Bitcoin?

No, I don't think it's a good idea - others might. don't think I can spend rubles in the U.S. just yet - peso's maybe soon. and then there is always the possibility that it might be Chinese Yuan next.

I don't have a fundamental problem with any kind of valid currency. Small business districts have been issuing their own currency forever. However Bitcoin is a an elaborate pyramid scheme. Only those who got in early are making any money. And that only if they get out before the whole thing collapses.

Pesos for many years in Tucson

Rubles will never happen. The Russians are behind most of the spam e-mail we get. They aren't after rubles, they are after the American dollar.

IRS Says Bitcoin Is Property, Not Currency
IRS Notice Means Investors Could Benefit but Transactions Subject to Taxes

http://www.wsj.com/articles/SB10001424052702303949704579461502538024502

I personally think it is too soon to be jumping on the bandwagon here. I have not yet seen any real problems with abiding by a variation of the old saying:

In God We Trust, all others pay case, good ol' American Green Back Dollars.


Seriously though, this proclamation by the IRS that bitcoin is property is, on the surface good news. But as property it is subject to capital gains instead of income taxes. The much more elaborate tracking that is required for reporting capital gains will create a night mare for tax payers if you have any significant bitcoin transactions.

If you have ever or still do invested in the stock markets and have 8, 10, 12, 20 positions and had to report each one each years and the capital gains and losses, that is not all that easy in some cases.

Now think of it as having been into trading stocks regularly, not full blown day trading, but maybe an aggressive options player. That creates a ton of billable hours for your tax accountant. I know, because I did it for years.

As I read what the IRS is saying about bitcoin, I think that is the kind of reporting they will be looking for. That could be night mare for a guy if he had dozens of bitcoin transactions.

It appears Russia with the rubles fall has gone into bit coin.
http://www.cnbc.com/id/102275772

Russians not Russia the country.

If the Russian government moves into bitcon, then you would have something. First, you would have the Russian financial house collapse and then the Dollar would boom and bitcoin as well. As it was, the Russians that bought bitcoin made for the largest number of transaction but did little or nothing for the value of bitcoin. That in itself says more about how the world traders sees the Russian currency and the bitcoin in relationship to value. Not so good.

If you want to see what the trend is in Russian currency, watch what George Sores does. He has been trying to devalue the dollar against the rubble for years and years. He is one of the world's largest investors in anything Russian include their currency.

One of the things you have to understand and be willing to risk with bitcoin is, the fact that it is not backed by any country or exchange. It is like buying an over the counter stock. There is no "market maker" in the currency that is required by any regulator so buy back the stock, or the currency in this case. Once you own it, it is up to you to find your own buyer. If it should state to fall, there will be no buyers. There will be no market. You will stuck in it.

Chucks characterization of bitcon of being like a pyramid scheme is not all that fare off, if off at all.

The IRS ruling of it being property and not a currency also supports that fact. Just like real-estate, if the market collapses, you can not sell your house. Same thing with bitcoin.

The other caution that has to be examined is how easily it can be manipulated. George Sores, one man, as did the Hunt Brother years ago, caused fluctuation in the US Dollar. Sores attacked both the dollar and the British Pound. Considering the total value of all of the bitcoin in circulation compared to the pound or the dollar, Sores or any large player in the currency market could probably totally destroy bitcoin.

Again, IRS equating it to more of a stock or property, made that much easier to do. It is done all the time to over the counter stocks. No reason at all that would prohibit it from happening to bitcoin.

I would suggest that anyone thinking of getting heavily involved in bitcon contact your stock broker or who every your financial adviser is.

I meant Russians, sorry.

As far as making money on bit coin it seems to me it is the guys that are selling the mining machines. Which is similar to back in the gold rush days. The guys selling the shovels made the money and had no risk.

Bit coin is hard to wrap ones head around.

http://www.bloomberg.com/video/microsoft-partners-with-bitpay-to-accept-bitcoin-payments-Co2fBb3_REu6ZYOYzLfo5A.html

The only thing falling faster then the ruble is bitcoin. Imagine waiting 30 days to be paid and the value is half of what it was.