UK reaches peak Bitcoin as bin firm accepts cryptocurrency People have bin going mad for Bitcoin lately and, as it appears some refuse to see sense, companies are queueing up to get on the bandwagon. The latest evidence that the cryptocurrency frenzy has reached fever pitch is a York-based bin company that has started accepting payment in virtual currencies. No, we're not talking …
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Just because someone who has $19290 dollars is willing to exchange it for a BitCoin right now doesn't mean everyone who has $19290 dollars will exchange it for a BitCoin. The exchange rate is a spot price. If the number of people prepared to exchange anything like $19290 for a BitCoin is small and those few people buy all the BitCoin they want, the price will drop suddenly. It value is entirely speculative hype, it has nothing to back it.
Most people who have worked for $19290 wont consider some used up computer processing to be of comparable value. Does bitcoin mining yield something of lasting value to you? Or is it the computational equivalent of digging holes and filling them in?
The difference between fiat currencies and virtual currencies, is that while a central bank can create new fiat currency from thin air, the money is issued as debt. So people paid with the new money produce something of value to society. There is an increase in total material wealth corresponding to the new money.
The majority of BitCoins that will ever exist, exist today, and none of them have been issued against / tied to any useful work done. In short the owners get to exchange used computer processing for material goods that other people have worked to produce. What's more, rather than reward people equally, those who get in early benefit the most - exactly like a ponzi scheme or MLM pyramid marketing.
Agree. That's because bitcoin is more of a commodity than a currency. Bitcoins are more like trading cards than anything else.
There's recently been a 'kitten' virtual pet which works with blockchain, which allows you to create new virtual kittens out of the properties of others. Some of the kittens' attributes are desirable to some people and also rare, and now these kittens are changing hands for real money. I don't know if the whole thing is a joke meant to show how ridiculous bitcoins are or what.
And, given the speculative bubble is still growing, it would be folly to convert your virtual gaming tokens into actual cash to settle bills at this point. It would be like throwing them in the trash.
Problem with speculative bubbles is, when they pop, they can often leave you with nothing (and unlike bubbles, not even a clean soapy scent, but with a bitter taste).
they can often leave you with nothing
Indeed. It's clearly one of the things that demonstrates the falsehood of the claim "it's just money". A "currency" that people are reluctant to spend is not much use as a currency.
As an investment, it's even worse (in the long term, though everyone who is presently invested clearly thinks they are sufficiently clever to sell out just before the bubble bursts so it's everyone else who suffers). At least tulips are pretty - and, in extremis, edible.
But when the bubble bursts, and the value of it falls off a cliff, it will be a brilliant time to buy some. No way that a lot of the stupids accepting bitcoin as payment will be able to convert their systems in time to stop you buying loads of stuff for sod all (believe me, a LOT of systems are not forex linked to the actual trading value at a particular moment).
I'm not sure what your issue is here. Once a transaction has been accepted in the bitcoin system then you can not spend it again. Of course, being a speculative currency, its 'value' may change while in flight, and...it might take a little time to actually spend it - 40 hours a transaction anyone.. and even longer to cash it in. I can be a little smug, having cashed in coins generated when things were just kicking off - and even then because I was simply curious along with a couple of friends and we experimented - it took 3 days to clear them all - not many just hedged my exchanges. Not that I am complaining - free money (with HMG taking their slice just in case anyone asks), and I was not tempted by the rapidly rising cost to 'hang on' and don't regret it - I did minimal work for them anyway, just a technical folly of my yoof so to speak.
I am however very glad that I had backups drilled into me from an early age, and was even disciplined enough to move them from floppy to Iomega to CD to DVD over time. Saved my historic bacon on a number of occasions.
Or tulip bulbs?
How do they determine the exchange rate? Do they count the rate at the moment the transaction is requested, or when it's completed?
Dear Mr Hall, BTC is not a currency. Nobody is dumb enough to try to pay you in it. But I imagine you might have a few customers who are unscrupulous enough to fake payment in it (they'll cheerfully send you screenshots showing that they've made the transaction, which you'll have no choice but to honour because you made this bloody silly announcement, but with transaction times being what they are, the customer could be up and gone before you can definitively say it was a fake).
Go away.
Bubbles are not restricted to "illicit" schemes, just look at the house prices in the UK, intentionally raised to benefit the builders and buy to let MPs yet people still believe there is no such thing as negative equity. All the bankers who threw away investors nest eggs for bonuses, no need to punish them just make everyone else poorer and th eproblem goes away.
Everyone living on credit is never going to be a problem because too many have indulged and they are "important" voters, I say let them pay for their own stupidity and short sighteness.
Frankly most people are stupid and the ones that are not total stupid make billions fleecing the ones that are, no point arguing with "common knowledge" you have to just pay the bill for them when the bubble bursts.
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