BITCOIN

BananaRepublic

Bitcoin is gambling. It has no intrinsic value and noone knows what it will do tomorrow, or next year. As far as I can see it is supported by a large group of speculators who use it as an investment rather than a means to buy goods. Doubtless there are also some criminals who like the anonymous nature of Bitcoin, but they are not the core Bitcoin owners.

On a related but important issue, Bitcoin has two severe flaws. The first is that mining, or the creation of new currency, consumes massive amounts of energy. The second is that because it uses a distributed leger, a transaction, or the buying and selling of Bitcoin, consumes huge amounts of energy. Basically it is totally impractical for real world use, and is an ecological disaster. So, if you want to become rich, or poor, and at the same time screw the planet, go ahead and invest gamble. See here for details:

https://www.bbc.co.uk/news/technology-48853230

Reaper

BananaRepublic said:

The first is that mining, or the creation of new currency, consumes massive amounts of energy.

To be fair that is starting to change. Etherium is in the process of stopping miners using any energy at all. To get technical its a switch from "Proof of Work" to "Proof of Stake". It's a big change though so will take a while.

Reaper

Another_Saver said:

Bitcoin "brokers" come and go all the time and when not if the broker you choose goes under, you're unlikely to have any recourse to recover your bitcoins.

Honestly I'm not a crypto fan boy, I'm just responding to these posts in the interests of balance...!

Leaving your bitcoins or cash with a platform long term is a bad idea. As you point out there have been some high profile hacks and scams which meant those who were using them lost their money. However there is a simple solution. As soon as you have bought your coins you take them off the platform and store them on your own PC at home in a "wallet" (I use Exodus). When you want to sell them again you send them back to the platform to do the trade, then withdraw the cash.

By the way I notice Bowlhead saying he used Bitstamp. I use them too. When I started they were a pain because in common with other platforms they didn't operate in sterling. But now you can send GBP straight to them, buy/sell coins priced in sterling, and withdraw the cash using Faster Payments. There are probably cheaper options but I was pleasantly surprised how easy it is to trade now.

BananaRepublic

Reaper said:

BananaRepublic said:

The first is that mining, or the creation of new currency, consumes massive amounts of energy.

To be fair that is starting to change. Etherium is in the process of stopping miners using any energy at all. To get technical its a switch from "Proof of Work" to "Proof of Stake". It's a big change though so will take a while.

Etherium is not Bitcoin.

EdGasketTheSecond

If you store on your PC at home, what happens if your hard-drive fails? Genuine question, I am not up to speed with 'digital wallets'.

Grenage

EdGasketTheSecond said:

If you store on your PC at home, what happens if your hard-drive fails? Genuine question, I am not up to speed with 'digital wallets'.

You can use a USB wallet or a paper wallet (all the info printed on a page).

I have a friend who bought quite a few bitcoins when they were $200 - he's done quite well.  I had an old PC with a good few hundred on it about a decade ago - now somewhere in a landfill.

I understand and appreciate the concept, but it's far too risky a punt for me.  I might as well go into a casino and put all of my money on black.  I have no reason to believe it will succeed (and maintain value) rather than just dwindle and disappear.

Malthusian

EdGasketTheSecond said:

If you store on your PC at home, what happens if your hard-drive fails? Genuine question, I am not up to speed with 'digital wallets'.

If the hard drive was the only place you kept your private key, then it's bye-bye Bitcoins. (Assuming that by "fails" you mean the key was totally irretrievable; if your hard drive had simply stopped working, an IT shop would have a good chance of retrieving the data.)

But on the plus side, no-one else ever gets to spend your money either. (Well, the guy who sold you his Bitcoins does, but best not to think about that kind of thing if you want to get rich quick from zero sum games.) Thanks to Bitcoin your money is finally 100% secure, even from you.

They would join a gigantic pile of Bitcoins that can never be spent, like Grenage's million-pound fortune in lost Bitcoins. Along with billions of dollars' worth owned by Bitcoin's mysterious inventor Satoshi Nakamoto; it is interesting to note that if he/she ever returned and revealed that they still had the private keys to all their Bitcoins, the price would collapse. It would be the equivalent of finding 10,000 tons of hitherto unknown gold under a tarpaulin in somebody's shed and dumping it all on the market at once.

Reaper

EdGasketTheSecond said:

If you store on your PC at home, what happens if your hard-drive fails? Genuine question, I am not up to speed with 'digital wallets'.

Funnily enough that happened to me. I had a hard drive crash and my main backup company (Zoolz) recently dumped all their private customers and I hadn't replaced them so didn't I have proper backups. Fortunately the wallet I was using features an alphanumeric "key". I wrote that down on paper. After restoring your hard drive you type in the key and it reconstructs your wallet. You do, of course, have to store that piece of paper very carefully as it not only allows you to recover your coins but means anyone else who gets hold of it could reconstruct your wallet on their own PC and then move all the coins out!

EdGasketTheSecond

Sounds too easy to lose a lot of money either by some mishap, dodgy platform, or just plain volatility.

onthebench

EdGasketTheSecond said:

If you store on your PC at home, what happens if your hard-drive fails? Genuine question, I am not up to speed with 'digital wallets'.

The wallet is not saved on your PC, as such. As long as you have the "seed phrase" which is 12 (or 24) random words, you can regenerate your wallet anywhere you like and access the funds. So what is important is storing that phrase somewhere safe, and ideally memorising it too.