To think a huge crypto bitcoin bloodbath is on the cards.

[Viviennemary]

I have thought this for quite a while. But surely it's any day now. How this crypto market is sustainable is a mystery. A lot of it is backed up by Tether a so called stable coin meant to be worth 1$ but it is suspected Tether isnt backed by anything. Its just printed tokens backed by nothing.

YANBU. Crypto fans love to rave about how it's fairer and safer because it's decentralised but in reality, it's unstable and majority owned by a small handful of players who control the field and are making money at the expense of everyone else.

What do you mean by bloodbath?

a bloodbath?!

It's a bubble that has to burst eventually. Everyone who owns them has a vested interest in them keeping their value though, which is why crypto-bros get so defensive over it.

YANBU. I think it was Warren Buffet who said "Investment must be rational - if you can't understand it, don't do it.". Anyone "investing" in bitcoin is basically just gambling.

Also bitcoin is terrible for the environment.

Yup. The FCA advice is pretty much only put money into crypto that you are happy to never see again. It’s an environmental nightmare too.

Presumably they've read about the Tulip Bubble and learned how to keep it going as long as possible. But yes, it's a bubble. I mean, diamonds are a bubble realistically and they've gone for decades. At least they're sparkly and massively controlled but Bitcoin isn't.

One could argue that the looming massive bitcoin payout following the MtGox crash in 2014 could indeed trigger this....if enough people decide to cash out at the same time

Personally I think i'm fine either way. I have made money from cryptocurrencies, I may make more, but I have to say I don't find it especially enjoyable or interesting.

Is there clear utility?

Tow things have happened recently:-

1. US has tightened monetary policy and
2. China banned crypto last year so all the Bitcoin miners went to a dormant volcano in Kazakhstan. Recent unrest has meant the internet isn’t running enough for mining. 18% of Bitcoin is produced there.

In addition there have been worrying signs that several other economically significant countries won’t accept crypo. Conversely, Gibraltar “might” become a crypto hub and run their stock exchange. One Latin American town is planning to mine crypto with government backing.

It’s like the property market in some ways- a tumble in the prices always has people saying it’s a bubble that might burst. Most of the time it doesn’t. Occasionally it does.

@Zilla1 the one thing I don't understand about crypto is that its supposed to be a currency. A currency is a medium of exchange of goods and services. Thats why we invented currency- cos bartering for stuff we wanted/needed with potatoes was extremely tiresome and currency provides more certainty. I know there are companies which accept bitcoin but the list is not exhaustive. And my perception is that people aren't interested in spending it, they are just interested in holding it as they think the value goes up. that in itself creates a bubble.

It's crashing at the moment...seemingly a lot is being sold to help prop up the stock market. I'd say it will go back up again in the future though. I bought some last year, sold enough to cover my investment when it went up, and am holding some long term now.

@sheroku I know very little about bitcoin etc, why is it bad for the environment?

[quote Daisypod]@sheroku I know very little about bitcoin etc, why is it bad for the environment?[/quote]
Because the 'cloud' isn't actually a cloud. It's massive server farms in the desert pumping out heat and requiring enormous cooling, which is wildly energy sucking.

The process for creating new bitcoins and validating the transactions is called "mining". It's essentially involves lots and lots and lots of computers doing hugely complicated, energy intensive calculations.

"According to Digiconomist, a cryptocurrency analytics site, a single Bitcoin transaction uses 2,106.37 kilowatt-hours of electricity, which equals the amount of power consumed by the average American household over 72.2 days."

DH is a nerd and says that quantum computers will render bitcoin blockchain and NFTs as useless as tulips.

Seriously, it's good job he is really hot.

if you can't understand it, don't do it

It must also logically follow that if you can't understand it, your discussions will be somewhat limited though ?

Also not understanding hasn't really held people back from using modern tech has it ?

At least housing is something people need and use. It has value in itself. Bitcoin is no more than boxing up fresh air and conning people into thinking it's worth something. Its the biggest con of modern times. It is 100% a ponzi scheme.

I’ve never understood it. They say they’re ‘mining’ it - (and using gargantuan masses of energy) - but mining what? Mining means having something tangible at the end of the process.

I’ll be sticking to investments I can understand. They’ve worked well for me and dh so far.

Might add that a very successful and highly paid relative of dh who’s been an investment manager for many years, won’t put other people’s cash into anything unless he understands fully how the company makes its money. And if that means a comprehensive tour of the factory, so be it.

DH is a nerd and says that quantum computers will render bitcoin blockchain and NFTs as useless as tulips.

It's going to be a good few years before quantum computers are good enough to crack bitcoin and they're already working on increasing the level of encryption to defend against quantum computing. I think there are much bigger risks to bitcoin in the short term.

It’s all a massive pyramid scheme. The tokens go up in value because there is increasing demand for them but there is no inherent value in them. People only invest in them because they think they will increase in value (or for some because they are anonymous and so can be used for underground purposes).

@Joined4this

Tow things have happened recently:-

1. US has tightened monetary policy and
2. China banned crypto last year so all the Bitcoin miners went to a dormant volcano in Kazakhstan. Recent unrest has meant the internet isn’t running enough for mining. 18% of Bitcoin is produced there.

In addition there have been worrying signs that several other economically significant countries won’t accept crypo. Conversely, Gibraltar “might” become a crypto hub and run their stock exchange. One Latin American town is planning to mine crypto with government backing.

It’s like the property market in some ways- a tumble in the prices always has people saying it’s a bubble that might burst. Most of the time it doesn’t. Occasionally it does.

Ok. Thicko alert here ... how is crypto "mined"?

Here to be educated. Thanks in advance

I don't think it will necessarily be happening imminently but crypto-currencies will crash eventually simply because they have no intrinsic value and are not backed up or guaranteed by government.

Things like gold have intrinsic value because they are scarce and have practical uses. Gold might fall in price but will never be wiped out entirely because people will always want it and there will always be uses for it.

Traditional currencies might crash from time to time but rarely do so when a reputable government has the power to stabilise them by borrowing to shore things up.

Crypto-currencies are not worth anything themselves and no major government will bail them out if they fail.

@DGRossetti You should understand the purpose or value of something before investing in it. I understand why Google is such a valuable company, i use its products daily and I cannot live without it. I understand why people buy property, they would like a place to live in the long term and they don't want to pay rent when they are old.

I don't really understand what I could do with bitcoin...Maybe someone could explain it to me.

Ok. Thicko alert here ... how is crypto "mined"?

Each transaction requires computer power to process securely. People provide the processing power and are rewarded with "mined" crypto-currency.

Generally its a very power-intensive process. Highly-spec'd machines are needed to compete and the rewards are low. And you've got a massive energy bill to consider too.