OT: Bitcoins / Other Crypto Currencies for Dummies

[RutgersMO]

Haven't been following the Bitcoin explosion (SEC closed down trading till after New Year).

Questions:
1. How will people trade these items....e.g. if the Coin? is worth approximately $20,000 how do you negotiate it for a transaction in the $20-100 range (i.e. will someone give you $19,900 change?)?
2. Why do we need a Bitcoin...if the transaction seems to be entirely electronic? What's to stop hackers / scammers from stealing $$ from your account?
3. Why do we need it? It seems like the Dark Web, Drug Dealers, Terrorists and others who value PRIVACY want it...and now some Tech Companies (are they in a Cabal with the Dealers / Terrorists??) but I don't care about that? What's the value of having a Bitcoin or Bitcoin account vs. currency, CD's, MM's, Checks, Credit Cards etc?
4. WTF is a Bitcoin anyway: it was being hawked about 2 - 3 years ago by Ron Paul-I'm not a fan)?
5. Is there a protection against THE BUBBLE? What if the Bitcoin...BITES The BIG ONE?
I.e. Is this an MLM ... or scheme that Madoff created to get back at society for putting him away?

Just wondering...

MO

 

[RUfromSoCal?]

.........yup, no signs of a bubble here.......

 

[RutgersMO]

.........yup, no signs of a bubble here.......

Attention Captain Video...
switch your secret decoder ring to Sarcasm ON!



MO

 

[theRU]

.........yup, no signs of a bubble here.......

its a bubble assuming the masses don't adopt bit coin. Thats the problem with the supply demand aspect of it. As long as people keep flocking to it, they drive the price up. The problem is that I think people are merely adopting it as a potential to get rich quick, instead of actually adopting it as a true form of currency.

I'd expect the bubble to pop at some point, but that doesn't mean you cant make some money off of it.

The energy consumption aspect of it is interesting since it might make the whole thing not feasible.

 

[RUNVA]

Been in it as well as two others. Bitcoin is The first decentralized digital currency. You can open a wallet with Coinbase. I would recommend jumping on YouTube for some videos on it. You can by fractions of a coin. A bubble may be in the making. It is used by major companies like Goggle, Starbucks, and Amazon. It is now the largest traded currency in S.Korea and Japan. Much of the PacRim is just getting on board. I am big on privacy, so it fits my life style. Spent time in military intelligence and know how much and how fast the Gov can take everything you have. Even when in error, you are done for life. Scammers are out there. Check out blockchain. This is the bases for many crypto currencies. Banks are coming on line with their own, B of A. Even the US Gov is thinking of establishing one. There will always be people using any form of known currency to fo illegal transactions. Sorry for the shot gun blast, but was heading out the door.

 

[czxqa]

Kim Jung Un approves this Bitcoins.

 

[RutgersUnion]

BCH went live on GDAX a couple of hours ago and things went nuts. Looks like they actually shut down trading. Its not for the faint of heart right now.

 

[robcac26]

its a bubble assuming the masses don't adopt bit coin. Thats the problem with the supply demand aspect of it. As long as people keep flocking to it, they drive the price up. The problem is that I think people are merely adopting it as a potential to get rich quick, instead of actually adopting it as a true form of currency.

I'd expect the bubble to pop at some point, but that doesn't mean you cant make some money off of it.

The energy consumption aspect of it is interesting since it might make the whole thing not feasible.

I'm not an expert on the technology behind all of this, but a newer cryptocurrency known as Iota is aiming to address the issues behind Bitcoin. Iota doesn't use blockchain technology, which makes it more sensible for microtransactions because there won't be fees involved like there are for Bitcoin. Their goal is to eventually be the platform on which machines transact with each other, like a car automatically paying a parking meter for example.

https://venturebeat.com/2017/12/19/...s-on-iota-as-it-invests-in-the-future-of-iot/

 

[robcac26]

By the way, if anyone on here is buying on Coinbase and then transferring to Binance or another exchange, you can get around Coinbase's fees by sending from Coinbase to GDAX and then to the other exchange.

 

[needmorecowbell]

I have been following crypto currencies closely for the past 10 months and the best way to describe this game changing technology is comparing it to the internet and dot com crash of the late 90’s. Many feel Blockchain and crypto currencies will be the greatest disruption since the internet and may in fact help replace the internet. Many of the uses of blockchain and crypto have not even been imagined yet and the technology is only in the infancy stage of development. That being said the speculation has been wild and will correct (yes a bubble). Many crypto currencies will disappear while others will be wildly successful. It has the potential to be one of the most important inventions of our lifetime.

 

[RutgersMO]

I have been following crypto currencies closely for the past 10 months and the best way to describe this game changing technology is comparing it to the internet and dot com crash of the late 90’s. Many feel Blockchain and crypto currencies will be the greatest disruption since the internet and may in fact help replace the internet. Many of the uses of blockchain and crypto have not even been imagined yet and the technology is only in the infancy stage of development. That being said the speculation has been wild and will correct (yes a bubble). Many crypto currencies will disappear while others will be wildly successful. It has the potential to be one of the most important inventions of our lifetime.

Could you please define Blockchain?

What about Iota?

Why do we need all these transcendental mechanisms to transact business?
Don't Gold, Silver and Diamonds have value?

Seriously, what is the purpose of using this technology...to only be replaced by something else...then something else...then something else (e.g. records, 8 track tapes, cassette tapes, CD's, Streaming...how many times can you replace your collection of favorite songs - currencies?).

MO

 

[RUfromSoCal?]

people believed in the investment potential for my small, bean-bagged animals due to the economic logic that allows new creations to assert magical, transcendent qualities that defy all reason, and the fact that the results of such baseless speculation are enhanced when others similarly perceive an object to have inherent value. Or maybe the general public was engaged in groupthink and collective delusion.

 

[RUDead]

Here's a link that will answer ever question you could possibly ever have!

http://www.zerohedge.com/news/2017-12-19/what-hell-it-74-cryptocurrency-questions-answered

 

[RUevolution36]

I have been following crypto currencies closely for the past 10 months and the best way to describe this game changing technology is comparing it to the internet and dot com crash of the late 90’s. Many feel Blockchain and crypto currencies will be the greatest disruption since the internet and may in fact help replace the internet. Many of the uses of blockchain and crypto have not even been imagined yet and the technology is only in the infancy stage of development. That being said the speculation has been wild and will correct (yes a bubble). Many crypto currencies will disappear while others will be wildly successful. It has the potential to be one of the most important inventions of our lifetime.

unless widely available massive improvements to computing power and its resource intensive process are made...like...quantum leaps (pun completely intended)...there is an upper limit on how many real life use cases will implement and benefit from blockchain. the overexuberance of technology folks, as usual, will eventually be tamped down by government regulation. as government, and tax authorities, study the use of blockchain and decide that cryptocurrencies are a threat to sovereignty, there is a greater than zero chance that crypto's get banned (like in china), and gov'ts go to e-currencies built on blockchain. and eventually levy a VAT style transaction tax on every single exchange of money.

 

[Extra Point]

I think it is like the big push to have America replace its measuring system to metric. I don't see people changing their cash and bank accounts with some vague cryptic electronic money system. It seems to me that currently bitcoin is a giant pyramid scheme. The last one out loses everything.

 

[read option]

Here's a link that will answer ever question you could possibly ever have!

http://www.zerohedge.com/news/2017-12-19/what-hell-it-74-cryptocurrency-questions-answered

Read the first 7 or 8 Q&A’s... I wouldn’t invest too much in Bitcoin. How can you when the true value is completely undetermined, the system is completely unregulated, and nothing is tangible? Seems like a scam to me.

 

[RUinOhio]

been waiting for a thread on this here...I put a few bucks into litecoin recently. if I had put $100 in bitcoin back in january it would be worth over $2k right now (but there were many times I probably would have cashed out some if not all of it for fear of crash). figured why not try it now, nothing I can't afford to lose.

 

[RUDead]

Read the first 7 or 8 Q&A’s... I wouldn’t invest too much in Bitcoin. How can you when the true value is completely undetermined, the system is completely unregulated, and nothing is tangible? Seems like a scam to me.

Agree, but you could say that about every Fiat currency. Question is do you trust the US government or a bunch of nameless, faceless programmers running software. Tough question!

I think most people wouldn't trust either one, thus the appeal of Bitcoin.

 

[RU Golfer]

Bitcoin is the most popular because it was the first. There are other Alt Coins out there that have improved upon the block chain technology and are faster and more secure than bitcoin. Another thing to note, over 50+% of bitcoin is controlled by China mining farms, I believe the top 4 or 5 mining farms are based out of china. If they were ever to be shut down Bitcoin would come to a screeching halt for a considerable amount of time. This is based on how the Bitcoin block chain calculates difficulty when mining.

 

[RUBlueLot]

For those claiming it is a scam - How so? Is the technology a scam - is the algorithm a scam? Why is it a scam if willing buyers and willing sellers enter into transactions with one another without a central power broker or government intervention.

For my money I think artificially inflating the money supply and deflating the value of the dollar is a pretty big scam.

 

[RUNVA]

Read the first 7 or 8 Q&A’s... I wouldn’t invest too much in Bitcoin. How can you when the true value is completely undetermined, the system is completely unregulated, and nothing is tangible? Seems like a scam to me.

Think they were just put on CME, should add some reg.

 

[robcac26]

For those claiming it is a scam - How so? Is the technology a scam - is the algorithm a scam? Why is it a scam if willing buyers and willing sellers enter into transactions with one another without a central power broker or government intervention.

For my money I think artificially inflating the money supply and deflating the value of the dollar is a pretty big scam.

Yeah the comments from the critics are often humorous. Is it a bubble? Yeah probably, but that doesn't make it a scam or a pyramid scheme. Anyone who bought in early enough could be a millionaire right now.

 

[RUfromSoCal?]

For those claiming it is a scam - How so? Is the technology a scam - is the algorithm a scam? Why is it a scam if willing buyers and willing sellers enter into transactions with one another without a central power broker or government intervention.

For my money I think artificially inflating the money supply and deflating the value of the dollar is a pretty big scam.

not a scam.

but, ironic that it has become (in many ways) the exact thing it was crated to avoid. instead of being an extra-national means of exchange... it's turned into (mainly) a market-commodity-speculation vehicle.

At some point, governments will step in..... they must.... The ECB and Fed can't let their socioeconomic-geopolitical-control be diminished...

and someday...before then end of this century....quantum computing will destroy the Alt Coin concepts anyway............

 

[RUBlueLot]

I don't know how gov'ts can control it. Nor do a I want them to. These are fantastic hedges against a central banks ability to deflate their fiat currency.

I imagine it will be a big fight - be prepared to have our liberties assaulted.

 

[RUevolution36]

I don't know how gov'ts can control it. Nor do a I want them to. These are fantastic hedges against a central banks ability to deflate their fiat currency.

I imagine it will be a big fight - be prepared to have our liberties assaulted.

easier than you think. since the idea of net neutrality is up for grabs, federal gov't can induce ISP's to either ban the crypto exchange and wallet sites or severely diminsh the sites ability to operate. and, with all the NSA and FBI invasion of privacy, they can simply create a law that bans the use of that currency within the US, and then find all the people who access the banned/diminished sites and arrest/fine them.

 

[RUBlueLot]

We gave up our rights to physical gold because of WW2 - I don't think this will happen to Crypto (unless they do it quickly) without a huge fight.

It's spreading overseas - that's the biggest problem to contain it.

 

[greenknight]

PONZI!!!!!!!!!

 

[RutgersMO]

not a scam.

but, ironic that it has become (in many ways) the exact thing it was crated to avoid. instead of being an extra-national means of exchange... it's turned into (mainly) a market-commodity-speculation vehicle.

At some point, governments will step in..... they must.... The ECB and Fed can't let their socioeconomic-geopolitical-control be diminished...

and someday...before then end of this century....quantum computing will destroy the Alt Coin concepts anyway............

Thanks!

Sounds like Junk Bonds / Derivatives ....all over again.

MO

 

[MorrisAsh]

Crypto currency is the sizzle. Blockchain is the steak. In our lifetime, every single interaction in your life may be on a Blockchain. Go to the doctor: the prescription he wrote will be on a block chain, get pulled over, the ticket goes on a block chain, direct deposit goes into your Blockchain. You entire life history will be on a central database.

If you decide to buy a house, you’ll give the realtor your personal key and you’ll get a mortgage, attorney review and title search and transfer literally in minutes.

Buying a car would take seconds to process.

Hookers and blow purchases would be instantaneous.

 

[RUfromSoCal?]

Crypto currency is the sizzle. Blockchain is the steak. In our lifetime, every single interaction in your life may be on a Blockchain. Go to the doctor: the prescription he wrote will be on a block chain, get pulled over, the ticket goes on a block chain, direct deposit goes into your Blockchain. You entire life history will be on a central database.

If you decide to buy a house, you’ll give the realtor your personal key and you’ll get a mortgage, attorney review and title search and transfer literally in minutes.

Buying a car would take seconds to process.

Hookers and blow purchases would be instantaneous.

you only rent either.................

 

[Upstream]

Agree, but you could say that about every Fiat currency. Question is do you trust the US government or a bunch of nameless, faceless programmers running software. Tough question!

I think most people wouldn't trust either one, thus the appeal of Bitcoin.

I think most people trust the US Government to manage currency. They have a successful track record that is more than 200 years old.

But back to Bitcoin, even assuming the technology is sound and appropriate and transaction costs are reasonable, Bitcoin is proving itself to be a lousy currency.

The hallmark of a good currency is stability, at least over the short-term.

If I put $100 cash currency in my wallet in January, it has approximately the same purchasing power today. I could write a contract with someone to deliver a good or service for $100 in January, and that contract would have approximately the same value today.

But Bitcoin is too variable to be a good currency. As was pointed out earlier in this thread, if I had $100 worth of Bitcoin in January, it is worth over $2000 today. If I wrote a contract to pay someone 1 bitcoin for a good or service in January, I would be overpaying 20-times today.

Even if all the other potential barriers to Bitcoin are solved, without stability, it is a poor currency.

Even though Bitcoin is a poor currency, maybe it is a good investment. I'd argue no. Good investments are things that have some intrinsic value, where the expectation is the value will increase. Currency, by nature, is a poor investment. That is why wise investors don't own a lot of dollars. They may own a lot of things for which they track the value in dollars, but actual cash holdings are typically a small percentage of an investor's holdings, usually just enough to transact business.

Because Bitcoin was designed as a currency, it has no intrinsic value. Like owning a Dollar or Euro, when you own a Bitcoin, you don't actually own anything that has value in and of itself. That makes it a bad investment.

I see the current surge in Bitcoin price as a bubble. Sure, you can make a lot of money by playing the bubble right. But I think the bubble will eventually crash. I certainly wouldn't take the risk of using Bitcoin as an investment to save for retirement.

 

[RUBlueLot]

"I think most people trust the US Government to manage currency. They have a successful track record that is more than 200 years old."

They have a successful track record? I would counter that any success has been in spite of the cartel known as the Federal Reserve.

 

[RUDead]

I


Even though Bitcoin is a poor currency, maybe it is a good investment. I'd argue no. Good investments are things that have some intrinsic value, where the expectation is the value will increase. Currency, by nature, is a poor investment. That is why wise investors don't own a lot of dollars. They may own a lot of things for which they track the value in dollars, but actual cash holdings are typically a small percentage of an investor's holdings, usually just enough to transact business.


.

Upstream,

I see you still have faith in the system! Many others do not, and that is why bitcoin became popular in the first place. Same thing for gold, it has very little value outside of a perceived store of value.

I disagree with one thing you said, if you hold anything tracked in a dollars (or any currency) you own that currency. If you hold financial assets in dollars instead of gold, bitcoin, the euro, etc. you are making a bet on the dollar

 

[Upstream]

I disagree with one thing you said, if you hold anything tracked in a dollars (or any currency) you own that currency. If you hold financial assets in dollars instead of gold, bitcoin, the euro, etc. you are making a bet on the dollar

Not true at all. Although I track the value of my stocks in US Dollars, I could just as easily track the value (and buy/sell) in Euros, or Canadian Dollars, or any other currency I choose. When I own $1000 of IBM, I own a share of IBM, not currency. Do you think people in Toronto or Paris track their stock in US Dollars instead of their local currency.

 

[RUDead]

Not true at all. Although I track the value of my stocks in US Dollars, I could just as easily track the value (and buy/sell) in Euros, or Canadian Dollars, or any other currency I choose. When I own $1000 of IBM, I own a share of IBM, not currency. Do you think people in Toronto or Paris track their stock in US Dollars instead of their local currency.

If the dollar loses all of its value, how much do you think your IBM stock will be worth?

 

[Upstream]

If the dollar loses all of its value, how much do you think your IBM stock will be worth?

Idiotic question. If the dollar loses all its value, it would be because of a complete collapse of the US economy, which would likely be part of a global economic collapse. It is not the dollar devaluation that is the problem here. It is the economic collapse that would cause the devaluation of IBM. Bitcoin would not be spared the consequences of a complete economic collapse.

 

[Scarlet Haze]

Trade bitcoin on CME. It is the Chicago futures market. Contract size is 1 bitcoin, so if bitcoin is $20,000 then 1 contract is $20,000. Margin rate is 47% I believe so you can control 1 contract with $9400. Beware though your gains and losses are more than doubled vs your deposit and this is indeed a crazy market. The reason I would choose this manner of trading is that it is a regulated market and you won't forever lose your bitcoins if they are hacked or if you forget your very lengthy key or password. There is no password recovery or encryption key recovery and it is "hasta la vista" forever for your bitcoins. Many billions have gone forever due to this. If you decide to enter this market, be prepared to lose all of your money if you trade on margin. Further this market could go either way very rapidly so be in a position to afford any loses you could easily have. Do not buy on hope if you cannot afford to take a large hit. That is not investing, that is gambling.

 

[RUhasarrived]

How crazy this is getting:Long Island Iced Tea changed their name to Long Blockchain.The stock is up 500 per cent.

If Tiny Tim were still alive,he'd be tiptoeing through the bitcoins.

 

[robcac26]

Even though Bitcoin is a poor currency, maybe it is a good investment. I'd argue no. Good investments are things that have some intrinsic value, where the expectation is the value will increase. Currency, by nature, is a poor investment. That is why wise investors don't own a lot of dollars. They may own a lot of things for which they track the value in dollars, but actual cash holdings are typically a small percentage of an investor's holdings, usually just enough to transact business.

This is why I have decided to go with two newer cryptocurrencies that aim to be more than just a currency--iota and ripple. Bosch is apparently working with iota to use their technology on their self-driving cars, and banks are getting on board with ripple as a cheaper and faster way to transfer money internationally. When the crypto bubble bursts, I think these two have a better chance of surviving than most of the others.

 

[RUDead]

Idiotic question. If the dollar loses all its value, it would be because of a complete collapse of the US economy, which would likely be part of a global economic collapse. It is not the dollar devaluation that is the problem here. It is the economic collapse that would cause the devaluation of IBM. Bitcoin would not be spared the consequences of a complete economic collapse.

You're missing the point and you don't seem to understand the value of the currency you hold your assets has on its real value. There are lot of reasons that bitcoin might be a bad store of value, but the arguments you make apply to all currencies, whether they are issued by a government or aren't.

You also don't "track" the value. You're IBM shares are held in some currency and you are taking risk in that currency. Unless you hold the physical certificate which I don't think you meant.