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ozleicester

Bitcoin?

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Does anyone have them? what exactly are they? and, are they and others like them.. the future of finance?

 

I admit im old and out of touch so this is all i know about them...

 

1 Bit coin is worth about $100?

You get them by solving an algorithm?

they are limited to only 25 million?

they are used particularly to buy drugs and other questionable products online?

 

 

Im sure a few of our educated financial types here may be able to explain more about it, if you have the time and inclination, id be interested to know more.

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China recently banned them as a tradeable currency and they dropped in value massively. They were worried about what it was being used for and that they couldn't control it. To be honest I'm intrigued to see how it goes, but I'm not going to risk any of my money buying bit coins.

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All I know is that my mate - who perhaps unsurprisingly is something of an IT whiz - accepted some as payment for an online transaction ages before I'd heard of them anywhere else, and their value had already gone up loads long before their value soared in a way that made the news.

 

No wonder he's just invested in a ten year old Toyota Corolla.  It's all spend, spend, spend now

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They are what people use to by drugs on line with as they are very hard to trace. That is all I know apart from they did cost about £125 each at one point then doubled when the US said they might recognise them as a currency.

Originally they were valued at under $1, Now currently £950 

 

They were the primary currency of the "Silk road" but now are legal currency

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Also another quick one, 

 

A transaction of $6,500,000 via a bank wire transfer, would charge you $140,000 for the transfer.

The same transaction via Paypal would cost you around $223,000 

 

If you made the transaction via bitcoin, the transaction would take a maximum of around 10 minutes to transfer, and would charge you 6 cents. (The general price is measured in $ and I cannot be bothered to work the rates into £)

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The algorithm gets harder as people invest in more and more computers to 'mine' the currency.

 

Each bitcoin is divisible, so you can buy/sell for smaller values.

 

There are other systems but bitcoin is the most popular.

 

It seems with the devaluation (although it came back up a bit because of Zynga accepting it) that the cost of mining and value of the bitcoins make it less profitable than it was before to mine. So, now we may have have lost the opportunity to be a first mover and make significant profits from developing the currency.

 

However, you can earn money through trading and this will continue to be a growth area as it increases in popularity.

 

Just my personal opinions, do not go and invest without doing your own research :)

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The algorithm gets harder as people invest in more and more computers to 'mine' the currency.

 

Each bitcoin is divisible, so you can buy/sell for smaller values.

 

There are other systems but bitcoin is the most popular.

 

It seems with the devaluation (although it came back up a bit because of Zynga accepting it) that the cost of mining and value of the bitcoins make it less profitable than it was before to mine. So, now we may have have lost the opportunity to be a first mover and make significant profits from developing the currency.

 

However, you can earn money through trading and this will continue to be a growth area as it increases in popularity.

 

Just my personal opinions, do not go and invest without doing your own research :)

 

Best bet.

 

 

Too many variables now it's got difficult to obtain them

 

Huge investment into computers needed to get the most out of the system.

Electricity bills rising.

 

Profits based on price of coin at current moment. Going up and down by $100+ or - in some days....

 

If the government decide in the future they do not want it, they will squash it.

 

At the moment there are no taxes involved in the currency.

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The Government cannot "squash" it, Lee....

 

Currencies that aren't issued by a central bank and which don't have a value that is set by Governments (or their central banks) are the future.  Currencies like bitcoin are the future.

 

However, I didn't invest in Bitcoin when I first heard about it because I believed then, as I believe now, that such currencies are (at the moment) subject to too many risks (e.g "mining", fraud, a massive drop in value etc.)

 

Essentially, Bitcoin is a bubble. It is a hugely volatile bubble. All bubbles burst. Stay away for now.

 

I still believe that, eventually, we will see an end to a World dominated by fiat currencies like Sterling and Dollar and will instead have more currencies whose value are set by the market (like bitcoin).

 

It's just a matter of when.

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I think the problem is that most people who aren't trying to score cool points by playing the contrarian find that existing currencies work perfectly well. Why would I go to the hassle of setting myself up with bitcoins when I can just pay with pounds?

That said if lots of respectable companies get on board with it then it could well be successful. If it can take say a 10% stake in global currency markets then with the limitation of bitcoins available then it's interesting from an investment point of view.

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The Government cannot "squash" it, Lee....

 

Currencies that aren't issued by a central bank and which don't have a value that is set by Governments (or their central banks) are the future.  Currencies like bitcoin are the future.

 

However, I didn't invest in Bitcoin when I first heard about it because I believed then, as I believe now, that such currencies are (at the moment) subject to too many risks (e.g "mining", fraud, a massive drop in value etc.)

 

Essentially, Bitcoin is a bubble. It is a hugely volatile bubble. All bubbles burst. Stay away for now.

 

I still believe that, eventually, we will see an end to a World dominated by fiat currencies like Sterling and Dollar and will instead have more currencies whose value are set by the market (like bitcoin).

 

It's just a matter of when.

 

 

Yes. Yes they can.

 

they cannot physically stop bitcoin, but they can spoil it. very easily

 

However I agree that we will see and end to fiat currencies.

Edited by cityfanlee23
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The biggest problem right now is that it has limited uses. 

 

What's the point in having millions of dollars in bitcoins if I can't spend it on 'real world' products and services?

 

Governments can squash the cash in/out points (traders) and therefore decrease the usage of the currency to transactions with a few vendors.

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The biggest problem right now is that it has limited uses. 

 

What's the point in having millions of dollars in bitcoins if I can't spend it on 'real world' products and services?

 

Governments can squash the cash in/out points (traders) and therefore decrease the usage of the currency to transactions with a few vendors.

 

 

This is the main risk 

My advice would be to anyone wanting to obtain them, is to sell them for £ 

 

When this currency becomes easily spendable, governments will crack down with taxes etc etc.

 

Making less  valuable, and 

 

 

In 50 years time, Virtual currency I expect will be used by everyone.

Therefore the values Will probably be the same as currency nowadays.

 

I  wouldn't  save up £1,000,000 worth of coins, because in 50 years, I  wouldn't  expect them to be worth anywhere near that figure, for me this is just an investment for now, Buy low, sell high, or mine them. but I  wouldn't  hang on to them personally.

 

Because the risk of loss is higher than the risk of gain. 

 

If governing countries all went against the currency tomorrow. It's value would crash.

 

there are certain places you can spend the currency though, for example an estate agents in france sell french villas using bitcoin.

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What actually is mining? And why is it rewarded with currency?

 

Mining is using your computer, to contribute towards solving a complicated maths equation, that gets more and more complex the more equations are solved. When one is solved, the people who help put computer power towards solving it get a percentage of bitcoins, the faster your computer is, the more bitcoins you will receive once the equation is solved.

 

There is a set amount of bitcoins to mine that is quickly running out, once all the equations are solved nobody can mine any more, and the currency becomes harder and harder to come by, meaning it goes up in value, just like any other rare item. It'l get to the point where people can only trade them and not mine for them any more.

 

A lot of people prefer trading in bitcoins for illegal activates, as it's pretty much impossible for the police to trace as any transactions are encrypted to the high heavens, it also means you can completely avoid taxes. It can be used for legitimate reasons to, such as dominos pizza, who accept orders in bitcoins. My friend was the first person in England to order food using bitcoins, it was in the paper and everything lol

Edited by MrSpaM
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What actually is mining? And why is it rewarded with currency?

 

Simply put, mining is solving a really long algorithm. It takes a high-end computer to solve it and takes about 11 minutes (or something). It doesn't produce anything useful but instead just triggers the disbursement of a bitcoin to the 'miner'. 

 

The reason not everyone can do it is because of the cost of the high-end computers and electricity to run them. As more coins are mined, and more people mine, it becomes harder to complete the calculation, therefore requiring more high-computers and electricity. 

 

The reward of the currency is the generally agreed consensus. Just like how the pound is agreed to have value for sitting at a computer talking on FT!

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But why? Why is it being rewarded? You aren't producing anything or providing a service, what is the benefit to the person who has created these algorithms and is distributing bitcoins?

 

If we consider bitcoins to be like gold, and there is a finite reserve, why is the person with all the gold handing it out gaining nothing in return?

 

Does anyone else suspect that these algorithms release the access codes to nuclear weapons and this is an elaborate plot by Hank Scorpio to harness people's greed to crack the code that will allow him to take over the world.

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But why? Why is it being rewarded? You aren't producing anything or providing a service, what is the benefit to the person who has created these algorithms and is distributing bitcoins?

 

If we consider bitcoins to be like gold, and there is a finite reserve, why is the person with all the gold handing it out gaining nothing in return?

 

Does anyone else suspect that these algorithms release the access codes to nuclear weapons and this is an elaborate plot by Hank Scorpio to harness people's greed to crack the code that will allow him to take over the world.

 

It's a generally agreed principal for people who use bitcoin. It's the same for fiat currency. We have agreed collectively that the metal and paper in our pockets can be exchanged for goods and services.

 

I personally do not have any and have never used it. Therefore, I do not currently attach any value to it. However, if I were to exchange goods and services for bitcoins I would attach a very high premium to my products/services because of the current risks involved.

 

No one is handing it out. To get bitcoins you have to sell something in exchange for them or 'mine' them using the computer. No one owns the currency outright and it is a peer-to-peer system.

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It's a generally agreed principal for people who use bitcoin. It's the same for fiat currency. We have agreed collectively that the metal and paper in our pockets can be exchanged for goods and services.

 

I personally do not have any and have never used it. Therefore, I do not currently attach any value to it. However, if I were to exchange goods and services for bitcoins I would attach a very high premium to my products/services because of the current risks involved.

 

No one is handing it out. To get bitcoins you have to sell something in exchange for them or 'mine' them using the computer. No one owns the currency outright and it is a peer-to-peer system.

 

 

Thus the people who created it, have the most bitcoins in the world....

 

The original creator of Bitcoin is now a bitcoin billionaire... 

He has invested that the coins will one day be used as currency so he will be very very rich....

 

on the other hand he could sell them for cash to other people hoping the currency would take off.. 

 

Personally I am not 100% sure what solving these algorithms achieves to the creator...

As far as I am aware, what these algorithms do is give the coin a platform of value (If it was easy to get, everyone would do it) 

 

with all the things involved in mining them, and obtaining, this pushes the value up or down...

 

I don't think the algorithms serve a purpose, but it means that bitcoins have a value, thus making the creator 

Satoshi Nakamoto VERY VERY RICH.

 

 

He has pretty much created a  computer  game that anybody can play, and earn real money from playing...

The fact you earn money means everyone wants them, which makes them valuable. 

which makes the creator rich.

 

Much like playing free games, the creators make money from the advertising on the page, but the game is free to play....

 

Mining bitcoins is free to do (Once you've got your "Computer mining rig" set up)

Yet the bitcoins serve as a value due to a global "gentlemans agreement" if you like that these little numbers actually have a value. 

 

Very clever Idea. 

 

And certainly the future currency, but the values will certainly drop once this idea evolves into a worldwide currency.

Edited by cityfanlee23
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