Bitcoin shocker

I just saw bitcoin dropped $430 to 120something on CNBC. OUCH!

https://www.cnbc.com/id/101445023

"... Bitcoin's nightmare began a week ago with word that its most prominent exchange, Mt.Gox, which formerly served as a trading platform for playing cards in Magic: The Online Game, had experienced a technical problem and wasn't allowing customers to cash in their bitcoins.

Since then, negative headlines have piled up, with Tuesday bringing statements from Mt.Gox reaffirming that it wasn't conducting further transactions. The exchange noted negative publicity and "potential repercussions" but offered no further clues as to the nature of the disruption and when or if business would resume. Reports swirled that the exchange was on the brink and couldn't meet its obligations."

I missed out on the bitcoin rush but stayed out of the fray. Didn't take Cramer to see a fall coming on bitcoins.

Whatever goes UP....must come DOWN!! What a sad situation for investors. Some sports books started taking Bitcoins for payment not too long ago!

When I looked into Bitcoin the first thing I learned that most folks ignored is that it IS NOT an investment commodity. It is a currency just like any other foreign currency. Currency speculation is a very volatile endeavor and not anything I would choose to engage my hard earned money in.

That said I did accept Bitcoin as payment for the sale of a foreign stock. My accountant thought I was crazy and I am sure is still cussing me for the amount of extra research he had to do.

While I have since spent the majority I still have a balance in Bitcoin. Since this bit of news has released the amount of Bitcoin I have is unchanged. The only thing that changes is the value compared to other currencies. These ups and downs in currency valuation go on all the time.

What I should have done is convert (sell) my Bitcoin to U.S. dollar immediately like I usually do......"But honey, it's new and shiny. I want to play with it a while."

Live and learn.

Did you actually get the physical bitcoins?, not just deposited into your "bitcoin account" ?

There is no such thing as "physical" Bitcoins. It is all virtual, as in computer code.

When I made my sale I was offered payment in Yen or Bitcoin. If paid in Yen there would be a surcharge, an extra commission and a money transfer fee. If I accepted Bitcoin there would be one very low fee. I chose Bitcoin.

I did have to open a "wallet", basically an account with an app to securely hold the code.

When I paid for another international purchase using Bitcoin it was very fast and also excluded many of the usual fees and charges. Of course the balance I had left has plummeted in value in comparison to all other world currencies so any savings I made is lost for now. If it were not for the exchange volatility I would use this currency exclusively for the great savings it gives by eliminating the "middle man" fees. I am hoping that it will eventually settle out and become commonplace.

Bitcoins were way too difficult for poor old DonDiego to understand. Thankfully his limited intellect saved him from any bitcoin-inflicted losses.

"United States Constitution
Article I, section 8, Clause 5__Congress shall have power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures."

"One of the purposes of inserting the coinage clause was to impose on the government a special trust to create and maintain a national metallic currency, to the exclusion of any other. "[Metropolitan Bank v. Van Dyck, 27 N.Y. 400, 484 (N.Y. 1863)]
In a series of nineteenth-century cases dubbed The Legal Tender Cases, the Supreme Court addressed the federal government's power to order its bills of credit to be accepted as legal tender for all debts, public and private.:
__In Hepburn v. Griswold (1870), the Court held it a violation of the Obligation of Contract Clause to retroactively alter contract terms by permitting payment in 'greenbacks' of an obligation incurred in gold dollars. Greenbacks were not immediately redeemable in gold.
__Following a dramatic change in membership, however, just one year later in the Knox v. Lee (1871), the Court expressly overruled Hepburn and upheld the Legal Tender Act as applied to both prospective and retrospective debts. Pointing to the crisis occasioned by the Civil War, Knox upheld the power to declare paper money to be legal tender.
__In Julliard v. Greenman (1884), the Supreme Court extended Knox, upholding the validity of legal tender laws during peacetime. The Court held that the federal government's monetary power was inherent in its sovereignty; thus it need not be enumerated in the Constitution.
Justice Stephen Field's blunt dissent declared, 'If there be anything in the history of the Constitution which can be established with moral certainty, it is that the framers of that instrument intended to prohibit the issue of legal tender notes both by the general government and by the States; and thus prevent interference with the contracts of private parties.'"
[boldface added - DD]
Ref: Heritage Guide to the Constitution

"Because gold is highly valued and in very limited supply it has long been used as a medium of exchange or money. The first known use of gold in transactions dates back over 6000 years. Early transactions were done using pieces of gold or pieces of silver. The rarity, usefulness and desirability of gold make it a substance of long term value. Gold works well for this purpose because it has a high value, is durable, portable and easily divisible."
Ref: geology.com

In the event of a societal upset citizens may find the internets and bitcoin unavailable, . . . and paper money unacceptable. Gold is the immutable medium of exchange.

Similar to Double D, I still don't understand bitcoins and have never taken the time to research them.

It took 50 bitcoins to get me a "happy ending"! But it sure was worth it!

"The Mt. Gox bitcoin exchange in Tokyo filed for bankruptcy protection Friday and its chief executive said 850,000 bitcoins, worth several hundred million dollars, are unaccounted for.
It remains unclear if the missing bitcoins were stolen, voided by technological flaws or both."

It is clear to DonDiego that any currency which can be "voided by technological flaws" is unlikely to be DonDiego's currency of choice.

Ref: ABC News