Hey, I hope this is the right board for this. Does anyone here use cryptocurrencies, like BitCoin, for investment purposes? I think many people who do so are more interested in its use and promotion as a regular currency, but I would only bother involving myself with BitCoin if I thought it would earn me money. I'm sure you're all aware it was recently worth around $900, after a steady climb for months, then plummeted practically overnight. Now it's around $300. I'd say risks are higher, so of course, potential for profit is, too! I don't really even know how to get any, but I'm certainly going to find out if it's a decent trading platform!
If you have money you want to gamble and can afford to lose, throw maybe $1000. Cryptocurrencies benefit the people who started them the most. With the shutting down of silk road, and now that TOR is no longer secure, cryptocurrncies are losing their value. Also governments do not like competition, they like it when the have a monopoly on creation of money, so governments if they can't get into the game might crack down on cryptocurrency.
Investing in cyptocurrency is very risky. I don't even understand the criteria they use to calculate the value of the currency, say one bitcoin. Most people don't either I'm sure. All this secretiveness always has me on my guard. Why would I invest in something whose value is not only volatile but also impossible to determine it's true value? Will they end up being worthless eventually? I'd rather not find out.
There is no valuation. That is my main problem with bitcoins. There are a lot of very ignorant people who are treating bitcoins like they are a stock.. It is not, there are no fundementals, no sales, no profits, no physical assets. Bitcoins are EXACTLY the same thing as investing in the currency of some third world country. If you got a lot of tech-smart, economics-dump people together and convinced them the Zimbabwe peso was the perfect crypo currency, the price of the zimbabwe peso would behave the same way. It is a pyramid scheme by the founderss, supported by anti-gov´t tech people. You still cannot buy anything with bitcoins unless it is valued immediately against the USD. It is not acting like a currency in that situation, it is acting like paypal, visa or any other payment method. It is a payment METHOD, not a currency.
Great information, Petersede. Very enlightening. Many people know very little about bitcoins but think they do because they've read some articles written by "experts" who probably want to make some fast cash off them. They embrace the lie that "bticoins are the future" and once they've bought them fancy coins with real money there can only be one result. Once again, thanks for the information and I hope that those who think bitcoins are an "investment" will read your post and learn that they are being deceived.
I agree with that, as far as I am concerned I see bitcoin as something really dangerous because it's value is always oscillating randomly, so how can we make a decent investment like this?
Bitcoin is far too volatile to seriously consider right now. I do have some bitcoins which I collect up from giveaway sites, but now is certainly not the right time to sell them. I plan to keep a close eye on the market for the next couple of months and see if things calm down a little.
Just to add.. how many of you know what a short squeeze is? Basically it is a positive reinforcement ´death cycle´ for people who shorted a stock. As the price starts to rise, people who shorted the stock are forced to buy it, which makes the price rise even more, which forces more people who shorted it to have to buy.. It is a viscous cycle where people who shorted the stock can lose everything because they have to buyback a stock that is now at a very high price. Bitcoins have the same type of positive reinforcement on the way down. As the price falls, there are people who are forced to sell... which makes the price fall. Here is how it works. You can mine bitcoins using computer power, basically you install a program and the system uses your CPU to perform calculations and you get paid in bitcons When bitcoins were trading at $800-$1000 each, a LOT of people started leasing computers and/or signing up with cloud-mining companies in order to mine bitcoins. Basically you spent $400 to mine something that had a value of $1000. Sounds great, right? well a TON of people signed contracts to do just that, either they leased computers or they joined a cloud-mining group. The problem of course is that once bitcoins dropped below $400, all of those people are now losing money. They are paying $400 to mine something that is worth $300... which means as soon as they get their bitcoins, they are forced to sell all of them to pay for the contracts... and all of that selling further pushes the prices of bitcoins down, which makes other people with contracts also unprofitable. Besides all that, you now have 3 ´dramas´ that have happened. First there was silkroad, where basically a drug dealing cartel was busted, and all of their bitcoins were sold, which helped crash the price, and also was some really bad PR. And now twice, including one this week, were ´exchanges´ have been either hacked, or have had the owners steal bitcoins. This week an exchange in China claims it was hacked, and people who used their service lost $2M in bitcoins. And of course becasue of the joy of ´anonymous´ currency, those bitcoins can never be tracked. The exchanges where bitcoins are traded are un-regulated, since, well, you know the whole purpose of bitcoins is to be ´above government intervention´.. so not only are the bitcoins untraceable, but nobody is really able to investigage the Exchange to see if the owners stole the bitcoins or if it really was a hack. But either way.. it shows how open the entire system is to fraud and theft. If you can´t store bitcoins securely, and if you can´t use exchanges to trade them, then what is the point of them?
Definitely agree with you there. I've been dabbling a little with faucets and see what it's about, but nothing more. I've heard more than enough horror stories about people investing everything they had and losing every penny with bitcoin. Worst thing is, the guy who stole from Mt Gox basically got away scott free because bitcoin doesn't HAVE any type of regulation at the moment.
Sure, if you sold your bitcoins right now most likely you'd get a couple hundred dollars. Either cases it's dangerous, we never know if their value will drop even further.
