What's your views on Bitcoin and why?
Discussion
All this "it's inflationproof, the future, a true cultural and political revolution" is epic geek-wibble.
A rediculous proportion of bitcoin is with 1 entity - satochi mining (the founder). That person effectively has control over the value of bitcoin. IF it ever catches on, and IF it's not hacked to death (another mt.gox / the other 3 that were compromised), all it takes is this person / company / government that is behind satochi to play silly buggers and to paraphrase the gobby bird out of hudsen hawk, economies would crash crash, and cities would burn burn.
Just think about it. It's hard enough to trust our governments because they have the ability to just poduce money - via quantatative easing. However, they're not going to devalue it by 1/14 overnight. Satochi could. We don't even know who the f he / they are.
The future? My arse.
A rediculous proportion of bitcoin is with 1 entity - satochi mining (the founder). That person effectively has control over the value of bitcoin. IF it ever catches on, and IF it's not hacked to death (another mt.gox / the other 3 that were compromised), all it takes is this person / company / government that is behind satochi to play silly buggers and to paraphrase the gobby bird out of hudsen hawk, economies would crash crash, and cities would burn burn.
Just think about it. It's hard enough to trust our governments because they have the ability to just poduce money - via quantatative easing. However, they're not going to devalue it by 1/14 overnight. Satochi could. We don't even know who the f he / they are.
The future? My arse.
All that jazz said:
That makes no sense to me either. Surely in order to use these "bit coins" you need to buy them from somewhere as clearly they must have some monetary value if you can buy s
t from Microsoft and Dell with them, thus whoever you're buying them from is making money from you and means that they are not decentralised as you claim.You are exchanging GBP for BTC.
Just like you would exchange GBP for EUR or USD.
That isn't anything to do with the de-centralisation theme.
The USD is backed up by the Fed and the earnings power of the US.
The Fed can print more USDs whenever it feels like it and it frequently does.
Hence by it's very nature, the USD is inflationary.
BTC on the other hand has an absolute limit to supply.
You will never wake up one day to find that the government has decided to make all the BTCs in your wallet worth a lot less because they decided to print an extra $1tn of them.
That makes it a good inflation hedge.
shigs said:
Bitcoin is not a company, it is not an organisation. Bitcoin is a protocol just like TCP/IP is for the internet. it's completely decentralised, meaning that there is no single point of control / failure.
[b] It doesn't rely on / require banks
it doesn't rely on / require governments[/b]
The invention truly is revolutionary and a historic moment in the evolution of computer science, in fact i'd argue Bitcoin is the most significant advancement since the internet itself. And the catalyst of a social, financial & political revolution.
in short, Bitcoin is the internet of money.
Michael.
Michael this sounds like you are massively talking your own book. Then a quick look at your profile sees you've posted less than once a month over 6 years and that you have a bitcoin related company..[b] It doesn't rely on / require banks
it doesn't rely on / require governments[/b]
The invention truly is revolutionary and a historic moment in the evolution of computer science, in fact i'd argue Bitcoin is the most significant advancement since the internet itself. And the catalyst of a social, financial & political revolution.
in short, Bitcoin is the internet of money.
Michael.
The "revolutionary" and "historic" stuff is just geek rubbish.
The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because or stable governments and stable banks. That means they guarantee your deposits and keep your money safe.
"it's completely decentralised, meaning that there is no single point of control / failure." this is the main point why bit coin will never be a world currency. There isn't a single point of failure there are multiple. You are keeping a digital currency which can be hacked, as has been proven. Or keep it in the bitcoin bank for the biggest exchange to collapse. The points I put in bold you list as negatives whereas the rest of the world see as positives.
Walm makes an interesting point about inflation and QE. However, as a result of the inflationary nature of fiduciary issue it means all prices go up, not only our costs but our assets too. And we get paid interest which I presume as everyone would be keeping their coins on stand alone hard drives to stop them being hacked then they wouldn't.
In short as a balanced portfolio it is worth a 1% punt of your assets but as a realistic world wide currency; at the moment no chance, and if they can prove 100% safety in the future then in may catch on for a small percentage of people. Then the governments won't like it and they'll regulate the crap out of it.....
Edit: bold wasn't bold
Edited by R11ysf on Wednesday 5th August 11:48
Edited by R11ysf on Wednesday 5th August 11:48
paulrockliffe said:
What happens when they've all been mined and I go and dig something out of the ground and make something with it? The value of each coin must deflate offer time as the level of assets rises.
I'm not sure that's much different to an inflationary currency?
No. The exact opposite.I'm not sure that's much different to an inflationary currency?
Imagine there were just 100BTC in existence (the absolute limit).
And that the only economic good anyone cared about was a “widget”, of which there also happened to be just 100.
Each one would be worth 1 BTC.
Then suddenly you dig up 10 widgets.
Now each BTC can buy you 1.1 widgets.
R11ysf said:
The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because of stable governments and stable banks.
Totally agree. There is only a very limited number of currencies on this planet with which I would want any involvement at all. Probably,
- UK pound
- US Dollar
- Euro
- Swiss Franc
This recently popped up on my Lifehacker feed -
http://www.lifehacker.co.uk/2015/08/03/ultimate-bi...
Still none the wiser.
http://www.lifehacker.co.uk/2015/08/03/ultimate-bi...
Still none the wiser.
Andreas Antonopoulos knows a lot about it and has been on the Joe Rogan podcast a few times.
This is the most recent. Very interesting.
https://www.youtube.com/watch?v=5wwbzwUXfgc
This is the most recent. Very interesting.
https://www.youtube.com/watch?v=5wwbzwUXfgc
Noooo, it's all absolutely safe, as set out in the article,
"the biggest online retailer, Amazon, has not made any indications that it ever intends to support the cryptocurrency."
"British banks have been a bit nervous about engaging with Bitcoin."
"the current supply of Bitcoins is owned by a relatively limited number of people, the price is more likely to go up and down much more quickly than with an established currency"
"one of its drawbacks is that it is not backed by any government"
Safe as houses!
"the biggest online retailer, Amazon, has not made any indications that it ever intends to support the cryptocurrency."
"British banks have been a bit nervous about engaging with Bitcoin."
"the current supply of Bitcoins is owned by a relatively limited number of people, the price is more likely to go up and down much more quickly than with an established currency"
"one of its drawbacks is that it is not backed by any government"
Safe as houses!
R11ysf said:
Michael this sounds like you are massively talking your own book. Then a quick look at your profile sees you've posted less than once a month over 6 years and that you have a bitcoin related company..
The "revolutionary" and "historic" stuff is just geek rubbish.
The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because or stable governments and stable banks. That means they guarantee your deposits and keep your money safe.
"it's completely decentralised, meaning that there is no single point of control / failure." this is the main point why bit coin will never be a world currency. There isn't a single point of failure there are multiple. You are keeping a digital currency which can be hacked, as has been proven. Or keep it in the bitcoin bank for the biggest exchange to collapse. The points I put in bold you list as negatives whereas the rest of the world see as positives.
Walm makes an interesting point about inflation and QE. However, as a result of the inflationary nature of fiduciary issue it means all prices go up, not only our costs but our assets too. And we get paid interest which I presume as everyone would be keeping their coins on stand alone hard drives to stop them being hacked then they wouldn't.
In short as a balanced portfolio it is worth a 1% punt of your assets but as a realistic world wide currency; at the moment no chance, and if they can prove 100% safety in the future then in may catch on for a small percentage of people. Then the governments won't like it and they'll regulate the crap out of it.....
Edit: bold wasn't bold
Hmmm, I'll do my best to not be offended by your first paragraph, i'll just put that down to you not having your coffee this morning. However I'd just like to point out that i've been a member of PH since 2009, throughout this time I probably check in at least a few times a week to keep up to date with one of my core passions, cars. The whole idea of public forums / communities is to be amongst individuals who share a common set of values & beliefs. I think it's pretty safe to say that 99.9% of PH members (including myself) are here for the cars, this is clearly evident if you go through my "short" posting history. The "revolutionary" and "historic" stuff is just geek rubbish.
The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because or stable governments and stable banks. That means they guarantee your deposits and keep your money safe.
"it's completely decentralised, meaning that there is no single point of control / failure." this is the main point why bit coin will never be a world currency. There isn't a single point of failure there are multiple. You are keeping a digital currency which can be hacked, as has been proven. Or keep it in the bitcoin bank for the biggest exchange to collapse. The points I put in bold you list as negatives whereas the rest of the world see as positives.
Walm makes an interesting point about inflation and QE. However, as a result of the inflationary nature of fiduciary issue it means all prices go up, not only our costs but our assets too. And we get paid interest which I presume as everyone would be keeping their coins on stand alone hard drives to stop them being hacked then they wouldn't.
In short as a balanced portfolio it is worth a 1% punt of your assets but as a realistic world wide currency; at the moment no chance, and if they can prove 100% safety in the future then in may catch on for a small percentage of people. Then the governments won't like it and they'll regulate the crap out of it.....
Edit: bold wasn't bold
Edited by R11ysf on Wednesday 5th August 11:48
Edited by R11ysf on Wednesday 5th August 11:48
Bitcoin is a passion of mine, you do not need to share it with me. I fully appreciate opinions will be split, i'm not here to argue or twist anyones arm. I will happily answer any questions to provide clarity on what is a very difficult subject to grasp first time around. Also my firm is an investment company who specialises in this area, I did not want this thread to be investment based, hence why I said "price aside" in my op so there is not any conflict with my intentions. Will I gain some insight into how the general populations views have / haven't advanced over the years, sure... but this will not influence my business in any way shape or form. If you feel i've come across this way and these where my intentions then I hope this explanation has now made you see otherwise.
Right so, that out of the way.
"The "revolutionary" and "historic" stuff is just geek rubbish."
Answer: completely your opinion, however I do admit I am a serial geek
"The most interesting bit is the bit I have put in bold. Bitcoin doesn't have the backing of banks or governments. One of the reasons that we use GBP or USD and it is accepted worldwide is because or stable governments and stable banks. That means they guarantee your deposits and keep your money safe"
Answer: It wouldn't be a good alternative system if it approached the same issue with the same thinking. Paypal's original goal was to create a digital currency, they failed. and the reason why they failed was due to:
1. being a company, meaning if you try to compete against the banks they have a target to attack / shut down. Paypal very quickly dropped this idea and where quickly conformed into a traditional bank.
2. How do you create digital cash without fixing a double spend? the way traditional models get around this is by having intermediaries who do reconciliation to determine what transactions are right or wrong / fraudulent. This creates encumbrance and expense. 40% of merchant fees are to cover fraud.
3. Who do you believe banks guarantee your deposits from? investments aside, why do you need guarantee / protection from yourself? People tend to get the intentions of regulation a bit mixed up. We can go into this subject in more depth if you like. But to get a quick idea of what I mean, just have a look into the Greece situation as an example of how well protected we are by banks and gov.
"this is the main point why bit coin will never be a world currency. There isn't a single point of failure there are multiple. You are keeping a digital currency which can be hacked, as has been proven. Or keep it in the bitcoin bank for the biggest exchange to collapse. The points I put in bold you list as negatives whereas the rest of the world see as positives."
Answer: I completely agree with some of your points here, apart from the fact that bitcoin is already a transnational currency, in fact its the first transnational currency (admittedly a small one right now). However, where you are bang on is right now the general population are not ready to be in control of their own digital wealth and bitcoin is not ready to allow people to be in control of their own wealth. Here's what I mean, as you've pointed out "hacking" is a big thing surrounding bitcoin, however not bitcoin itself or the Bitcoin network... this has never been hacked as you would need 1000x of all the computational power google has to offer to even attempt it. Bitcoin is the most powerful computing network in the world by some magnitude.
However, the issue is that digital security has been around for 30 - 40 years and the average individual suck at it! hell... even most professionals suck at it! what needs to be built is methods / tools where the average individual can feel comfortable securing their digital wealth in a stable non geeky fashion, and Bitcoin is simply not there... yet. This is why individuals and ill equipped companies are being hacked. Also it is worth noting the system we use today is to store millions of customers financial data in a central server, creating a honeypot of financial information. ID theft is the largest financial concern today as companies globally are being hacked and millions of customers credit / debit card details being stolen. As credit / debit cards work on pull mechanism, funds can be directly taken from your account without your authority, you are handing over the right for any company (and their chain of intermediaries) the ability to do this. Bitcoin is a push mechanism it literally works like a digital version of cash, therefore can not be frozen, pulled from or confiscated without your authorisation. Companies do not need to secure your sensitive data, they do not need to worry about charge backs, once you receive a payment, you've received a payment.
"Walm makes an interesting point about inflation and QE. However, as a result of the inflationary nature of fiduciary issue it means all prices go up, not only our costs but our assets too. And we get paid interest which I presume as everyone would be keeping their coins on stand alone hard drives to stop them being hacked then they wouldn't."
Answer: Not quite sure why you've mentioned fiduciaries? please elaborate?. Inflation is the effect of the increase of the money supply, as the value of our currency depletes, naturally so does its purchasing power. Attaching interest is a whole different subject, as this links back to the debt based system we have today, every single £, $ Yen (don't have the currency symbol :P ) in circulation is owed to somebody by somebody, if all debts are paid off we have no currency. Bitcoin by design is deflationary, the point Walm is making is that by having a fixed money supply as the value of that money supply increases so does the purchasing power of the money itself.
As it stands right now, 25 bitcoins come in to existence every 10 minutes. This is halved roughly every 4 years creating a pre determined predictable rate of money supply.
Break down is as follows:
3,600 bitcoins come into existence every day, and these (along with transaction fees generated) are paid directly to the miners who's job is to secure the network and process transactions.
Current price of 1 bitcoin is $282, therefore just over $1m is paid out to miners on a daily basis. These miners, just like any other business have expenses (mostly electricity cost) they need to satisfy, so a large bulk of these coins are sold in the open market / otc channels, bringing new currency into the system and naturally with it, creating selling pressure.
By the back end of 2016 this will be halved to 12.5 bitcoins paid out every 10 mins. This formula can not be changed or manipulated. This is why bitcoin is commonly is referred to as digital gold / gold 2.0
It's premature to decide if this is a better system or not, logistically it makes sense (to me at least), however we tend to frown on the term deflation when applied to our existing monetary system as it's always associated to catastrophic collapse in demand (nigeria anyone?)
Michael.
Edited by shigs on Wednesday 5th August 16:03
Edited by shigs on Wednesday 5th August 16:37
There doesn't appear to be any real advantage to the end user for regular ecommerce transactions.
As it stands right now, if I wanted to buy a laptop with a Bitcoin accepting merchant I'd need to use an intermediary to get the coins in the first place, which takes time, hassle and costs me money.
So I get to pay extra money, forced to jump through extra hoops and just general hassle.
What do I get in return? Apart from giving up a bunch of my consumer rights that I'd have had by using a credit card to fund the purchase. Its bonkers really.
The real value in Bitcoin is for committing crimes anonymously. If you want to buy drugs online then Bitcoin is excellent.
There could also be some benefit for legal transactions that you just don't want to tie your name to. Perhaps gambling or buying porn.
I own 100 Bitcoins, I see it as a very speculative gamble with money that I can afford to lose. I don't see it ever becoming mainstream as there is simply no real benefit to the end user currently.
As it stands right now, if I wanted to buy a laptop with a Bitcoin accepting merchant I'd need to use an intermediary to get the coins in the first place, which takes time, hassle and costs me money.
So I get to pay extra money, forced to jump through extra hoops and just general hassle.
What do I get in return? Apart from giving up a bunch of my consumer rights that I'd have had by using a credit card to fund the purchase. Its bonkers really.
The real value in Bitcoin is for committing crimes anonymously. If you want to buy drugs online then Bitcoin is excellent.
There could also be some benefit for legal transactions that you just don't want to tie your name to. Perhaps gambling or buying porn.
I own 100 Bitcoins, I see it as a very speculative gamble with money that I can afford to lose. I don't see it ever becoming mainstream as there is simply no real benefit to the end user currently.
Defcon5 said:
Could someone explain Bitcoin mining? And why it's finite?
Calling if 'finite' is a bit of a stretch of the truth. Yes only 21 million bit coins can ever be mined... but those coins themselves can be divided into as many units as required. So if needed we could have 21 million coins each divided into 100,000 pieces per one...
KFC said:
Defcon5 said:
Could someone explain Bitcoin mining? And why it's finite?
Calling if 'finite' is a bit of a stretch of the truth. Yes only 21 million bit coins can ever be mined... but those coins themselves can be divided into as many units as required. So if needed we could have 21 million coins each divided into 100,000 pieces per one...^to be fair, that point is pretty clear.
If you have 10 grand, then that is 10 thousands. It's 100 hundreds. 1000 tenners. 10,000 pounds. 1,000,000 pence.
Doesn't matter how you split it, you have 10 grand. In that sense, it is finite.
At present, there are 14 million bitcoins. 1 million held by satochi. Eventually, there will be 21 million btc (presumably with 1m still witch satochi). None more can be made, which gives the illusion of security. However, 1m can be released ovenight, care of satochi. So it's finite, but not a true market at present. Since satochi have made such effort to stay secret, you can only assume they are somewhere between lovely people and isis. No-one knows where tho.
Presuming that satochi is/are a company or induvidual, that gives that induvidual the ability to completely control the future price of btc significantly downwards at will. At some point in future, that might be immesurably profitable. If it is, one has to hope satochi is/are honest benevolent people, rather than people who want a return on their invention and investment - despite being linked with the Daily Mail's adversery, the banking sector. Personally, that's not a bet i favour.
If you have 10 grand, then that is 10 thousands. It's 100 hundreds. 1000 tenners. 10,000 pounds. 1,000,000 pence.
Doesn't matter how you split it, you have 10 grand. In that sense, it is finite.
At present, there are 14 million bitcoins. 1 million held by satochi. Eventually, there will be 21 million btc (presumably with 1m still witch satochi). None more can be made, which gives the illusion of security. However, 1m can be released ovenight, care of satochi. So it's finite, but not a true market at present. Since satochi have made such effort to stay secret, you can only assume they are somewhere between lovely people and isis. No-one knows where tho.
Presuming that satochi is/are a company or induvidual, that gives that induvidual the ability to completely control the future price of btc significantly downwards at will. At some point in future, that might be immesurably profitable. If it is, one has to hope satochi is/are honest benevolent people, rather than people who want a return on their invention and investment - despite being linked with the Daily Mail's adversery, the banking sector. Personally, that's not a bet i favour.
I have a small amount (<£100) that I used mostly out of curiosity. Have made a few online purchases (legal!), donated to a few charities and, more recently, used them to play with other things like Nxt and assets / tokens on the Counterparty platform. I'd say my fascination is more with the concept of the blockchain than with the currency that sits on top of it. Have heard it argued, and I think I agree, that the real disruptive technology is the blockchain and the currency element is simply the first "app".
For those getting interested, I'd say the key thing now is not to view it as an investment or some sort of get rich quick scheme, rather just enjoy playing with the technology. Buy a small amount and do stuff with it rather than sit on it thinking you're going to retire on it.
For those getting interested, I'd say the key thing now is not to view it as an investment or some sort of get rich quick scheme, rather just enjoy playing with the technology. Buy a small amount and do stuff with it rather than sit on it thinking you're going to retire on it.
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