Bitcoins - the debate rages

by Tamara Pitelen

A couple of people have sent me emails after reading my blog Bitcoin for Beginners a couple of days ago. One of them was a bit mad at me. I'll get to him in a minute.

A couple of people have sent me emails after reading my blog Bitcoin for Beginners a couple of days ago. One of them was a bit mad at me. I'll get to him in a minute.
My first email correspondence over the bitcoin issue was with Julian Tosh, who lives in Las Vegas and has a website called www.bitcoinsinvegas.com. He said: "Trying to earn bitcoins online is less profitable than mining. Offer a good or service and you'll have more luck - or simply buy them from someone or a business like CoinBase.com.
"If you'd like to buy them from an individual, you also might benefit from their experience and learn some easier or more secure ways to do things. I recommend trying to meet someone through localbitcoins.com or bitcoin.meetup.com."
Julian also holds weekly bitcoin lunch mobs in Las Vegas so if you're in town and interested, go and say hi from me. I asked Julian if he earned and spent bitcoins on a regular basis and did he see  future when we'd all be paid in bitcoins, pay our rent and buy our groceries in bitcoins?
He said: "I earn bitcoins, buy bitcoins, and spend them just about every day. There is a growing community of adopters in many major metropolitan areas. In Las Vegas, I have a group of about 60 people who meet regularly to keep up to date and participate in the Bitcoin economy. Here in Vegas, there is a dentist that works for bitcoin, a real estate agent that will let you buy/rent/lease properties for bitcoin, a mechanic will fix your car for bitcoin, and numerous food establishments that will feed you for bitcoin.
"I see bitcoin as a competitor to all money systems. It has properties that are better at times, and not so good at times. But where it shines is its frictionless ability to transfer value/wealth over distance. It is impossible to send 10g of gold to someone in another country for payment. It is expensive to send the same value in fiat due to banking fees. But it is very easy and inexpensive to send that same value in bitcoin to any location in the world. There is no counterparty risk with bitcoin, no way to regulate maximum amounts you can send, and no way to reverse a payment.
"This is a brand new globally accessible currency and the world is only now beginning to understand its properties and benefits. It's not surprising it's not ubiquitously used. But due to the ease at which it can be used once you learn it, I'm confident that it will be accepted everywhere eventually - just like credit cards were not always accepted at all merchants 20 years ago."
Thanks for that Julian! Very interesting.
Second, there was Mike Gehl - I don't know where he's from - who emailed me and wrote:
"I think you're missing the point of digital currencies if you think the only way to acquire them is by filling out surveys and watching videos. People aren't going to just hand you an ounce of silver - you need to  dig it from the ground, earn it, or exchange something of value for it. Bitcoin is the same.
"The most important part of the Bitcoin system is the payment network - not the currency aspect. Currently, one of the most pervasive problems with credit cards & online transactions is identity theft and fraud. A consequence of this leads to 2-3% credit card processing fees along with charge-backs levied on merchants. This results in overall higher prices to consumers. "
"The Bitcoin system solves this problem and this should be your story. Bitcoin enables near Instant, secure, global transactions facilitated by minimal processing fees on a network trusted by its users (no banks, no governments required)."
My reply to Mike was, yes, I know I'm missing the point... endeavouring to get the point is the idea behind the experimentation. Theoretically I understand that having a global payment network that bypasses the banks and finance houses has masses of advantages but I'm taking it to the realm of the common woman and man. How do I get these things in everyday life. My boss won't pay me in them, my landlord won't accept them for rent, I can't buy my groceries with them.
I can envisage a future of a global digital currency - I'd love that to manifest actually. I do wonder though if Bitcoin needs to work on its reputation though, when you start investigating them, you end up with a lot of gambling opportunities and links to dodgy websites.
However, here's another interesting development in the last few hours. Germany has just officially recognised Bitcoin as legal tender, calling it 'private money' - which basically means they're going to tax it like any other income source.
Finally, a mystery. I checked my Bitcoin account balance this morning and it's grown! I now have BTC 0.010012. I don't know where that BTC 0.01 came from but it's equivalent to about 72 pence! I'll be getting that Mr Zombie Geek mug in no time.
Keep the emails coming if you want to continue chatting about bitcoin - write to me at tamara@cpifinancial.net - if someone can explain this 'mining' concept to me, awesome. I've read many explanations but still I don't get it.

Reff: http://www.cpifinancial.net/blog/post/22595/bitcoins-the-debate-rages

Bare necessities

 

by Isla MacFarlane
 
Is Islamic finance merely a luxury the majority of the Muslim world can't afford?

The head of an angel investor fund from Egypt laughed when I asked her if there was any demand for Islamic loans. “No,” she replied firmly. “There is demand for money. They don’t care where from.”
In fact, ninety five per cent of the Muslim world does not have access to Islamic finance. And they don’t seem to mind. I’m not talking about Muslims living in non Islamic territories – out of the countries which boast a Muslim population of 98 per cent or more, the vast majority, including Afghanistan, Algeria, Azerbaijan, Comoros, Jordan, the Maldives, Morocco, Niger, Tajikistan, Tunisia, Somalia and Yemen either have no domestic Islamic finance industry, a pocket-sized or an embryonic one. Only Iran, Iraq and Turkey feature on the list and have an industry to speak of.
The world’s largest Muslim countries don’t fare much better. Indonesia, home to 12.7 per cent of the world's Muslims, has a tiny domestic industry which pales in comparison to its neighbour Malaysia’s. Pakistan, the second largest, has been making progress but its conventional banks still dwarf the few Islamic institutions. India, the third largest Muslim country, has yet to open one Islamic institution.
It seems Islamic finance is not considered a necessity in the majority of the Muslim world, especially in countries where a sizeable number of the population does not have enough money to open a bank account. It is born out of business needs, rather than fundamental ones.
As one of my contributors, Rushdi Siddiqui, pointed out to me recently, this is the opposite of Islamic finance’s much larger cousin, the Halal industry. All must eat, and Muslims will only eat Halal.
With its surplus liquidity, it seems a good way for Islamic finance to make itself relevant to the wider Muslim world would be to invest in the capital-hungry Halal industry. As Siddiqui pointed out, with so little access to Islamic finance, many Halal businesses are reliant on conventional funding. Ironically, this means that Muslims may eat a Halal burger but may not be able to invest in a Halal burger chain.

Tried and tested - Bitcoin for beginners

by Tamara Pitelen

Are bitcoins the future of money or are they a bit of a con? Tamara Pitelen tries them out for size. 

I’ve been hearing a lot about bitcoin lately. Apparently this is the currency of the future. Fast forward a decade or two and currencies like the euro and swiss franc will be history, we’ll all be earning and spending bitcoins. That’s the theory from what I can gather… but I’m not convinced so far.
What are bitcoins? The first decentralised digital currency, the pundits say. Essentially, they are digital coins you can send and received via the internet into and out of your online bitcoin wallet.
Bitcoin cheerleaders say it’s a new kind of money and ‘the biggest opportunity for innovation that the world has seen since the industrial revolution. An idea whose time has come!’
It all sounds great but how do you earn and spend these bitcoins? I figured the best way to understand bitcoins is to use them. So, to find out what it was all about, I first downloaded the software at www.weusecoins.com to create my online bitcoin wallet. This also gave me a bitcoin address, which is: 1JfhhT1PAW8quKCt4qbbvg61nfS54Y4NVx. Doesn’t exactly roll off the tongue.
Ok, I’m ready to spend but my bitcoin bank account is empty, which  begs the question, how do you earn bitcoins?
One way you can earn them is by watching videos at www.cointube.tv which is where I watched someone called Chef Ricardo making home-made Jamaican-style vegetarian pizza. Chef Ricardo’s video was 10 minutes 51 seconds long. I don’t think Chef Ricardo is really a chef. He’s a guy who’s making a pizza in his kitchen using ingredients out of a jar. Frankly, life is too short to watch this stuff.
Worse, despite the website promising to pay me 20 uBTC* for stealing that 11 minutes of my life, the money did not turn up in my Bitcoin Wallet.
I went to several other websites that claimed to offer ways to earn bitcoins but for one reason or another, none of them worked. These included: www.iwantfreebitcoins.com, www.coinvisitor.com, www.bitcrate.com, www.coinad.com, www.netlookup.se... There are hundreds more websites that claim to give ‘free’ bitcoins in return for doing things like filling in surveys, downloading software or Facebook apps, staying on a website page for three minutes, or watching videos but in my experience it just never worked out to be that easy. For example, I started filling in a survey at www.abitback.com but a few pages into the survey – at the nationality question – the survey suddenly stopped and I was basically told I didn’t fit the brief of the people whose details were desired. At other websites, I was told ‘this offer is not available in your country’.
During this afternoon of experimentation, I earned BTC 0.000008 for viewing a website page for one minute at www.earnfreebitcoins.com. So I watched that page a few more times until I’d racked up the mighty total of 0.000012. Next, at www.bitcoin4you.net, I earned BTC 0.000028 for looking at a website page for three minutes.
In the end, after an afternoon’s work, I’d had earned the princely sum of BTC 0.00004. What can you buy with that? One of the online stores that accept bitcoins is UK-based www.somethinggeeky.com where a Mr Zombie geek mug sells for £8.99. I’d need BTC 0.13 to buy that mug since £1 is worth about BTC 0.01. Unfortunately, my BTC 0.0004 is worth less than one pence.
Worse, it turns out the bitcoin network won’t relay transactions that have a payment of less than BTC 0.01 unless you pay a transaction fee of at least BTC 0.0001 (that's 100 uBTC) per kilobyte. So if I earned 200 uBTC, I’d have to pay a fee of 400 uBTC just to send it somewhere! In other words, the rewards of my afternoon’s toil would be spent on transaction fees.
So far, my verdict of bitcoin is ‘a bit of a con’. Am I missing something crucial about this ‘money of the future?’ Tell me where I’m going wrong! Email me at tamara@cpifinancial.net

*1 mBtc is Btc 0.001
1 uBtc is Btc 0.000001

http://www.cpifinancial.net/blog/post/22566/tried-and-tested-bitcoin-for-beginners