Posted on 02/03/2017 10:35:09 AM PST by Vermont Lt
Every once in a while I like to take the temperature of different forums I visit. I am wondering what the general thoughts are on bitcoin.
Yes, I know all of the pros and cons. Yes I have a little stash. No, I am not going to try to "sell" anyone on the idea.
I am simply curious.
The information is also “useless”. It’s value is based on the fact that people have decided to value it. In that sense, it is like beanie babies, except a company can’t simply dump a bunch of bitcoins on the market.
But at any time, any player in the market can decide to simply no longer “take” bitcoin as having value. Obviously those holding the information won’t stop giving it value, but if suppliers of goods and services decide they don’t want bitcoin anymore, the value will drop. If some other thing comes along, it could replace bitcoin.
Currencies have the same problem, although they also have legal structures. Sure, governments can devalue, and could even just say “currency is worthless”, but it is more transparent.
The Bitcoin blockchain “system” cannot be hacked. Period. If you allow another person, company, organization to hold your “Keys”, or if you hold them on your own internet connected computer, That could be a real problem.
I have no problem investing in bitcoin, as long as a person is aware of what they are really investing in. Investing in bitcoin is not like investing in a currency. It is more like investing in any other technological solution — you are gambling that the technology will become more valuable over time, not less. In this case, you are investing in a payment transfer mechanism. Bitcoin is significantly better than her rivals (debit cards, and proprietary frameworks like Paypal), and stands a decent chance of growing substantially over the medium term. As such, and because bitcoin are limited in number, existing bitcoins stand to increase in value. But Bitcoin could be also replaced tomorrow. A better form could come along, and no-one is forcing anyone to use bitcoin over better alternatives.
I would sooner gamble on a highly productive technology, as opposed to a relatively useless metal, or a currency whose value is determined by fickle political processes. But that is just me. Nobody should be under any misguided notion that *any* investment is free from a potential 100% loss.
You could definitely have bought 10 dollars worth which would be worth 10 million today.
Like any investment it has its risks. Part of its appeal is anonymity, and the reason it has spiked recently is because so many governments are trying to do away with cash.
If the same governments start cracking down on bitcoins its value will tumble - that’s the risk.
It’s a Ponzi instrument, but in the current economic climate you could correctly apply that phrase to nearly every “legitimate” currency on the planet, and about half the listings on the NASDAQ.
Like other fiat currencies, its value is entirely based on public faith in the issuing institution. It’s been around long enough to have some legitimacy as a currency. I wouldn’t class it as an asset yet because that legitimacy could evaporate overnight either based on market forces or government interference. Once again, same as for other currencies, but much more likely to collapse suddenly than something like USD.
Could be very useful to an individual fleeing the country under duress, but it will be just as useless as any other paper asset in any kind of widespread societal SHTF situation.
Maybe “gamble” would be a better word for where bitcoin is at right now. You’re gambling that the scheme will stay afloat long enough for you to unload it on a greater fool at a profit. The only other reason to have it is that you’re up to something shady, and actually need to use a crypto-currency to cover your tracks.
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