Silk Road forums
Discussion => Security => Topic started by: vlad1m1r on August 04, 2012, 07:46 pm
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Hi all,
For those of you who don't know my name is vlad1m1r and I operate a service selling Bitcoins for cash in the mail to people in the UK and Europe.
The Bitcoin's value is currently climbing and as such some users have contacted me because they expected to receive more Bitcoins than they actually received. (This is something of a surprise to me as I never quote in Bitcoins but in GBP/EUR but more on that later).
I cannot stress strongly enough that the number of Bitcoins you possess in this context isn't as important as their value.
Let's say you have 7 gold coins sitting in a drawer at home. Each day, as the gold spot price changes, the value of these coins in dollars for instance will go up and down but you still have no more or less than 7 coins.
Now let's try understanding the system in reverse. Let's say you go to a jeweler's to buy three more coins and you're told they cost USD 100 each, you pay up your 300 dollars for three coins and leave.
If you then come back the following week and find that the value of gold has risen such that the coins are now USD 200 each, you still don't lose out if you then pay more for each one - the coins are *worth* USD 200 each.
The only times a buyer actually loses out as a result of the fluctuating Bitcoin is when one of two things happen:
1. The Bitcoin rises in value and prices for a product/service you wanted to buy remain unchanged. This can happen but vendors accounts on Silk Road have the option to peg prices of products to the USD/Bitcoin exchange rate as per MtGox. If the value of the Bitcoin increases, the price of the item (in BTC) will therefore decrease.
2. The Bitcoin falls in value before a buyer has the chance to spend. This is quite an easy scenario to avoid. Decide what you want to buy in advance, only order as many Bitcoins as you need and place the order for your chosen product as soon as you have them.
If I've not explained anything clearly, please let me know and I'll do my best to clarify.
V.
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+1, great post. Most people seem to think they're constantly losing money with Bitcoins no matter what's going on with them. I'd suggest buying just a tiny bit over what you need, making your purchase, and then you have nothing to worry about.