Discussion
The Spruce goose said:
Why are Bitcoins so highly valued? the price just seems over inflated to what it actually is?
How much do you think one should be worth?If you're sure they are overvalued (and you might be right) then open an account with IG index and take a short position. Any gains will be tax free.
C0ffin D0dger said:
They're only worth the value of the goods that someone is prepared to exchanged with you in return for them. Don't most of these exchanges take place on certain "dark web" sites or do they get used with legitimate businesses as well?
supply and demand would dictate a price, but the creator owns 1 million out of the current 14 million, 7%. 100 people own around a third of all bit coins (including owner). The distribution/spread is not great really, could say price is propped up, and in theory could be a bank run at one point by a high holder that would reduce the bitcoin to worthlessness, considering the anonymity involved, i.e lack of accountability. I don't see you can view it as a currency, it seems more like a share or commodity. A storage vessel for money that probably wasn't set out they way.
Edited by The Spruce goose on Monday 4th January 18:55
A bitcoin is the result of finding a number where it's hash is less than a threshold. The "hash" is a 1-way mathematical operation that is currently impractical to do in reverse. (otherwise it would be easy to find more).
The more numbers you "hash", the more chances of finding one with the result in the required range.
I've designed chips that generate hashes for cryptographic purposes.
To mine any effectively, you probably need custom accelerators now and a free power source (e.g. University power sockets!).
The hashes have no real value. The anonymous way they can be exchanged (block-chains) is more interesting and where any possible value lies e.g. illegal activities.
rotarymazda said:
The hashes have no real value. The anonymous way they can be exchanged (block-chains) is more interesting and where any possible value lies e.g. illegal activities.
No money has value until a bunch of people decide to trade with it. The blockchain is far from anonymous. In fact it contains a complete digital trail that makes it pretty easy to identify what has been spent and by whom. Only the most dedicated and careful user can retain a semblance of anonymity. Hard cash is far more anonymous and useful for naughty people. Transacting into Bitcoin these days requires the same full id processes as you have opening any normal bank account.
The Spruce goose said:
But I just can't get how high the price is, when you look at litecoin etc.. the value is so much higher.
It was the original concept and thus has much greater traction, actual usage and infrastructure backing than the me-toos. There are plenty of legit places you can actually buy real stuff & services with Bitcoin. Not the case for the me-toos.Gassing Station | Finance | Top of Page | What's New | My Stuff