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Bitcoin / Litecoin / Ethereum / alts discussion
- Thread starter mattsk42
- Start date
I never had any extra cash to invest in these things because I invested heavily in child support payments for many years, and really lost my a** in that market.
Alkali Ike
Gold Supporting Member
- Jan 1, 2011
- 2,854
- 15,665
- Disclosures
- I never actually learned to play very well
You too can be a cryptocurrency miner! 1200W Power supply not included. Generates tremendous heat and noise. 40% restocking fee.
https://www.amazon.com/dp/B0757434L1/ref=cm_sw_r_cp_ep_dp_OG.UzbGB3AMCC
https://www.amazon.com/dp/B0757434L1/ref=cm_sw_r_cp_ep_dp_OG.UzbGB3AMCC
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It is a currency. I can give someone and businesses BTC for services and product. It's not a fiat currency, sure. But it's still a currency.
In theory, I could find someone to take dog doo as payment, but that doesn't make it currency. It's a barter, at best.
It's not currency.
Sure. Good luck getting Overstock, Newegg, Expedia, WordPress, Microsoft, Reddit, and many others to take "dog doo". They'll all take btc.
I've seen friends who are into this and I've looked into it, but I think the pro bitcoin and nay sayers are both right.
1. It is a currency in the fact you can buy something with it (I mean I can buy something with anything if someone puts value to it
2. our current cash currency is mostly not backed by anything either (used to be backed by gold...not so much anymore
3. I don't invest in this because it fluctuates so much and people in the money industry are trying to quash it (thus causing it to fluctuate).
personally I prefer something more stable: Gold (I'm with goldmoney.com), Silver, etc. or money that is forever descending in value, but at least that is at a stable rate I can generally predict.
1. It is a currency in the fact you can buy something with it (I mean I can buy something with anything if someone puts value to it
2. our current cash currency is mostly not backed by anything either (used to be backed by gold...not so much anymore
3. I don't invest in this because it fluctuates so much and people in the money industry are trying to quash it (thus causing it to fluctuate).
personally I prefer something more stable: Gold (I'm with goldmoney.com), Silver, etc. or money that is forever descending in value, but at least that is at a stable rate I can generally predict.
True, any investment involves a degree of uncertainty. But uncertainty levels can vary dramatically. Amazon, Microsoft, Johnson & Johnson--these are companies that are highly unlikely to go to zero in the next decade. (I'd put their chances of bankruptcy at less than 1%.) Bitcoin, on the other hand, seems like a 50/50 proposition.
Sir John was one of the best investors ever, in part because he was keenly aware of risk. Let's face it, it's all but certain he would go nowhere near Bitcoins.
the only value in bitcoin is in its usefulness - which is in transferring and storing value in a certain way (without going through the banking system). so if no one wants to use it, it will lose value. for the moment, it looks like they do want to use it, so it has value.
in that way - and that way only - it's not completely different from people collecting gold or silver as currency, except for the fact that these are physical substances. and it's a lot harder to pay someone on the other side of the world in gold
the price fluctuations in bitcoin are almost a red herring - and they are possibly down to pump-and-dump tactics deliberately intended to cause instability, which can then be profited from. or maybe from the fact that it's new and unregulated, i don't know. either way, if the price stabilized, it would make it more useful as a means of paying/storing, in a lot of ways.
(talking of value, the code itself is complex and would probably have been worth a lot of money, if it hadn't been released. I forget the figures but i read an article saying it could have taken a team of people a long time to create. so either there is investment behind it, or one very smart person with a lot of time to spare.)
in that way - and that way only - it's not completely different from people collecting gold or silver as currency, except for the fact that these are physical substances. and it's a lot harder to pay someone on the other side of the world in gold
the price fluctuations in bitcoin are almost a red herring - and they are possibly down to pump-and-dump tactics deliberately intended to cause instability, which can then be profited from. or maybe from the fact that it's new and unregulated, i don't know. either way, if the price stabilized, it would make it more useful as a means of paying/storing, in a lot of ways.
(talking of value, the code itself is complex and would probably have been worth a lot of money, if it hadn't been released. I forget the figures but i read an article saying it could have taken a team of people a long time to create. so either there is investment behind it, or one very smart person with a lot of time to spare.)
Not sure this is kosher, bu I'll cut/paste part of our newsletter here.....but keep it sort of anon.....I wrote it so you can blast my arse if y'all disagree......as a matter of disclosure I am a CFA charterholder, a Chartered Financial Analyst.
Is Bitcoin an Investment?
We oft get asked about bitcoins; mostly not by clients but by students and curious investors, thankfully. Thought we’d give our clients a bit of education of the digital currency world, and the “bit” in particular. Having said that, this is only kindergarten level, as frankly, we understand the structure of block chain more than the “markets” for digital currency.
First off, bitcoin is like a digital wallet, expect that your “account” is held by a sequence of servers in the cloud and it is not dominated in any currency you may recognize. That chain of servers with parallel “pigeonholes” for users is also how transactions clear. Like a regular paper currency, bitcoins are “minted” or mined in the vernacular by a collusion of developers who have pledged to maintain a market in the currency and “mine” according to demand, for transactions that is.
Who uses bitcoin? High level criminals mostly. It’s a virtually untraceable currency ( although the NSA may beg to differ!) , nor are transactions traceable. But as in every laundering operation, you eventually have to “wash” the stuff to get real things. Digital currency makes this easier than ever before.
As an investment advisor, we’ve never consider foreign currency as an “investment”. Its either a hedge for companies exposed to foreign currency translation ( like our black market laundries in the bit world) OR its for speculators who pride themselves in their macro forecasts. The word investment does not appear in those definitions.
A few weeks back I was asked about bitcoin at a family dinner. My answer was, it’s a speculation, not an investment so it is not in my circle of confidence. Of course, everyone piped up as to how much money has been made by early investors, it trade at over $4000 dollars a coin now! As we send our email note out today bitCoin is down to $3500/coin, yet that is not the point. The point is, speculations become investments in our minds when we hear of how much money has been made by others. Our risk appetite is whetted, and our risk guards are down with the information that there is money to be made. A perfect cognitive trap. BUY! BUY! BUY! How can you lose if demand keeps going up?!
So, earlier this summer a competing band of “miners” started bitcoin-cash, a competing currency exchange. In the recent edition of the Economist, they report a consortium of banks is gearing up to set up their own digital currency. Another competitor. Now these alternative currencies may not be as nice as the original bitCoin for criminals’ laundering activities, yet the emergence of competing markets put the whole “prices will rise as demand has to increase” in question. What happens to prices if we open the pipelines and flood supply? Yes, it was supposed to sound like the oil markets a few years ago, just before bankers were falling over themselves to lend money to energy developers at an assumed floor price of oil of $80/bbl forever, and a dynamic caused primarily by the Saudis and North American frackers sent oil plunging due to radically increased supply. Just as demand started to slack. Ouch.
Assuming the markets for digital currency behave as most capital markets amongst humans do, albeit without the transparency and legal rules of conduct, they ought adhere to the basic law of supply and demand. If they do, their behavior can be reasonably estimated, occluded only by the shadows of the miners. SPECULATORS must become INTIMATE with the “supply and demand lines” in their chosen markets to be successful. Otherwise, it is not even a speculative game they play, but pure gambling. Gambling is speculation by the naive. Here, in the bitcoin world, its naïve gamblers versus global criminals who are “hedging”. Futures markets aren’t that much different in that regard. But speculators there aren’t so naiive.
As one Wall Street chief is quoted as telling his traders, “ if you put our money in digital currency , we will fire you regard less of the trade’s outcome!” Harsh, but very real and here is why…..
Speculators need liquid, transparent markets. From options, to antiques, to art, to real estate, most markets have some of that characteristic – and it is how we judge the strength of a market. The bitcoin market, although staunchly defended by its promoters as having these traits, is void of any of the traditional measures of a healthy market. There is no way you can think that’s akin to buying up vacant land just before a major mall is being planned. We can’t “mine” land, it’s a finite resource we will always need. Speculating in bitcoin is more like buying oil in the hope that you can sell it to some other fool in a few years at a much higher price. Even though the use of oil is slowly phasing out by competing “supply” over the long term. And by the way, you have to get WAY more than the $100/barrel you just paid.
Good luck! As that all you got!
Is Bitcoin an Investment?
We oft get asked about bitcoins; mostly not by clients but by students and curious investors, thankfully. Thought we’d give our clients a bit of education of the digital currency world, and the “bit” in particular. Having said that, this is only kindergarten level, as frankly, we understand the structure of block chain more than the “markets” for digital currency.
First off, bitcoin is like a digital wallet, expect that your “account” is held by a sequence of servers in the cloud and it is not dominated in any currency you may recognize. That chain of servers with parallel “pigeonholes” for users is also how transactions clear. Like a regular paper currency, bitcoins are “minted” or mined in the vernacular by a collusion of developers who have pledged to maintain a market in the currency and “mine” according to demand, for transactions that is.
Who uses bitcoin? High level criminals mostly. It’s a virtually untraceable currency ( although the NSA may beg to differ!) , nor are transactions traceable. But as in every laundering operation, you eventually have to “wash” the stuff to get real things. Digital currency makes this easier than ever before.
As an investment advisor, we’ve never consider foreign currency as an “investment”. Its either a hedge for companies exposed to foreign currency translation ( like our black market laundries in the bit world) OR its for speculators who pride themselves in their macro forecasts. The word investment does not appear in those definitions.
A few weeks back I was asked about bitcoin at a family dinner. My answer was, it’s a speculation, not an investment so it is not in my circle of confidence. Of course, everyone piped up as to how much money has been made by early investors, it trade at over $4000 dollars a coin now! As we send our email note out today bitCoin is down to $3500/coin, yet that is not the point. The point is, speculations become investments in our minds when we hear of how much money has been made by others. Our risk appetite is whetted, and our risk guards are down with the information that there is money to be made. A perfect cognitive trap. BUY! BUY! BUY! How can you lose if demand keeps going up?!
So, earlier this summer a competing band of “miners” started bitcoin-cash, a competing currency exchange. In the recent edition of the Economist, they report a consortium of banks is gearing up to set up their own digital currency. Another competitor. Now these alternative currencies may not be as nice as the original bitCoin for criminals’ laundering activities, yet the emergence of competing markets put the whole “prices will rise as demand has to increase” in question. What happens to prices if we open the pipelines and flood supply? Yes, it was supposed to sound like the oil markets a few years ago, just before bankers were falling over themselves to lend money to energy developers at an assumed floor price of oil of $80/bbl forever, and a dynamic caused primarily by the Saudis and North American frackers sent oil plunging due to radically increased supply. Just as demand started to slack. Ouch.
Assuming the markets for digital currency behave as most capital markets amongst humans do, albeit without the transparency and legal rules of conduct, they ought adhere to the basic law of supply and demand. If they do, their behavior can be reasonably estimated, occluded only by the shadows of the miners. SPECULATORS must become INTIMATE with the “supply and demand lines” in their chosen markets to be successful. Otherwise, it is not even a speculative game they play, but pure gambling. Gambling is speculation by the naive. Here, in the bitcoin world, its naïve gamblers versus global criminals who are “hedging”. Futures markets aren’t that much different in that regard. But speculators there aren’t so naiive.
As one Wall Street chief is quoted as telling his traders, “ if you put our money in digital currency , we will fire you regard less of the trade’s outcome!” Harsh, but very real and here is why…..
Speculators need liquid, transparent markets. From options, to antiques, to art, to real estate, most markets have some of that characteristic – and it is how we judge the strength of a market. The bitcoin market, although staunchly defended by its promoters as having these traits, is void of any of the traditional measures of a healthy market. There is no way you can think that’s akin to buying up vacant land just before a major mall is being planned. We can’t “mine” land, it’s a finite resource we will always need. Speculating in bitcoin is more like buying oil in the hope that you can sell it to some other fool in a few years at a much higher price. Even though the use of oil is slowly phasing out by competing “supply” over the long term. And by the way, you have to get WAY more than the $100/barrel you just paid.
Good luck! As that all you got!
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And in one sentence, you've named every major retailer that takes alternate currency.
Just a joke, but when you're talking about CURRENCY, and the number of retailers that accept it can be maintained on a single sheet of paper, you're really talking about something with very little liquidity.
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Other than the full faith and credit of the largest government in the world.....
slobake
resident ... something
Say, can you loan me 43 billion dollars?
All the basses i want are now about 20% more expensive thanks to my gov't. Is all i'm saying
All the basses i want are now about 20% more expensive thanks to my gov't. Is all i'm saying
Irrelevant to my point. But hey, at least you can get your hands on Overwaters.
No matter how large your government, they can still make decisions that stiff you financially, is my point.
Not familiar with Overwaters, i'll check them out!
As much as I try to get my brain around it, I still can't understand how bitcoin works. How does one mine something off the net and turn it into a tangible valued item? It not like mining gold or silver where you have an end product you can touch and feel. Can anyone explain this to me and make it more clear?
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slobake
resident ... something
Not in anything in particular, but I'm also not in debt. I also have some sweat equity in my house.
Alkali Ike
Gold Supporting Member
- Jan 1, 2011
- 2,854
- 15,665
- Disclosures
- I never actually learned to play very well
Someone please explain what the $10,000 cryptocurrency computing machine linked to previously "makes" and why it has value. It's like someone trying to sell me a sophisticated printing press to print my own $20 bills.
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