DEVTOME.COM HOSTING COSTS HAVE BEGUN TO EXCEED 115$ MONTHLY. THE ADMINISTRATION IS NO LONGER ABLE TO HANDLE THE COST WITHOUT ASSISTANCE DUE TO THE RISING COST. THIS HAS BEEN OCCURRING FOR ALMOST A YEAR, BUT WE HAVE BEEN HANDLING IT FROM OUR OWN POCKETS. HOWEVER, WITH LITERALLY NO DONATIONS FOR THE PAST 2+ YEARS IT HAS DEPLETED THE BUDGET IN SHORT ORDER WITH THE INCREASE IN ACTIVITY ON THE SITE IN THE PAST 6 MONTHS. OUR CPU USAGE HAS BECOME TOO HIGH TO REMAIN ON A REASONABLE COSTING PLAN THAT WE COULD MAINTAIN. IF YOU WOULD LIKE TO SUPPORT THE DEVTOME PROJECT AND KEEP THE SITE UP/ALIVE PLEASE DONATE (EVEN IF ITS A SATOSHI) TO OUR DEVCOIN 1M4PCuMXvpWX6LHPkBEf3LJ2z1boZv4EQa OR OUR BTC WALLET 16eqEcqfw4zHUh2znvMcmRzGVwCn7CJLxR TO ALLOW US TO AFFORD THE HOSTING.

THE DEVCOIN AND DEVTOME PROJECTS ARE BOTH VERY IMPORTANT TO THE COMMUNITY. PLEASE CONTRIBUTE TO ITS FURTHER SUCCESS FOR ANOTHER 5 OR MORE YEARS!

Cheap shots

Author's note: This article is part of an ongoing blog about my adventures in the world of alternate currencies.

I never realized how much of an insider's view on Bitcoin and other cryptocurrencies I have until I read a couple scathing cheap shot articles about Bitcoin over the weekend. Last week has admittedly not been one of Bitcoin's better weeks. It began with some of Mt. Gox's ongoing problems coming to a head in the platform's suspension of Bitcoin withdrawals, which as far as I can tell have not been reinstated. It was easy to write the transaction malleability off as a Mt. Gox playing the victim issue, but then BitStamp and BTC-e also suspended Bitcoin withdrawals as a precaution. BitStamp applied some upgrading and testing to its system and reinstated Bitcoin Withdrawal on Saturday. BTC-e is expected to reinstate withdrawals very soon if they haven't already. The bottom line is that the transaction malleability issue when combined with a distributed denial of service attack could in some cases allow for the same user to make the same withdrawal twice. BitStamp chose to deal with this possibility in a proactive way. Mt. Gox is still stalling, leading some to believe the platform's real issues are more along the lines of insolvency.

Combined with the back story of Mt. Gox's issues were a few other stories indicating a future with more regulation of cryptocurrencies in some countries and the wiping out of the black market site Silk Road 2 caused by a hack reminiscent of the recent Inputs.io hack, but apparently exploiting the same transaction malleability issue (I'm skeptical). There was plenty of good news too, but certainly enough bad news to serve as fodder for the gloom and doomers.

There is an up and coming Bitcoin trading platform opening up in New York City, right on Broadway as a matter of fact, called CoinSetter. CoinSetter is still in beta so it's not yet available for use. However, it does have a news cloud page and that's where I found a couple gloom and doom articles which actually topped off my weekend with some humor… and the realization that I'm more of an insider than I thought.

Both articles are citing whatever Bitcoin is trading for on Mt. Gox as its value. As I type this the current Mt. Gox Bitcoin price is $310, and its lowest price in the past 24 hours was $230. This is the price that these gloom and doom pundits are citing as the Bitcoin value! Did somebody never tell them that when an exchange has a major issue (like the inability for traders to withdraw their funds), that its asset prices are going to reflect that issue, not the actual value of the asset? There are a number of places to check to get the real Bitcoin value such as the CoinDesk Bitcoin Price Index, which hit a low of $561.19 over the past week. I also like to check Cryptocoincharts which show the BTC/USD price from a number of exchanges. Those were my sources for the Bitcoin price. No one outside of Mt. Gox was selling Bitcoins for lower than $500. Most of the time the price has actually been higher than $600. It's true the price has fallen from its lofty plateau of $800, but it has definitely not dropped all the way to $230.

My first clue that a pundit doesn't know the basics about Bitcoin is when he cites Mt. Gox' price as the standard. People I know in the Bitcoin community gradually quit even mentioning that price because it was overinflated due to Mt. Gox' continual issues with fiat currency withdrawals. BitStamp instead became the unofficial standard. CoinDesk even dropped Mt. Gox's price from its calculations of the Bitcoin Price Index and Cryptocoincharts doesn't even list it anymore. In other words, the Bitcoin community is pretty much done with Mt. Gox so it's quite funny when some media pundit quotes Mt. Gox's now irrelevant price as proof that the end is near for Bitcoin.

One of the authors of the gloom and doom articles cites 25 years of experience with derivatives trading as his claim to expertise. I'm not sure any more needs to be said.

The gloom and doom articles do raise a valid point, which is that it's not a good idea for anyone to cash out their life savings, 401K account or any other large sum of fiat money they might depend on later and buy Bitcoins with it. People who want to play around with buying and trading Bitcoins should do so with money they don't mind losing. Some will do quite well, but it's very easy to lose everything. When people say that Bitcoin is not a good investment, if what they mean by investment is the kind of asset you buy low and sell high, then I would agree with them, and I don't recommend people buy Bitcoin in the first place. The only time I have ever bought Bitcoin (other than at the very beginning of my crypto-journey) I did it only to get my funds out of Camp BX and I lost a significant amount on that deal.

My experience with Bitcoin is that it works better to earn it in some way. In my case I earn Bitcoin through my writing services. I trade the Devcoins I earn from the Devtome for Bitcoins or I get paid in Bitcoins directly. Then I cash out those Bitcoins for fiat and from there I pay bills. My goal is to keep more and more Devcoins and Bitcoins and try to use them for the things I need, but that depends a lot on what I need and what becomes available. But my point is that I don't buy Bitcoins and hope that I can sell them later at a higher price. There are plenty of people who do that and it's not wrong to do that, but I don't recommend it for someone who is not familiar with the markets and day trading.

Bitcoin really shines when people can earn them for work they do or products they sell. It is so easy to get paid in Bitcoin and it is cheaper to receive a payment in Bitcoin than it would be to receive a credit card payment, as more and more merchants are discovering. You also get paid the same day the payment is sent, usually within an hour, in contrast to the two to three day delay on getting paid for credit card transactions. The major payment gateways supporting Bitcoin and the other cryptocurrencies allow merchants to set the crypto prices to exactly match the going exchange rate with US Dollars in real time. So for example, if you have a widget on sale for $45, the Bitcoin price will always match the equivalent of $45. So if the Bitcoin price shoots up to $1000, then the price of your $45 widget will be 0.045 BTC. If the Bitcoin price drops down to $100, then the price of your $45 widget will be 0.45 BTC. This ability to set a BTC price tied to the USD/BTC exchange rate protects you from market volatility before the sale. Of course, once you get paid, you could lose money if the Bitcoin price drops, but you could also gain if the Bitcoin price rises.

People offering goods and services can accept Bitcoin payments for a portion of what they sell, and they can view Bitcoin income as a supplement to their current fiat income, not as a replacement for it. The Bitcoins could be traded for fiat and added to the fiat income, or they (or a portion of them) could themselves be invested in various ways available so as to grow into more Bitcoins over time. The Bitcoins can also be used to buy things.

When crypto income is an addition to fiat income, or when it is considered to be a stash to play with, then the many benefits of cryptocoins are free to be realized. It's when pressure is put on the cryptocoins to perform at a certain level that they instead cause stress and possibly even ruin to their holder. People need to remember that Bitcoin as a currency (or even as a speculative investment vehicle) is only five years old. It's still a baby. It will grow up; it will mature and become more stable. But at this time it has to be treated a bit more like a child. I wouldn't give the keys to the car to my five year old child; nor would I put her in charge of paying the bills. I fully expect her to be capable of both in another ten to fifteen years, though.

In the same way, Bitcoin and the other cryptocurrencies need to be viewed as something with a lot of potential which has yet to be realized but which will also suffer from various forms of growing pains. If you are going to get involved in cryptos, you have to expect that things aren't always going to turn out your way. You may find you have to sell when the price is not great. You may find you have to buy too high (only to sell low) so you can get your funds out of an exchange whose banking partner got cold feet. You may lose your entire collection to a hack on a web-based wallet service you trusted. All of these things have happened to me.

On the other hand, despite its newness, you will also find that Bitcoin often does perform very well. I personally have been living off my Devtome earnings for the past month because my ordinary fiat income is on hold for another two weeks. I have been fortunate in that the price of Bitcoin did not actually crash (despite what the gloom and doomers have said), and $600 is still a good amount of money to receive in return for a Bitcoin. I was also able to sell most of my Devcoins for the past week at the top of a pump. These things together made for a good Monday morning when I placed my order with Coin RNR. I'm excited about paying a few more bills when the fiat funds hit my bank account no later than Wednesday. But last Monday was not so great because the Mt. Gox craziness crashed the price by around $150 and the price of Devcoins wasn't all that great to begin with. I have learned to take the good along with the bad and not stress too much about either.

The situation I'm in where I'm actually counting on my Devtome earnings to keep my household afloat financially is one I'd like to leave as soon as possible as there is nothing more stressful than needing a certain amount of money while watching the value of either asset I'm about to trade drop. Not needing the money means I'm more free to ride out the lows while waiting to sell at the highs. It also means I can do more with the assets themselves. I'm hoping I can go back to only trading out some of my earnings by next week, or in two weeks.

This insight I have about Bitcoin has been gained over the past year of working with it. I started out by buying a little bit of Bitcoin with cash, then with earning micro amounts through various faucets and earning sites. I joined the Bitcoin Forum and eventually started keeping up with the news on Bitcoins, and there is a lot of it. I found the Devtome opportunity (or rather it found me), and then I really started earning substantial amounts.

When the value of both Devcoins and Bitcoins went to the moon before Christmas I realized that my fun little hobby had morphed into a profitable venture and decided I'd better take some profits just in case the whole thing crashed and burned. I treated (and continue to treat) the profits as temporary and have used them to pay overdue bills. My next goal is to pay down debt. If I can use my Devcoin and Bitcoin earnings to make even a small dent in our mountain of consumer debt I will consider my foray to have been very successful no matter what happens in the future–even if the gloom and doomers are right about 2014 being the year the house of cards comes crashing down.

I actually think the more likely explanation for the fear, doubt and uncertainty (FUD) is that the pundits are eating sour grapes because they regret having turned down the opportunity to buy Bitcoins back when they were worth only 50 cents, or only three dollars, or only ninety dollars. Who wouldn't after seeing the price top out at $1200? I think Bitcoin is going to continue to do well and with it many of the emerging alt coins. People who missed out on the opportunity to buy super low or mine back when it was easy need to get over it and educate themselves so they can figure out how they can best jump in and get involved in a nonspeculative and sane way. Otherwise they will miss the many awesome opportunities still available to the not so early adopters before the entire cryptocurrency movement goes mainstream.

Devtome Writers


QR Code
QR Code cheap_shots (generated for current page)
 

Advertise with Anonymous Ads