Bitcoin- buy now?

[figgy]

I thought bitcoin was at its peak when it hit £1.800 and people were still putting in. Now at ten times that figure it’s got to have peaked, who is going to have a punt when you can only buy a little bit of one unless you go big.

i ageee with Mungler when it goes pop it’ll go in big way. Who is going to be left holding the virtual coins. 

This hype has certainly helped other crypto currencies that are easier to trade in. 

[Whatmuff]

It's no different from trading normal currencies, you can't see them either and if they go pop then you loose everything. And what about the Stock market? You are trading shares where they have only value depending on who else is bought in and dependant on the performance output of the companies. A Silver ETF for example is a market that people trade silver through but they dont actually own any Silver, they trade on the price,  but thats regulated by the banks....  so the price is fairly steady and manipulated. Cryptos are not manipulated and controlled so they can go where they like in the short term and while it's still difficult to get into and find the right sites to trade/buy on, next year it will be much easier to trade with new easy Apps coming along that will flood the market with new trade, this will have a huge effect on the prices. 

 

Don't think of 1 BTC as a fiat currency like a pound. It's completely different, the value per 1 coin fluctuates depending on the market cap and how many people own that Crypto. For example if 1 BTC  is worth 10000 then the coin can be broken down into 1.00000000 and if the value goes up the purchasing power increase and it will cost less BTC to buy something. loaf of bread is 0.0000002 BTC. Where as over the years your pound coin has less and less value because the government keep printing more of it, so the value goes down, and of course interest rates control economic output and the overall expense of borrowing. There is only ever so much BTC so 21 million for example and each one has been mined by computers that use huge amounts of energy (money) and once they are all mined you cannot simply print or generate more which makes it more valuable. Over the time the more BTC that are mined then the more difficult it is to mine so this stops the market being flooded with currency and keeping the value more stable. I think BTC is very difficult to use as a currency as it's very volatile at the moment, however I can see Governments turning towards this digital currency and controlling it that way they can have full control over the economy. This will ensure everyone pays tax, cuts crimes and can financial profile everyone. (cashless society)

 

With this Crypto idea if they need to stimulate the economy then they can just raise the value of the crypto coin or token giving more people purchasing power. 2016 1 BTC worth £600 and 2020 1 BTC worth  £1000 this could carry on until whenever. 1 BTC could be worth a million. q

 

I trade in other Cryptos now and not so much BTC, and only been in a few months. I originally put in £1000 and made £2000 profit and took that out in cash, and then put £1000 back in and my investment is up £3000. The returns are crazy! And much better than my 0.5% ISA or 4% Stocks and Shares.  This is the future of currency and we are moving into a digital age, wherever the people go that's where money goes whether you agree or not. 

 

People keep comparing this to previous penny shares or the tulip craze, but when it comes to the current state of the property markets and I mean global! everyone seems to think it's only going to go up. look at the debt levels (all time highs, loans, car lease, credit cards, mortgages) and look at interest rates (globally) all time lows 0.5%! And then look at wage growth (0 for most) last crash was 2008 and we are 10 years on with poor growth and still ultra low interest rates. we are on the verge of another financial crisis and currently our system isn't working, this year could see the crash and they cannot lower the interest rates to stimulate growth and spending. I think it will need a currency reset and it just so happens that Crypto is here and Its here to stay. That's just my take on it all, of course don't use debt to trade, only trade what you can afford to loose, read and do your research before investing anything. There are some really good guys on this site that trade these markets and know alot about it. 

[Whatmuff]

Just carrying on from before. The market is full of large investors with lots of capital. This is the last month of trading BTC, just look at the highs and lows, on some days these can fluctuate 1000s. 1 of these large investors just has to cash out at say 19000 and then sit and watch the small guys crack and sell and before you know it it's down to 14000 and he buys back in again and makes a killing! in less that a few hours, if you had some cash and time to play with you could be making 30-50% a day. 

I've attached Ripple as well which is a smaller Crypto and slightly different with the tech behind it and ability to process transactions much quicker than BTC. I bought in at 12 cents and it's up around the 2 dollar mark within a month. That was a helping hand from another legend on Pigeon Watch who is well educated on these markets. Ripple has just had huge investment from various big companies Visa, Abu Dhabi Bank and now AMEX. If these are jumping on board then something is going on in the background! 

I find the returns on the smaller coins far great than if I went all in on BTC. As John Macafee says it's easier for a coin to go from 3 cents to 30 dollars than a one to go from 300 dollars to 30 000 dollars. 

[SxS]

2 hours ago, Whatmuff said:

It's no different from trading normal currencies, you can't see them either and if they go pop then you loose everything.

With respect, with their high level of volatility and lack of nation state support, they're completely different!

I know a good number of people in finance and, trust me, very few of them would be doing what they're doing at present if 30-50% intraday returns were a realistic prospect.

To anyone thinking of investing, I'd recommend a read of this: https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp and this http://www.bbc.co.uk/news/business-42457983 . It's quite easy to argue that, when you have the man on the street piling in to an asset (often seemingly based on the media coverage and fear of "missing out"), there is likely trouble ahead when sentiment begins to change...

[Whatmuff]

52 minutes ago, SxS said:

With respect, with their high level of volatility and lack of nation state support, they're completely different!

I know a good number of people in finance and, trust me, very few of them would be doing what they're doing at present if 30-50% intraday returns were a realistic prospect.

To anyone thinking of investing, I'd recommend a read of this: https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp and this http://www.bbc.co.uk/news/business-42457983 . It's quite easy to argue that, when you have the man on the street piling in to an asset (often seemingly based on the media coverage and fear of "missing out"), there is likely trouble ahead when sentiment begins to change...

That's fine, however I too know some people in finance and they are not interested in this and told me it was a bubble when it was 200 a coin.... I agree it's volatility is enough to break anyone however, with some knowledge and sensible trading there is alot of money to be made. I wouldn't be listening to BBC news and mainstream media as they are all owned by the banks anyway and they are the people that need Cryptos to fail for their own system to carry on. Their is currently only 600 billion in the Crypto world which is a fraction of the Gold market or Stock market and as the platforms and marketing increases this is only going to add to the value of Cryptos. It could also crash tomorrow but hey I'm only risking 10%, unlike some who have remortgaged! 

[yod dropper]

I reckon there's still plenty of money to be made but I'm staying out of it, I should have got involved years back when I first encountered it.  I did hear recently that there are 1300 crypto-currencies and that some have much more stability built in than others which should make them more attractive in the long term but the truth is at the moment it's all about exposure.  Some of these others have gone up 10,000% in a year.  I'd be wanting to look at the lifecycle of a bubble graphs to make some wild stab in the dark guess as to where we are.  AVB also once commented on a theory about something squared(?), I think on the growth of such things.  Interestingly on this program they were talking about the mining power requirements being increasingly unsustainable, I'm sure they said the mining on Bitcoin was equivalent to the power requirements of Denmark.

[figgy]

I don’t understand what the mining coins part is and why it’s so energy hungry. 

If there are 21 million bitcoins why do you have to mine for them. If you have to mine to find them who knows that there are only 21 million could be more or less. If they are kept in wallets where does the mining take place?

It all makes no sense to me. 

[Whatmuff]

3 minutes ago, figgy said:

I don’t understand what the mining coins part is and why it’s so energy hungry. 

If there are 21 million bitcoins why do you have to mine for them. If you have to mine to find them who knows that there are only 21 million could be more or less. If they are kept in wallets where does the mining take place?

It all makes no sense to me. 

Have a quick read of this mate it explains it a little easier. it's to do with the control of currency and flow. if you you tube Bitcoin Mining it will show you the extremes that companies are going too to mine BTC. People say it's worth nothing then I tell them to check out some of the mining rigs. Apparently by 2020 BTC mining will consume the world's power 

 

https://www.investopedia.com/terms/b/bitcoin-mining.asp

[JohnfromUK]

1 minute ago, Whatmuff said:

 Apparently by 2020 BTC mining will consume the world's power 

 

 

Makes you wonder if the whole thing was dreamt up by the Energy Companies!  No wonder electricity is going up.  All the fault of these bitcoin 'miners'.

[figgy]

If you mine a coin is it yours for free?

[roadkill]

SO how do I go about getting some ripple coins, what site can I go on and purchase some?

[dbob]

28 minutes ago, roadkill said:

SO how do I go about getting some ripple coins, what site can I go on and purchase some?

Not that easy so I’ve heard. My brother looked into it but a real ball ache so gave up  

 

[7daysinaweek]

 

5 hours ago, figgy said:

I don’t understand what the mining coins part is and why it’s so energy hungry. 

If there are 21 million bitcoins why do you have to mine for them. If you have to mine to find them who knows that there are only 21 million could be more or less. If they are kept in wallets where does the mining take place?

It all makes no sense to me. 

Hi Figgy

The way I could try and explain is.

In our society we get paid when we provide goods and services. Our goverment pays us in coin and paper which is perceived to have a value within society so we can use for buying goods and services. When my employer puts my money into my bank it is just digits/numbers with a perceived value which i can move to another persons account for goods services rendered. Our society at whole accepts that these numbers paper notes and coin have a value of worth. Around 95% of our economy is held in banks just in numbers on a screen, the remaining 5% is paper notes and coin, the numbers are basically an IOU. Banks are centralized and controlled by goverments.

The bitcoin network is a decentralised network of many thousands of powerful computers in peoples homes, warehouses, buildings which are connected and provide a platform/highway for sending digital numbers similar to banks with a perceived value of worth but not through a traditional banking system. The network is not owned by any central entity like a banking system or goverment which as users we have no other option but to trust.

The problem of trust:

When a bank holds our numbers in our account we trust that it hold our account information correctly and does not go about subtracting value from it. (the trust of safety)

We trust that they do not go about randomly assigning money to itself out of thin air (trust of issuance)

We trust that the system ensures consistency of information and carries out it's main function (trust of correctness)

 

The bitcoin network is a trustless network, this means the ability to trust the network does not depend on the intentions of any particular party which could be malicious.

An example i have used before, you would not send an email to protect any snooping or eavesdropping. With the use of cryptography an encrypted message can be sent safely through a untrusted channel making it a trustless system. When the blockchain network was set up a predefined system was coded into the algorithm which requires a unique crypographic signatures generated by the individuals wallet, every single mining rig computer on the network is able to verify the signatures and refuse to accept payment without it and this makes it impossible for anyone to transact your funds. The blockchain ledger is immutable meaning that once your signature has been created it cannot be changed in any way by anyone and is unchangeable over time. You can prove that your data has not been changed and as a recipient you can be sure that the data has not altered, all good for financial transactions, unlike traditional transaction systems, no more tampering or doctoring paper or computational ledgers as the transaction is recorded on the complete network on every single mining computer and the public blockchain ledger.

So back to the bitcoin network and where do these coins come from?

You have a very powerful computer at home or you build a super duper powerful one capable of doing many millions of mathematical computations per second these are called mining rigs. These are connected via the internet to an opensource bitcoin blockchain network, you computer helps in part with all the other computers we talked about all over the world. The rigs support, verify and record every single transaction on the whole network so establishing security and trust that when you send a transaction that it will land where you want it to and unchanged. You want to send me some bitcoin from your wallet, i give you my wallet address to send it to, along the transaction route it is checked at thousands of points along the way, if the ledger is tampered with along any point from it's send and receive journey the transaction does not complete but as importantly it is recorded exactly where the change took place and the whole sequence of the ledger is held on the network public blockchain.

We who run mining rigs are rewarded by a concept called proof of work in that by us giving our computational power to the network we are rewarded with a percentage of this digital currency as it is perceived to have a value of worth. When the anonymous creator of bitcoin decided when he or she ( no one actually knows) to create bitcoin as a digital currency they decided that the max amount that would only ever be produced would be 21 million coins and this was coded into the alogorithm and at present cannot in any way be change, currently 19 million coins have been mined, every four years the block size (which is a whole different subject) halfs and slows down the amount of coins which are paid out for your computers hard work slows constantly. The last bitcoin will be mined in approx 120 years. It makes sense to only make a certain amount of something, could you imagine if there was the same amount of gold in the world as rocks it would be worth very little. 

The rigs are energy consuming because of the sheer computational power they need to complete all the demands of the network, the bitcoin network faces some challenges at present however upgrades developments are being developed and rolled out to overcome these . In part these are faster transaction times, security and fee lowering among a few, ultimately virtually all blockchain tech is built upon the bitcoin blockchain and as with all evolving technology there comes concerns both financial, economic impact. Actually the whole public worldwide blockchain public ledger could be stored on 10 old computers if it halted today, however to continue the transactions needs the many others to be operational.

Blockchain has the ability to send payment to someone on the other side of the world in seconds for pence, a repository of worth without a centralised banking control system which has significant control over your assets. Remember in Italy when people could not get there own money out of the bank ( errh ze computer, he say no!) Countries without systems or corrupt banking systems could benefit hugely from blockchain currency. 

As long as there is a perceived worth in the asset it can be moved anywhere at anytime all over the planet as long as someone has access to the internet they can recieve currency. Making digital currency illegal will probably not change things, in order to stop transactions the goverment would have to switch the internet off. (good luck with that one) Our own govement like many others is looking into the uses of blockchain and creation of centralised crypto currency and it is going to be an interesting 5 years or so.

At present i mine ethereum which is slightly different to bitcoin though i do traded in bitcoin and many other currencies and have done so since 2016 on several public platforms. Yes the markets can be volatile and as i have said in the other crypocurrency thread never ever put in what you cannot afford to forget about, if it makes you a return all well and good. Speculation and promises are rife by the usual sharks, people promising the world who do not even have an understanding what they are selling or buying and the risks associated. One of my friends rang me the other week and had said he had replied to one of the faceache ads doing the rounds about bitcoin, a very polite lady rang him and he was about to sign up to a mining contract which you pay a set amount to them per month and they returned a set percentage each week of the spot price of bitcoin. After we done the math the returns were very poor. Not saying everything is a scam but need to exercise caution and not throw yer life savings at it. Some prominent currencies are more stable than others and the technology behind the development is the fundamental thing. 

Gold and silver, then coin, then notes, then western union, then visa, then paypal, now developing blockchain. 

Hope this goes some way in helping you understand a little more.  ( I hope so took me bleddy hours to do )  I am in no way a developer, nor do i possess extensive knowledge around the exact attributes of the technology and there are many others who may be well placed to give a more definitive information than i. I am simply someone who has followed it as it has developed and took non professional interest in it.

atb

7diaw

Whattmuff enjoyed your post ad some very valid points.

Arrghh 3am, need tooo sleeeep zzzzzzzzzzzzzzzzz

Edited January 2, 2018 by 7daysinaweek

[mel b3]

It sounds like the matrix, the mind boggles. 

[figgy]

Thanks for taking the time to compose your well thought out and easy reading reply 7daysinaweek you have cleared up a lot of the crypto currency confusion for me and I’m sure for many others on here. 

Thats the best post I’ve read this year 

should say one of the best in the last 12 months on pigeon watch. 

[walshie]

7diaw, You lost me right after "The best way I could try and explain is..." 

[stumfelter]

19 minutes ago, walshie said:

7diaw, You lost me right after "The best way I could try and explain is..." 

???

[JohnfromUK]

7daysinaweek, Thank you for taking a lot of time and trouble for that explanation. 

Although I think I already had a very basic understanding, this has added considerably to my knowledge, but it is still (for me) an area about which I understand far too little to risk participating.  My particular worry is that the value is 'demand' driven, and I don't see any long term stable underlying factor that would underpin that demand (for a particular 'cyber currency' rather than the blockchain concept - which I'm sure has a bright future).  I'm also always nervous of any area where changing legislation (either UK or worldwide) can have such an unknown and unpredictable effect on future value.

[stumfelter]

What is the point of all these computers doing mathematical equations? Are the equations used in any way? And why does this have a value? Sorry for all the questions but I find this whole thing confusing.

[Jason_ox]

For those wanting to buy xrp ripple my friend created  a simple  guide to do so. Hope it helps some of you, 

http://aim-investing.com/how-to-buy-cryptocurrency/xrp-ripple/

[JohnfromUK]

14 minutes ago, stumfelter said:

What is the point of all these computers doing mathematical equations? Are the equations used in any way? And why does this have a value? Sorry for all the questions but I find this whole thing confusing.

As I understand it (and I may be completely wrong), the 'point' is that having a 'difficult' mining process makes supply restricted and therefore creates 'value' because demand outstrips supply.  A bit like the metal gold, or diamonds - there is a very limited supply and they are hard (and costly) to mine/dig up - and hence there is value because lots of demand and only a very limited supply pushes up the price.  IF someone suddenly discovered the old alchemists goal of easily transmuting base metal  such as iron into gold, then the value of gold would plummet because the supply would become plentiful.

Similarly, IF someone found a way of 'mining' bitcoins easily and lots came on the market suddenly, their price would plummet.

[Whatmuff]

Awesome post 7 Days! great advice as always mate.

[la bala]

7daysinaweek,   That was a great post, thanks for taking the time.

[7daysinaweek]

8 hours ago, mel b3 said:

It sounds like the matrix, the mind boggles. 

 It felt like i was in the matrix last night Mel, up til 3am writing that post.

5 hours ago, figgy said:

Thanks for taking the time to compose your well thought out and easy reading reply 7daysinaweek you have cleared up a lot of the crypto currency confusion for me and I’m sure for many others on here. 

Thats the best post I’ve read this year 

should say one of the best in the last 12 months on pigeon watch. 

You are very welcome Figgy and always happy to impart any knowledge or lend a hand. 

 

4 hours ago, JohnfromUK said:

7daysinaweek, Thank you for taking a lot of time and trouble for that explanation. 

Although I think I already had a very basic understanding, this has added considerably to my knowledge, but it is still (for me) an area about which I understand far too little to risk participating.  My particular worry is that the value is 'demand' driven, and I don't see any long term stable underlying factor that would underpin that demand (for a particular 'cyber currency' rather than the blockchain concept - which I'm sure has a bright future).  I'm also always nervous of any area where changing legislation (either UK or worldwide) can have such an unknown and unpredictable effect on future value.

Hi John 

yes with bitcoin a significant proportion is value driven at present and i can warrant that 99.9 of the people who have bought bitcoin have never used it for a transaction and would not even know how to. They are holding it for gains and in the hope of cashing out into fiat and that is not what it's real aim was/is, I used some bitcoin towards buying the equipment for my mining rig from the biggest supplier of computer equipment in the uk. The transaction took seconds, like all currency and new technology for bitcoin to succeed as what it was intended for as a transactional repository of worth will require mass adoption. Amazon has just registered amazon.bitcoin and amazon.ethereum domain names which may signal a move towards acceptance, ebay recently said it is looking at accepting bitcoin as payment, these are big and influential drivers around mass adoption. Remember when ebay was in it's infancy back in the early 2000's and cherie blair bought a pair of shoes on there. Paypals use rose by millions within society who had previously been suspicious and reluctant to adopt paypals use. I am in no way saying we should all run out and buy bitcoin as there is tons to be ironed out, as i said in my previous post bitcoin is struggling with a scaling concept at present. There are other currencies/ contracts which are built upon the bitcoin bloc technology which may very well succeed bitcoin. Yes legislation is a whole other thing, that said as of today you can easily buy and sell bitcoin and use it for transactions through reputable retailers in the uk such as I did. You can also sell it if you have made a profit and it goes back into your bank account in fiat.

 

2 hours ago, stumfelter said:

What is the point of all these computers doing mathematical equations? Are the equations used in any way? And why does this have a value? Sorry for all the questions but I find this whole thing confusing.

Hi stumfelter the blockchain ledger is a long list of blocks (the blockchain) it is used to explore any transactions between any bitcoin adresses at any point on the network. Whenever new transactions are created (bitcoin sent between people) it is added to the chain making an increasingly lengthy list of every single transaction that ever took place. This where the mining comes in, when a block of transactions is created miners put it through a process by applying a mathematical formula to it turning it into a far shorter data sequence known as a hashing. The hashing process results in a totally unique random set of numbers and letters, a unique digital fingerprint if you will that is realted to that very transaction,  this hash is then stored on the end of the blockchain at that exact point in time. Hashes produce this collection of data which is unique and is practically impossible to work out what the data was by looking at the hash, if you change just one single character in the bitcoin block once it is added it will change the hash completely.

Basically the mathematical process results in a collective consensus by the computers saying yes this transaction is valid, it has come from a valid adress, it is going to a valid adress and then the transaction is stored on the chain and is unchangeable, if it it tampered with along the chain going through the verification process the digital fingerprint changes and the the transaction does not complete. So the process of mining is one of security, validation and carriage.

Hope that helps, still boggles my mind  at times!

atb

7diaw

2 hours ago, Jason_ox said:

For those wanting to buy xrp ripple my friend created  a simple  guide to do so. Hope it helps some of you, 

http://aim-investing.com/how-to-buy-cryptocurrency/xrp-ripple/

Interesting jason, thankyou

 

20 minutes ago, la bala said:

7daysinaweek,   That was a great post, thanks for taking the time.

You are welcome lb

Edited January 2, 2018 by 7daysinaweek

[7daysinaweek]

40 minutes ago, Whatmuff said:

Awesome post 7 Days! great advice as always mate.

Cheers whattmuff