Bitcoin Discussion

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Bitcoin has no intrinsic value - the only case for Bitcoin is that it is a medium of exchange that will grow, which then depends on the adoption rate, and the amount of good and services it will provide. If a large enough set of the population believes it has value, it will have value (bitcoin in that regard is worse than gold, which actually has some intrinsic value due to industrial use, ornamental use).

Fiat money on the other hand is obviously backed by the government. The distinct advantage of fiat (which gives it its value) is that you can use that to eliminate taxation liabilities to the government - try paying off you tax bill in bitcoin, real estate, or oil (all have to be converted to AUD) to prevent going to jail (there are some interesting cases in Europe where people have settled tax bills by donating art to the state, but that is for all intent and purposes a small subset). Of course, fiat then is only as strong as the state issuing the fiat, and the real goods and services in the economy backing the fiat, but that is a different discussion topic.

So the issues for Bitcoin in my mind are
(i) adoption rate (perhaps we will get here)
(ii) regulation - this is the biggest issue - all it takes is for government to strap some restrictions (and why would it not if they are losing control of the money supply?) - and Bitcoin (and crypto currencies for that matter) is done for. There may be a small underground economy that continues to use Bitcoin (and you may argue that that is the purpose - a currency w/o government interference), that is all well and good, but where are you going to get your dollars (or fiat currency) to pay the government when the time comes? And will you be able to buy a large enough set of real goods and services on your bitcoin to feed yourself and your family?

Or put another way - I will offer to pay your salary in bitcoin, with the caveat that you cannot convert that to fiat currency. Would you do it?

Isn't it interesting that the value of Bitcoin is still denominated in USD - i.e. a fiat currency that it is looking to replace? Real traction will come when the price of real food and water is denominated in bitcoin.
 
So now we're challenging traditional currency systems with crypto currencies such as Bitcoin. Ha!

It is similar to a Ponzi scheme. There are going to be people hurt at some point.
 
In July 2010 the bitcoin price was USD $0.08. Don't you wish you had of bought some then and still had them now.
Could be interesting trying to explain to the ATO how you suddenly got few hundred million $$ in your bank account (upon sale).
 
In 2010 Pres.Obama forced Visa etc to not allow payments to Wikileaks so they went to bitcoin.Really a great move by POTUS.
 
One vote of no confidence:

Bitcoin.com is one of the world’s largest bitcoin sites, having grown its profile thanks to the insane price surge of the cryptocurrency this year. But its cofounder and CTO, Emil Oldenburg, a Swedish native, is extremely skeptical of bitcoin’s future.

“I would say an investment in bitcoin is right now the riskiest investment you can make. There’s an extremely high risk,” he says in an interview with Swedish tech site Breakit.


“I have in fact sold all my bitcoins recently and switched to bitcoin cash,” says Oldenburg, referring to the problems with bitcoin’s high transaction costs and lead times.

Indeed, by some counts, bitcoin transaction fees are doubling every three months, and it now takes on average 4.5 hours to confirm a bitcoin transaction. Ars Technica reported that fees reached $US26 per trade recently. Bitcoin.com operates in everything that has to do with bitcoins.

What's the difference between bitcoins and bitcoin cash?
 
In 2010 Pres.Obama forced Visa etc to not allow payments to Wikileaks so they went to bitcoin.Really a great move by POTUS.

Yeah, that worked out rather nicely for Wikileaks. They now have more money than they know what to do with thanks to that move.

What's the difference between bitcoins and bitcoin cash?

A couple of months ago there was a fork of bitcoin creating two currencies. The second one being bitcoin cash. The easiest way to conceptualise this would be if a bank suddenly split in two. Everyone who had an account with the old bank also had an identical account with the new one, with the same balance in their accounts.

The reason for the split is there were disagreements about how to improve the bitcoin blockchain.
 
I see that one of the cofounders has supposedly unloaded all of his bitcoins.
 
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I see that one of the cofounders has supposedly unloaded all of his bitcoins.

One of the co-founders of bitcoin.com, not bitcoin. The person who started it (bitcoin) hasn't moved a single coin.

In other news, coinbase.com now supports bitcoin cash. Price of bitcoin cash has double in the last 24 hours on this news while the price if bitcoin has dropped about 10-15%. Anyone who held bitcoin prior to the fork will now have the equivalent in bitcoin cash on coinbase.
 
I disagree with that Bitcoin is a poinze scheme. I agree that the bitcoin is a bubble now even though it is definitely a currency on many level.
However I think the bubble is not ready to purst yet because I had seen bubble before in 2015, I can see everyone on the train discussing and buying stock.
Nowaday 99% of the ones who is discussing bitcoin have not buy yet. I am pretty sue there are much more bigger fools outside waiting to get in and make the bitcoin higher and higher until there is not enough bigger fools.
 
"You know it's time to sell when shoeshine boys give you stock tips."
 
The important part is generating returns for old investors through revenue paid by new investors. This is NOT the case with bitcoin.
Of course it is. When you sell your Bitcoin, who are you selling it to? The answer is another investor. Oh sure, you'll come back with the argument that you can buy stuff with Bitcoin. Sure... that's just a ruse that doesn't stand up under scrutiny in the real world. Someone did actually buy a pizza drom Dominos with Bitcoin recently to test it. The pizza cost something like the equivalent of $76 and came with another $9.86 transaction fees on top.

It's working (for now) on the Greater Fool theory. Each investor (fool) has to find a greater fool (investor) in order to sell to to make money. Eventually that pool of fools dries up and everyone suddenly realises that what they have oceans of is utterly useless because they can't sell it on (or use it in any useful way). Then everyone stampedes for the exit at the same time and the price collapses.

Gold at least is a physical element with practical uses (though limited) in the real world by virtue of its physical properties. Bitcoin doesn't have any physical properties.
 
Of course it is. When you sell your Bitcoin, who are you selling it to? The answer is another investor. Oh sure, you'll come back with the argument that you can buy stuff with Bitcoin. Sure... that's just a ruse that doesn't stand up under scrutiny in the real world. Someone did actually buy a pizza drom Dominos with Bitcoin recently to test it. The pizza cost something like the equivalent of $76 and came with another $9.86 transaction fees on top.

It's working (for now) on the Greater Fool theory. Each investor (fool) has to find a greater fool (investor) in order to sell to to make money. Eventually that pool of fools dries up and everyone suddenly realises that what they have oceans of is utterly useless because they can't sell it on (or use it in any useful way). Then everyone stampedes for the exit at the same time and the price collapses.

Gold at least is a physical element with practical uses (though limited) in the real world by virtue of its physical properties. Bitcoin doesn't have any physical properties.

You can apply what you just said to any currency then. Therefore currencies are Ponzi schemes. So are shares traded on the ASX too by your definition.

A Ponzi scheme is where the owner sells something to A promising a return on the investment. The owner then sells some more to B and uses the money from B, to pay the promised returned to A. This is VERY different to buyers and sellers exchanging and asset or currency.

I'm not sure what your example of a bloke buying a lot of (bad) pizza is meant to prove really.
 
I'm not sure what your example of a bloke buying a lot of (bad) pizza is meant to prove really.
That Bitcoin is not very practical and when the number of fools runs out everyone will panic.

And yes currencies and shares are roughly the same and easily manipulated by individuals.
 
You can apply what you just said to any currency then. Therefore currencies are Ponzi schemes. So are shares traded on the ASX too by your definition.

A Ponzi scheme is where the owner sells something to A promising a return on the investment. The owner then sells some more to B and uses the money from B, to pay the promised returned to A. This is VERY different to buyers and sellers exchanging and asset or currency.

I'm not sure what your example of a bloke buying a lot of (bad) pizza is meant to prove really.

Fiat currency is simply a medium of exchange. But derives its value from the goods and services that can be procured, AND the fact it can extinguish governmental tax liabilities, to prevent you from going to jail.

Try doing that with Bitcoin. You will need to exchange it into fiat first.
 
I saw a place for Bitcoin as a low cost medium of exchange between Fiat currencies.

Unfortunately the way it's being traded it's not good for this due to volatility and ever increasing costs
 
Bitcoin will only be worth the amounts being paid now if there is anarchy.Now some do want that but at present I dont like their chances apart from a few failed countries.If no anarchy the big boys will clobber it.
The technology behind it though is going to bring great benefits.EG it is being trialled to much more quickly identify the sources of food poisoning so that the number of cases can be lessened.
Blockchain in Food Safety: IBM Blockchain Blog
The technology is where investment returns will be made.Bitcoin is for gamblers.
 
Bitcoin is speculative nonsense. There are many great ideas behind the idea, but these have been so far overtaken by investor greed and such rubbish.

get out while you can.....
 
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