Moving money the modern way

JISHOU, HUNAN — You work in China, and get paid in Chinese currency. So how do you send US dollars in your bank account back home quickly and cheaply? Short answer: PayPal. Longer answer: keep reading. Using myself as a real life example. here are the options, ranked from most expensive to least. Bank wire transfer: $15-30 in fees, 2-3 business days for final credit Western Union transfer: basically the same Withdraw cash from an American ATM, using Chinese bank debit card: $7-10 in fees, very quick, but requires physical presence in the USA at the time PayPal: 4% in fees, two websites, 1-2 business days for final credit Bitcoin: 1-2% in fees, three to four websites, 3-4 business days for final credit The hands-down winner in my case has been #4 for the last four years. Today I tried #5, to test one of the presumed advantages of Bitcoins and similar crypto-currencies — that they make moving money across national borders easy and cheap. It was a little cheaper than PayPal, and almost as fast. As for easier. not so much. Bank wire transfers My contract allows me to take 70% of my monthly pay out and send it ...

Bitcoin update 2: I was wrong, my shirt got bigger 1

JISHOU, HUNAN — My last post got it wrong. My Bitcoin shirt did not shrink. It stretched. I took time today to do a proper accounting of my Bitcoin and related activity. I am ahead of my initial investment by about 18%, or about $50! Frankly, I’m a bit surprised, since Bitcoin values against the dollar are a little lower than they were when I first bought in last month. One of my strategies has been to diversify. Bitcoin is not the only crypto-currency. It gets the most press, and has the largest value against national currencies, but there are other altcoins available, too. My Bitcoin assets are about $115. In addition, I have smaller holdings in Peercoin (PPC), Namecoin (NMC), Litecoin (LTC), Devcoin (DVC) and iXcoin (IXC). These all trade separately from Bitcoin. The last two count for very little at this point, with dollar values measured in pennies to the altcoin. They’re like the penny stocks of the altcoin world. In addition, I have counted my portion of a mining system at cex.io as an asset. While it is an expense (I had to buy it), it’s also easily sold as a commodity at cex.io at market prices. ...

Bitcoin update: Haven’t lost my shirt yet

JISHOU, HUNAN — My “shirt” shrank a little, however, because the value of Bitcoin against the dollar has dropped from $864 to about $820 in the last four weeks. I’m still in the game, but bearish on the market for now. Not that it’s easy for me to get Bitcoins in China anymore. China’s financial overseers have choked off access to Bitcoin by forbidding China’s banks and third-party payment services — similar to PayPal — from trading in the crypto-currency. The big Bitcoin exchanges here, BTC-China, Huobi and OKCoin, soldier on, however. They have found ways to get around government restrictions, but they are not especially convenient. So, if I want to buy Bitcoins, I can transfer money from my Chinese bank to my American bank, then pull money from the American bank to fund my account at Coinbase, where I can buy Bitcoins. Easy, right? Aside from mining Bitcoins (see below), most people who want to own Bitcoins now have to exchange a fiat currency, like dollars or euros, for them. If that is hard to do, then most people will just forget the whole thing. Coinbase in the USA makes it fairly easy, but Bitcoins are a solution ...

Bitcoiners’ dubious sense of economic history 2

JISHOU, HUNAN — Banks are all evil, right? Especially the Federal Reserve Bank, which if you believe Sen. Ron Paul (R-TX), is unconstitutional and shouldn’t even exist. And governments shouldn’t control currency, because … free markets! That’s pretty much the reasoning behind bitcoin and its various clones. Although I have playing with bitcoin and other crypto-currencies for the last month, I don’t totally buy into the philosophy behind their creation. For one thing, bitcoin fans don’t know their economic and political history too well. Here’s a tip, guys. It’s important to get your history straight before you introduce a whole new currency to replace something that’s been used for centuries. Maybe I’ve put the cart before the horse, but only now have I had the time to review the rationale for introducing bitcoin and its offshoots. Quite simply, I am not impressed. The wiki for Devcoin, an offshoot of bitcoin, links to this so-called “History of Money,” which contains this reference to Colonial Scrip (paper money) and Parliament’s regulation of it. In Response the world’s most powerful independent bank [The Bank of England] used its influence on the British parliament to press for the passing of the Currency Act of ...
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