If I Knew Then What I do Now

Bitcoin now £7,500 !

A £300 investment eight years ago would now be worth about £18,000,000.00 today.

That's a LOT of vintage Gibson J45s.

Comments

  • MegiMegi Posts: 6,877Member
    I was thinking the same thing earlier today. Although an economist was on somewhere saying it had all the hallmarks of a financial bubble, and the price could come crashing down some time soon.
  • Kevin PeatKevin Peat Posts: 2,892Member
    edited November 29
    Bitcoin does rise and fall - that's the nature of it.

    But it's not the classic bubble where people buy and hold. They are actually buying and selling *with* the 'stuff' and *of* the 'stuff' on the basis that they hope to beat the next dip.

    Martin Lewis bought a pint with several bitcoins a few years back. Turns out it cost him about £10k and I'd sooner be what I am (uninvolved) than have bought a coffee table with 50 bitcoins 8 years ago thinking I'd got a bargain.

    Having read up on it I still haven't a clue how to buy it or how to store it safely really but it would be fun to dabble with an amount I could afford to lose.
  • Kevin PeatKevin Peat Posts: 2,892Member
    Mind you. Looking at the graphs it seems people are holding on to bitcoin now. It has become its own commodity rather than what it was designed for - trading off grid.

    I suppose it could slump pretty badly.
  • MegiMegi Posts: 6,877Member
    Time will tell I guess! Still, at the moment, people are still eager to buy, so your original point stands.
  • nicholaspaulnicholaspaul Posts: 718Member
    Too risky for my blood. I’m not sure I could sleep at night thinking that my fortune is floating up and down like that.
  • nicholaspaulnicholaspaul Posts: 718Member
    But what would you do with all those J45s?
  • Kevin PeatKevin Peat Posts: 2,892Member
    edited December 9
    I'm seriously bothered. I don't mind people risking real money but when I hear of taxi drivers investing in bitcoin on credit cards then there is a risk of another credit crunch.

    I guess the J45 fits with the austerity era it was designed for (deep tobacco burst to hide poor woods.)
  • nicholaspaulnicholaspaul Posts: 718Member
    I see what you mean. That does make for a flimsy economy. If only people weren’t so greedy.
  • Kevin PeatKevin Peat Posts: 2,892Member
    edited December 9
    It's not so much greed as not wanting to miss out. I do, however, wonder if there is a god sometimes. The people making billions are drug dealers. First on the drugs and now they are showered with free money because the currency they are laundering their ill gotten gains with has gone stratospheric.

    There is no justice.
  • DaveBassDaveBass Posts: 3,306Member
    I bought a very small amount back in 2013, out of interest. It was a private deal, not via an online exchange. (No, it wasn't anything illegal!) I'm not a gambler but it's been interesting to see how it's taken off. I must also have some bitcoin derived stuff in the other blockchains following the recent forks, and I bought a little ethereum, again a private purchase.

    It's a wild ride but the way I look at it is this: the maximum loss I can make is the amount I put in, which was chickenfeed. Like house prices, the present valuation is only theoretical unless I actually sell!
  • Kevin PeatKevin Peat Posts: 2,892Member
    Good on you, Dave. Even a small amount is worth a lot now. I don't mind good guys making out of it.
  • nicholaspaulnicholaspaul Posts: 718Member

    It's not so much greed as not wanting to miss out. I do, however, wonder if there is a god sometimes. The people making billions are drug dealers. First on the drugs and now they are showered with free money because the currency they are laundering their ill gotten gains with has gone stratospheric.

    There is no justice.

    Drug dealers are the epitomy of greed. I’ve seen personally how money can corrupt and cause lasiness, and certainly does not bring happiness in any real form. I think that using riches as a metric for anything else isn’t helpful. At the end of the day it’s just stuff.
    You’re richer than any drug dealer!

    Since God gave us free will, what we do with it is up to us and the price God is willing to pay for us to have it. That’s how I see it.
  • nicholaspaulnicholaspaul Posts: 718Member
    DaveBass said:

    I bought a very small amount back in 2013, out of interest. It was a private deal, not via an online exchange. (No, it wasn't anything illegal!) I'm not a gambler but it's been interesting to see how it's taken off. I must also have some bitcoin derived stuff in the other blockchains following the recent forks, and I bought a little ethereum, again a private purchase.

    It's a wild ride but the way I look at it is this: the maximum loss I can make is the amount I put in, which was chickenfeed. Like house prices, the present valuation is only theoretical unless I actually sell!

    That is an interesting way to look at investing. At least you’re not putting your house on the line!
    Mind you - since you mentioned house prices - houses are a certain investment, and safer.
  • Kevin PeatKevin Peat Posts: 2,892Member
    A good point there Nick.
  • nicholaspaulnicholaspaul Posts: 718Member
    edited December 11
    I once worked out how much Pablo Escobar made in a second. It worked out to $694.
    A second.
    No wonder the drug dealer in Seven was killed to represent sloth.
  • Kevin PeatKevin Peat Posts: 2,892Member
    Oh, I don't mean that sort of wealth. Just a mortgage clearing amount would do.

    I wouldn't want to be in the same country as Escobar, let alone the same room. I'm sure closeness would have been dicing with death.
  • nicholaspaulnicholaspaul Posts: 718Member

    Oh, I don't mean that sort of wealth. Just a mortgage clearing amount would do.

    Know what you mean. Enough left over to help others is my goal.


    I wouldn't want to be in the same country as Escobar, let alone the same room. I'm sure closeness would have been dicing with death.

    Very true!
  • DaveBassDaveBass Posts: 3,306Member
    edited December 13

    Mind you - since you mentioned house prices - houses are a certain investment, and safer.

    Indeed. The traditional homes of wealth -- gold, land and property -- are all solid, physical things, whereas cryptocurrencies are insubstantial. They're even more insubstantial than traditional currencies such as pounds sterling, which can be conjured out of thin air by central banks and the fractional reserve banking system.

    There's also the Lindy effect to consider, which says that, on average, ancient things survive longer than new-fangled things. So gold, land and property are likely to survive a lot longer than bitcoins.

    Still, no asset class has an intrinsic value: the value of something is what other people are prepared to pay for it. Try selling your Christmas presents on Ebay if you doubt this!

    Here endeth today's lesson.
  • Kevin PeatKevin Peat Posts: 2,892Member
    edited December 12
    It's actually the virtual ledger (Blockchain) that is the big news - the crypto currency is a side issue. The frictionless movement of funds incognito, instantly and bypassing borders, taxes.

    A bitcoin may seem intangible but it isn't. The innitial value is in the energy, time and expertise expended in mining it - further regulated by a slow release system. The coins are divisible but the effect is designed to be deflationary - the opposite of fiat.

    So in that sense there is a more solid basis to a virtual coded encription than to paper printed before quantitative easing. No-one says a copyright is valueless, nor a personalised number plate.

    Intrinsic value is what a leading clique decides it is - a leading clique are internet nerds and when they say bitcoin is here to stay it is.

    I read that it's probably nowhere near peak yet. Unlike tulips this has a truly global and instant market to whip into a frenzy to reach its true and stable value - so that it can become a proper currency rather than something to speculate on.

    The counter culturalists say that it democratises money but it does the reverse. At least fiat has someone accountable for it on pain of elections/revolution. Cryptocurrency is parentless (so they tell us. 1000 people own 40% of bitcoin, I hear.)

    I'd get in if I could. All I'd say is don't borrow to do it and don't spend more than you can afford to lose.

    ***Edit*** I hear a dip is expected due to shorting but the value will rally.

    ***Edit +1*** Sorry to sound so forthright. It's difficult putting across an idea that I find counter intuitive in an appropriate tone.
  • DaveBassDaveBass Posts: 3,306Member
    I agree with most of what you say, Kevin. However, I'd point out that intrinsic value has nothing to do with the effort, or expense, or number of kilowatt-hours put into mining a coin. This is the same error that Marx made, asserting that the value of a good is equal to the labour expended in producing it. Untrue: if nobody wants your product, it's worthless, no matter how expensive or toilsome it was to produce. If at some point in the future nobody wants a bitcoin, its value will be zero.

    It's the market that decides prices, and in reality the value of a good and its market price are the same thing. I know that many people will disagree; they believe that everything has a "fair price" or a "true price" which may differ from the market price, but that's literally medieval thinking. Shops support this way of thinking by features such as BOGOFs (buy one, get one free) and "up to 70% off" sales; as if there's a true retail price that they're discounting. (Actually they're undercutting their competitors to increase their own volume while accepting a reduced gross margin. Sometimes this works, but there's a risk of going bust.)

    About the blockchain: yes it's a novel and important idea, but it's really a massively distributed database that keeps on growing without limit. The storage and bandwidth needed to maintain it and update it are enormous. Bandwidth is already a bottleneck, meaning that bitcoin transactions can take a long time to confirm, when ideally they'd be almost instantaneous. We'll have to see how this works out, and there will no doubt be more forks in the future in an attempt to either change the software or maintain the status quo. For those of us already in the blockchain, a fork is like being given free money! Or at least free foreign currency.
  • Kevin PeatKevin Peat Posts: 2,892Member
    The effort in mining is what makes them scarce.

    Yes. Plenty of effort has been expended on failed ventures - we only hear the successes.

    Fascinating about the blockchain.
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