Bitcoins

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  • JohnRo
    JohnRo Posts: 2,887 Forumite
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    Imitation is the sincerest form of flattery.
    The fiat crooks and payment processors can see what bitcoin is and have little choice but to copy it and try to take away some of the ground bitcoin has. That's if they don't pursue outlawing it which is all but impossible anyway at this stage.
    It's difficult to know what or how any moves to imitate bitcoin will affect it's value, whatever those things are they won't ever be what bitcoin is and that will imho have more value added as time goes on, discounting the speculative rises and falls which are driven by human behaviour and greed.
    The big difference is integrity and transparency, the crooks price gouging, central control and manipulatory ways bar that, whereas no one involved with bitcoin has any power over it other than the power to hash, hold and transact with it or steal it if you're the FBI.
    The most comical aspect is the mainstream ignorance and fear about bitcoin using the usual tired old slurs and hysterics whilst alongside mumbling a grudging acknowledgement that blockchain technology is brilliant.
    Talk about confused.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • Malthusian
    Malthusian Posts: 10,941 Forumite
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    Why not just transfer the money in pounds and change it at either end in the normal way? Why change it three times instead of once with treble the transaction costs (never mind fluctuations in value)?

    In theory if Bitcoin had some sort of mainstream application the value would be more stable (not necessarily higher or lower) because it would be more frequently traded and less subject to the whims and fancies of speculators. (Who at the moment account for 99% of Bitcoin trades.) But in the absence of the article to explain it a bit more fully, that sounds like the usual wishful thinking.
  • TheTracker
    TheTracker Posts: 1,223 Forumite
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    Malthusian wrote: »
    Why not just transfer the money in pounds and change it at either end in the normal way? Why change it three times instead of once with treble the transaction costs (never mind fluctuations in value)?

    You're missing the point. That's exactly the point of Bitcoin (or one of the points). Transactions cost pennies not pounds. Spreads become those between buyer/seller, not what a maker decides. That's why I don't care about Bitcoin price, only the volatility. Bitcoins future is in forex and it doesn't matter if one is worth £1 or £1m. But it needs to be wider spread first, to create supply/demand, reduce arbitrage potential, become less volatile, and be easier to use for average Joe.
  • Malthusian
    Malthusian Posts: 10,941 Forumite
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    Transactions cost pennies not pounds.

    In the scenario being described by pops66 it is still two lots of unnecessary pennies when Person A is sending British pounds and Person B is receiving Kenyan shillings.

    And neither person is going to want to send or receive Bitcoins for the same reason that you don't send your mum in the old country a bushel of wheat, a barrel of oil or some penny shares. You send cash because you want to know the value of what you're giving them.
  • JohnRo
    JohnRo Posts: 2,887 Forumite
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    Malthusian wrote: »
    In the scenario being described by pops66 it is still two lots of unnecessary pennies when Person A is sending British pounds and Person B is receiving Kenyan shillings.

    And neither person is going to want to send or receive Bitcoins for the same reason that you don't send your mum in the old country a bushel of wheat, a barrel of oil or some penny shares. You send cash because you want to know the value of what you're giving them.

    It's already been classified as private money by the Germans and the UK, and an exchangeable currency by the ECOJ. The US has other ideas currently but that's primarily about powers that be preserving their privileges, control and pound of flesh.

    From here it's all about adoption, volume and confidence and the stability that will follow. Whether it ever gets to a point where the fiat pyramid schemes and the counterfeiters empowered to run them are threatened by bitcoin or some other private cryptocurrency is anyone's guess, it's an odds on certainty few if any alive will see it or something similar happen but that's the road being travelled whether detractors like it or not.

    All fiat currencies eventually fail in some way or other because of the nature of the pyramid scheme and the infallible people running them, typically every 30 or 40 years before total collapse or some redefining and redesign is required to obscure the failure.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • Malthusian
    Malthusian Posts: 10,941 Forumite
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    "Hello dearest Mama. This month I have sent you part of my salary in Bitcoins rather than the fiat fraud that is Kenyan shillings. I know by the time you get it it'll probably buy you half of what last month's payment did, but in fifty years' time when everyone else is as clever as I am, you'll be thanking me."

    The value graph of Bitcoins shows that the founders of the scheme who got in at zero and then cashed out at peak Bitcoin mania in 2014 made an absolute fortune. Everyone who came into the scheme after them has made less and less and most of those unlucky enough to enter the scheme after 2014 are sitting on huge losses. The founders and others who get in early make a bundle, the suckers who come in late lose their shirt - what does this remind you of? Yet it's the dollar and the pound that are the "pyramid scheme". Gotcha.
  • hildosaver
    hildosaver Posts: 360 Forumite
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    Bitcoin is in its infancy, anybody buying today is still an early adopter.
    I am insane and have 4 mortgages - total mortgage debt £200k. Target to zero = 10 years! (2030)
  • TheTracker
    TheTracker Posts: 1,223 Forumite
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    Malthusian wrote: »
    "Hello dearest Mama. This month I have sent you part of my salary in Bitcoins rather than the fiat fraud that is Kenyan shillings. I know by the time you get it it'll probably buy you half of what last month's payment did, but in fifty years' time when everyone else is as clever as I am, you'll be thanking me."

    The value graph of Bitcoins shows that the founders of the scheme who got in at zero and then cashed out at peak Bitcoin mania in 2014 made an absolute fortune. Everyone who came into the scheme after them has made less and less and most of those unlucky enough to enter the scheme after 2014 are sitting on huge losses. The founders and others who get in early make a bundle, the suckers who come in late lose their shirt - what does this remind you of? Yet it's the dollar and the pound that are the "pyramid scheme". Gotcha.

    The value of a bitcoin is totally irrelevant in forex, as long as the price doesn't fluctuate during the course of the end to end transaction more than a nominal amount. Transactions happen within seconds (minutes, anyway). At the moment, it requires both end parties to convert their own currency (pounds, shllings) to/from the common "currency" (bitcoins). What's needed and will come are services that makes the bitcoin invisible to users, as well as volume that will buy/sell the intermediate currency fast enough. Then I deposit a pound to a service and it is in a kenyan account as shillings within minutes. Of course it need not be bitcoin, any commonly accepted digital distributed currency would work. If that sounds farfetched, it's basically what PayPal or Western Union does today.

    It's madness that it costs about 3-10% in spread to send money between two common currencies, only its not madness because the 3-10% pays for all the infrastructure and people in between. A distributed non-owned system like bitcoin makes those costs plummet. The likes of PayPal will be first to do this, there will come a day they use bitcoin (or alternative) at the backend and the sender/receiver are none the wiser apart from lower conversion costs.

    The clever part of bitcoin is the blockchain that allows all this. People get too hung up on the "value" of a bitcoin and speculators and the anonymity.
  • JohnRo
    JohnRo Posts: 2,887 Forumite
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    Malthusian wrote: »
    "Hello dearest Mama. This month I have sent you part of my salary in Bitcoins rather than the fiat fraud that is Kenyan shillings. I know by the time you get it it'll probably buy you half of what last month's payment did, but in fifty years' time when everyone else is as clever as I am, you'll be thanking me."

    The value graph of Bitcoins shows that the founders of the scheme who got in at zero and then cashed out at peak Bitcoin mania in 2014 made an absolute fortune. Everyone who came into the scheme after them has made less and less and most of those unlucky enough to enter the scheme after 2014 are sitting on huge losses. The founders and others who get in early make a bundle, the suckers who come in late lose their shirt - what does this remind you of? Yet it's the dollar and the pound that are the "pyramid scheme". Gotcha.

    All fiat currencies are pyramid schemes. If you're ever going to get beyond the hysterics it might be useful to learn something about what bitcoin really is and what it's not.

    Here's a starter https://en.bitcoin.it/wiki/Myths
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • pops66
    pops66 Posts: 28 Forumite
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    TheTracker wrote: »
    What's needed and will come are services that makes the bitcoin invisible to users, as well as volume that will buy/sell the intermediate currency fast enough. Then I deposit a pound to a service and it is in a kenyan account as shillings within minutes.

    As I understand it, that is exactly what Visa's experimental app does. I have found the article I read about it:

    http://www.coindesk.com/hands-on-with-visa-europes-bitcoin-remittance-app/
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