65 replies to this topic

[Nev]

But one that people trade in. At this point last year a bit coin was worth around $700 if you'd have bought just one the value of that coin today is $13K.

 

...one that people currently trade in, simply because the press (and other hidden) marketing is prevalent. Once it all dies down, the price will die down, particularily when people start to realise their electric bill is 100* the value of the bitcoin.

 

To return to my previous point, if you owned shares in South Sea, they are now worthless, but at one point they were all the fashion...

 

I used to work in the City for various top banks and trading places, I know how this sort of thing is "drummed up" and then dies on it's arse a few years later. Clever (and manipulative) equity/bankers do this sort of thing day in day out, and then when people are left with a hole in their pocket they complain and bitch cos they realise they've been duped.  

Edited by Nev, 08 December 2017 - 02:32 PM.

[The Batman]

Come on nev stop being jealous and upset that you didnt invest and make a crap load of money out of this over hyped product

[SteveA]

It's one of the main reasons I didn't invest, I figured it would be fad but in the last 6 months it's exploded. Like any stock, the key to making money is knowing when to cash out.

[Nev]

It's one of the main reasons I didn't invest, I figured it would be fad but in the last 6 months it's exploded. Like any stock, the key to making money is knowing when to cash out.

 

Indeed. Maybe the prices will rise to $20k or 30$ or more(!), but eventually the bubble will burst, and then there will be the usual backlash from all the saps left holding their binary 1s and 0s that are now worthless.

 

There is a fundamental negative thing about these sorts of phenomena IMO, they waste human time and money, without making any useful tangible contribution to the world. It's just gambling really, buy at a price and hope that confidence in the instrument will gain and then sell before the confidence evaporates. The winners of such variances are either highly informed (traders/bankers etc) or the lucky, these however are always outnumbered by the losers at the end of the day. It's another form of artificial wealth gathering.

Edited by Nev, 08 December 2017 - 02:49 PM.

[SteveA]

Absolutely and all using energy that could go into something infinitely more useful like cracking Fusion

[sford]

Mining them has been a relative waste of time for a while. That is until they went mental and became worth $16404 a coin. Then you may start to see some worth in going back to mining. 

 

What more disconcerting is the people that are spending their fakemoney on fakeobjects. Like cryptokittys. I mean wtf. https://www.cryptokitties.co/marketplace/sale?orderBy=current_price&orderDirection=desc&sorting=expensive 

 

Some talk of 100k a bitcoin. That's just stupid. 

 

Still rather be buying gold. At least that's real and will always be worth something.

[Nev]

Absolutely and all using energy that could go into something infinitely more useful like cracking Fusion

 

Indeed, steady state/cold fusion should be the top priority of the world's governments, yet because it's a massive long term effort all of the short term governments simply don't even mention it, let alone fund it. This short termism is one of democracy's fundamental flaws.

 

It would be wonderful to see it go live in my lifetime, a true step change for mankind.

 

PS: Just come back from my afternoon run, f*ck it's cold out there !

 

 

 

Edited by Nev, 08 December 2017 - 03:58 PM.

[SteveA]

2025 is the target date.

 

https://www.iter.org/

 

Thankfully some governments are funding it.

 

'Europe has responsibility for approximately 45.5 percent of construction costs, whereas China, India, Japan, Korea, the Russian Federation and the United States will contribute approximately 9.1 percent each.'

 

13bn

Edited by SteveA, 08 December 2017 - 04:11 PM.

[The Knobs]

So should I sell my diamonds to buy this sh*t, I think not as I like the shiny things I can see and touch

[hairy]

I'm sure there was someone on here a couple of years ago who was extolling their value when they were under £50. Can't find the thread though.

[jonnyboy]

Certainly an interesting arena. I have a small amount of bitcoin just accidentally left in a wallet a couple of years back. I think it was about £20 now $399

 

Its a speculative market at the moment and there is big money to be made and more to be lost. Lots of clever people involved. If you think you can compete with them go for it. 

 

For me the long term issue with these crypto currencies is that their achilles heel is the very thing they are supposed to bypass which is that they are not underpinned by a state and therefore some regulation and the freedom to print more/buy more back to correct the inflation. The alarming rate of thefts undermines them further with a pretty regular occurrence of exchanges going off with 60 million quid or whatever. Ultimately its only a matter of time until bitcoin or any other crypto currency is hacked as well. If theres a hacking project with a trillion dollar prize it will always attract the best minds in the world to solve the problem of hacking it. 

 

I'm in no position to even start to understand when a good time to sell out would be but there will be a date in the future when BTC goes from being "worth" something to being useless code. 

[SteveA]

Currently there is an artificial ceiling of 21m

[Captain Vimes]

It's just ethereal nonsense that gullible people buy into because (as usual) it's over hyped. It's not like owing anything of value, like a share in a company (which has tangible and human assets). Instead all you "own" is something that doesn't exist physically, and only has a value becuase others think it has. When confidence in it fails for one reason or another, the value will drop faster than any other financial instrument.   To draw an analogy, imagine selling your VX220 in exchange for a fist full of air. Would you do it simply because a few other people in the world also think a fistfull of air is worth something? Hopefully you have enough wit not to do such a thing.   In short, it is imaginary currency, like kids invent in a playground. Reminds me of the Pokemon card craze, cards used to sell for crazy money in the playground just cos some other kids thought they were worth something. Now that the craze has past, the cards are worthless, no doubt some of the kids who spent hundreds of dollars on them are now wondering why they ever did it...

Isnt the above exactly the same as any other currency? When currencies were first created there was a promise to pay the bearer the equivalent in gold but (for GBP) we didnt continue to buy gold to net off the increased amount of money in circulation as wealth grew. Then to prove the system was a scam Gordon Brown sold the gold, so its essentially now just a confidence trick. Ie. I did sell my VX220 for a fistful of air - the digital currency in my bank account changed. There was no physical exchange of gold or other assets. Fundamentally it seems like the same concept with the key difference of being backed by a state or not?

Edited by Captain Vimes, 09 December 2017 - 09:20 AM.

[Nev]

 

It's just ethereal nonsense that gullible people buy into because (as usual) it's over hyped. It's not like owing anything of value, like a share in a company (which has tangible and human assets). Instead all you "own" is something that doesn't exist physically, and only has a value becuase others think it has. When confidence in it fails for one reason or another, the value will drop faster than any other financial instrument.   To draw an analogy, imagine selling your VX220 in exchange for a fist full of air. Would you do it simply because a few other people in the world also think a fistfull of air is worth something? Hopefully you have enough wit not to do such a thing.   In short, it is imaginary currency, like kids invent in a playground. Reminds me of the Pokemon card craze, cards used to sell for crazy money in the playground just cos some other kids thought they were worth something. Now that the craze has past, the cards are worthless, no doubt some of the kids who spent hundreds of dollars on them are now wondering why they ever did it...

Isnt the above exactly the same as any other currency? When currencies were first created there was a promise to pay the bearer the equivalent in gold but (for GBP) we didnt continue to buy gold to net off the increased amount of money in circulation as wealth grew. Then to prove the system was a scam Gordon Brown sold the gold, so its essentially now just a confidence trick. Ie. I did sell my VX220 for a fistful of air - the digital currency in my bank account changed. There was no physical exchange of gold or other assets. Fundamentally it seems like the same concept with the key difference of being backed by a state or not?

 

 

The key difference is that a whole state is directly backing UK Stirling, which means you currency is backed by strong and ethical laws that enforce it's credibility. In the case of Bitcoin, there is nobody on the planet who is (as they are issued by some "invisible" guy in Japan who nobody even knows!). You might not realise it, but it's a fcuking massive difference. Currency value == backing/government == confidence in value. The 3 things are directly related, in the case of Bitcoin the 2nd of those things is missing.

 

If a state (that backs a currency) starts to fail (usually marked by reduced GDP per capita) then so does the value of it's currency. Look at Zimbabwe as an easy to see example of this. In the case of Bitcoin, there is no state to fail, to confidence is just an etheral inertia, in this case mainly whipped up by the media and IT hype. It is fundamentally unsupported by any governing body behind this, so subject to pure "desire" to own. If/when the desire evaporates, so will it's value.

 

In short, Bitcoin is a confidence "trick" of sorts IMO. There is an chance it survives it naissence and is still around in 100 years, but I think it's unlikely. Something usually upsets the apple cart, if other major currencies are subject to confidence, then Bitcoin will be too.

 

Edited by Nev, 09 December 2017 - 07:35 PM.

[jonnyboy]

Currency is just confidence thats the easiest way to describe it. Its nothing at all to do with GDP per capita or at least not in isolation. You could have a country with a huge GDP and the currency plunges...say like the UK. Currencies have variations in value because peoples confidence varies. Currently the world quite rightly knows we are a bit fooked due to brexit so the exchange rate is down. When we get past the brexit date our currency will eventually firm back up. Its daft really. Zimbabwe is an example where its not the GDP of the country that caused the currency to fail its the confidence in the sate that have caused its hyperinflation and essentially its become worthless because the state has no reserves or credit lines. 

 

The idea behind crypto currencies is sound. In fact its more than sound its completely perfect. You have a currency with a fixed number of units available so no cheeky treasury can print/buy back the currency to control its "value". The problem comes because its inherently not safe. It can never be safe because someone will crack it and the exchanges are unregulated and seem to be set up just to grow to a point where its worth running off with all the money. The strongest currencies will always be the ones with the ones backed by the biggest states with the biggest reserves and credit lines like the USA/Euro zone. 

[jonnyboy]

Double post

Edited by jonnyboy, 09 December 2017 - 07:53 PM.

[Nev]

Currency is just confidence thats the easiest way to describe it. Its nothing at all to do with GDP per capita or at least not in isolation. You could have a country with a huge GDP and the currency plunges...say like the UK. Currencies have variations in value because peoples confidence varies. Currently the world quite rightly knows we are a bit fooked due to brexit so the exchange rate is down. When we get past the brexit date our currency will eventually firm back up. Its daft really. Zimbabwe is an example where its not the GDP of the country that caused the currency to fail its the confidence in the sate that have caused its hyperinflation and essentially its become worthless because the state has no reserves or credit lines.

 

Correct, because the UK has a government, confidence will return over time. Bitcoin does not have such a governing body. Hence my point about the 3 linked things not applying to Bitcoin. To put it more clearly:

 

UK Stirling: Currency value == backing/government == confidence in value.

Bitcoin......: Currency value == confidence in value.

 

In short Bitcoin value is only as good as the confidence. The governing body aspect does not exist for it, and without governance an entity it is subject to volatility.

 

And BTW, there isn't a fixed number of Bitcoins issued from what I've read, the amount is continually growing as the maths problems are solved...

 

Edited by Nev, 09 December 2017 - 08:04 PM.

[jonnyboy]

The very essence of a crypto currency though is that it is free from Government. Government in itself wont guarantee the success of a currency. Zimbabwe has a Government. 

 

What ultimately backs up a normal currency is how much the host state has got tucked away. How much property to they hold. How many people owe them. What resources they are sat on.  How much actual meat is there on the bone. That feeds into what their credit lines are like and that then finally feeds into ultimately how much confidence there is around that country/currency. The particular Government thats in charge of it at a given time only makes a bit of difference. 

 

Its simplistic to say that Bitcoins value is in people thinking its worth something. Thats just not true. The theory of it is completely sound it is essentially perfect but for the fact that there are means of undermining it by hacking and by the exchanges bringing it into more than a little bit of disrepute. Its a perfect currency but you are always at the mercy of your bank account being cleared at any time. Holding large amounts of it is brave and not something I would be at all comfortable with. 

 

If there was a way to insurance back the exchanges or regulate just that part of the process then it could do away with all currencies. As far as I was aware the 21 million limit is absolute within the protocol of the system. If there is a clever way to defeat this somehow that is the point at which the currency will fail as if unlimited coins can be mined that would be the equivalent of everyone having a money printing machine rendering the whole thing useless. The first people to figure out a cheat would win but they would need to cash out before anyone found out and as I understand it the blockchain is a self verifying mechanism that would prevent this. 

 

[Nev]

Well, time will tell... I've put a reminder in my calendar to revisit this thread in 10 years...

 

History is scattered with similar bubbles though, God knows how many "one hit" wonder financial instruments that were all the flavour one day and gone the next, flipping hundreds of them, leaving carnage behind them.

 

Edited by Nev, 10 December 2017 - 08:17 AM.

[jonnyboy]

Oh yeah a bubble would be the best outcome for Bitcoin in the short to medium term. It might be that having more exchanges and regulated exchanges might give more confidence in it but if it turns out to be unbreakable (which I doubt) and there is no way to print coins in the future it could well be enduring. In fact if it was somehow guaranteed to be safe it would overtake gold as the go to "safe" place for wealth. 

 

At the moment its in its infancy and we just dont know enough. Its been completely taken over by speculators/hackers which is always a dangerous game anyway. The key thing is that its nothing to do with Governance though its the integrity of the blockchain. Its in the wild west phase at the moment and it needs to be legitimised. The actual currency can never be regulated but exchanges could be hence why that was my suggestion as to how its future could look as BTC can only be "worth" something if there is a mechanism to swap it for other currency. Unless BTC becomes universally accepted.....which you never know it could be eventually.