Bitcoin...surprised there isn’t more uk discussion/press coverage?

[Dancinggertrude]

Bitcoin has had an interesting few months, steadily rising.
Twitter feeds are full of American discussion about it, US press coverage etc.
Yet here it is still not v mainstream..
Aibu to be surprised ?
I’m neither a convert to bitcoin or an investor btw, I like to dabble and watching the charts /world press coverage really interests me.
Most (Uk)people I mention it to aren’t even aware you can purchase fractional bitcoin.

@Cailleachian Yes, central banks and governments control the supply of fiat currency but without venturing into lizard territory I think it's fair to surmise we don't know who is pulling their strings. What we do know is the banks do control our money once it is deposited with them. They lend it to other people many times over - fractional reserve banking. We are meant to have confidence because the government will bail us out up to £85,000 if anything happens to the bank. My question is where will all this money come from? Is there enough money to bail everyone out?

Look at capital controls applied in the last decade or so in Cyprus, Greece and Iceland to see how you lose control of your money once you have deposited it.

For instance - in Greece, in 2015, banks shut down for weeks to stop people withdrawing their money, when they reopened there were strict limits of 60 euros on withdrawals. In Cyprus, 2012, as well as limits on withdrawals, depositors with deposits larger than 100,000 euros lost a substantial part of their deposits through a "haircut".

And there is no reason why it wouldn't happen here. I found this article last night in the Independent. Heres how capital controls could soon return to the UK The author identifies three conditions - a messy Brexit, an election and a Labour Party victory which could lead to capital controls and those three conditions now look perilously close to being met.

I keep money in the bank for everyday things but would not ever use a bank as a long term store of my money. I'm not alone in this, a lot of people distrust banks and look for other places to put their money. Gold is an obvious choice (proper hold and touch gold never derivatives of), and I think Bitcoin will in time prove to be a great alternative to gold. Of course, I could be wrong. Its a much riskier store than gold - the upside, if I'm correct, is that the increase in value of Bitcoin will eclipse that of gold's many times over.

There's definitely something in it esp the tech behind it, it's the tech behind it I'd like to invest in. I did see place where I could do that once in paper I think but then lost it

@AnnaForbes
There is always enough money to bail everyone out because the government can always just print more money....but then it is back to the old Harold Wilson "pound in your pocket" issue.

I think people are drawn to crypto from many different directions. For some its an alternative to keeping your money under the mattress, for others, its an easy way of doing business internationally, for still others, its a route into the wonderful world of dapps and smart contracts.

There is something for everyone in this brave new world.

I've put up a thread on the Money Matters boards if anyone wants to chime in.
www.mumsnet.com/Talk/legal_money_matters/3659983-Bitcoin-and-other-cryptocurrencies

God yes twitter feeds - all lambos and to the moon nonsense. I follow a few feeds including several women listed up thread but I don't contribute. I find a lot of twitter post are full of lingo and references unknown to me and so I lose interest even though I'm so interested in the currency itself.

@Cailleachian true but then everyone holding sterling becomes poorer. Regarding your idea, I think there is a huge gap for women in crypto space. It wasn't so long ago we needed a husband's approval to participate in financial transactions. As I said in my first post, imo it's incumbent on women to be involved because I think it will impact on the way everything is done the way the dot.com boom did.

A properly deregulated and decentralised crypto currency robs them of this control

I don’t know who controls the technology underpinning bitcoin and doubt very much people are in it for charitable reasons. Hence my apprehension.

Also someone up thread claimed that Jeremy Corbyn was a populist. I disagree.

It is very clear that he’s anti big corporate etc - whereas Boris and Trump have said things which do not correlate to their actual party beliefs - it’s just for votes. Look at Boris’ noise about spending on the NHS and education; completely out of sync with the Tory austerity narrative. Trump for example was very much a supporter of bank bailouts and tries to appeal across the spectrum with promises of jobs, walls etc. Yet his actions point very much to supporting big rich corporations such as his business.

Anyway, I digress.

I am cautious of bitcoin - it’s effectively a made up commodity and I remain sceptical - but with all investments it’s worth spreading risk.

@Iggy

There isnt really a "who" that controls the technology underpinning bitcoin, it is controlled by mathematics.

The people who mine bitcoin can change the mathematics controlling it, if 51% of them agree to do so, and sometimes it is changed to enhance it (eg Segwit, Lightening Network), but its not in their interests to harm it, as the people who are mining are heavily invested in its success.

In the news today that HMRC have asked some Bitcoin firms to hand over details of their buyers/sellers so that HMRC can check that the right taxes have been declared/paid on profits made!!

That'll annoy those who are using Bitcoins to avoid tax!

Crypto is usually taxed as an asset in UK law, so you have a limit of £12k
per annum allowance before you are liable for tax.

If you've turned bitcoin back into pounds in a year that you've used up your capital gains tax allowance (or cashed out more than £12k in a financial year), it might be worth getting in touch with HMRC and explaining the situation.

Regulation isnt very clear and a lot of accountants are a bit clueless around bitcoin, so I suspect HMRC would be sympathetic to any errors (but would probably want the back taxes!)

HMRC can't even make up their minds how to calculate the tax on crypto investments/profits. Very few tax accountants know much about it either.
It is clear from HMRC advice that they don't really understand how it works.

No, they are not in the least sympathetic.

okay so I doubt I'd ever invest because I don;t understand it and I can't be arsed to spend the time required, but I read a description a year a go and I wonder if people on here can point to whether or not its a reasonable one.

The article represented blockchain as a revolutionary transformative technology similar in nature to discovering a new technology for generating say a new drug such as new antibiotics. It equated bitcoin to an example of a drug generated by the new technology (blockchain). Bitcoin was the first new drug and people got very VERY excited about its existence! Now its clear there is a market for new drugs - particularly antibiotics - however, the point about the new technology (blockchain) is that it makes generating the new drugs (cryptocurrencies) straightforward.

So it follows that any given drug (currency) is not actually worthy of investment in itself - because its one of a basically infinite number of new drugs (currencies).

The conclusion was that while it may well be worth investing in the technology (blockchain) or in companies that are developing the technology, it wasn't ever a good idea to invest in a particular currency. using the currency is fine, just as using the antibiotic du jour is fine, but investing in specific iteration of blockchain was nonsense.

I got as far as checking that, yes, there are indeed hundreds of different cryptocurrencies, and bitcoin isn't even the most expensive of them necessarily, and decided the article was probably right.

What do the experts on here think?

@M3lon

There are a number of perspectives that people who believe in crypto have. That is one if them, although not one I agree with.

Blockchain technology is bigger than just bitcoin, but I believe that Bitcoin will always have a significant place within it, because it is the longest chain, the best supported, and the most decentralised.

Bitcoin isnt the most expensive to buy as a unit, but nearly 70% of the value of the whole crypto space is in it. The next most highly valued (Ethereum) is only around 8%. In the last 10 years, bitcoin has never lost its leadership position and I think its unlikely it ever will.

it is controlled by mathematics

That makes absolutely no sense.

My understanding is that there are algorithms underpinning bitcoin? And that algorithm was created a long time ago and has been left to run etc.

So there is no single entity controlling it as such, but at the same time it’s not fully understood IMO.

Not a reason to fear it, but also not a reason to jump on the bandwagon without some scepticism

HMRC can't even make up their minds how to calculate the tax on crypto investments/profits

Seems pretty clear to me.

www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals

Not read Kazzy’s link- sorry Kazzy!- but I thought crypto gains just came under capital gains tax in the U.K.?

@Iggly Yes, its all run by algorithms. The original algorithm was established in 2009 with the genesis block, The original algorithm is described mathematically in Satoshi Nakomoto's o white paper and could be understood relatively easily by someone who had degree level mathematics.

Since 2009 there have been a number of updates to that algorithm. When there is consensus among the bitcoin miners that an update is desirable, a new proposed version of the algorithm (Bitcoin core) is circulated, once everyone is agreed that this change should happen, it is released as an update. Miners then update their software and switch over to mining on the new protocol.

Ultimately tho, it is all controlled by the mathematics that is in the mining software.

Enjoying reading this thread. Not well educated on the subject at all but as a victim of Mr Woodford (thankfully only a small amount I can afford to lose) I'm particularly interested in this as a mechanism to store money (wealth, I suppose, but I'm not dealing in the kind of figures I would equate with wealth). @AnnaForbes, your comment about the government potentially not wishing us to own gold, could you elaborate? I have a small amount of gold and have wondered about getting more. But where do you keep it?

Until they change it again, Kazzyhoward.
They have changed their rules 3 times that I am aware of, which has been tricky for people who have been investingin/ trading/ mining over the last 10 years.

@endofthelinefinally

Yeah, but taxes and tax rates do change all the time, thats just what taxes do. It is a bit harder keeping abreast of your liability as most accountants arent very clued up in this area, but this will grow over time - in the meantime directly checking the government guidelines when you are doing your tax return is a good idea.

Afaik, for ordinary people (ie not running an exchange or trading professionally) crypto is treated as an asset, so is liable to capital gains tax when it is converted to pounds, and you have a £12k allowance every year for CTG, which includes all assets sold that year.

Bitcoin = gangstas
Do people really want to be involved in this? Or are they just greedy?

I think BTC is one of these things that will sneak up on everyone and one day we will turn around and discover it has become mainstream. If you look at the last time bitcoin was at $12k (not including the recent run), the media was full of their Bitcoin millionaires! stories and far too many people were getting themselves into a frenzy about it. This time it’s been much quieter with BTC being quietly added to news tickets in the US and so on, but no big fanfare so it feels a lot more sustainable now. I hope!

News tickers, not tickets

@tentative3 your comment about the government potentially not wishing us to own gold, could you elaborate? I'll try my best.

Gold has proven to be a great store of wealth and there is no reason to think this can't continue. However ... none of us knows what's in store in the future and I think normalcy bias makes it easy to assume a status quo will be maintained. But sometimes governments do take drastic action especially in times of crisis and it is this I was alluding to.

In fact, in the UK in 1966 it became illegal to own more than 4 gold coins in response to a falling British pound. Anyone with a bigger collection of coins had to inform the Bank of England who either granted a collectors licence or confiscated the coins.

Given economic uncertainty, it's quite feasible that the government at some point could make owning gold illegal. If I thought this was a real risk I'd have sold my gold already. I don't think it's imminent but I am aware it is possible. I believe strongly in spreading risk because nothing is 100% guaranteed (apart from death and tax of course). It was this train of thought that led me to find out more about bitcoin.