Bitcoins

spock007

Anybody buying? I remember I was going to in 2012 and would have made substantial gains since then, but I ended up not buying. Need to read more into it...

[Deleted User]

spock007 wrote: »

Anybody buying? I remember I was going to in 2012 and would have made substantial gains since then, but I ended up not buying. Need to read more into it...

The chances of Bitcoin succeeding is so exceptionally low that looking back on what happened in 2012 and kicking yourself would be a mistake, there was every chance that Bitcoin would be worth pennies right now.

Personally I think Bitcoin has huge potential as a protocol (the underlying technology is really really cool and there's so much that has yet to be made use of) but as a currency the chances of succeeding are so slim they're basically nil...

That said, because Bitcoin has huge potential and could succeed I think the best strategy is fairly simple: buy in with what you can afford to lose, and hold for a couple of years. If Bitcoin does succeed, each coin is going to be worth a lot more than the ~$200 it's been floating around the last few days... try $1,000... $10,000... $100,000. The chances of that are so tiny though that expecting anything other than to lose every penny would be dumb, but for some people it might be a punt worth taking.

The thing to remember is that no matter what, do not put in a single penny that you need, if you can't afford it to be wiped out tomorrow... don't put it into bitcoins. So many people have done that thinking, "these gains are crazy I can't lose" and then they've lost everything. There are people that bought in at $260 and sold at $80 in April of this year.

You can buy as little as you like on exchanges (there's no central authority, you buy from people that have mined them) they do not need to bought in whole coins, BTC is divisible down to 8 decimal places. You can spend £5 on 0.04651BTC if you like.

grifferz

Some would argue that the conditions for bitcoin to be considered a success are ones in which you can actually buy real things with them at a large number of conventional places, not that they are simply worth a lot more than when you bought them.

Though I note you can spend them at a few pubs now.

http://www.theguardian.com/technology/shortcuts/2013/jun/23/britains-first-bitcoin-pub
http://www.theregister.co.uk/2013/09/16/australian_pub_to_serve_beers_for_bitcoin/

[Deleted User]

grifferz wrote: »

Some would argue that the conditions for bitcoin to be considered a success are ones in which you can actually buy real things with them at a large number of conventional places, not that they are simply worth a lot more than when you bought them.

Absolutely. However if Bitcoin becomes successful as a currency that will mean it is supported by the majority of retailers. If the majority of retailers support it (and there is a banking layer on top of the protocol for "regular" consumers) the demand for Bitcoins will be very high: people will want them. There is a small and finite number of Bitcoins that can ever be available, therefore value will rise.

I think the chances of this happening (bitcoin becoming a successful currency, which is what is needed for it to then become highly valuable) are practically nil, but there is a chance.

dryhat

The underlying technology of Bitcoin allows for so much more than just a payment system.

vectistim

How practical is the current set up?
AIUI there's some great big file of a couple of gig that seems to record the entire history of the thing that everyone carries around in their virtual wallets.
If you had millions of transactions per day how long would you be kept waiting all over the place whilst it updates your record?

Linton

citricsquid wrote: »

Absolutely. However if Bitcoin becomes successful as a currency that will mean it is supported by the majority of retailers. If the majority of retailers support it (and there is a banking layer on top of the protocol for "regular" consumers) the demand for Bitcoins will be very high: people will want them. There is a small and finite number of Bitcoins that can ever be available, therefore value will rise.

I think the chances of this happening (bitcoin becoming a successful currency, which is what is needed for it to then become highly valuable) are practically nil, but there is a chance.

But under those circumstances, why would the people holding Bitcoin waste them as currency? Better to use those nasty inflating fiat currencies to buy the groceries and let one's hoard of Bitcoins get more and more valuable.

What you are suggesting may happen is deflation in spades. This is disastrous for investment. Why would anyone go to the effort of investing in new products/ improved processes/ new infrastructure/ research etc when all they need do is relax in the garden and watch their bitcoins become more valuable?

Bitcoin world sounds like a disaster.

dryhat

vectistim wrote: »

How practical is the current set up?
AIUI there's some great big file of a couple of gig that seems to record the entire history of the thing that everyone carries around in their virtual wallets.
If you had millions of transactions per day how long would you be kept waiting all over the place whilst it updates your record?

That problem was anticipated by "Satoshi" when he invented Bitcoin and solutions are built into the protocol.

"lightweight" or "thin" wallets already exist (like a mobile phone wallet for example) and these do not need to download the whole blockchain (transaction record)

[Deleted User]

dryhat wrote: »

The underlying technology of Bitcoin allows for so much more than just a payment system.

Yes, exactly this. Anyone looking at Bitcoin and not looking at the protocol and what Bitcoin has proven is really missing out.

vectistim wrote: »

How practical is the current set up?

As dryhat said, there's clients for that use case: http://electrum.org/

Linton wrote: »

But under those circumstances, why would the people holding Bitcoin waste them as currency? Better to use those nasty inflating fiat currencies to buy the groceries and let one's hoard of Bitcoins get more and more valuable.

The only reason growth is so crazy at the moment is because it's based only on potential and not Bitcoin being a "real" currency. If Bitcoin becomes viable as a real currency, once people can use it as a currency, the pricing will act like a real currency.

The behaviour of the price right now is not something you should consider as meaningful in the long term of Bitcoin, the price right now is totally disconnected from the real "value" if Bitcoin becomes a currency.

IronWolf

I think it would be quite interesting to debate Bitcoin vs Gold.

There is something a bit uncertain about having your wealth stored as some electronic signatures which makes me prefer gold. Not that I invest in either