Bitcoin

[telstarbox]

Has anyone had any experience of this new and somewhat unconventional currency?

Unlike other currencies, Bitcoins are not issued by a central bank or other centralised authority. Instead they are created in a process called "mining", in which coins are issued to a user when they solve a complicated mathematical problem using their computer.

Part of the attraction is they can be used to make transactions that are difficult to trace, offering privacy to their users, and the currency has been adopted by Wikileaks and other sites to receive donations.

http://www.bbc.co.uk/news/technology-21601608

 

[maniacmartin]

Yes, my colleague at work has made £5,000 from currency speculation with Bitcoins. Another colleague has been mining them and made around £10,000

 

[michael769]

Has anyone had any experience of this new and somewhat unconventional currency?

It's been around for years!

 

[telstarbox]

"Newer than pounds, euros and dollars" then

 

[Xenophon PCDGS]

There was a short Radio 4 discussion on this matter this week that mentioned "Bitcoin wallets" and then the reporter attempted to purchase some fast food by the use of this method.

 

[telstarbox]

Yes, my colleague at work has made £5,000 from currency speculation with Bitcoins.

Martin - does this mean buying Bitcoins and keeping them until the price rises sufficiently to sell at a profit?

 

[wintonian]

They're great if you have some reason to put them through the 'laundry' and don't want them traced back to you, (examples of which I won't give here and can be found with a bit of research anyway), otherwise I can't think of any legitimate use for them considering how expensive they are to convert.

For those who don't know much about them; bitcoin.org/en/how-it-works (or the wiki for the more adventurous reade.), slight warning in that it does get very complicated and to the point that I don't fully understand the ins and out's of it, but then I enven have trouble with the general concept of currency markets sometimes.

 

[Xenophon PCDGS]

Is there any chance that the more computer literate of the criminal fraternity will see more openings for criminality by the mis-use of large amounts of these, should this idea take off ?

 

[wintonian]

They already do and have done for sometime, if you have ever looked into the deep dark corners of the internet then you'll know that it is, (almost without exception if you include the conversion to/ from other digital currency's) the only currency used.

Apparently the FBI are worried according to last years alleged leaked report.

 

[GatwickDepress]

Some pages of the deep web offer illegal services such as prostitutes, drugs and hitmen (!) that are typically paid for with bitcoins thanks to the anonymity provided.

 

[wintonian]

Some pages of the deep web offer illegal services such as prostitutes, drugs and hitmen (!) that are typically paid for with bitcoins thanks to the anonymity provided.

Yep, but you are more likely to find someone's run off with your bitcoins than you are to find someone to knock off ex, such is the integrity of such dark grubby corners.

 

[maniacmartin]

Martin - does this mean buying Bitcoins and keeping them until the price rises sufficiently to sell at a profit?

That is correct. He has written some software to monitor the exchange rates and buy/sell at the appropriate times.

If you look at the statistics, something like 80% of bitcoin transactions are gambling transactions nowadays. This is because online gambling with real currencies is illegal in the USA, but since Bitcoin is not a recognised currency, it it allowed through a loophole.

Whilst they have illegal uses, they can of course be used for legal purposes. Some techies use them for all sorts. Where I work, someone even paid his rent to his flatmate in bitcoins!

 

[Xenophon PCDGS]

Will there be those in the "dark corners" of the online banking industry currently feverishly working out how to mis-sell them...

 

[telstarbox]

I decided to gamble and buy a small amount out of curiosity. Their have increased in value by 33% over three days since I purchased them which is a decent return by any standards, but whether the current rate of growth will continue is anyone's guess and it could be like the 'tulip mania' with a lot of people left holding worthless Bitcoins if there is a crash.

 

[Xenophon PCDGS]

I decided to gamble and buy a small amount out of curiosity. Their have increased in value by 33% over three days since I purchased them which is a decent return by any standards, but whether the current rate of growth will continue is anyone's guess and it could be like the 'tulip mania' with a lot of people left holding worthless Bitcoins if there is a crash.

It does not appear to be a very stable "currency" in its current situation.

 

[Broken Viking]

They're great if you have some reason to put them through the 'laundry' and don't want them traced back to you...

Not entirely. If someone knows your wallet ID, then they can trace the passage of any specific BitCoin - Both before and after it went through your wallet - Via the public block-chain.

That is correct. He has written some software to monitor the exchange rates and buy/sell at the appropriate times.

...Which is about the only real way to make money with BitCoin nowadays, ever since the Black-Hats started using their botnets for mining. To stand half a chance at mining coins quickly enough today, you'd need a large number of FPUs and an inside-out understanding of exactly how the SHA-1 algorithm works...To say nothing of the gradually decreasing award for each mined block over time! hock:

To summarise: BitCoin was great when it first came out, when not many people were mining and the award was 50 BitCoins per block. At it's current 12.5-25BTC award per block though, it's no longer worthwhile investing in hardware for mining.

I decided to gamble and buy a small amount out of curiosity. Their have increased in value by 33% over three days since I purchased them which is a decent return by any standards, but whether the current rate of growth will continue is anyone's guess and it could be like the 'tulip mania' with a lot of people left holding worthless Bitcoins if there is a crash.

There has been a BIG crash in BitCoin in the past, when the value of BitCoin on Mt. Gox (The main BitCoin forex) fell to less than USD 0.001 and wiped out millions on BitCoin investments, though those few who successfully bought BTC during the crash managed to make a mint in the end. See http://youtube.com/watch?v=T1X6qQt9ONg for a report from the time.

Personally, I would not recommend speculating in BitCoin unless you are happy to look at your investment like chips on a Roulette table. The rewards can be great if things go well, but the risks can be significant if they don't. BitCoin is a VERY volatile currency whose future is not secure, and could pose problems if ever any government successfully illegalise it.
Please note however that I am not a financial advisor, and can only liken BitCoin speculation to conventional gambling from the standpoint of personal opinion.

Remember: Only speculate with money that ye can afford to lose!
>> Death <<

 

[soil]

Bitcoin crashing NOW

http://bitcoinity.org/markets

 

[Broken Viking]

Bitcoin crashing NOW http://bitcoinity.org/markets

Crash and a half? Since when was 1.00000 BTC worth the USD 148.24146 currently showing on Mt. Gox?!?!? hock: hock: hock:

<-- Is now wishing he'd bought a few BTC back when they were around about a fiver each...

 

[soil]

They were $260 earlier today. I'm trying to sell the BTC I bought for a fiver each, but Mt Gox is totally melting down.

 

[Broken Viking]

I'd say...MtGox Live is under so much load it simply can't keep up! hock:

Current BTC price (On MtGox) is GBP 117.86091 versus todays high of GBP 174.27213 (If ye paid more than GBP 50.00000 for 1 BTC and can sell 'em, ye've still made a mint!) and looks to be dropping. There are some peaks, but it could be a full-scale crash...

Edit: If I join MtGox now and put in a PayPal'd buy order for, say, 100BTC at the rate of GBP 0.05 each, is there much chance of my buy order being fulfilled?
----------
Addendum: I'm feeling like a right idiot tonight. At the start of the year, one BitCoin was worth around ~GBP 5,-. Even with todays crash (Which seems to have been caused by a massive DDoS) they're worth at least GBP 125,- each now! hock:

If Id've bought a bunch at the start of the year and sold them off low today (Say GBP 118,- each) Id've still made a Killing, despite the undercutting! hock:

 

[bb21]

Is someone able to explain this thing in a few short sentences for me please? I read through a few websites and still haven't got the foggiest idea what they do and what you do with them.

 

[Xenophon PCDGS]

Is there any official world-wide banking overseeing body that has any powers over a "new currency" being introduced that is not just a currency of a single country ?

 

[telstarbox]

No - for some users, this is part of the appeal.

 

[Spaceflower]

Is someone able to explain this thing in a few short sentences for me please? I read through a few websites and still haven't got the foggiest idea what they do and what you do with them.

Wikipedia is your friend.


http://en.wikipedia.org/wiki/File:Bitcoin_GBP_to_April_2013.PNG

I wont be investing anytime soon.:roll:

 

[ralphchadkirk]

The value of Bitcoins is very, very changeable. If you're going to trade in them the you need to have a very quick mouse finger.

 

[bb21]

Wikipedia is your friend.


http://en.wikipedia.org/wiki/File:Bitcoin_GBP_to_April_2013.PNG

I wont be investing anytime soon.:roll:

I did have a look at Wikipedia, amongst some others, but it still read like gobbledygook to me.

 

[soil]

The value of Bitcoins is very, very changeable. If you're going to trade in them the you need to have a very quick mouse finger.

Insufficient. Lag times can be u to an hour, so you may miss the boat when rushing to sell.

 

[maniacmartin]

I'll try and explain it in layman's terms.for bb21's benefit...

Bitcoins are a currency that is not centrally controlled by any official authority. They can be "mined" by solving computational problems which take some time and computational power to compute.

The algorithm is set up so that as more and more coins are mined, the level of difficulty of the problems that need to be solved increases in levels, so that it keeps up with Moore's Law. Also, as time goes on, it is expected that the rate at which new coins will be able to be "mined" will slow down. So the people who mined way back in the beginning had it really easy and could use standard PC's to generate vast quantities of the coins. Then as it got more competitive, you needed GPUs to make it economically viable, and we're now around the point where you will soon need custom manufactured circuitry to make it economically viable (power costs, hardware costs etc).

Bitcoins can be stored in a type of digital wallet, which is identified by a long string of characters, and cryptographically protected. A transaction involves moving coins from one wallet to another, which only the holder (who has the cryptographic keys) can do. Each coin has in it a transaction history of all the transactions it's been invovled in, and which wallets its been in, but the owner of each wallet isn't generally known. There are also thought to be many coins that have been stockpiled and are not in publicly visible wallets.

You can exchange real currencies for Bitcoins and vica versa via sites like MtGox, which is a big foreign exchange where you can trade with other people. The way it works is by you transferring the coins into their wallet (so they hold the coins for you, like a bank would) and then they will trade it to and from Sterling or whatever. Or you can transfer coins to someone else directly without a middleman.
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And Death, I feel your pain. I too have been kicking myself for not investing earlier. Every day recently I've thoguht "Oh I would invest, but the price can't keep rising forever so I won't". I suppose its like all investments, sometimes you win and sometimes you lose.

 

[ralphchadkirk]

As I understand it, it's a self generating currency. A load of transactions are organised into a block. When you "solve" the block with your computer you create more Bitcoins.

Although I'm sure I read somewhere about a theoretical limit of 21 million Bitcoins?

 

[greatkingrat]

Bitcoins are not an "investment", they are a modern version of a Pyramid scheme. The people who got in early may have made some money, but sooner or later it will collapse and they will be worthless.