Cryptocurrencies to end in tears, says investor wizard Warren Buffett
Famed investor Warren Buffett has predicted a nasty landing for cryptocurrencies. "In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," the chairman and CEO of Berkshire Hathaway told CNBC in an interview. Later in the interview he added: "I think what is going on will …
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Thursday 11th January 2018 08:11 GMT jmch
Re: Oh, the irony
"Buffet would do well to examine the US Dollar, a currency printed ex nihilo (and completely at the will of the Federal Reserve and the fractional reserve banking system), and consider the value of something that can be printed to oblivion (for practical examples, see the Zimbabwean Dollar, the Venezuelan Bolivar, et cetera) "
While in theory the USD, EUR, GBP, CHF etc *could* b eprinted into oblivion, they remain strong currencies because the market understands they have strong governance and will not be overprinted as in Zimbabwean Dollar etc. They ARE overprinted to keep a bit of inflation going, but that is known and 'built into the price', so to speak.
Buffet is right that cryptocurrencies currently have no intrinsic value and will continue to do so until they reach some stability. After all the main purpose of currency is trade, the utility that I can buy something for it, and in theory cryptocurencies *could* provide that utility, having many useful features (accountability, public ledger, built-in hyperinflation control etc...) BUT what fool will buy an item worth $100 with $100 worth of bitcoin if they expect that within a month their $100 in bitcoin will be worth $120, $150, $200...?? The only exception to this rue is the grey and black market where criminals will be happy to pay / get paid in bitcoin for anonymity and then convert to other 'real' currencies when possible. In money-laundering the expense is calculated as part of the cost of 'doing business' so, not a problem.
Currently bitcoin isn't functioning as a currency, it's functioning as a speculative asset backed by nothing, no more than a bunch of black tulips. Once the crash comes, speculation dies down and value stabilises, it can be used as intended.
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Thursday 11th January 2018 09:48 GMT Rameses Niblick the Third Kerplunk Kerplunk Whoops Where's My Thribble?
Re: Oh, the irony
"...and compare it to cryptocurrencies, which have public ledgers, and have closed the "hyperinflation" cheat mode by design."
But the current situation of hyperdeflation (in BitCoin terms at least) is totally fine and dandy? Just so you know, that way lies economic depression and recession. But hey, we all have pretend money to spend, so who cares, right?
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Friday 12th January 2018 22:10 GMT Mr Finance
Re: Oh, the irony
Yes, yes, kicking and screaming. I wonder who's going to win that fight? Will it be governments with their 20th century currencies good for nothing other than maybe paying for a few soldiers and police, or will it be the technoanarchists with their weight control issues and over developed right wrists? Sooo tough to call.
Morons.
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Thursday 11th January 2018 15:03 GMT Anonymous Coward
Re: Oh, the irony
Curious about the third generation of cryptocurrency. What I liked about the current was it being uncentralized. I would buy bitcoin and then transfer it through 3-4 wallets that were easy to create through either a vpn i trusted or tor and then i felt safe in spending it. For me, governements are the enemy but I would definately buy an uncentralized crypto currency if it was supported and backed by a country such as Israel before buying bitcoin for the same reasons if it completely preserved my anonyminity.
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Thursday 11th January 2018 16:00 GMT Brangdon
Re: third generation
IOTA is currently centralised, and a bit flaky. The flakiness is partly due to being designed for machine-to-machine transfers, and dumb humans don't follow the rules as well as machines do. Might be fixed by better wallet software. The centralisation they say will be removed when usage increases sufficiently. An alternative is RaiBlocks, which is working now, but not supported by many exchanges.
Neither has proven itself as well as Bitcoin in terms of security, and both have the usual issues of being deflationary and volatile. They are also proof of stake, so don't use huge amounts of electricity like Bitcoin does.
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Sunday 14th January 2018 09:58 GMT Chris 155
Re: Oh, the irony
Bitcoin is "safe" only because the government doesn't (didn't) have a decent enough set of mappings between wallets and real people. This is changing very quickly and may possibly already have changed.
Once the government has that set, working out where money is going and where it has come from is simply a matter of data analysis, the block chain literally gives you the entire history of that coin and every other coin in existence.
Creating extra wallets is completely and utterly pointless and even coin laundering services are only a data problem.
To repeat, if you're using bitcoin to escape the US government you're a fool. It's not anonymous, it just doesn't have real names.
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Thursday 11th January 2018 09:32 GMT Anonymous Coward
Re: Oh, the irony
This neatly brings home the point that despite being designed as a currency Bitcoin no longer is one. It can now only be regarded as an investment. Whilst calling it a currency or an investment may sound just semantics it does have important ramifications. Currency trades are not subject to capital gains tax (under UK law at least) whereas if it's classed as an investment vehicle capital gains tax is due on all disposals. Sovereign states are free to rule that Bitcoin is not a currency because it fails to pass a test of what they consider to be the essential characteristics of a currency. Once this happens failing to declare gains above the threshold will be tax evasion.
Of course the taxman won't know who is trading Bitcoins, however getting the proceeds of a significant gain back into real money that can be spent is going to be challenging. The technical term for achieving it without the tax man noticing is Money Laundering, and despite what you read in the press BitCoin isn't good for that either as every transaction is recorded in the blockchain.
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Thursday 11th January 2018 09:57 GMT Anonymous Coward
Re: Oh, the irony
"Currency trades are not subject to capital gains tax (under UK law at least) whereas if it's classed as an investment vehicle capital gains tax is due on all disposals. "
Glad it's not just me that see's that. I've paid my fair share of capital gains to HMRC over the years on investments. Bitcoin (and every other coin) will need to be disposed of and converted to GBP or USD or whatever other currency you need to actually spend them. No shops are really offering BTC or another currency to buy items in and haven;t even worked the VAT etc elements out.
Granted - converting your BTC to cash will get you a lot of it - but it'll be subject to currency conversion, taxes, potentially income tax if it's brought in that way, capital gains etc.
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Sunday 14th January 2018 03:53 GMT Dog Eatdog
Re: Oh, the irony
You are wrong. Currency gains are subject to CGT.
From the HMRC manual:
"When foreign currency is held in a bank account and the account has a credit balance, the account is an asset for the purposes of capital gains tax.
For capital gains purposes all gains and losses must be computed in sterling (see CG78310) so on the disposal of all or part of this asset a capital gain or loss may arise."
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Tuesday 16th January 2018 03:13 GMT richsmith
Re: Oh, the irony
Revenue and Customs Brief 9 (2014): Bitcoin and other cryptocurrencies
https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies
"As with any other activity, whether the treatment of income received from, and charges made in connection with, activities involving Bitcoin and other similar cryptocurrencies will be subject to CT, IT or CGT depends on the activities and the parties involved."
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Thursday 11th January 2018 07:43 GMT Steve Davies 3
Who really does understand them?
come on now. Don't be shy.
I'd heard and read so many different definitions of Cryptocurrencies that I'm baffled.
How exactly did they get a value in the first place.
I guess that I'm like Mr B in that I think that they are at the moment a bubble. That may change in the longer term who knows eh?
When I think of them, these phrases come to mind
Get rich quick and poorer even faster
A fool and their money
Buy in haste repent at leisure
I'm sure that there are many more.
Paris because Bitcoins aren't 'blingy'.
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Thursday 11th January 2018 08:54 GMT John Smith 19
Re: Who really does understand them?
That is exactly his point.
Buffet seems to have 2 golden rules.
1) Don't invest in something you don't fully understand. If you can't explain the business model how can you trust the management?
2) Look at the assets. Do they justify the share price.
I don't think he's against companies that pay no dividends per se, but I'd bet he wouldn't Facebook with a barge pole, seeing it as essentially a bunch of servers, who's intrinsic worth is pretty much zero, compared to their share price. I doubt he'd go near Uber either.
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Thursday 11th January 2018 12:07 GMT I ain't Spartacus
Re: Who really does understand them?
Buffet called the dot.com bust in advance because he can count. So he looked at the balance sheet of a bunch of these companies and noticed that although they had rising turnover, and often were reporting profits (or predicting them for the future), they didn't seem to have the cash to match their claims.
He's also confident enough to publicly say, "I don't understand this, so I won't do it".
Before the great recession the head of one of the big European banks (UBS?) said something similar. That he didn't understand the CDO market - all those lovely mortgage backed securities that proved so disastrous, because they were impossible to value. So he stayed out of the market. In about 2005 he was sacked for not making enough profits. It's a shame we can't retrospectively go back and remove a bunch of peoples' bonuses from that era, and give some portion of them to people like him.
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Thursday 11th January 2018 15:52 GMT h4rm0ny
Re: Who really does understand them?
Warren Buffet is very smart, very experienced and knows a lot more about investment and the economy than anybody who is likely posting here. It's outrageous arrogance for El Reg to be pronouncing on Buffet's lack of understanding. Especially given they seem to be misrepresenting Buffet saying "I don't fully understand this" to "will all end in tears".
People saying Bitcoin et al are no different to the US dollar because neither are backed by physical wealth miss that the US dollar IS backed by two very important things: as the national currency you can pay US taxes in it. And the US tends to bomb any country that calls into question its value (Libya I'm looking at you).
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Thursday 11th January 2018 07:45 GMT Ken Hagan
I'm not sure the "don't understand" bit is entirely fair. What he doesn't understand is why anyone could possibly think these currencies were worth anything. That's different from understanding how they work. (Possibly he doesn't understand that either, but at least that is because he doesn't *need* to, given his position on their intrinsic value.)
On the other hand, he probably knows a pyramid scheme when he sees one.
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Thursday 11th January 2018 07:55 GMT Anonymous Coward
Easy to understand
1. I have to work (mine) therefore the item should have some value more then the effort I have put in.
2. As I have decided in my own mind it has value then is the value I assign to it higher or lower then other peoples value.
3. I can always find a sucker who values mine for more then I do, I should sell mine to him/her.
4. That sucker can almost certainly find another sucker to sell them to for a higher price.
5. Hey! There's a market....I should mine some more and sell them.
6. Rinse and repeat.
I find it amusing that people argue the underlying value of cryptos is worthless (a notional concept) while at the same time buying banking shares which have proved historically to be worthless time and again when confidence evaporates.
Any system, except direct bartering is smoke and mirrors to some extent.
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Thursday 11th January 2018 08:20 GMT jmch
Re: Easy to understand
"I find it amusing that people argue the underlying value of cryptos is worthless (a notional concept) while at the same time buying banking shares which have proved historically to be worthless time and again when confidence evaporates"
Banking (and any other company) shares are not worthless, they are backed by the assets and revenue-generating capabilities of that bank/company. Of course stocks etc can also be grossly overvalued, but you can look at their balance sheet before you buy. In case someone tries to screw the system, there are legal safeguards in place that are backed up by courts and the force that the state can bring to bear on non-compliance (arrest, jail time etc). Right now bitcoin's value is based solely on 'we think that someone else might pay more for it', and if you can't findsomeone who will pay more for it, the whole house of cards comes crashing down.
Of course the value of stocks and shares is also to an extent a 'smoke and mirrors' built on the collective trust in the rule of law, and the legal system does not always work ideally,but it's highly unlikely that shares in Apple or Google are suddenly going to crash, whilewith Bitcoin I think it's a matter of when, not if.
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Thursday 11th January 2018 10:08 GMT John Jennings
Re: Easy to understand
[quote] 3. I can always find a sucker who values mine for more then I do, I should sell mine to him/her.
4. That sucker can almost certainly find another sucker to sell them to for a higher price.[quote]
Problem being 1:that eventually the suckers run out -
and 2: with the design of BC, the cost you have in making the coins are such that no further suckers can afford them.
There is a cost to producing a BTC, but you have no real asset delivered... There is no lump of coal to warm someone, there is no service given to a customer. Noone is actually buying stuff with BTC now. They are trading BTC (and it seems many are now really struggling to do so)- and that is a real problem. PPL claim banks having no intrinsic value - but that is not correct. Banks provide a service (overcharged, I believe but hey!). The banks needed to be bailed out by central governments to keep the rest of the economy working - they really were 'too big to fail'. Governments will not to do this for BTC.
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Thursday 11th January 2018 12:18 GMT I ain't Spartacus
Re: Easy to understand
The banks weren't bankrupt. Well apart from a couple of small building societies and Northern Rock and the government made a profit on selling the assets of that after it was broken up, so it probably wasn't either.
The banks were illiquid. That is they had a bunch of assets that they couldn't sell (such as mortgages that were still being repaid) and a bunch of debts that they couldn't pay in the short term. Bonds and peoples' savings accounts.
So the government took custody of their long-term assets in return for huge loans of freshly printed money. the banks were then liquid and the panic subsided. Within two years all UK banks had paid those loans back, and the Bank of England returned their collaterol and "unprinted" the money. This is what Central Banks are supposed to do, and is the only way so far discovered to have a stable banking system - short of the government running it.
So shares went down, but didn't disappear. Obviously in the case of RBS the government also took a huge stake, so share value collapsed. But if you held on to them, the price started to slowly rise - and might continue to do so.
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Friday 12th January 2018 01:00 GMT Doctor Syntax
Re: Easy to understand
"1. I have to work (mine) therefore the item should have some value more then the effort I have put in."
I can work at, say, making mud pies. If I do that I've put effort in. But that effort creates no value at all. What would create value would be that someone finds mud pies useful. All the rest of your items could be applied to finding the person to whom they are useful. If no such person is found then they indeed worthless and the entire mud pie economy collapses - rather like the mud pies themselves.
See also - The Emperor's New Clothes.
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Thursday 11th January 2018 07:59 GMT Nick Kew
Alternative Hypothesis
The debasement of the (traditional) coin - whether it be adulteration in a declining Roman empire or today's abuse of fiat - calls for an alternative. Bitcoin is an interesting candidate alternative. It has no inherent value, but then neither do those coins, notes and plastic cards we carry around.
The problem there is the proliferation of competing cryptocurrencies, with nothing inherently to choose between them. And of course the implied hard restart: the people who own real wealth (like land, or Buffett's pile) can just sit it out.
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Thursday 11th January 2018 10:37 GMT Stork
Re: Alternative Hypothesis
Well, what is the worth of gold? Apart from electronics and door stoppers, what is the use of the stuff?
OK, I know, to impress the ladies (or gents) - better at that than bitcoin.
One problem with bitcoin is that the transaction cost is so high that it is useless as currency.
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Thursday 11th January 2018 13:33 GMT Anonymous Coward
Re: Alternative Hypothesis
And here lieth an issue
A few years ago everyone talked about cashless society....and even had some people survive on card alone for a few weeks
Great if you live in Knightsbridge but our local Kebab, Chiaken and Corner shops dont deal in cards less than a tenner if, at all.
So when do you think the Hackney Chicken shops will start taking BC?
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Thursday 11th January 2018 20:00 GMT Kernel
Re: Alternative Hypothesis
"Great if you live in Knightsbridge but our local Kebab, Chiaken and Corner shops dont deal in cards less than a tenner if, at all."
Good grief - the UK must be more of a benighted banking backwater than I've ever imagined!
In NZ even a stall at a weekend morning farmer's market is risking a significant loss of sales if they don't offer card payment.
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Friday 12th January 2018 12:16 GMT John Brown (no body)
Re: Alternative Hypothesis
"In NZ even a stall at a weekend morning farmer's market is risking a significant loss of sales if they don't offer card payment."
You must have very low transaction overheads there. Here in the UK, the vendor has to pay for certification, rental and maintenance agreements on the reader(s), per transaction charges etc. I'm not sure of the exact figure, but most small traders will charge 50p per card transaction otherwise they are losing all (and more!) of their tiny profit margin on low value sales. Better to not sell at all than to lose out on the transaction.
I do also note that the transaction charge for a debit card purchase is significantly lower than a credit card purchase, but small retailers do not make a distinction when adding a transaction charge and that most small retailers do have card processing facilities, very few don't do card sales at all, none that I know of will take a card for less than a fiver. The only people who can operate truly cashless are people who don't care about the "convenience" charge of going cashless and can absorb the likely few hundred quid per year they pay in charges.
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Thursday 18th January 2018 11:40 GMT Charles 9
Re: Alternative Hypothesis
"You must have very low transaction overheads there."
Most transaction fees in the US are percentages, usually with a monthly fee on top of it for equipment rentals, etc. Depends on the size of the business and the amount of traffic you generate (bigger business or more transactions = economies of scale meaning bulk discounts), but rates of about 2-4% per transaction are pretty common (debit transactions tend to be lower than credit ones). You're also supposed to get a break if you take Chips since there's less fraud risk with them.
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Friday 12th January 2018 13:17 GMT Charlie Clark
Re: Alternative Hypothesis
The problem there is the proliferation of competing cryptocurrencies, with nothing inherently to choose between them.
No, the problem with all the cryptocurrencies is that there is no backstop. While the central banks are currently working hard to erode confidence in them and hence the currencies they administer, the large currencies are still essentially backed by their economies.
The blockchain is interesting and here to stay, the cryptocurrencies are a textbook example of a speculative fad: no real value but lots of volatility, ie. the chance to make money fom nothing.
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Thursday 11th January 2018 08:24 GMT mt_head
Heard an excellent quote
...on the most recent episode of "Risky Business": "Cryptocurrencies are basically an Internet-wide bug bounty." (I don't have the audio at the moment; the wording may not be exact.)
It does seem to be the most consistent use for them: as something for criminals to steal, or extort, or to get other people to unknowingly mine. I think I'll start my own crypto coin and name it the McGuffin.
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Thursday 11th January 2018 08:52 GMT Anonymous Coward
Anyone know of anyone who specialises in Bitcoin property sales in the UK?
Someone has asked me to sell his commecial property for bitcoin, bit of a surprise request because I don't do this at all. How exactly I'd accomplish this task, I have no idea, also would rather not have the grief to be utterly honest. He's got a mortgage he's paying on it, freehold property. The Land Registry accept bitcoin as currency, how exactly the contracts shape up is going to be the major problem.
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Thursday 11th January 2018 10:20 GMT Tim Seventh
Re: Anyone know of anyone who specialises in Bitcoin property sales in the UK?
"Someone has asked me to sell his commecial property for bitcoin, bit of a surprise request because I don't do this at all. How exactly I'd accomplish this task, I have no idea, also would rather not have the grief to be utterly honest. He's got a mortgage he's paying on it, freehold property."
You could just tell him you'll sell the property, but he has to buy the bitcoin online (on exchange, etc), leaving you out of the mess.
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Thursday 11th January 2018 12:27 GMT I ain't Spartacus
Re: Anyone know of anyone who specialises in Bitcoin property sales in the UK?
How do you sell the Bitcoin once you've got them? If you look at the charts online, quite a few exchanges total daily Bitcoin turnover is just a handful of coins. And are any of those exchanges regulated? What if you sell it for Bitcoins and then get ripped off, or it goes wrong? You've then still got to pay that mortgage.
If the guy wants to invest, surely he sells for sterling cash, then buys the Bitcoins himself.
It's an insanely risky investment, where you have to understand computer security and backups enough to guard your own wallet when you hold them - while also having to find an exchange that won't suddenly announce that it's been hacked - just after you've turned over £100,000 to them - or all your Bitcoin. Are any of them regulated or audited?
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Thursday 18th January 2018 11:43 GMT Charles 9
Re: It's the Blockchain, stupid
I agree that the blockchain concept in itself has potential, but it probably needs a little more refining. For example, it would help if the blockchain can be "volumized" so like in real life you can skim volumes as needed and only need to keep a smaller running book at a time.
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Thursday 11th January 2018 09:28 GMT Spanners
Cryptocurrencies - The ultimate capitalism
You no more need to know how bitcoin works than you do your TV or smartphone. It's nice when you do but you still use them, even when you don't.
All the central banks that are objecting to Bitcoin etc are longing for the good old days of central control. My cryptocurrency "wallet" is effectively a finger raised to those who think that Stalin and Ceausescu were right.
I suspect that it is not the fact that Bitcoins etc could be used for bad things that causes the hostility. Most investment schemes could and have been used from everything from tax avoidance (their favourite activity anyway) to illegal drugs.
Why are all the big banks and investors hostile then? Why have, supposedly democratic, governments been persuaded that this, new,perceived freedom is a bad thing? It is because it is outside the control of those banks and investment bodies. They can't control what people do. They can't destroy its usefulness with "high speed trading". They can't report to each other what we have done and they (wrongly) think that it is untrackable. Some people on wall street are looking to get into Bitcoin or something. On my salary, I keep away from stockbrokers but even if I did, I would not see any point in that. If there is a good chance that I loose money, I might as well do it myself.
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Thursday 11th January 2018 15:59 GMT strum
Re: Cryptocurrencies - The ultimate capitalism
>Why are all the big banks and investors hostile then?
I see no evidence that they are. On the contrary, I see lots of banks quite interested in blockchain (not so much in volatile "currencies"). An investors seem to be pumping and dumping BC - just like regular junk bonds.
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Thursday 11th January 2018 09:32 GMT Sherminator
It's 100% your choice and decision
The old classic statement of only invest what you can afford to lose stands firm in this case.
Sure, we can all wax lyrical about the dangers of the unknowns of Cryptocurrency, I've seen as much volatility on the stock market, with some poor decisions on investment choices in some cases made by yours truly, particulalry on the AIM markets, but on the other hand I've had some absolute crackers as returns in some cases.
The crypto markets, if you can call them that, are nothing more than trading exchanges where you can maybe make some money, or maybe lose some money.
The only thing that isn't likely to happen is a major stock market crash if bitcoin folded overnight.
We can all dream that the holding of 10 Ethereum or whatever you invested in will be worth millions in 5 years time, there's also a danger it will be worth nothing too.
I say have some fun, if it's what you enjoy and don't be surprised if it kicks you in the arse at some point.. :)
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Sunday 14th January 2018 05:59 GMT Desgrippes
Re: It's 100% your choice and decision
That is incorrect. The dip you refer to was to around 500 bucks (in Jan) and it never went back to anything close to 100. The 9 upvotes are indicative of the levels of ignorance in these parts.
If you look at gold price from the 70s on there as much volatility or more in some periods.
Google is so hard.
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Thursday 11th January 2018 09:41 GMT uncle sjohie
I've just read an article https://www.nu.nl/geldzaken/5081915/bitcoin-verbruikt-meer-stroom-dan-heel-nederland.html (in dutch, but it is based on a study done by Morgan Stanley) saying bitcoins will consume as much, mayber even more, electricity in 2018 as our whole country, the Netherlands. So that means the Bitcoin value should be something like $846 billion, since that is the projected GDP of our country for 2018.
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Thursday 11th January 2018 23:37 GMT Sorry that handle is already taken.
Unless the only thing produced in the Netherlands is electricity, the GDP is not based on the amount of electricity. The 140 Terawatthours mentioned in the article would cost a few hundred million euros.
"Uses as much electricity as the Netherlands, produces as much value* as Dominica"
* Just kidding. Cryptos don't produce anything of value.
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Thursday 11th January 2018 11:14 GMT Zippy's Sausage Factory
If I follow what he's saying, the rampant speculation in BitCoin won't end well. I don't know whether there's a peak BitCoin market, but it's possible it's been and gone, possible it hasn't. So he might be right.
The reason he makes more money than most people is that he usually invests for the long term - businesses that are resilient and pay dividends. He's not your traditional stock market speculator, which a lot of the financial press seem to ignore.
Which is probably why he knows very little about BitCoin. But I assume he's seen markets getting overheated by too many gold diggers, which is what BitCoin looks like right now. Usually that doesn't end well, so I think he's making what looks like a safe prediction now.
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Thursday 11th January 2018 12:29 GMT JPeasmould
gambling
Share trading and bitcoin trading are both just forms of gambling - one the establishment approve of and one it doesn't.
I was angry enough about The Names being bailed out when Lloyds of London had a bad year (after years of raking in profits), but the bankers continuing to get bonuses after costing the taxpayers a fortune is beyond satire.
I certainly have no sympathy for anyone who loses their shirt playing around in the cryptocurrency markets.
(Pint icon 'cos I get thirsty after a wee rant)
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Thursday 11th January 2018 12:37 GMT I ain't Spartacus
Re: gambling
When did anyone ever bail out the Lloyds names?
As for the bankers, you do realise they weren't given any cash. All the banks were given huge loans (in exchange for collaterol), but had paid them back within 2 years. With interest. We took shares in the 2 banks that didn't have enough collaterol - and have sold the shares in one of those at a profit. IN the case of RBS, the government owns 70% of it - so as long as its share price can recover above the level needed to cover the money it was given - we'll make a profit on that as well.
Not that they didn't screw up the economy. But the taxpayers loaned the banks money, and got a return on it - and/or took shares (i.e. partial ownership) in exchange.
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Thursday 11th January 2018 15:44 GMT Anonymous Coward
Re: gambling
yep, gambling and nothing more. I did a lot of research and have some servers sitting around so I thought I'd do some mining. Got to the point of selecting the mining software and was looking at the download button. Couldn't bring myself to do it. Here is what ran through my mind.. ( a rat :-) )
1. I have no clue what is in the software I am about to download.
2. I have no clue who the people are that made the software I am about to download.
3. Even after reading descriptions of "mining" it really didn't make sense.
4 I have no idea who else has access to any "wallet" I might create or software I install or how any information I provide these strangers in this entire process will be used. I mean BitCoin and crypto seem to be the preferred currency of some very shady people - but I'll get lucky and avoid them all, because, hey, that's how I roll. Right up to the point where I don't.
5. I can't see how the use of my machines and electricity will definitively provide profit.
6. How do I know this "mining software" is actually mining for me and not the people who provided it?
I have since watched several yt videos by people calling out how crypto is a scam on many levels and am happy with my decision to just leave it alone.
That said, I am an infrastructure guy and see the value of blockchain and its various implementations. Blockchain will continue long after this unbelievable crypto hype has died down and all the lawsuits have been settled. My first hope for a lawsuit is to nail the asshats that are promoting putting your retirement funds in BitCoin. There will be much wailing and gnashing of teeth before this is over.
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Sunday 14th January 2018 06:10 GMT Desgrippes
Re: gambling
Maths is hard? You could have calculated the potential profit/loss to the last penny. In fact you could just enter the numbers on a site that does it for you, but that is too hard too?
The software is open source with a plethora of devs working on it, it's not hard to research the 'trust' element if you can't review the code yourself.
Even if you dislike bitcoin it has been immensely useful in so many ways to test:
1. A level of security (0 hacks, not a penny lost to any technical attack vector) of an amount of money unrivaled by any institution or software.
2. A game theoretic means of implementing consensus across a trustless global network.
3. A censorship resistant form for the transmission of value.
4. An immutable ledger of transactions which is again trustless.
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Thursday 11th January 2018 12:43 GMT mark l 2
There are other things which exist and people are willing to invest and spend money on but when you think about it have no real value, take a bunch of flowers they grow in the ground for free yet loads of people go out and buy them, but their only purpose is to look pretty for a couple of weeks then they are just junk. Yet there is a multi million pound industry made around something that is already dead from the moment it was picked from the plant.
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Friday 12th January 2018 01:16 GMT Doctor Syntax
"take a bunch of flowers they grow in the ground for free"
Would you care to elaborate on that. How is growing them in the ground free? Remember your explanation needs to cover the fact that if the flowers weren't being grown something else would be. It also needs to explain how the flowers are grown with zero effort in propagating, ground preparation, planting, weeding, pest control and harvesting. It also needs to explain how the flowers got to be looking pretty without any cost, given that it will have taken generations of careful hybridisation and selection to get them to that state.
Have you ever actually tried growing flowers or anything else?
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Thursday 11th January 2018 17:51 GMT NBCanuck
Said it before and I'll say it again....
1) the people who hype Bitcoin have an interest in the price going up, not down so of course they are are telling everyone that they should buy it.
2) Bitcoin has less intrinsic value that Pokemon trading cards and even that bubble popped (but I AM curious to see how far it will go).
3) Money being held in Bitcoin is not good for the economy. It is sitting stagnant and not supporting the building of anything - not helping companies grow and create new jobs and opportunities.
Ok...#3 is not 100% accurate - companies are being created to manage Bitcoin trading and investment.
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Friday 12th January 2018 10:31 GMT David Roberts
Just another hare brained Ponzi scheme
There is no underlying value, and at some point you are going to run out of suckers.
And yet.....this was the tune when the nominal price was $100 and $1,000 and....the standard warning is always past performance is no guarantee of future performance. What if it defies current theory and just stays up there?
I will be avoiding anyway, but as I can't explain the current valuation I can't be sure that it is wrong.
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Friday 12th January 2018 12:42 GMT John Brown (no body)
cryprocurrency == corporate scrip?
Currency is backed by nation states. Cryptocurrency is backed by....what?
Is the likely evolution that we end up with big corps creating their own currencies, paying wages in those currencies and you can only spend it at the company shop? Want something not in the company shop but sold by A.N. Other company shop? That'll be a hefty exhange charge on your currency.
The Space Merchants/The Merchants War?
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Sunday 14th January 2018 05:52 GMT Desgrippes
I'm always somewhat shocked to see the levels of ignorance and blind disdain of crypto in the comments here. I would have thought technically minded people would 'get it'. I don't mean the speculation but the boundless opportunities many of these technologies open up. Then again, I remember how people thought the internet was a fad in the 90s. Crypto will not be far off in terms of importance and effects on society.