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bugg smasher
24th Dec 2017, 22:48
Ok, everyone knows the recent story of Bitcoin, the cryptocurrency based on distributed ledger technology, the Blockchain. Recent swings have seen the value of a single unit rise to $20K, plunge to $11K, and back up to seventeen. All within just a few days. There are untold numbers of newly minted Bitcoin billionaires, and busts, as a result.

Transfer of your Bitcoin gains to a currency legitimately recognized by a central bank does seem problematic at the moment, but great strides are being made in that area as we speak. Seems the New York, Hong Kong and London traders are all piling in, the money scrum is on the move. In a huge and life changing way.

Do we actually need a form of currency that references its value to physically stored gold, goods and services, or are we capable of enabling the planet's economic needs on a form of exchange referenced to nothing more than perceived vapor?

Pyramid of the increasingly rich and shrinking minority, or common barter of the future?

Effluent Man
24th Dec 2017, 23:24
We've been off the Gold Standard since 1931. Bitcoin however does seem quite a wild idea for a unit that has been trading at nearly $20k.

treadigraph
24th Dec 2017, 23:37
Too ephemeral for me at the minute. If you can afford to laugh at a loss go for it I guess. I can't. We think a relative by marriage may have gone for it big time judging by his enthusiasm and knowledge of it; he will either be a hero or an ex-relative some months hence if so.

clark y
24th Dec 2017, 23:48
I just see this as the latest ponzi type scheme where the winners will be the initial investors.

As for bitcoins, block chains etc becoming a new currency, a recent New Scientist magazine had an article about the massive amount of energy required to "mine" these currencies. It stated that at the moment, the mining is estimated to be around "23.07 Terawatt hours, roughly the amount of electricity used by Ecuador each year"

Effluent Man
24th Dec 2017, 23:50
It's not seen a conventional "bubble burst" but the falls in the last week have been inexorable, six thousand dollars or 20% of it's value. There have been substantial recovery periods in between.

Gertrude the Wombat
24th Dec 2017, 23:56
It's not seen a conventional "bubble burst" but the falls in the last week have been inexorable, six thousand dollars or 20% of it's value. There have been substantial recovery periods in between.
Somebody I know claimed to have £40k worth a week or so ago ... but on the other hand he says his investment cost around £3k, so whilst he's got less in the way of fantasy profits than he used to have he still has plenty of fantasy profits. I'll believe them being not fantasy if and when he has converted any to real money.

Effluent Man
25th Dec 2017, 06:26
The factors sound correct. They traded at around $1,000 per unit for a long time, so assuming four units they would have increased to around £60k in value last week, now back to around £40k. I think if I were him I would be inclined to sell now.

airwave45
25th Dec 2017, 06:35
You are focusing on or being distracted by the trading aspect of the currencies.
If you ignore that and look past it (as it will settle)
Then what is happening will make more of a difference than the internet has.

Currencies are appearing which can not be meddled with by governments.
Which have a fixed number of possible "Coins" (so there is no ability by anyone, to "Print" more) not all the crypto currencies work this way, but a fair chunk do.

These can currently be used to buy a very limited number of things from a very limited number of companies, that number is increasing, daily.

None of these rely on banks or governments for use, transfer, spending, storing.

Person to person transfer of currency is almost instant across the globe.

What is coming is easily transferable currency that the government has yet to figure out a way to tax, unless you hand out your private key, there is no way at all for anyone to figure out what you have or have had or what you have done with it.
Banks make no money from you using it or transferring it.

A significant change is coming.

meadowrun
25th Dec 2017, 06:44
I have not gone looking into bitcoin type currencies, but what I have read never answers the one main question.


National currencies are backed up by the country. (gold standard immaterial)
(still, usually quite a solid bet and you get to choose).


What backs up a Bitcoin and just how reliable is that backing?

Octane
25th Dec 2017, 06:47
What happens if you do time it right, convert it to cash to your bank account? Lets say a $million is deposited, does the bank care, do they inform the Tax Office (Inland Revenue or whatever)? Presumably tax is legally liable (payable) on the capital gain? It's all a bit of a mystery to me to be honest..

airwave45
25th Dec 2017, 08:50
I have not gone looking into bitcoin type currencies, but what I have read never answers the one main question.


National currencies are backed up by the country. (gold standard immaterial)
(still, usually quite a solid bet and you get to choose).


What backs up a Bitcoin and just how reliable is that backing?

Country currencies are subject to how much M0 the country decides to have in circulation (cash) which varies depending on the government of the day.
The amount of currency in circulation pretty much always goes up, that's just not possible with some of the crypto currencies (is with some others)

Remember the adverts to buy a spitfire with a spare zero hour engine for 46 pounds?

Most crypto currencies are blockchain based, this is a massively distributed network, there are thousands of computers running it.

Currencies are worth what people believe them to be worth, a large factor of that is based on trust, see what happens to currencies in which there is no trust Zimbabwe is a recent example.
Blockchain based currencies are as near as makes no odds, impossible to faff with.

When you take your pound sterling to the bank of England and request it be redeemed by the bank, what will they actually give you for it ?

All currencies are based on trust.

The new ones back that up with verifiable process too.

airwave45
25th Dec 2017, 08:51
What happens if you do time it right, convert it to cash to your bank account? Lets say a $million is deposited, does the bank care, do they inform the Tax Office (Inland Revenue or whatever)? Presumably tax is legally liable (payable) on the capital gain? It's all a bit of a mystery to me to be honest..

you are still thinking that cash is the end position, (fiat currency) that will not be the case for long.

Gertrude the Wombat
25th Dec 2017, 09:53
Blockchain based currencies are as near as makes no odds, impossible to faff with.
So all the stories we regularly read about bitcoin repositories etc being hacked and everybody losing all their money are fake news are they?

EGLD
25th Dec 2017, 09:56
You are focusing on or being distracted by the trading aspect of the currencies.
If you ignore that and look past it (as it will settle)
Then what is happening will make more of a difference than the internet has.

Currencies are appearing which can not be meddled with by governments.
Which have a fixed number of possible "Coins" (so there is no ability by anyone, to "Print" more) not all the crypto currencies work this way, but a fair chunk do.

These can currently be used to buy a very limited number of things from a very limited number of companies, that number is increasing, daily.

None of these rely on banks or governments for use, transfer, spending, storing.

Person to person transfer of currency is almost instant across the globe.

What is coming is easily transferable currency that the government has yet to figure out a way to tax, unless you hand out your private key, there is no way at all for anyone to figure out what you have or have had or what you have done with it.
Banks make no money from you using it or transferring it.

A significant change is coming.

This is what's interesting for me about Bitcoin, not it's current traded value

I've never been an investor and don't intend to start with something so bizarre as a cryptocurrency, but people creating their own global currency, unmonitorable and untaxable by governments is fascinating

And these modern technological phenomenons tend not to go away once the people have decided it's what they want

i.e. eventually the big media companies had to accept that people wanted to download their entertainment, and for all their attempts to shut it down, they've now all had to embrace it

Gertrude the Wombat
25th Dec 2017, 10:10
And these modern technological phenomenons tend not to go away once the people have decided it's what they want
Needs to be ever so slightly more stable before it's usable as a currency for everyday transactions, though. At present if you try to buy a pint of beer with bitcoin the price will have to be shown digitally on the beer pump and updated every second, and by the time you pay the price will be out of date, and by the time the pub converts back to real money they'll either get nothing of the price of a gallon of beer.

airwave45
25th Dec 2017, 13:37
So all the stories we regularly read about bitcoin repositories etc being hacked and everybody losing all their money are fake news are they?

Nope, completely accurate.
Heard of the great train robbery ?
It's currency, people want to steal it.

There are digital offline safe type devices you can use with crypto currencies that ensure you can not loose your stash.
Which if left online, or you give out your password are the equivalent of leaving the safe in your house open.

It is currency, it's being accepted, it is going to change things, at least as much as the internet did, in probably a smaller time frame.

EGLD
25th Dec 2017, 18:45
Needs to be ever so slightly more stable before it's usable as a currency for everyday transactions, though. At present if you try to buy a pint of beer with bitcoin the price will have to be shown digitally on the beer pump and updated every second, and by the time you pay the price will be out of date, and by the time the pub converts back to real money they'll either get nothing of the price of a gallon of beer.

This is true, but it's hardly beyond the realms of possibility is it

We can wave our phone/credit card at someone these days to pay for something

So long as the price was prominently displayed and easily understandable it should be fine

But I agree it would need to find some stability

Pitchpoller
25th Dec 2017, 18:51
http://www.telegraph.co.uk/content/dam/PortalPictures/Dec2017/2412-MATT-PORTAL-WEB-P1.png?imwidth=789

andytug
25th Dec 2017, 19:55
Not viable as a currency really in my view until it attains some sort of stability, but the problem is that nobody makes a profit out of stability, speculators bet on volatility. Until it gets stable, I'm out.

airwave45
25th Dec 2017, 21:35
I'm out.
As with Brexit and the internet, old people don't really get that the world is changing, until it has.
it has always been so.
and always will be.

PDR1
25th Dec 2017, 22:20
As with Brexit and the internet, old people don't really get that the world is changing, until it has.
it has always been so.
and always will be.

As with Brexit and the internet, childish people don't really get that the world is a serious place where decisions have real consequences for real people, until it has.

It has always been so, which is why we put a minimum age limit on voting, car driving and even commercial piloting* to protect children from the consequences of childish simplicity.

And we always will, one the big kid in chief goes back to his Manhattan glitz palace .

PDR

* no, there really is one - I checked

airwave45
25th Dec 2017, 22:30
As with Brexit and the internet, childish people don't really get that the world is a serious place where decisions have real consequences for real people, until it has.

It has always been so, which is why we put a minimum age limit on voting, car driving and even commercial piloting* to protect children from the consequences of childish simplicity.

And we always will, one the big kid in chief goes back to his Manhattan glitz palace .

PDR

* no, there really is one - I checked

Indeed,
life goes on, keep up or get left behind.

airwave45
25th Dec 2017, 22:35
sadly, as we have seen with brexiteer voters, minimum age makes no allowance for below average intelligence.
Same with crypto, just because you don't understand it, doesn't mean it won't actually happen.
may look a bit up in the air right now, remember how you felt about the Internet when that started ?

keep up, or get left behind.

Trossie
25th Dec 2017, 22:54
Bitcoins? Sounds like investing in tulips. Been done before. "When will they ever learn?"

M.Mouse
25th Dec 2017, 23:21
I suppose I am considered older generation now but I am happy to endorse change. I had a mobile 'phone in 1989, a PC and e-mail address not many years later.

Two problems with bitcoin for me at the moment. One is that I do not understand the 'mining' concept and nothing I have read or watched has adequately explained it in a way I can understand.

Secondly, until it becomes stable, if ever, it will be utterly useless as a regular payment method.

airwave45
25th Dec 2017, 23:22
Bitcoins? Sounds like investing in tulips. Been done before. "When will they ever learn?"
tulips don't facilitate p2p . . or dodge banks, or tax, what can you buy with a tulip ?
but hey, keep smelling the flowers.

Pitchpoller
25th Dec 2017, 23:27
until it becomes stable, if ever, it will be utterly useless as a regular payment method.

It was stable for years. Occasional burps, but mostly stable. Rather like the Pound.

Trossie
25th Dec 2017, 23:27
tulips don't facilitate p2p . . or dodge banks, or tax, what can you buy with a tulip ?
but hey, keep smelling the flowers."Those who do not know history are condemned to re-live it".

"When will they ever learn?"

airwave45
25th Dec 2017, 23:29
I do not understand the 'mining' concept and nothing I have read or watched has adequately explained it in a way I can understand.

Secondly, until it becomes stable, if ever, it will be utterly useless as a regular payment method.

Mining is really the act of validating transactions (mostly) part of the stability of the currency is the breadth of distribution of validation. the blockchain is a thing that needs to have records of transaction validated and confirmed, that is really all 99.99% of mining is (which miners, get paid for)

Stability is a function of desirability / want, as the daily transactions in bitcoin get over the 10's of billions of dollars a day (that they are currently at) and get to higher numbers, things will naturally stabilise.

Gertrude the Wombat
25th Dec 2017, 23:29
Same with crypto, just because you don't understand it ...
One has tried, on occasion. The conclusion I've reached is that the mathematicians who actually understand this stuff are, erm, how to say politely, people who do indeed have these maths skills but in general seem not to have the communication skills necessary to document their software in such a way that the ordinary jobbing application programmer has a hope in hell of understanding it.

Which results in people like me using the crypto APIs via monkey-see monkey-do cut-and-paste, which I'm really not very happy with. Have I got it right? - who could possibly know :{

Pitchpoller
25th Dec 2017, 23:35
People who talk about tulips tend to be those who know nothing true about the actual tulip craze. In reality it was nothing like they think.

All that crap about an entire country estate, together with horses and carriages, being bet on a tuilp which was susequently eaten as an onion by a sailor havng some herring for lunch was just a bullshit story made up by a novelist.

It is believed by crowds of people, which ironic as he subtilted his work of fiction "madness of crowds".

bugg smasher
25th Dec 2017, 23:41
I think it more a function of cutting out the middleman factor, P2P (Peer to Peer) mode, Uber being a prime example, and all of the 'throttling' costs associated with artificially created bottlenecks, designed to extract very real economic value from the goods and services barter process. Taxation, deus ex machina, by any other name.

Said middlemen do not add value to the efficient economic exchange of essential human processes and interactions; rather, in blocking to personal advantage, manning the boyz-erected toll booths as it were, they make everything far more costly.

Non sequitur alert!

The demise of Net Neutrality here in the U.S. is a shocking example of the Donald's march toward uncomprehending, self aggrandizing fascism. And twelve words no longer allowed, by governmental decree, to be uttered by the Environmental Protection Agency. Scott Pruitt. Douchebag.

Perhaps Bitcoin is the first frontal assault of the underground resistance, the reactionary wave of defiance.

My Brit mates, we shall fight them on the beaches, we need your help.

Trossie
25th Dec 2017, 23:43
People who talk about tulips tend to be those who know nothing true about the actual tulip craze.
Pitchpoller, the 'fine detail' is unimportant. The fact that it was an early 'financial craze' without any real foundation, much like the dot.com bubble several years back (remember it?) is the important comparison.

EGLD
26th Dec 2017, 10:26
sadly, as we have seen with brexiteer voters, minimum age makes no allowance for below average intelligence.

Until you deal with your preposterous arrogance that leads you to believe people who disagree with you can only logically be doing so because they are thick, you are destined to repeat the mistakes of the past :uhoh:

andytug
26th Dec 2017, 11:06
Until you deal with your preposterous arrogance that leads you to believe people who disagree with you can only logically be doing so because they are thick, you are destined to repeat the mistakes of the past :uhoh:

Indeed, it is this kind of attitude that has rendered politics on all sides indistinguishable from religions or cults, bereft of facts all they have left is belief and the hope that he who screams loudest will win. Brexit (both sides) and Trump (ditto) are prime examples.

I understand the concept of Bitcoin fine, but until its value is more stable and the speculators stop playing with it it's not something you can use unless you can afford to lose.

Pitchpoller
26th Dec 2017, 11:23
until its value is more stable and the speculators stop playing with it it's not something you can use

Will currency speculators ever stop trading Pounds/Dollars/Euros? Will any of those currency pairs ever stabilise?

https://s.tradingview.com/x/5AqXZPwP/

airwave45
26th Dec 2017, 11:29
Until you deal with your preposterous arrogance that leads you to believe people who disagree with you can only logically be doing so because they are thick, you are destined to repeat the mistakes of the past :uhoh:

Statistically, 49.999999% of the population are below average intelligence.
Those will be the easiest to lie to.
(big slogans on busses seem to be particularly effective on the hard of thinking . .)

EGLD
26th Dec 2017, 12:07
Statistically, 49.999999% of the population are below average intelligence.
Those will be the easiest to lie to.
(big slogans on busses seem to be particularly effective on the hard of thinking . .)

Only remainers believed the bus nonsense, most leave voters decided they wanted to leave the EU 10+ years ago

But please do keep going, the incessant tantrum of remainers is going to be quite something to watch you recover from :ok:

PDR1
26th Dec 2017, 12:22
Statistically, 49.999999% of the population are below average intelligence.


Not necessarily - but it is true that half the population will be below the median intelligence...

Mind you, we do know that when we leave the EU the Leave campaign will be able to take the 350 million lies they used to tell about the EU each week and redirect them to be lies about remainers, or foreigners, or women, or moslems or whatever else their new campaign will be about. Because like all morally bankrupt and despicably reprehensible sub-humans, they can only exist when they have a scapegoat to ridicule and lie about.

But I'm guessing you already knew that.

PDR

EGLD
26th Dec 2017, 12:29
https://cdn.mamamia.com.au/wp/wp-content/uploads/2016/04/14162134/crying-toddler-507x315.jpg

its not fair!

I'm cleverer than they are!

Gertrude the Wombat
26th Dec 2017, 12:32
https://cdn.mamamia.com.au/wp/wp-content/uploads/2016/04/14162134/crying-toddler-507x315.jpg

its not fair!
Is that a reference to

(a) the #brexit press whining about the reaction to the blue passport farce, or

(b) the #brexit press whining about Clegg, not Farage, getting a knighthood?

EGLD
26th Dec 2017, 12:37
(b) the #brexit press whining about Clegg, not Farage, getting a knighthood?

Is that the same Clegg who lost his job at the last General Election? LOL

TURIN
26th Dec 2017, 12:40
Needs to be ever so slightly more stable before it's usable as a currency for everyday transactions, though. At present if you try to buy a pint of beer with bitcoin the price will have to be shown digitally on the beer pump and updated every second, and by the time you pay the price will be out of date, and by the time the pub converts back to real money they'll either get nothing of the price of a gallon of beer.

Not true. I was listening to the radio before Xmas. There is at least one café in London that accepts bitcoins for something as inexpensive as a double espresso.
If I can find the link I'll post it.

More than one in fact a few pubs too according to this in the Telegraph.
Ten places where you can spend your bitcoins in the UK - Telegraph (http://www.telegraph.co.uk/technology/news/10558191/Ten-places-where-you-can-spend-your-bitcoins-in-the-UK.html)

M.Mouse
26th Dec 2017, 13:17
Mining is really the act of validating transactions (mostly) part of the stability of the currency is the breadth of distribution of validation. the blockchain is a thing that needs to have records of transaction validated and confirmed,....

So why does validating a transaction take such enormous amounts of computing power. I understand the concept of the blockchain being, effectively, a ledger but if, at this early stage of its development, the blockchain requires all this effort what happens when Bitcoin is a useable worldwide currency?

Pitchpoller, the graph you posted shows a fluctuation overall of 0.03 US cents. How does that speculation compare with the size of the fluctuation in the value of Bitcoin?

Gertrude the Wombat
26th Dec 2017, 13:21
Is that the same Clegg who lost his job at the last General Election? LOL
A job that Farage made many failed attempts at obtaining :ok:

EGLD
26th Dec 2017, 13:22
Farage got elected into the European Parliament and got us out of the EU :ok:

Pitchpoller
26th Dec 2017, 15:13
There is at least one café in London that accepts bitcoins for something as inexpensive as a double espresso.

If you pay by charge card the trader takes a 2% hit. If the transaction involves forex, there's another 3% hit to take. We live with that all the time.

Now look at Bitcoin transaction costs.

https://estimatefee.com/
https://bitinfocharts.com/comparison/bitcoin-transactionfees.html

Who wants to pay a $30 transaction cost on a $10 bill? Or on a $100 bill for that matter.

Five years ago that cost was about a cent. Entirely acceptable, quite attractive actually. Now look at it.

It won't be untill all 21M bitcoins have been mined that miners will underbid eachother to get the transaction verification business from the users and the price of transactions will go back to sensible levels.

amcal
26th Dec 2017, 15:24
Bitcoin.....everyone knows the smart money is in Ethereum. :-)

funfly
27th Dec 2017, 15:19
So why does validating a transaction take such enormous amounts of computing power. I understand the concept of the blockchain being, effectively, a ledger but if, at this early stage of its development, the blockchain requires all this effort what happens when Bitcoin is a useable worldwide currency?

The computing power is required to generate the new bitcoins by solving a puzzle that can only be done by trial and error requiring thousands and thousands of ‘tries’. made worse by a, as more bitcoins are made the puzzle gets harder and b, each bitcoin is based on the previous one mined so as soon as a new one is ‘created’ then you have to start again with a new base.

M.Mouse
27th Dec 2017, 16:47
While I appreciate the effort to respond and explain forgive my ignorance when I say that, if anything, I am further confused!

funfly
27th Dec 2017, 21:32
Making, or 'Mining' bitcoins is the incentive and takes all of your computing power.
'Validating' blockchains is carried out by your programs virtually without you being aware of it - it's the price you pay for being able to 'mine'.
However, it does get more complicated the more you think you understand. I thought that I had the general idea but the more I read about it, the more I realise what a complicated system it is and the less I really know about it.
You have to give it to them, there were some very clever brains behind this.

fltlt
28th Dec 2017, 15:34
Making, or 'Mining' bitcoins is the incentive and takes all of your computing power.
'Validating' blockchains is carried out by your programs virtually without you being aware of it - it's the price you pay for being able to 'mine'.
However, it does get more complicated the more you think you understand. I thought that I had the general idea but the more I read about it, the more I realise what a complicated system it is and the less I really know about it.
You have to give it to them, there were some very clever brains behind this.

Who managed to pull off the biggest con while becoming Uber rich, yes, you certainly have to give it to them.

Jet II
28th Dec 2017, 15:36
Is that a reference to

(a) the #brexit press whining about the reaction to the blue passport farce, or

(b) the #brexit press whining about Clegg, not Farage, getting a knighthood?

No - its the remoaners whining about losing..

airwave45
28th Dec 2017, 19:38
Who managed to pull off the biggest con while becoming Uber rich, yes, you certainly have to give it to them.

Hardly, the first bitcoin transaction on the blockchain was the developer paying himself 50 bitcoin for developing it. Which at the time was buttons, now that's about 3/4 million usd.

5.36 tn dollars was traded in Bitcoin on the 23rd of Dec.

makes 3/4 mil seem like the buttons it was back then.

But, if you think that "currency" remains the sole preserve of printed notes issued by untrustworthy governments, fill yer boots.

clark y
28th Dec 2017, 20:10
So if mining the coins takes more resources/cost than the face value of the coins themselves,what are the ramifications of this? Someone has to pay.
In a dollar terms how much would it cost to mine a coin at the moment?
Bit like traditional coins made of precious metals being scrapped for their raw material value.

airwave45
28th Dec 2017, 21:16
Currently mining / validation takes about half what conventional currency costs to produce (in energy use)

Some of that is down to algorithms which increase the difficulty of "finding" coins, currently if you set your best house computer to "mine" bitcoin using it's cpu, on average, (and it's not guaranteed) at current difficulty levels, you'll find one after 94 years. that level of difficulty is set to double in 2022 (ish)

This is not a small business, it's also not localised (although, much of it is done in China with subsidised electricity)

crypto currency, like conventional currency has many different formats, some stable, some not.
There are, a tremendous amount of snake oil salesmen out there, use significant caution if you are dipping a toe in the water.

Cost wise, you are better buying coins/tokens than mining for them.
If you build a mining rig and run it 24/7 in your house it pays for itself in about 6 months, some people are spending large chunks of cash(like more than a house costs) building rigs and coming up with novel ways to power them.
But economics over the last couple of years say you'd make more just buying tokens/coins and hanging onto them than building rigs and running them.

99.99% of the population (probably more than that, but you get the gist) have no crypto currency, the main crypto's are numerically fixed in issue size (not all, but some)
as the number of people who have access increases, as will the nominal value.
as the number of vendors accepting them increases, as will the fiat currency value.
Over time, the relevance of fiat currency will decline as there becomes less requirement to convert back to it.
If you can spend it on what you want, get paid in it, why would you change it to something else ?

transaction costs are disproportionately high now and that will need to change, but I'm sure it will.

funfly
28th Dec 2017, 21:57
When I look at my bank accounts online I say to myself "do I actually have anything at all apart from some numbers on a computer somewhere?"
I have some old fashioned idea that somehow those figures represent pounds that I actually own, a belief that there are pound notes waiting for me to collect.
Pound notes that I have diligently saved one by one over the last 70 years and stored in trust with the bank for which, in return, they pay me in the region of 0.5% per year.
Something tells me to 'get real'.

jack11111
28th Dec 2017, 23:40
A good summary of BitCoin on the BBC World Service. 23 minutes in length, BBC World Service - The Inquiry, What?s The Point Of Bitcoin? (http://www.bbc.co.uk/programmes/w3csvsyh)
.

Jet II
29th Dec 2017, 02:17
Cost wise, you are better buying coins/tokens than mining for them.
If you build a mining rig and run it 24/7 in your house it pays for itself in about 6 months, some people are spending large chunks of cash(like more than a house costs) building rigs and coming up with novel ways to power them.
But economics over the last couple of years say you'd make more just buying tokens/coins and hanging onto them than building rigs and running them.


Thats all the while that the value rises - when the inevitable crash comes those with hardware will at least have something to sell to cover the loses.

cattletruck
29th Dec 2017, 06:13
For the propeller heads on here below is better summary of Bitcoin by the author himself:

https://www.mail-archive.com/[email protected]/msg09959.html

I like the 3 Byzantine Generals analogy he uses for describing proof-of-work.

Even for me the above article is a bit heavy, but the gist that I'm left with after reading it is that the value of the currency itself is inconsequential to the facility that it provides. That is, traditional thinking financiers have jumped onto the Bitcoin bandwagon thinking that it must have some exploitable intrinsic value in fiat currency, however that is not the coin's purpose.

Bitcoin (and other emerging crypto currencies) are just ledgers and their physical worth is measured in CPU cycles and energy to power them - which is not anything of value to me. So regardless if 1 Bitcoin is worth 1c or $1m then it doesn't matter as I only need enough Bitcoin to complete my financial transaction with my merchant.

But that still doesn't stop people wanting to own a piece of the ledger system rather than the contents the ledger points to.

funfly
29th Dec 2017, 11:17
It does seem to me that the concept of the bitcoin was a virtual currency for transactions and not a currency to be used as an investment. In fact, reading the summary, this possibility was not really considered as an issue.
What the bitcoin really required was a unit value based not only on CPU power but on a physical entity thus providing a link with the ‘real’ world. This requirement would be justified by the fact that, in the end, a bitcoin has to be able to buy something from the real world, thus this link is essential. Without this link the bitcoin can only value itself against itself, i.e. one bitcoin is worth one bitcoin.