Bitcoin - Virtual Currencies and the future of Cash

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Snowy79
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And down almost $500 more in less than 6 hours.

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Mike J
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5 hours ago, Snowy79 said:

This doesn't make sense to me

The whole cryptocurrency craze makes no sense.  I wrote applications for a living and have at least a little knowledge of block-chain security and its value for secure data transactions.  What I do not see, nor understand, is how that can translate into the mania that surrounds bitcoin and the 1000+ other digital currencies that have been created.  Basically anyone who has the knowledge and the computing power can create their own virtual currency.  There are some people who would say that these are a logical extension of electronic transactions that we already use such as electronic banking, debit/credit cards, paying with your cell phone, etc.  I say "not true", those examples are ways to simplify the exchange of existing currencies, dollars, euros, pesos, etc.  The only "real" value I see is the ability for parties/individuals to interact anonymously and hide the transaction.  I can see where criminals, drug dealers, buyers/sellers of child porn, people wanting to hide money, etc would find it attractive.  But even so there are not enough dishonest people and deviants (I hope) to drive the prices so high.  The majority of the rise is driven by greed and gullibility, not by usability or asset value.  In the history of mankind has there ever been a currency or asset class that has risen 20 fold in a single year and NOT collapsed?  Just my opinion of course (and also Warren Buffett) :whistling:

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OnMyWay
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1 hour ago, Mike J said:

The whole cryptocurrency craze makes no sense.  I wrote applications for a living and have at least a little knowledge of block-chain security and its value for secure data transactions.  What I do not see, nor understand, is how that can translate into the mania that surrounds bitcoin and the 1000+ other digital currencies that have been created.  Basically anyone who has the knowledge and the computing power can create their own virtual currency.  There are some people who would say that these are a logical extension of electronic transactions that we already use such as electronic banking, debit/credit cards, paying with your cell phone, etc.  I say "not true", those examples are ways to simplify the exchange of existing currencies, dollars, euros, pesos, etc.  The only "real" value I see is the ability for parties/individuals to interact anonymously and hide the transaction.  I can see where criminals, drug dealers, buyers/sellers of child porn, people wanting to hide money, etc would find it attractive.  But even so there are not enough dishonest people and deviants (I hope) to drive the prices so high.  The majority of the rise is driven by greed and gullibility, not by usability or asset value.  In the history of mankind has there ever been a currency or asset class that has risen 20 fold in a single year and NOT collapsed?  Just my opinion of course (and also Warren Buffett) :whistling:

This may have been mentioned earlier, but this all reminds me a lot of the dot.com boom in the late 90's.  Many people were making tons of money and everyone else wanted to jump on the train before it crashed.

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earthdome
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12 hours ago, Snowy79 said:

Down to just over $6,500. There must be a few people hurting just now.

I still can't get my head around giving a process that makes transactions simpler a value that varies so much from rival crypto currencies. The differences in the blockchain must be like trying to convince someone two similar bicycles but painted differently have a massive price difference. A bit like when I used to do biathlon competing. I could buy last years skis which were identical in manufacturing as this years skis but almost 1/3 less due to being last years colours.

It can be easy at first glance to think all the coins are the same, just different names.

There are many ways crypto currencies are differentiated from each other. Bitcoin has a huge advantage from being first to market, it is the most well known and most widely adopted crypto currency. But that advantage is slowly fading. Two years ago bitcoin was 90% of the crypto market, now it is down to 35% as other crypto coins find ways to provide value propositions that differentiate them from bitcoin. So one factor is how well known and widely adopted the coin is.

Litecoin was the first new coin after bitcoin. It was just a copy of bitcoin with a few minor changes to how it operated. For a long time it was considered the silver to bitcoin if you thought of bitcoin as gold. its value proposition was showing there was room in the market for more than one coin. Since then it has been the first to implement some new features which were later implemented in bitcoin itself.

Other coins try to address the issue of all the electricity used for bitcoin mining by changing its proof of work algorithm and other changes to how the blockchain works.

Other coins make changes to try and improve the privacy and anonymity over that provided by bitcoin.

Some coins like Ethereum and major new features to what a blockchain can do. The developer for ethereum originally wanted to add the new features to bitcoin but the major players in the bitcoin community had become conservative in making changes. So the developer created Ethereum with its coin Ether.

Yes, there are many of the coins that are just clones which add no new value proposition. Just attempts to get rich quick. But there also is a great deal of innovation occurring.

 

 

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earthdome
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5 hours ago, OnMyWay said:

This may have been mentioned earlier, but this all reminds me a lot of the dot.com boom in the late 90's.  Many people were making tons of money and everyone else wanted to jump on the train before it crashed.

The .com boom happened a bit slower since it was communicated mostly by old media. The crypto currency boom happened much faster since it could spread at internet speeds. Also the crypto currency boom is global rather than just in select stock markets.

 One thing to keep in mind. Even with the dramatic drop in prices, down to one third off the recent high. Bitcoin is still priced at 5 times more than its price a year ago.

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Snowy79
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I understand there are differences in the block chain but for the average guy on the street it's like saying this kettle will boil your water in 3 seconds where as that one takes 5 seconds.

I think it's all hype and once the initial speculators are weeded out it will take a while for others to be interested, which will give competitors time to adapt their block chain and Governments to regulate it's use and implement taxes etc.

In a few years it'll just be seen as a way of carrying out a transaction and no one will see a value in it. A bit like the mobile phone. An amazing invention with high price and limited audience and now it's a standard item that everyone has and the price has plummeted.

 

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Mike J
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Here is a clip from a website.  I have edited the text with "Xx" to comply with forum rules.  The site also claims "zero risk" to investors.  I think the clip speaks for itself.  Seriously - invest $2,000 and 48 hours later get back $2,600 in bitcoin.  Only people blinded by greed could possibly not see that this is a complete scam.  At best it is a ponzi scheme, at worst 100% thievery returning nothing to anyone.

<clip text>

First of all, register yourself at XXXXxxx. XXXXxxx offers 3 subscription plans to its users. The XXXXXX plan, the XXXXX plan and the XXXXXXXXX plan. You can subscribe to one or many plans at the same time. You can purchase these plans for minimum of $10, $500 and $2,000 respectively. Now on behalf of you, our company invests your fund in our mining farms. You do not have to worry about any expenses to purchase and setup hardware or any maintenance cost. We do it for you.

We are committed to return your investments as per the plan purchased by you. The XXXXXX plan, the XXXXX plan and the XXXXXXXXX plan promises you return of 10%, 20% and 30% daily respectively for 48hrs. XXXXxxx accepts and returns payments in Bitcoins. With the returns you can subscribe to more plans or withdraw and sell your Bitcoins to book your profit
 

<end clip>

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earthdome
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28 minutes ago, Mike J said:

Here is a clip from a website.  I have edited the text with "Xx" to comply with forum rules.  The site also claims "zero risk" to investors.  I think the clip speaks for itself.  Seriously - invest $2,000 and 48 hours later get back $2,600 in bitcoin.  Only people blinded by greed could possibly not see that this is a complete scam.  At best it is a ponzi scheme, at worst 100% thievery returning nothing to anyone.

<clip text>

First of all, register yourself at XXXXxxx. XXXXxxx offers 3 subscription plans to its users. The XXXXXX plan, the XXXXX plan and the XXXXXXXXX plan. You can subscribe to one or many plans at the same time. You can purchase these plans for minimum of $10, $500 and $2,000 respectively. Now on behalf of you, our company invests your fund in our mining farms. You do not have to worry about any expenses to purchase and setup hardware or any maintenance cost. We do it for you.

We are committed to return your investments as per the plan purchased by you. The XXXXXX plan, the XXXXX plan and the XXXXXXXXX plan promises you return of 10%, 20% and 30% daily respectively for 48hrs. XXXXxxx accepts and returns payments in Bitcoins. With the returns you can subscribe to more plans or withdraw and sell your Bitcoins to book your profit
 

<end clip>

Yeah, that sounds pretty scammy. If the investment sounds too good to be true. It probably is a scam. There have been a number of those mining pool ponzi scams.

As they say, a fool and his money is soon parted.

I bought a 6 month and a lifetime contract in a mining pool last summer. This was a legit mining pool operated by someone with a long history of investing in this space. I have already cashed out more than my initial investment. My returns were more like 0.1% per day. Still a nice return but nothing like the scam above and there were no guarantee's.

 

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Mike J
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7 minutes ago, earthdome said:

Yeah, that sounds pretty scammy. If the investment sounds too good to be true. It probably is a scam. There have been a number of those mining pool ponzi scams.

As they say, a fool and his money is soon parted.

I bought a 6 month and a lifetime contract in a mining pool last summer. This was a legit mining pool operated by someone with a long history of investing in this space. I have already cashed out more than my initial investment. My returns were more like 0.1% per day. Still a nice return but nothing like the scam above and there were no guarantee's.

 

It reminds me of the Legacy rural bank scam here in the Philippines about 8-10 years ago.  There was at least one expat who was actively promoting the scam.  The Philippine Deposit Insurance Corp. ended up having to pay out billions of peso to legitimate customers when a number of banks involved in the scheme closed their doors.  I remember reading all about these fantastic returns, and rewards for bringing in new customer deposits.

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earthdome
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One of the worst scams in the crypto world isn't even a real crypto currency. There is just a website which fakes a crypto currency and is running a Multi Level Marketing (MLM) ponzi scheme. You can read more about it here: https://en.wikipedia.org/wiki/OneCoin

 

Warning. This is a confirmed scam. I posted a link to information about it so others could learn how they operate.

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