To think a lot of folk are going to get their fingers burnt by Bitcoin

[Viviennemary]

I can't see this Bitcoin phenomena going on for much longer. I don't really understand it but isn't it a bit like the South Sea Bubble which has to burst eventually. Because it isn't actually based on anything tangible from what I can see.

[Evelynismyformerspyname]

It's probably too late to make much money on it now crisscross - I suspect that the big profits are only available to those who purchased/ received/ mined bitcoin when it was worth very little early on. You can still actually use it to buy stuff online though, if your husband has made sure he knows how!

[Noofly]

It probably will crash someday and other cryptos will surpass it. That doesn’t mean it was a con. . It’s a system which is being developed. Old holders like me bought into a vision of the future, recent frenzied purchasers seem to be buying into the potential of getting rich quick (which is not what Bitcoin is about).

I highly doubt it will crash to next to nothing in the next month. Within the next 24 months, if the Lightening Network hasn’t delivered and there’s still no scaling solution, then yes, it probably will collapse 90ish%.

I’d suggest you read the white paper and if you still don’t understand, pop over to reddit and chat with any of the many developers who will happily tell you what they are working on.

[crisscrosscranky]

I wish I'd read this a moment ago- have just posted about husband buying us BitCoin as an investment with our Xmas money; he's convinced he'll make a fortune...

[GETTINGLIKEMYMOTHER]

I don't understand it, but at the same time I sometimes wish I'd put £50 in when it kicked off!

Seems to me a bit like the CDOs that eventually helped to cause the Big Crash. Though at least they did, as I understand it, consist of packages of sliced up, mixed up mortgages, sold on.
I don't see that Bitcoins consist of anything. If they do, perhaps someone will enlighten me.

[ChazsBrilliantAttitude]

will either not with either

[ChazsBrilliantAttitude]

I think bitcoin is speculation and people are buying into an idea rather than a genuinely useful currency. That said, I do think it is a sign of how money is changing. If you consider the advent of contactless payment where you can buy a coffee and get on the tube by waving your phone, I think it is increasingly the case that currencies and money will be dematerialised. Most financial transactions are just electronic messages and entries on computer systems now. However, in my view, no country will willingly give up control of the legal tender used within its borders to a bunch of random people sitting behind computer screens so cryptocurrencies with either become mainstream controlled by central banks or remain very niche.

[Viviennemary]

Interesting post Firesuit. Didn't see it before I replied. I will be reading it carefully.

[Viviennemary]

I certainly don't believe that nobody can understand something if I don't. at the thought. It seems to me like those women investing in that crackpot company a few years back. Most sensible people knew it was a con. This seems much the same though more mysterious and lots of people thinking it's a great thing. What's the bet it will crash to next to nothing in the next month. Or even before then.

[Firesuit]

I've come across two interesting bitcoin skeptic articles today.

First brought up something called the governance paradox: a payment system needs a way to enforce rules, and (possibly even more important) a way to make them, bitcoin only really has the first. Because of the anti-establishment ideals on which it was founded, it's governance is a bit random. The paradox is that if there were a trusted institution making the rules, they could enforce them, and you'd no longer need the blockchain. (Though I think I have an answer to this: use blockchain to implement a voting system that elects a board of directors to make the rules...)

The second one is actually saying blockchain isn't of much use, so it's not just an attack on bitcoin. (Although I'm a bitcoin skeptic I think I can see some uses for blockchain.)

hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100

Some quotes:-

In the end, the advantages of the existing human and software systems surrounding transactions — from verifying identity with a driver’s license to calling and clarifying the statements made in a credit disputed transaction to automatically billing your credit card for a newspaper subscription — outweigh the purported benefits, as well as hidden costs, of irrevocable, automated execution. Blockchain enthusiasts often act as if the hard part is getting money from A to B or keeping a record of what happened. In each case, moving money and recording the transaction is actually the cheap, easy, highly-automated part of a much more complex system.

and

In conversations with bitcoin entrepreneurs and investors and consultants, there was often a lack of knowledge or even interest in how the jobs were being done today or what the value to the end user was. With all the money spent on bitcoin cash registers, nobody went out and did a survey about whether most credit card users would be willing to give up their frequent flyer miles in return for also losing the ability to dispute a transaction. Presumably, they thought, the reason IPOs are so expensive or venture fund formation paperwork is so onerous is because all those lawyers and accountants are just getting rich sitting around pushing paper… a bunch of smart engineers in their 20s with no industry experience could certainly do their jobs, automatically, in a matter of months, with just a few million bucks of venture capital.

[Evelynismyformerspyname]

It's volotile and very high risk, absolutely. However your point at the beginning of the thread is the same as the point you make at the end - if Vivian doesn't understand something, then anyone who thinks they do understand can't possibly, and must be being conned. It's very self confident of you to believe that nobody could possibly understand anything that you don't, but that doesn't make it true...

[Evelynismyformerspyname]

Vivian in the limited sense that that's true, it's true of most currencies. I assume you use barter and gold?

[Viviennemary]

I can't see how it can be anything else but a complicated con. It isn't based on anything tangible. It's just somebody buying something imaginary and then selling it as far as I can see. Like a chain letter asking you to send ten people £10 each and they send it on to 10 people. So the ones at the end get nothing. It's not different from selling people bags of hot air. IMHO.

[PersianCatLady]

You can buy as little as £20 worth of BTC through Localbitcoins but the fees may make that pointless.

You can probably buy even less but I would think that it would be hard to find a seller who can be bothered to sell you say £5 worth and then there are the fees

[huha]

I can't understand why banks are putting money into cryptocurrency if it's a con. I don't think bitcoin is a con per se, but it's quite volatile. DH has money in bitcoin but also several other types of currencies on the block chain. He bought a coin for $3000 in early summer. It's worth $18k now. Not that I understand what any of that means.

[Sanshin]

Noofly, I've noticed that too - keep setting low bids to execute overnight but the price has climbed overnight and then dropped during the day. Today it's held onto its value which is encouraging. I need it to rise to £14000 to start my exit 😂

Rossigiggi, on the platform I use the minimum amount you can buy is 0.01% of a bitcoin which would set you back around £130

[SouthySa]

I bought a whole bitcoin in 2013 and it was stolen from Mtgox. I actively avoid looking to see how much it’s worth now.

[Firesuit]

"Well, all the currencies I can think of are not investments."

What a bizarre thing to say. People have always bet on exchange rates, switching from sterling to dollars etc.

People bet at roulette wheels, that doesn't make roulette bets investments. The fact that city types trade currencies does not make currency trades investments.

My definition of investment is something with a positive expected return. Shares give you profits, bonds (loans, debt) pay interest, property pays rent. Those thing are all investments.

Gold, over hundreds/thousands of years, has on average maintened its value in real terms, so it has been a useful store of value, a hedge against inflation, but it doesn't have a return. In fact it costs you money to own, as you have pay to store and protect it. It is sometimes held by investors for its diversification benefits, but that still doesn't make it an investment.

I suggest you look at the contents of a typical pension companies generic investment fund, the default fund that gets used by people who don't have specific ideas about how they want to invest. You will find that they own shares, bonds and maybe property. You probably won't find them owning gold, or hedge funds seeking profit from currency trading.

[Noofly]

On a light note, I need a new top for the gym so ordered this last night. It’s perfect for me.

[Rossigigi]

I've heard of bitcoins but never understood them. This has given me more of an insight but here's a really silly question:- if I wanted to buy a bit of a bitcoin, what's the least amount you pay? Are we talking £50 or £500? This is the part I don't get...

[Noofly]

Bitcoin started as a way for people to buy & sell dodgy stuff in secret.

And what an utterly bizarre thing that is to say. I’d genuinely like to see your source for that and I can guarantee you won’t find it in the white paper. Bitcoin was quickly adopted by the dark net. It absolutely did not start as a way for people to use the dark net- conflating much?

Sanshin bearing in mind that I was telling people on Mumsnet that they would be crazy to buy Bitcoin back in 2014(?) that they’d be crazy to buy at £300ish, I’m probably full of shit with where I think it’s going now. I currently think Coinbase’s adding Cash is a big threat because loads of newcomers will get confused between the two and will see it just as a “cheap” Bitcoin. Bitcoin desperately needs the Lightening Network to be implemented and I think we’ll continue to be up and down but mostly sideways until it is in place. Then I think it will skyrocket again.

For the past few days it’s been slumping during the day (Western trading times) and then climbing overnight (Eastern trading times). Today is the first since Friday that we’ve seen a steady increase during the day building on the overnight climb which I’m taking as a good sign. I’m hoping some of the slump of the past few days has been large US holders selling some before the end of the tax year. If this is the case, they are hopefully pretty much done selling.

I’m really hoping for a good surge once we get past January so I can use some of my exit strategy.

[Firesuit]

You don't have to understand bitcoin to predict it's future.

That's possibly the most anti intellectual statement I've ever seen on mn.

I mean obviously I can make predictions about things I don't understand but they're not likely to be right...

Ok, let me elaborate. You can be the person who actually invented bitcoin, or (if not the same) wrote the actual code that implements it, and still not be able to predict its future.

It's future depends on its economic role, not the technicalities of how it works.

All you need to understand is that currencies vanish when better ones become available. You don't have to google much to realise that on a technical level, Bitcoin is not unique, and other crypocurrencies are better designed. So why is bitcoin still most successful? Because it was first, and has most credibility. Could another currency with more credibility be invented? Yes, the Bank of England or Federal Reserve or one or more major financial institutions could issue an asset-backed cryptocurrency which would be immediately be more attractive to all non-criminal users. (I would hope they would deliberately omit the features of bitcoin that make it attractive to criminals.)

All you need to know to know bitcoin will probably fail is that better alternatives can be created at will by any of a range of governments or financial institutions whose backing will give their currency greater credibility in the eyes of most potential users. And that if it can be done, and some useful purpose is served by doing it, it will be done.

[DoctorTwo]

Blockchain technology is the future of money.

I said this on here nearly 3 years ago and got laughed at. The Blockchain is the future in technology, and has been since Satoshi proved that it works.

[safariboot]

Yes, when the current bubble bursts a bunch of speculators are going to lose out.

Bitcoin in simple terms: The rate new bitcoins are created (or 'mined') at is governed by maths and physics. To process bitcoin transactions and mine new coins requires computing power which requires electricity. You can't forge a bitcoin or transaction and there's no central government with the power to suddenly print loads more.

So you can be assured that any bitcoins you have won't be rendered worthless by the market suddenly being flooded with loads more, unlike with fiat currencies which can undergo hyperinflation. Like another poster said, bitcoin is similar to gold in that way.

The demand for bitcoin on the other hand depends entirely on whether people want it. The bitcoin you have could certainly be rendered near-worthless if people stop wanting to buy it.

Bitcoin was and is an experiment, and I think one of the "results" is that if a currency doesn't have enough general use it's value will swing wildly due to speculators. This makes it a poor currency and is likely to mean even less use of it as a currency for buying and selling stuff, and it behaves as a volatile commodity with no inherent value or use other than its rarity.

[ArgyMargy]

Bitcoin started as a way for people to buy & sell dodgy stuff in secret. Once it becomes primarily a speculative investment it is vulnerable to crash. The fact that it's now discussed in the Daily Mail is probably a sign that its value has peaked.

[ArgyMargy]

"Well, all the currencies I can think of are not investments."

What a bizarre thing to say. People have always bet on exchange rates, switching from sterling to dollars etc.