Active discussions

Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Talk
Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Original poster

Please tell me about Bitcoin... the Good, the Bad and the Ugly.

100 replies

shadypines · 18/01/2021 08:27

What is it? Is it a scam? BIL has got involved so I'm a bit concerned as he has a history of being rubbish with money. Thanks

OP posts:
Cailleachian · 29/01/2021 21:31

@JellyBabiesFan

With bitcoin you dont need a bank, you are your own bank

Doesnt make it any easier to access. You are still reliant on the holding company.

What "holding company".

The holding company is you!

Whoever owns the private key owns the bitcoin. No middlemen at all.

I can directly send bitcoin to someone in a village in Afghanistan within 10 minutes. All I need to know is their bitcoin wallet address.

DoubleDessertPlease · 30/01/2021 02:04

Doesnt make it any easier to access. You are still reliant on the holding company.

You can hold bit coin in your own hardware wallet, you don’t need a holding company.

safariboot · 30/01/2021 02:28

The good: Bitcoin technologically works. You can exchange Bitcoin with someone else without the need for a central bank, and without it being possible to spend the same coin twice. Bitcoin has value because its supply is limited by the mathematics that makes the whole system work.

(That said, while there will never be more than 21 million Bitcoins, nothing stops someone making new cryptocurrencies.)

The bad: Bitcoin has become a speculative bubble and its value is primarily determined by the actions of speculators. This has impeded its use as a currency to pay for goods and services; the value is too volatile. Also, just as with cash, when you hold Bitcoin in your own wallet it can be lost if you lose certain computer files. If you leave your Bitcoins on an exchange (bad idea!) they can get stolen.

The ugly: While Bitcoin is itself legitimate, there are lots of scams and frauds using it, as well as some other outright fraudulent cryptocurrencies. Oh, and Bitcoin is also considerably energy-hungry (something legitimate newer cryptocurrencies often try to fix). Transactions thus have a significant carbon footprint.

safariboot · 30/01/2021 02:34

PS: My 2 satoshis. If you have money you can afford to gamble, basically, Bitcoin's as good a bet as any. And if you just want to buy something with Bitcoin to see what all the fuss is about, go ahead and do so. But if you want to make prudent investments, look elsewhere.

(A satoshi is the smallest unit that can be transferred. There are 100 million satoshis to one Bitcoin.)

JellyBabiesFan · 30/01/2021 12:53

You can hold bit coin in your own hardware wallet, you don’t need a holding company

Okay so in the event of a marketcrash. How do you convert bitcoin into pounds from this hardware wallet?

samanthawashington · 30/01/2021 15:38

It's a dreadful environmentally negative exercise as a whole. I wouldn't do it for that alone

Cailleachian · 30/01/2021 17:20

@safariboot - you can transact with millisatoshis (1/1000th of a satoshi) on the lightening network.

@JellyBabiesFan - who wants pounds when you can have bitcoin?

Cailleachian · 30/01/2021 17:30

@JellyBabiesFan

But actually, if I saw the rate of btc dropping relative to fiat and I thought that I could gain more bitcoin by selling it for now, then buying it back later, I would use a bridge to convert it to wbtc (bitcoin on the Ethereum chain, then exchange the wbtc to dai (a synthetic asset pegged to the dollar) until I was ready to transfer it back.

There are synthetic sterling denominated stablecoins, but of all the fiat stablecoins, Dai is the one that I trust the most.

JellyBabiesFan · 30/01/2021 21:11

So nobody is willing to answer the question? Funny that

Cailleachian · 30/01/2021 23:22

@JellyBabiesFan

"How do you convert bitcoin into pounds from this hardware wallet?"

The short answer is
"you cant,."

The long answer is
"the only thing you actually need pounds for is taxes, so long as you have sufficient sterling income to cover any tax liabilities you incur, there is no need to convert bitcoin to pounds.

JellyBabiesFan · 31/01/2021 17:02

the only thing you actually need pounds for is taxes, so long as you have sufficient sterling income to cover any tax liabilities you incur, there is no need to convert bitcoin to pounds

Wait, your mortgage provider accepts bitcoin?

Cailleachian · 31/01/2021 18:08

@JellyBabiesFan

the only thing you actually need pounds for is taxes, so long as you have sufficient sterling income to cover any tax liabilities you incur, there is no need to convert bitcoin to pounds

Wait, your mortgage provider accepts bitcoin?

@JellyBabiesFan

If I want to pay a non-tax liability like a debt secured on a property, with bitcoin, there are third party services that can facilitate that. (I know HSBC will not accept this, but Santander will, not sure about other banks)

If you have (substantial amounts of) crypto, and you want to buy a house without selling it, you can take out a fiat loan against the crypto and use that to buy the house. Risky, very very risky....but I suppose you always have the house even if it all goes pear shaped.

As to taking out a mortage on the basis of a crypto income, that becomes more tricky, but there are a few solutions in the pipeline, like Liquid mortages, Reserve Rights, Cred etc.

doubleaces89 · 31/01/2021 18:25

Why all the negative energy?'

I thought bitcoin was a scam when I first heard about it, but (rightly or wrongly) it's here to stay, and it's increasing been seen as a store of value, and a hedge against inflation, similar to gold.

Think about it for a second, gold is a crappy metal (too soft), and limited number of actual uses beyond a few electronics uses. But it it's been adopted as a store of value, even though it actually has no value..Why??

The 'why' is simply because people have ascribed that value to gold'. If the part of history had gone slightly differently, it would be something else instead of gold.

Bitcoin will (it already has) become an alternative asset class to gold, and due it's limited supply will become another store of value across the world.

doubleaces89 · 31/01/2021 18:28

Having said that, it does have alot have a fundamental flaw in the sense that unlike gold, a small small number of people (non corporations) control a large supply of bitcoin, which causes volatility and market manipulation. I do think over time this will iron itself out...

doubleaces89 · 31/01/2021 18:32

@JellyBabiesFan

Something, anything can have value because people say it's valuable. Take diamonds for example, why do they have value, especially when you can easily create flawless diamonds in a lab?

tinks29 · 05/02/2021 18:21

Bitcoin is a fantastic store of value, and it will go much higher in this bull cycle (100K-250K+).

Smallgoon · 08/02/2021 23:25

30k for a single coin today....

jimmyjammy001 · 13/02/2021 10:30

Eventually people will fully switch over from Gold to Bitcoin, it has allready happened a bit, gold is hard to transport or send to someone else without massive costs and storing it somewhere as well, with bitcoin it's easily transferable and sellable anywhere in the world. Tesla is the first major company to buy into it, banks are starting to take interest and alot of other company's will buy into it as well as having cash lying around is pointless with zero interest rates.

Smallgoon · 14/02/2021 10:24

@jimmyjammy001

Eventually people will fully switch over from Gold to Bitcoin, it has allready happened a bit, gold is hard to transport or send to someone else without massive costs and storing it somewhere as well, with bitcoin it's easily transferable and sellable anywhere in the world. Tesla is the first major company to buy into it, banks are starting to take interest and alot of other company's will buy into it as well as having cash lying around is pointless with zero interest rates.
I have a significant sum just sat in a low interest savers account. Am debating whether to just use it to purchase Bitcoin - could prob purchase just shy of 3 coins but wondering if price will take a smallish hit again which would be prime buying time
Cailleachian · 14/02/2021 22:55

@smallgoon

I'd suggest that you look at "dollar cost averaging"...only with pounds.

Set aside an amount a month that you will transfer and regardless of price. Timing the market and throwing it all in at once as a newbie can be risky.

Viviennemary · 14/02/2021 22:58

It's a scam and a Ponzi scheme controlled by criminals.

tinks29 · 14/02/2021 23:47

@Viviennemary

Have fun staying poor.

Smallgoon · 15/02/2021 00:03

[quote Cailleachian]@smallgoon

I'd suggest that you look at "dollar cost averaging"...only with pounds.

Set aside an amount a month that you will transfer and regardless of price. Timing the market and throwing it all in at once as a newbie can be risky.[/quote]
Thanks

WizardOfAus · 27/02/2021 08:05

A question for seasoned crypto investors...

I’m thinking of investing a small amount of my portfolio in cryptocurrency, but wondering the best exchange to use?

I’ve read some horror stories about Coinbase freezing accounts, which worries me. Does anyone use Kraken? Binance? Bitstamp?

Could you recommend one over the other?

Also, how do you store your crypto? Do you transfer it to a wallet? Any recommendations on which one to use?

Cailleachian · 27/02/2021 15:47

@WizardOfAus

A question for seasoned crypto investors...

I’m thinking of investing a small amount of my portfolio in cryptocurrency, but wondering the best exchange to use?

I’ve read some horror stories about Coinbase freezing accounts, which worries me. Does anyone use Kraken? Binance? Bitstamp?

Could you recommend one over the other?

Also, how do you store your crypto? Do you transfer it to a wallet? Any recommendations on which one to use?

Coinbase does freeze accounts from time to time, generally tho they will let you transfer out the crypto, just not fiat. Its also the easiest exchange for newbies to use.

I quite like Binance, but there are quite a few good exchanges...check on coinmarket cap for their volume. I would suggest avoiding Bitfinex tho (so many dodgy rumours around that one!)

If you have any significant amount of crypto get a hardware wallet (like Ledger or Trezor) and learn how to use it. Do not keep large amounts on exchanges, no matter how big they are or trustworthy they seem.