DH has spent our Xmas money on BitCoin

[crisscrosscranky]

🤦🏻‍♀️ we often get cards addressed to "Criss and Mr Criss" at Christmas from grandparents/aunts etc. The past couple of years we've used it for a weekend away around Easter time and I book it before the new year so I can send thank you cards and let the gifters know where we're off too they're mostly old folk; they like a proper thank you!

This year we got £155 in total. Just suggested to DH that Bath might be nice and that I'd to the bank tomorrow to pay the cheques in. He's then told me cool as a cucumber that he's invested it in BitCoin so if we wait a few months we might be able to afford a weekend in Europe rather than the UK

I love this man to bits but he's just thrown our Xmas money away hasn't he!? I can't tell Aunt Doris and Uncle Quentin that he's gambling in digital currency so looks like we'll be paying for a weekend away on top of his new career as a broker he's actually a lorry driver

He thinks I'm massively unreasonable to be a bit cross because he seems to think next year we'll be millionaires if you didn't read that in Del Boy's accent you haven't watched enough Xmas telly

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"Can you explain "mining" ? I could not make head nor tail of the wiki explanation."

Basically it's maths. Cryptography. There are millions of computers around the world working on arbitrary maths problems. Every 10 minutes they (all the computers working on this) are awarded some bitcoins (this is not awarded by some central authority, but by consensus - you get confirmations from other computers on the network, and given sufficient confirmations then you can assume that it's valid (because one computer could be running a hacked version of the code, but if you demand multiple confirmations that wouldn't work)).

Each bitcoin is currently worth something around £10k but even this figure is uncertain even at a given point in time, because matching a holder of bitcoins (arbitrary numbers on a computer) with holders of cash wanting to exchange cash for bitcoins is not as easy as most other assets.

For example, you can sell your pounds to Transferwise and have a foreign currency in less than 24 hours in a foreign bank account at a cost of under 1%, even in relatively shitty unstable foreign currencies.

But there are zero reputable places to sell bitcoins, and the 'price' quoted varies sometimes by 10% or more between different venues, and there are often limits on selling and buying.

And selling is not as easy as, say, selling a car. If I sell you my Ferrari for £1 million, then you give me the Ferrari and I transfer the cash to your acount, and there's a good chance we can trace both cash and Ferrari if things go wrong.

But if someone knows your Bitcoin details, they can steal them and that's totally unreversible.

In comparison:

Bitcoin vs shares:

• Shares generate an income and this will tend to increase over time, whereas bitcoin generates no income
• Shares an easily be sold at relatively low cost (around £10/deal), Bitcoin cannot easily be sold and the cost to sell may be high
• Popular shares are highly liquid and relatively stable, whereas Bitcoin has high bid/offer spread and fluctuates 30%+- DAILY. The volatility of bitcoin is far beyond any asset class, while even shares are considered high risk, bitcoin is suicidal
• Shares are completely secure and cannot be stolen, Bitcoin can be stolen by numerous means and are easily lost and unrecoverable if passwords are lost

Bitcoin vs currency

• Currency is relatively stable - £1 might buy 10% less food than last year, but bitcoin has fallen by 90% on several occasions and bitcoin suicides aren't unheard of
• Currency is fast to use - you can pay for things instantly and network such as Visa can support over 45,000 transactions per second, Bitcoin however is capped at FIVE transactions per second, and those wanting their transactions to go through must pay ludicrous fees, and even this will take several hours to confirm
• Currency is backed by the government - the government has a military and tax-collecting powers which underwrite the currency and assure us that it is worth something - there is literally nothing whatsoever underwriting bitcoin, and what utility it once had in supporting drug deals, etc. is now severely undermined by the fees
• Currency is traceable - generally lost currency can be replaced, whereas around 20% of all bitcoin are lost for good, and cannot be replaced. This makes bitcoin completely unsuitable for all but the most hardcore of libertarian anarcho-capitalists, as it's a cinch for the technologically sophisticated to steal it from the technologically less sophisticated. This makes bitcoin unacceptable to all but the sort of person who would say the uninsured health patient should die because they could have got insurance, or the starving should have worked to buy food.
• Currency has low cost - to accept currency via standard means you can expect to pay around 3% in processing fees. However bitcoin not only has ludicrously high fees, the insane volatility means that any business that actually charged in bitcoins would spend most of its income on hedging the ridiculous bitcoin volatility. Hence bitcoin payment processing would actually require you to convert bitcoin to cash immediately which would be far more expensive than currency usage is - certainly over 10%.

In other words it's completely shit and the equivalent of leveraged spread betting.

Thank you. Fascinating stuff.

The details of Bitcoin are unimportant. What matters is that your 'D'H has used joint money for a high-risk investment without speaking to you first.

He can rectify this if he agrees that he hasn't spent the Christmas money on Bitcoin, he's spent £155 of his own money on it, and he does whatever bank transfers or handing over cash is needed so your bank accounts match up with that.

If he's not prepared to do that, think twice in future before giving your DH any control over money you earn, because he'll have shown he's willing to gamble and risk it without giving you any say.

Re the fees, this is why I asked the OP to find out whether her DH has a legacy or SegWit address. The problems with the double digit fees is with legacy addresses. If dealing with small amounts you need to have a SegWit address to avoid large fees. Hopefully anyone who even vaguely monitors the market knows this.

As for stealing, I probably wouldn’t both for £150 worth, but for anything I’d really rather not lose, I’d be moving it off my exchange pretty darn pronto and into a wallet. For large amounts, I’d be getting a Nano Ledger or Trezor. Only fools leave their coins on an exchange.

I'd be very very cross.

Bitcom shares have plummeted too!

They are down quite a bit on yesterday. I checked. I read on another thread they are used to fund illegal weapons. It's about the most dodgy thing I've ever heard about. Basically you are just donating money to crime. You can't actually spend them on anything as far as I can see. Certainly not a nice weekend away. Make sure you get your weekend away whatever happens. Incensed on your behalf!

He might not be so happy today www.theguardian.com/business/live/2017/dec/28/bitcoin-south-korea-crackdown-stock-markets-ftse-100-business-live

Pisacake, thank you so much for your very clear explanations and for summing it up as "leveraged spread betting", which I totally get. You're a !

My dh was talking about bit coin last week. For that very reason I wouldn't invest in it. Once the dogs on the street are trying to get in on it you know it's going to crash. There is only a finite amount so if the plebs are buying it then someone savvy is selling It to make their huge profit.

So in effect he pinched your Xmas money and went gambling?

I've been reading more articles. Getting a bit obsessed now. But bit bored at the moment. I read that they might lift this £21m max so more can be 'mined' And save it for another day. Bitcoin?? More like Bitcon I'd say.

Agreed @BattleCunt

I'm a bit bemused about the 'Bitcoin is good/bad'

That's irrelevant.

The man has completely disregarded and disrespected you and lied to you by omission (initially.)

I am appalled

OP, I don't think you're bu at all. But, don't cut your nose off to spite your face (in case they go up).

They have held their price over the last couple of days. I predict a big crash New Years eve/day when exchanges won't be open. I know they're virtual but strange things happen to computers at NY.

But you should get your weekend away no matter what happens to Bitcoin.

Why on earth wouldn't the exchanges be open over New Year's?

I think if Bitcoin went into freefall then the exchanges will stop trading them or close down. And best time to do that is NY when people are doing other things and won't be watching the markets. It's only my opinion. I might even be wrong. They might climb to dizzy heights and go up thousands of percent. Can't see it though.

That’s not what you said. You said the exchanges won’t be open. As an aside, IT professional, DH would like to know what strange things happen to computers at NY.

I know nothing about IT. But I know a con when I see one. And I think Bitcoin is a con. It's unregulated and all on line. Ideal for hackers and other crooks. And websites are often hacked around NY's eve. And then that strange virus one year.

If I was you I would be demanding that gives you your half of the Christmas money back and he can do whatever the hell he likes with his half. I know nothing about Bitcoin but I honestly can't see this working out for him the way he thinks it will.

Plus it cant 'burst' anyway; because it has a finite number of coins. Factor in coins being lost over time, and its only going to get more and more valuable

What about the competition from other currencies?

If the Bank of England issued a new cryptocurrency, would most people use that, or stay with bitcoin? If the BOE currency were exchangeable for a fixed number of pounds or grams of gold, would that not make it considerably more credible and stable than bitcoin?

If Ebay or Amazon issued a cryptocurrency that could be used for payments on their sites, would most people use that, or stay with bitcoin?

Why do you think the fixed supply of bitcoins will prop up its value when a potentially infinite amount of other cryptocurrency can be put into circulation at any time.

I think bitcoin will go to zero because other better currencies will come along. The second most likely scenario is that no cryptocurrency will be in widespread use, because actually a cryptocurrency is much shitter than Paypal for on-line money transfers, as far as most of the general public are concerned. When you use Paypal or credit cards you have protection against theft and scamming that is worth far more than the (currently theoretical) lower cost of a cryptocurrency.

Thank goodness somebody else agrees with me. I said in an earlier post they are thinking of lifting the £21m ceiling and allowing more mining. And who can stopped them if it's unregulated. Where can you spend a bitcoin? OP certainly won't be able to buy a weekend away AFAIK.

I don't know if this makes sense, or if securities laws would allow it, but if I were Amazon, which google says has $9 billion of debt funding, I would issue amazoncoins at a slight discount to face value, that could be used for any amazon purchase. The receipts from the coins would be used to reduce my debt. Most amazoncoins would be redeemed fairly soon, so the discount would be calculated so that the cost was no more than my interest savings. If amazoncoins were seen as a credible currency, some of them would start being transacted between other people, and to the extent those remained in circulation, I would be paying no interest on that portion of my debt. (Governments currently have the same advantage when they issue conventional currencies, it's called seigniorage.)

Plus it cant 'burst' anyway; because it has a finite number of coins. Factor in coins being lost over time, and its only going to get more and more valuable

But they're not actual coins, right? You can't lose them down the back of the sofa

Or perhaps the way to do it would be to issue the coins at face value, but offer a discount when they were used for payment. The discount could be altered from time to time to ensure that I was paying less to have the coin receipts offsetting my debt than I would have to pay in debt interest on more conventional funding.