The "What if" question.

Every month in Writer's Digest's InkWell section, we pose a question related to the writing life. Tell us your thoughts.
plughmann
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Re: The "What if" question.

Postby plughmann » Thu Sep 28, 2017 1:55 pm

[quote="T.A.Rodgers"]I haven't invested in bitcoins nor plan to, but this 8-year gimmick seems to be doing pretty well. If the long run is 20 years from now, then investors can still make money off this no? As for it being risky...absolutely. Maybe more so than stocks.[/quote]


Stocks have some value if the company is liquidated even if just for selling the buildings and equipment.

Bit coins have no real value.

Buying and selling either is pure speculation and for every winner there is a loser on the otehr side.

kimjune
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Re: The "What if" question.

Postby kimjune » Thu Sep 28, 2017 2:14 pm

@T.A Rogers
I'm not sure i would call it a gimmick. If Bitcoin is still here in 20 years from now, then it will likely be a reserve currency or a new global store of value aka Digital Gold (or Gold 2.0). If you look around, you will notice that everything around you is becoming digital. The future currency is going to be digital for sure. The real question, however, is: Will Bitcoin be THE digital currency of the world? Anyways, with high risks come high rewards, buddy ! ;)

T.A.Rodgers
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Re: The "What if" question.

Postby T.A.Rodgers » Thu Sep 28, 2017 3:51 pm

I wouldn't call it a gimmick either. I was referring to what Plughmann had said. I have no idea how long Bitcoins will be around. As with any stock it has it's risks. I've read a few articles on speculation of Bitcoins going to $6k. If they are $4k now that's a huge move. Last year they were under $2k.

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Re: The "What if" question.

Postby plughmann » Thu Sep 28, 2017 3:57 pm

[quote="T.A.Rodgers"]I wouldn't call it a gimmick either. I was referring to what Plughmann had said. I have no idea how long Bitcoins will be around. As with any stock it has it's risks. I've read a few articles on speculation of Bitcoins going to $6k. If they are $4k now that's a huge move. Last year they were under $2k.[/quote]


They have also dropped in value. Bitcoin exchanges have been hacked. People lost everything when their hard drive crashed.
Their dollar value is volatile which makes them risky as well as a con game of sorts since they lack any inherent value or use.

It is not clear to me where there is any value monetarily, or procedure wise, to overcome the risks and dangers of theft or loss by accident.

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Re: The "What if" question.

Postby kimjune » Fri Sep 29, 2017 10:44 am

@T.A.Rogers
Actually Bitcoin was only worth a maximum of about $9xx last year. There is some drama in the community about Segwit2X, a so called "upgrade", which might be in fact harmful for Bitcoin, because it could result in less decentralization for the digital currency. Bitcoin as you know is all about decentralization. If they avoid a Hard Fork, Bitcoin can easily reach +$10K by the end of next year. You can go to https://www.reddit.com/r/Bitcoin/ and read about the Segwit2X part (aka 2X).

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Re: The "What if" question.

Postby kimjune » Fri Sep 29, 2017 11:00 am

@plughmann
Bitcoin exchanges are just like any other website, they are hackable. The Bitcoin protocol, however, is unhackable. You are talking about monetary value of Bitcoin? Well, maybe you have got to answer this one first: what is the monetary value of FIAT? The latter used to be backed by gold, but not anymore. The government can print whatever amount of bills they wish, and it costs them very little to nothing to do that. Bitcoin, on the other hand, has a very limited amount of coins that can ever be created, which is 21 million coins. Besides, it costs over $1000 (worth of computer hashing power and electricity) to mine just 1 bitcoin. Yes, it is correct that lot of people lost bitcoins because of hard drive failures and exchanges being hacked. That is why if you have an amount that you consider considerable, then the safest way to protect them is by storing them on a hardware wallet, such as Trezor or Ledger Nano S. There is a saying in the Bitcoin community that goes: "Your Private keys, your Bitcoins; not your private keys, not your Bitcoins." That means if you happen to store your Bitcoins on an exchange, then you really don't have access to the private keys, thus, you can't prove ownership of those Bitcoins. You are simply trusting your Bitcoins to a 3rd party, which you shouldn't be doing anyway.

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Re: The "What if" question.

Postby plughmann » Fri Sep 29, 2017 12:52 pm

[quote="kimjune"]@plughmann
Bitcoin exchanges are just like any other website, they are hackable. The Bitcoin protocol, however, is unhackable. You are talking about monetary value of Bitcoin? Well, maybe you have got to answer this one first: what is the monetary value of FIAT? The latter used to be backed by gold, but not anymore. The government can print whatever amount of bills they wish, and it costs them very little to nothing to do that. Bitcoin, on the other hand, has a very limited amount of coins that can ever be created, which is 21 million coins. Besides, it costs over $1000 (worth of computer hashing power and electricity) to mine just 1 bitcoin. Yes, it is correct that lot of people lost bitcoins because of hard drive failures and exchanges being hacked. That is why if you have an amount that you consider considerable, then the safest way to protect them is by storing them on a hardware wallet, such as Trezor or Ledger Nano S. There is a saying in the Bitcoin community that goes: "Your Private keys, your Bitcoins; not your private keys, not your Bitcoins." That means if you happen to store your Bitcoins on an exchange, then you really don't have access to the private keys, thus, you can't prove ownership of those Bitcoins. You are simply trusting your Bitcoins to a 3rd party, which you shouldn't be doing anyway.[/quote]


They claim it is unhackable. That only means it has not been hacked yet.

FIAT is worthless except for its chartilist value. You must use it to pay your taxes which gives it some value while that government exists.
If you dont have the fiat chartilist money you have to buy it to pay your taxes with.

The renmimbi is now backed by gold. China will replace the dollar as the reserve currency while others are trying to move to Euros and real Au.

Hardware wallets are inconvenient if you want to actually use bitcoin to buy and sell things.

There are not enough bitcoins to be practical for commerce.

If an EMP took the internet down what would happen to any e-coin?

I find these things to be an interesting concept but not practical nor trustworthy enough. OTOH the blockchain is being used to track inventory shipments more efficiently. Then the record can disappear with no problem after delivery to the end user.

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Re: The "What if" question.

Postby kimjune » Fri Sep 29, 2017 10:34 pm

@plughmann

So far nobody was able to hack into the protocol, and it is extremely unlikely to ever happen.

In the future, governments might allow their citizens to pay taxes with Bitcoins. Actually, the municipality of Chiasso in Switzerland let's their people to pay for their taxes in Bitcoins. http://fortune.com/2017/09/12/switzerland-chiasso-bitcoin-tax-zug/

Hardware wallets are equivalent to savings accounts. You don't usually use your savings account to buy stuff, do you? That's what Checking accounts are for. For smaller amounts, i believe it is safe to use a high security exchange, such as Coinbase, and they are insured and regulated as well. You can use Bitcoin on the exchange to buy stuff. I know there are limited places where you can spend your Bitcoins right now, but in the near future it is possible that Bitcoin will be accepted at most major retailers and stores, everything takes time.

Yes, there are enough Bitcoins to be practical for commerce. 1 Bitcoin is like a $100 bill. Each Bitcoin has 100.000.000 Satoshis (0.00000001 BTC). There might be more denominations in the future, since apparently only a very few people can afford to own 1 whole bitcoin with the current price of over $4200.

The Bitcoin network can now use satellites to verify transactions (send/receive), no need for internet anymore. https://www.coindesk.com/blockstream-using-satellites-beam-bitcoin-earth/

Bitcoin is very volatile at the moment, but i believe it will be more stable in the coming years, when more money pours in, and it will be very difficult to manipulate the market. We are still at the very early stages of the adoption.

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Re: The "What if" question.

Postby plughmann » Sat Sep 30, 2017 10:22 am

[quote="kimjune"]@plughmann

So far nobody was able to hack into the protocol, and it is extremely unlikely to ever happen.

In the future, governments might allow their citizens to pay taxes with Bitcoins. Actually, the municipality of Chiasso in Switzerland let's their people to pay for their taxes in Bitcoins. http://fortune.com/2017/09/12/switzerland-chiasso-bitcoin-tax-zug/

Hardware wallets are equivalent to savings accounts. You don't usually use your savings account to buy stuff, do you? That's what Checking accounts are for. For smaller amounts, i believe it is safe to use a high security exchange, such as Coinbase, and they are insured and regulated as well. You can use Bitcoin on the exchange to buy stuff. I know there are limited places where you can spend your Bitcoins right now, but in the near future it is possible that Bitcoin will be accepted at most major retailers and stores, everything takes time.

Yes, there are enough Bitcoins to be practical for commerce. 1 Bitcoin is like a $100 bill. Each Bitcoin has 100.000.000 Satoshis (0.00000001 BTC). There might be more denominations in the future, since apparently only a very few people can afford to own 1 whole bitcoin with the current price of over $4200.

The Bitcoin network can now use satellites to verify transactions (send/receive), no need for internet anymore. https://www.coindesk.com/blockstream-using-satellites-beam-bitcoin-earth/

Bitcoin is very volatile at the moment, but i believe it will be more stable in the coming years, when more money pours in, and it will be very difficult to manipulate the market. We are still at the very early stages of the adoption.[/quote]


Logical fallacy. Even if it had not been hacked yet does not mean it wont be.
There are other problems looming in the future that would be a big problem if it got widely used a lot.

Exchanges have been hacked. Disks fail and it is lost. It is too risky for me.

I dont see the volatility stopping. More money wont pour in. You said the bitcoins are limited. Using 0.00000000001 bitcoin is a practical problem that may or may not have a solution.

I see a major hole in the whole thing but will not describe it until I can fake enough bitcoins to retire. You say it is not possible. Wait and see.

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