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Bitcoin

Investment discussion for beginners. Why you should invest your money, get help getting started
Leothebear
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Bitcoin

#334377

Postby Leothebear » August 19th, 2020, 12:32 pm

Had a quick search on here and cannot find much about Bitcoin. Anyone here invested in Bitcoin? Is it a bubble?
Any advice gratefully received.
Leo

dealtn
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Re: Bitcoin

#334389

Postby dealtn » August 19th, 2020, 1:18 pm

Leothebear wrote:Had a quick search on here and cannot find much about Bitcoin. Anyone here invested in Bitcoin? Is it a bubble?
Any advice gratefully received.
Leo


Not me. Probably.

There is a thread in "Other Investing"

viewtopic.php?f=78&t=9368&p=286977&hilit=crypto#p286977

GoSeigen
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Re: Bitcoin

#334391

Postby GoSeigen » August 19th, 2020, 1:21 pm

Leothebear wrote:Had a quick search on here and cannot find much about Bitcoin. Anyone here invested in Bitcoin? Is it a bubble?
Any advice gratefully received.
Leo


Why do you call it investing? What are you investing in?

GS

JohnB
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Re: Bitcoin

#334409

Postby JohnB » August 19th, 2020, 2:58 pm

Bitcoin wastes vast ammounts of electricity, very bad for environment. Avoid, avoid

Snorvey
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Re: Bitcoin

#334421

Postby Snorvey » August 19th, 2020, 3:40 pm

JohnB wrote:Bitcoin wastes vast ammounts of electricity, very bad for environment. Avoid, avoid


So does gold mining.

Ok, gold is very slightly more useful, but the principle is the same

bungeejumper
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Re: Bitcoin

#334424

Postby bungeejumper » August 19th, 2020, 4:18 pm

You don't invest in bitcoin, you gamble it. Bitcoin has no fundamentals whatsoever, its price depends entirely on how many people are looking for it.

Which is where it differs from normal fiat currencies that do at least behave in rough accordance with the performance of their underlying economies.

And then, "stuff" happens. Some bitcoin exchange or other gets scammed and disappears (or hey, maybe it was the scammer in the first place?) China muscles up against its own bitcoiners because they're using it to get renminbi cash out of the country, and bang goes half the global market. Overnight. :(

Gamble if you must, but let's at least call it gambling.

BJ

Bubblesofearth
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Re: Bitcoin

#334434

Postby Bubblesofearth » August 19th, 2020, 4:49 pm

The surprising thing for me is that the price has held up so well as I was very much in the 'bubble' camp a couple of years back.

My personal opinion is that Bitcoin is something for more knowledgable people than me to invest in if they wish. I simply don't understand it well enough so, for me, it would be like investing in wine or paintings. Except wine is nice to drink and paintings nice to look at. Mostly.

BoE

Mike4
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Re: Bitcoin

#334539

Postby Mike4 » August 19th, 2020, 11:56 pm

Surely bitcoin is the perfect example of the 'bigger fool' principle of 'investing'. Or more accurately, gambling.

There is no underlying asset so whatever you decide to pay for your bitcoin, the only point of buying it is the expectation that another person will come along later and buy from you for more than you paid for it.

Eventually, the supply of fools will run out and someone will be left 'holding the baby'. A bit like pass the parcel. How long will you hold your bitcoin hoping it rises in value before losing your nerve and selling, for fear of the inevitable eventual crash happening while you are still holding?

bungeejumper
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Re: Bitcoin

#334548

Postby bungeejumper » August 20th, 2020, 7:25 am

ISTR that a couple of US banks had a stab at calculating a "correct" value for bitcoin a couple of years ago, and that they came up with $2,300 and $2,700 respectively. Or somewhere around those figures.

The calcs were based on the utility value of the currency (could you buy a cup of coffee with it?), the likely transaction delays and execution costs of such a purchase (horrendous), the number of known buyers in the world (or, more precisely, the probable number of "wallets"), and the likelihood of clampdowns by disapproving governments that might drastically reduce the "customer pool".

Conversely, of course, they will have weighed up the likelihood that normal corporations would set up their own crypto operations, and that central banks might also change their tunes on cryptos and maybe even issue their own?

Not to mention the likely explosion of bitcoin use by scammers and extortionists. :?

That's a lot of very expensive guesswork!
Eye of newt and toe of frog,
Wool of bat and tongue of dog,
Adder's fork and blind-worm's sting,
Lizard's leg and howlet's wing,
For a charm of powerful trouble,
Like a hell-broth boil and bubble.

Double, double toil and trouble;
Fire burn and caldron bubble.
Cool it with a baboon's blood,
Then the charm is firm and good
.
If you really insist, there's a sort of a bitcoin tracker called https://www.hl.co.uk/shares/shares-sear ... acker-euro. (Check the three year record before you let the six month chart seduce you.) But AIUI, it comes with poor security, and a lot of UK platforms won't let you access it. (Hargreaves allows it in a SIPP but not an ISA,)

BJ

GoSeigen
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Re: Bitcoin

#334551

Postby GoSeigen » August 20th, 2020, 7:48 am

Snorvey wrote:
JohnB wrote:Bitcoin wastes vast ammounts of electricity, very bad for environment. Avoid, avoid


So does gold mining.


This is flippant and misleading. Gold mining is entirely incidental to the use of gold itself in transactions or for other purposes. Bitcoin mining OTOH is required in order to process each and every bitcoin (blockchain) transaction. The more transactions the more power used. Its deplorable wastefulness is by deliberate design.

GS

GrahamPlatt
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Re: Bitcoin

#334554

Postby GrahamPlatt » August 20th, 2020, 8:00 am

Not quite accurate that, GS. The mining aspect is the ‘creation’ of new bitcoins. The transactions are another matter.

servodude
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Re: Bitcoin

#334562

Postby servodude » August 20th, 2020, 8:19 am

GrahamPlatt wrote:Not quite accurate that, GS. The mining aspect is the ‘creation’ of new bitcoins. The transactions are another matter.


But don't you create them by finding/guessing the hash for transactions?

Snorvey
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Re: Bitcoin

#334583

Postby Snorvey » August 20th, 2020, 9:47 am

This is flippant and misleading.

No. It's not.

Adamski
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Re: Bitcoin

#334594

Postby Adamski » August 20th, 2020, 10:10 am

Bitcoin has held its value in the last 12 months but during the CV sell off bitcoin went down in lockstep with equities. Gold and bonds are better safe haven assets. So there's no good reason to hold it for diversification. Plus it's so volatile, that retailers won't touch it, cause of its volatility, so it's a poor long term investment.

GoSeigen
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Re: Bitcoin

#334659

Postby GoSeigen » August 20th, 2020, 1:16 pm

Snorvey wrote:This is flippant and misleading.

No. It's not.


Flippant because it was a casual, dismissive, overly simplistic retort to a serious criticism of bitcoin.
Misleading because it was a falacious argument -- attempting to legitimise the energy use of bitcoin by drawing a dubious comparison with something more acceptable.

Sonrv, you're not seriously suggesting you made a post which wasn't intended to be flippant, surely?

GS

Mike4
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Re: Bitcoin

#334672

Postby Mike4 » August 20th, 2020, 1:59 pm

GrahamPlatt wrote:Not quite accurate that, GS. The mining aspect is the ‘creation’ of new bitcoins. The transactions are another matter.


Widening the discussion, how does mining work please? I've never understood. I can see the need for a supply of new bitcoins, but mining is presumably jargon for creating new bitcoins, yes?

GrahamPlatt
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Re: Bitcoin

#334685

Postby GrahamPlatt » August 20th, 2020, 2:43 pm

I have to GS apologise here. I thought I understood how it worked, but following SD’s rather cryptic note I did a bit of research & find that mining and transactions are indeed intimately linked. It would seem that as new transactions occur, in order to keep the blockchain (the immutable record of transactions) running new blocks are needed. These blocks need to be (mathematically) ‘found’ and it is this process which is referred to as mining. The miners presently earn their crust by being awarded a number of bitcoins per new block found, and via transaction fees. When the supply of new bitcoins (there’s an upper bound of 21 million) expires, miners will continue to be needed to run the blockchain and will rely entirely on transaction fees.

Snorvey
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Re: Bitcoin

#334692

Postby Snorvey » August 20th, 2020, 3:43 pm

....with something more acceptable.

Now that's a matter of opinion - although I did say gold was marginally more useful than Bitcoin.....but it's pretty negligible.

So a vast amount of energy (and occasionally human life) is utilised in the mining of a near useless metal. It doesn't really deserve a less simplistic retort.

Sonrv, you're not seriously suggesting you made a post which wasn't intended to be flippant, surely?

It's a first for me. I'll give ya that. ;-)

Bubblesofearth
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Re: Bitcoin

#334845

Postby Bubblesofearth » August 21st, 2020, 10:02 am

Snorvey wrote:
Now that's a matter of opinion - although I did say gold was marginally more useful than Bitcoin.....but it's pretty negligible.



Gold has several properties that make it very useful in a whole range of applications. I suspect it would be used far more widely if it were not so expensive.

These properties, along with its scarcity, also make it ideally suited to a role as money. It's been used in that way for thousands of years.

I can't see much of a comparison with cryptocurrency at all. Except maybe that the cost of creating new Bitcoins may eventually come close to the cost of creating gold using a nuclear reactor.

BoE

Mike4
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Re: Bitcoin

#334855

Postby Mike4 » August 21st, 2020, 10:17 am

Bubblesofearth wrote:
Snorvey wrote:
Now that's a matter of opinion - although I did say gold was marginally more useful than Bitcoin.....but it's pretty negligible.



Gold has several properties that make it very useful in a whole range of applications. I suspect it would be used far more widely if it were not so expensive.

These properties, along with its scarcity, also make it ideally suited to a role as money. It's been used in that way for thousands of years.

I can't see much of a comparison with cryptocurrency at all. Except maybe that the cost of creating new Bitcoins may eventually come close to the cost of creating gold using a nuclear reactor.

BoE


Quite. Apart from all the industrial uses, wedding rings crafted from bitcoins don't seem to have quite the attraction as gold rings.

You don't need a nuclear reactor to make gold, I noticed in a news report a few weeks ago. You just get copper bars and gold plate them. American banks accept them as security for loans as though solid gold, apparently.

https://www.scmp.com/business/companies ... ted-copper


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