I just saw an article on ACA about Bitcoin. At the moment 1 Bitcoin costs you just under A$2300. Who gets my hard earned ozzie dollars if I buy a bitcoin, and what protection do I get to stop it crashing?
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I just saw an article on ACA about Bitcoin. At the moment 1 Bitcoin costs you just under A$2300. Who gets my hard earned ozzie dollars if I buy a bitcoin, and what protection do I get to stop it crashing?
The guys at work are talking about them at the moment, figures they mentioned (and elsewhere on tv etc.) current value is around $11,000. If the market crashes you loose, just like the stock market.
It's all virtual too, no actual coins involved. There are bitcoin "coins" around but face value is not of that of the virtual bitcoins. The whole thing is Snake oil to me. Like any gambling, spend what you can afford to loose.
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Anyone remember Poseidon shares.
Life is a gamble, do you feel like gambling? If you buy shares to fund your retirement it is a gamble and those that have lost money (including me many years ago) ask the same questions. Bitcoin is driven by speculation exactly the same sentiment as is driving the share market at the present time and long may it continue says he hopefully. I reckon Mr Bond and his mates had then same guarantees as Bitcoin does, where is my money that went down the slot back then?Quote:
Originally Posted by Grumpy John
Oh yes, I remember waking up one morning and listening to the radio and everyone was buying them or trying to and reportedly the Queen lost a motza on them. Share clubs sprang up everywhere but I cannot recall ever getting any money back from my participation in them.Quote:
Originally Posted by DavidG
today's tulips
Was it P. T. Barnum that said, "There is a sucker born every minute?"
If you had bought Bitcoins way back when, then my advice would be to SELL NOW. My advice also would be to not buy now. IMHO What you're buying is a computer algorithm. Then someone has declared a value on the algorithm. So in the words of PTB, you're buying smoke and mirrors. And, a Ponzi scheme of sorts? Probably?
So all of you time travellers out there, go back and buy a few thousand Bitcoin, sell them today and retire tomorrow. :)
Correction, the price today is circa $23,000AQuote:
Originally Posted by Cal
https://www.cryptocompare.com/coins/btc/overview/AUD
If Bitcoin is a ponzi scheme, then by definition, so is Medicare, Social Security etal which rely on new participants to fund old and established benefits. Just saying...Quote:
Originally Posted by Grumpy John
No protection what so ever, much like shares except extremely volatile. Similarly to Cal the advice I was given before getting into shares is whatever you invest be prepared to lose it. If you can't afford to lose it don't invest.
Investing is one of those things like the lottery, there are many more people who lose everything than those that actually win. So as tempting as it is to hear all the people who have cashed in their bitcoin I'm sure there are many others who have lost everything. The stories i have heard of those that have scored big is the typical "yep bought something forgot about it realised i had it then cashed in"
First of all Bitcoin is not a ponzi scheme. Just because it shares an at-a-glance similarity in some superficial respects does not make it a ponzi scheme.
However Bitcoin is unlike a currency or shares in one significant and important detail. Both of the latter have intrinsic value that can be objectively calculated but Bitcoin does not. Yes, it is linked to the ability to generate the crypt that defines the coin but that more defines its limits rather than some inherent value.
A currency is valued against the country (or countries in the case of the Euro) economy, A stock or share is valued against the companies fundamentals which can be defined. There is no such fundamental value that can be attributed to Bitcoin. As such the Bitcoin is whatever people say it is.
In terms of who gets the money you pay for Bitcoin, it is the person selling that particular coin or portion of coin. the difference in what they paid for it and what you are paying goes into their pocket (or comes out if you are paying less than they paid). If the coin is sold by the person who mined it then the whole value of the sale is profit by the seller. Of course the cost of the computer and power used to generate the coin needs to be factored into it.
The premise of course is that the harder it is to generate Bitcoin the more valuable they become. But this is more perceived than actual intrinsic value.
My personal view is that the bubble will burst and there will be a lot of very disappointed people. My advice to people who ask me is that you should not spend any money on Bitcoin that you would not be upset to see disappear.
I have no skin in this game, I'm simply curious; are just another armchair Internet punter, or do you hold some financial qualifications?Quote:
Originally Posted by Yanis
Just in case I gave the impression in my OP that I was contemplating purchasing Bitcion, no way would I touch it, not even with someone elses money.
Bitcoin aside, which may or may not survive, the technology behind it is I am lead to believe impressive.
Whether we like it or not 'blockchain' technology is here to stay and part of the future.
Banks, Governments and businesses are looking to implement it with their own digital currencies. Its part of the touted cashless society that has been pushed on the global community for the last decade or so and I think that the next 12-24 months will be very interesting, especially with cryptocurrencies. We shall see...
Totally agree cava, I work in software development and blockchain tech isn’t going anywhere. It’s being adopted in the banking sector, e-commerce and a whole swag of other industries. Bitcoin might seem like a scam but it’s basically become the gold standard when purchasing crypto currencies, until someone else takes that crown it’s here to stay.
There is one thing no one is talking about with bitcoin. Sure this last few weeks it's being snapped up by the usual late to the party wannabe speculators, but who was buying it for the last some years since it launched at 10c ?
Criminals.
Bitcoin is great for laundering money. It's virtually untraceable and until the authorities figure out how to counter moving money around the globe undetected demand will remain for it.
Apparently it's been used extensively on the "dark web", whatever that is, to buy drugs guns and other dodgy stuff but I reckon the real traffic is drug traffickers and such wanting to make their profits disappear.
Opinions worth what you paid for them...
Neither. I am a geek, nerd, or just plain curious person who accumulates a lot of useless knowledge. I have not bought BC (but my son has) but am now regretting not getting into it in its very early days. I have followed its progress from when no one but extreme nerds knew about it. I know of people who did mine it early on and sold it all. I also know of at least one person who just held onto it and is now (on paper at least) a very wealthy person but who still has has day job.Quote:
Originally Posted by matt_s
Right now I consider "investment" in BC to be a mugs game. Equivalent to investing in IT in the 1999 IT sector boom with one significant difference. In 1999 the IT stocks were clearly overvalued and heading for a bust. We are now in completely uncharted waters and what happens next is purely speculative, no one now has anything but raw instinct to fall back on.
But I agree that block chain technology is going nowhere. It is here to stay.
As for the criminal use of block chain currencies, absolutely correct. There is valid use for BC et al and also the dark web, it is not all criminal activity but these are the things exploited by criminals. Policing these things is problematic and is not easy and will not get any easier.
Isn't that why cash was originally invented? To be able to move money around anonymously?Quote:
Originally Posted by Yanis
Yes. Gold and silver were also used which coincidently, according to the Australian Constitution, is to be used for the payment of debts.Quote:
Originally Posted by rrich
No. "Cash" or currency was invented to facilitate trade.Quote:
Originally Posted by rrich
Quote:
Originally Posted by cava
Common fallacy. It is taking one clause completely out of context.
One could argue that Bitcoin was invented to do the same. One of the benefits (or so i've heard) is that the transfer of bitcoin is instant and no currency conversion is required. So intead of paying a bank x% to convert AUD to USD or waiting 4 days for your money to transfer, bitcoin is instant... this also facilitates tradeQuote:
Originally Posted by Yanis
I personally don't invest in anything because i have horrible luck with money, but thats my understanding...
It should be called BitLotto. The more punters put in, the bigger the prize pool will be for the winners. The winners will be the ones who sold before the bubble bursts. It's only a matter of time. It has already demonstrated it can rise and fall irrationally in seconds and there's no way to analyze when the fall will come because it's just a global heard emotive thing.
The financial institutions with all their knowledge, acumen and computing power can't even correctly predict the direction international exchange rates are heading viz the AUS to US$ rate. This time last year they were predicting AUS$=45c US, but they have shown that cowboys on their trade desks can manipulate the rate.
FOMO. Are you felling lucky?
Thats an interesting concept, and certainly one I have not heard before.Quote:
Originally Posted by Yanis
Quote:
115. States not to coin money. A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts
Quote:
115. States not to coin money. A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts.
Needs to be read in context.
The section is a prohibition on a State (NSW, Vic, WA, SA, etc) running their own State mint or note printing business independently of any Commonwealth mint or note printing unit. (Note that it was around 1964 that the RA Mint was established in Canberra.)
It is also a prohibition of on a State introducing or sanctioning a system of barter for payment of debts, or establishing it's own State currency.
Which leads to some fun thought explorations. Imagine if NSW had settled on super-fine wool as a currency. We would all be walking around with our pockets full of fluff. :wink:
"Debt" in this context needs to be read as legally enforceable.
All true, however to throw a spanner in the works, I read in Quick and Garran sometime ago that the Commonwealth is (believe it or not) legally also a State.
If I find it, I will post the excerpt.
For those that are not familiar with Quick and Garran, they put out the Annotated Constitution of the Australian Commonwealth back in 1901 and is the word by word explanation of the Constitution which has been used and is accepted in the High Court in constitutional matters.
I love the woodwork forum. You start talking about bitcoin and next your discussing the interpretation of the australian constitution. :D
Bitcoin was developed for altruistic reasons but like many things it's been turned to the dark side. The current speculative bubble is a sideshow. Good for the media, bad for punters, irrelevant for everyone else.
The things that differentiate bitcoin from say the tulip bubble is the fundamental limit on supply and the fundamental demand from criminals. With the price so high some are already turning to the alternatives, but I think that will drive a correction not an annihilation...
At the risk of opening another can of worms I pay far more attention to the property market and see terrible similarities between sydney/melbourne now and the crash of the 1890's, only this time the bubble is so much bigger...IF (!) I am correct there will be many many tears..
I think that all currencies are not unlike Bitcoin when it is all said and done and are based on human sentiment to get it right back to basics. Who says an ounce of gold is worth more one day that the next? The traders who SPECULATE the price based on how they feel international commerce is going from day to day. There is no hard standard for gold and all national currencies have gold as the base of their valuation. Others might argue differently as I am just an observer with no formal education in all of this at all.
Wow, I didn't expect all the different responses from my OP. It has been very educational for me to read all the comments. I have googled some of the terms mentioned such as "blockchain" "crypto currency", and must admit it has added to the confusion, rather than reduced it. I guess I'm a bit of a dinosaur and more of a bricks and mortar type of person. Old school, if you can't hold it in your hand it doesn't exist, except for electricity, don't try and hold that in your hand, DAMHIKT. :D:D:D
The gold standard has long been abandoned. If I recall Australia was rather lat to the party, sometime in the 80s.Quote:
Originally Posted by Chris Parks
The important and significant difference between a nation's currency and Bitcoin is that a currency has (in simplistic terms) the nation's fundamentals as its underlying value whereas Bitcoin has nothing.
Interesting reading for any one *really* interested. https://en.wikipedia.org/wiki/Gold_standard
Care to comment why China, Russia and other countries are buying gold hand over fist?Quote:
Originally Posted by Yanis
Because gold is essential in the production of modern electronic components.
That's interesting, I thought that Silver took over that role, in smart phones in particular.Quote:
Originally Posted by DavidG
To take currency and worth back to the basics it is only what we think it is worth and the value we put on anything at any given time, nothing more or less. I am listening to a book at the moment (The Flash Boys) based around trading on the US share market and it absolutely astounding to hear how the share holders on the stock market are or were (I haven't finished it yet) getting ripped off because some smart guys have arranged things to make money by working in milliseconds when trading.Quote:
Originally Posted by Yanis
it's still going on.Quote:
Originally Posted by Chris Parks
I recall a news item from a year or so ago where the flash traders in Sydney were upset about the ASX trading computers being relocated. The distance from a trading desk to the "market" computer being a relevant factor in a flash trader's profitabity.
Whilst there is an element of "randomness" to the value of a currency this is minor and not the fundamental value of a currency. This is why printing money (literally) can only lead to inflation since it devalues the currency. There are a lot of factors that contribute to the overall value of that currency its traded value is not purely random, it is based on those fundamentals.Quote:
Originally Posted by Chris Parks
This is how it differs from crypto-currency.
Australian Stock Exchange is moving to a Blockchain style system early next year
https://www.businessinsider.com.au/t...nology-2017-12
Bubble, what bubble?
https://finance.yahoo.com/news/bitco...183500758.html
The characteristic of Bitcoin that hasn't been directly discussed here, or much if at all in the popular press, is sovereignty. I'm using the term in the context of state sovereignty, i.e. countries.
In my appreciation, all or the vast majority, of the various country currencies in circulation, are fiat currencies. Fiat currency is defined as currency that is declared legal tender by a sovereign government.
The word fiat derives from the latin verb facio or "do". A usage which is not too obscure is 'Caesar fuit' or 'Caesar wills it (to be done)'. Thus, Caesar said 'you do it' and in the instant case fiat currency came into existence.
In the old days most sovereigns were people, i.e. Caesar, the King, Tsar, Moghul, Pharaoh, Khan, Emperor, Fuhrer or whoever. If the Caesar said 'do it' and you didn't comply you could be pretty sure that Caesar would send some muscle to either make you 'do it' or truss you up to die more or less slowly as an example to anybody else who might have the inclination to question Caesars' will. Money wasn't the only thing created by imperial fiat of course, Peter the Great commanded the creation of the city of Saint Petersburg in 1703 and it got done.
Over time the concept of individuals as sovereigns evolved into the prevalent current practice of bureaucratic sovereign states. This system has some advantages over the systems based on single or small numbers of individuals. For instance, these systems are somewhat less susceptible to being taken over by tyrants. These systems don't die and lead to succession conflicts and so on. However, the bureaucratic sovereign governments still rely on the same old tools of fiat power. They create and assign value to their own currencies. They maintain military forces to bludgeon challengers and they use a variety of additional means such as economic, legal, propaganda, alliances and covert means to exert their will in the community of nations. The blunt instruments of national power IMO can be reduced to three essentials: Military Might, Capital and Energy. I know that there are many other supporting factors such as demographics, educational capital, intellectual capital, geography and so on that contribute to or support these three essentials but really these three are central to the maximum exercise of national sovereignty these days.
Military Might is of course the standing and reserve armed forces, their equipment and it's technical capabilities (smart weapons) but also of critical importance is 'The Bomb'. States possessing The Bomb throw their weight around in the world more freely than those states that lack it. Thus, Bomb owners (with the exception of Pakistan) are more sovereign than those states that lack The Bomb.
Capital IMO encompasses national wealth including fiat currency, the derivative intangible faith (Faith) of others in the value of that fiat currency, various tangibles such as national intellectual prowess, businesses, infrastructure, valuable natural resources (esp. fossil fuels) and so forth.
Energy is obvious. The more oil and gas that a present day sovereign state controls the more powerful it is because the baubles of modern life all are critically enabled by fossil fuels. Note the number of international conflicts going on just now, the vast majority of which exist because sovereign states are contending for access to or control of fossil fuels. For example, the government of Canada is developing corps of elite arctic fighters with stealth snowmobiles in anticipation of preserving control of the fuel deposits that are becoming accessible as the arctic sea ice recedes along it's northern border. The Russian navy recently used a submarine to plant a Russian flag on the sea bed at the North Pole. The Chinese government is building artificial islands/ fortresses to monopolize fossil fuel deposits. The United States and to a lesser extent other countries including Russia have their hands all over the less pliant countries of the Middle East. I remember reading a couple of years ago (don't remember the source ATM) that the United States Air Force is the single largest consumer of liquid hydrocarbon fuel on the planet.
At this point the United States of America has the most Capital in the world, it has the The Bomb, it contains within it's boundaries fairly large reserves of Energy and by dint of it's Military Might it's able to control at least enough additional Energy to satisfy national consumption. In consequence the US dollar has been considered the 'reserve currency' benchmark for many years. Each of these three essentials of national sovereignty serve to backstop and enhance the others. Capital pays for the Military Might and The Bomb. The Military Might guards the prerogatives of Capital with the implied threat of The Bomb. Energy enables Military Might and The Bomb because it creates Capital and they in turn ensure access to Energy to keep the wheels turning. These factors inspire and support a greater or lesser degree of Faith in the other countries of the world.
Getting back to Bitcoin, it has only Faith, that is the faith of those who've bought it. If that Faith wains it will cease to exist because it has no Capital, Military Might, Energy or Bombs.
Further, and perhaps most important among the liabilities of the cryptocurrencies, is the fact that sovereign states are jealous of their powers. Thus, if Bitcoin ever looks like it presents a threat to those entities possessing Capital, Military Might, The Bomb and Energy mere Faith doesn't stand a chance and it's easy to predict the outcome.