Since there are so many brilliantly smart people on this forum ... can someone explain BitCoin ?
WingedLiberty1957
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So is BitCoin sort of an electronic currency? You trade your regular currency for bitcoins then buy stuff with bitcoins then later can convert your bitcoins back into regular currency.
The thing that perplexes me is the Volatility of Bitcoin.
From Wikipedia ... Back in 2014 it was determined that bitcoin has volatility seven times greater than gold, eight times greater than the S&P 500, and eighteen times greater than the U.S. dollar. Attempting to explain the high volatility, some think the reason is there is no stabilization mechanism. The Bitcoin Foundation contends that high volatility is due to insufficient liquidity, while a Forbes journalist claims that it is related to the uncertainty of its long-term value, and the high volatility of a startup currency makes sense, "because people are still experimenting with the currency to figure out how useful it is."
This chart of the BitCoin price really kind of scares me with all the Bubble and Bust cycles. The exponential rise at the end reminds me of a bubble getting ready to pop (I could be wrong tho, IDK). Seems like holding bitcoins long term could make you money (maybe a lot of money) but you could also lose your shirt at any time. Is it akin to gambling at Vegas?
Funny this chart of BitCoin is what I think many thought the price of Gold and/or Silver might do. Has BitCoin replaced Gold/Silver in terms of gambling with alternative forms of money? Breathtaking the rise in 2013 from near $0 to $1200 ... then it drops to near $200 ... now racing up towards $1800.
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Yes. Like all fiat currencies, it's basically an agreement among users to accept it.
There are a limited # of bitcoins in existence. They are created as a reward for the work necessary to continue the chain of transactions.
So the # of coins in existence vs. the # of coins desired causes the value in another unit of measure (e.g. US$) to fluctuate.
The other thing to know is the "blockchain". This is a distributed ledger of all bitcoin transactions, which is cryptographically sealed. So everybody (in theory) has sight of every bit coin in existence and who transferred it to whom (the wallets are anonymous because they are just an ID# itself is cryptographically sealed). Sealing each block of the chain is the work.
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Meh.
I'd rather have a wad of cash in my pocket instead of a wad of bitcoins.
up to over $2500 now
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There is a bitcoin ETF now ... Trades under GBTC
Will be volatile I'm sure.
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I've been watching GBTC for a while now. It is a closed end mutual fund. Each share is 0.093 bitcoins. As a closed end fund, the shares can trade higher or lower than an actual bitcoin. GBTC trades at over a 100% premium to an actual bitcoin which is astounding for a closed end fund. Not for me at that premium.
Fidelity has expressed interest in creating a bitcoin fund. I think I will wait for that
"Vaporware backed by a vacuum."
Never heard of it and never intend to use it....what ever it is.
Yep.... truly a risky endeavor....for a while, I have no doubt, some fortunes will be made... and many lost. I will remain with cash, gold, silver, investments..... Yes, tempting, but not for me. Cheers, RickO
Crypto-currencies like Bitcoin are great for anarchists, libertarians, and those that want to live on the legal edge of society. They are pretty popular with gold and silver stackers since they are not necessarily traceable. It's pretty common for people on buy, sell, trade forums like /r/PMsforsale to want payment in a particular cryptocurrency. It's also one of the big things that enable places like the silk road. This is also true Golem, Monero, and Litecoin, which are also highly volatile.
If you are the kind of person that prefers to bury your money in the ground and also wants to buy stuff online, then Bitcoin could be for you.
I would encourage those in this thread that are dismissive of Bitcoin to learn more about it. The concept of using a Blockchain has been getting a lot of momentum in the business and financial world, and there is ongoing talk of it being adopted within establshied governments and banks.
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The electricity it costs is staggering.
``https://ebay.us/m/KxolR5
Hey! We are talking a COMPUTER ALGORITHM !!!
WHAT could ever go wrong?
Now gold, on the other hand....well..... maybe, but I'd like to see some more longevity.
My friend, Carlo Ponzi, might like it.
Bitcoin doesn't cost anything other than a reliable computer that is efficient enough to mine the data for solving the mathematical equations that award increments of bitcoin.
"Everything is on its way to somewhere. Everything." - George Malley, Phenomenon
http://www.american-legacy-coins.com
Oh, I am TRYING to "learn about it."
And.... the more I learn, the more I am convinced that NO government will let an untraceable "currency" be used for long.
It would surprise the gold out of me to think that the Treasury and the IRS is not at this moment, trying to figure out how to word the legislation to ...um.... deal with it.
In my very aged and simple mind, I believe Bitcoin will die with **LEGISLATION.""
Speculators almost always lose in the end, every "success" can become a trap for future risk. You could try Blockchain a production of the notorious Blythe Masters, one of the inventors of credit default swaps: http://www.zerohedge.com/news/2015-03-10/bitcoin-default-swaps-blythe-masters-joins-bitcoin-startup
What the Founders understood, like Roger Sherman, is that physical money like gold and silver create a discipline that runs counter to countries and now "bankers" that like to print money out of thin air.
The sole reason for Bitcoin is to pay to get your computer data back.
Should be shut down as a currency as thieves get away with it.
bob
Interesting video ...
"Could go to 0" or "Could go to 1 million" LOL ... Sounds like a lottery ticket.
"Perfect asset for a speculative bubble"
"No intrinsic value"
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There is not a limited number of bitcoins but the algorithm is written so that it is continuously more difficult to create additional bitcoins as they are produced. The early 'miners' were the big beneficiaries as their bitcoins were created at a far less cost than it would take to produce one today. As mentioned in a previous post the mining of bitcoins is not cost effective as the electricity costs outweigh the, well for lack of a better term, dollar equivalent. This leaves the production of bitcoins to fringe groups such as governments and government agencies who want to hide their financial activities, people or organizations who can hijack electricity, etc.
It is not, IMO, something anyone should ever invest in as the volatility can crush you.
Want to get started mining bitcoins? Here ya go...
ebay.com/sch/i.html?_from=R40&_trksid=p3984.m570.l1311.R1.TR12.TRC2.A0.H0.Xbitcoin+m.TRS0&_nkw=bitcoin+miner&_sacat=0
K
It is my understanding that this is a computer based monetary system that is dependent upon others accepting it as a payment in that form of cash. It's really not any different than the fiat currency issued by the governments of the world. The difference is, what sort of legal support is there for this currency? Is anyone obligated to take it to discharge a debt and if someone accepts it does that discharge the debt in the eyes of the law?
It is good that there are limited on the amount of Bitcoins that can be created. That might keep the system from collapsing. Still there is the legal issue.
By the way the fact that this "currency" has not backing in precious metals is not a problem. Economists have long dismissed "the commodity theory of money" as an invalid economic concept. I could get into why that is true in another post.
Language like this make Bitcoin sound like a Ponzi scheme.
I can see how the existence and use of an electronic currency COULD be a great thing. Unlike things like PayPal, or GooglePay, or ApplePay (may have the names wrong), or credit cards, you can buy and sell and transfer money WITHOUT TRANSACTION FEES at either end!! Just like handing a $20 bill to someone....
The downside is lack of accountability. Buy a counterfeit coin with BitCoins? Good luck getting your 'money' back.
I half expect someone to create a "consumer friendly" electronic currency at some point. But you can bet the farm that they'll want a cut of every transaction, or why would they bother?
I like the Nigerian Princess money best of all.
This crytocurrency thing reminds me of an investment paper game I first got into about 40 years ago. You bought as many units as you wanted and hoped to cash out for a payoff into the $millions. On a very regular basis the value dropped off a cliff into nothing.
Well one time I put $300 in and found that I could cash out at $10,000. Not exactly millions but certainly a bit more that nothing.
Anymore the scam just bores me and I refuse to play their dreamer games.
Oh it's called "Mega Millions" or something. By any name it's just a Suckers Game.
Bitcoin in no way is a Ponzi scheme. It is however, very speculative.
Vaporware is a technology product that is announced/advertised but never released. That does not apply to Bitcoin.
Showtime's show "dark net" had a great segment on bitcoin the other week, on both the speculators and the People in china lining up rows and rows of computers to "mine" bitcoins..
http://www.sho.com/video/55883/the-price-of-bitcoin
stroke of a key - gone! Just like 20% of the Iranian centrifuges.
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The Blockchain technology is interesting and will probably get adopted and used in some future regulated environment.
But anonymous movement of money between entities and limited fees will not stand the test of time.
There are just too many other interested parties in the financial world that will want to intervene at some point in the future if Bitcoin continues to grow.
In the mean time you can try to figure out where we currently are on this chart pattern.
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100% bubble territory right now. Threads like this are popping up all over the place. Crazy amounts of media coverage. The price of bitcoins (and related crypto currencies) are currently being fueled by greed and fear of missing out.
Rapid decline will happen very soon. The only time to even consider buying for the longer term is once all this short term hoopla is over and no one is talking about cryptos. Give it about a year from now for it to bottom out again.
my natural question is what backs everything from a financial perspective, who holds that money. if the answer is that there is none than I have to agree with those who mention Ponzi.
The only thing the government can do is pass a law that makes owning/transacting in BitCoin is illegal (which strikes me as unconstitutional but IANAL). It would stop companies based in the US from accepting it but it would do nothing to stop private use, it would just be another law they use to pile charges on you when you get arrested for something else.
I dont think even Einstein would understand bitcoins
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You mean like the gov't saying owning any gold over let's say $20 is illegal? : )
Bitcoins are virtual currency and each individuals balance is stored on multiple countries around the world in what are called Blockchains.
To start using Bitcoins, you need to create an account. Contrary to people thinking Bitcoins are untraceable, when you open your account, the IP address you use is recorded.
When you want to move money in or out, it is treated like any other currency conversion. Just as there is a ratio of USD to BP, there is a ratio of USD to Bitcoins. Each transaction is recorded on computers by "miners" who maintain a list of "Bitcoin" transfers.
Bitcoins will be more mainstream soon, as there is a lower processing fee than credit cards.
I mean, Roosevelt did a lot of unconstitutional shit he was never challenged on but I don't think making BitCoin illegal is the same as forcing people to exchange their gold currency for non-gold currency.
Soooo..... after all this information and speculation,
what is it that increases or decreases the "value" of the publicly traded Bitcoin Services Inc (BTSC) ??
It doesn't seem that the COMPANY has the money in a back room bucket.
http://www.otcmarkets.com/stock/BTSC/profile
I can easily understand how a method to transfer OWNERSHIP of any FUNDS could gain or lose value simply by addition of ....profit margin.... but not even then ...REALLY. ... as the profiting party would have to be containing all their funds in ....bitcoins..
and...
assigning the wealth access to a public entity of some sort. Which would be assigned to yet ANOTHER party who would have claim on the funds.
Nope. Don't understand it.
Prefer tulips.
A mixture of hype and artificial scarcity.
The value of all the BitCoin in the world is like less than twenty billion dollars.
I'm still not convinced the whole thing isn't being manipulated by a small group of wealthy people.
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The gov has more tricks than just laws. When they tire of it they will more likely just feed it a virus.
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Hmmm, I thought it was a coin after someone tested its authenticity by biting into it...
It was an analogy for nothingness ---
$1,000 per Bitcoin coming soon to a theater new you. Every mania has its day. What goes way up, comes way down.
"On a long enough timeline the survival rate for everyone drops to zero."
I'm not looking at a long term chart. A retrace of this 3rd/acceleration/point of recognition wave will bring it back in the near future for a retest of the $1200-$1800 level. And after several years of a good run, I figure a return to $1000 is in the cards.
Consider Bitcoin like a mining company and their "life cycle curve." First step is the discovery phase. But when it comes time to get environmental and govt approvals and then fully fund the project, things tend to retrace much or nearly all of those early gains. The mining Bitcoin has done so far are like early "core samples" to an exploration miner. Next step is characterizing those samples with something similar to a National Instrument 43-101 "verification."
Not for me......EVER!!!
Or maybe it was as rumored, started by someone in the "shadow government" and now that many nefarious and illegal operations on the dark web use it because of anonimity.. they can just fold the tent on the whole operation and crush many illegal people and businesses in one fell swoop.. be the greatest sting operation ever... just saying..
Forget all this stuff..........I have enough trouble paying my light bill.
Pete
Bitcoin does not have a monopoly on crypto currencies as there are many other competitors out there. All backed by nothing more than an implicit agreement among users that a virtual entity constitutes "money." I'm trying to figure out why Bitcoin is "worth" more than any other crypto currency.
Regarding its staying power, the government could make a case that only the Feds have the right to "create" money, and shut it down on that basis. If you start getting substantial criminal activities related to crypto currency, you can easily see "law and order" politicians speaking out against it.
Might as well buy Beanie Babies.
Didn't someone recently misplace quite a few (quite a few!) million bucks worth a few years ago. Mountain Goat? Something like that.... Sounds more like a potential black hole
