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Originally Posted by xpl0sive
i just read this thread... first time I've ever heard of these things... i still don't get what makes them worth money.
You guys are comparing them to foreign currency or to stocks on the exchange. To me, foreign currency is backed by governments, who have economies, which is why their currency is worth money.
stocks for various companies are worth money because the companies that sell stocks have some assets and profits which makes their stocks worth money.
What makes bitcoins worth money? Just because there's a limited number of them? What exactly are they? They aren't anything physical from what I understand like gold or diamonds, for example.
What about taxes? Do you guys declare the profits you make from trading these things? Are they considered investments by the CRA? I sure hope no one gets audited and fined for not paying taxes
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Hi Grandpa, let me explain some things
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To me, foreign currency is backed by governments
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This is not always true. Currency treasuries are usually (but not always) separate from the government.
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who have economies, which is why their currency is worth money.
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Countries are not what make currencies "worth money". What makes something worth "money" is that you can exchange them for goods or services. If people don't want USD anymore, it isn't worth anything, even if it's money. Many currencies (often backed by governments) have gotten to the point where people don't want them anymore. At that point, they are only worth whatever material they are made with.
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What makes bitcoins worth money?
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The same thing that makes anything worth 'money'. You can buy stuff with them. Now it's brand new, so there's not much you can buy with it. But there are more and more stores that accept it as payment..
The other allure is the idea that the economy (that you seem to count on so much) is going to eventually crash, as we go through a paradigm shift. When that happens, people will need something to buy and spend with. For the last few thousands of years, it has been gold and precious metals. In this day and age, digital currency makes much more sense.
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What about taxes? Do you guys declare the profits you make from trading these things?
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For the people talking about their huge gains here, I sure hope they are declaring it