bitcoin flying high

[Soul-Sing]

Dear cafemembers I bought a bitcoin some while ago. It can offer you all a firm single malt. (Islay)
From 1 bitcoin=24 euro to a 100. Man I am in heaven.( For a short while.) Skol!!

[Kirboosy]

If only I would of bought several hundred when they were at 15-30 bucks....


Very nice for you though. Congrats!

[|{urse]

Had I started mining 2 years ago, I'd be silly rich.

[bashhimup]

Nice job.

[3rdalbum]

I want to buy a bitcoin or two in the hopes that the price will continue rising and I can cash out for a profit.

However I read about the 1929 stock market crash, railway stocks, tulip mania and the South Sea Bubble. Oh, and Dotcom.

It all comes crashing down when people get wise or get nervous, and I think we're not far away from that. I'll buy after the crash and see what happens.

[Soul-Sing]

In the first place I was curious about the concept, the idea, and technology. It was in the beginning a bit 'underground' imo. But the concept becomes mainstream maybe, some day.
And indeed its about trust. Everything about economy is about trust. Over 112 euro now....

[Sharpie1]

And now Instawallet has been hacked - or has it ? And the bubble will burst.

Sharpie1

[Ace.....]

I saw the Aljazerra inside story broadcast last week.
Anybody else see that?

I was way shocked.
Like out of sight.

Had they rigged it for that?
Very possibly.
I've seen similar phoo phoo operations before on the TV.

For those that didn't see it.... it is still available for viewing online:
http://www.aljazeera.com/programmes/insidestory/2013/04/20134572639241668.html

You'll see that the guy they chose to represent bitcom was an official UK trader - with a Mohecan haircut!
When he spoke, he wasn't calm and rational.... instead it was a rant, with his hand in the air doing a classic Rapper 'downward point' LOL.

I actually don't mind if some guy has got his own style.
But, I do expect a calm, considered outline/argument.
And, as an introduction (which it would be for the majority watching a mainstream news channel), some idea as to what the hell it is that I'm supposed to be exchanging my money for.
Like who is sat there, in front of the PC, saying, 'let's generate a million more signatures (or whatever a bit coin actually is).'

I know the BoE does that..... but at least there's like a million people out there watching what they're doing, and the effects are market driven, based upon transparency.
Who is controlling bitcoins?

Like as 3rdAlbum said
This sounds way too much like 'paying the price of a house for a tulip bulb'.

And..... it appears to be run by would be rappers, sporting a Mohecan cut, doing a 'down pointing' rant. LOL

Seems kind of wierd to me..... I guess that doesn't mean it won't work.

But.......

[Ace.....]

So I looked a bit(coin) further into this. :)

It seems the money (bitcoins) are generated by the general public.
Anybody who wants to create this form of money can do so.

25 bitcoins are created every ten minutes (decreasing) until 21 million have been created in 2140AD

You install the software, called mining software.
This software attempts to solve a mathematical puzzle.
If you are lucky, it solves the puzzle in an hour (say).
Otherwise, it apparently could take years.

But if you do win, then you get 50 bitcoins for free.... or for the price of the electricity consumed by your PC.

The software, of which there are many, can be set to run in background mode, operating only when you're not using your PC.
Plus, you can install it on your web site, and use your visitors PC while they are browsing your site.

Like say ubuntu did this, and you left yourself logged in, then you would be helping ubuntu create bitcoins (an example only obv).

So the big question as to who gets paid for the newly released coins.... the answer is.... the electricity companies, AND the graphics card companies.
The latter, cos the better your graphics card, the faster you can solve the puzzles.
OR, apparently you can buy a specific chip designed purely for maximising the puzzle solving speed.

For the average bod; this is no diff to the weekly lottery, so, often people combine to form a syndicate.
This way, if some bod wins, then the syndicate gets paid out and each person gets their share.

I guess with modern PC's that partially shut down (and save electricity)... by running the software, the PC never shuts down, so you do pay a price.

Apart from luck.... the only way to do this profitably, is to set up your system with the latest hardware and software, and run a few PC's.
Ideal if you've got personal solar or wind power.
But at current valuations, it could be worth it for a bit of fun.
A site offers the full package just on a sign up basis, even offering the website code (devious eh?)
They take a small cut on winnings 3% I think.

A bizarre financial system, but that's how it works. :)

[tgalati4]

How is this different from a Ponzi (http://en.wikipedia.org/wiki/Ponzi) scheme?

[3rdalbum]

Because the farmer sold his tractor and started taking clarinet lessons.

Seriously, it's nothing like a Ponzi scheme. Bitcoin is a financial system (money) and as far as I know nobody has used Bitcoin as a vehicle to start a Ponzi or pyramid.

[Ace.....]

I agree.
This is not a ponzi scheme.

It does sound exceptionally dodgy at first glance.
For me. it was "who is getting paid for the initial money supply".

Once I'd done my research, and discovered the amazingly inventive method of introducing the coins into circulation, I must admit.... I reassessed my point of view.

The problem now resolves primarily down to hacking theft.

There are no backup funds to replace your money, if stolen thru a successful hack.
Also, there are enforcement issues vis a vis payments, as it is not an accepted currency covered by any local laws that could be quoted on your contract.

To me, it seems much more akin to trading shares.
I note that the graph is now peaking.
People who are buying now, may see a big fall.

Presumedly (but no guarantee) if it crashes, then it will rise again.
But I would say.... "don't get into that game, without doing some research... and even then.... don't bet the mortgage on it". ;)

[Soul-Sing]

I stay away from it now, sold the energy consuming bitcoin thing. It's a silly game, not even an alternative for money. It's a botnet competition. Over and done with. :(

[Ace.....]

Yes, I have to agree.

I have not at all been glued to the screen watching the rise & fall of Reginald Perrin.
However, I did see a report stating that it had fallen to $50 and risen to $250.

Er......
.... this is not a currency.
This is a trading commodity, only without any commodity, other than an artificially accepted value of a token, that agreeing participants are prepared to gamble with.

You could say that this is no different to trading FX only that with sterling, yen, dollar, euro etc. you might see a 'wall of money' being invested into a currency, and it's value might change by 1%.
It might continue to change by greater degrees, however the (say) dollar does not drop down to $1= €0.5 and then rise to $1= €5.

You can't trade (buy & sell objects/commodities) over this trading range.

Therefore, I also must re-asses my position on the bit coin.

While I appreciate it's generic status.
It's liquidity, or lack of, means that it must become (be) a target for speculators.

So fine.

If it drops to say $10..... then it may be worth a punt, with a sell at (say) $100 (ten bagger :) )

On a funnier note:
I saw some coffee house was taking bitcoin payment.

I just wonder whether the punters are checking their ipod bitcoin trading screen, to choose the moment they pay the bill... LOL.

Perhaps it's true.
The epicentre of bitcoins is truly located somewhere in the South Sea Isles :D

[Mikeb85]

A Ponzi scheme by it's nature is an investment in which the only profit made is the money taken from other investors. If there's no return of capital into the system (no dividends, buybacks, etc...), then an investment vehicle is essentially a Ponzi scheme.

Bitcoin isn't an investment, there's no underlying real value. It's only worth anything as a currency. And right now it's a very unstable currency, which plays into the hands of speculators.

If you're looking into bitcoins as an investment, you're going to get burned. If you like to speculate on currencies, have fun. Just don't forget what bitcoin actually is...