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Wednesday, December 4, 2013

Bitcoin Or Bust: One Couple’s Quest To Live On Virtual Currency

Newlyweds Austin and Beccy Craig are embarking on an adventure to find out whether they can live on Bitcoin. (lifeonbitcoin.com)

Newlyweds Austin and Beccy Craig are embarked on an adventure to find out whether they could live on Bitcoin. (lifeonbitcoin.com)

Austin Craig and Beccy Bingham-Craig are no ordinary newlyweds. The Utah couple decided to travel the globe and for the first 90 days of their marriage, make purchases only using the virtual currency known as Bitcoin.

Their experiment — which ended up lasting more than 100 days — is the subject of the forthcoming documentary “Life on Bitcoin.” The Craigs join Here & Now’s Jeremy Hobson to discuss the experience.

Video: The Craigs try to use Bitcoin at a farmers market

Guest

  • Austin Craig and Beccy Austin-Craig, of “Life On Bitcoin.” They tweet @lifeonbitcoin.

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  • say592

    Loved the segment! I operate a local cash exchange service, and things have really started to take off the last few months. My transaction volume has about trippled in the last month alone!

    • Roberto Optimo

      Do you buy sell and Bitcoin for USD? What are your rates?
      Where are you located? Do you take PayPAL?

      • say592

        I do both, buy and sell. I can be found on LocalBitcoins, and I highly recommend finding someone in your local area to deal with. If not, they have online sell functions through bank deposits, Western Union, Moneygram, and many other services. Be very skeptical of anyone who wants to buy or sell bitcoins using Paypal. It is against Paypal’s terms of service. Additionally, payments on Paypal can be easily reversed. As a seller, it is extremely risky to sell on Paypal, so they will most definitely be charging you much, much more than market rate.

        Their was a segment on To the Point about Bitcoins today (12/4/13) that was very good, and you can always get a lot of good information from online forums, such as Reddit.com/r/Bitcoin

        • Roberto Optimo

          Thanks. Great answer. I just signed up to LBC and all the local sellers want cash deposited to specific Banks. They also want a photo of the deposit slip.
          You then hope that the Bitcoin amount is deposited in your wallet at the agreed rate. WOW, this gets even more arcane and risky.

          • say592

            Most local sellers do cash in person, are you sure you weren’t looking at online sales? Online sales are escrowed, the seller can not change the price, cancel the transaction, or remove the coins. If there is a dispute on either side, the site staff will request information and determine who didn’t do their part and give the coins to the other party.

            To reiterate, you receive the coins you pay for, at the rate agreed, and it would be nearly impossible for the seller to take both the money and bitcoins.

          • Roberto

            Thanks again. I was not looking at the online sites, but then down the page I found the local P-to-P list. I might try it, but we have some scary people down here in Miami. Daylight, public place, handover cash, etc. Just like a biind date. The Escrow feature sounds real good though.

          • say592

            The escrow feature works very well, I bought my first Bitcoins that way. In person is the best though, I’m sure you have several sellers available in Miami, so look for someone with a good price and good reviews. Follow the usual “Craigslist” safety standards, meet in the day, public place, etc. Check in advance, but most sellers are pretty willing to help you out in terms of what wallet to use and how to keep your Bitcoins safe and secure. Most of us are pretty passionate about Bitcoins and love to answer questions and give advice.

    • Cilina Magtheridon

      I don’t mean to throw a wrench into all this. But don’t you need to have some kind of permit or license to sell Bitcoin for US Dollars?

      • say592

        You are correct. My business is registered with FinCEN as a money transmitter, and I have taken the appropriate steps to be compliant with my state’s money services laws as well. It’s not something that anyone should jump in and start doing, there are a LOT of regulatory issues to consider as well.

  • Bobby

    They only talked about price of bit coin going up and the dentist being happy. Had the price gone down, the same dentist would have been upset. I still don’t get bitcoin.

    • say592

      Past performance does not necessarily indicate future results, however, Bitcoin has historically always gone up given a little bit of time. In any market there are corrections and downturns, but overall, Bitcoin goes up.

      As for what Bitcoin is, I suggest you listen to the segment To The Point did on Bitcoin today (12/4/13). They did a great job explaining it. In short, it is digital cash with no government backing. It shares much of the same principles as cash in that it can’t be reversed or taken back arbitrarily, but also shares properties with gold or other limited supply instruments in that there is a fixed amount of Bitcoin that can ever exist, and no one can arbitrarily increase that amount, resulting in a devaluation of the existing units.

      • Roberto

        There was an interesting article on the financial newswires this morning
        making the case that due to the limit to the ultimate number of Bitcoins they are inherently deflationary and will soon become almost worthless.
        I don’t say that I agree, but when you toss in all their competitors, and unlimited number of similar digital cash schemes that will be hatched, it does give me pause as an investor. For merchants it might not matter.

        • say592

          It is true that they are inherently deflationary by design. The argument is typically that because of that people will horde instead of spend, and the economy will implode. Personally, I don’t think that is the case. People know cellphones will be cheaper in six months, yet they still buy them today. It comes down to need (or want) and utility. If you want or need something, you will spend the money on it, regardless of whether or not it is the most financially sound decision. As for utility, Bitcoin isn’t just a currency, it is also a protocol for moving value. Since it already has far more momentum, it has a much larger opportunity to succeed than any competing design. It is also borderless, which gives it far more utility than anything a government or group of governments can create, because it can be universally accepted.

          • Roberto

            Good reply, but I still worry about the effect of Litecoin, peercoin, namecoin etc. They offer better deals to merchant (so they say) and different mining techniques. They could catch on.

          • say592

            The problem is that the differences are not significant enough, and they don’t have the market share to do what they are intended. If you want to move $1M, why would you try to do it using a lower volume currency where your movement alone will cause slippage in the markets? Most, dare I say all, alt coins are poorly vailed attempts at trying to capitalize on Bitcoins success for those who missed out on the early days. Scrypt mining is no more secure, and it’s lower participation rate makes the network overall less secure than Bitcoin. Competition is healthy, but there is no need for the alts. They aren’t silver to Bitcoin’s gold. Bitcoin doesn’t need a less valuable alternative to make figuring small amounts easier, as it is already digital and infinitely divisible.

          • Roberto

            From a recent review…

            Litecoin – 84 Million Coins Faster Than Bitcoin

            Capitalization: 734 Million Dollars. Price as of 12/2/12: ~$30

            Pros:
            • At .5 billion dollars, it has the second or third biggest market cap, depending on whether or not you consider Ripple to be cryptocurrency (as of (11/25/13).
            • Transaction times happen 4x faster than Bitcoin.
            • Still affordable to a lot of people as an investment whereas Bitcoin is seen as too expensive. It has a good combination of momentum and affordability right now.
            • Theoretically, one Litecoin should be worth 1/4 Bitcoin since there will be 4x as many coins. Right now LTC is around $20, and BTC is almost at $1000. It could be argued that Litecoin is therefore undervalued by an order of magnitude (1/50 when it should be 1/4).
            • More coins than Bitcoin means that Litecoin may be more future-proof than Bitcoin.
            Cons:
            • Cannot be purchased directly with USD or other currencies as easily as Bitcoin, ultimately meaning its price is directly connected to Bitcoins.
            • Ultimately, Bitcoin has more momentum and support from the community. Litecoin may be the second biggest cryptocurrency, but many feel similar to one pundit who said, “There can only be one. The Network effect is simply too strong. Bitcoin has orders of magnitudes more adoption, acceptance and use compared to any other cryptocurrency on the market. The game is over and Bitcoin won.”

  • cral

    What was that aphex twin cover at the end of the story with marimba?

    • Rachel Rohr, Here & Now

      Hi @7843c27e1ed108bf8c6e407c055ec9ba:disqus, It looks like the song that played at the end of this segment was “All In” by Flying Lotus, but we did play some Aphex Twin in today’s show — the song was “Rhubarb.” I hope that helps! Full list of today’s music here: http://hereandnow.wbur.org/2013/12/04/music-from-the-show-759

  • Float On

    We run a Float Tank Center (Sensory Deprivation Tank Center) in Portland, OR. We’ve been accepting Bitcoin for some time now.

    Part of the reason we do so: we love the idea of a decentralized, universal currency.

    • Bobby

      how would you feel if the price of Bitcoins started dropping?

      • say592

        I don’t think anyone would love that (unless you want to buy cheap coins…) but most merchants shield themselves from the changing exchange rate using a service like Coinbase or Bitpay. Both services offer a guaranteed amount deposited into the merchant’s bank account. Coinbase offers free processing for the first $1M it processes, then 1% after that. Bitpay charges 1%, but has unlimited plans starting at $35 a month.

      • Float On

        Bitcoin rises and falls every day.

        Obviously, a huge drop wouldn’t be ideal… it is, however, an understood risk.

  • Roberto Optimo

    VERY SUPERFICIAL. You can not cite a price without the exchage that gives the Bitcon quote. There are over 20 exchanges, prices vary by hundreds of dollars.
    1. You need an “intenet wallet” to carryand use your Bitcoins. What exchange and wallet did they use?
    2. I have not found a single exchange that accepts Us Dollar deposits except by international bank wire. How did they do it? Is it safe?
    3. Do merchant know that to get cash in US dollars it may take weeks?

    • say592

      I’m not sure where you are looking. There is some variance between exchanges because of market challenges in the various exchanges. Bitstamp is the best base, because they have good volume and are able to get fiat in and out of the exchange consistently.

      In the US there is CampBX which allows you to find your account using money order or personal check, and they will be allowing ACH soon as well. Coinbase utilizes ACH as well, but they are more of a retail shop than a true exchange.

      As far as merchants go, most use Bitpay or Coinbase to process transactions. They can price in dollars, and receive dollars in their bank account the next day via ACH. No international wire needed, no exposure to fluctuations.

      • Roberto

        Prices vary right now from $955 to $1250 (MTGox). Bitstamp is located in Slovenia, how can it be safe to send a Bank Wire? CampBX has one tenth the volume of MtGox, seems a bit thin and has a much higher bid-sk spread %. What makes it safe for me to send them a check?

        • say592

          Mt Gox had a couple US Bank accounts seized, essentially leaving them illiquid for withdrawals in dollars. The wait time to transfer dollars out of Mt Gox is well over a year, so people buy Bitcoins and transfer those out instead. That leaves a market where people are less willing to sell Bitcoins for dollars, driving the price up.

          BTC-E typically has the lowest prices, but they are based out of Russia and operate essentially anonymously. They frequently have problems where were transfers don’t show up or are “misplaced” for weeks. Money for the most part flows freely, but people are hesitant to wire money to the shady unknown Russian group, so this makes them a poor choice as well.

          CampBX is simple. They are based in Atlanta. It is a single guy with some part time help, and they have a history of being late in processing payments and responding to support tickets, but they have gotten better. The benefit here is no international wire transfers, and you have the mental peace that it would be easy for US authorities to prosecute should the owner try to grab the money and run. The downside, as you pointed out, is their order book is very thin.

          Finally Bitstamp. It’s funny that you thought Bitstamp was potentially the most shady, as they are held in pretty high regard. The owners are known, they have an established level of trust, and they have high volume. It is easy to move money in and out. They are really the gold standard for Bitcoin exchanges.

          There are smaller exchanges as well, but the lower volumes and similar difficulties in moving money makes them not worth analyzing.

          • Roberto

            Thanks, good info.

  • JC

    Millionaire spoiled couple doing a publicity stunt. And yes, they are writing a book about it reading to cash in the money.

  • JC

    Also very easy to get people to accept BitCoins when a documentary crew is following them around with a camera. In fact, I bet most of the exchanges on the video were staged for the camera.

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Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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