Planning for worldwide disaster? Bit coin, etc.?

ruperts

If it gets to the point where existing currencies collapse then tangible, useful items like food and medicine will have the highest value and if it gets to the point where those items are in short supply then the ability to protect and grow your own stash is going to be the most valuable thing you own. Realistically that means weapons and ammunition become by far the most valuable items in a full on doomsday scenario. In a more moderate currency collapse scenario the army would more than likely take over in this country and we'd have rations of energy, communications and food. In that scenario I think luxury items like alcohol, sugar and cigarettes would hold very high bartering value.

Bajjo

Linton wrote: »

Between December 2013 and April 2015 the price of Bitcoin in £ dropped by 75% - note that a drop of 75% requires a rise of 300% to return to the original value. What evidence have you that such a drop wont happen again? Doesnt look like a good way to safely store wealth.

Linton, you're spot on it did fall from ~£750 to ~£150 in that period.

Today it's £1,034 and you're right to be sceptical about the possibility of it happening again because it absolutely could happen again. That said, there is something different about this rally and I'll do my best to explain.

Nov 2013 - Jan 2014 was the mania-phase for bitcoin, money from venture capitalist was pouring in, bitcoin hit a major wave of media attention and FOMO (fear of missing out) kicked in. We hit our first mainstream bubble, every Joe and his dog thought they'd found a get rich quick ticket, sorry that's not how life works!

The problem was that Bitcoin was still nascent, the potential was clear and that was driving the run up but what was overlooked is that it takes time, the venture capital takes time to build the companies, the infastructure and write the underlying code.

It didn't help that the biggest exchange at the time, Mt. Gox, was running trading bots, manipulating the price and opperating despite being insolvent. Anyway, Mt. Gox duely went bankcrupt in Feb 2014 taking with it 850,000 bitcoins and popping the bubble.

We were also in the first half of a 9% inflationary period (2012-2016) where the rate of issue was 3,600 bitcoins per day. After the bubble popped the price stabalised in the £300-£400 range and we had a slow bleed down to £150 over 16 months because of this.

People (and companies) in the mania phase had invested in mining equipment and once the bubble popped suddenly their margins are a lot smaller and they are forced to sell more of the coins they mine to cover costs. So we had a large portion of the mined 3,600 bitcoins per day being dumped on the market and coupled with the lack of trust from would be buyers due to various hacks and exchanges going bust there were not enough buyers to maintain a price in that range, hence the slow bleed downward trend in price.

Fast forward to now and we are in a lower issuance rate of 1,800 bitcoins a day (an annual inflation rate of 4.5%). We have half a dozen world class exchanges. We have a plethora of advanced user wallets and mobile wallets. Companies producing superb unhackable hardware wallets. Over 100 of the best coders maintaining the project. Use cases (e.g. Purse.io save money on Amazon using bitcoin). A potential ETF around the corner.

Bitcoin also has a scaling roadmap... there are some disputes in the community about this, specifically how to scale... which is not great as it's hindering progress but I have faith Bitcoin will get through it.

Basically, bitcoin is a censor resistant, decentalised, peer-to-peer medium of exchange. A powerful invention, it'll be around for a while, growing and improving.

Sorry if I butchered this explanation.

tldr;
Bubble, insecure eco-system, triggered lack of faith. Fundamentals not there, bitcoin was not ready.
16 months, recoup, rebuild, bitcoin came back stronger with the infastructure in place. Ready to go.
we're here to take over.

Shashy

Bajjo wrote: »

tldr;
Bubble, insecure eco-system, triggered lack of faith. Fundamentals not there, bitcoin was not ready.
16 months, recoup, rebuild, bitcoin came back stronger with the infastructure in place. Ready to go.
we're here to take over.

Why do you keep using the word "we" ?

Thanks

Bajjo

Shashy wrote: »

Why do you keep using the word "we" ?

Thanks

I am using we to denote people in general.

JohnRo

Tulip bulbs

jimjames

Bajjo wrote: »

Linton, you're spot on it did fall from ~£750 to ~£150 in that period.

Today it's £1,034

What use is something as a currency that drops and leaps like that? You might as well own Zimbabwe dollars if they still existed. The whole idea of a currency is store of value, something that you have no idea of value from one day to the next is useless in that regard.

Bajjo

jimjames wrote: »

What use is something as a currency that drops and leaps like that? You might as well own Zimbabwe dollars if they still existed. The whole idea of a currency is store of value, something that you have no idea of value from one day to the next is useless in that regard.

Almost like Zimbabwe dollars but actually the opposite. Zimbabwe dollars are inflationary to the extreme, as soon as you have them you need to spend them before they lose their value.

Bitcoin is deflationary, only 21 million bitcoins will ever exist and if you look at countries suffering hyper-inflation, e.g., Venezuela, they have some of the strongest bitcoin adpotion rates.

Bitcoin's volatility levels are actually quite low and the trend has been towards lower volatility since 2014, with an underlying trend in price upwards. That's called growth. Here's a graph of 60-day Bitcoin/US Dollar volatility:



Bitcoin was the world's best performing currency in 2010, 2011, 2012, 2013, 2015 and 2016. Also the best performing so far in 2017. But yeah, it's too volatile. At this point in time anyone that bought bitcoins, at any time in the past, has bitcoins that are worth more than when they bought them. Pretty good store of value if you ask me.

I'll take bitcoin, you store your value in inflationary fiat currency. FYI the pound lost ~17% to the US dollar last year and 10% to the Euro. Not to mention the 2% lost to inflation.

Here's a 2017 Bitcoin for Beginners video by Andreas Antonopoulos: https://www.youtube.com/watch?v=UlKZ83REIkA

Lots of Bitcoin scepticism here which is smart, be sceptical but don't be afraid of new technology, do your due diligence and if what you find still seems dodgy then by all means ignore it.

P.S. Hi JohnRo, still hating on bitcoin eh? :rotfl:

masonic

Bajjo wrote: »

At this point in time anyone that bought bitcoins, at any time in the past, has bitcoins that are worth more than when they bought them.

The same was true of gold in mid-2011. In hindsight, that was not a good time to buy into gold.

vigman

masonic wrote: »

The same was true of gold in mid-2011. In hindsight, that was not a good time to buy into gold.

I've done well with gold over the last few years jumping in and out. Bought Krugerrand for £450 and sold for £1100. Also bought gold scrap and items at an average of £7 per gram for 9ct and sold at over £12. Waited until it went back to £8 gram 9 ct and now selling at £12

I'm a realist but not a Luddite on Bitcoin. From £150 to £1200 seems OK to me and using something like Coinbase allows for fast transfer out. It's high risk but I think it should not be written off as a potential investment. Indian analysts reckon a rough ride is due for 2017 but generally agree it will be about £2000 a Bitcoin by Dec 2017

Quite surprised at the animosity against it here. I've lost more in stocks and shares which seemed good at the time eg original Bank of Scotland shares and Amstrad which cost me my total investment

Vigman

JohnRo

The animosity is a bit of a curiosity. The so called mainstream media have played their part with all the initial ignorance and hysterics about criminals, drugs, etc., once it established itself and started to become a valuable resource with huge potential, all the usual thrill buttons the herd enjoy having pushed.

Whilst conveniently ignoring fiat as the criminals number one preferred choice.

It's still very early stages of adoption and very high risk as an investment. That's not saying the concept is flawed but the challenge will come if it starts being something more than just a bit of a curiosity and starts to establish a mainstream user base. The money printing masters of the universe might have a little more to say about it's future if it starts to threaten their nice little earner.