Buying bitcoins

zonEEE · 23-03-2013 7:19am

Cavehill Red wrote: »

I get it from responses such as where you asked if I was mad or in a bubble for having the temerity to disagree with you.

On the contrary, I have at least done due diligence on this. The risks I have detailed are why bitcoins do not make up part of my portfolio.
Further due diligence indicates that you are an undergraduate at Sligo IT with a significant interest in online gaming. Again I would ask, since this is the investments forum, what else have you invested in? Revealing your portfolio or your investing history would perhaps grant some much needed credibility to your proselytising for a highly speculative investment in a highly emotional manner.

I guess while you were looking through my post history you forgot to look at the dates. I had a significant interest in online gaming 4/5 years ago. I need an investment portfolio to post my opinion which is the opinion of many economists? You really need to get down off your high horse. I don't know where you are getting this emotional manner from? If you think the majority of people in the world trusts the government and banking system 100% then I don't think you live in the real world at all, until recently there hasn't been much of an alternative to cash.

You have deteriorated the debate into personal digs while avoiding the topic. Well done.

Cavehill Red · 23-03-2013 7:25am

zonEEE wrote: »

I guess while you were looking through my post history you forgot to look at the dates. I had a significant interest in online gaming 4/5 years ago. I need an investment portfolio to post my opinion which is the opinion of many economists? You really need to get down off your high horse. I don't know where you are getting this emotional manner from? If you think the majority of people in the world trusts the government and banking system 100% then I don't think you live in the real world at all, until recently there hasn't been much of an alternative to cash.

The longterm viability of bitcoin is certainly not shared by the majority of economists, most of whom view it as little more than an intriguing experiment on the fringes of the internet.
If you are unaware of alternatives to cash, may I introduce you to the concept of precious metals, which have functioned as money since long before cash was even invented.
Let me assure you that not only do I live in the real world, I invest in the real world too, and not in virtual worlds which have a hazard of exploding in nasty puffs of Ponzi bubbles.

zonEEE · 23-03-2013 8:33am

Cavehill Red wrote: »

The longterm viability of bitcoin is certainly not shared by the majority of economists, most of whom view it as little more than an intriguing experiment on the fringes of the internet.
If you are unaware of alternatives to cash, may I introduce you to the concept of precious metals, which have functioned as money since long before cash was even invented.
Let me assure you that not only do I live in the real world, I invest in the real world too, and not in virtual worlds which have a hazard of exploding in nasty puffs of Ponzi bubbles.

Sorry but I cant buy goods and services with gold. Like it or not virtual worlds as you call them are here to stay.

"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."

Fukuyama · 23-03-2013 1:18pm

The way I see it, the black market is just as legitimate as any other market. If government don't want to recognise Tor and the Silk Road I'm not going to let it stand in my way of making money.

Right now the value assigned to BitCoin is that

a) They're an investment that seem to be on the rise. This is a bubble. It will burst. But people have gotten very rich of of bubbles in the past. When it does burst, they won't loose all value because of point b.

b) You can buy illegal stuff with them. Never the one to judge things at face value I've signed up to the Silk Road and checked it out. Quite a good set-up I must say with a pretty wide selection. Everything from weed, to heroin to pretty disturbing porn genres.

I leave my little values at the door. If somebody want to buy my over inflated currency from me to do with whatever they please, be it donate to Wikileaks or buy weed, then so be it.

Also, as far as saying that the BitCoin network could be destroyed :rolleyes::o If you hold that opinion then you really don't understand how a P2P network works. It'd be like trying to punch the ocean to death. The only thing that might take out BitCoin would be thousands of EMPs exploding in the atmosphere across the globe knocking out every computer, server and satellite.

martyoo · 23-03-2013 1:45pm

I've signed up to the Silk Road and checked it out.

I'm still waiting for a refund on that assassin I ordered months ago. :mad:

martyoo · 23-03-2013 1:57pm

Joking aside, the "deep web" is something that will continue to grow and people will continue to lose confidence in fiat currency so Bitcoin (or an alternative) will continue to grow in popularity.

Taken from Nassim Taleb's AMA on Reddit

Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative. But I am not familiar with the specific product to assert whether it is the best potential setup. And we need a long time to establish confidence. I only talk from skin-in-the-game. If I had money in bitcoin, I would have reported it. But I don't yet. I am waiting to understand it better, not with my brain, but with my experience...

Link

Cavehill Red · 23-03-2013 3:37pm

zonEEE wrote: »

Sorry but I cant buy goods and services with gold.

Of course you can.

zonEEE · 23-03-2013 6:42pm

Cavehill Red wrote: »

Of course you can.

Paying for your shopping with a bullion is real practical isn't it? Get with the times.

moneymad · 23-03-2013 7:38pm

Cavehill Red wrote: »

Like anything it has the value someone is prepared to pay for it. It is the same as fiat currency, in that it isn't backed by anything tangible, but lacks the credibility of a state support. Effectively, it's an online electronic fiat currency, primarily being used by drug dealers to evade detection, which has been historically extremely volatile and is in my opinion likely in a bubble.

It works fine as a medium of exchange.

Cavehill Red · 23-03-2013 9:05pm

zonEEE wrote: »

Paying for your shopping with a bullion is real practical isn't it? Get with the times.

You certainly should.

Cavehill Red · 23-03-2013 9:07pm

moneymad wrote: »

It works fine as a medium of exchange.

Only while people invest confidence in it. When it was hacked, confidence plunged its notional value to less than a sixth of what it had been previously. If people are comfortable with that sort of volatility and moral hazard, who am I to disagree?
You do your own due diligence and make your own investments. It wasn't for me, and I've explained why.

Tearwave · 24-03-2013 11:48pm

The slow and steady rise of bitcoin ($1 to ~$10) for roughly a 2 year period was probably based on the demand for them to carry out transactions on silk road. But what has happened over the last 6 weeks or so (jumping to ~$70) is an entirely different kettle of fish. Seems a lot of people saw BTC value rising and jumped on the bandwagon, looking to make a quick buck - and driving the demand up hugely. Jumping 700% in value in less than 2 months, without a (nowhere near) corresponding rise in silk road activity would set off alarm bells in my head.

The "people" actually using silk road (buyers and dealers) have the drug prices pegged to the USD at time of transaction so it doesn't make a blind bit of difference to them what BTC are worth. (Dealer sells ounce of weed for USD $100, buyer pays USD $100 for ounce of weed, done and dusted). Seller then sells BTC on exchange to another potential drug buyer and the wheel turns full circle.

TLDR version: you could have made a colossal lot of money investing before January 2013, but more than likely have missed the boat at this stage.

Tearwave · 24-03-2013 11:54pm

Cavehill Red wrote: »

Only while people invest confidence in it. When it was hacked, confidence plunged its notional value to less than a sixth of what it had been previously.

The encryption protecting bitcoins (Elliptic Curve DSA) is among the strongest in the world, even with all the computing power and time in the world it would be almost impossible to crack the bitcoin network. What you are referring to (I think) is an exchange being hacked in 2011 or earlier this year.

I would compare that to some idiot bank staff member, leaving a safe open overnight with a large amount of Euro banknotes inside. The cash gets stolen obviously. Doesn't mean the currency system itself caused the problem!

Cavehill Red · 25-03-2013 12:07am

Tearwave wrote: »

The encryption protecting bitcoins (Elliptic Curve DSA) is among the strongest in the world, even with all the computing power and time in the world it would be almost impossible to crack the bitcoin network. What you are referring to (I think) is an exchange being hacked in 2011 or earlier this year.

I would compare that to some idiot bank staff member, leaving a safe open overnight with a large amount of Euro banknotes inside. The cash gets stolen obviously. Doesn't mean the currency system itself caused the problem!

Yes, it was an exchange that was hacked. But since the currency is virtual, it is vulnerable to anything that interferes with the electronic mechanism of interaction, be it exchanges, or the internet going down, or the power, or whatever.
Its one positive attribute - mobility - is also its main negative in my mind (apart from its current bubblicious state). I might have difficulty moving cash or gold from A to B, running risk of robbery, which is not run by accessing my currency virtually. But if the method of access is compromised, the end effect is little different.

zonEEE · 25-03-2013 9:52pm

Cavehill Red wrote: »

Yes, it was an exchange that was hacked. But since the currency is virtual, it is vulnerable to anything that interferes with the electronic mechanism of interaction, be it exchanges, or the internet going down, or the power, or whatever.
Its one positive attribute - mobility - is also its main negative in my mind (apart from its current bubblicious state). I might have difficulty moving cash or gold from A to B, running risk of robbery, which is not run by accessing my currency virtually. But if the method of access is compromised, the end effect is little different.

The euro, dollar and every other currency in the world have the same vulnerability when it comes to computers/power etc...

Roonbox · 25-03-2013 10:52pm

Cavehill Red wrote: »

What else do you invest in, ZonEEE? Because it sounds very like this is an ideological rather than an investment decision for you and all your posts are extremely emotional and lacking in diligence or critical distance.

agreed

Roonbox · 25-03-2013 11:08pm

There is so much interest in Bitcoins that I think it may turn out to be a massive bubble very quickly..

But as far as I can see that's all it will ever be, any explanation I have heard so far does not sell it to me..

If somebody can give me a clear explanation as to where their value comes from apart from the fact that the are finite I would very much appreciate it...?

Liam.

Tearwave · 26-03-2013 12:05am

Roonbox wrote: »

There is so much interest in Bitcoins that I think it may turn out to be a massive bubble very quickly..

But as far as I can see that's all it will ever be, any explanation I have heard so far does not sell it to me..

If somebody can give me a clear explanation as to where their value comes from apart from the fact that the are finite I would very much appreciate it...?

Liam.

Primary factor is demand to carry out transactions on silk road marketplace (an underground website), basically buying and selling drugs. The dealers on these websites only accept bitcoins (for a variety of reasons - security, untraceable, irreversible transactions, etc). It's changing the face of the drug industry, people can rate dealers just like ebay sellers on things like quality and purity of product, time taken to deliver, etc. The buyer pays for the drugs in bitcoins then receives a package (usually with a fake return address) in the post a week later with the drugs, and the dealer has never been seen or identified during the whole process. The bitcoins are placed in escrow until the package is received so it's quite consumer-friendly too (a bit like paypal buyer protection).

Aaaaaaaaaaanyway to cut a long story short - this system is favourable to all parties involved, drug dealers never have to be seen, never have to launder banknotes, risk getting shot, etc. Drug users don't have to worry about getting ripped off, buying poor quality product, getting shot over debt, etc. So more and more people are turning to this site, coupled with finite amount of bitcoins in the world to buy drugs with = price increases.

Cavehill Red · 26-03-2013 7:55am

zonEEE wrote: »

The euro, dollar and every other currency in the world have the same vulnerability when it comes to computers/power etc...

Um, cash?

zonEEE · 26-03-2013 3:23pm

Cavehill Red wrote: »

Um, cash?

Are you serious??????????? Or is that some sort of a joke?

Cavehill Red · 26-03-2013 8:40pm

zonEEE wrote: »

Are you serious??????????? Or is that some sort of a joke?

No joke. I would have thought the point was obvious. Cash transactions in any currency are unaffected by hacking or internet access failure or power disruption.

zonEEE · 26-03-2013 9:35pm

Cavehill Red wrote: »

No joke. I would have thought the point was obvious. Cash transactions in any currency are unaffected by hacking or internet access failure or power disruption.

Where does the cash come from??? Do you understand how the money system works?

Cavehill Red · 26-03-2013 9:39pm

zonEEE wrote: »

Where does the cash come from??? Do you understand how the money system works?

Under the mattress? Out of the wallet?
If the net went down, so would much of world commerce, including the entirety of bitcoin. The cash and barter economy would sustain until they could reboot of course.

zonEEE · 26-03-2013 9:48pm

Cavehill Red wrote: »

Under the mattress? Out of the wallet?
If the net went down, so would much of world commerce, including the entirety of bitcoin. The cash and barter economy would sustain until they could reboot of course.

Without computers you don't have an economy in today's world in any shape or form. Do you really think euros would be worth anything in the morning if the whole electronic system crashes? Euros made by the central bank are records updated on a computer. The system doesn't work plain and simple, the whole money system/bond market is a bubble blowing up the day the first Rothschild was born.

arrowloopboy · 26-03-2013 10:30pm

This may or may not be a bubble(probably is),i can see them being in big demand by people involved in criminal activity,these people usually have lots of easy money that they'd like to hide,bitcoins might be good for this,in the short term until their heavly regulated they should rise in value.
Are they listed on any markets ?if so whats the ticker.A spread bet with something like a 15/20 % position could be the way to go if their listed.

Cavehill Red · 26-03-2013 10:53pm

zonEEE wrote: »

Without computers you don't have an economy in today's world in any shape or form. Do you really think euros would be worth anything in the morning if the whole electronic system crashes? Euros made by the central bank are records updated on a computer. The system doesn't work plain and simple, the whole money system/bond market is a bubble blowing up the day the first Rothschild was born.

You've been reading far too many conspiracy websites and insufficient investing ones imho.
There's always an economy and they evolve with circumstances. The main argument FOR bitcoin is that it will transcend its current status as an anonymising agent for drug dealers and present an alternative to fiat currency. That is undermined by both its inability to inflate (the cap) and its vulnerability to the very collapse of the economic status quo that its proponents await (not unlike hardcore communists awaiting the revolution).
In the event that the electronic infrastructure went down, an economy of sorts will continue until the system can be rebooted. In those circumstances, cash, silver and gold would come into their own and bitcoin would be irrelevant.

Tearwave · 26-03-2013 11:01pm

Cavehill Red wrote: »

You've been reading far too many conspiracy websites and insufficient investing ones imho.
There's always an economy and they evolve with circumstances. The main argument FOR bitcoin is that it will transcend its current status as an anonymising agent for drug dealers and present an alternative to fiat currency. That is undermined by both its inability to inflate (the cap) and its vulnerability to the very collapse of the economic status quo that its proponents await (not unlike hardcore communists awaiting the revolution).
In the event that the electronic infrastructure went down, an economy of sorts will continue until the system can be rebooted. In those circumstances, cash, silver and gold would come into their own and bitcoin would be irrelevant.

To be honest if the "electronic infrastructure" went down, banks and euro/dollar/etc would be in a lot more trouble than bitcoins. What you are suggesting anyway is completely unrealistic and never going to happen, computers, databases, networks and internet are here to stay and will only grow and stabilize with time.

zonEEE · 26-03-2013 11:08pm

Cavehill Red wrote: »

You've been reading far too many conspiracy websites and insufficient investing ones imho.
There's always an economy and they evolve with circumstances. The main argument FOR bitcoin is that it will transcend its current status as an anonymising agent for drug dealers and present an alternative to fiat currency. That is undermined by both its inability to inflate (the cap) and its vulnerability to the very collapse of the economic status quo that its proponents await (not unlike hardcore communists awaiting the revolution).
In the event that the electronic infrastructure went down, an economy of sorts will continue until the system can be rebooted. In those circumstances, cash, silver and gold would come into their own and bitcoin would be irrelevant.

I think you need to stop believing everything the main stream media tells you. The same ones who were shouting about buying bank shares back in the boom.

I can see it now alright, bringing a wheel barrow of gold to the local shops, i say it again, practical?

Cavehill Red · 26-03-2013 11:34pm

Tearwave wrote: »

To be honest if the "electronic infrastructure" went down, banks and euro/dollar/etc would be in a lot more trouble than bitcoins. What you are suggesting anyway is completely unrealistic and never going to happen, computers, databases, networks and internet are here to stay and will only grow and stabilize with time.

Of course it's not going to happen. But that's the basis upon which the bitcoin proselytisers campaign.

Cavehill Red · 26-03-2013 11:35pm

zonEEE wrote: »

I think you need to stop believing everything the main stream media tells you. The same ones who were shouting about buying bank shares back in the boom.

I can see it now alright, bringing a wheel barrow of gold to the local shops, i say it again, practical?

Have you any idea what a wheelbarrow of gold would buy?

Buying bitcoins

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