BITCOIN
 

Some loon must have a positive view on this disaster waiting to happen? Today US$16500ish......will it be $50000 or $500 at year end?

Re: BITCOIN
 

Could well be!

Re: BITCOIN
 

Would you care to guess the price at year end, perhaps even buy some?

Re: BITCOIN
 

https://charts.bitcoin.com/chart/price (US$ - interesting to see when it picked up) and https://www.worldcoinindex.com/coin/bitcoin for C$, current values

I know someone who has a stash of them (digitally) - I wonder if they realise they are sitting on about $500,000's worth at the current rate!

(wish it was me!)

Re: BITCOIN
 

When I see an investment all over the media getting rammed down my throat it makes me suspicious. I think some city boys are pushing bitcoin and crypto currencies in general to get the inexperienced investors to pump up the value so the city boys can take the money and run.

Re: BITCOIN
 

I don't understand how so many can have such blind faith in these crypto currencies. Admittedly, I was saying the same thing when the Bitcoin was selling for $500 about a year ago. I think it will crash down to the hundreds of dollars (or lower) within the year.

There seems to be something unsustainable in the concept that the currency is created out of 'complex algorithms' which take time to 'mine'. I don't get what is actually happening there or whether it is simply an enormous blatant scam.

Re: BITCOIN
 

My view is that it was thought to be a dark web form of payment (for illegal activities) and now it is being legitimized by some, with restricted access due to the limited supply, the price leaps. It should never have been legitimized and those using it should have been arrested. It is a massively speculative invtment for some that will end in tears.

Re: BITCOIN
 

The last time I flew into YVR I mused on the physics that kept the aircraft in the air. The engines provided the thrust that forced the wings through the air and the physics of air movement over the airfoil generated the lift that kept me aloft.

But it was burning kerosine that provided the energy that allowed everything to work as it should, no flow of kerosine- no movement- no lift and large hole in the ground.

Bitcoin is a little like me sat in my seat in the aircraft, it's reliant on a steady supply of cash to keep the bitcoin engine ticking over, as the flow fluctuates then the altitude on the bitcoin value scale fluctuates.

There will come a time when investor fear will cause the flow of cash to dry up and when that happens the earth will open up and we'll be discussing the Bitcoin question 'How far can it fall?' and as most investors know, the bottom is the ground.

Re: BITCOIN
 

Great analogy, thats exactly how I see it.

Investor fear has took down credible well run companies before, let alone some crypto currency who's value has risen at an unrealistic rate....as shakyuk says...there is something suspicious about that, the city boys are ready to sell and run.

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I suspect, no I know, that bitcoin is a temptation too far. Imagine you have a few pounds, dollars, dinars or whatever, just a little money that you wish would buy more of what you want. You might have read in the papers, have seen on TV or chanced to scan the internet and noted that this thing called a bitcoin apparently makes people rich. What do you do?

Your neighbour, your student flatmate or the man in the pub, he stands there buying the drinks because he's just doubled his investment. It might not have been much but somehow the madness invokes the red mist.

It's easy, they've made it so. machines in the supermarkets, apps on line, buy and sell on demand, the machinery of the 'steal' has been mobilised in the certainty of removing wealth from the weak minded.

There will be some who will make their fortunes, but it takes many losers to fund a fortune and those that lose will far outnumber those that win and like poker there are those few out there more practiced in the art of taking from the unwary than most are and they're already playing the game.

It's true that many will think that they've made money while the price continues to rise but when the crash comes those profits will be as ephemeral as the bitcoin concept itself. As investors you know you should take your profits and go elsewhere but.. greed won't let you. It's a madness really, it's insanity for many and completely logical for the few.. but then they wrote the code.

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The founder of Coinbase, who in my opinion is the biggest winner, recently came out and said that in the event of a crash and run on digital currencies that his platform may not hold up to the volume and you may not be able to sell.

That was enough to frighten me from trying anything.

Re: BITCOIN
 

Very true, rumours and capital drying up have taken down some very successful real companies.


There's a limited number of companies allowing cryto-currencies as forms of payment but due to these currencies volatilities many of these companies are stopping cryto-currency support.


The volatility shows how fragile and unregulated they are. No central bank would willingly allow such volatility and central banks would take big steps to stabilise but volatility allows city traders to make money off those less experienced and so it is positively encouraged.

Re: BITCOIN
 

I don't think Bitcoin / cryptocurrency trading has reached the regulated markets yet, so it's not the beleaguered "city traders" that are behind this ponzi scheme, but the bitcoin companies themselves, and the unregulated electronic exchanges that allow punters to buy/sell the vapour.

Re: BITCOIN
 

Re: BITCOIN
 

So what are national currencies then?

Re: BITCOIN
 

Government approved vapour.

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Excellent question, and a frightening one really when you understand that the concept of money is based on faith. The faith is a belief that these small metal and paper tokens will still be exchangable for usable goods on demand once you yourself have accepted ownership of them.. and even more so when you realise that a record of your ownership of these tokens recorded in electronic memory by a third party will be recognised as such.

So how does this differ from the Bitcoin you ask?

It differs in that, unlike a government supported currency, there is no universal acceptance of the Bitcoin worth.

If you were selling your house, would you accept payment in Bitcoin when other currencies were available? If the answer is no, then I think you have answered your own question.

Re: BITCOIN
 

Us$15200 today.

Re: BITCOIN
 

Well put.


True and made me laugh!

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Thinking of going in ?

Re: BITCOIN
 

Never....I'm one for a small wager, but this to me is a folly.

Re: BITCOIN
 

I heard quite an interesting piece on the radio the other day, talking about the environmental impact of Bitcoin. The premise is that the amount of electrical energy it takes to run the supercomputer clusters that are doing the algorithms to mine these things is just enormous. A lot of the mining is taking place in China, where that electrical energy is supplied by coal-fired power stations. The guys making real money out of the Bitcoin mining game are in Iceland (where there's a couple of mines powered by geothermal electrical generation) and in Quebec where cheap over-capacity hydro is available - there's at least one co-located with an aluminium smelting operation on the cote nord. And as the available number of new bitcoins to mine is cut by half every four years, the amount of computing power required will roughly double in the same time frame, so the energy consumption to produce the "raw" currency will not go down any time soon.

It is also enormously expensive, in energy cost and therefore also in dollar cost, to process every transaction with Bitcoin. Because it involves the whole blockchain in a mutual certification process, it's orders-of-magnitude more costly to process (hundreds of dollars, against the few cents for Interac or Visa etc) so it's only cost effective in the long term to use Bitcoin for very large transactions.

My view? It's all a house of cards. I certainly won't be buying into the myth.

Re: BITCOIN
 

Really? The power to run the computers that 'mine' the algorithms is significant enough to be a concern? It just sounds so far fetched, and aimed at adding another layer of mythology to the scheme. Google and Facebook seem to operate their vast computer farms without environmental concerns.

Re: BITCOIN
 

Yes, really.

https://www.wired.com/story/bitcoin-...keeps-growing/

https://e27.co/alarming-environmenta...ning-20171128/

How mining bitcoin is 'killing the planet'

Re: BITCOIN
 

I know you're making it up, but I simply don't believe it. Sometimes these stories come out in dodgy research and end up getting amplified in the mainstream press. I'm no engineer, so I may be wrong, but it sounds implausible to me.

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Do I really believe this? If true how is it funded? Is the value of the new bitcoins enough to pay the energy consumed?

I don't claim to know anything about Bitcoin mining, but looking at it logically, would you spend an ever increasing amount of real money to mine bitcoins when you've no idea what the real value of the coins mined will be? I've no doubt they are being mined but I suspect the costs of doing so aren't accurately reflected by these stories.

I'm sorry, I think that reporters and editors peddling these stories probably know as much on the subject as I do and perhaps they should be questioning rather than simply repeating stories. I'd like to see some factual numbers, attributed to reputable people and organisations, instead of simply publishing hearsay.

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I really don't think the facts are in dispute. Take a look, for example, of a couple of the videos on this company's web page https://www.genesis-mining.com/datacenters - these are the guys that build the datacentres that run the bitcoin mines/farms: what takes the power is not just the servers themselves but the vast amount of energy to cool the rooms they operate in. I think the general public vastly underestimates the scale and sophistication of these outfits.

Re: BITCOIN
 

Here, for example, is a video produced by a middling Quebec-based bitcoin farm. Near the beginning is a caption boasting of the 10 megawatt facility. That's about the equivalent consumption of 6,000 North American households. For one farm. One smallish farm. You do the rest of the math...

Any company that thinks it's worthwhile to produce such a self-congratulatory video ("we use sustainable energy") strikes me as having to work hard to defend its reputation against valid criticism - but maybe it's just that my cynical mind (as a former PR practitioner and current marketing person) is too jaded for the naive environmentalists operating bitcoin farms...

Re: BITCOIN
 

Hmmm.. I've had a read around and I suspect that the stories are true. One I read suggested that a year or two ago bitcoin mining was profitable when the price was less than $300 and we know what it is today.
I had a quick calculation and the quoted 31TWh/year total use is about equivalent to a sustained output of 3500MW or about 4.5percent of the UK total generating capacity (of course this was a year or two ago).
A lot, but this is dispersed worldwide, and with the bitcoin value at today's price of about 15k then I begin to understand the rapid rise in installed mining capacity and it's impact.
As a comparison, Facebook recently announced that it'll buy 200MW from a new windfarm in Nebraska to operate one of it's data centers so these places do soak up power.

Re: BITCOIN
 

:) Glad to have been of service!

Re: BITCOIN
 

They're incredibly expensive to mine.

Here's the antminer: Bitmain Antminer S9 14TH/s + PSU 180 days Warranty – Bit miner shop

$2400 plus HST upfront and then it'd cost about $197 a month to run full time in Ontario.

Now imagine you have multiple devices.

Re: BITCOIN
 

The principle here, and one we should all observe, is to always be skeptical and never believe what you're told unless you trust the source or convince yourself that what you're being told is probably true.

In addition, never be afraid to alter your view if and when evidence suggests otherwise.

Re: BITCOIN
 

What does a device like this do?

Re: BITCOIN
 

multiple devices is the start of it. Racks of 6 of these per shelf, stacked 4 shelves high in a frame, let's say 20 or so frames in a smallish datacentre. That's 480 units x $2500 to buy is over a million bucks just for the hardware, then another million or so per year for the hydro to run them ($200 x 480 units x 12 months). Plus paying somebody to maintain them, and for the building to put them in, and the additional hydro to run the a/c for the building... that's a lot of investment for a not-very-futureproof return, IMO.

Re: BITCOIN
 

It performs the calculations that compute the algorithm that unlocks the bitcoin.

https://www.investopedia.com/tech/ho...n-mining-work/

It's not an effective way of doing anything unless you have many many of these things running simultaneously - the computing power needed to be the first to find the "hash" solution is effectively a brute-force problem so there is a natural tendency to escalate the hardware to ridiculous levels in order to "win the race" and be awarded the bitcoin.

Re: BITCOIN
 

I can believe it, some of the rigs they use in Hong Kong and China are huge. The GPU is the most power hungry part of the system so multiple GPUs running at maximum capacity, I can believe they're using vast amounts of energy.

https://qz.com/1055126/photos-china-...bitcoin-mines/

Re: BITCOIN
 

So should bit coins be valued by the profit an electricity provider can generate from making them? A bit like electricity shares being valued by the earning per share?

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Good article.

Aside from eventual government interference, and electricity costs, there's a clear diminishing returns spiral as more and more 'mining' capacity is added. Classic bubble.

Re: BITCOIN
 

I like the faux Stephen Hawking voiceover, nice touch, should sucker a few more people in. What an industry! Ultra rare tulips anyone?

Re: BITCOIN
 

A very good aricle and one that explains why all the computing power is necessary. It also suggests, and I totally agree with it, that mining is like hitting your head with a hammer, it hurts. Best to sell the pills to ease the headache. The article suggests investing in AMD and the like, but with the value of bitcoin fluctuating so wildly on an hourly basis then surely the more acutely aware will invest in the currency itself and you can see it happening in real time at https://bitcointicker.co/. Fascinating really.