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.

[Noofly]

Geeks and the dark net being two separate groups...

[Firesuit]

coins were more or less guaranteed to increase in value over time

By "guaranteed to increase in value over time" I mean on average over decades, assuming you aren't unlucky enough to live through a communist revolution, or the planet being struck by an asteroid, or various other extreme events.

[TammySwansonTwo]

We had 10 bitcoin a few years ago - they went up to a grand each then crashed to about £500 and sat around there for a long time. Sadly we sold earlier this year before the crazy rise, but got back in a few months ago, more than doubled our money.

The current insane hike and crash is definitely a bubble and there are some fundermantal issues with bitcoin like transaction fees which are preventing it from being adopted as an actual currency. There are other coins coming up which are more likely to succeed longterm and many others that will die a death. We got out of bitcoin a few weeks ago and into something else which looks promising, but heaven knows you shouldn't be risking any money you can't stand to lose. Bitcoin will go up again I'm sure and perhaps they'll be able to fundamentally change the blockchain to deal with some of the issues, but to me it's sort of a MySpace / Facebook thing - it's just a case of figuring out which one will be like Facebook...

[contortionist]

Bitcoin miners burn electricity to get bitcoins - currently making something like £20 million per day. This money comes from people buying bitcoin.

[Firesuit]

Bitcoin won’t ever be completely killed. It’ll just move back to the world of geeks and the dark net.

I would define "killed" loosely enough to include that. I guess by "killed" I mean the idea that it would ever become mainstream, maybe replace paypal as the most used currency on ebay, would be killed.

(Ebay issuing their own cryptocurrency is another scenario in which I suppose bitcoin could be supplanted by a potentially more credible alternative.)

[Noofly]

I paid £10 a coin. To me, killed means to cease to exist.

[Noofly]

And I am part of the geek group, not the dark net. Just so I’m clear.

[Firesuit]

Bitcoin miners burn electricity to get bitcoins - currently making something like £20 million per day. This money comes from people buying bitcoin.

So after those costs, the total amount of money that can be take out of bitcoin must be less than the total put in.

I expect if someone is bored enough to google it, they can tell us whether the fundamental return of bitcoin is worse that putting your money on a roulette table in a casino.

[EllenRipley]

I bought £5k of bitcoins in November. I cashed out after three weeks with £10k.

No major currency is backed by gold reserves.
Even if it is a bubble, it doesn't mean it's going away. Blockchain technology is the future of money. It's worth researching and trying to understand it.

[Andrewofgg]

Silly sods.

To put money into bitcoin when the net is full of offers from people needing your help to get money out of blocked accounts in Nigerian banks and other such safe and sure fire investments - or if even that is too risky for you send me your bank details and I will let you in on the ground floor in my New Atlantic Bridge Company.

[latebreakfast]

Mining bitcoin is a bit of a misnomer. You don't actually mine them at all. Instead you are rewarded with them for solving mathematical problems.

Each time somebody makes a bitcoin transaction (I pay you some bitcoin), that transaction goes into a queue together with all other transactions that are waiting.

A bitcoin "miner" will grab a bunch of potential transactions from the queue and try and solve a maths problem that will allow her to bundle them up in a single "block" and add them to the list of transactions that are valid. If she is the first person to do this then she gets awarded with some new bitcoins (created out of nowhere) for doing so. She also gets rewarded with a "transaction fee" which the participants in the transaction will pay.

Her new block of transactions will then get added to the list of valid transactions "the chain" and transmitted to everybody that has a copy of the chain. As the chain is monitored by a large amount of people and each block depends on every block prior to it, it is nigh-on impossible to hack it or create a fraudulent transaction.

As more powerful hardware comes along, the maths puzzle gets harder and it gets harder to "mine" new bitcoin.

Eventually, and by design, there will be no new bitcoin available and the only reward for miners will be the transaction fees. However this will be set at a level that still makes it worthwhile to mine. Once this happens bitcoin will be valued for its rareity - just like Roman coins are.

[chestylarue52]

YABU if you say about anything 'I don't understand it but here's my judgement on what's going to happen'.

Crypto currency isn't difficult to understand, just do some reading / watch some YouTube docs.

[chestylarue52]

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...

[Sanshin]

The people saying "you're going to lose all your money" are often the people that don't understand it and haven't made any money from it.

Saying that, I'm starting to get an uneasy feeling about the whole thing. I invested in November with £600 and that is now standing at £1980. I've decided I'm going to wait until I have £2k in there and then withdraw the initial £600. That way, I'll never loose my initial investment.

And then - I'm going to leave the balance at £2k and anything more that accumulates in there I'm going to withdraw and start paying off the credit card.

I'm trying to encourage DH to withdraw the initial £3600 he put into his too. His account is now standing at £7500 so taking out the initial deposit will still give him a few grand to "play" with.

I don't think bitcoin will crash btw, but I want to play it safe.

[Noofly]

Sanshin They also tend to be people who have low risk tolerances and don’t understand why people would thrive on high risk. I love high risk. I spend my days prowling round the AIM . Bitcoin is like the stock market on steroids and fantasitic fun for high risk takers.

I’ve heard the same messages for five years now. The only difference is the individuals- each new wave thinks they are the first to proclaim, ‘Bubble!”

I have no idea where Bitcoin will be in 10 years time. I don’t even really care. I also have Ether and Litecoin and will sell and buy others as I think the market will evolve. If I’m lucky, I’ll get it very very right. I think a variety of crypto currencies, each with different purposes, will be held by everyone someday- probably not in my lifetime, but likely in my DC’s.

[Sanshin]

I'm usually very intolerant of high risk, especially where money is concerned but when you're making £100 a day by playing on your phone for an hour or so each day it's bloody addictive. I suppose the same could be said for gambling 😁

[Noofly]

FWIW, I don’t think you’re as crazy as when you first started posting, Sanshin I really thought you would panic when it dropped and would sell at a loss. You are a hodler.

[sagamartha]

I'm usually very intolerant of high risk, especially where money is concerned but when you're making £100 a day by playing on your phone for an hour or so each day it's bloody addictive

If you are making £100 a day, where is that £100 coming from?

[Sanshin]

Haha Thanks noofly, I'll take it as a compliment 😁 I'll be honest, my finger was hovering over the "sell" button - when it went down to £9k I was having kittens but I kept reading the bitcoin forum and all the old timers were saying "don't panic, we'll make money off the newbies that sell now, this correction is normal ... " etc etc and I thought "ah fuck it, they don't seem worried".

Now today it's back upto £13k so thank Christ I didn't sell at £9k!!

Sagamartha, I make the money by buying and selling. For example I'll buy at £11k and sell at £12k. Whoever bought mine at £12k will sell at £13k and so on.

[sagamartha]

Sagamartha, I make the money by buying and selling. For example I'll buy at £11k and sell at £12k. Whoever bought mine at £12k will sell at £13k and so on

So someone somewhere needs the £12K to buy it....

So they have to get that money from somewhere. Maybe from borrowing £12K on credit / trust etc...But it goes up..luckily someone else has got £13K..probably from being lent money by someone who had the £11K at the start.

Money is a fascinating concept, isn't it? It feels sometimes like it's just being created so easily and so much of it isn't 'real' or physical but is tied up in credit, virtual money, debt etc.

[Sanshin]

No they don't actually cost £12k! If they did I wouldn't be able to buy in.

You buy a part of a bitcoin. So say 1 bitcoin is priced at £12k. I had £530 this morning to "play with" so I bought something like 0.04 of a bitcoin at a value of £12600. I then sold that 0.04 at a value of £13300 an hour later. That £530 is now £550. I made £20. I've now put that £550 back in to buy at £12700 - again buying 0.04% of a bitcoin with the aim to sell it later on at around £13300 again. Of course it might not hold that value and I'll have to sell it cheaper than that, you never really know.

[sagamartha]

Yes - I understand how assets work and that things go up and down in value - and you can buy 'bits' of it.

Some markets are interesting..such as coffee and oil.
Then there's Dutch Bulbs..

[Sanshin]

Tulips?

[sagamartha]

Tulips

Yes...Dutch Tulip bulb market. Very interesting

[Sanshin]

It is. Don't get me wrong, I'm not saying I'll keep making money forever with this and that there is no risk involved. I could wake up tomorrow with a bitcoin value of £0.50p. I sincerely hope not as a hell of a lot of people would have lost a lot of money but most of us know the risks when we get into this. And, this is why I'm going to start taking precautions by withdrawing the initial £600 that I put into it. (I've just hit my benchmark of £2k as we speak so it's time for me to start pulling bits out of it).