SURVEY: Cryptocurrencies -- wave of the future or disaster waiting to happen?

[mrfill]

1 hour ago, overherebc said:

Seems it's getting a bit of bad press because of the energy

  ( electricity )  being consumed to produce each 'coin'.

Just the 72 Gigawatts per bitcoin......

[donnacha]

20 minutes ago, Peter Denis said:

Their mining takes so much energy that they do look for locations where they can do this at lowest cost.

*** EDIT: My mistake, I misread what you wrote, sorry, have re-written the below section accordingly ***

Yes. Mining can be extremely thin margin at times. That is why China became so heavily represented in mining, they were able to use the surplus power from their massive hydroelectric dams. They are not using the more expensive coal-fired electricity because it would eat up all their profits.

All serious Bitcoin miners seek out the least expensive electricity available to them. Many foreign companies set up in Iceland to use the thermal electricity.

 

20 minutes ago, Peter Denis said:

But bitcoin-mining and keeping the whole bitcoin-system in the air is surely not a 'green' operation.

Profit is the main consideration, it just happens that the greenest energy is often the most profitable.

Every service or product requires energy. As an entirely networked product, Bitcoin has the luxury of shifting its energy requirements to the cheapest source. The same is not true of all the products in your house, or the milk in your fridge, or the electricity running your fridge which, if you live in Thailand, probably is from a coal-fired station.

Again, applying these energy questions to Bitcoin and nothing else we use is just a clickbait meme by lazy journalists who almost all own Bitcoin themselves.

 

[Peter Denis]

9 minutes ago, donnacha said:

That is nonsense. Early investors in Google, or Apple, or the vast majority of companies are richly rewarded because they spot the value long before most other people. Their early support allowed companies to be created that will create value, for everyone, for decades (possibly even centuries) to come.

Bitcoin is of use because only Bitcoin can be used for certain things. Decentralized money acts as a counterweight as cash is phased out and the official money systems become increasingly controlled. The families who used it to get their money out of Venezuela or China gained massively, because their alternative was the evaporation of their savings.

The people who launched Bitcoin in 2009 did so at the tail-end of a decade during which Alan Greenspan flipped US policy to massive money-printing. Bitcoin was invented as a direct response to dollar debasement. They spotted, earlier than most, where all this was going. Bitcoin, the world's favorite non-inflationary currency, is the solution to the dollar debasement. That is about to become very important, and that is why those who invest this will be rewarded.

I wrote > The gains made by those that stepped in early are 'financed' by those stepping in later.  Or in other words, my gain will be the loss of someone else.

And your responded by stating that this is nonsense.

And then went on to give the example of highly successful companies that provide high value products/services, and thus reward their shareholders with huge gains for having provided them with the funds to finance their projects.  That's exactly the win-win scenario I talked about. The shareholder literally 'holds a share' of the company, and when the company is successful he - and all stakeholders, company, society, customers - benefit from it.

But this is not how Bitcoin - or other crypto-currencies - create 'value'.  The value of Bitcoin (i.e. the price to pay for buying one) is solely determined by supply and demand.  The only 'underlying value' of Bitcoin would be, if there were services which you could ONLY buy with Bitcoin - and as far as I know that is not the case (except maybe some criminal operations).

>> Bitcoin's rise is dependant on new 'investors/gamblers' stepping into it (and pumping their hard-earned fiat money in it).  And I fully agree that it will keep on rising as long as there is more demand for the coin, than people wanting to 'cash out'.  When everybody holds on to the Bitcoins he has, new entrants drive up the price. 

So yes I agree with your post that it surely will make you a Buck in current times and for the current year and most probably beyond.  But you need fiat-money to step into Bitcoin, and when that incoming stream stops or slows down, the price will go down and those that stepped in latest will have paid for the gains of the earlier adopters.   

 

[donnacha]

1 minute ago, Peter Denis said:

I wrote > The gains made by those that stepped in early are 'financed' by those stepping in later.  Or in other words, my gain will be the loss of someone else.

And your responded by stating that this is nonsense.

Yes. I misread what you wrote, sorry. I edited that section when I noticed, a few minutes, later to apologize. 
 

[rabas]

32 minutes ago, donnacha said:

The energy is being used, essentially, to record the transactions. The Visa or Mastercard systems would use an equivalent amount of energy per transaction.

This is not true. Mining a bitcoin requires incredible amounts of energy running the most powerful computational hardware available. This huge amount of energy is what limits the production. It is the guaranteed regulation, otherwise it's just another fiat currency.

 

But here is the fallacy in the idea bitcoin is infallible. Its scarcity and thus value is based on the limited number of bitcoins that can be produced. But, there is no limit to the number of digital currencies that can be established.

 

As long as people have faith in bitcoin over other currencies though it should be OK.

[worgeordie]

Seems too easy to set up a Cryptocurrency, there are so many around now,

I don't know anything about them and too old to risk money on it,giving

someone your cash and getting digital money, who someone just invented !

regards Worgeordie

[donnacha]

3 minutes ago, Peter Denis said:

The value of Bitcoin (i.e. the price to pay for buying one) is solely determined by supply and demand.  The only 'underlying value' of Bitcoin would be, if there were services which you could ONLY buy with Bitcoin - and as far as I know that is not the case (except maybe some criminal operations).

The main value is actually more obvious, in some ways so obvious that it often gets overlooked.

Business is inherently unpredictable, so, value coalesces around islands of predictability. As we enter a decade or so of hyperinflation, an aspect of Bitcoin that we all know about and take for granted suddenly becomes very valuable: the fact that the supply of Bitcoin is enshrined in code that is visible to all, and that cannot be altered by any individual, company, or individual.

Imagine you are finalizing contracts for a major project involving dozens of companies in dozens of currency areas. What currency do you denominate the project in?

The answer used to be U.S. dollars, but countries such as China are now insisting on Yuan-denominated contracts for any projects they partly fund. As the money machines go into overdrive this year, more countries and companies will worry that profitable agreements they make today may turn out to be loss-making by the time they get paid.

If governments, forced by dire necessity, are no longer trusted guardians of currencies, that introduces unmanageable unpredictability into any endeavor that involves money and contracts. To happen at all, many project will have to shift to assets that are considered less likely to lose value. You could notionally use gold for this but Bitcoin is more practical in terms of storage, export laws, and portability.

Each Bitcoin now has a significant amount of value attached to it, and anyone with any fiat currency can easily acquire them. There may be a risk of Bitcoin devaluation but, because the market is already confident that the dollar will lose significant value this year while Bitcoin will continue to rise, it is far cheaper to hedge against that. You can package Bitcoin in such a way that it ends up being a far more stable option than dollars.
 
Think of Bitcoin as just another a tool for the increasingly complex world of business. The companies currently adopting it, for limited uses, are the very, very early pioneers, but they are motivated to do so because they can see immediate advantages. As acceptance grows, smart people experiment with more uses. After a decade as a fascinating curiosity, a year in which the whole world was turned upside-down has created an environment in which companies searching for alternatives and Bitcoin is exactly the right solution, the financial version of Work-From-Home.

 

[metisdead]

A troll post has been removed. 

[Misty]

1 hour ago, Mr Meeseeks said:

It's a no brainer and the future of money. 

 

 

 

How much bitcoin will your groceries cost next month?  Next year? 

[donnacha]

48 minutes ago, rabas said:

This is not true. Mining a bitcoin requires incredible amounts of energy running the most powerful computational hardware available. This huge amount of energy is what limits the production. It is the guaranteed regulation, otherwise it's just another fiat currency.

You have got it upside down. The amount of processing was never intended to limit production. The code limits the number of Bitcoin produced, not the hardware capacity.

Bitcoin doesn't care whether you use a supercomputer or a Raspberry Pi. All it wants is to write each transaction into each Bitcoin. This processing must be done regardless of how many or how few miners there are, and regardless of what devices they use.

Obviously, those able to process faster have more chance of writing more transactions and, therefore, creating more coins.

If, one day, energy becomes free and equivalents to today's supercomputers cost five dollars, exactly the same number of transactions will need to be processed and exactly the same amount of coins will be produced. The final Bitcoin will be mined in 2040.
 

48 minutes ago, rabas said:

But here is the fallacy in the idea bitcoin is infallible.

No one claims Bitcoin is infallible. You're thinking of the pope.

All we are saying is that a hard-coded non-inflationary currency is clearly better than "soft" money whose supply can be increased whenever a government needs more money.
 

48 minutes ago, rabas said:

Its scarcity and thus value is based on the limited number of bitcoins that can be produced. But, there is no limit to the number of digital currencies that can be established.

This is fuzzy thinking. Bitcoin is a known quantity. Other cryptocurrencies make no difference to it, anymore than the US dollar is affected by the North Korean Won.

If some idiot decides not to buy Bitcoin because some scammer tells him that he can "get in on the ground floor" by instead buying WinCoin3000, or BargirlCoin, or whatever marketing nonsense they can dream up, that does not affect Bitcoin. There will always be idiots. The majority of Bitcoin purchases now are either companies of financial firms.

 

[J Town]

Are US citizens required to report any profits?

[donnacha]

19 minutes ago, Misty said:

 

How much bitcoin will your groceries cost next month?  Next year? 

Next month? About 20% less than today.

Next year? About 80% less than today.

Odd question.
 

[donnacha]

5 minutes ago, J Town said:

Are US citizens required to report any profits?

US citizens are required to report everything.

 

[Mr Meeseeks]

25 minutes ago, Misty said:

 

How much bitcoin will your groceries cost next month?  Next year? 

A lot less if I hold Bitcoin over the equivalent USD or THB.

[donnacha]

54 minutes ago, worgeordie said:

Seems too easy to set up a Cryptocurrency, there are so many around now,

I don't know anything about them and too old to risk money on it,giving

someone your cash and getting digital money, who someone just invented !

regards Worgeordie

That is like saying it is too easy to create a Word document. A cryptocurrency is just code.

Think of it in terms of books. Anyone can write a book but only J.K. Rowling has the right to publish a new Harry Potter book.

People buy Harry Potter books because they have heard good things about them. She has built up that reputation over many year and, now, her brand is the biggest in the kids books category.

Bitcoin has been around for 12 years. It is the Harry Potter, the Coca-Cola, the Apple Mac of cryptocurrencies. When someone invests $100 into Bitcoin, they are buying into a known quantity.

There may be some exciting new currencies that claim they will be "the next Bitcoin", but my sense is that there is only really room for two really big cryptocurrencies: Bitcoin and, to a much lesser extent, Ethereum. Coke and Pepsi.

As companies and financial institutions are increasingly drawn towards cryptocurrency, they are going to buy those two. No executive is going to risk his job by buying off-brand cryptos, they are going to buy what every other executive is buying.

That is what will drive the rise in prices over the next two years. Other cryptos may rise as general interest in the area grows, but only Bitcoin and Ethereum will be adopted by the business mainstream and, as a result, see huge increases (just as they already have over the past year).

 

[ivor bigun]

at my age i will stick to cash ,end of .

[david555]

Option C & D  are the same result .only one ( D) put it more polite.....

 

Hacker groups must be buzzy now discussion WHEN to act and cash in ... before other hacker groups do ....but waiting could mean more gain for them also ...of course  ...????

 

I just watch and wait to see it happen ????

[donnacha]

8 minutes ago, ivor bigun said:

at my age i will stick to cash ,end of .

Thanks for letting me know. I will adjust my demand projections accordingly.

 

[david555]

4 minutes ago, ivor bigun said:

at my age i will stick to cash ,end of .

Some gold with it also could not harm ????

[Dagfinnur Traustason]

All that is important with everything that regards investments, is if you are willing to take the risk that comes with the investment and how long time you are willing to wait for the profit.

 

Get rich quick guys always lose at the end, while the ones who spread thier investments by doing well analyzed risk assesments, as well as have time on their hands, mostly lands on the shiny side of the coin.

[OneMoreFarang]

I remember I read an article about a coffee shop which allowed payment with Bitcoins. Some customers liked it, a modern payment system, fine.

But soon later the owner didn't accept Bitcoins payments anymore because it was just too volatile. Every day different prices (or exchange rates, every day changing money because tomorrow the exchange rate will be different. Or maybe keeping the money because soon the price will go up....

Crypto currencies might be interesting for people to speculate or gamble. But for everyday payments they don't make much sense - except people want to hide what they pay for or where the money comes from.

For "normal people" it's a lot of headache without advantage. 

[bkk6060]

Now is the time to get in.  When you can now buy a Tesla and once it goes more mainstream, it has unlimited potential.  There are now only a limited supply of Bitcoin people need to read up on it and understand it. And, you do not have to buy a whole coin for investment.

I own one coin and am hanging onto it for long term. I predict $500,000 USD for one coin by 2030. Some professional analysts are predicting much higher.

[OneMoreFarang]

3 hours ago, Mr Meeseeks said:

I made seven figures USD on Bitcoin and Ethereum in the last 12 months from a fairly modest investment. To those saying that it is a ponzi or a fad, or only backed by greed, I suggest you educate yourself very quickly, or you'll be left behind. You can start by reading or listening to The Bitcoin Standard by Safedean Ammous. 

 

Microstrategy and Tesla have invested, Apple and Google will be next, and you are still sitting there without any Bitcoin? ????

Did you have those seven figures now in real money? Or is it the current value of your Bitcoins? Because if it is the current value of your Bitcoins then maybe in a week you have only 6 figures left and maybe it will go down from there. Is it likely? I don't know. Is it possible? Sure.

 

[OneMoreFarang]

6 minutes ago, bkk6060 said:

Now is the time to get in.  When you can now buy a Tesla and once it goes more mainstream, it has unlimited potential.  There are now only a limited supply of Bitcoin people need to read up on it and understand it. And, you do not have to buy a whole coin for investment.

I own one coin and am hanging onto it for long term. I predict $500,000 USD for one coin by 2030. Some professional analysts are predicting much higher.

So obviously you are not a professional analyst, correct?

I know personally a fund manager and a top banker and a hedge fund manager. They don't touch any cryptocurrency - at least not with their own money. 

Now who should I trust? ???? 

[1FinickyOne]

3 hours ago, Mr Meeseeks said:

so does the mining difficulty increase,

So, what exactly is mining? 

 

I get what mining is in the realm of rare earths and gold...

 

But what needs to be mined in the case of what to me is an invisible, semi-imaginary "coin."

 

I bought in through an etf as I don't know where I would keep a coin I can't see... 

[Peter Denis]

1 hour ago, donnacha said:

The main value is actually more obvious, in some ways so obvious that it often gets overlooked.

Business is inherently unpredictable, so, value coalesces around islands of predictability. As we enter a decade or so of hyperinflation, an aspect of Bitcoin that we all know about and take for granted suddenly becomes very valuable: the fact that the supply of Bitcoin is enshrined in code that is visible to all, and that cannot be altered by any individual, company, or individual.

...

Yes, in our current very much unpredictable world, that transparency of Bitcoin is a clear Plus.

However, I still stick with my assessment that Bitcoin (like any other crypto-currency) is NOT based on legally enforceable obligation of the borrowers, but is created out of 'thin air'.  And so its underlying value is 'moot', resulting in the pricing-mechanism to buy a Bitcoin being determined solely by supply and demand for that coin.  

Bitcoin is indeed a sort of 'pyramid'-scheme that relies on new fiat-money to be pumped into it, in order to 'grow' and drive up the coin-price. That being said, there is also the very true saying that the "value of something is what the fool is prepared to pay for it".

From a logical, rational point of view you would be crazy to trade your hard-earned fiat-money for 'some digital numbers on a block-chain' but when enough people put their trust in that new digital gold, it will fly as long as it keeps on attracting new Get Rich Quick hopefuls and thereby fueling its self-fulfilling prophecy.

And I have to admit, I have somewhat changed my mind re Bitcoin in course of last year.  Not that I renounce any of what I wrote above, but I underestimated the craziness of our society.  The world has gone mad with their hysterical panic and over-reaction on covid-19, and despite all voices of reason both governments and the large public continue on this march of folly.  Also the billions of fiat-money printed to address this covid-crisis, will quite rightly have its effect in undermining public trust in the current financial system and people looking for alternatives.  And since logic and reason do not seem to apply anymore in our world, there is of course also a Huge Opportunity for Bitcoin that feeds on the same primal mechanisms.

[dannyol]

I'd love to have some crypto, but..... I want to fund it from the USA (have US address and bank account) but no exchange will have me.  They are not accepting ID verification from here even by using a VPN.  They obviously can tell when you use a VPN.

[donnacha]

42 minutes ago, Peter Denis said:

I underestimated the craziness of our society.  The world has gone mad with their hysterical panic and over-reaction on covid-19, and despite all voices of reason both governments and the large public continue on this march of folly.  Also the billions of fiat-money printed to address this covid-crisis, will quite rightly have its effect in undermining public trust in the current financial system and people looking for alternatives.  And since logic and reason do not seem to apply anymore in our world, there is of course also a Huge Opportunity for Bitcoin that feeds on the same primal mechanisms.

I long had what I believe to be sane, logical reasons for storing my money in Bitcoin and my results, over time, seemed to suggest my reasoning was in tune with reality. The only problem was that the periods of rapid gain were interspersed between long periods of slow growth.

When I became aware of Covid in February, I realised it would accelerate money-printing to unprecedented levels and that, therefore, the next two years would be a period of compressed hyper-growth for Bitcoin. I was saying this, right here on ThaiVisa, back in March when it was at 5K. I also said that gold, silver, and Apple shares (then at $56) would benefit, but all would be outpaced by Bitcoin and Ethereum.

Now, you can say that my previous reasoning on Bitcoin was faulty, and that my extraordinary profits over the years were just a lucky coincidence. You can even say that the 10X gain since March is proof that Bitcoin is crazy because how else could it thrive in such crazy times.

But here's the thing: I don't care why my hunches have been so successful, I don't care if it means I am just some crazy loon. All I care about is that my hunches have consistently put me far ahead of the market over the past two decades and given me opportunities that most people only dream of. My delusions, if that is what they are, do seem to map rather neatly to reality.

You seem to be suggesting that the "Huge Opportunity" for Bitcoin over the next year is invalid because "logic and reason do not seem to apply anymore in our world", but each of the people who cash out at 200k+ at the end of this year, or far more at the end of 2022, will spend their profits to make their own worlds safer, freer, and more fun. There are people who will life better lives because they caught what, in retrospect, everyone will see as an important financial and technological wave, but which you are currently only able to perceive as a crazy aberration to the proper order.

True change always provokes this response. Some of the same idiots who were smugly predicting the imminent collapse of the "Bitcoin ponzi scheme" back in March, when I was encouraging people to get in at 5k, are here again today, repeating the same misconceptions with the same smug certainty. Hilarious.

 

[Dagfinnur Traustason]

1 hour ago, bkk6060 said:

Now is the time to get in.  When you can now buy a Tesla and once it goes more mainstream, it has unlimited potential.  There are now only a limited supply of Bitcoin people need to read up on it and understand it. And, you do not have to buy a whole coin for investment.

I own one coin and am hanging onto it for long term. I predict $500,000 USD for one coin by 2030. Some professional analysts are predicting much higher.

That´s an amazing prediction! ????????????

[donnacha]

9 minutes ago, dannyol said:

I'd love to have some crypto, but..... I want to fund it from the USA (have US address and bank account) but no exchange will have me.  They are not accepting ID verification from here even by using a VPN.  They obviously can tell when you use a VPN.

Try Kraken. My Thai girlfriend had no problem opening an account and, then, getting her passport accepted.

Maybe don't use the VPN while signing up.