Let the fun begin.
It’s going up and up, again, until it goes down and down again.
Ponzi, beany baby, tulip bulb,
Hopefully the bubble collapses sooner rather than later. Fewer people getting sucked into the pyramid scheme and losing their money as far as I’m concerned 
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Now now, no need to disparage the US$ like that. We’re talking about real currencies here, not that fiat paper stuff :).
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I think crypto currencies are ponzi scheme. However, I still invest few thousand dollars in Bitcoin and Ethereum for the following reason.
- Bitcoin are used in real world business transactions such as drug deal and blackmail virus. It has some support for its value.
- Blockchain technology may become the future of financial system, I want to have some hand on experience with it before others do.
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too volatile, not my cup of tea
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I think block chain is a cool technology that will be around for a long time.
The problem is that bitcoin is just one of 3,000 cryptocurrencies. Speculators are bidding it up to the moon with expectations of being a millionaire. It will be a tough lesson for many.
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In its day, the 1989 Upper Deck complete set of baseball cards could fetch hundreds of dollars. Almost 30 years later, you can get the same set on eBay for $35.
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Bitcoin is great marketing for blockchain technology. The problem is - while trying to learn about blockchain, many people stop at the price of Bitcoin because they are hypnotized by its rocket rise.
Here’s a high level run down of blockchain. Transactions are grouped together in a block, and such block is held together by a crypto key. You have to “mine” for each crypto key. Each block is then joined with a previous block, eventually forming a chain of blocks. The blocks themselves are linked by crypto keys in a cumulative manner, so that if one old transaction in an old block (or any block) is modified, you can quickly check against the key(s) and know it’s been tampered with.
That is why people say blockchain is immutable (unchangeable). In a public blockchain (like Bitcoin) all the participants have a copy of the blockchain, so they all can verify.
Just with any technology, there are limitations, errors, hype, problems, and issues that accompany blockchain. It’s susceptible to hacks, 51% attacks, viruses – since it’s just software code.
People are coming up with new use cases for blockchain every day. It could be great for record keeping, money transfers, identity management, micropayments, tracking product origin, and many other uses not yet thought of.
Cryptocurrencies are an application of blockchain technology. Due primarily to Bitcoin (and Ethereum) now the whole world knows about blockchain. It will spur investments in this new technology and drive adoption. Whether blockchain will be truly revolutionary or just another overhyped tech-- the jury is still out. No one truly knows.
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I don’t fully understand it (how to make/earn it), but my 19-yr old college son (who still hasn’t learned to live frugally) decided two weeks ago to jump in and bought Bitcoin through Coinbase.com
Does anyone know if you can use Paypal with Coinbase? I didn’t want him inputting his bank information into the website when he wanted to cash out.
I don’t think you can use PP. What I did was using my “firewall” bank account that’s tied to PP.
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I made this point before on FW and instantly got labled a bitcoin freak and I only got something like $50 USD worth of it.
The point is the comparison to tulip, beanie baby, etc, are off the mark. Putting the valuation aside, bitcoin actually serves purposes other than a speculative commodity. Sure, other cryptocurrency can serve the same purpose but it got market traction being the first one available so there’s no sense for people to adopt to other cryptocurency.
More than a year ago I predicted it would be worth $800 or something on FWF. I think it will be still around in 5 years and still be worth something. How much? No idea… probably more than the $5k today but who knows.
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i think the concept is worth something, but not in its current form. right now it’s lke trading pawgs
What really burns me is that in the beginning, mining bitcoins was simple as turning your computer on and watching them “pile up.” That was when bitcoins were worth very little - cents. The nature of the blockchain / mining is it gets progressively harder to find the next hash - and the rewards shrink as more hash discoveries are rewarded. There is a finite number as well.
But I didn’t so I’m bitcoin broke! But, if I had, I’d be a mega-millionaire after cashing out!
What makes me wonder about the whole thing is what’s to stop someone else from creating a different kind of bitcoin, promoting it successfully, with mining starting all over again. There’s already competition, it’s just like how MySpace was taken over by Facebook - fickle people can change fortunes instantly!
The supply isn’t really finite. It’s infinte. It’s limited by a programming variable that can be changed. All it requires is a consensus of bitcoin users to decide to increase the number of bitcoin outstanding
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What you say makes sense - it does seem like an infinite number of coins - but a quick scan on google does reveal there is a 21 million bitcoin limit.
Example Article Discussing 21M Bitcoin Limit
“Gold must be mined out of the ground, and Bitcoin must be mined via digital means. Linked with this process is the stipulation set forth by the founders of Bitcoin that, like gold, it have a limited and finite supply. In fact, there are only 21 million Bitcoins that can be mined in total.Jun 8, 2017”
I always see so many negative comments about crypto currencies.
To be fair, I don’t know enough to comment about any remarks made.
But I would like to know more about the topic. I understand how to mine for them and what is needed in software and hardware. I also understand, for the most part, how the blockchain works.
But what I don’t understand is how people know which ones are good to get into early. Is it better to just buy the currency when it is low, or should it be mined instead? Is it all about knowing every bit of news and information on the particular crypto currency?
I would also like to know why people think it is good or bad. I saw a few comments on it being like a Ponzi or Pyramid scheme, but I didn’t quite understand why crypto currencies would be compaired to those things.
I am interested in crypto currencies, if only to just understand them. The technology itself is intriguing, but I feel like I should try to get as much information on as many aspects of it to really understand it.
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I don’t understand it and I don’t believe anybody will get rich with it. I am no doubt wrong. But I can’t help but wonder who is doing to pay the millions that the bitcoins are supposedly worth.
At this point it doesn’t make sense to mine BTC (the symbol for bitcoin) with traditional computer hardware. The computing power and electricity you’ll need just won’t make sense. You’ll need a ASIC miner which is a specialized piece of hardware. The second most popular currency is what’s known as ethereum (ETH). There are hundred of types of currency out there at this point.
I’m a big believer in blockchain technology/cryptocurrency and have a very good understanding of economics and finance (finance degree, CFP, working as a financial planner for the past 15 years). I say that because I’m not looking at this as I would a traditional investment. It simply doesn’t make sense if I am thinking about it from the way I would think about stocks, bonds, or anything that would utilize traditional forms of valuation like cash flow analysis or price to earnings. If you’re looking to invest in things that can be broken down like that, this is not the space you want to play in.
However, I feel that based on my limited technical understanding of blockchain that it has the potential to be as significant as the creation of the internet. The implications span beyond just financial as it’s already being used in healthcare, real estate, and other sectors.
I can’t tell you which currency will be the one to make you rich but you will definitely continue to hear more and more about it as time goes on. Many of the large financial institutions already agree that the underlying tech will be one of the biggest drivers for change in financial services. The general disagreement is around whether or not there is validity in blockchain existing as a currency. And if so, which one.
I personally don’t see it replacing fiat currency for a very long time but I do believe that it can be a store of value like gold. What some would call “mining” is securing the blockchain or the process by which the miners verify transactions. The tokens that a miner receives (like BTC or ETH) is what incentivize the miners to verify those transactions. There has to be some kind of value to the tokens or else they’ll just stop mining.
There are is much more that I can write about than I have time for but I would recommend listening to episode 145 of The Investors Podcast (Bitcoin and Ethereum w Tuur Demeester). I usually point my friends there to get started.
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Many people have already gotten very rich on it. Mike Novogratz is one public example of someone who put in about 1 million (in Ether), and made 250 million. It’s not just paper money. He’s taken out most of the money and is re-investing about 150 million into his new crypto-oriented hedge fund (which invests in various other parts of the crypto-world, not just the currencies themselves).
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I should have said “late adapters”, as the early adopters of any ponzi scheme always do well. Not that I think this is a ponzi scheme. I view it more as akin to tulip bulb mania and a get rich scheme.
The fact that people are getting rich is absolutely necessary to driving new investors into buying these tulip bulbs, for without the new money I do not believe investors will make anything and will likely lose everything they invested.
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