I don't know much about it. I know the dollar used to be backed by gold. Then I heard it was backed up by confidence in the U.S. government. What backs Bitcoin? Confidence in what?
OT - Bitcoin
- Thread starter Gamecock Jacque
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Well if the dollar is backed up by confidence in the U.S. government we are up sh#t creek
I want to know more about mining Bitcoin. Supposedly it’s bad for the environment. Like a huge power suck.
Seriously.
Seriously.
Confidence that there will exist a demand for it in the future, as with pretty much any investment.
I would say that the main attraction is that its supply is mathematically fixed, making it potentially deflationary and an ideal store of value.
It also has some possible utility as an electronic payment system. With present data networks it's a bit cumbersome for that purpose, but it's still far more liquid than say precious metals.
As long as we have electricity, right? It wouldn't exist in an apocalyptic world for instance like gold or silver would, would it?
Correct. As far as I know, blockchain tech would be impossible without electricity.
I have just recently gained an interest in blockchain tech, like tonight. I have to do some serious research on this. If a currency can be concocted out of thin air without a government behind it then what stops anyone, including me, from creating one. I might be on my way.
Nothing is stopping you. These are like giant weird pyramid schemes. You just make something up and then get people on social media to obsess over it.
U.S. Currency is backed by our economy and confidence in it. Our economy got so large that it far outstripped the Federal Reserve's ability to use a precious metal backed currency.
I mean practically the thing that would probably stop you would be competition.
I mean, it was more like they wanted to inflate the currency faster than a gold standard would have allowed.
There's a theory that all the security at Fort Knox is to keep anyone from finding out that we no longer have much gold.
For every person claiming they have made it big with crypto; there's a half a dozen people in the shadows that you don't hear about and lost small or big.
Governments are extremely weary on it because the pure concept of it makes it extremely hard to put under their control unlike printing actual cash and market manipulation with commodities like oil and gold.
Quick history; You hear crypto currency and blockchain very often together. There's other uses of blockchain that doesn't involve currency and there's crypto currencies that aren't based upon blockchain.
Before crypto currency was mainstream; there were lots of people investing in mining these coins. (https://www.investopedia.com/tech/how-does-bitcoin-mining-work/). This one of the reasons why there was a runup on price of the graphic video cards. It's much cheaper and $ efficient to use a GPU instead of investing in a powerful CPU.
Mining has gotten so popular that it's extremely hard to run a profit as your cooling electric bill and cost of PC infrastructure typically cancels out any currency mined. (It's extremely impressive what people have done to keep their bottom line green in mining; try googling it when you are bored)
There is NOTHING that backs most of these digital currencies. You do have corporations trying to figure out ways to have it tied back to their stock and exclusively to their products. They haven't quiet figured out exactly how to handle it yet. Until these currencies become truly mainstream and can be used it almost all purchase situations like traditional currencies can... It's all a big fugayzi. The only value in the currency is what the general public bestows upon it. People are finding some patterns out there in the rise and fall of prices but it's even more unpredictable than the stock market.
If you are really looking to dabble in it all. Take a look at starting with CoinBase. That's a good simple digital wallet with decent low fees.
Most people that work with digital currency say the endgame is to take the financial market away from governments that control their own currency and to even the playing field. It's still a massive longshot given that no government is going to give up their control of their own currency as their debt structure is completely tied to it.
In the meantime, it's about the equivalent of sitting down at a blackjack table in Vegas. The only thing 'kinda' working in your favor is that your odds and payout are completely tied to how many people are sitting at the table playing with you. If you are one of the last one's still sitting at the table; you are either SOL or just have to sit their with your losses until a lot more people join again.
???? Bitcoin is the best performing asset of the past decade by a longshot. Has done a 10x versus the Nasdaq which has also set records over that period. BTC was at $3200 at the beginning of last year and it's now at $45,000 and was above 60K earlier this year.
If you hold or even swing trade (versus day trade), it's been a phenomenal asset as has Ethereum, Chainlink and many others. And it's all in response to how our government handled 2008 and has operated since that point. Look at what's going on now with the printing. You don't believe it has the potential to run far higher?
The dollar is not pegged to anything and it's being debased daily now. Total manipulation.
Thanks for all the responses. My research is starting to indicate that a thing called Ammo might become the currency of the future.
If you held on for the long run... yes.
Guess how many didn't and continue to get get caught in all the movement?
Mid 2017 it was 2,5k; Dec 2017 it peaked at 20k.
Slid down to 3.4k over the next year in 2018.
BitCoin moves at the whim of million bulk buyers and is an extremely dangerous liquid asset to have.
If you have spare cash to let sit idle for a long time; by all means.
But this gold rush and ignorance of it being pushed as an investment vehicle in the common market is dangerous. A massive amount of people were burned in the first drop. Everyone were chatting during the holidays that this was the perfect thing to invest in and the big players dropped out like flies.
With it bouncing around 10-60k within the last year. The stakes have only increased.
Anyone attempting to do any speculation is purely gambling.
Nothing I said specifically is knocking what BitCoin or some of the other cryto currencies have done. But don't act like it's an 'investment' that the average person should make. You could easily see a US gov decision linking BitCoin to the Chinese gov and prevent all transactions in digital currency for it and it would dropped again and a massive fortune could disappear.
It is funny that you mentioned 2008 though. One of the biggest problems of 2008 was that no one was really digging into see what the true value of all these MBS bonds and CDOs were truly worth. The answer to it was to properly start monitoring cash flows propping the overall bonds and to dig further into risk models on 'What-if' scenarios with volcker and FRTB.
Digital currency? It's still the wild wild west. There is no possible way to measure what's true value is because of the pure concept of it was created. Case in point; Dogecoin
Blackjack payout isn't based on how many people are sitting at the table. It's you vs the dealer, payout just depends on house rules. But carry on about the internet money y'all are discussing. I'll never invest in something like it, but I enjoy learning about it.
It does remain more volatile than stocks due to overall market liquidity, but you see the year by year breakdown of returns. The "average person" buys and holds. {e.g. 401ks, etc.}
Most of Wall Street has now joined the party and you see BTC and others on the CNBC ticker along with stocks. As soon as they get an ETF passed, things are probably going to get wild.
Dogecoin is a different beast. The reason it's been running is b/c many believe Musk has plans to incorporate into Tesla's business model. For example, your Tesla mining Doge as you drive via the battery power. You could then turn around and use Doge to pay for the electric charge. That would be very cool and imagine the pressure on token price.
Honestly, there's not as much security at Knox as you woukd think. I've literally rode over all of that base probably 50 to 100 times in the last 5 years. I was kind of shocked to be honest.
Didn't say anything about the payout for comparison between the two. I was simply trying give a comparison of the risk involved with gambling in BJ and gambling with digital currencies.
Overall; digital currency speculation is about as equivalent as gambling at a blackjack table.
There are ways you can manage risk to some degree in both.
For example; If you are counting cards in blackjack with a 6 deck non-continuous shuffle. With enough patience you can come out on top. Now if you are the only one at the table; that takes longer because you see less cards. If you have a full table; you are getting to see more cards and will be able to manage your bets better. At least in this scenario; you can walk away with what is won or loss very easily any time you choose.
The same can be said about digital currency; the more people you get in buying and helping increase the price of the currency... the better for you. The table is getting hot and everyone wants in on the action. If the table gets cold, it gets cold fast and you can quickly lose whatever position you were trying to make. Now you are either stuck at the table for a LONG time to see if it gets hot again or you take your losses because you want that capital invested in something else.
The same guys I see getting burned on digital currencies are the same guys I see trying to pick options on silver simply because India had a good harvest and they think the farmers are going to spend a lot of money on silver jewelry on their wives.
Definitely is exciting times. I personally mess around with Coin-Poker and BlockChain Poker which has their digital currencies tied directly to BCH.
I've always thought the first real world use that was going to take with the public is these huge video game firms like Nintendo, Activision, and EA using their own currencies to pay for ALL of their online products.
My brother in law has been on hold with ETH for a long time. He better let me stay free at his beach house whenever he has the guts to cash it in.
ETH is potentially still a great opportunity - even with the recent rise.
The piece below is written by a Wharton grad and former CEO of Bitmex.
If you don't want to read in it's entirety, check the last third of the article, particularly "The Ratio" segment and the corresponding chart at the bottom of page where he highlights CEFI to DEFI % transition and the potential impact on Layer 1 (ETH) price. Face melting activity on the horizon if he's even close.
https://cryptohayes.medium.com/yes-i-read-the-whitepaper-59cfa2ea9c2c
Also, this is a great summary of ETH and it's proposition for anyone who hasn't kept up.
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When he initially invested in ETH when it was new.... he was convinced they about something.
He never told me what he put in but I think it was at least $1k around when it hovering around 8-10.
He's sitting pretty
Hahaha. You should be a billionaire since you have cards figured out. I'll give you 20k to take to the blackjack table. Just bring me 30k back after a round and you can keep the rest. I get what you're saying about the coins. Still not a smart investment as far as I'm concerned.
Gold is really heavy to try and steal. If you want to steal $500,000 you are going to need a mule to help carry it off. If I have the right passwords I can steal $500,000 from your bank account or brokerage account in seconds, then send it to my account in the Grand Caymans seconds later.
I am believer and follower of Dave Ramsey for personal finance and Warren Buffet for investing. Both gurus have said multiple times that if you do now understand the investment and how it works then stay away from it. I personally have no idea how block chain tech works and I use to write/develop software for a living. Maybe that now makes me a BOOMER, I don't know. Anyway, I have always thought that crypto could be manipulated by nefarious actors and therefore I have no interest in it. Maybe it is a homerun bet, if it is I will definitely miss out.
USCALUMNI
USCALUMNI
Would the dollar be worth a lot more if backed by gold today? I do not know the answer to that.
USCALUMNI
Yes, almost certainly.
The dollar used to be defined as a particular weight of gold. That means that, over the long run, the money supply could only be increased in proportion to the increase in gold supply (which I believe is typically no more than ~2% per year.) Under the current pure fiat system, no such constraint applies.
All I know is this-- the price of video cards is up over 300% because of crypto mining. That's VERY irritating for PC builder enthusiasts like myself.
Somebody had to do it 1st.
www.dailymail.co.uk
Bitcoin falls 11% as El Salvador starts using currency as legal tender
El Salvadorians began using Bitcoin to shop at Starbucks, McDonald's, and even Pizza Hut on the same day that cryptocurrencies lost a total of $400billion in market value.
Democrats float a tax on investments to help pay for $3.5 trillion budget plan
Democrats are weighing proposals to fund their $3.5 trillion budget plan, including mark-to-market levies on certain investments, taxing growth every year.
Speaking of gold, what happened to the gold supply in Fort Know? It would be worth trillions.
Bitcoin plunges as El Salvador rolls out nationwide acceptance: CNBC After Hours
On today's show, CNBC.com's MacKenzie Sigalos explains El Salvador's rollout of bitcoin acceptance nationwide, and why some citizens are protesting the move.
What this guy said. Just as an fyi all projections are pointing to a bull run for crypto through the end of the year. It is highly volatile though. Example. I bought 4500 in an alt coin back in the spring, that bought me 2 coins. Yesterday it was worth 8500, today 7000. Projections right now are saying that my coins could be worth anywhere from 15k-20k per coin, so i would have about a 30k-35k profit if this comes true. There are some countries however that are now accepting bitcoin as a currency, most recently (yesterday) el salvador. Its a risk but if you have a few thousand to play with it could have tremendous upside.
