Tag Archives: Cryptocurrency

Why do I love bitcoin?

In the previous post, I said bitcoin is a new religion, but of course bitcoins is more than just a kind of belief, it is useful.

The vendor of my cellphone service is http://mobilevikings.com, which claimed the first mobile company accepts bitcoin. Before the acceptance of bitcoin, the way I top up my credits is using bank card, credit card and Paypal. This works and fine. But the problem is that if I do not have  euro bank card or credit card, how can I top up my mobile phone? Bitcoin works. No matter what kind of currency I have, I just purchase some bitcoins, and use it as the payment method. Since the ratio of prices of bitcoin in different fiat currency is almost exact the corresponding exchange rate, the money paid in fiat currency and bitcoin is actually the same.

Another case of mine is domain registrar I use. I have been choosing Godaddy for my domain registrar for many years. The payment option for me is credit card. Imagine my credit card expires one day, I do not know how I can renew my domains at Godaddy.com. Fortunately, I found http://namecheap.com supports bitcoin. That means if I have bitcoin, I can register new domain, renew my domains and buy SSL certificate at namecheap.com. This is pretty handy, no matter where I am and what kind of currency I have, what I need is bitcoin.

Actually, the implementation of bitcoin payment at mobilevikings.com and namecheap.com is bitpay.com. I get bitcoins using my fiat money (CNY, EUR, USD etc.), and then pay the bitcoins to bitpay.com, mobilevikings.com and namecheap.com recieve the fiat money from bitpay.com.

Just looking at the two sides, i.e. companies that support bitcoin and I who is the consumer, the payment start from fiat money and ends at fiat money which is not supposed to be the same currency nor from the same country. This is not easy to be achieved without the help of bitcoin. In other words, bitcoin plays as the bridge role to finish each payment, with low fee and pretty fast speed.

By the way, since the payment could be finished during short period, the price fluctuate during the short period is too small to be concerned. No one has to bear the loss of changing price of bitcoin if not holding the bitcoins. Bitcoin just acts as a modern payment tool, which is the money of the internet era.

People who has never experienced bitcoin may say it is just a piece of code, but actually it is a piece of powerful and useful code. At least, this is one of the reasons why I love bitcoin.

The risk to sell bitcoins at decentralized exchanges localbitcoins.com and bitcoinbourse.eu

If you are interested in Bitcoin, you maybe would like to buy a bit. And if you once bought some bitcoins and now want to sell them with the hope of making profit from trading. The most common way for people to trade bitcoin is exchange, such as btc-e.com, bitstamp.net and the already dead Mt.Gox. All of these exchanges are centralized ones. As we see from the bankrupted Mt.Gox, the centralized exchanges charge commissions on the one hand, and put the investors on the risk of any potential loss on the other hand.

Some people then turn to exchange www.localbitcoins.com, since it is based on person to person model, you are trading your fiat money or bitcoins with another trader. Localbitcoins.com still charges 2% commissions from the trader who posts a buy or sell advertisment.

Recently, a new exchange called Bitcoin Bourse is launched. It is similar like www.localbitcoins.com, but the biggest difference is it does not charge commission, as it claimed “decentralised market place to buy and sell Bitcoin person to person!”

Indeed, decentralised exchanges are the future of Bitcoin trading. But I have to point out that you have to be careful when selling bitcoins at localbitcoins.com and https://bitcoinbourse.eu. You may be asking: WHY?

I sold two bitcoins to a German two months ago on localbitcoins.com. After I received the SEPA transaction of the two bitcoins, I released the bitcoins to the account of the buyer. Unfortunately, the money was reversed to the sender’s bank account on the request from police. It is said the bank account of the sender was hacked thus s/he was the real buyer who purchased my bitcoins. Fortunately, I offered the proof that the money had been reversed, then localbitcoins.com help team found the two bitcoins were still in the account of the scammer, so I got my bitcoins back. Otherwise, I would lost my bitcoins as well as the money.

My story shows the money you received from any trader paying with SEPA is subject to be reversed if the transaction is fraud. As you know, the bitcoin transaction is non-reversible. Even you ask the buyer offer a proof of his/her identity, it may be an invalid document as this does happen. This would make the seller of bitcoins on localbitcoins.com at risk from trading.

The risk borne by seller at localbitcoins.com also exists at https://bitcoinbourse.eu.

Bitcoin is a new religion

Bitcoin, one of the most famous P2P cryptocurrency, has been said as “The Most Dangerous Project We’ve Ever Seen”. And cryptocurrency is indeed a very hot topic talked by the whole world while the price soared from almost nothing to as high as 1200 USD per unit that was higher than the price of gold per ounce.

Why do so many people believe in bitcoin and invest their fiat money on it? There is no secret that the foundation of bitcoin protocol is basically solid, such as the total amount is fixed as 21 millions, double spending not possible, and complete ownership of your bitcoin once you know the private key. To some extent, bitcoin is a kind of digital gold except it does not have the physical properties as the real gold has.

Even after so many times of accidents such as the collapse of Mt.Gox and Silk Road, the tight regulation from Chinese government, the price of bitcoin plunged and later soon bounce back. The fluctuated price of bitcoin does show the strong support from bitcoin community. This kind of phenomenon really makes bitcoin a special concept.

I have been following cryptocurrency for several years. In my opinion, no matter wherever bitcoin goes in the future, bitcoin will not at least disappear from the internet. It is supported by the powerful mathematical algorithm behind bitcoin on the one hand, and on the other hand, the belief of lots of people who do not believe governments and banks will always attract them to bitcoin. Bitcoin means true freedom of your wealth, of course, the precondition is you believe in that it is money.

No matter how far science has developed, religion still pays a very important role in people’s life, and the root cause of wars, conflict in the nowadays world always comes from different religions. Now, I think bitcoin is also a kind of new religion on the internet, just as said:

“In Computing We Trust”.