if I end up getting no camera or something I didn't pay for, I have no recourse with bitcoin at the moment.

That's going to change, as companies like Coinbase are going to have to start offering insurance guarantees like Visa/Mastercard due, to prevent customers from getting ripped off, but that always has to necessarily come with increases transaction fees to cover that insurance, which is one of the reasons that Visa/Mastercard end up being able to charge 2-3%.

So the question really is: Can Bitcoin provide a similar level of service to end users at a lower cost to them/merchants? Or at least, that's the question in the western world. In the world where governments are much more oppressive, btc has value simply as a somewhat-more-anonymous currency.

Vadimuses

Bitcoin is interesting for me because the Paypal "frozen funds" stories are far too common and too scary, and coupled with their hilariously poor customer support, seem quite real.

Though from what I know about it, converting real money into BTC money is somewhat of a pain (afaik there is no established marketplace for this?) and that's putting me off.

Kasos

I understand what you mean. Bitcoin is far from perfect, and the market is certainly volatile, but I'd wager a guess and say that it's here to stay. Or at least cryptocurrencies in general, the cat's out of the bag now.

Buying/selling/trading collectives like bitcoin-otc use a 'web of trust' styled rating system. Trust is really the only protection buyers and sellers have at this point, as you illustrated with the camera example. Obviously, this is problematic/infeasible for most businesses. I haven't looked into Coinbase too much, but I imagine an insurance guarantee of some kind could inch btc closer to mainstream appeal, if the middleman fulfills your caveat of reasonable transaction fees, which will incentivize businesses to use the service.

Having said that, I think the average bitcoin user has a certain degree of understanding on these points. I wouldn't buy a camera with bitcoin either, but you can bet that I would buy credits with them. I know that IRE isn't going to rip me off; the trust is there.

Sarapis said:

So the question really is: Can Bitcoin provide a similar level of service to end users at a lower cost to them/merchants?

Call me an idealist, but I'd like to say yes. Eventually.

Kasos

Vadimuses said:

Bitcoin is interesting for me because the Paypal "frozen funds" stories are far too common and too scary, and coupled with their hilariously poor customer support, seem quite real.

I can sympathise with this. I have a love-hate relationship with PayPal, generally leaning toward the latter. I dread calling their customer support.

Vadimuses said:

Though from what I know about it, converting real money into BTC money is somewhat of a pain (afaik there is no established marketplace for this?) and that's putting me off.

As I said before, I'm just a hobbyist and I've only experienced bitcoin from the consumer viewpoint, but I believe that's what MtGox and similar organizations are for. A full description is available on the bitcoin wiki, which you can find with a simple search (there's a huge list of other rate exchange services as well). However, I did see in the news that the Feds have been raining on their parade lately, so take all of this as interesting information, not advice!

Sarapis

Vadimuses said:

Bitcoin is interesting for me because the Paypal "frozen funds" stories are far too common and too scary, and coupled with their hilariously poor customer support, seem quite real.

Though from what I know about it, converting real money into BTC money is somewhat of a pain (afaik there is no established marketplace for this?) and that's putting me off.

I get absolutely excellent service from Paypal these days. I don't know what they changed, but in the last year it's been truly excellent. They assigned us to a small group of five people, and I deal with one of those five people (usually the same one) any time I have a problem.

Jonathin

What is bitcoin? What is cryptocurrency? (Please don't answer this, just showing that I have no idea what they are and I really don't care).

Just going to say right now that if I have to go an extra step and buy some random currency to buy credits, I won't be buying credits anymore.

Jovolo

Pretty sure they're considering it as an alternative and not a replacement, THAT would be silly. Not everyone deals in the shady btc areas of the internet

Sarapis

Correct.

Sylvance

Jonathin said:

What is bitcoin? What is cryptocurrency? (Please don't answer this, just showing that I have no idea what they are and I really don't care).

Sybilla

@Sylvance : Explain like I'm five: Bitcoin for a basic overview/introduction.

Sylvance

Read it. Even more confused. So it's a made-up currency (yes, I get that that's redundant). Who owns it? Who guarantees its value (like the government does with real money)? Where does one buy bitcoins, and what are they bought with? Real money? Labour? So confused...

Sarapis

Sybilla said:

@Sylvance : Explain like I'm five: Bitcoin for a basic overview/introduction.

I love that whoever wrote this thinks five year olds know what 'fungible' means.

Lynara

Read it. Even more confused. So it's a made-up currency (yes, I get that that's redundant). Who owns it? Who guarantees its value (like the government does with real money)? Where does one buy bitcoins, and what are they bought with? Real money? Labour? So confused...

Bitcoins are created by 'mining'. Essentially, this is labour. Your computer (well, not yours, it doesn't have enough power... trust me, people buy special hardware above and beyond what any of us likely has at home) crunches numbers, and this generates the currency. What guarantees it? Nothing. However, based on how it works, there is a finite amount of them available for creation, and as they are created, it becomes harder and harder to create them. Currently, 1 bitcoin is worth over $100. And, as I understand it, the vast majority of them have already been 'mined'. Which means that currently, the only feasible way to get more is to purchase them, have them donated, or that sort of thing. IE, get them from others. I don't use bitcoins personally, so please correct me if my 5yr old understanding is flawed.

Echald

While the value of dirty fiat money is entirely based on the trust the users have on the issuing government, the bitcoin more wisely rest on the desire to waste a huge amount of hardware and electricity to produce nothing useful. The internet has proved that these parameters are the true ones we can trust.

Soludra

@Lynara: The important thing about "mining" is that these number crunchers are actually the actors that take outstanding transactions and validate them, etching them into the Bitcoin transaction chain. After mining in and of itself is no longer profitable, miners will compete for the transaction fees associated with each transaction. (If you want to give a transaction more priority, just increase the transaction fee you offer!)

Soludra

Another thing about Bitcoin is that it isn't necessarily anonymous. Rather, it is only as anonymous as the Bitcoin wallets you use. There was a great post somewhere else on the Web about how the government could create a regulated component of BTC by requiring law-abiding citizens to register their wallets with the government. Because every transaction is part of the global, public transaction chain, auditing money trails becomes a lot easier. If you wanted to move cash within the "dirty", unregulated BTC economy, you would have to be careful to keep your registered wallet(s) separate from your others, but it would still be possible. (Essentially, no-one could completely regulate all of the Bitcoin economy.)

Sylvance

Lynara said:

Read it. Even more confused. So it's a made-up currency (yes, I get that that's redundant). Who owns it? Who guarantees its value (like the government does with real money)? Where does one buy bitcoins, and what are they bought with? Real money? Labour? So confused...

Since the 5-year-old explanation was too tough for you, Sylv, here's a 2-year-old explanation.

And, just like that, it makes perfect sense. Thanks, @Lynara! *mwah*

ETA: Next question - how much money do I need to make a computer capable of farming bitcoins? It kinda sounds like a (free) license to print money.

Hegua

Sylvance said:

And, just like that, it makes perfect sense. Thanks, @Lynara! *mwah*

ETA: Next question - how much money do I need to make a computer capable of farming bitcoins? It kinda sounds like a (free) license to print money.

It's getting to the point now where you need ASIC rigs that cost multiple thousands of dollars to compete, or beefy enough GPU hardware that still nets little enough results that you have to track your machine's power usage to make sure you're actually generating a profit vs the electricity cost.

And all this to mine for scrip coins.

Adet

According to Tom's Hardware, using a CPU to mine bitcoins now costs more in electricity than you get from the bicoins themselves; thus, GPUs are needed.  Most people do it as part of a group, and take a share in the value of any bitcoins mined.

You'll want an AMD GPU, because they outperform Nvidia cads by a factor of five to seven, at a comparable price point (because Nvidia cards are good at floating-point operations, but bad at the integer operations needed for this particular algorithm).

Costs will likely be in the region of $600 for the initial hardware (a dedicated machine, rather than your own computer), plus your electricity bill.  Quoting directly from the article I linked above,

"As we will explore in more detail on the next page, assuming your 230 W, 230 MH/s graphics card runs 24/7, it costs you about $1.05 per day to mine in California, but only 35 cents in Georgia and a mere 15 cents in Douglas County. At current difficulty, this GPU generates about 0.01 Bitcoins per day, or about $1.15 worth. If the Bitcoin exchange rate drops below $105, the miner in California would be well advised to turn off his GPU mining rig immediately. When difficulty rises to 10 times its current value, which is expected by fall, it would be prudent even for GPU-based Bitcoin miners in Douglas County, WA, to take off their hard hats and cease mining operations."

(Note that that's using your GPU to give 230 MH/s (I don't know what those are), rather than the $600 setup above, which runs 800 MH/s.)

In summary, your best bet is to join a group, and run it on your GPU in the background.

Important disclaimer: I've taken the vast majority from the article above, which I've skim-read rather than looking at it in depth.  I know very little abut this, myself.

Eld

MH/s looks like a typo for MHz.

Sylvance

Guess I'll stick to turning tricks...

ETA: More seriously (last question; promise!), what all can you actually spend them on? Practically? The fact that I'd never heard of one suggests that they're about as useful as American Express.

Sylvance

@Kasos - just noticed that your OP refered to 'cryptocurrencies'. Plural. I wonder if you would be willing to list some others. I'm now well interested in this. (@Haters - That this wasn't a question, so I didn't break my promise)

Akali

And they told me I couldn't use my Monopoly money. Ha!

Sarapis

Adet said:

According to Tom's Hardware, using a CPU to mine bitcoins now costs more in electricity than you get from the bicoins themselves; thus, GPUs are needed.  Most people do it as part of a group, and take a share in the value of any bitcoins mined.

You'll want an AMD GPU, because they outperform Nvidia cads by a factor of five to seven, at a comparable price point (because Nvidia cards are good at floating-point operations, but bad at the integer operations needed for this particular algorithm).

Costs will likely be in the region of $600 for the initial hardware (a dedicated machine, rather than your own computer), plus your electricity bill.  Quoting directly from the article I linked above,

"As we will explore in more detail on the next page, assuming your 230 W, 230 MH/s graphics card runs 24/7, it costs you about $1.05 per day to mine in California, but only 35 cents in Georgia and a mere 15 cents in Douglas County. At current difficulty, this GPU generates about 0.01 Bitcoins per day, or about $1.15 worth. If the Bitcoin exchange rate drops below $105, the miner in California would be well advised to turn off his GPU mining rig immediately. When difficulty rises to 10 times its current value, which is expected by fall, it would be prudent even for GPU-based Bitcoin miners in Douglas County, WA, to take off their hard hats and cease mining operations."

(Note that that's using your GPU to give 230 MH/s (I don't know what those are), rather than the $600 setup above, which runs 800 MH/s.)

In summary, your best bet is to join a group, and run it on your GPU in the background.

Important disclaimer: I've taken the vast majority from the article above, which I've skim-read rather than looking at it in depth.  I know very little abut this, myself.

Too late really. Mining via GPU is on the verge of being unprofitable and will very quickly be completely unprofitable due to specialized hardware that recently started shipping that is specifically designed to mine for bitcoin. They now measure, at the low end, in gigahashes rathert than megahashes. The biggest one that Butterfly labs is selling does 500 gigahashes/sec in real-world tests. 

Honestly, I find the mining portion of bitcoin a bit uninteresting. The real purpose of mining is to incent people's rigs to confirm transactions (hard to explain), and while it was printing money if you were there in the early days (it is believed that the fellow who started bitcoin, whose real identity nobody knows, is sitting on $100 million in bitcoin), it's a very efficient 'market' for them now, so profit margins are razor thin. 

Teg

Taking bitcoins is both a hilariously good and bad idea simultaneously.

It's hilariously bad because the price is so inherently unstable (because a finite currency encourages speculation and there's nobody to stabilize the currency) that accepting $100 of bitcoins today might very well mean it's worth like $25 two hours later.

It's hilarious good because if the price ever stabilizes chances are nobody who buys credits actually calculates the real interest rate on BTC correctly so it's really easy to gain a few extra % points of profit when accepting BTC.

Sylvance

Teg said:

Taking bitcoins is both a hilariously good and bad idea simultaneously.

It's hilariously bad because the price is so inherently unstable (because a finite currency encourages speculation and there's nobody to stabilize the currency) that accepting $100 of bitcoins today might very well mean it's worth like $25 two hours later.

It's hilarious good because if the price ever stabilizes chances are nobody who buys credits actually calculates the real interest rate on BTC correctly so it's really easy to gain a few extra % points of profit when accepting BTC.

I'm not an economist by any stretch of the imagination, but I just cannot see how your first point could possibly be true.

Echald

Well, the main interest people have with the BTC is just how much real currency they can get out of it. It will have value as long as somenone wants to buy them in the hope of selling them for more.