Never owned any BITCOIN or the like- but BTC in the high 18k this morning

Status
Not open for further replies.
Joined
Apr 27, 2012
Messages
13,466
Location
MA
Agree. I think some money was put in the system to get it kick started. Since them additional coins have been mined, and the other coins purchased gave the money to the sellers. I kind of doubt that the actual money behind BTC is a lot less than the product of $18,000 times the number of existing coins. If I am correct, it is definitely a Ponzi scheme. If I am wrong, I would certainly look for someone to explain how it is not and that the system is backed by actual funds remotely equivalent to the market capitalization of the system.
Not a Ponzi scheme. More like Tulip mania. Ponzi is one person selling someone an investment and giving them interest payments from later investors and pocketing the money without actually investing in anything. That's not going on here although some investment firms are selling it as a good investment, but they're not pocketing the investors money, it's just basically gone when the value goes down. So doesn't meet any of the requirement for a Ponzi scheme. Tulip mania was where the price of Tulips skyrocketed and then came crashing down when everyone grew them to cash in on it. In this sense Bitcoin is limited in the number of bitcoins that can exist so supply can't increase. But there are many other crypto coins out there and the value is only worth whatever someone is willing to pay. When/if people come to their senses it can come crashing down. I knew about Bitcoin when it was $600 and thought it was overvalued then. Guess it means I'm not a good investor/gambler. I still hear talks of how some think it could still go to $1 million eventually.

Like social security or the stock market.
Social security are controlled by certain rules from the government. Currently those rules means it will be insolvent at a certain point. But Congress can just as easily change the rules except that no one wants to touch it as it's considered the 3rd rail. What will happen is that as we get closer to the insolvency date, it will be tweaked but nothing will happen before then.

Stock market is not a zero sum game, in theory stocks can continue to go up as business continue to grow. But you can't buy one stock and hold it forever, there are always new companies out there growing and old companies dying and the trick is to figure out which one is which. Of course if the overall economy goes down, the stock market in general will go down but even in a down market there are still stock market winners, just fewer of them.
 
Joined
Jul 26, 2020
Messages
3,149
Location
FL
Cathie Wood saying Bitcoin can hit $1M is down right silly and helping to fleece dumb speculators out of their money.

Yes, the early investors and insiders made crazy money and got out.
 
Joined
Mar 23, 2003
Messages
1,700
Location
Hopewell, Virginia, USA
On a different note: How'd those Hess trucks appreciate?
Funny you mention that. When I started going to the big car swap meets in the late 1990s, vendors were regularly asking $30+ for Hess toy trucks, even the newer ones. By the mid–2010s, the prices had crashed and the same ones were going for $10–$15. Might be some lessons for Bitcoin fanboys here.
 
Joined
Aug 5, 2002
Messages
21,406
Location
Silicon Valley
It doesn't have to be a Ponzi scheme, but I'm still not investing in crypto because of the uncertainty of its future: there is no government having any stake in it.

If Satoshi starts cashing out BTC then the market can suddenly go oversupply and crash, if someone found a way to mine it for way less, or found a security flaw of the algorithm then it can be stolen, and if the whole world migrate to a newer blockchain and obsolete what you bought then you can lose money in your "investment".

This can go for any currency as well, but at least we have government to keep them stable. Crypto by definition does not have the government backing them up.
 
Joined
Nov 29, 2021
Messages
4,486
Hopefully, the Bitcoin market crash will also crash the Bitcoin mining industry that has been using exorbitant amounts of electricity (just under 1% of total electric power production worldwide).

Okay,.now THAT I have never understood. A "Bitcoin miner."

How.. would it?
Wouldn't that cost now $18,000 per coin?
Are they just computers that run all day and all night which is supposedly draining all that energy?
So that's on a regular home electric bill, right?
How would a Bitcoin be "mined?" From where? How?

I don't get it.
 
Joined
Aug 5, 2002
Messages
21,406
Location
Silicon Valley
Okay,.now THAT I have never understood. A "Bitcoin miner."

How.. would it?
Wouldn't that cost now $18,000 per coin?
Are they just computers that run all day and all night which is supposedly draining all that energy?
So that's on a regular home electric bill, right?
How would a Bitcoin be "mined?" From where? How?

I don't get it.
Most BTC are mined using ASIC designed for it (i.e. BitMain) these days, a regular GPU won't be efficient enough for that. They are also typically mined somewhere with cheap electricity like Iceland or in some rural area with cheap hydro power in an industrial park (sometimes with stolen electricity or illegally build small hydropower). You are not going to make money mining BTC at a California home, you might be lucky to break even mining ETH in S Korea using a GPU though.

 
Joined
Jun 14, 2011
Messages
3,342
Location
Texas
Most BTC are mined using ASIC designed for it (i.e. BitMain) these days, a regular GPU won't be efficient enough for that. They are also typically mined somewhere with cheap electricity like Iceland or in some rural area with cheap hydro power in an industrial park (sometimes with stolen electricity or illegally build small hydropower). You are not going to make money mining BTC at a California home, you might be lucky to break even mining ETH in S Korea using a GPU though.

The Bitmain bitcoin mining setups are small potatoes compared to the 100,000 sq/ft+ sized warehouses full of sophisticated computers that use enormous amounts of electricity. Notice that the ANTSPACE HK3 uses 1mw and it is only a 20' shipping container. Normally they run 24/7. These are running all over the world. We have several of them running in Texas. Texas (for one) is well aware of these and has come with regulations that require they be turned off during an electric grid crisis. They can and will pull the plug on them if they don't comply.
 
Joined
Apr 27, 2012
Messages
13,466
Location
MA
Okay,.now THAT I have never understood. A "Bitcoin miner."

How.. would it?
Wouldn't that cost now $18,000 per coin?
Are they just computers that run all day and all night which is supposedly draining all that energy?
So that's on a regular home electric bill, right?
How would a Bitcoin be "mined?" From where? How?

I don't get it.
The more miners there are, the less profitable it becomes as the difficultly level increases as there are more miners. But you join a pool and your rig contributes computing power to the pool. They get released randomly and if you're not in the pool that got something, you did all that computing and made nothing. And you need powerful rigs. When the price of bitcoin was high, you could mine some bitcoins and the ones you got could pay off the electric bill and computing power. Now that the price of it has fallen, with high electric rates, it becomes unprofitable so some miners drop out. The difficulty level can decrease if the number of miners go down. The computer basically tries to solve problems and can get randomly rewarded with bitcoins. They get released at a fixed amount but there's a fixed amount that will be released and as time goes by fewer coins will be released. It's probably partly why the value of bitcoin goes up, the cost of mining has increased so it needs to keep going up to make it profitable. But a bunch of people can get out and the rigs left mining can still be profitable as there's a fixed amount of coins around to go to fewer people. So the ones who can stay in are the ones who have the lowest costs and those will be people with access to cheap electricity and lots of computing power per dollar spent. So anyone trying to get in now doesn't have much of a chance against corporations who can have racks and racks of computers with access to low cost electricity.
 
Joined
Sep 27, 2015
Messages
4,562
Location
USA
Ponzi's scheme was to tell victims that he has a secret way to earn unusually large returns from legitimate investments such as the stock market. A recent example is Bernie Madoff's "mutual fund" that was actually Ponzi. The workings of the Ponzi scheme-- the fact that it is not based on legitimate investments-- are not revealed to "investors."

This is much different than pyramid schemes where the participants know that it is a pyramid, and the money they expect to receive will be coming from people who buy in after them.
 

LDM

Joined
Nov 8, 2018
Messages
247
Location
Illinois
Okay,.now THAT I have never understood. A "Bitcoin miner."

How.. would it?
Wouldn't that cost now $18,000 per coin?
Are they just computers that run all day and all night which is supposedly draining all that energy?
So that's on a regular home electric bill, right?
How would a Bitcoin be "mined?" From where? How?

I don't get it.
Mining Bitcoin or any other cryptocurrency isn't like going out and digging a hole, its basically just using a computer to calculate hash values that then turn into the amount of Bitcoin.

That said, cryptocurrency is probably one of the stupidest tech ideas that I've ever seen. The fact that anyone thought it was a good idea in the first place is sad by itself yet the amount of money and energy that has been wasted on this garbage in the last decade is even more pathetic. This and NFTs have no real value and no real use. They fall clearly under the area of scam as far as I'm concerned.

I think most people are finally starting to realize just how useless all this crypto nonsense really is, which is why all these various "coins" have plunged in value or died entirely. Blockchain technology just isn't good enough in many ways that the technology we already have for dealing with transactions. While blockchain could have some uses in certain scenarios, the cryptocurrency part is just useless garbage.
 

JHZR2

Staff member
Joined
Dec 14, 2002
Messages
49,451
Location
New Jersey
Stocks are worth something because they're a claim on future earnings.

Why is a bitcoin worth anything? It's worth what a "greater fool" will pay for it. That's not a great basis for an investment.

Before you invest, think about Wile Coyote.
People buy and sell currencies based upon the “worth something” attribute all the time.

Bitcoin (I own none, never have) has that allure that it is independent of other nations’ indebtedness and failing currency.

Thing is, Bitcoin isn’t based upon anything either…
 
Joined
Apr 22, 2018
Messages
2,320
Location
MA
It’s not hedging either since it’s overall direction correlates with the direction of stock market.

I have a retirement well into the high 6-figures at 43 and I bought $1000 of bitcoin…which is now worth $376…lol. It’s not part of my plan.
 
Joined
Nov 29, 2021
Messages
4,486
Bitcoin does seem like a scam. Maybe it was cool for awhile.

We are going to a digital dollar?????? (Are we?)
 
Joined
Feb 22, 2011
Messages
302
Location
MN
I put 500.00 into Doge last year, right before the big run up.
I'm down big. LOL
 
  • Sad
Reactions: GON
Joined
Jan 13, 2016
Messages
3,489
Location
Northeast Nebraska
We are going to a digital dollar?????? (Are we?)
I don't think we are quite there yet. What scares me is if you lose your card or passcode there would be no way to recover your money because it's not tied to a bank or credit account.

 
Joined
Aug 5, 2002
Messages
21,406
Location
Silicon Valley
Mining Bitcoin or any other cryptocurrency isn't like going out and digging a hole, its basically just using a computer to calculate hash values that then turn into the amount of Bitcoin.

That said, cryptocurrency is probably one of the stupidest tech ideas that I've ever seen. The fact that anyone thought it was a good idea in the first place is sad by itself yet the amount of money and energy that has been wasted on this garbage in the last decade is even more pathetic. This and NFTs have no real value and no real use. They fall clearly under the area of scam as far as I'm concerned.

I think most people are finally starting to realize just how useless all this crypto nonsense really is, which is why all these various "coins" have plunged in value or died entirely. Blockchain technology just isn't good enough in many ways that the technology we already have for dealing with transactions. While blockchain could have some uses in certain scenarios, the cryptocurrency part is just useless garbage.
I'm sure the first person who thought of using seashells or gold as a currency was being told the same thing until a governing body officially recognized seashells or gold as a "currency". Then as soon as they see you need everyone to agree it is a currency, it becomes a currency.

With the government controlling currency and bitcoin being the antigovernment currency, it becomes a dilemma.
 
Joined
Aug 5, 2002
Messages
21,406
Location
Silicon Valley
I don't think we are quite there yet. What scares me is if you lose your card or passcode there would be no way to recover your money because it's not tied to a bank or credit account.

There's a believe that in order to completely replace cash / gold you need to keep transaction anonymous, like real cash and gold. So the criminals and tax dodgers will trust them. The dilemma is if you want this you have to take the risk of losing them to carelessness or criminal activities.

The thing is, most people do not really care about the anonymous part of it unless they live in some dictatorship, like trying to smuggle money out of China, launder cartel drug money, spy agencies sending money to arm dealers to buy money for terrorists, etc.

Most people like me just want to buy a happy meal without holding a bunch of dirty paper or metal coins, we already have ways to get it done with credit card, alipay, octopus card, etc without using blockchain.
 
Status
Not open for further replies.
Top