Regarding the rise in Bitcoin prices.

[Frank Brown]

What do you guys think of the crypto-currency? Do you think it'll last, or is it just another tulip bulb?

[sivispacem]

Been a few threads on this recently.

 

It's a flash in the pan. Very hard to make any money from currently given that you need ~£3k worth of hardware to recoup that investment in any reasonable length time. If I owned any I'd be selling fast before the number of successful attacks against mining pools and wallets by criminals cause the entire economy to collapse.

Edited December 5, 2013 by sivispacem

[El Dildo]

well technically the price is still relative to whatever market you're buying in.

lets not forget that at one time in Russia a loaf of bread would cost you hundreds of thousands of rubles.

 

as for whether or not it will last, that's up to the people who use it to decide. it's just a trust issue.

if people trust it, it'll stick around. if they see it as susceptible to fraud it'll burn out. right now Bitcoins reputation isn't particularly stellar....

[Pyrrhic]

Can someone explain to me what exactly Bitcoin is?

[sivispacem]

It's a virtual peer-to-peer cryptocurrency based on a unit of work. It's a "proof of work" for completing cryptographic functions-basically solving complex and progressively more difficult mathematical equations with a fixed value. It works as a currency because it's finite nature and anonymous use. It has no value in itself, but is valuable due to being anonymous, and people becoming disenfranchised with conventional currency. At one point it could be created with no real cost but these days the cryptographic algorithms have become so difficult you need a large financial investment to actually make any money.

 

It's probably best described as a Ponzi scheme where a few people have become fantastically rich trading in imaginary magic beans.

[Pyrrhic]

If it knows if you are right or wrong why doesn't it just do it itself?

Sorry if this question sounds stupid I just don't understand it haha

[sivispacem]

It doesn't know if you are right or wrong, it's up to peers (as in other people doing the mining) to determine whether it has been solved. Hence it is theoretically prone to fraud but in reality hadn't been so far, mainly because most of the mining is done in pools so people have to work together on it. I meant fixed value as in reward.

[SouthLand]

Bitcoin sounds like medicine for people who suffer depression.

[rudy]

Apart from anonyomus tradings, what advantage does this have?

Sure, it works out well for crooks but what about the rest of us?

The only reason anyone still takes bitcoin seriously as a currency is because there are a lot of shady criminal types who don't care that it's inefficient as a medium of exchange due to the massive deflation.

[sivispacem]

It doesn't really have any advantage because it isn't a real currency. For a while the advantage was the lack of volatility in exchange rates compared to hard currency so you had people from places like Greece and Spain putting cash into it. But now it's hugely volitile.

[SouthLand]

It doesn't really have any advantage because it isn't a real currency. For a while the advantage was the lack of volatility in exchange rates compared to hard currency so you had people from places like Greece and Spain putting cash into it. But now it's hugely volitile.

 

No.

a lot of people in Spain put money in Gold because they don't trust the banks.

[sivispacem]

 

 

It doesn't really have any advantage because it isn't a real currency. For a while the advantage was the lack of volatility in exchange rates compared to hard currency so you had people from places like Greece and Spain putting cash into it. But now it's hugely volitile.

 

No.

a lot of people in Spain put money in Gold because they don't trust the banks.

I'm aware of that, and that a lack of trust in the banking sector meant people looked toward alternate investments that weren't pegged against their own currency, so I'm not sure what your point is? That people didn't put money into bitcoin by investing in the hardware to mine it? I think you'll find they did. Plenty of discussion around it if you want to corroborate what I'm saying.

[Mr. House]

 

It doesn't really have any advantage because it isn't a real currency. For a while the advantage was the lack of volatility in exchange rates compared to hard currency so you had people from places like Greece and Spain putting cash into it. But now it's hugely volitile.

 

No.

a lot of people in Spain put money in Gold because they don't trust the banks.

 

Uh, it even made mainstream news that Greeks and Spanish were investing in bitcoins, the value of bitcoin went through the roof. Where have you been living?

[theadmiral]

Can someone explain to me what exactly Bitcoin is?

Sure, it is a way to buy drugs from sites run by the authorities and get yourself arrested, and it is also an "investing tool" tool that unemployed people on the internet like to talk about people getting rich from.

 

Pretty much a giant scam.

[Raavi]

Bitcoin is far worse then Tulip Mania, at least at the end of that you got yourself a tulip, with Bitcoin you get nothing. It is pure speculation with an exchange rate so volatile, it's ridiculous. Furthermore are Bitcoins not protected, there is no deposit insurance of any kind. So essentially when the bubble inevitably eventually bursts and the prices drop like there is no tomorrow, there is no central organ that can be held responsible - I.E bye, bye money.

[sivispacem]

Bitcoin is far worse then Tulip Mania, at least at the end of that you got yourself a tulip, with Bitcoin you get nothing. It is pure speculation with an exchange rate so volatile, it's ridiculous. Furthermore are Bitcoins not protected, there is no deposit insurance of any kind. So essentially when the bubble inevitably eventually bursts and the prices drop like there is no tomorrow, there is no central organ that can be held responsible - I.E bye, bye money.

Case in point the recent $100m theft from the Sheep marketplace.

[RedDagger]

All I can think is that those who got some early and kept theirs have a hell of a lot now - or those who decided to invest in hardware for mining early.

 

I can understand why people like and use it, but I personally don't really need to use it at the moment.

[TheGodDamnMaster]

I heard it's better to go with litecoin because it's a lot cheaper at the moment. Too complex for me though.