Bitcoin crashes…

[Gordon WParticipant @gordonw]

Supply and demand- if there's a shortage of oil the price of oil goes up, a bad harvest and the price of grain goes up. Shortage of nurses the wage goes up, no, something wrong here.

[blowlampParticipant @blowlamp]

Posted by Neil Wyatt on 15/10/2017 09:49:32:

Posted by blowlamp on 15/10/2017 09:35:56:

Please be aware of how and where bitcoins are produced – it's not done by some guy firing up his laptop when he runs low on money for drugs. See here for some pictures of the equipment necessary to run the Bitcoin network.

Bear in mind that currently it costs over $1000 in electricity to mine a bitcoin, so compare that to the cost of paper & ink to print a banknote or to mint a coin (called Seigniorage) and you should start to see which currency is more rooted in reality.

It's the service economy gone insane investing in producing nothing more than useless data that does nothing other than verify itself.

I do see a solution to global warming, there's a lot of energy that can be saved here…

 

The amount of energy consumed actually reflects the level of competition between miners to secure the network through the concept of Proof of Work.

If only two miners were competing on the network using their old Sinclair ZX81s, then energy consumption would be extremely low, it would however, be secure whilst still mining blocks every ten mins. In short, the mining difficulty adapts to the number of participants and the computing power they bring to the network to maintain a steady block time.

Edited By blowlamp on 15/10/2017 10:24:44

[SillyOldDufferModerator @sillyoldduffer]

Posted by Michael-w on 15/10/2017 05:45:32:

Posted by Phil Whitley on 14/10/2017 14:50:34:

Creating money from nothing……………………..banks have been doing it ever since the gold standard was scrapped!

I wouldn't say exactly nothing, the coins and notes have to be paid for, a time when it really becomes created from nothing would be when there's no actual currency involved, this is why governments are always in debt, precisely because the money doesn't cost nothing and somebody has to pay for that.

Just like gold was discussed, the supply of physical money is limited and may be a reason why they haven't already scrapped it besides it's convenience. If money becomes truly virtual, and thereby anyone could create it, then it's worthless, unless the bank could guarantee that nobody (including themselves) would tamper with it.

An interesting question to ask is 'what exactly is money?' At bottom, I suggest it's just a promise. The physical or virtual form of 'money' doesn't matter much, what's essential is that the promise remains trustworthy. Quite a lot of that trust depends on promises to deliver in the future, not on wealth that already exists.

A complication is that we live in a world where much of what we want and are prepared to pay for doesn't have significant physical value. Haircuts, entertainment, funerals, medical services, banking, information, repairs, education, insurance, design, advice, defence, training, science, traffic lights, law, labour, skills, and many others. The cost of 'services' is fundamentally no different from the cost of physical items: everything is only worth what someone is prepared to pay for them. And the 'payment' is usually just another promise.

Gold has been used as a token of exchange because it's rarity and stability makes it difficult to devalue the promise it represents. But, if an large supply of gold were suddenly discovered at the North Pole, then the value of gold would crash. Exactly this problem has occurred several times with Silver after new discoveries suddenly dropped the 'value'. The USA economy suffered boom/bust cycles after the Comstock Lode and other 19th century sources were opened up because the dollar was a silver coin, and the value of silver was unstable.

The realisation that wealth can grow is British. Rather than believing Wealth to be limited like a birthday cake that has to be shared out, it was understood that an economy could grow on the basis of promises to deliver in the future.

Generally the idea has worked out well. Unfortunately there are limits, and the foolish or greedy behaviour of governments, banks, corporates, and individuals has and will cause trouble. Making too many promises by printing excessive numbers of banknotes and gambling on the stock-market, causes individuals to lose confidence in those promises. Loss of confidence can happen quite suddenly, like when the sub-prime market collapsed, or it can be a slow process like the progressive devaluation of the pound relative to the dollar over the last 100 years, and more recently, it's sharp decline against the euro.

What frightens me to death is the possibility of a loss of confidence in the whole Western economy (which includes China, India, Brazil and Russia). Is the West really rich, or do we just think we are? It's probably best NOT to ask the question. An awful lot of promises have been made by an awful lot of people.

Dave

[J HancockParticipant @jhancock95746]

Geronimo had it about right when he said (approx ) , " When you've destroyed the world, eat your money".

[Ady1Participant @ady1]

Gold like bitcoins has no useful purpose except as a store of wealth

The increase in value is temporary, until bitcoins find an equilibrium

If your government or economy or banking system goes bust, like in Greece, then they are unaffected because they are totally independent of these things

[Gordon WParticipant @gordonw]

Just had a look at the pictures of bitcoin production, it reminded me of all the actor luvvies wittering on about working at the coalface.

[MWParticipant @mw27036]

Posted by Ady1 on 15/10/2017 13:15:57:

Gold like bitcoins has no useful purpose except as a store of wealth

Gold has stood the test of time, you can't make more of it (unless you could harness the power of the stars), only reuse what's there, it's pretty, it doesn't corrode with most things, highly conductive and make it into other nice things, hence why the rich and royalty love it; you've not truly arrived unless you're covered in it.

It was once believed that the Inca's were the only culture who didn't value gold like the rest of the world did from Europe to Africa and the far east. This may be an incorrect interpretation based on their ceremonies where gold artifacts would be tossed into a lake or river, it was a kind of offering to their gods and not necessarily because they didn't value it (indeed they often compared the material to having come from the gods).

At least you can put your hands on gold whereas a bitcoin, not necessarily, a bitcoin will only be worth whatever anyone is willing to pay for it, in other currency, which eventually has to have it's roots in solid objects, which is why a virtual currency can't replace it.

Otherwise one could simply imagine money and argue this imagining is worth something, in physical property. Then you've truly arrived at nonsenseville.

Michael W

[blowlampParticipant @blowlamp]

How many here do online banking… how do you know those numbers are actual £s or $s… where is the definition of what a pound or dollar is?

Do those numbers in your bank account belong to you, or are they just an unsecured loan you made to the bank without realising?

Does your bank let you send any amount you choose, instantly, to people in far flung places without question, or do you need to 'convince' them you're not up to no good?

Can you send a lump of gold abroad… do you think it would get there… would the recipient be able to spend it to buy coffee?

Who uses Fusion 360… can that be held the hand… does it have value in what you use for?

Ever sent an email rather than post a letter?

Is this forum real?

[SillyOldDufferModerator @sillyoldduffer]

Posted by Michael-w on 15/10/2017 13:36:44:

Posted by Ady1 on 15/10/2017 13:15:57:

…

…

Otherwise one could simply imagine money and argue this imagining is worth something, in physical property. Then you've truly arrived at nonsenseville.

Michael W

That's right Michael. Welcome to the real world. Scary but true, we are indeed living in Nonsenseville. The hard part is deciding what to do about it.

Dave

[blowlampParticipant @blowlamp]

Posted by Michael-w on 15/10/2017 13:36:44:

…Otherwise one could simply imagine money and argue this imagining is worth something, in physical property. Then you've truly arrived at nonsenseville.

Michael W

 

 

Banks have always done this and continue to do so.The whole point of Bitcoin is to circumvent the problem.

This is a quote from the Bank of England's website:

"In the modern economy, most money takes the form of bank
deposits. But how those bank deposits are created is often
misunderstood: the principal way is through commercial
banks making loans.

Whenever a bank makes a loan, it
simultaneously creates a matching deposit in the
borrower’s bank account, thereby creating new money.
The reality of how money is created today differs from the
description found in some economics textbooks:
Rather than banks receiving deposits when households
save and then lending them out, bank lending creates
deposits."

 

 

It seems we already live in nonsenseville.

Edited By blowlamp on 15/10/2017 16:06:18

[Barnaby WildeParticipant @barnabywilde70941]

You not only live in nonsenseville, it is so much nonsense that you could never ever begin to believe it. Our banking system should be so simple that everyone can understand it, yet it is actually so complex that nobody understands it.

You would think that when you put your money in the bank, the bank then lends it out to earn interest, it pockets the difference between what it pays the saver & the lender.

You are what we call 'asleep'. You would be sweet & innocent in your sleep state if the truth weren't so tragic.

If you think you're not asleep, that nobody can pull a fast one over you, that you are so clever in your chosen occupation then answer me these two questions :

1. How does our currency enter the system? How does a newly printed £5 note end up in your wallet?

2. You are both a borrower & a saver, how can you quantify the absolute stupidity of being a borrower & a saver at the same time?

[Ady1Participant @ady1]

Something for the uninitiated to mull over:

The money in your Bitcoin Wallet that you look at…

…well it's not actually in your wallet.

Nope.

It's actually in the blockchain, racing about on the internet.

Spooky eh.

Edited By Ady1 on 15/10/2017 23:56:49

[Ady1Participant @ady1]

At least you can put your hands on gold whereas a bitcoin, not necessarily, a bitcoin will only be worth whatever anyone is willing to pay for it

Everything is based on what you are willing to pay for it

A lathe, a gallon of oil, a bottle of water, a dollar, whatever

The advantage of gold is it's physicality, but this is also it's weakness, both the USA and Nazi Germany showed us that physical wealth has distinct weaknesses and the government guys can nick your money any time it suits them and there's nowt you can do about it

You can put your hands on gold… and so can everyone else!

Bitcoins are untouchable and almost untraceable, you can walk out of country A on Monday with a bit of sackcloth covering your naked body and be living in a 5 star hotel as a multi millionaire in country B on Friday

A pretty handy option for many people

[SillyOldDufferModerator @sillyoldduffer]

Posted by Ady1 on 16/10/2017 08:25:00:

…

… you can walk out of country A on Monday with a bit of sackcloth covering your naked body and be living in a 5 star hotel as a multi millionaire in country B on Friday

…

Much easier to start in the Ritz with loads of money and finish by waking up naked in a skip somewhere near Qingdao…

Don't ask how I know.

[Ady1Participant @ady1]

I like one of Richard Bransons quotes

How do you become a millionaire?

First you become a billionaire, then you buy an airline.

[Andy CarruthersParticipant @andycarruthers33275]

Chatting to a colleague earlier today, we both work in Investment Banking

A friend of his has a business idea and 5 weeks ago was looking for £200,000 seed funding. He was introduced to Bitcoin technology, there are a number of vendors who will "sell" a bespoke Bitcoin implementation (think Etherium, Litecoin etc) which the acquiring company can sell as an Initial Coin Offering (ICO)

Before reading the next line, have a guess how much has been raised from knowing nothing about an ICO to closing the offering?

£15,000,000

[Gordon WParticipant @gordonw]

Be aware that reading this forum entry will generate spam re bitcoin. I've had 3 in 2 days, despite having only passing interest.

[Neil WyattModerator @neilwyatt]

Could suggest you have some spyware tracking your browsing history.

Neil

[Gordon WParticipant @gordonw]

Yes. Since last post have 2 more. Suggests desperation.

[blowlampParticipant @blowlamp]

Price update.

[Neil WyattModerator @neilwyatt]

My intuition says it might be time to cash in your bitcoins…

Neil

[Neil WyattModerator @neilwyatt]

Actually, I've just worked out that if Bitcoin keeps doubling in value every three months, in five years each on will be worth nearly six billion pounds.

Where's my piggy bank?

[vintagengineerParticipant @vintagengineer]

Having dealt in shares for the last 30 years, I would have bailed out a long time ago. Nothing increases in value that quickly without heading for a major crash!

[blowlampParticipant @blowlamp]

There's been a pullback to ~ £5470 at the moment, but that's not surprising considering the price was ~ £4430 last Sunday morning (29/10/17).

I feel the reason for these gains is largely due to the strictly limited supply of bitcoins versus the increasing demand. Only 21 million can ever be created, so if demand continues, I don't see the price falling any time soon, except for relatively minor corrections over short periods or unless something many times more useful appears from nowhere.

I intend to keep what I already have and add more when the price dips.

Martin.

[John McNamaraParticipant @johnmcnamara74883]

Tall trees don't grow forever.

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