Bitcoins

sabretoothtigger

I dont think its currency yet, its a conduit between two points and maybe its doing this just great.

Its got no nationality which might be fine but also no independent worth to itself.
Bitcoin has no competition yet so maybe it is truly unique, timeless and elemental to our future economy but yep I do doubt that and its longevity

currency 1.0

I dont hold it. Some people have no choice primarily because of the demands made upon them by various parties. Nobody is demanding a hashcode, it is transitional and speculative.
Maybe it'll metamorphosise into something more

waiax73

notatroll wrote: »

Hi,


I like the idea and thought of buying 500-1k coins (mostly for excitement).


With prices as low as they are now and use picking up (in the US at least) plus all media attention – what is your opinion?


I’m not asking bubble-wise but if it has any settled future as intended, taking into account anonymity, total/trading volumes, current holdings, criminal use, etc.

TIA.

wouldn't even consider it. I reckon there are thousands of hackers working on different ways of stealing gazilions of them...No thank you, not for me

[Deleted User]

Paypal president mentioned BTC earlier, now it's on the up up up. $165 on mtgox right now, I guess it will hit $200 by tomorrow night.

merlingrey

Fact remains that half of the bit coins are in the hands of the creators, and we do not know who they he/she is.


Bernie madoff had to cover his tracks but he was easier to catch since he had a real name.
These people when they decide to cash out and take your money there will be no compensation or justice for your loss.

JohnRo

Hysterical nonsense, like all your other posts on bitcoin.

merlingrey

JohnRo wrote: »

Hysterical nonsense, like all your other posts on bitcoin.

Good, well you keep piling money in bitsh!t then.

It has had flash crashes and i suspect the creators sell the market and then buy back, it's pump and dump, pump and dump over and over. They have nothing to lose and everything to gain.

The only losers are the people who fall for this !!!! over and over again.

It's all too easy for anonymous interests who hold most of the capital to do this, hardly nonsense since it is unregulated.

On real markets your name will be known, you will be identified when you sell a large stake, those are the rules, this is without rules so anything goes.

Human nature, if the risk of being caught out is small enough vs the gain then they will do it.

grifferz

waiax73 wrote: »

wouldn't even consider it. I reckon there are thousands of hackers working on different ways of stealing gazilions of them...No thank you, not for me

So if you had bought £500 worth when they were about £2.50 each (times in 2010, 2011) and then sold them last week when they were going for around £180 each, you would have made about £35,000.

In that span of time, quite a few bitcoin web sites got compromised, so if you had left your bitcoins sitting around in a wallet on one of those instead of in a wallet safe on your own computer, then yes you may have lost your entire £500 stake.

Your other risk would be that something happens to completely wipe out the value of bitcoin. Say, various governments crack down on it, make it illegal to convert to fiat currency. There is some doubt over whether that could feasibly be done, but let's say that happens and it wipes out the value of bitcoin to zero.

Or, a very clever person or persons finds some flaw in bitcoin and that either wipes out its value or else enables them to steal everyone's bitcoins (which achieves the same result).

Those outcomes also would have resulted in you losing your entire £500 stake.

So.. while you may reasonably say that you don't understand the risks so won't speculate, you can see why there are plenty of people who are willing to. They believe they understand the risk/reward ratio. I can't really think of any other risks that are worse than losing your entire stake, can you?

FWIW I've never been brave enough to buy more than £150 worth of bitcoins, but I can certainly see why people have been willing to risk larger sums.

grey_gym_sock

merlingrey wrote: »

It has had flash crashes and i suspect the creators sell the market and then buy back, it's pump and dump, pump and dump over and over. They have nothing to lose and everything to gain.

you're just making stuff up.

if you don't know who the creators are, then how do you what they're doing, what their motivations are, or whether they have anything to lose?

why do you think the creators control bitcoin? they don't.

there is no need to imagine a scam, or speculate about "bad guys". it would suffice to warn ppl that it's dangerous in speculate in bitcoins.

it's a pity that a combination of speculation and scare-mongering are distracting from the positive uses that some form of digital currency could have.

On real markets your name will be known, you will be identified when you sell a large stake, those are the rules, this is without rules so anything goes.

enforcement of the rules is very weak in "regulated" markets, too, and ppl would be unwise to rely on it.

grifferz

grey_gym_sock wrote: »

why do you think the creators control bitcoin? they don't.

Bitcoin seems to attract many conspiracy theories and conspiracy theorists.

There are some interesting control issues around bitcoin though.

Firstly, there is some evidence that some entity, which likely to be the creator of bitcoin, has a massive stockpile of at least 1 million BTC that they have never sold:

https://bitslog.wordpress.com/2013/04/17/the-well-deserved-fortune-of-satoshi-nakamoto/

Since the bitcoin economy is so small, someone with 1M BTC (that's almost 1/20th of the amount of the currency that can ever exist!) can really skew the prices if they like. They can crash it at any time by dumping even a fraction of this.

Secondly, bitcoin is a distributed network that requires (some) participants to attempt to solve sums ("mine"). I will attempt to explain using fairly simple terms so please forgive me if you feel like I am teaching grandma to suck eggs:

Most participants don't mine, because it requires so much CPU power (thus electricity) that it's not cost effective to do it. But some participants do need to mine because it's only by continually solving the sums and growing the block chain that the record of actual transactions is authenticated.

In the early days people were mining with their normal computers, because it was still easy enough to be worth it. Then they had to switch to mining on the GPU processors on their graphics cards as these are a lot faster than regular CPUs for certain tasks (normally they're doing the maths for displaying stuff on your screen, but they can be re-purposed for other kinds of maths like this).

After a while even mining on a GPU or two got too hard, so people started to band together into mining pools. Why pool instead of mining individually? Well, you have to do a bunch of sums and eventually you will successfully solve a block ("mine a coin"). Doing that will take a long time no matter how fast your hardware is, but when you do you'll receive a reward of a certain number of BTC. But if some other individual solves the same block that you've been working on, they get the whole reward and you get nothing. Your work to date on that block was wasted.

Mining pools provide a better individual return because it is the pool that solves the block, mines the coin, gets the reward, using the combined power of all miners in the pool. It then splits out the reward (possibly minus some fees) to every miner. Thus, everyone gets something, instead of just the one lucky miner.

The possible issue comes to light when you realise that the security of the bitcoin architecture is reliant on no one entity having more than 50% of the total computing power of the entire network. Before mining pools that was a pretty safe assumption. Now, it's not so much:

http://blockchain.info/pools

One mining pool, "BTC Guild", currently has 39% of the total hash rate.

That's a little worrying as it is, since all they need to do is entice 11% of total miners from the other pools to theirs in order to have more than 50%.

But, bitcoin mining tech has just hit a step-change:

http://codinginmysleep.com/bfl-jalapeno-unboxing-and-demo/

This company is now shipping the pre-orders it took of their custom mining hardware, and indications are that it's at least twice as efficient (Watts per hash solved per second) than any of their competitors. They say they have had enough pre-orders to ship 400 units a day until the end of June. That means that a bunch of serious miners are going to rapidly hike up their hash rates soon. The 11% safety margin doesn't look that safe to me.

So why is it a big deal when someone has >50% of the network hashrate? As far as I understand, the immutable history of trades that is the block chain is formed by solving the blocks, and all the bitcoin software on our computers treats the longest block chain as the one that reflects reality. So, logically, if there is (everyone in the world) putting 49% of their power to build one block chain and then (evil guy) putting 51% to build their own, evil block chain that says some transactions have been done that in reality haven't, (evil guy) is going to win. (Evil guy) can write bitcoin history.

(Evil guy) can be anyone, even a mining pool, and the mining pool can be anyone.. even a government.

You don't really get any of this with boring old sterling do you!?

Finally, again the bitcoin economy is so small that even a small amount of hype or scaremongering can make it soar or crash. It's not hard to imagine that it would be pretty easy to co-ordinate something like that. Something like this:

pastebin dot com/raw.php?i=xetDcCfG

(AFAIK that one was either unsuccessful or a joke!)

grey_gym_sock wrote: »

it's a pity that a combination of speculation and scare-mongering are distracting from the positive uses that some form of digital currency could have.

I think a lot of bitcoin enthusiasts (as opposed to people just speculating to make a profit) would like to see it stabilise even at a low value, so that people can get on with just using it to buy goods and services.

At the moment even if you do acquire some BTC from selling something, it can be hard to consider spending it again because if you've been paying attention you've seen the price go up by 10, 50 or 100 times. So people hoard.

I think I started paying attention when bitcoin was worth about $0.15 and I remember when there was a fairly long stretch of time when it was just hovering around $3 to $4; lots of people were happy to see that. But then the huge growth, crash, growth again.

merlingrey

Scare-mongering?

The scare-mongering exists because everything finance related requires a cynic, that's the world we live in .

We don't live in the fairy land of fluffy pink balloons and unicorns you obviously live in.

The real world is full of fraudsters and scammers and everybody out to take your hard earned cash. If something looks to be dodgy or too good to be true then it invariably is .
A clever fraud is still a fraud no matter the ingenuity/effort behind it or timescale OR even if some people gain from their "speculation".


I took facts as facts are known and used inductive reasoning, it started with 5 million coins and publicly people point to these being owned by the creators, if they want to make money they have to sell right?

They are anonymous and there is no regulation so you can guess the rest and the market trading cycles, it's not making things up.

Is it an accusation? yes damn right!

Is it it cynical? you bet