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Proper Bitcoin mining.....

How to buy, profit and invest in crypto currencies or NFTs
Mike4
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Re: Proper Bitcoin mining.....

#520668

Postby Mike4 » August 8th, 2022, 8:57 am

Urbandreamer wrote:
GoSeigen wrote:I'm so categorical about it simply because bitcoin cannot handle the volume of transactions required. At 300,000 transactions per day it would barely support the commerce of a single medium sized town like Bolton or Brighton. How could anyone but the most delusional supporter think it would manage as any sort or currency? Quite apart from the fact that not a single person would accept a 15 minute wait in their local shop for their grocery payment to clear. The idea that bitcoin will replace credit or debit card transactions is nonsense.

GS


I thought that we had dealt with that. Gold also can't handle that level of transactions, which is of course why gold was never used as a currency......

Historically the solution has always been what is now know as a 2'ed level transaction system. In the days of gold you passed a piece of paper with a written (trusted) promise. If you happen to use UK £'s dig out a £10 note and look at it. Doesn't is say "I promise to...."
Why do you think that it says that? Better yet if you live in Scotland, do the same and check who made that promise (it wasn't the BOE).

Of course you may not have a £10 note, even if UK based. You may chose to use Visa, Mastercard, ApplePay et-al. When you use them are you making a transaction in real £'s or simply denominated in £'s or $'s or what the merchant accepts? I could swear that it's possible to use them to buy stuff priced in $'s or €'s.
They work really well. It takes seconds to transact, just like the seconds it takes using the lightning network.

For those who don't know (I actually think that GS may have read an explanation of this). Lightning aggregates transactions before updating the bitcoin ledger., if bitcoin is the currency. Lightning will actually deal with other currencies, it is just mostly used to transact in bitcoin.

In truth Visa could allow bitcoin transactions, aggregating and settling transactions. There is some question if the bitcoin community would chose it over lightning, unless there was a good use case. There actually is a use case though and some do use it for this. Again, I thought that I'd made GS aware of the fact. Bitcoin debit cards exist. You fund them with bitcoin and the Visa payment layer is used for transactions in £'s and €'s.

Ps, I can't comment about how likely it is that local shops in the UK will accept bitcoin in the future, however apparently "Bitcoin accepted here" was seen in some London pubs back in 2013. I would accept in the argument that the term "local shops" was meant to imply something very different, but I think that the argument is now being used to imply something beyond that by some.



All the above ignores my point about BC/Sterling volatility being a deal breaker if I were a "local shopkeeper" considering accepting BC.

Until both my suppliers and my employees all willingly accept BC in payment, I wouldn't accept BC as payment from my customers.

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Re: Proper Bitcoin mining.....

#520669

Postby pje16 » August 8th, 2022, 8:58 am

Mike4 wrote:All the above ignores my point about BC/Sterling volatility being a deal breaker if I were a "local shopkeeper" considering accepting BC.

Until both my suppliers and my employees all willingly accept BC in payment, I wouldn't accept BC as payment from my customers.

You won't be using it then :D

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Re: Proper Bitcoin mining.....

#520673

Postby Urbandreamer » August 8th, 2022, 9:22 am

Mike4 wrote:...
All the above ignores my point about BC/Sterling volatility being a deal breaker if I were a "local shopkeeper" considering accepting BC.

Until both my suppliers and my employees all willingly accept BC in payment, I wouldn't accept BC as payment from my customers.


I'd use the phrase "does not address" rather than ignores. However for the record, I accept your point as currently quite valid when talking ₿/£ risks for merchants. Doubly so with respect to inventory. It gets worse when you consider accounting and tax issues.

It clearly IS possible. Institutions like StarBucks ARE doing it in some countries. However it would be extra work and effort, currently for no gain to the business in the UK.

I see only two "real" reasons why any merchant or service provider would wish to offer BTC payments.
1) If they thought that it would increase custom and profits (like the London pub example).
2) If they trusted bitcoin to devalue less than their other option. Currently very uncertain with decent currencies like GBT, USD or EURO.

However the initial example given was local shopkeepers in EL Salvador. Quite a different situation than the UK, though I would argue that the above points would still count.

In that situation, given that until recently the entire economy was fairly cash based and is fueled by remittances, the questions would be how many local people receive remittances in bitcoin rather than via Western Union. Also how many are paid in cash, rather than bitcoin.

If we want to, we can move the conversation on to local payments in the UK, however Mike4 and I have already had that discussion. I think that we agree, sadly in my case, that currently BTC does not make financial sense for the UK merchant or small business. Only believers are likely to wish to accept BTC currently in the UK.

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Re: Proper Bitcoin mining.....

#520676

Postby Mike4 » August 8th, 2022, 9:44 am

Urbandreamer wrote:
Mike4 wrote:...
All the above ignores my point about BC/Sterling volatility being a deal breaker if I were a "local shopkeeper" considering accepting BC.

Until both my suppliers and my employees all willingly accept BC in payment, I wouldn't accept BC as payment from my customers.


I'd use the phrase "does not address" rather than ignores. However for the record, I accept your point as currently quite valid when talking ₿/£ risks for merchants. Doubly so with respect to inventory. It gets worse when you consider accounting and tax issues.

It clearly IS possible. Institutions like StarBucks ARE doing it in some countries. However it would be extra work and effort, currently for no gain to the provider in the UK.

I see only two "real" reasons why any merchant would wish to offer the service.
1) If they thought that it would increase custom and profits (like the London pub example).
2) If they trusted bitcoin to devalue less than their other option. Currently very uncertain with decent currencies like GBT, USD or EURO.

However the initial example given was local shopkeepers in EL Salvador. Quite a different situation than the UK, though I would argue that the above points would still count.

In that situation, given that until recently the entire economy was fairly cash based and fueled by remittances the question would be, how many local people receive remittances in bitcoin, rather than via Western Union.



My apologies, I was thinking about my post after pressing "Submit" and how "ignore" was the wrong word. I decided I'd edit it to "overlook" but you beat me to it so I'll leave it unedited.

So broadly, we agree its the "currency risk" that prevents many businesses e.g. local shops from accepting BC. This encompasses the government requiring tax and VAT to be submitted in Sterling not BC.

To expand on reasons to accept BC, the mechanism by which accepting it increases business is I'd suggest, more than customers having a handful of loose BC in their pocket but no sterling. To illustrate, when I was designing and fitting luxury bathrooms back in the 90s and WWW came along, I designed and published a rudimentary website about my bathrooms just for the novelty of learning about the technology really. But pretty quickly and to my surprise people found it and tracked me down (i didn't even have my contact details on it initially!) and asked me to quote for a new bathroom.

I found when I got there, 50% of the time I spent with these potential customers was discussing how I did the website rather than their new bathroom. They felt such an affinity with me as someone who shared their interest in this new WWW thing that they nearly always accepted my quote and had me fit their bathroom. Similar thing happens with the pubs I bet. The novelty of paying for beer and food in BC positively attracts and sucks in BC enthusiasts. I bet half the chat around the bar involves the niceties of BC rather than football/rugby like most pubs. The effect will fade though, as and when BC gets more common.

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Re: Proper Bitcoin mining.....

#520730

Postby ursaminortaur » August 8th, 2022, 1:17 pm

Urbandreamer wrote:
GoSeigen wrote:I'm so categorical about it simply because bitcoin cannot handle the volume of transactions required. At 300,000 transactions per day it would barely support the commerce of a single medium sized town like Bolton or Brighton. How could anyone but the most delusional supporter think it would manage as any sort or currency? Quite apart from the fact that not a single person would accept a 15 minute wait in their local shop for their grocery payment to clear. The idea that bitcoin will replace credit or debit card transactions is nonsense.

GS


I thought that we had dealt with that. Gold also can't handle that level of transactions, which is of course why gold was never used as a currency......

Historically the solution has always been what is now know as a 2'ed level transaction system. In the days of gold you passed a piece of paper with a written (trusted) promise. If you happen to use UK £'s dig out a £10 note and look at it. Doesn't is say "I promise to...."
Why do you think that it says that? Better yet if you live in Scotland, do the same and check who made that promise (it wasn't the BOE).


So all those gold sovereigns, doubloons etc which were used before people started issuing such pieces of paper didn't exist ?

(Though to be fair for most of history most such precious metal based currency was based on silver rather than gold, with just a small minority of coins being made of gold, which is why the pound is known as Sterling as in Sterling Silver. The first formal gold specie standard was established in the UK in 1821
https://www.royalmint.com/invest/discover/gold-news/what-was-the-gold-standard/

These factors led to the establishment of the world’s first formal gold specie standard in 1821, in which the monetary unit was tied to the value of circulating gold coins.
)

The first primitive use of paper money in Europe didn't commence until the 16th century

[url][https://www.theguardian.com/business/2013/sep/10/banknotes-history/url]

16th century

The goldsmith-bankers began to accept deposits, make loans and transfer funds. They also gave receipts for cash, that is to say gold coins, deposited with them. These receipts, known as "running cash notes", were made out in the name of the depositor and promised to pay him on demand. Many also carried the words "or bearer" after the name of the depositor, which allowed them to circulate in a limited way. The similar phrase "I promise to pay the bearer on demand the sum of ...." still appears on British banknotes today.

1694

In 1694 the Bank of England was established to raise money for King William III's war against France. The Bank started to issue notes in return for deposits. These notes were initially handwritten on Bank paper and signed by one of its cashiers. Today, all British banks carry the chief cashier's signature. After 1696, it was decided not to issue any notes worth less than £50 and since the average income then was less than £20 a year, most people went through life without ever coming into contact with banknotes.

18th century

The move towards fixed denomination notes started in the 18th century and from 1725 the Bank was issuing partly printed notes for completion by hand. The £ sign and the first digit were printed but other numerals and details were added by hand. By 1745 notes were being part printed in denominations ranging from £20 to £1,000.

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Re: Proper Bitcoin mining.....

#520740

Postby Urbandreamer » August 8th, 2022, 2:22 pm

ursaminortaur wrote:
Urbandreamer wrote:
I thought that we had dealt with that. Gold also can't handle that level of transactions, which is of course why gold was never used as a currency......



So all those gold sovereigns, doubloons etc which were used before people started issuing such pieces of paper didn't exist ?


Apologies. I was attempting to be sarcastic.

As you undoubtedly know gold HAS been used as money. I was under the impression that most knew the fact and would recognize the sarcasm.

Just about everything from cows to glass beads have been used as both money and currency.
Terms like salary have Latin for salt as it's root. Pecuniary, Latin for cow as the root.

Most of these forms of money can't handle the level of transactions that Visa does, but it doesn't mean that they were not useful as currency or money.

More importantly Visa is NOT no definitely not money. It's a method of transacting. I suspect that GS knows that, but he still argues that Bitcoin, and by extension gold coins, can't function as money, because they can't handle the volume of transactions that Visa does.

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Re: Proper Bitcoin mining.....

#520741

Postby pje16 » August 8th, 2022, 2:30 pm

Urbandreamer wrote:Apologies. I was attempting to be sarcastic.

In attempt to avoid the misunderstanding I use the :roll:

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Re: Proper Bitcoin mining.....

#520748

Postby ursaminortaur » August 8th, 2022, 2:54 pm

Urbandreamer wrote:
ursaminortaur wrote:
Urbandreamer wrote:
I thought that we had dealt with that. Gold also can't handle that level of transactions, which is of course why gold was never used as a currency......



So all those gold sovereigns, doubloons etc which were used before people started issuing such pieces of paper didn't exist ?


Apologies. I was attempting to be sarcastic.

As you undoubtedly know gold HAS been used as money. I was under the impression that most knew the fact and would recognize the sarcasm.


I probably should have included a smiley to indicate that that part of my reply was also being sarcastic.

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Re: Proper Bitcoin mining.....

#520887

Postby GoSeigen » August 9th, 2022, 8:09 am

Urbandreamer wrote:Historically the solution has always been what is now know as a 2'ed level transaction system.


So even Urbandreamer accepts that Bitcoin is no good to use in local shops. Progress...


GS

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Re: Proper Bitcoin mining.....

#520941

Postby Urbandreamer » August 9th, 2022, 10:17 am

GoSeigen wrote:
Urbandreamer wrote:Historically the solution has always been what is now know as a 2'ed level transaction system.


So even Urbandreamer accepts that Bitcoin is no good to use in local shops. Progress...


GS


I'm confused.
You can actually use a 2'ed level transaction system to use Bitcoin in most (even local shops) in the UK via a known 2'ed level system.

Here is how.
1) get yourself a bitcoin debit card and deposit some bitcoin with the institution.
2) buy something at a local shop using your debit card.

Here is what happens. The local shop puts the transaction though as £'s using Visa.
Visa charges the card institution (again in £'s).
They in turn debit your bitcoin balance, charging a Fx fee, just like if your account used $, ¥ or even ₫ (Dong).

What I think most people realize is that I was actually accepting that selling goods or services in bitcoin was extra work, cost and risk in the UK.

I thought that I was also clear that the situation is probably different in a country where bitcoin is legal tender and that has a different tax regime. You know, a country that is mostly cash based and you may not be able to use Visa in the local shops.

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Re: Proper Bitcoin mining.....

#521032

Postby XFool » August 9th, 2022, 1:36 pm

Urbandreamer wrote:
GoSeigen wrote:So even Urbandreamer accepts that Bitcoin is no good to use in local shops. Progress...

I'm confused.
You can actually use a 2'ed level transaction system to use Bitcoin in most (even local shops) in the UK via a known 2'ed level system.

Here is how.
1) get yourself a bitcoin debit card and deposit some bitcoin with the institution.
2) buy something at a local shop using your debit card.

Here is what happens. The local shop puts the transaction though as £'s using Visa.
Visa charges the card institution (again in £'s).
They in turn debit your bitcoin balance, charging a Fx fee, just like if your account used $, ¥ or even ₫ (Dong).

So a bit like if I used a card in my local shop to buy things in £, but the card was backed by $.

But, whyever would I want to do that? (And pay FX charges on top)

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Re: Proper Bitcoin mining.....

#521071

Postby Urbandreamer » August 9th, 2022, 3:58 pm

XFool wrote:So a bit like if I used a card in my local shop to buy things in £, but the card was backed by $.

But, whyever would I want to do that? (And pay FX charges on top)


The fact that the cards exist clearly indicates a demand for them.

A possible reason for someone to have an account in $'s but pay in £'s would be if they received income in $'s. Clearly the same would be true of bitcoin.

Another is that they travel a lot.

Revolut make a big thing about handling multiple currencies.

Another possibility is those who want the minimum amount of fiat possible. I listened to an interview with someone who had that attitude.
Their expenses are less than their income and they want the difference to be in bitcoin. They achieve that by converting their salary from $'s to bitcoin and spending in both bitcoin and $'s.

Note that we are using bitcoin as an example, but some might just prefer one fiat currency over another. The concept works just as well (assuming no financial repression) if you save using USD rather than the Argentinian Paso or the Bolivar, assuming that you live there rather than in the UK.

Then again it would work for people with a large amount of capital in bitcoin, but no fiat income.

My point was to clarify that GS's statement about what I accepted was incorrect, not to suggest that you in particular should want such a card. Personally I don't have such a card and currently am unlikely to apply for one.

Everyone's situation is different. I have no knowledge of yours and don't make the assumption that it matches mine.

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Re: Proper Bitcoin mining.....

#521119

Postby GoSeigen » August 9th, 2022, 5:58 pm

Urbandreamer wrote:
GoSeigen wrote:So even Urbandreamer accepts that Bitcoin is no good to use in local shops. Progress...

I'm confused.
You can actually use a 2'ed level transaction system to use Bitcoin in most (even local shops) in the UK via a known 2'ed level system.

Here is how.
1) get yourself a bitcoin debit card and deposit some bitcoin with the institution.
2) buy something at a local shop using your debit card.

Here is what happens. The local shop puts the transaction though as £'s using Visa.
Visa charges the card institution (again in £'s).
They in turn debit your bitcoin balance, charging a Fx fee, just like if your account used $, ¥ or even ₫ (Dong).


We're talking about Bitcoin here (you know, the trustless decentralised thing with the blockchain ), not some random second level derivative someone has chosen to invent. So let's stick to the topic...

GS

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Re: Proper Bitcoin mining.....

#521160

Postby Urbandreamer » August 9th, 2022, 8:29 pm

GoSeigen wrote:
Urbandreamer wrote:
GoSeigen wrote:So even Urbandreamer accepts that Bitcoin is no good to use in local shops. Progress...

I'm confused.
You can actually use a 2'ed level transaction system to use Bitcoin in most (even local shops) in the UK via a known 2'ed level system.

Here is how.
1) get yourself a bitcoin debit card and deposit some bitcoin with the institution.
2) buy something at a local shop using your debit card.

Here is what happens. The local shop puts the transaction though as £'s using Visa.
Visa charges the card institution (again in £'s).
They in turn debit your bitcoin balance, charging a Fx fee, just like if your account used $, ¥ or even ₫ (Dong).


We're talking about Bitcoin here (you know, the trustless decentralised thing with the blockchain ), not some random second level derivative someone has chosen to invent. So let's stick to the topic...

GS


So when you say "Bitcoin is no good to use in local shops", you mean that $'s are no good to use in local shops? Doesn't that depend upon where the local shop IS? Which brings us right back to local shops in El Salvador. Which may accept bitcoin (though not on-chain but via lightning) and will accept $'s, unlike local shops in the UK.

I was clear that I was drawing a number of distinctions. You seem to want to conflate the use of bitcoin in local shops in El Salvador with the use in local shops in the UK. A comparison of Visa transactions with on-chain bitcoin transactions. Sorry, but it's not surprising that I'm confused by what you mean.

So what did you mean by your claim about what I accepted? Please be clear what you mean by "use" and "local". I have been clear that transaction means exist to "use" bitcoin and other currencies, where the likes of Visa is accepted. I have also been clear that local shops in the UK, rather than elsewhere may chose to not directly accept bitcoin, any more than they accept Yen or USD. I have also argued that at least some local shops (though not local to me) in El Salvador do accept bitcoin, so I'm unsure exactly WHAT you meant. As clearly what you claimed that I accepted could either be right or wrong.

Are you honestly, as I understand your last post, claiming that all bitcoin transactions only count as such if nobody acts as a middle man? That would be somewhat difficult with any fiat currency as it relies on banks and the likes of Visa. Indeed are not even the notes reliant on a middle man (the BOE or BOS).

FWIW, I'm quite happy to use the likes of Visa or MasterCard and would be similarly happy to use lightning.

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Re: Proper Bitcoin mining.....

#521250

Postby murraypaul » August 10th, 2022, 8:49 am

Urbandreamer wrote:Are you honestly, as I understand your last post, claiming that all bitcoin transactions only count as such if nobody acts as a middle man? That would be somewhat difficult with any fiat currency as it relies on banks and the likes of Visa. Indeed are not even the notes reliant on a middle man (the BOE or BOS).


Regardless of the Bitcoin vs fiat discussions, the whole point of Bitcoin was that it was a decentralized, trustless currency. Not having middle men was indeed part of the defining characteristic. A Lightning transactions isn't a Bitcoin transaction.

Yes, fiat isn't decentralized or trustless, and relies on middlemen. Noone expects it to be, that is part of its defining characteristics.

Getting away from that was the point of Bitcoin. Lightning removes a lot of the point. If Lightning is just like Visa, with all the good and bad, then why not just carry on using Visa?

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Re: Proper Bitcoin mining.....

#521271

Postby Urbandreamer » August 10th, 2022, 10:01 am

murraypaul wrote:
Regardless of the Bitcoin vs fiat discussions, the whole point of Bitcoin was that it was a decentralized, trustless currency. Not having middle men was indeed part of the defining characteristic. A Lightning transactions isn't a Bitcoin transaction.

Yes, fiat isn't decentralized or trustless, and relies on middlemen. Noone expects it to be, that is part of its defining characteristics.

Getting away from that was the point of Bitcoin. Lightning removes a lot of the point. If Lightning is just like Visa, with all the good and bad, then why not just carry on using Visa?


Perfectly valid point's. However on-chain transactions take time and there are scaling issues if we were all to attempt to pay for coffee on-chain.

I think that it's not unreasonable to accept compromises for an easy life.

Is lightning like VIsa? Well yes and no. Is ApplePay like Visa? They can all look very similar from a distance, but if you get into how they actually work they are very different. For example Visa is an entity. It can chose who it is willing to allow to transact or enforce the choice of others. Lightning is a distributed collection of entities. It's far more difficult for the likes of a government to close down transactions.

Why not carry on using Visa? Well I do when at my local (UK) supermarket. They don't accept bitcoin. Likewise I use paypal for most of my internet purchases. I have yet to purchase anything using bitcoin. Were I to do so, I'd probably use lightning for small transactions and on-chain for large ones.

Of course I COULD use Visa for bitcoin transactions.
Visa said during its recent earnings call that customers made $2.5 billion in payments with its crypto-linked cards in its fiscal first quarter of 2022.

https://www.cnbc.com/2022/01/28/visa-sa ... arter.html

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Re: Proper Bitcoin mining.....

#521274

Postby murraypaul » August 10th, 2022, 10:14 am

Urbandreamer wrote:Why not carry on using Visa? Well I do when at my local (UK) supermarket. They don't accept bitcoin. Likewise I use paypal for most of my internet purchases. I have yet to purchase anything using bitcoin.


This might come across as trying to score points, but it really isn't.

You are clearly very pro-Bitcoin, and even you haven't actually used it as a currency.

The problems it addresses are ones that the vast majority of people in first world countries just don't have.

As a currency, it has failed. It has been almost a decade now since people were telling me we would soon all be buying our coffees with Bitcoin, I think that is long enough to have waited. It exists now as a speculative commodity. Digital gold indeed, as no one uses gold as a currency either.

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Re: Proper Bitcoin mining.....

#521282

Postby murraypaul » August 10th, 2022, 10:31 am

(The above post is assuming my position that Lightning transactions are not Bitcoin transactions)

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Re: Proper Bitcoin mining.....

#521292

Postby Urbandreamer » August 10th, 2022, 10:55 am

murraypaul wrote:
Urbandreamer wrote:Why not carry on using Visa? Well I do when at my local (UK) supermarket. They don't accept bitcoin. Likewise I use paypal for most of my internet purchases. I have yet to purchase anything using bitcoin.


This might come across as trying to score points, but it really isn't.

You are clearly very pro-Bitcoin, and even you haven't actually used it as a currency.

The problems it addresses are ones that the vast majority of people in first world countries just don't have.

As a currency, it has failed. It has been almost a decade now since people were telling me we would soon all be buying our coffees with Bitcoin, I think that is long enough to have waited. It exists now as a speculative commodity. Digital gold indeed, as no one uses gold as a currency either.


We have a different opinion about the future.... but the present, I can't dispute your points.

Why have I not bought anything with bitcoin? Well I have found nothing that I want to buy where payment in bitcoin is an option. I have actually paid in bitcoin for bitcoin services (ie Whirlpool fee), but I think that we can agree to discount that. It simply isn't widely accepted here. I'm not interested in spending it just for the sake of spending it, though I have contemplated adding some to the odd "tip jar". Why spend it if fiat is accepted and I have far too much of that in my current account. Like every money, it's subject to Gresham's law.

As for the problems that it addresses, thank goodness most are not a problem currently in the UK.
The trouble is that we have seen examples where they HAVE been a problem in at least one "first world country". Sure, not for the vast majority but for a significant minority.
I am of course talking of the Canadian Truckers and those who chose to support them.
We might get little to no warning of similar moves by our own government.

Then there is the debasement of our currency. I think that we are all aware that there are tough times ahead. I personally think that the money printer will be turned on in an attempt to ease the pain. Isn't that a "first world" issue and are not most printing money (or using QE)?

But I do accept your point about me not having spent any. I'll add it to my to-do list.

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Re: Proper Bitcoin mining.....

#521299

Postby Mike4 » August 10th, 2022, 11:04 am

murraypaul wrote:(The above post is assuming my position that Lightning transactions are not Bitcoin transactions)


'Local shops' don't accept Dollar coins in payment for goods, and the only way to spend Dollars in yer typical English corner shop is to use a 'translating' currency exchange service built into any payment service the shop does happen to accept e.g. Visa. So you're not really paying in Dollars at all. You're paying in Sterling and the currency exchange is being carried out at arm's length from the retailer.

Similarly the only way to spend BC in a shop that only accepts Sterling is to use an equivalent arm's length currency exchange translating service, which Lightning would appear to be. Is that right?


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