BitCoin anyone?

nooshinjohn

I have heard of them but never thought much about them...now 4 years after launch, a single 25 dollar investment is worth nearly a million dollars???
What are these tings and why are they worth so much when there is absolutely nothing to back them up?

http://www.examiner.com/article/24-bitcoin-investment-buys-house-for-norwegian-man

billbillw

You're too late. The cost/effort of mining has gone up exponentially along with the value of each coin. If you got in early, you might be sitting on a pretty nice pile of cyber-money. I thought about building a mining machine out of spare computer parts and putting in a high end video card from a few years back, but when I ran the calculation, it would barely pay itself off vs the cost of electricity. The latest wave is to use dedicated ASIC miners that use hardly any power and mine at something like 100x faster than a GPU based system could. Of course, you have to drop a bunch of money to buy that and if bitcoin goes belly up, you are stuck with an otherwise useless piece of hardware.

billbillw

Sorry, I guess to answer one of your questions, it's the market that puts value on these things, just like any tradable commodity. What value does a barrel of oil, an ounce of gold, or anything have other than what a buyer will pay for it? Heck, half of the financial investments out there are just as much of a wisp if you ask me. Derivatives? Credit Default Swaps?

jflail2

Well said Bill. My understanding is that each coin is multiple times more difficult to "mine" than the last. Meaning, over time you'll be spending even more $$ on electricity to mine the next coin. Diminishing returns as it were.

I wish I'd tasked an old PC (with good vid card) with mining these when I first heard about them a couple of years ago.....coulda woulda shoulda. Sigh.

tonyb

Bitcoins are basically an alternate cyber currency not affected by the usual currency pressures. Also has no controls over it either so the value swings can be very high. They have gone down close to zero a few times already. It's too shadowy for me, the owners run it off a laptop and still can not be identified. A huge Ponzi ? Me thinks so.

People/countries are looking for alternate ways to exchange trade without being made prisoner to the big banks of the world, or being subject to market fluctuations. A transition of wealth if you will. Bit coins was intended to do just that, but obviously the pitfalls are apparent with no controls over them and nothing backing it up.

cnh

Bitcoins are aptly named since they are potentially worthless and nothing more than a new way to leverage non-existent value for speculators (something those boys love--crash and burn economies).

That anyone takes this stuff seriously is very scary, since even gold, currency, bonds, etc. have no real intrinsic value other than what we give it. You can't eat gold, you might be able to stuff currency into a winter jacket to keep you warm, and use the back of bonds to write on. lol

In the end the only things that have "value" are what keep us alive: food, clothing and shelter! And this economic business is very much like the tables at Las Vegas. That's why we need all these 1000s of Hedge fund managers, NOT!

Ponzi scheme? Isn't that the way most entrepreneurs actually "make" their money! lol It's a rich man's game and the money they're worth is not really worth what they think it is! It's an inflated bag of paper that will deflate overnight as soon as we go "bust"!

I guess, if you look at the DEBT almost every nation carries, we're all using Bitcoins. lol And since the "initial" value of bitcoins has to be "purchased" using diverse national currencies that CONSTANTLY fluctuate and are not worth their face value, just HOW can cyber money CONTROL for that? It's already disadvantaged if it has ANY connection with real world currency. It is beholden to it! If some fancy algorithm could control for that every business and bank would be using it!

In a sense the bitcoin is a form of "magic". You put REAL coins into its top hat and the PROGRAM can pull out many rabbits, a giraffe, or even a pair of pandas for you--as you prefer? It is Halloween, \after all!!! Witches brewing cyber money over a cauldron:

Swelter'd venom sleeping got,
Boil thou first i' the charmed pot!
ALL. Double, double toil and trouble;
Fire burn, and caldron bubble.
Fillet of a fenny snake,
In the caldron boil and bake;
Eye of newt, and toe of frog,
Wool of bat, and tongue of dog,
Adder's fork, and blind-worm's sting,
Lizard's leg, and owlet's wing,—
For a charm of powerful trouble,
Like a hell-broth boil and bubble.
ALL:Double, double toil and trouble;
Fire burn, and caldron bubble.

MACBETH

cnh