<p>When you buy an ounce of silver bullion at the coin store, who gets the money?</p>

<p>The person who held the coin before you did.</p>

<p>All bitcoins are first issued to miners. From there, miners use those coins for trade or exchange.  So when you buy a bitcoin with cash, you are buying it from someone who owned it but initially it was obtained from a miner.</p>

CC BY-SA 3.0
2013-04-02T01:35:03.333Z
When I buy a gold or silver coin I have the coin with value, as silver and gold are needed to build computers and other things.  I only see the bitcoin as another fiat currency?  I still do not quite comprehend the miner aspect, what does a miner do to add value to the bitcoins?  The I.R.S. question still not answered.  Can bitcoins be held in a ROTH or IRA account?  The overall concept sounds ok however a barter system would be value for value, I trade you some food you fix my roof.  What am I missing?
user3788
CC BY-SA 3.0
2013-04-02T02:08:05.633Z
Hi Stephen I can see this is a fraud as my first post has been edited by you? post as I sent here it is again
user3788
CC BY-SA 3.0
2013-04-02T02:11:01.347Z
Again here was my post before it was changed by Stephen"Question if I buy a bitcoin @$103.89 USD as of today’s prices where does the USD payment go?  Do the funds paid in any world currency go into a pool to back the bitcoin or into the developers of bitcoins pockets?  What are the IRS requirements as to the value of ones account?  The Norfed dollars where backed or made of precious metals and taken down by the federal coinage act.  The $20.00 coin is now worth about 30% more than face value, go figure.  Thanks any info would be appreciated
user3788
CC BY-SA 3.0
2013-04-02T03:34:43.023Z
Gold is gold, silver is silver and food is food.  I still can not see where the value in bitcoins are?  What happens if your computer is hacked?
user3788
CC BY-SA 3.0
2013-04-01T23:05:07.067Z
2013-04-01T23:05:07.067Z
Stephen Gornick
<p>Bitcoin is neither a commodity or a fiat currency, but has characters of both. The value is derived from the scarcity (since there will only ever be a finite amount of bitcoins, and before then there can only be so many at any given time, with no possibility of finding a new resource of them). The value is also derived from the liquidity perks that commodities and currencies have failed to offer, especially person to person, and over the internet.</p>

<p>If you bought a bitcoin with usd, the person you bought it from no longer has a bitcoin and would have usd instead.</p>

<p>For the IRS you would most likely have to report your cost basis in US Dollars, and at reporting time report a gain or a loss if you sold them for cash. In the absence of specific regulations (recognized foreign currency trading profits have a max tax rate subject to the 60/40 rule), you will use the short-term or long-term capital gains tax code. Short-term capital gains are treated as normal income and taxed in whatever bracket you are in. Long-Term Capital gains are treated in a lower max different tax bracket. Unless explicitly prohibited you can hold anything in an IRA or Roth account.......</p>

CC BY-SA 3.0
2013-04-02T04:36:20.177Z
Still the question has not been answered how was or is the bitcoin monetized ?  I have a real cool cat that I have trained to give me a high five on command.  If I brush him everyday there will be a finite amount of RARE,,,scarce cat hairs from this cat.  Are these hairs worth the same as gold, silver or bitcoins? When I dig a hole in my backyard and say goodbye to my beloved kitty are the hairs worth anything?  There are a limited amount of these hairs on the market,  $1.00 each, any takers?
user3788
CC BY-SA 3.0
2013-04-02T04:56:01.523Z
what answer do you want to hear? bitcoin is currently very liquid and allows people to transfer large amounts with zero reporting requirements. There are liquidity crisis around the world and people are using bitcoins for liquidity instead of a reserve currency like gold and precious metals. People find value in that.
CQM
CC BY-SA 3.0
2013-04-02T03:48:32.527Z
2018-01-08T20:27:00.230Z
2018-01-08T20:27:00.230Z
CQM
<p>If you are asking about trading on an exchange, then the exchange software matches up buyers and sellers.  Since you are a buyer, it matches you up with someone that wants to sell (or potentially several sellers that add up to what you want to buy).  The sellers get the money (and usually a small part of it goes to the exchange itself)</p>

CC BY-SA 3.0
2013-11-19T18:23:17.047Z
2013-11-19T18:23:17.047Z
RentFree
<p>Question if I buy a bitcoin @$103.89 USD as of today’s prices where does the USD payment go?  Do the funds paid in any world currency go into a pool to back the bitcoin or into the developers of bitcoin clients?  What are the IRS requirements as to the value of ones account?  The Norfed dollars where backed or made of precious metals and taken down by the federal coinage act.  The $20.00 coin is now worth about 30% more than face value, go figure.  Thanks any info would be appreciated.  </p>

CC BY-SA 3.0
2013-04-01T22:21:53.400Z
Just like any other currency exchange, then you find a person/company, agree on a rate, and you get bitcoins and the exchanger get dollars/euro/whatever you have.
Nicolai
CC BY-SA 3.0
2013-11-19T16:16:29.023Z
So... lets say someone buys a lighter from me, it cost B2, how do i cash the money in order to buy more lighters? And i don't mean only in the USA i mean in more complicate economies, with hardcore money regulations, as Venezuela or Argentina?
elbreeder
<cash>
If I buy a bitcoin in USD who gets the cash?
user3788
# If I buy a bitcoin in USD who gets the cash?

(Asked by: username_0 on 2013-04-01)

Question if I buy a bitcoin @$103.89 USD as of today’s prices where does the USD payment go? Do the funds paid in any world currency go into a pool to back the bitcoin or into the developers of bitcoin clients? What are the IRS requirements as to the value of ones account? The Norfed dollars where backed or made of precious metals and taken down by the federal coinage act. The $20.00 coin is now worth about 30% more than face value, go figure. Thanks any info would be appreciated.

**Tags:** cash

> **Comments:**
> **username_1**: Just like any other currency exchange, then you find a person/company, agree on a rate, and you get bitcoins and the exchanger get dollars/euro/whatever you have.  
> **username_2**: So... lets say someone buys a lighter from me, it cost B2, how do i cash the money in order to buy more lighters? And i don't mean only in the USA i mean in more complicate economies, with hardcore money regulations, as Venezuela or Argentina?  

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## 3 answers

### Answer by username_3 on 2013-04-01. Score: 5

When you buy an ounce of silver bullion at the coin store, who gets the money?

The person who held the coin before you did.

All bitcoins are first issued to miners. From there, miners use those coins for trade or exchange. So when you buy a bitcoin with cash, you are buying it from someone who owned it but initially it was obtained from a miner.

> **Comments:**
> **username_0**: When I buy a gold or silver coin I have the coin with value, as silver and gold are needed to build computers and other things.  I only see the bitcoin as another fiat currency?  I still do not quite comprehend the miner aspect, what does a miner do to add value to the bitcoins?  The I.R.S. question still not answered.  Can bitcoins be held in a ROTH or IRA account?  The overall concept sounds ok however a barter system would be value for value, I trade you some food you fix my roof.  What am I missing?  
> **username_0**: Hi username_3 I can see this is a fraud as my first post has been edited by you? post as I sent here it is again  
> **username_0**: Again here was my post before it was changed by username_3"Question if I buy a bitcoin @$103.89 USD as of today’s prices where does the USD payment go?  Do the funds paid in any world currency go into a pool to back the bitcoin or into the developers of bitcoins pockets?  What are the IRS requirements as to the value of ones account?  The Norfed dollars where backed or made of precious metals and taken down by the federal coinage act.  The $20.00 coin is now worth about 30% more than face value, go figure.  Thanks any info would be appreciated  
> **username_0**: Gold is gold, silver is silver and food is food.  I still can not see where the value in bitcoins are?  What happens if your computer is hacked?  

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### Answer by username_4 on 2013-04-02. Score: 0

Bitcoin is neither a commodity or a fiat currency, but has characters of both. The value is derived from the scarcity (since there will only ever be a finite amount of bitcoins, and before then there can only be so many at any given time, with no possibility of finding a new resource of them). The value is also derived from the liquidity perks that commodities and currencies have failed to offer, especially person to person, and over the internet.

If you bought a bitcoin with usd, the person you bought it from no longer has a bitcoin and would have usd instead.

For the IRS you would most likely have to report your cost basis in US Dollars, and at reporting time report a gain or a loss if you sold them for cash. In the absence of specific regulations (recognized foreign currency trading profits have a max tax rate subject to the 60/40 rule), you will use the short-term or long-term capital gains tax code. Short-term capital gains are treated as normal income and taxed in whatever bracket you are in. Long-Term Capital gains are treated in a lower max different tax bracket. Unless explicitly prohibited you can hold anything in an IRA or Roth account.......

> **Comments:**
> **username_0**: Still the question has not been answered how was or is the bitcoin monetized ?  I have a real cool cat that I have trained to give me a high five on command.  If I brush him everyday there will be a finite amount of RARE,,,scarce cat hairs from this cat.  Are these hairs worth the same as gold, silver or bitcoins? When I dig a hole in my backyard and say goodbye to my beloved kitty are the hairs worth anything?  There are a limited amount of these hairs on the market,  $1.00 each, any takers?  
> **username_4**: what answer do you want to hear? bitcoin is currently very liquid and allows people to transfer large amounts with zero reporting requirements. There are liquidity crisis around the world and people are using bitcoins for liquidity instead of a reserve currency like gold and precious metals. People find value in that.  

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### Answer by username_5 on 2013-11-19. Score: 0

If you are asking about trading on an exchange, then the exchange software matches up buyers and sellers. Since you are a buyer, it matches you up with someone that wants to sell (or potentially several sellers that add up to what you want to buy). The sellers get the money (and usually a small part of it goes to the exchange itself)


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