Cryptocurrencies - an Idiots guide
Discussion
Hi all .........wondered if there are any crypto specialists on here that could explain to an old luddite, in very janet and john language, how to get started with them?
and I am talking REAL basic stuff .....ive had a quick look this morning but I am still stuck at the first hurdle of buying some ......
Are there any websites or books or seminars that could give me a really good grounding?
thanks in advance
snaz
and I am talking REAL basic stuff .....ive had a quick look this morning but I am still stuck at the first hurdle of buying some ......
Are there any websites or books or seminars that could give me a really good grounding?
thanks in advance
snaz
I would like to know how they have value.
As i understand it Fiat currencies is just a means of marking debt. People do work for each other in exchange for the debt marker (guaranteed by the government) rather then bartering with their specific skills. The currency its self has no value.
With cryptocurrency there has been no exchange of work for the value, so where is the value coming from?
As i understand it Fiat currencies is just a means of marking debt. People do work for each other in exchange for the debt marker (guaranteed by the government) rather then bartering with their specific skills. The currency its self has no value.
With cryptocurrency there has been no exchange of work for the value, so where is the value coming from?
98elise said:
I would like to know how they have value.
As i understand it Fiat currencies is just a means of marking debt. People do work for each other in exchange for the debt marker (guaranteed by the government) rather then bartering with their specific skills. The currency its self has no value.
With cryptocurrency there has been no exchange of work for the value, so where is the value coming from?
And if a govt increases money supply (QE), where is all this extra work? Certainly not coming from the unproductive UK workforce As i understand it Fiat currencies is just a means of marking debt. People do work for each other in exchange for the debt marker (guaranteed by the government) rather then bartering with their specific skills. The currency its self has no value.
With cryptocurrency there has been no exchange of work for the value, so where is the value coming from?
Regarding fiat only as a debt marker works in a simplified world (eg the famous Yap stones), but not in the one we live.I fear a discussion on this would derail the O/P's simpler question.
bloomen said:
Well, I've been obsessing for several hours a day since 2012 or so, so might know a thing or two.
What basic things would you like to know? Purely how to buy and store them? Do you have some grounding in the principles of what they're about?
Hi Bloomen ...thanks for the reply ......What basic things would you like to know? Purely how to buy and store them? Do you have some grounding in the principles of what they're about?
Edited by bloomen on Tuesday 9th May 22:58
I have been doing a fair bit of research over the last few days .... but really want some sanity checks ....this is all a very new arena for me .....and I don't mind admitting that some of the jargon (and even, if I am honest, some of the concepts) I really don't understand ...and that scares me ..
To give you some background, having traded FIAT FX/FXO for the last 20 odd years ....I have always taken the 'asset backed' nature of FIAT for granted ......... but I believe all of the QE, regulation and algo based trading (within the FIAT trading concept) we have seen in the last 10 years has broken this system beyond repair, and market fundamentals just don't exist any more. its time to look elsewhere ....
So here is where i need help:-
I think I understand the reasoning behind cryptocurrencies( instantaneous, peer to peer, non reversable, proof based instead of trust based - have I missed anything?)
Is my understanding correct for all of the different cryptos? ......not just BTC?.....and if there are differences between BTC, ETH, DASH etc etc etc what are they?
My understanding of 'mining', and how people make money by doing this is very hazy .......am I right in saying that people are rewarded for 'solving' sums? ...and if so what do these 'sums' relate too? also what happens when all the sums are solved (ie when the 21million mark is reached).
As above, I understand that there will only ever be 21mio Bitcoins. Is this a proper line in the sand definite number? .....or could there ever be a scenario where this limit is increased?
As an addendum to this question, is this concept the same for all cryptocurrencies?....and if so who decides on the limit?
I know that BTC are accepted as payment by a fair few retailers now, what about the others? ...I can't seem to find any retailers that take Litecoins or Etherium for example? .......does this mean that these are not 'real world' viable payment options, and only exist as an electronic concept?
More practically, I understand that I will need a 'wallet' for my BTC etc etc - what are the most secure wallets out there at the moment ( I am thinking cloud based - I will Lose a USB stick!!!)?
How do I actually go about buying some bitcoins and transfer these bitcoins to my wallet? is it as simple as cutting and pasting a blockchain code or QR code?
In terms of trading these cryptos, I have looked at sites like Kraken and Poloniex (are these good?) ...Kraken appears to let you deposit FIAT for crypto, where as Poloniex seems to only let you transfer cryptos from a wallet ? (I take it Kraken would become a form of wallet in this instance?)
I am obviously aware of the Mt Geox scandal, are there any safe guards out there that could mitigate exposure in another such event?
Now a theoretical question, taxation?.......if, for example, I seeded a BTC trading account with £100.00, and managed to turn that investment into say £15000.00, which I then withdrew to my 'real world' account - is there a capital gains issue? (as I am guessing none of these exchanges are set up for spread betting?).
Thinking bigger (and thinking in luddite FIAT terms) what is the practical depth of the respective crypto markets? .......for example is $10mio (equivilant) a market moving amount in BTC?
I have loads more questions flashing about my noggin ......but the above would really help me out ......
thanks in advance
snaz
Behemoth said:
98elise said:
I would like to know how they have value.
As i understand it Fiat currencies is just a means of marking debt. People do work for each other in exchange for the debt marker (guaranteed by the government) rather then bartering with their specific skills. The currency its self has no value.
With cryptocurrency there has been no exchange of work for the value, so where is the value coming from?
And if a govt increases money supply (QE), where is all this extra work? Certainly not coming from the unproductive UK workforce As i understand it Fiat currencies is just a means of marking debt. People do work for each other in exchange for the debt marker (guaranteed by the government) rather then bartering with their specific skills. The currency its self has no value.
With cryptocurrency there has been no exchange of work for the value, so where is the value coming from?
Regarding fiat only as a debt marker works in a simplified world (eg the famous Yap stones), but not in the one we live.I fear a discussion on this would derail the O/P's simpler question.
98elise said:
On the Bitcoin thread there seem to be people making loads, and various new coins being created, which then climb.
People have made loads on currency speculation for thousands of years. What value do these people add for their work? Price discovery & the heavy risks that come with it.98elise said:
I can't see where the value is coming from other than it being a ponzi.
With respect to Bitcoin, the World Bank, amongst many others, disagrees with you.You do have a point when it comes to alt-coins, many of which are clear scams. But not Bitcoin. It's in a different league & shouldn't be conflated.
"I think I understand the reasoning behind cryptocurrencies( instantaneous, peer to peer, non reversable, proof based instead of trust based - have I missed anything?)
Is my understanding correct for all of the different cryptos? ......not just BTC?.....and if there are differences between BTC, ETH, DASH etc etc etc what are they?"
I'd say you have the right idea overall. For most the core principles are decentralisation and immutability. No one entity can control it, shut it down or change what has already been recorded.
ETH did carry out a roll back of their blockchain because of a programming disaster. Some people have a problem with this so they continued along the previous unchanged path and that is what ETC is. It's Ethereum but now a separate blockchain that refused to give up immutability.
Many currencies aim to fulfil specific roles. Factom aims to decentralise and democratise data. Ethereum aims ultimately to be a computing platform and the currency bit has kind of arrived as a byproduct to an extent.
"My understanding of 'mining', and how people make money by doing this is very hazy .......am I right in saying that people are rewarded for 'solving' sums? ...and if so what do these 'sums' relate too? also what happens when all the sums are solved (ie when the 21million mark is reached)."
Cryptocurrencies have two main ways of securing themselves. Proof of work is also known as mining. You do indeed solve a complex algorithm and in return the winner is rewarded a set number of new coins every ten minutes. The coin delivery is also when user transactions are included and processed.
The algorithm ultimately doesn't do anything useful or meaningful other than police the creation of bitcoins which is plenty useful enough for most. There are some cryptocurrencies that have a problem with that so their mining aims to do something useful like contributing to things like folding@home.
The other main method of blockchain security is proof of stake. With this method usually all coins are created at once at the beginning and there are various methods to decide which account gets to process the next block.
The advantages of this are a fraction of the energy usage. But critics say it can also be gamed and there is ultimately nothing at stake because no work has been done.
Some coins are a hybrid of Proof of Work and Proof of Stake. Ethereum has plans to switch to Proof of Stake soon with some modifications to the usual problems.
"As above, I understand that there will only ever be 21mio Bitcoins. Is this a proper line in the sand definite number? .....or could there ever be a scenario where this limit is increased?
As an addendum to this question, is this concept the same for all cryptocurrencies?....and if so who decides on the limit?"
Ultimately all crypto is software and software can be changed by mutual agreement. That being the case the lines in the sand could be changed at any time. However everyone in the system is incentivised to protect it so radical proposals like that are likely to be roundly rejected.
ETH is the best example we have of this. Enough people decided that they needed to roll back the blockchain to prevent a lot of money being nabbed when a security hole was discovered in one of their first big projects.
Ethereum had a smaller user base at the time and an identifiable leader so it was far easier for them. Bitcoin is too big and too anarchic to do something similar.
Most altcoins could push through changes easily. Litecoin managed an upgrade recently that Bitcoin hasn't so far as again it has a leader and a smaller group of miners and users.
All coins are made up of users, miners, developers and businesses. It's hard to tell who has the most sway with Bitcoin.
"I know that BTC are accepted as payment by a fair few retailers now, what about the others? ...I can't seem to find any retailers that take Litecoins or Etherium for example? .......does this mean that these are not 'real world' viable payment options, and only exist as an electronic concept?"
Ultimately very, very few retailers truly accept Bitcoin. It's used as a very efficient payment rail for fiat currencies. Payment processors handle the crypto transaction, fix the exchange rate and deposit fiat in the retailer bank account. Bitpay and Coinbase are the two largest.
Personally I think retail is at best a side show. Crypto is superb for retailers and terrible for consumers. Retailers get very fast and irreversible transactions. Consumers have to buy it first, then secure it, then spend it. If there's a problem they're at the retailer's mercy unlike Paypal.
The only way it can take off properly is if they offer deep discounts and I assume margins are too thin for that. The other way it can take off is to have masses of people already into it who enjoy a nice price rise and feel like spending some free money.
It would be very easy for somewhere like Bitpay to integrate other cryptos. It's up to whether there's enough demand from users. If Bitcoin fees become too expensive, and they already are for small stuff, it's possible Litecoin will be used.
And there are retailers who accept other currencies, but not many.
The only place crypto is unassailable in retail is in dark markets for drugs as there's no alternative. There they are starting to experiment with currencies other than Bitcoin like Monero which has anonymity baked in.
"More practically, I understand that I will need a 'wallet' for my BTC etc etc - what are the most secure wallets out there at the moment ( I am thinking cloud based - I will Lose a USB stick!!!)?"
By far the safest and most painless wallet option would be a hardware wallet such as a Trezor or Ledger Nano S and I wouldn't consider anything else for decent amounts. These are air gapped from whatever machine you're using it with so you could be using the most virus riven computer in the world and it can't get to your bitcoins.
The way these are backed up is by a series of seed words it gives you when it creates the wallet. Store them somewhere safe and you will always be able to restore your coins somewhere else if you lose the actual hardware.
Note the seed and the first Bitcoin address it gives you, erase the wallet and re enter the seed again and check to see whether you have the same address to make sure it works before depositing any money.
Most wallets are HD wallets these days which means it creates a new address for you with every transaction. The seed backs up all addresses created in the same wallet.
They can also handle other currencies. Dunno about Trezor, but my Nano S can also store Ethereum, Dash and Litecoin.
blockchain.info is often suggested to newcomers, but it's ultimately internet based so only as secure as the machine you're using it with so it's not really worth considering.
Some people use companies like Xapo and Coinbase to store their coins but you're handing over control of your private keys to them so you're at the mercy of their terms and conditions.
"How do I actually go about buying some bitcoins and transfer these bitcoins to my wallet? is it as simple as cutting and pasting a blockchain code or QR code?"
Yes. That's all it requires. Copy and paste your Bitcoin address into their address field for the withdrawal.
"In terms of trading these cryptos, I have looked at sites like Kraken and Poloniex (are these good?) ...Kraken appears to let you deposit FIAT for crypto, where as Poloniex seems to only let you transfer cryptos from a wallet ? (I take it Kraken would become a form of wallet in this instance?)
I am obviously aware of the Mt Geox scandal, are there any safe guards out there that could mitigate exposure in another such event?"
Both Kraken and Poloniex are solid choices but they're also prone to crapping out at vital moments. Kraken regularly seizes up under heavy traffic and Poloniex is undergoing regular Ddos attack at the moment.
Dealing with fiat is very onerous in terms of regulation and compliance so there are comparatively few fiat/crypto exchange compared to alt only exchanges like Poloniex.
There are no safe guards other than limiting what money you have on there and withdrawing rapidly. Make sure you enable whatever 2FA options there are. Exchanges have a pretty dire history so it's best to always remain vigilant.
I don't know how deep their market is, but https://coinfloor.co.uk/ is the only exchange that regularly publishes audits of their holdings. Might be worth a look. Bitstamp has also been around for a long time.
http://bittybot.co/uk/ has comparisons of UK prices. If you just want some fast then the P2P options like Bittylicious, Localbitcoins and Bitbargain are the fastest as you can use faster payments between individuals but they also can command big premiums. Bittylicious has always been excellent. I think Coinfloor has some type of similar off exchange service too.
No UK exchange can get a bank account, I think Coinfloor banks in Poland or something despite being GBP, so options are limited.
The safest is probably Gemini.com but Brits can only trade BTC/ETH.
"Now a theoretical question, taxation?.......if, for example, I seeded a BTC trading account with £100.00, and managed to turn that investment into say £15000.00, which I then withdrew to my 'real world' account - is there a capital gains issue? (as I am guessing none of these exchanges are set up for spread betting?)."
Yes. You'll be subject to capital gains. It's the same treatment as forex trading. Right now I believe it's treated as a foreign currency tax wise.
"Thinking bigger (and thinking in luddite FIAT terms) what is the practical depth of the respective crypto markets? .......for example is $10mio (equivilant) a market moving amount in BTC? "
All of the crypto markets are shockingly thin compared to what a trader from elsewhere would be used to. It's still extremely early days. $10 million is very definitely a market moving amount in one lump. In places like https://www.reddit.com/r/BitcoinMarkets/ people still get excited if there's a $1 million dollar buy or sell in one go.
When you move into alts it becomes even thinner. None of the markets are subject to any regulation so there's nothing stopping outrageous pumps and dumps and brazen manipulation. It's the wild west and will remain so for quite a while.
Let me know if you want to know anything else.
Is my understanding correct for all of the different cryptos? ......not just BTC?.....and if there are differences between BTC, ETH, DASH etc etc etc what are they?"
I'd say you have the right idea overall. For most the core principles are decentralisation and immutability. No one entity can control it, shut it down or change what has already been recorded.
ETH did carry out a roll back of their blockchain because of a programming disaster. Some people have a problem with this so they continued along the previous unchanged path and that is what ETC is. It's Ethereum but now a separate blockchain that refused to give up immutability.
Many currencies aim to fulfil specific roles. Factom aims to decentralise and democratise data. Ethereum aims ultimately to be a computing platform and the currency bit has kind of arrived as a byproduct to an extent.
"My understanding of 'mining', and how people make money by doing this is very hazy .......am I right in saying that people are rewarded for 'solving' sums? ...and if so what do these 'sums' relate too? also what happens when all the sums are solved (ie when the 21million mark is reached)."
Cryptocurrencies have two main ways of securing themselves. Proof of work is also known as mining. You do indeed solve a complex algorithm and in return the winner is rewarded a set number of new coins every ten minutes. The coin delivery is also when user transactions are included and processed.
The algorithm ultimately doesn't do anything useful or meaningful other than police the creation of bitcoins which is plenty useful enough for most. There are some cryptocurrencies that have a problem with that so their mining aims to do something useful like contributing to things like folding@home.
The other main method of blockchain security is proof of stake. With this method usually all coins are created at once at the beginning and there are various methods to decide which account gets to process the next block.
The advantages of this are a fraction of the energy usage. But critics say it can also be gamed and there is ultimately nothing at stake because no work has been done.
Some coins are a hybrid of Proof of Work and Proof of Stake. Ethereum has plans to switch to Proof of Stake soon with some modifications to the usual problems.
"As above, I understand that there will only ever be 21mio Bitcoins. Is this a proper line in the sand definite number? .....or could there ever be a scenario where this limit is increased?
As an addendum to this question, is this concept the same for all cryptocurrencies?....and if so who decides on the limit?"
Ultimately all crypto is software and software can be changed by mutual agreement. That being the case the lines in the sand could be changed at any time. However everyone in the system is incentivised to protect it so radical proposals like that are likely to be roundly rejected.
ETH is the best example we have of this. Enough people decided that they needed to roll back the blockchain to prevent a lot of money being nabbed when a security hole was discovered in one of their first big projects.
Ethereum had a smaller user base at the time and an identifiable leader so it was far easier for them. Bitcoin is too big and too anarchic to do something similar.
Most altcoins could push through changes easily. Litecoin managed an upgrade recently that Bitcoin hasn't so far as again it has a leader and a smaller group of miners and users.
All coins are made up of users, miners, developers and businesses. It's hard to tell who has the most sway with Bitcoin.
"I know that BTC are accepted as payment by a fair few retailers now, what about the others? ...I can't seem to find any retailers that take Litecoins or Etherium for example? .......does this mean that these are not 'real world' viable payment options, and only exist as an electronic concept?"
Ultimately very, very few retailers truly accept Bitcoin. It's used as a very efficient payment rail for fiat currencies. Payment processors handle the crypto transaction, fix the exchange rate and deposit fiat in the retailer bank account. Bitpay and Coinbase are the two largest.
Personally I think retail is at best a side show. Crypto is superb for retailers and terrible for consumers. Retailers get very fast and irreversible transactions. Consumers have to buy it first, then secure it, then spend it. If there's a problem they're at the retailer's mercy unlike Paypal.
The only way it can take off properly is if they offer deep discounts and I assume margins are too thin for that. The other way it can take off is to have masses of people already into it who enjoy a nice price rise and feel like spending some free money.
It would be very easy for somewhere like Bitpay to integrate other cryptos. It's up to whether there's enough demand from users. If Bitcoin fees become too expensive, and they already are for small stuff, it's possible Litecoin will be used.
And there are retailers who accept other currencies, but not many.
The only place crypto is unassailable in retail is in dark markets for drugs as there's no alternative. There they are starting to experiment with currencies other than Bitcoin like Monero which has anonymity baked in.
"More practically, I understand that I will need a 'wallet' for my BTC etc etc - what are the most secure wallets out there at the moment ( I am thinking cloud based - I will Lose a USB stick!!!)?"
By far the safest and most painless wallet option would be a hardware wallet such as a Trezor or Ledger Nano S and I wouldn't consider anything else for decent amounts. These are air gapped from whatever machine you're using it with so you could be using the most virus riven computer in the world and it can't get to your bitcoins.
The way these are backed up is by a series of seed words it gives you when it creates the wallet. Store them somewhere safe and you will always be able to restore your coins somewhere else if you lose the actual hardware.
Note the seed and the first Bitcoin address it gives you, erase the wallet and re enter the seed again and check to see whether you have the same address to make sure it works before depositing any money.
Most wallets are HD wallets these days which means it creates a new address for you with every transaction. The seed backs up all addresses created in the same wallet.
They can also handle other currencies. Dunno about Trezor, but my Nano S can also store Ethereum, Dash and Litecoin.
blockchain.info is often suggested to newcomers, but it's ultimately internet based so only as secure as the machine you're using it with so it's not really worth considering.
Some people use companies like Xapo and Coinbase to store their coins but you're handing over control of your private keys to them so you're at the mercy of their terms and conditions.
"How do I actually go about buying some bitcoins and transfer these bitcoins to my wallet? is it as simple as cutting and pasting a blockchain code or QR code?"
Yes. That's all it requires. Copy and paste your Bitcoin address into their address field for the withdrawal.
"In terms of trading these cryptos, I have looked at sites like Kraken and Poloniex (are these good?) ...Kraken appears to let you deposit FIAT for crypto, where as Poloniex seems to only let you transfer cryptos from a wallet ? (I take it Kraken would become a form of wallet in this instance?)
I am obviously aware of the Mt Geox scandal, are there any safe guards out there that could mitigate exposure in another such event?"
Both Kraken and Poloniex are solid choices but they're also prone to crapping out at vital moments. Kraken regularly seizes up under heavy traffic and Poloniex is undergoing regular Ddos attack at the moment.
Dealing with fiat is very onerous in terms of regulation and compliance so there are comparatively few fiat/crypto exchange compared to alt only exchanges like Poloniex.
There are no safe guards other than limiting what money you have on there and withdrawing rapidly. Make sure you enable whatever 2FA options there are. Exchanges have a pretty dire history so it's best to always remain vigilant.
I don't know how deep their market is, but https://coinfloor.co.uk/ is the only exchange that regularly publishes audits of their holdings. Might be worth a look. Bitstamp has also been around for a long time.
http://bittybot.co/uk/ has comparisons of UK prices. If you just want some fast then the P2P options like Bittylicious, Localbitcoins and Bitbargain are the fastest as you can use faster payments between individuals but they also can command big premiums. Bittylicious has always been excellent. I think Coinfloor has some type of similar off exchange service too.
No UK exchange can get a bank account, I think Coinfloor banks in Poland or something despite being GBP, so options are limited.
The safest is probably Gemini.com but Brits can only trade BTC/ETH.
"Now a theoretical question, taxation?.......if, for example, I seeded a BTC trading account with £100.00, and managed to turn that investment into say £15000.00, which I then withdrew to my 'real world' account - is there a capital gains issue? (as I am guessing none of these exchanges are set up for spread betting?)."
Yes. You'll be subject to capital gains. It's the same treatment as forex trading. Right now I believe it's treated as a foreign currency tax wise.
"Thinking bigger (and thinking in luddite FIAT terms) what is the practical depth of the respective crypto markets? .......for example is $10mio (equivilant) a market moving amount in BTC? "
All of the crypto markets are shockingly thin compared to what a trader from elsewhere would be used to. It's still extremely early days. $10 million is very definitely a market moving amount in one lump. In places like https://www.reddit.com/r/BitcoinMarkets/ people still get excited if there's a $1 million dollar buy or sell in one go.
When you move into alts it becomes even thinner. None of the markets are subject to any regulation so there's nothing stopping outrageous pumps and dumps and brazen manipulation. It's the wild west and will remain so for quite a while.
Let me know if you want to know anything else.
Edited by bloomen on Wednesday 10th May 14:53
Edited by bloomen on Wednesday 10th May 14:56
Edited by bloomen on Wednesday 10th May 15:03
Great summary, bloomen. I agree with everything pretty much.
Retail is certainly low level for bitcoin at the moment. I think that will be solved in due course with sidechains. But at least real world retail exists for Bitcoin and has been happening for quite a few years now. No alt coin is yet used for any sort of meaningful retail transaction.
Gaining consensus for change is difficult with Bitcoin, easy with alts. Bitcoin is slow to move, because it is naturally very cautious. Alt cryptos, by contrast, evolve quickly because they are controlled by small dev teams or individuals. Therein lies their weakness. Code & concepts are pushed without thorough testing and this results in calamitous mishaps such as Ether's DAO fiasco.
I see the same dynamic in my software teams. Our experienced programmers are a cautious, sceptical bunch. Our new kids on the block always want the latest and greatest bleeding edge solution. Years down the line, the stuff the young kids produce very often turns out to be either full of bugs or costly to support or both. They don't care, because they've already moved onto the next bleeding edge idea. The better code with long term stability always comes from our more experienced programmers, not the young kids.
Retail is certainly low level for bitcoin at the moment. I think that will be solved in due course with sidechains. But at least real world retail exists for Bitcoin and has been happening for quite a few years now. No alt coin is yet used for any sort of meaningful retail transaction.
Gaining consensus for change is difficult with Bitcoin, easy with alts. Bitcoin is slow to move, because it is naturally very cautious. Alt cryptos, by contrast, evolve quickly because they are controlled by small dev teams or individuals. Therein lies their weakness. Code & concepts are pushed without thorough testing and this results in calamitous mishaps such as Ether's DAO fiasco.
I see the same dynamic in my software teams. Our experienced programmers are a cautious, sceptical bunch. Our new kids on the block always want the latest and greatest bleeding edge solution. Years down the line, the stuff the young kids produce very often turns out to be either full of bugs or costly to support or both. They don't care, because they've already moved onto the next bleeding edge idea. The better code with long term stability always comes from our more experienced programmers, not the young kids.
Bloomen, Behemoth .....thank you very much for your input on this ...its such an interesting space, I am just very wary of getting caught up in the euphoria that often goes along with new things and missing the pitfalls .......so your insights are invaluable .....
I am sure that I will have other greenhorn questions over the next few weeks learning curve ......so expect some more idiotic questions!
Once again my thanks
Snaz
I am sure that I will have other greenhorn questions over the next few weeks learning curve ......so expect some more idiotic questions!
Once again my thanks
Snaz
After reading this topic and having my brain explode I ask this.....
Owing to the dramatic volatility of this "currency" how can it be practical to use it in normal business transactions ?
I cannot understand how the risk instability of Bitcoins is practical in the real world.
I can understand it as a very risky punt for the most adventurous amongst us.
I have thought of it as a means of conducting business of an illegal nature i.e.under the radar.
I applaud Behomoths and Bloomens valiant attempts to convey an understanding of but I admit to still be a tad perplexed.
Owing to the dramatic volatility of this "currency" how can it be practical to use it in normal business transactions ?
I cannot understand how the risk instability of Bitcoins is practical in the real world.
I can understand it as a very risky punt for the most adventurous amongst us.
I have thought of it as a means of conducting business of an illegal nature i.e.under the radar.
I applaud Behomoths and Bloomens valiant attempts to convey an understanding of but I admit to still be a tad perplexed.
avinalarf said:
After reading this topic and having my brain explode I ask this.....
Owing to the dramatic volatility of this "currency" how can it be practical to use it in normal business transactions ?
I cannot understand how the risk instability of Bitcoins is practical in the real world.
I can understand it as a very risky punt for the most adventurous amongst us.
I have thought of it as a means of conducting business of an illegal nature i.e.under the radar.
I applaud Behomoths and Bloomens valiant attempts to convey an understanding of but I admit to still be a tad perplexed.
When it comes to business it's down to companies like Bitpay to grease the wheels. They fix your exchange rate and handle the fiat conversion. By the looks of things it looks like they're leaving retail behind and moving into B2B. Owing to the dramatic volatility of this "currency" how can it be practical to use it in normal business transactions ?
I cannot understand how the risk instability of Bitcoins is practical in the real world.
I can understand it as a very risky punt for the most adventurous amongst us.
I have thought of it as a means of conducting business of an illegal nature i.e.under the radar.
I applaud Behomoths and Bloomens valiant attempts to convey an understanding of but I admit to still be a tad perplexed.
But even with that it's still only really practical for businesses to use it as value transfer, not holding or investing. You can send millions and have it settled in 10-20 minutes.
The current Bitcoin price is 95% speculation, other coins 99.5%. Due to its deflationary nature I don't think it'll ever be practical as a widespread currency, and if it ever did occur it'll be one of the last things to fall into place.
Right now it's primarily a gamble that might become an asset class.
bloomen said:
avinalarf said:
After reading this topic and having my brain explode I ask this.....
Owing to the dramatic volatility of this "currency" how can it be practical to use it in normal business transactions ?
I cannot understand how the risk instability of Bitcoins is practical in the real world.
I can understand it as a very risky punt for the most adventurous amongst us.
I have thought of it as a means of conducting business of an illegal nature i.e.under the radar.
I applaud Behomoths and Bloomens valiant attempts to convey an understanding of but I admit to still be a tad perplexed.
When it comes to business it's down to companies like Bitpay to grease the wheels. They fix your exchange rate and handle the fiat conversion. By the looks of things it looks like they're leaving retail behind and moving into B2B. Owing to the dramatic volatility of this "currency" how can it be practical to use it in normal business transactions ?
I cannot understand how the risk instability of Bitcoins is practical in the real world.
I can understand it as a very risky punt for the most adventurous amongst us.
I have thought of it as a means of conducting business of an illegal nature i.e.under the radar.
I applaud Behomoths and Bloomens valiant attempts to convey an understanding of but I admit to still be a tad perplexed.
But even with that it's still only really practical for businesses to use it as value transfer, not holding or investing. You can send millions and have it settled in 10-20 minutes.
The current Bitcoin price is 95% speculation, other coins 99.5%. Due to its deflationary nature I don't think it'll ever be practical as a widespread currency, and if it ever did occur it'll be one of the last things to fall into place.
Right now it's primarily a gamble that might become an asset class.
Thank you.....understood.
The reason why BTC in particular took off so well is in my opinion 95% down to the market it attracts : the darkmarkets. It was always going to happen and I've done very well from it as an early investor. When you consider that the 'underworld' is worth billions and all those people need to transfer money between each other as anonymously as possible it was pretty much a dead cert right from the start and it's still got a lot of life in it yet despite a fair bit of volatility. The 3x T's (Tor, Tails, Tumbler) and a couple of wallets makes life very easy for the crims.
XMR (Monero) is going to go the same way imho. Purports to be even more "anonymous" than BTC so instant attraction to the darkmarkets. I bought $2k worth back in November when it was $5 a pop. Price today $30. And one of the biggest Darkmarkets - AlphaBay - has recently starting accepting XMR. The price is only going to go one way for a long time to come. All imho of course.
XMR (Monero) is going to go the same way imho. Purports to be even more "anonymous" than BTC so instant attraction to the darkmarkets. I bought $2k worth back in November when it was $5 a pop. Price today $30. And one of the biggest Darkmarkets - AlphaBay - has recently starting accepting XMR. The price is only going to go one way for a long time to come. All imho of course.
This stackexchange page gives some fairly simple examples of what the "solving mathematical puzzles" mining stuff is all about. This was something that greatly confused me when I first got into it.
https://bitcoin.stackexchange.com/questions/13639/...
https://bitcoin.stackexchange.com/questions/13639/...
I haven't read a better summary of principles than this. It's also recently written (yesterday), very valuable in a fast changing market. I'd urge anyone thinking of piling into crypto as an investment or a punt to spend 5 minutes reading this:
https://www.reddit.com/r/investing/comments/6acolz...
https://www.reddit.com/r/investing/comments/6acolz...
Behemoth said:
I haven't read a better summary of principles than this. It's also recently written (yesterday), very valuable in a fast changing market. I'd urge anyone thinking of piling into crypto as an investment or a punt to spend 5 minutes reading this:
https://www.reddit.com/r/investing/comments/6acolz...
It's just some random's opinion. He even says himself in his speech that he doesn't understand any of it ! :https://www.reddit.com/r/investing/comments/6acolz...
Random guy said:
So what does it take to invest responsibly in cryptocurrencies? It requires at least a basic understanding of three disciplines: public-private key cryptography; programming, and how open-source projects function; and economics, particularly game theory and the quantity theory of money. This is why is is so difficult to apprehend easily: because very few people actually boast a sincere understanding of these three topics. I certainly don't.
So what qualifies him to outright tell everyone :Random guy said:
The vast majority of projects will fail within 5 years
[...]
Cryptos are the future, but almost none of these coins will survive 10 years
Source? [...]
Cryptos are the future, but almost none of these coins will survive 10 years
Random guy said:
None of this is necessary if you just want to invest randomly in one of the top ten cryptos. That's the strategy of 95% of investors today. Pick a coin and go. If it's not bitcoin, I can pretty much guarantee you'll lose money.
Ah-ha! So now we get to the crux of it! He's neck deep in BTC and is s
tting himself that all these other alt coins are going to wipe out BTCs market share and consign BTC to the history books.Behemoth said:
And it's a very considered, insightful and candid opinion. Unlike late night rants in threads like this, it's well worth reading before making any investment choices in this segment.
Sorry no, it isn't. It's a very biased opinion from someone that clearly holds a lot of BTC. The thread is difficult to read because it's on reddit but if you delve deeper a lot of people have called him out on his various claims about certain crypto-currencies being dead within a few years and unsurprisingly he hasn't been able to provide any evidence to support his claims.I stand by my closing comment on my previous post : he has a lot of BTC and is crapping himself that ETC/ETH are going to go viral in market share and render his BTC worth about £2.50.
Let's just agree to disagree on this one!
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