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Keeping Bitcoins on the Balance Sheet

posted by martyb on Friday September 08 2017, @09:09AM   Printer-friendly
from the the-times-they-are-a'-changin' dept.

An Anonymous Coward writes:

Overstock.com and the Internet Archive have separately discussed their decisions to hold onto cryptocurrencies rather than convert them immediately. From news.bitcoin.com:

Operating as a 501(c)(3) non-profit, the Internet Archive has accepted bitcoin donations since 2012. This week Kahle decided to explain to the public in a blog post why bitcoin remains a fixture in the nonprofit's balance sheet.

"A foundation was curious as to why we have Bitcoin on our balance sheet, and I thought I would explain it publicly," explains Kahle. "The Internet Archive explores how bitcoin and other Internet innovations can be useful in the non-profit sphere – this is part of it. We want to see how donated bitcoin can be used, not just sold off."

[...] At the beginning of August the company's CEO, Patrick Byrne revealed it is currently stashing fifty percent of its bitcoin revenue. Byrne has been [a] long-time bitcoin proponent and believes the technology behind the decentralized currency will be the future of finance. During a budget report, Byrne revealed the business used to keep 10 percent of the daily bitcoin revenue the company earned and converted the rest of the funds to USD. Now Byrne details that the corporation's board of directors has authorized a strategy to hold fifty percent of the firm's bitcoin revenue.

The original announcements:
http://blog.archive.org/2017/09/02/why-bitcoin-is-on-the-internet-archives-balance-sheet/
https://finance.yahoo.com/news/edited-transcript-ostk-earnings-conference-155549361.html (requires ECMAScript to "Read More")

Note: "HODL" appears to be a bitcoin joke, see here

Original Submission

 
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  • (Score: 0) by Anonymous Coward on Friday September 08 2017, @10:32AM (2 children)

    by Anonymous Coward on Friday September 08 2017, @10:32AM (#565006)

    Of course that test had a few parameters that might cause someone not to buy even if determining/believing the coin is not fake and knowing quite well its true value:

    • The whole thing is done in front of a jewellery shop. So the first question is: Why doesn't he try to sell it there? This smells at something being wrong with it; if it is not the coin, it is the circumstances; e.g. it could be a stolen coin (maybe even from that very jewellery), so you might be complicit in a crime by buying it. Or it might be part of money laundering.
    • The fact that it is sold that much under value by itself raises suspicion (and suggests that you might get into heavy legal waters if buying). It also means that in case you are questioned, you'll have a hard time explaining why you did not suspect the deal to be dubious.
    • Normally if you want to sell something, you don't ask random strangers passing by. You'll go to a place where sell offerings are to be expected, and where you'd therefore also expect potential buyers to come by. Unless, of course, you have a good reason not to, e.g. because you don't want the police to notice.

    So in short, everything in this shouts "warning, possibly crime involved; don't buy". Indeed, one might say he didn't sell the coin not despite it being ridiculously cheap, but because of it being ridiculously cheap.

  • (Score: 3, Interesting) by anubi on Friday September 08 2017, @12:04PM (1 child)

    by anubi (2828) on Friday September 08 2017, @12:04PM (#565028) Journal

    All you say rings true.

    The guy who made this video made a bunch of videos of similar social experiments.

    In a way, an eye-opener for me, as I put myself in the same position... what if I had gold coin and needed something?

    What if I needed it bad?

    What would be more valuable in a situation where shit has just hit the fan... an adjustable wrench? A flashlight? A cigarette lighter? Can of food? Gold coin?

    I would sure be loathe to give up one of my tools for a coin of unknown authenticity, especially seeing the latest spiel of fake gold coins I see advertised on TV ( You know, the ones "clad in 44 milligrams of pure 24 Karat Gold!" )

    Hell, I would probably accept the coin out of charity if I was asked to give up a bottle of water in short supply.

    Fine, I guess, if the guy can get to a trusted money-changer, but my take on it is a bottle of liquor is probably a more tradeable item during an economic collapse. If it wasn't for them going stale, my best bet would be cigarettes. Even though I do not smoke. My guess is cans of food, rechargeable flashlights, fuel, toilet paper, antacids, tools, and other manufactured goods will skyrocket in price if the factories and distribution systems take a hit. Note this list is by no means conclusive - these are just things that come to mind that can be bought and stored while they are available, and some have a very long shelf life.

    --
    "Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]

    • (Score: 1, Interesting) by Anonymous Coward on Friday September 08 2017, @03:35PM

      by Anonymous Coward on Friday September 08 2017, @03:35PM (#565146)

      You are thinking of survival on the wrong timescale. Gold and other precious metals are mostly useless in the immediate timeframe after somme sort of collapse or disaster, but they are hedge in the intermediate scale. The ifs whats and hows are going to be wildly different based on what sort of scenario you are imagining, but almost all scenarios are going to be localized in some fashion. If the USD collapsed, someone holding gold bullion could still do trade with the Europeans or Asia. Also, metals are portable and divisible. How much does two thousand dollars of canned food or cigarettes weigh? For the last 10 or so years, that is less than two ounces of gold. Ever try to split off five dollars of a battery? Doesn't work too well. Again, not particularly usefull to have if you are starving after a flood, but if you have a stash somewhere, you may be much better off after things settle down.

      Anyway, the article is about Bitcoin and neither organization seems to be concered with the dollar collapsing, more of holding Bitcoin as another investment device like stocks or securities. The Archive.org guys seem to be mostly technophiles, so the bitcoins were actually used to pay a number of salaries and ended up making them some money.