Bitcoin – Is it me?

[winkie]

Spending power can be made from nothing it can be lost to become nothing......can always make more.

[Sour Mash]

Cryptocurrencies and blockchain are a great idea and much needed but Bitcoin itself is clearly in a bubble phase right now.  The thing is that it can potentially keep bubbling for longer than you could stay solvent if you shorted it.  Or alternatively, it could crash tomorrow (or later today).  Roll the dice if you feel like taking a chance I guess.

 

The big problem (apart from rampant speculation rendering it useless as a medium of exchange) as I see it, is that there's simply no way that authorities will allow it to develop as a legitimate fiat-free currency.

 

But some form of crypto and blockchain type technology is definitely the 'future of money', probably there will be many different cryptos.  But I think the mania surrounding bitcoin is down to the example of how many internet services/ websites/ platforms became runaway market leaders and effective monopolies.  eg.  Facebook is now THE social media platform.  Google is THE search platform.  Spotify is THE streaming music platform.  Amazon is the only place many people think of for online retail. etc.  A lot of people feel that something similiar will happen with cryptocurrencies and Bitcoin seems poised to be the de-facto future market 'monopoly' by virtue of early mover advantage.

[hotblack42]

8 minutes ago, Sour Mash said:

Cryptocurrencies and blockchain are a great idea and much needed but Bitcoin itself is clearly in a bubble phase right now.  

This.  I've worked in IT within Financial Services for 30 years and yet struggled to understand Bitcoin until I comprehended the conflation between the value of the blockchain mechanism, and the hyped price of Bitcoin.

Once you separate the technology from the mania and treat them as unconnected, it all falls into place.

When bitcoin crashes we can console  people who have 'lost' potential millions by re-assuring them that they have backed a winner and when the things have settled they will be left with holdings worth thousands and a valuation that as broad support.

[Kurt Barlow]

I see the FTSE and other share indices have been doing well. Makes me wonder if the big holders in BTC have been selling out to the 'mortgage the house to get in on the action brigade' and reinvesting in tangible assets.

[Habeas Domus]

The promise of cyber currencies is that they are decentralised and anonymous. But they are so complex to use directly that everyone signs up using an exchange, the exchange has complete control of your bitcoin, is centralised and completely unregulated.

The question to ask yourself is not just 'do I trust bitcoin' but 'do I trust this particular exchange'.

[ThePiltdownMan]

1 hour ago, Greg Bowman said:

2) it can immediately be transferred globally

 

Someone in the other thread is buying a hardware wallet. It's going to cost 6$ and take 6 hours to confirm the transaction for it. Far from the instant and zero cost narrative that people make out. Take away the speculative aspect and there is really very little to appeal to the ordinary man.

[wsn03]

1 hour ago, Locke said:

LOCKE - MY ANSWERS IN BOLD

 

Why does gold have value? It is what money used to represent, one of the oldest trading currencies in the world, and still used a form of value by many cultures and many investors still.

Why does silver have value? As above, but nowhere near the same league as gold. It has an industrial purpose too. In theory it should be worth far more than gold, but its about perception, as with all things.

Why does bread have value? People eat it, however unlike the other 2 it has a very low value, there is so much of it available and it doesn't store too well

Lets talk scarcity. Bitcoin has a finite amount. There are a finite amount of Austin Allegros, but they never did and never will become worth very much. People don't perceive them as being something they need that is scarce. Gold they do. Silver less so. Bread they need, but it is plentiful. Bitcoin only has scarcity, it is not perceived as anything anyone needs aside from a few visionaries and techies.

Crypto currency may be what we all need, but there is no reason BITCOIN will win that contest, even though it was first - I don't believe the worlds powerful governments will let that happen.

Until you can answer these fundamental questions, you won't understand Bitcoin. Right, err, sorry, what?

 

What differentiates blockchain from Fiat is: If only I understood what blockchain means, I keep searching, but its not really getting through my thick skull

1) You are not forced to use blockchain currencies Agreed, I don't use it, I don't know what it is or how to use it

2) A particular blockchain cannot easily be forged unless it becomes unpopular Now I'm lost

3) Regulation is decentralised This is going to end well then, putting my wealth into something that is effectively managed by itself, yes that's bound to become popular. The masses actually (wrongly) trust governments. I don't, but I have a fair idea of where I stand with them, so I'm starting to see a flaw with this

 

What differentiates blockchain from physical assets is:

1) It cannot be physically stolen I don't believe it, systems get hacked, nothing is safe from that

2) it can immediately be transferred globally So can fiat currency, so can diamonds, gold etc...it might be faster, but that doesn't make it worth holding more than the others. Banks deliberately take time with transfers hanging onto our money, but it doesn't stop people using them

3) It weighs nothing, even for large values But it has no physical presence either. It's just an algorithm backed by nothing! At least people think that money is a representation of real wealth, its that whole trust thing in their governments. This is just an algorithm created by some bloke whose existence no one can confirm - seriously?!?  Does this sound like the world's future currency? This is the bit that makes it really fall over for me.

4) It requires telecommunication to work No, sorry I cannot see a single reason why that matters, everything requires telecommunications to work these days. My money is accessed via telecommunications, I have to make a phone call for everything.

 

Blockchain is how wealth will be recorded and transferred in the future. I'm sure that's possible, but my questions are about BITCOIN itself. How does it suddenly become worth a fortune. How is it not a bubble about to go pop? How is the whole world going to start using it while governments sit by and let it happen?

Anyone who disagrees does not understand the first 3 questions. Yes that makes sense, and doesn't at all sound like mindless propaganda. Tell me I'm wrong, please spell it out to me. This is no different to HPI propaganda.

 

Edited December 15, 2017 by wsn03

[crooksook]

3 minutes ago, ThePiltdownMan said:

Someone in the other thread is buying a hardware wallet. It's going to cost 6$ and take 6 hours to confirm the transaction for it. Far from the instant and zero cost narrative that people make out. Take away the speculative aspect and there is really very little to appeal to the ordinary man.

Playing devil's advocate for a moment, there are lots of efforts in progress to fix scaling at the moment. From things like LN and Raiden, to new blockchains. At least some of them look very sensible and practical - and it's highly likely that at least a few will make it to a reliable production deployment. Bitcoin is a victim of its own success - it's not (in terms of development progress) supposed to be this big and popular yet.

[wsn03]

14 minutes ago, Habeas Domus said:

The promise of cyber currencies is that they are decentralised and anonymous. But they are so complex to use directly that everyone signs up using an exchange, the exchange has complete control of your bitcoin, is centralised and completely unregulated.

The question to ask yourself is not just 'do I trust bitcoin' but 'do I trust this particular exchange'.

I don't trust the idea at all. I don't trust FIAT currencies either, they are manipulated by money men, institutions and governments. Unfortunately I can predict the more likely outcome with my FIAT currency than I ever will be able to a centralised and unregulated exchange. FIAT controlled by government is actually the lesser of the two evils.

[crooksook]

1 minute ago, wsn03 said:

I don't trust the idea at all. I don't trust FIAT currencies either, they are manipulated by money men, institutions and governments. Unfortunately I can predict the more likely outcome with my FIAT currency than I ever will be able to a centralised and unregulated exchange. FIAT controlled by government is actually the lesser of the two evils.

It's not true that everyone uses an exchange. Most people I know who understand the tech do not - they use cold storage, or a hardware wallet. This is the anticipated (by the developers) way to store BTC - but it is also not yet ready for general participation by more naive participants.

[wsn03]

38 minutes ago, Kurt Barlow said:

I see the FTSE and other share indices have been doing well. Makes me wonder if the big holders in BTC have been selling out to the 'mortgage the house to get in on the action brigade' and reinvesting in tangible assets.

We're all expecting another "crunch". I guess it won't be car debt that does it, my money says it will be a collapse in the BITCOIN bubble.

EDIT - I should add I mean as a TRIGGER to a crunch, not the sole reason for one

Edited December 15, 2017 by wsn03

[crooksook]

1 minute ago, wsn03 said:

We're all expecting another "crunch". I guess it won't be car debt that does it, my money says it will be a collapse in the BITCOIN bubble.

I'm not sure it's yet big enough, or sufficiently entangled with the real economy to cause a crunch. However a collapse seems highly likely.

[wsn03]

11 minutes ago, crooksook said:

It's not true that everyone uses an exchange. Most people I know who understand the tech do not - they use cold storage, or a hardware wallet. This is the anticipated (by the developers) way to store BTC - but it is also not yet ready for general participation by more naive participants.

This is the problem with techies, they think on a different wavelength to everyone else. I'm soon to take over the running of a manufacturing business, long story. I earn my living as a SAP consultant (world leading business systems).

A colleague and good friend thinks I'm mad for not putting SAP into this relatively new opeation. It is the worlds most capable system. I told him because its a relatively small(ish) operation, and I don't want an army of expensive SAP consultants holding my operation to ransom, no value add. He told me that he once ran a very very small operation on SAP, it could be done.

How many full-time SAP consultants for this very very small operation I asked?

His reply - "only 8..."

Edited December 15, 2017 by wsn03

[wsn03]

4 minutes ago, crooksook said:

I'm not sure it's yet big enough, or sufficiently entangled with the real economy to cause a crunch. However a collapse seems highly likely.

I don't know, the dot.com frenzy did crash the entire stock market. It only takes one downturn in sentiment to generate a totally unrelated tidal wave.

[Kurt Barlow]

14 minutes ago, wsn03 said:

We're all expecting another "crunch". I guess it won't be car debt that does it, my money says it will be a collapse in the BITCOIN bubble.

EDIT - I should add I mean as a TRIGGER to a crunch, not the sole reason for one

I had 250 quid  in Bitcoin I sold '200' yielding 600 on my initial purchase. Thats me out bar my current 150 pounds equivalent.

At least with car debt in most cases there is something of some value to recover.

Edited December 15, 2017 by Kurt Barlow
addition

[wsn03]

Incredible - this thread gets moved to Investments forum where sod all people are going to read it. Yet the bubbly propaganda bitcoin thread gets pinned to the top of the main board.

Absolutely no different to the HPI mania this forum was set up to object to. There goes something different, what a shame.

Wonder which BITCOIN holding moderator did that.

Edited December 15, 2017 by wsn03

[goldbug9999]

2 hours ago, wsn03 said:

I don’t want to post this on the Bubbly Bitcoin Thread, because reading through that it seems to be turning into the Bitcoin Supporters Club thread.

I’m writing this in its own thread, because the Bitcoin thread seems to be full of the same propaganda

I am a special snowflake so I am going to ignore forum decorum and good manners and start a new thread despite the existence of a pinned topic intended to cover the subject of my post. I'm doing this because my arguments are somewhat specious and would probably get ripped to shreds in the actual topic I'm really supposed to post in. I've also essentially got nothing  to say that hasnt already been said and soundly debunked on the proper thread.

Corrected for you.

[Cosmic Apple]

3 minutes ago, wsn03 said:

Incredible - this thread gets moved to Investments forum where sod all people are going to read it. Yet the bubbly propaganda bitcoin thread gets pinned to the top of the main board.

Absolutely no different to the HPI mania this forum was set up to object to. There goes something different, what a shame.

Wonder which BITCOIN holding moderator did that.

Just noticed there's one about Bangoramic's in the Investment in General sub as well. Really?!

To be fair I was expecting this to get merged with the pinned bitcoin thread.

[wsn03]

1 minute ago, Northern Welsh Midlander said:

Just noticed there's one about Bangoramic's in the Investment in General sub as well. Really?!

To be fair I was expecting this to get merged with the pinned bitcoin thread.

I was hoping not, because that just seems to be "look how well it's doing" thread by people who have a bitcoin holding. I've observed people trying to be objective on there, they just get drowned out or ignored by "look how well its doing" posts. I was hoping for a reasoned debate.

 

[kibuc]

1 hour ago, longgone said:

IT will be hacked, who ever says it won`t is a moron. What about the social aspect of decentralised banking. The drug dealers people traffickers fraudsters and other nutters don`t go away with crypto. if anything they will increase.  

That does not relate to your original argument though - the 'computer says no' scenario. A system failure is less of a risk in decentralized environment than in a centralized one.

In regard to your two new points:

Maybe blockchain will be hacked, maybe it won't. What we do know for a fact is that centralized banks are already getting hacked, so it's hardly a point in their favor.

When it comes to criminal use of technology, there are multiple angles to look at it.

One would be to discuss whether we should be putting constrains on it to make it harder to use for criminals (and everyone else), or maybe we should make it as open as possible for the benefit of honest users and let the law enforcement deal with the crime. We're currently driving 200mph in that first direction, which is why it took my wife two years to get a bank account in UK and it's impossible to carry a bottle of water through airport security. Bitcoin takes the opposite approach, where everyone can instantly participate in the system, let it be my wife or a wicked criminal. We'd still have the police to prevent and deal with crime, and once you attach identity to a wallet, tracking the movement of money is easy.

Another angle would be pointing out that the very same argument could be held against cash, mostly US dollar, only magnified by the factor of 100.

Some could also state their belief that technology doesn't make criminals. Criminals are who they are, and they will be breaking the law regardless of the method. It's basically in their job description. Even if crime became easier, it doesn't mean honest people would suddenly start adopting a criminal mindset.

And whoever disagrees with me is a moron, obviously.

[wsn03]

4 minutes ago, goldbug9999 said:

Corrected for you.

By one of the main bitcoin fans...yes, a rational contribution to the debate

[Cosmic Apple]

1 minute ago, wsn03 said:

I was hoping not, because that just seems to be "look how well it's doing" thread by people who have a bitcoin holding. I've observed people trying to be objective on there, they just get drowned out or ignored by "look how well its doing" posts. I was hoping for a reasoned debate.

 

Completely agree and I've seen others note similar observations. Still it will be a great thread to read in hindsight if it all blows up

[Locke]

1 hour ago, Greg Bowman said:

isn't there a prediction that blockchain will be crackable by 2030?

Encryption tech will improve to resist attacks.

1 hour ago, longgone said:

I can hear the phone call, 80yo granny goes to buy some bread and milk gets to the shop  and the computer says no. 

Literally already happened in Greece, with your beloved Fiat. You are going to be so stunned when the government robs your bank account.

[wsn03]

Just now, Northern Welsh Midlander said:

Completely agree and I've seen others note similar observations. Still it will be a great thread to read in hindsight if it all blows up

I know, I've been thinking about that, those words "I shouldn't laugh" will be ringing in my ears...

[tm_81]

For bitcoin to be used as a currency, transaction fees have to come way down.

 

Once all coins are mined there is no more motivation for miners to continue running their rigs other than transaction fees -- so when transaction volumes go UP and fees go DOWN -- the confirmation delay will be so long that it will be useless as a currency anyway...

 

the primary reason its gone up in value is as a speculative investment. Once all bitcoins are mined and it becomes obvious it is useless as a currency - people will start taking profits en masse.

 

There wont be enough buyers to support that massive price (for example the founder has 10 million bit coins stockpiled, Thats supposed to be worth $100bn+). But for that to be sold there needs to be $100bn+ going in from buyers -- there is no way that will exist, once it becomes clear that it is useless as a currency...