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Originally Posted by Sunny Day
As for BitCoins, I looked yesterday at a site that severely limited how many you could buy a month (probably they had a small supply). This makes it difficult if you need some to make a major purchase now.
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I'm assuming that you were trying to use CoinPal. That service is very new. Also, they are still trying to keep fraud down to a minimum so they limit how many Bitcoins you can buy per week.
The problem with accepting reversible transactions (PayPal / Credit Cards) a non-reversible currency such as Bitcoin is a big one.
Example: Fraudsters can rush in with stolen PayPal/CC numbers and run away with Bitcoins. Bitcoins can't be charged back, but PayPal/CCs can! The fraudsters convert the Bitcoins into a bank wire and run off with the money.
We call this a "soft" to "hard" money problem. It's no different than selling something on ebay, shipping it, only to find that the buyer decided to chargeback later and rip you off. It's an ongoing problem that doesn't just affect Bitcoin.
Most exchangers only accept non-reversible forms of money for this very reason. Most exchangers accept wires, money orders, liberty reserve, cash in the mail (I'm serious), cash in person, various pre-loaded cards that you can buy from 7-eleven/wal-mart, and many others. Of course you can always mine them into existence, but that process is very very competitive now.
Quote:
Originally Posted by Sunny Day
Other problem, since you really don't know who you're dealing with, opposed to PayPal or a postal address, they burn you, there's no recourse
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Is there recourse with PayPal? Also, anyone who has been through a lawsuit will tell you that it solves nothing.
Anyway, due diligence is always required. Don't buy from people that have a horrible track record, and limit your exposure to risk. If it's too good to be true, it probably is. You know "the drill".
Quote:
Originally Posted by Sunny Day
Lastly, the claim of there will be only 21,000,000 created. If BitCoin takes off, they will go up in value as more people need them. At some point they will become so valuable, most people can't afford them and the market will collapse or suddenly more will be created causing deflation.
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I'm glad that you made this statement. It's a very common question.
Bitcoins are divisible to 8 decimal places. If demand for Bitcoins is excessively larger than the 21,000,000, it is not a problem at all.