Keiser Report: Magic of Bitcoin Gathering (E432)

[Shami-Amourae]

http://www.youtube.com/watch?v=IbSOHwCOnG0

[Glass]

ok so it (bitcoin) is a dungeons and dragons off shoot?

So basically there is no suitable "authentication" of buyers and sellers and what they have to offer? I think at the crux of that is the backstop. The Government is the backstop for all other markets. In some way the Govt is the back stop.

This is where we get too big to fail.

With bitcoin you are on your own.

I think that I'm wondering why you need a public trading platform for bitcoin anyway? Why does there need to be a public exchange? The only reason I can think of is so that you can speculate on it.

I still think bit coin is purely speculative. I don't see it going forward as a mainstream currency. I can't see how it can.

And finally we see what Max is upto with his on-going promotion of this speculative device. He has patents that he hopes he can convince the bitcoin guys to license this from him. He has no vested interest in this?

[Shami-Amourae]

ok so it (bitcoin) is a dungeons and dragons off shoot?

No. The exchange MTGox used to be an exchange for Magic: The Gathering cards. They started trading Bitcoins for the hell of it and that eventually took over, but they kept the domain name. It's like how Amazon started as a book store, and is now what it is. MTGox has a completely different owner now too.

Magic
The
Gathering
Online
eXchange

[vacuum]

ok so it (bitcoin) is a dungeons and dragons off shoot?

So basically there is no suitable "authentication" of buyers and sellers and what they have to offer? I think at the crux of that is the backstop. The Government is the backstop for all other markets. In some way the Govt is the back stop.

This is where we get too big to fail.

With bitcoin you are on your own.

I think that I'm wondering why you need a public trading platform for bitcoin anyway? Why does there need to be a public exchange? The only reason I can think of is so that you can speculate on it.

I still think bit coin is purely speculative. I don't see it going forward as a mainstream currency. I can't see how it can.

And finally we see what Max is upto with his on-going promotion of this speculative device. He has patents that he hopes he can convince the bitcoin guys to license this from him. He has no vested interest in this?

Basically bitcoin is the underlying protocol which enables the persistence of these tokens called bitcoins in such a way that they cannot be counterfeited, created (except through mining), or destroyed (except through destroying your own wealth).

On top of bitcoin is the exchanges, which provides liquidity for these tokens. Lets say you want to get 100 gold coins of yours out of the country to another country. Well, you have to first go to an exchange for gold and convert them to some type of fiat. Then, you go to a bitcoin exchange and convert them from fiat to bitcoins. Then, in the other country, you reverse the process. So the exchanges (gold, fiat, or bitcoin exchanges) provide liquidity.

Built on top of the exchanges are things like bitpay. With the rock-solid bitcoin protocol to avoid counterfeiting, and with the exchanges providing liquidity, bitpay can actually compete with and destroy paypal and visa in terms of payment processing. Lower fees, less risk, and much faster.

http://i.imgur.com/XAnPGcP.png


So now we've got a system that is more efficient than paypal or visa, and not to mention much more private.

So the value basically comes from enabling commerce to happen better on the one hand, and allowing capital controls to be avoided on the other hand.