I’ve invested in Bitcoin – it’s been a...

124

Comments

  • Aegis
    Aegis Posts: 5,688
    Name Dropper First Post First Anniversary
    Forumite
    edited 10 May 2018 at 2:29PM
    Those cynical of Bitcoin and digital currencies really need to have a long hard look at the fiat currency they're using.


    Go in to your purse or wallet and grab a note.... any note.. on it will be "promises to pay the bearer on demand"


    All these notes are just promissory notes/ IOU's


    What are the notes promising? They are promising that you can take them along to the bank and get your gold and silver back in exchange for them.

    Where does it say anything about gold or silver on the notes? If you take in your £5 note you can get five £1 coins. Promise upheld!

    Currency doesn't need to be convertible into commodities for it to be useful - instead it's a store of value because debts are recorded in the currency, and good can be directly purchased in the currency, so you have a degree of value stickiness.

    Can you actually do that? No, governments abolished the gold standard so you can't do that anymore.

    Why? Because the banks don't have any/ or enough gold


    Where did all the original gold go? Who knows


    So what backs the value of the paper? The government classing it as "legal tender" and a public belief that it has value.

    Does that not leave it very open to manipulation, miscalculation, fraud etc? Yes

    Go have a look in to the above/ validate

    Have a look in to how cryptocurrency

    Honestly... fiat currency that we use today far far more silly than cryptocurrency.
    Based on the above, the rest of this is just irrelevant. A fiat currency makes a lot of sense because it allows more fine control of money supply and demand pressures, which can increase the velocity of currency in a given economy, which can stimulate various parts of said economy. For example, there was a lot of quantitative easing (money printing) over the past 10 years to help stimulate the economy following the financial crisis. This would have been impossible under a commodity standard because the amount of currency in circulation is strictly limited by the amount of gold to hand.

    We're lucky to no longer be on the gold standard, but the good news is that there is nothing stopping you from still owning gold if you genuinely think that's in your best interests.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • markj113
    markj113 Posts: 256
    First Post First Anniversary
    Forumite
    edited 10 May 2018 at 3:04PM
    Aegis wrote: »
    For example, there was a lot of quantitative easing (money printing) over the past 10 years to help stimulate the economy following the financial crisis. This would have been impossible under a commodity standard because the amount of currency in circulation is strictly limited by the amount of gold to hand.

    We're lucky to no longer be on the gold standard, but the good news is that there is nothing stopping you from still owning gold if you genuinely think that's in your best interests.


    If we were still on a gold linked money standard perhaps the financial crisis would not have occurred in the first place.

    Endless bailouts and QE just encourages financial recklessness in the banking industry. 10 years on and now Deutsche Bank is the next on the brink.
  • Aegis
    Aegis Posts: 5,688
    Name Dropper First Post First Anniversary
    Forumite
    markj113 wrote: »
    If we were still on a gold linked money standard perhaps the financial crisis would not have occurred in the first place.

    Endless bailouts and QE just encourages financial recklessness in the banking industry. 10 years on and now Deutsche Bank is the next on the brink.
    It's very unlikely to have helped. The Great Depression happened under the gold standard, and that's the worst fallout from an economic crash in over a century. There are actually papers on the subject of whether a fiat currency could have led to a faster recovery, with the general conclusion that it actually would have done.

    I've never personally understood the hatred I sometimes see for the fiat system. Ultimately it works.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • markj113
    markj113 Posts: 256
    First Post First Anniversary
    Forumite
    If the fiat system works then why are interest rates where they are, global debt at levels never seen in human history and the printing presses running at full steam to prop up the artificially inflated markets and housing.

    The current state is not sustainable and it will all end badly sooner rather than later.
  • chucknorris
    chucknorris Posts: 10,785
    Name Dropper First Post First Anniversary
    Forumite
    I don't understand why you no-coiners are so argumentative when it comes to crypto currencies.

    This is a new opportunity for everyone. Wouldn't you have loved to have invested in Apple or Google or Amazon back when they were just starting out? This is just that! This is the new internet, these are the new Apple, the new Google, the new Amazon.

    Years ago, you couldn't give away stock in Google because people didn't understand! It wasn't something you could touch, it was an algorithm and people couldn't wrap their heads around it.

    You owe it to yourself to understand, you will be left behind and you will regret it.

    It would be a huge gamble, I already have just about more than I can spend, so there would be no upside, with a huge downside. So there isn't any sense in me taking on the risk of bitcoin.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    Those cynical of Bitcoin and digital currencies really need to have a long hard look at the fiat currency they're using.


    Go in to your purse or wallet and grab a note.... any note.. on it will be "promises to pay the bearer on demand"


    All these notes are just promissory notes/ IOU's

    And so they were when we were on the gold standard. :doh:
    What are the notes promising? They are promising that you can take them along to the bank and get your gold and silver back in exchange for them.

    Oh dear, more uninformed opinion from the acolytes of crypto-currency.
    Can you actually do that? No, governments abolished the gold standard so you can't do that anymore.

    Why? Because the banks don't have any/ or enough gold

    No, that wasn't the reason that currencies were taken off the gold standard. The finite nature of gold was a significant problem anda disparity grew between economic growth and the supply of gold, particularly at a global level, with large economies, e.g. UK and USA holding massive gold stockpiles in reserve.The First World War further demonstrated the problems of the gold standard as government expenditure rose based on indebtedness, thus the value of currencies declined (inflation). It became evident that the gold standard was not all it had been cracked up to be.The reality was, thaft after the war, pounds sterling and US dollars became global reserve currencies, and thus even more of the gold reserves became concentrated in the hands of these major world economies. In an attempt to stop people converting cash to gold following the 1929 Wall Street Crash, a number of countries increased interest rates to encourage investors to keep their currency holdings, rather than exchange for gold and depelete reserves. The Second World War siilarly damaged confidence in gold as a suitable basis for currency, and Bretton-Woods sought to remedy the situation by basing the value of national currencies in relation to the dollar, which was, in turn, convertible to gold. The truth is that a fiat currency allows for greater flexibility in the money supply, while the gold standard undermines countries' ability to use monetary policy.

    But, hey, why let facts get in the way of comments about crypto-currency?!?

    Where did all the original gold go? Who knows

    Um, lots of of people do, but apparently not you. Many sovereign governments hold gold reserves, but the historic stockpiles of the leading economic powers of the ninenteenth century still remain, while the USA cornered the market in gold during the 1930s.
    So what backs the value of the paper? The government classing it as "legal tender" and a public belief that it has value.

    The first thing that you have got correct! That isn't a problem, however, it is entirely sensible for a currency to be based on a fiat and common acceptance. Indeed, that is the very benefit of a monetised economy, I can take my pound and radily give it to someone else in exchange for goods, and they can then take that pound and do likewise.

    You don't seem to understand how a currency works in general terms, so I worry about your understanding of crypto-currencies.
    Does that not leave it very open to manipulation, miscalculation, fraud etc? Yes

    No.
    Go have a look in to the above/ validate

    Have a look in to how cryptocurrency

    Honestly... fiat currency that we use today far far more silly than cryptocurrency.

    No, it really isn't, as anyone who has ever studied (and understood) economics will confirm.
  • Hutch143
    Hutch143 Posts: 4 Newbie
    edited 10 May 2018 at 7:41PM
    Yes its a gamble as are most things in life , I have 10k invested (gambled) in crypto I have already gained 5K profit and pulled that out , the markets dip and peek just like the stock exchange , its your choice to buy or sell as u see it .
    I can advise that you research whatever coin you fancy , I buy what I think will benefit the world the internet , theres a lot of crap out there , and beware giveaways they can be fake .

    I have invested in TRON and IOTA , My opinion on IOTA is the future is IOTA , the future when machines talk to eachother (no not like Terminator) when your car tell your house that you are on your way home and the heating comes on , and you house knows the outside temp and inside temp and the heating adjusts to your preferred heat . Bosh VW FUjitsu and many others investing in IOTA .

    Its a gamble thats for sure .

    DON'T PUT IN WHAT YOU CAN'T AFFORD TO LOSE ,,,,,,,
    Paul H:T
  • msallen
    msallen Posts: 1,494
    First Anniversary Name Dropper First Post
    Forumite
    How about you share your extensive knowledge of the subject with us? Then we can point out just how little you really know.

    In order to point out that the emperor has no clothes I don't need to go into detail about the fine weaving of the non-existent fabric or the vibrant hue of its dye.
  • bowlhead99
    bowlhead99 Posts: 12,295
    Name Dropper First Post First Anniversary Post of the Month
    Forumite
    Hutch143 wrote: »
    Yes its a gamble as are most things in life , I have 10k invested (gambled) in crypto I have already gained 5K profit and pulled that out.
    Clearly you are a newbie. If you had gambled in the early days your ten cents in bitcoin would have been worth ten to twenty thousand dollars: a hundred thousand percent return. Coming late to the party and acting like you've just discovered the holy grail with your fifty perfect return isn't impressing anyone.

    In the context of such returns (the fractions of bitcoins I have left were mostly bought pretty late, in the $300 range, then split into BTC and BTH, with the BTCs alone getting up to the $20k range last year and currently back down to only 3000% profit).... what kind of fool gloats on a forum that he made 50% profit and then pulled it out - of something that he claims is the future...
    My opinion on IOTA is the future is IOTA , the future when machines talk to eachother (no not like Terminator) when your car tell your house that you are on your way home and the heating comes on
    If you were enough of a grown-up to have your own house you would know there are any number of apps that perform a similar function. British Gas, one of the oldest and most boring-sounding utility companies, had their Hive website/app back in 2013. Were you in long trousers by then? If I'm heading home, I don't need my car to guess that I'm going home; it takes only a few seconds for me to click to say I want the heating on when I get there. I can do that - perhaps while taking a dump on company time - before leaving the office. Quite efficient.
    and you house knows the outside temp and inside temp and the heating adjusts to your preferred heat
    I'm only 40ish so a youngster compared to many here. And not from a particularly wealthy family. Still, I've lived in a house with central heating and a "thermostat" function for as long as I can remember because systems that could measure the temperature and moderate heat output were commonplace by the mid to late 70s.

    Are you suggesting that a virtual coin called "IOTA" is somehow enabling the inventions in home automation that have already been created? Or that innovation in home technology wouldn't happen without the coin? Or is it a special coin that has more value when my car speaks to my heating and less when it doesn't? Doesn't really seem a compelling reason to invest. I mean, gamble.
    DON'T PUT IN WHAT YOU CAN'T AFFORD TO LOSE ,,,,,,,
    Paul H:T
    Thank you for the advice, but that's common knowledge and many will routinely apply it to a range of investments, speculative scenarios and risky japes. It works for cryptocurrency, Ponzi schemes and dipping your wick while on a business trip near Mong Kok.
  • grey_gym_sock
    grey_gym_sock Posts: 4,508 Forumite
    edited 10 May 2018 at 10:03PM
    markj113 wrote: »
    If the fiat system works then why are interest rates where they are, global debt at levels never seen in human history and the printing presses running at full steam to prop up the artificially inflated markets and housing.

    The current state is not sustainable and it will all end badly sooner rather than later.

    you're conflating the fiat money system with global debt. not the same thing.

    there are some unresolved issues with excessive debt of certain kinds. though all of all kinds - e.g. there is no real problem with sovereign debt issued by the same country that issues the currency the debt is denominated in (e.g. gilts issued in sterling, or US treasuries issued in $).

    there are solutions to these problems. i won't bore you (i already have, you say? :)).

    but they don't involve switching from fiat (which is the best currency system known). the gold standard is (as has been mentioned) one reason the 1930s depression was so bad. and cryptos as currency (at least: the ones invented so far) would be bad for the same reasons: deflationary by design, no ability for government to adjust the money supply as needed to prime the economy.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards