Bitcoins in 2014?

[boxerdogboxerdog is verified member.]

I don't really know, it could go either way.
This shows just how volatile Bitcoins are and why most couldn't care less about them (and who can blame them) but there will be lessons learnt and improved security from other exchanges which will only help.
I will only ever buy back in if they hit £100 or less

 

[Retired_Member38]

Buy back in? What did you go in/out at originally?

 

[boxerdogboxerdog is verified member.]

Early days bought in at xx got out at xxx

 

[EdwinEdwin is verified member.]

Unlike fiat currencies? What do you mean? Fiat currencies aren't backed by anything either.

They're backed by the full financial muscle of the government of the country that issues them. That's a huge amount more than the "nothing at all" backing Bitcoin!

 

[jasman]

Not exactly - but they at least are Promissory note.

The BoE bank notes are promissory notes but the promise they carry is just a ridiculous joke. We find inscribed on them "I promise to pay the bearer on demand the sum of ..." but if you took a tenner to the BoE and gave it to them and demanded the sum of £10, they would just give you a different tenner or two fivers, which of course aren't backed by anything either. It's swapping one 'promise' with another ad infinitum, with no settlement at the end.

This is the problem with fiat currencies, they have no real backing. Governments like it because they can keep printing more and more money so they can spend more without increasing taxes (although they often do both). Central banks like the BoE love it because they receive interest-bearing government bonds in exchange for all the money they are creating out of thin air. Commercial banks love it too because they too can create 10 times the amount of money they have on deposit out of thin air (this also being backed with nothing) and loan it out at interest.

This is why we have inflation because the central banks and commercial banks can just create more and more money without having any limits imposed as there is no requirement to back any of it with anything. They just keep inflating the money supply until the currency becomes worth a fraction of a percent of its original value. In extreme cases hyperinflation ensues and billions of units of the currency are needed just to buy a loaf of bread.

So neither bitcoins nor fiat currencies are backed by anything. At least the expansion of bitcoins is limited by computational power. Bitcoin's problem is that there is not enough accountability in the exchanges and people have little recourse if they get scammed.

In my view the ideal alternative currency would be a super-secure (to the standard of a major bank's internet banking) digital gold currency with accounts insured against fraud/ theft and regular independent auditing of the gold that backs the currency up.

 

[websaway]

The BoE bank notes are promissory notes but the promise they carry is just a ridiculous joke. We find inscribed on them "I promise to pay the bearer on demand the sum of ..." but if you took a tenner to the BoE and gave it to them and demanded the sum of £10, they would just give you a different tenner or two fivers, which of course aren't backed by anything either. It's swapping one 'promise' with another ad infinitum, with no settlement at the end.

This is the problem with fiat currencies, they have no real backing. Governments like it because they can keep printing more and more money so they can spend more without increasing taxes (although they often do both). Central banks like the BoE love it because they receive interest-bearing government bonds in exchange for all the money they are creating out of thin air. Commercial banks love it too because they too can create 10 times the amount of money they have on deposit out of thin air (this also being backed with nothing) and loan it out at interest.

This is why we have inflation because the central banks and commercial banks can just create more and more money without having any limits imposed as there is no requirement to back any of it with anything. They just keep inflating the money supply until the currency becomes worth a fraction of a percent of its original value. In extreme cases hyperinflation ensues and billions of units of the currency are needed just to buy a loaf of bread.

So neither bitcoins nor fiat currencies are backed by anything. At least the expansion of bitcoins is limited by computational power. Bitcoin's problem is that there is not enough accountability in the exchanges and people have little recourse if they get scammed.

In my view the ideal alternative currency would be a super-secure (to the standard of a major bank's internet banking) digital gold currency with accounts insured against fraud/ theft and regular independent auditing of the gold that backs the currency up.

What would you like the bank of England to give you for your tenner ? a Chicken.
Apart from the BOE, the pound is supported by a stable country and it's government and it's citizens. The government could do anything necessary to underpin the value of it's currency ,and frankly the argument you put for your support of alternative currency is not credible. Nothing is safe but some things are safer than others.

 

[EdwinEdwin is verified member.]

In my view the ideal alternative currency would be a super-secure (to the standard of a major bank's internet banking) digital gold currency with accounts insured against fraud/ theft and regular independent auditing of the gold that backs the currency up.

You mean, like e-Gold was supposed to be (just have to read the news reports from around that time)?

Oh, no, that turned out to be a big scam

 

[disruptive]

Wishful thinking that we'll be going back to some kind of techno utopia gold-standard is not going to help. As neat as schemes are intellectually and however appealing, real systems stand the test of time and provide meaningful ways of conducting exchange over long time frames, for the majority in most regions. Even if those schemes are far from perfect, dirty, messy and intellectually unsatisfying.

I think people will look back and think: "I can't believe I put my wealth into a set of encrypted digits" and trusted such a scheme.

Many people are confused by these alt-currencies and suckered in by potentially high capital gains. Somehow I cannot help thinking that their "anchor" are services like PayPal and consequently believe there is more safety then there really is in alt-coins. Alt-coins are the equivalent of sticking all your wealth in a string of numbers and hoping that you'll be able to trade them for something of value...the more I think about it the more I think there are serious issues without regulation.

I was a big fan of BitCoin - its a very cool experiment. But I think even the founder Satoshi never expected it to be this prevalent.

 

[websaway]

If someone emailed me explaining the way the system works, I would expect the email to have originated from Nigeria.
The main contention is anonymity ..... what's that all about.

 

[disruptive]

I don't really know, it could go either way.
This shows just how volatile Bitcoins are and why most couldn't care less about them (and who can blame them) but there will be lessons learnt and improved security from other exchanges which will only help.
I will only ever buy back in if they hit £100 or less

Why £100 - is that some kind of magic figure? Why not £89 or £112?

 

[boxerdogboxerdog is verified member.]

Why £100 - is that some kind of magic figure? Why not £89 or £112?

£100 or less, i just wouldn't bother spending anymore than that as I'm not overly interested but at £100 or less its worth a punt.

 

[disruptive]

£100 or less, i just wouldn't bother spending anymore than that as I'm not overly interested but at £100 or less its worth a punt.

Just curious whether you value the entire market at a certain figure and £100 is your value per BC or you think this an anchor in your mind or where you think there is a fundamental value.

 

[boxerdogboxerdog is verified member.]

Just curious whether you value the entire market at a certain figure and £100 is your value per BC or you think this an anchor in your mind or where you think there is a fundamental value.

Its just a price i have stuck in my mind that I`m willing to pay, no real reason at all.

I think the price has been way too high for it to go mainstream, for investors its OK but for Joe public its ridiculous, personally i cant really see it taking off and becoming a daily payment method it will just be investors making money and losing money.

 

[anthony]

... at £100 or less its worth a punt.

But that's exactly why Bitcoin will stay a fad. Currencies exist to help control economies, Bitcoin serves no purpose whatsoever.

 

[Retired_Member38]

Bitcoin serves no purpose whatsoever.

That is wrong though.

There is a demand for an anonymous way to pay for goods and services - look at how much Silk Road alone was turning over.

 

[EdwinEdwin is verified member.]

That is wrong though.

There is a demand for an anonymous way to pay for goods and services - look at how much Silk Road alone was turning over.

There is no need for an anonymous way to pay for LEGAL goods and services. Secure, yes. Anonymous, no.

 

[Retired_Member38]

There is no need for an anonymous way to pay for LEGAL goods and services. Secure, yes. Anonymous, no.

There might not be an absolute need for it, but there is a demand for it. Some people want privacy, even if they aren't buying crack on silk road.

And even if people are spending coins on illegal drugs, who cares? You can still buy/sell coins with these people without doing anything illegal yourself.

The whole 'no chargeback' and 'instant' part of the bitcoin transactions is certainly an upside for a lot of people too.

If the price of bitcoins stabilises it would also be a very cheap way to pay for things - far cheaper than using credit cards for very small amounts for example.

 

[websaway]

There might not be an absolute need for it, but there is a demand for it. Some people want privacy, even if they aren't buying crack on silk road.

And even if people are spending coins on illegal drugs, who cares? You can still buy/sell coins with these people without doing anything illegal yourself.

The whole 'no chargeback' and 'instant' part of the bitcoin transactions is certainly an upside for a lot of people too.

If the price of bitcoins stabilises it would also be a very cheap way to pay for things - far cheaper than using credit cards for very small amounts for example.

What about money laundering, which may explain the enormous rise in it's value without a large amount of legal trading.

 

[Retired_Member38]

What about money laundering, which may explain the enormous rise in it's value without a large amount of legal trading.

What about it? If it pushes up the value of coins, then great :grin:

 

[EdwinEdwin is verified member.]

And just how many Bitcoin's did the inventor of Bitcoin stash away before its general release, me thinks!

About a billion dollar's worth.
http://motherboard.vice.com/blog/bitcoin-mints-its-first-billionaire-satoshi-nakamoto

In domain terms, it would be like a registry hanging onto all the best domains to sell later at super inflated prices. Oh, wait, that's what a lot of the new GTLD registries are doing...