I've missed the boat with this one this time around but the price of Bitcoin has virtually doubled since mid Nov, and appears to have quadrupled in the last 12 months.
I don't get it but has anyone here dabbled in them, as an investment? I can do it easily, it's just another currency on my Revolut card which I can exchange into or out of.
I expect the wheels will come off big time before too long.
12 month chart here
ycharts.com/indicators/bitcoin_price
|
Just two days ago I was looking at a Reddit discussion from 2012. The guy had 384 bitcoins - and had lost the password for his wallet. He was distraught - they were worth nearly £3000. Nobody could help.
Assuming he never recovered the password, but still has the wallet, then today, he's looking at over nine million quid he still can't access...
|
|
More doh than dough then?...
|
I did think about it roughly three years ago, but discounted as, after reading a BBC report it seemed difficult to get your money when you wanted.
They did explain it but it seemed a bit complicated (to me anyway) so I didn't bother.
|
|
You really want to invest in something that does not actually exist?
|
Currency speculation is a gamble even for the well informed.
With major "traditional" currencies there is at least a central bank sitting behind it, and some connection to real world interest rates, trade balances, inflation, productivity etc.
Bitcoin is trust in a computer algorithm with zero connection to reality. Its value is whatever people think it is - be they Russian oiligarchs, assorted billionaires, slush fund owners, drug and arms dealers, etc. Plus, of course, supremely confident gamblers!
If you can't explain why the price has fluctuated wildly in the past, there can be no rational logic attached to how it will move in the future. Gamble by all means, but don't bet the house on it!
|
Yep I know all about that, I was just curious whether I knew anyone who had done it.
I might buy a tenners worth now just because I can :-) I see it's up over 10% since 1 Jan. (Not really the time to be buying though - buy the troughs...)
|
There, used a few leftover Euros on my Revolut and am the proud owner of 0.00047363 Bitcoin (€13 incl charges). Current exchange rate is £23869.92, down 0.83% today according to the app.
EDIT: a few minutes later... Made 5p already!! :-) Now £11.35 (£11.30 at purchase)
Last edited by: smokie on Sun 3 Jan 21 at 18:56
|
>> EDIT: a few minutes later... Made 5p already!! :-) Now £11.35 (£11.30 at purchase)
>>
...that's me manipulating it through its linkage with pork belly futures!
I'd sell pdq if I were you. ;-)
|
Mate made significantly over £1m on BTC on an initial 10 grand investment.
He sold up after they went over £10k/BTC.
Would be over £3m if he had held onto them but he said he was going nuts checking the price all the time and doesn't regret selling.
|
Oops I'd forgotten about this.
My £11.35 is now £13.29, in just a few days!!
Maserati here we come... :-)
|
I know nothing about Bitcoin. I just googled at random, and some site or other offered me £200 worth, click here guv.
I didn't, but I looked up the value on Google of the 0.00639 bitcoin i would have got - £193.
Fair enough. I explained to Mrs C, for about three minutes. By that time it was up to £197.50.
Crikey. Shan't be doing it though, too complex for my tiny brain.
How's the £13.29, smokie?
|
|
Now £14.31. That's better than 25% since Sunday!!!
|
Just been looking at this
www.cryptohopper.com
Set it up, tweak it, let it lose all your cash. Sounds great.
|
Ooo that looks like fun!! I've not had a bet for ages!! :-)
Just stuck €25 on (€10 wasn't enough to place a bet), could be a millionaire by this time next week!! LOL
It's up 0,4% in 4 minutes!! I don't think I've got it auto investing yet though, can't see how to do it.
Last edited by: smokie on Fri 8 Jan 21 at 16:39
|
Don't you just set your triggers?
docs.cryptohopper.com/docs/en/Configuring your Hopper/triggers/
|
Geez. I didn't expect to have to understand what I was doing, I thought it;s be like in Ladbrokes where you just pick whichever dog has just done a whoopsy and that was it!!! :-)
I hadn't set any triggers, I'd done a manual buy and it auto sold it. Had almost lost interest in it so thanks for the steer!!!
|
If I were doing it, then I'd want to chuck in some money to the hopper, then have it auto sell such that it paid me £25, every time it rose enough to do that. If the market fell such that my investment was worth only half of the start, it would sell the lot and be done.
At worst you lose half, at best it spits out £25 chunks every so often.
|
I'm a bit more adventurous, I've only put a spare €25 in and I think I've just let it accumulate until I stop it. If I had a more serious amount in I'd take more care but this is a bit of lockdown fun - less than the cost of two nights at the pub...
The triggers require as bit of understanding which is why, I expect, it's not bought me anything yet. I've set up a 4 hour candle, to trigger when EMA signals a Buy with a short period of 10 and a long period of 20. I've no idea what that means but it was close to being a default. I was hoping it would spring into action immediately...
Last edited by: smokie on Fri 8 Jan 21 at 18:23
|
|
For the autistic obsessives amongst us, it's a dream. I shall have to have a go.
|
>>at best it spits out £25 chunks every so often.
Just like my premium bonds, although not so often.
|
FCA warning about "cryptoassets such as bitcoin":
tinyurl.com/yxo7mb6u
|
I expect they raise a very good point. I am not seriously thinking of investing in Bitcoin.
My £11:35 went over £14 at the weekend but has gone back to £11.63.
Been busy with other stuff and forgot about the toy CC put me onto. I couldn't work out how to make it auto-trade and lost interest. Will go back to it sometime...
|
"There is no guarantee that cryptoassets can be converted back into cash, putting consumers at the mercy of supply and demand in the market."
Cryptoassets absolutely can't be converted into cash, only sold or exchanged to somebody who believes in their value which isn't quite the same thing.
Almost the same can be said of fiat currency which has the additional disadvantage that unlimited quantities can be printed but with an established system it's hard to see it being as unstable in the short term.
Once people start selling bitcoin it only stops falling when there are more buyer than sellers. The currency should substantially hold value as long as the government can restrain itself from printing too much.
Is bitcoin a bubble? Definitely. Do I wish I had even one? Yes. Would I sell it? Yes.
|
- It's a quick way of moving money
(It's pretty expensive moving money, especially if you want to do it quickly. Whereas to buy Bitcoin from a bank account in one country and to sell it with the money going to a bank account in another country is, depending on a few things, free of admin charges, currency charges and banking delays)
- It is untraceable and untrackable up to the point when it is sold for real money.
- Its unit price absolutely depends on more people wanting it than have it and a belief that will always be the case. If not supply & demand will drop it through the floor.
- Faith that it can always be exchanged for real money. Countries/banks are likely to step up the focus on the source of funds converted from bitcoin et al as part of money laundering and proceeds from crime legislation and regulation.
It is as close to gambling as one can get and thus should be done only with money that you can afford to lose. Not my sort of investment at all. Risk/reward ratios are a thing for a reason.
That said, it is possible to win big, though knowing when to quite would be smart.
Last edited by: No FM2R on Mon 11 Jan 21 at 15:08
|
I don't really understand the idea of "mining" bitcoin, though it seems that is what is driving the very high prices and scarcity of the new Nvidia graphics cards.
I also havent delved into the maths to understand why there will only ever be 21 million bitcoin.
I think I'm happier with these white fivers in my wallet. I'm sure they are better value...
|
If you look into the electricity cost of mining a BTC (on a scale of £10,000 in 2020 but it goes up as processing power increases) you'll see there is a kind of basis for value.
If you have a dedicated miner computer consuming the same as a 3 bar electric fire round the clock you might mine 1/4 of a BTC in a year. The key to profitable mining is cheaper electricity than you can readily buy in the UK, and turning your miner on and off as the BTC price falls and rises. You might as well just buy BTC when you think it's cheap and sell when the price goes up, and hope you aren't holding them when the bubble bursts or the world's governments successfully stop bitcoin transactions.
It has been estimated that 1% of the world's electricity generation is going to bitcoin mining. If this is true then arguably it is not only environmentally disastrous but also inefficient compared with conventional payment systems. I've given up researching this because the sources I've found don't really stand scrutiny e.g. some don't seem to understand the difference between GW and GWh so you're never quite sure how to interpret the information.
|
Hence the effort put in to using botnets / hijacked home PCs etc. to perform the calculations.
Abut 2 years ago I find a friend's computer which was deathly slow was being used for just that.
|
I think I'd heard even phones scan be hijacked now.
I exchanged back my bitcoins at a small loss. Still need to work out that auto gambling machine as I have a stake in it, luckily uninvested, as most cryptos seem to have gone down by a min of 20% today.!
|
>>I think I'd heard even phones scan be hijacked now.
I hadn't heard that, but I don't doubt it for one moment.
|
>> >>I think I'd heard even phones scan be hijacked now.
>>
>> I hadn't heard that, but I don't doubt it for one moment.
>>
Basically almost any device that can run Java embedded in to a webpage with an internet connection can be high jacked.
Just include the mining code within the necessary code for the web page and get it to report back the result of the calculation.
I have no idea how to implement it but have seen it demonstrated by our IT staff when being introduced to our hacking community to show them what my division does.
|
The mining code doesn't need to be included in the webpage. You just call it from a remote site.
Another attack vector that gained some interest last week was the subversion of established browser extensions.
The writer/owner of a browser extension downloaded by 2M+ users sold the rights to an unknown party who made 'updates' to the code without documenting those changes. When some folks decided to look at the code changes (on GitHub) they found that what appeared to be innocuous additions of open source analytics code was in fact calling remote scripts and had links to other extensions that had been bought and replaced with malware.
Updates to the extension had also been downloaded automatically so it is probable that some users were running the suspect code without knowing it.
The moral of the story is be careful with what extensions you download, do not allow auto updates and don't update manually until you've checked that it's still clean.
|
>> The mining code doesn't need to be included in the webpage. You just call it
Just goes to show how ingenious these people are and how quickly methods of attack can change.
If they put it to good use then the world would probably be a better place.
(I wonder how many of these hackers are state sponsored.)
|
>> It has been estimated that 1% of the world's electricity generation is going to bitcoin
>> mining.
Flinking blip! That's one to drop into conversation, if I ever meet anyone again.
|
>> - It is untraceable and untrackable up to the point where is sold for
>> real money. one of the worlds major broker/keeper of other peoples bitcoins dies and no-one knows his crypto keys leading to speculation that he never had them in the first place.
|
Article in todays Telegraph , Bitcoin values crashed 25% over the weekend from $40,000 to $30,000 .
Average loss to UK investors in Bitcoin of £2300. Total loss to Britons is estimated £4.4 billion.
Price has now recovered to $30,000 but I won't be investing anytime soon.....
Last edited by: helicopter on Wed 13 Jan 21 at 11:17
|
It’s not an investment, it’s a gamble. An investment suggests backing by assets, business plans etc.
Mind you, I wish I put a punt on it when a mate told me about them when they were £300 each!
|
>> It’s not an investment, it’s a gamble. An investment suggests backing by assets, business plans
>> etc.
>>
>> Mind you, I wish I put a punt on it when a mate told me
>> about them when they were £300 each!
So do I, but I'd probably have been dealing with the bloke who was running the Ponzi scheme/didn't leave the password and died, and spent the rest of my life in bitter regret.
I remind myself that money doesn't matter as long as it doesn't run out.
|
Tesla bought $1.5bn of Bitcoin in January, with plans to take it for cars.
www.bbc.co.uk/news/business-55939972
As of typing is now £34,000 per BTC
Last edited by: Lygonos on Tue 9 Feb 21 at 08:46
|
|
Well I did put my £11 back into BTC and right now I could change it back for £14.89.
|
|
Enough profit for a pint and bag of crisps down the pub
|
|
My man shed is a pop up bar. Am extensive range of bottled beers, with complimentary tapas. Nuts, crisps and pork scratchings
|
>> Tesla bought $1.5bn of Bitcoin in January, with plans to take it for cars.
If Elton Tusk is now involved, expert Bitcoin to crash and burn.
|
>> If Elton Tusk is now involved, expert Bitcoin to crash and burn.
According to the crypto lingo, you are just being a salty no-coin.
|
Be careful hackers got involved never trust anything you can't control.
|
|
My £11 odd is now £15 odd
|
Wow coining it in. (did you see what I did there)
I might buy a a bit of a coin, just for the fun..
Last edited by: Zero on Mon 15 Feb 21 at 08:50
|
|
I just knew you’d have to put in your tuppence worth...
|
|
Just cashed in for £15.12. Not too shabby - something over 30% in not very long. Should have bet more!! :-)
|
New car. :-)
Don't know really, just thought it might have peaked...
Seeing as the £E15 is going nowhere if the value drops I may try to catch a trough and reinvest and see how much I can make it grow, if at all!!
Last edited by: smokie on Wed 17 Feb 21 at 06:54
|
|
Smokie...better than Reabold then, which I believe you hold ?
|
I do, and it has been - so far.
Reabold have been stagnant longer that I thought they should but they have apparently a major hydrocarbon find somewhere up your end of the country (West Newton - tinyurl.com/y9ptqow3 ) which, so it's said, would be larger than Wytch Farm was back in the ?70s.
The next steps are a competent persons report and an extended well test, and although it feels like slow progress, if they come up trumps then the perceived value is many times it's current share price. Some of that is reasonably imminent.
This is not investment advice!!
EDIT: Looking back, I mentioned Reabold on 29 Sept. In the same thread I mentioned NCYT as being at £5.20. Less than a month later they hit a bit over £12 but are now down again to £7.70ish.
Last edited by: VxFan on Wed 17 Feb 21 at 10:42
|
BTC hit £40k earlier this evening.
|
Crumbs, I sold too early @ £35570!
I really don't get it...
|
20% of all the dollars ever made were created in 2020.
|
|
Its a Ponzi scheme. Ok its a big one, the biggest ever, so it will take a fair while to reach the point where it fails, but it will come.
|
Technically not a Ponzi scheme: there is no income paid out to owners.
Whether it is over/undervalued is one question.
The other is can it be cracked/forged/double-spent: if that happens it will be electronic toilet paper.
|
>>The other is can it be cracked/forged/double-spent
I think the basis of the technology is that there are so many copies of the ledger that it would be impractical to do so. I hope so anyway as my employer (major UK bank) is converting their accounts to blockchain technology.
By their accounts, I mean yours!
Last edited by: zippy on Sat 20 Feb 21 at 10:20
|
>> (major UK bank) is converting their accounts to blockchain technology.
I wish I knew what that meant.
I assume it means the balances can't just be changed by amending an electronic record unless the money comes from somewhere else, so the total amount in issue remains the same unless new money is officially created. Which is what is supposed to happen anyway.
|
>> >> (major UK bank) is converting their accounts to blockchain technology.
>>
>> I wish I knew what that meant.
>>
Me too!
Try this: www.investopedia.com/terms/b/blockchain.asp
>>
>> Which is what is supposed to happen anyway.
>>
Some of what goes on is frightening.
|
>> Its a Ponzi scheme. Ok its a big one, the biggest ever, so it will
>> take a fair while to reach the point where it fails, but it will come.
The same can be said of official currencies.
But the inflation in BC gives away its ephemeral nature. I still wish I'd bought £100 worth 5 years ago.
|
>>The same can be said of official currencies
Indeed - what does £1 buy today compared to 1980?
|
www.bbc.co.uk/news/science-environment-56215787
Article about bitcoin, mainly on the massive amounts of electricity needed to keep the whole thing going.
|
And there will be a shortfall in the required GPUs to keep mining it.
Which of course puts the value up
Till there isnt.
|
|
I did think it didn't really mention, how/could think keep up with amount of computers needed to keep it going?
|
Perhaps Moore's Law is supposed to balance that out. Or did it turn out not to be a Law? Or did the CAGR of processing speed turn out to be less than that of the processing requirement for completing the blocks?
It still sounds like tulips to me. Unless and until it can supplant a major currency, Shirley its a bubble?
|
Tulip demand could always be satisfied ultimately (propagate more).
Similarly sugar cost more than gold by weight until it could be supplied more effectively.
Truffles are hugely expensive because they can't be farmed - if you could grow them in a greenhouse the price would collapse..
Bitcoin supply is limited by design.
|
Unwittingly we are all paying for the popularity of Bitcoin.
Demands on the electricity grid means that power companies have to build more capacity which is ultimately added to the cost of electricity that we all pay for.
|
>>which is ultimately added to the cost of electricity that we all pay for.
How's that work? More electricity used means higher revenue. I'm not sure that increased investment in the infrastructure to increase supply would necessarily increase cost for everybody.
|
Electricity supply is finite - limited by generated capacity.
With the advent of smart metering the energy companies will move to a model that charges based on demand. Look at Texas earlier this month where people have received huge electricity bills:
www.npr.org/2021/02/22/970074424/why-some-texas-residents-now-face-huge-electricity-bills
In the UK, we operate a model that has little spare capacity at peak times. To provide for future consumption, the Govt are allowing nuclear power stations to be built with a guaranteed fee per kwh which at the time of signing was twice the price available on the wholesale market. The consumer will have to pay for this.
Rather than fixed ratios between income and costs, there are clear step changes, when new power stations or alternatives are needed. The current structure of the UK market means that the UK consumer will pay for the new capacity through their bills and bitcoin mining in the UK will result in that threshold being reached sooner.
|
|
No, I think that's a leap which is not necessarily true. Supply & Demand impacts in Texas are not relevant, quite a different circumstance.
|
>> No, I think that's a leap which is not necessarily true. Supply & Demand impacts
>> in Texas are not relevant, quite a different circumstance.
>>
Texas was used an example of what can happen with peak pricing and bitcoin mining contributes to overall demand.
The stepped increase of cost to produce electricity in the UK are relevant and as bitcoin increases demand then we move closer to the next step and consumers will pay for the necessary increases in capacity.
In the case of electricity from Hinkley, twice the going rate.
Last edited by: zippy on Sun 28 Feb 21 at 13:32
|
Octopus's Time of Use (ToU) tariff is capped at 35p a unit at peak time (4pm - 7pm every day). Earlier this year it sat at the max for quite a few days, but without cap I'm sure I read it would have been in excess if £1 per unit (most in the UK don't yet pay 20p a unit).
As an aside, they also now will be your FIT provider, paying you for the power you input to the grid from your home generation (usually solar). There were times when they were paying around £1 a unit but it only cost 35p a unit to buy from them at the same time. And there are quite a few people who have significant battery packs which they can charge at lower rates and feed back in at higher rates.
|
i wasn't about to start a new thread about this but here is an article explaining higher Jan electricity prices.
tinyurl.com/yb4be69t
|
Hitting £44k tonight.
My friend who has amassed a substantial stack reckons the $1.9bn US stimulus will be yet another boost for crypto, with US adults being given a $1400 stimulus payment each leading to even more buying crypto "assets".
|
Wow, that's up an awful lot since Elon bought $1.5bn worth somewhere in the low £30s.
The rich get richer...!!!
Last edited by: smokie on Sun 14 Mar 21 at 09:40
|
Bitcoin surges past $60,000 for first time
www.bbc.co.uk/news/business-56390409
|
Just had a nosey:
Bitcoin around £38.5k, but Ethereum (which I suspect has more actual practical use) is £2k.
3 mth ago they were £24.3k and £970 respectively.
|
|
I don't get it really. There is a company called Argo Blockchain (which is probably related to cryptocurrencies, who knows?) that was about 10p a share at Christmas but is about £2 now, went to nearly £3. I think they are "miners" and invested loads in some new rigs. Something like that anyways.
|
>> I don't get it really.
No, neither do I. A market entirely desire based with no product not value with limited facility beyond sell or buy and no relevance or relationhip to any physical benefit.
How on earth does one judge that?
|
|
We are told these currencies use vast amounts of energy in their mining although the output is notional. In what sense are they "mined"?
|
There are huge mathematical calculations that need to be undertaken to release more Bitcoin. There are a finite number and as more are 'mined' the calculations get harder requiring enormous amouts of computing power to solve.
Bitcoin mining and maintenance of the blockchain that supports it requires so much energy that it is probably the least green form of value transfer ever created. Hence I will not be involved. Something like the total energy requirement of Portugal is required to keep Bitcoin going.
Imagine the reduction in CO2 emmissions and other infrastructure demands if Bitcoin did not exist?
|
>> it is probably the least green form of value transfer ever created. Hence I will
>> not be involved. Something like the total energy requirement of Portugal is required to keep
>> Bitcoin going.
>>
>> Imagine the reduction in CO2 emmissions and other infrastructure demands if Bitcoin did not exist?
>>
As we all contribute to the capital cost of power generation through our bills I believe that Bitcoin and other virtual currency mining is all costing us a bit.
Add to that the fact that energy prices increase when demand is high, the extra costs increases further.
|
There is an old phrase in economics - "money is what money buys".
As a proposition this holds true for all currencies - cryptocurrencies are just a means of exchange.
But they are fundamentally differentiated from traditional currencies. the value of most traditional currencies have some connection to a fundamental reality - imports, exports, taxation policies, government policies, balance of payments, relative labour costs, interest rates, inflation etc etc.
This does not means the value of a currency is inviolable - but these constraints add stability.
Cryptocurrencies have no hard links. They are simply a product of supply and demand. There is no accountable central bank or government. It is a gamble, a confidence trick.
Invest at your peril - if the value can double in a month it can halve in a month. And I suspect that governments the world over do not like them or know how to deal witth them - eg: how are bitcoin profits taxed.
|
|
HMRC: As capital gains, or as income if you are a very frequent trader.
|
|
I said I don't get Bitcoin. I get even less this new phenomena of non-fungible tokens (NFT), which are digital ownership certificates - so you don't actually own anything except a certificate to the "ownership" of the item/ The first tweet was sold for £2.1m. www.bbc.com/news/business-56492358#:~:text=Twitter%20founder%20Jack%20Dorsey%27s%20first,by%20Mr%20Dorsey%20for%20charity. and other stuff has now been sold for ridiculous sums.
|
Actually that confuses me less. It's just a fashion to buy fashionable s***. There's not suggestion of any legitimacy or value about it.
Crypto currencies with their pretence to be more than a trendy and desired fashion statement are quite beyond me.
|
Value is (like beauty) in the eye of the beholder. Value means the capacity in economic terms to be capable of trade for other things of value.
There are countless things of no real use (so far as I can discern) which can be traded for things of value - eg: houses, cars, food, etc etc.
- old masters - an indistinguishable fake can be had for 1/100th of the price
- jewellery - shiny metal and glass
- bitcoins - digital blips
There is only one conclusion - some things feed the mind and emotions, not consumption.
|
Bought some bitcoin and Ethereum in January - I suspect we have, like EVs, passed the "early adopter" stage and are now entering the mainstream.
I don't see it failing but expect a bumpy yet inevitable upward journey.
Bitcoin's massive power requirement is of course the Achilles heel, hence I have a little more in Ethereum.
All money I can afford to lose of course.
|
Govts are is massive hawk. Interest rates will be kept down as govts can't afford them not to.
Even then they are printing money like mad.
A cash ISA at 1% is pretty much guaranteed to lose money over time.
The vast bulk of my savings (other than owned property) is shares or equity funds, and corporate bond funds.
I don't see how cash savings can outpace the independent cryptos for the next few years at least.
|
Piece in The Telegraph Money section today about a woman who was scammed out of £60,000 via a bitcoin investment.
www.telegraph.co.uk/money/katie-investigates/lost-63000-falling-love-bitcoin-scammer/
|
|
Must say am pleasantly surprised Lloyds refunded her £20k
|
|
If I were a Lloyds investor, I might not have been pleased.
|
True, but similarly I have shares in Sainsbo's and they could have kept millions in business rate relief - that's a few quid of dividends I don't get due to "doing the right thing".
Good advertising in the press is money well spent perhaps...
|
2 weeks later BTC £42k, Ethereum £2.5k
Bubble or the inevitable result of large companies/funds buying in?
Probably both.
|
|
ETH have near tripled since you bought in in Jan? But BTC is down.
|
Both up - paid £23-£33k for bitcoin iirc, more like £900-£1000 for Ether.
Made a handful of small transactions - overall think paid £2200 and now worth ~£4200.
Not mindblowing gains but always an outside chance will further double or triple by year's end.
|
|
Well done - I wish I'd done the same...
|
|
My friend who bought bitcoin at £300 some years ago is now sitting on almost £4m (mostly in Ether now as he suspects it will prove more sustainable), having already bought a Tesla Model 3, his house and a couple of gites in France to let out (not a big Brexit fan finnily enough).
|
Said friend is moving to Portugal to take up domicile - no CGT on his profits there.
|
Anything that increases in value from $10000 to $50000 in 15 months must come under the heading of "anything that sounds too good to be true, probably is"
I think i'll stick with my premium bonds.
|
>> I think i'll stick with my premium bonds.
I got fifty quid this month.
|
>>2 weeks later BTC £42k, Ethereum £2.5k
>>Bubble or the inevitable result of large companies/funds buying in?
>>Probably both.
10 days later BTC £32k, Ether £2.5k.
Sold my BTC at £37k after Elon Musk said maybe BTC isn't a terribly good environmental idea (I knew that already, I just expect that when St Musk makes an utterance his acolytes would act in unison to bale out). Took out £400 and split the rest between some more Ether and Ripple (which uses waaay less electricity to operate but has been having its own issues with the US regulator).
My chum has largely shifted to Ether and Cardano.
It's like a foreign language - if you try and read some of the drivel on 'investment' sites it looks more like astrology tham economics.
Last edited by: Lygonos on Tue 18 May 21 at 07:37
|
|
Bailed out of Ether at £2200 - currently in freefall (£1500 when I looked a few mins ago)
|
I should think that one more piece of substantial and negative news will about do it.
I don't own any, but if I did I'd be selling right now.
www.bbc.com/news/business-57169726
|
|
Just bought a couple of grand of British American Tobacco shares for my ISA (which I suspect may amuse some observers)
|
|
That's bold. They've had a lumpy year and I'm not sure I see much reason for share price optimism despite a possible current undervaluation.
Last edited by: No FM2R on Wed 19 May 21 at 14:05
|
|
Looking for dividends - expect a fairly flat share price.
|
A reasonable assessment, I think.
Probably the current undervaluation will protect it from any falls.
|
>> Just bought a couple of grand of British American Tobacco shares for my ISA (which
>> I suspect may amuse some observers)
I can certainly see some massive irony. You are making sure you are not underemployed?
|
>>You are making sure you are not underemployed?
It's a bit like putting a bet on the opposition - if they win you get some recompense - if they lose "it was worth it".
Pretty twisted, I know
|
>> It's a bit like putting a bet on the opposition - if they win you
>> get some recompense - if they lose "it was worth it".
>>
>> Pretty twisted, I know
It's exactly what I do with England in the 6 nations. I bet against them, if they win, so what. If they lose, I have some recompense.
|
>> Just bought a couple of grand of British American Tobacco shares for my ISA (which
>> I suspect may amuse some observers)
>
Holly smoke, what made you cough up for them?
|
>>
>> >
>> Holly smoke, what made you cough up for them?
>>
He got some tips.
|
I see the live Bitcoin price is USD 33,629
I guess the emotional owners are not bailing out yet and it's the speculators that are pushing it down. I think one more bit of bad news will do it and cause the emotional owners to worry. (so far Musk, China, US Taxes).
Without a 4th bit of bad news then I guess it'll probably come back. But who knows, the entire BTC thing is beyond me.
|
|
The title of the thread is completely wrong. It should read "Bitcoin as a gamble", or perhaps "Bitcoin is a gamble".
|
As is all investing to some extent, of course.
Buying gold is little different other than a lower risk:reward profile.
Gordon Brown can tell you that.
|
What makes the difference between an investment and a gamble? The level of risk, I suppose, or is it the the level of respectability and normality? Lots have made loads of money on cryptos, same as they have on the AIM market. but both are something of a gamble aren't they?
And anyway, what's wrong with gambling, so long as you only stake what you can afford to lose (which is the same advice for many investments).
|
A gamble isn't necessarily an investment but an investment is always a gamble.
Investments are money that is put to work. A car can be an investment if you have to buy it to earn money (e.g. to get to work, or use it as a taxi). Otherwise it's just a cost. I'd see gambling as a cost for most people, there is obviously a desire to make a return but few can really believe that it is likely to be a retirement plan.
Speculating on a share price is a bit harder to analyse but arguably a price will only rise in the expectation of future earnings so it's still an investment in my opinion, even if it is an ill-judged one. As an owner of shares you become entitled to future income from the profits of the company employing the capital and that includes a premium for the expectation of those returns.
Money under the bed is not an investment. Gold is not an investment, just a store of money in a different form that provides some diversification in periods of volatility.
I think I see this fairly clearly, whether the model in my head is right or not. I'm convinced many don't. They behave as if they become better off by buying stuff - expensive clothes, new cars every 2 or 3 years, nice restaurants. That's just spending to me and whilst I do it sometimes I am very aware that I am making myself poorer, not richer. "Pay yourself first" means before spending money, put something to one side, ideally invested rather than under the mattress. I can attest that this doesn't necessarily make one rich but it does mean having more choice in the future and being able perhaps to do some good, maybe for one's children.
Gambling is spending and people who see it that way generally don't do it, or if they do it's in a very limited way and maybe to a small budget or tied to a social occasion (without getting into the very serious problem of addiction which is nothing to do with rational behaviour).
|
>> A gamble isn't necessarily an investment but an investment is always a gamble.
A gamble means its known you have a measurable chance of loosing your entire stake.
An investment means you shouldn't loose all of it in one fell swoop*
*if you do its usually fraudulent.
|
Coincidentally an article on investing & risk which mentions cryptos has dropped into my inbox.
tinyurl.com/jh9eyjuf
It is a bit superficial but in part tries to look for the reason why some people might take a risky investment.
|
I agree it's waffly, and it doesn't really address the fact that most amateur investors neither intuitively understand risk nor to they apply and systematic risk assessment and management.
Professionals don't guess risk unless they have to, they calculate it and related volatility to come up with "value at risk". For example the make up of the investments in the fund that pays my main pension is such that the 3 year value at risk on a 1 in 20 basis is about 25% of the value of the assets. In other words there is a 5% chance, as near as can be estimated by the investment consultants, that the fund value might dip 25% below its present value at some point in the next 3 years. This sits alongside a target for investment returns. The trustee can reduce the value at risk, but will either have to pay for the protection or accept a lower projected return.
Amateur investors and I have to include myself to a large degree firstly don't have the resources to do this but also don't really rationalise in that way. They will search for higher returns and in some cases either just put risk to the back of their minds or simply decide whether they feel lucky. Or they will focus on risk and hope the rewards take care of themselves.
Neither do they really understand the relationship between risk and reward. Typically when people seek advice on their pension investments they will be asked whether they want to take a low risk, a medium risk, or a high risk. Many treat this simply as a question about their general attitude to taking risks with their life savings, and 'sensibly' select "Low". The problem with a 25 or 30 year old doing this is that he or she will probably not be able to achieve the returns they need over perhaps a 30 year period by putting the money in the building society. They are long term investors and as such can and usually should sensibly take a higher level of risk, albeit diversifed as far as practicable. The stock market probably will drop by 40% at some point in the next 20 years but that really shouldn't affect their thinking very much. There's plenty of time to move gradually into lower risk investments to protect them against that happening to them the week before they retire (bearing in mind that even at retirement, they might still be long term investors with part of their pension fund).
Does crypto have a role? With hindsight, it would have been a brilliant idea. But if you had been making that decision say 5 years ago, would it have looked reasonable? Truth is I suspect that it is very risky, but potentially very high reward.
How will it work in relation to economies? Perhaps like gold, which people use as a store when economies and normal investments look risky. How will they be affected by inflation? GBP inflation is driven by UK's competitiveness/GDP growth vs. its peers, and by interest rates. Bitcoin AFAIK accrues no interest, and "inflation" is really just a function of price in the way that gold is.
If I'm honest I really don't understand it and I don't trust myself to know whether it's a good investment or not. And I am sure there are risks with it that almost nobody considers or has thought of.
Last edited by: Manatee on Fri 21 May 21 at 15:47
|
>> Neither do they really understand the relationship between risk and reward.
Very few people do, in any arena. It frustrates me that people neither see nor understand the connection between the two. It exists in pretty much everything we do, you'd think people would focus on getting the hang of it.
>> Does crypto have a role? With hindsight, it would have been a brilliant idea. But
>> if you had been making that decision say 5 years ago, would it have looked
>> reasonable? Truth is I suspect that it is very risky, but potentially very high reward.
Far too heavy on the risk side for me. And when something is risky it doesn't mean it will never work out, it means it usually won't. So those people pointing at a high risk investment that did work out as some kind of justification for all high risk investment that also irritates me.
>> How will it work in relation to economies?
I don't know. I still believe that it is a fad that will eventually become worthless unless a country or other fund legitimises it in some way, and I don't see that happening since sufficient control is not possible.
>> Perhaps like gold, which people use as a store when economies and normal investments look risky.
Those I know that invest heavily in gold always cite the fact that it is somehow real and legitimate because it actually exists. That isn't a view I subscribe to, but one would have thought i precluded them from investing in anything virtual,
>> If I'm honest I really don't understand it and I don't trust myself to know
>> whether it's a good investment or not.
I'm basically in the same position, but I'd say it's as good an investment as anything that high risk. Sticking a pin in the next days race card would be similar, I guess.
|
Good posts, thanks.
The obvious thing is to diversify investments and thus spread risk. Mine go from money in National Savings and Premium Bonds thru unit trusts and ISAs to a fairly solid pension with one of the majors. Then comes my "gambling" stocks and shares ISA, which has a small of our "wealth" in and with which I dabble in higher risk stuff - really only AIM shares to date but within that I've tried a bit of day trading, but not cryptos or shorting. That's the only money I'd use for something like cryptos, and then it wouldn't be the whole fund by any means. I wouldn't like to, but it's the money I could afford to lose.
Last edited by: smokie on Sat 22 May 21 at 10:31
|
Buffett is known not to be a fan of crypto. He says it will end badly, but he's not shorting it either.
www.fool.com/investing/2020/10/13/4-reasons-warren-buffett-cant-stomach-bitcoin/
|
>>A gamble isn't necessarily an investment but an investment is always a gamble.
Agreed. Though there are professional "gamblers" who insist that they are not gambling.
For me the difference is a question of known odds but no knowledge versus knowledge but unknown odds.
An imperfect definition, I am aware.
>>Money under the bed is not an investment. Gold is not an investment
Why do you say that, particularly about Gold? I remember in the 80s when I was in Turkey, there were many people keeping USD & GBP in boxes under their beds as a play against inflation and devaluation. Also, since the value of Gold can also go up or down is it not an investment?
For your interest...
www.investopedia.com/articles/basics/10/investing-or-gambling.asp
|
>> >>Money under the bed is not an investment. Gold is not an investment
>>
>> Why do you say that, particularly about Gold?
Only because there is no return. I think I might be parroting something Warren Buffett said.
>>I remember in the 80s when I
>> was in Turkey, there were many people keeping USD & GBP in boxes under their
>> beds as a play against inflation and devaluation.
The currency thing is just a bet isn't it? Could be a hedge I suppose, is that a bet? And you would probably hold gold for similar reasons
>. Also, since the value of Gold can
>> also go up or down is it not an investment?
See above, and isn't it a bet on the price movement? If I buy, say, City of London Investment Trust, the price can also either go up or down. But regardless of that, buying at today's price I can have a reasonable expectation of a solid 4.8% yield, so even if the price goes down if I reinvest my divs I will be able to buy more shares that if it hadn't to add to my holding and increase the average yield assuming they can maintain the div. If I have invested for income and spend the income then in the short term I don't care about the price. It has a return, it earns something, which to me makes it an investment.
>>
>> For your interest...
>>
>> www.investopedia.com/articles/basics/10/investing-or-gambling.asp
I read part of that as saying if you have a rationale for why your purchase will increase in value then it's an investment. Seems reasonable. So if you think the markets are going to hell and people will buy gold as a haven, then maybe it is an investment.
|
I wholly agree with the inability of most to assess risk and reward. Even if they do they frequently fail to understand the benefits/implcations of spreading risk appropriately.
Investment suggests an objective assessment of risks and potential reward where a knowledge of fundamentals can impart intelligence possibly not evident to others.
Gambling is fundamentally different - it tends to be a zero sum game with the odds stacked in favour of the house. Horse racing, cards, roulette are all examples. Few can consistently profit but (sadly) many get addicted.
There may be little difference between gambling and investment at the margins. A bet on the horses is an ill-informed gamble for me. For others it may be the product of horse racing knowledge, study of form, conditions etc.
It may be economically illiterate, but investment in assets which generate an income, meet a fundamental human need, and tend to be less price volatile seem more attractive as one ages - eg: housing, farmland, energy generation, some materials.
At the gamble end are those which are remote from a real need - eg: gold, gemstones, art, cryptocurrencies. They have a value in that people will pay to possess them, even if their value is not sustained by any fundamental need. (is beauty, design etc a need??) They are inevitably very volatile.
|
Actually for some reason as I was watching Brentford win a thought occurred:
Does investment involve a purchase and some level of ownership in something which at some point can be sold whereas gambling merely involves a bet on an outcome with no ownership.
|
I start a company and raise money to develop coal mines on the moon. This is an investment opportunity.
I would regard this as something of a gamble. After "investing" the money in buying moon mining licences the company and its assets still exist.
The chances of it having some value are probably immesurably small, but the investment was made with some expectation of a return or increased future value.
There's one (or probably more than one) born every day!
|
>> Does investment involve a purchase and some level of ownership in something which at some
>> point can be sold whereas gambling merely involves a bet on an outcome with no
>> ownership.
>>
In the case of shares, they represent a valuation of the company that includes its net assets, goodwill, assessment of earnings etc. For listed companies the relationship is not 1:1, in that the share valuation may be several times the net assets of the company and projected earnings or dividend performance can be a major factor in pricing.
For SMEs, there is no quoted share price but for my purposes if there are 100 shares and the net assets are £100,000, then each share is backed by £1,000 of assets. What those assets are worth at particular points in a business cycle is a moot point. I always discount goodwill.
Investors are usually at the bottom of any distribution of assets if a business fails.
|
|
It's still ownership, even if it's only owning a share of the debt.
|
>> It's still ownership, even if it's only owning a share of the debt.
>>
That's the point I was making.
|
>> Actually for some reason as I was watching Brentford win a thought occurred:
>>
>> Does investment involve a purchase and some level of ownership in something which at some
>> point can be sold whereas gambling merely involves a bet on an outcome with no
>> ownership.
You can often substitute the buying and selling of shares with spread betting. Apart from the leverage doesn't it amount to the same thing? Or isn't spread betting betting?
I don't think there can be an absolutely clear definition but I think it's about returns. Those can be capital gains but there is a difference, albeit a soft one, between simple usually short term price changes and e.g. the kind of growth you see in the value of Berkshire Hathaway (which famously doesn't pay dividends but clearly has generated very good returns for its shareholders).
I think most people know gambling when they see it. Distinguishing between investment and spending is sometimes harder. I've just invested in a suspension seatpost for my bike, the return being greater comfort on long rides. I'm gambling that it will work. My wife thinks it's just more reckless spending on one of my enthusiasms.
|
>> 10 days later BTC £32k, Ether £2.5k.
10 months later BTC £31.8k, Ether £2.1k
Relative stability throughout the Ukraine crisis, certainly safer than stock & shares so far.
Was wondering if the prices would leap up as dodgy Russian loot moved in.
|
.*******
A little harsh I hear you say...
Edit. It was a very derogatory comment !
Last edited by: legacylad on Mon 24 May 21 at 18:03
|
My employer, along with many other financial institutions are implementing blockchain technology.
We had a very non - technical "webinar" on it and as I understand it, it is akin to a giant ledger that records every transaction and is very robust because there are lots of copies of the ledger held around the world that get updated at the same time.
One of the issues suggested was that if every transaction is recorded, then there will be no privacy to transactions in the future, every transaction would be available for scrutiny.
|
>>My employer, along with many other financial institutions are implementing blockchain technology.
Would it have prevented the Post Office accounting system errors?
|
Despite reading a lot about it, I still don't really grasp how this can work. It's supposed advantage is its independence of central banks but without some sort of underpin I don't see why I could have any confidence in its stabiity. And now that there are over 10,000 cryptocurrencies, how would anyone know which will endure?
For now its main function seems to be as an investment. Actually not even that, more of a speculative asset.
Bitcoin now accounts for maybe 1% of all electricity used. Allegedly every transaction uses around 2,000kWh of power. A single bitcoin costs tens of thousands of dollars to mine even using the cheapest electricity. It's mind-bogglingly inefficient. Some miners use renewable electricity, many mine using low cost power derived from dirty generation. It's insanity when the world should be trying to control demand and switch to renewables.
At least our super-expensive power should ensure that we don't end up with a mine on our doorstep in the UK.
www.washingtonpost.com/business/2022/03/18/bitcoin-mining-noise-pollution-appalachia/
Other than greed, why would anybody want anything to do with it?
N. Ludd.
|
It is just greed.
Crypto currencies are unregulated and disconnected from economic fundamentals. Their main benefit is a way to store (often illicit or illegal) financial wealth beyond the reach of the authorities.
Their value is a function of supply and demand - a gamble.
That they can be sold for "real" £,$,Yen etc and can buy cars, houses, yachts, drugs etc etc is possible only because the market believes they have value. This is true of all currencies, although at least the conventional have some foundations in long term realities of trade.
With horses and cards bets are based on fundamental form or probability - although the only long term winners are the bookmakers. Bitcoin etc is the product of some clever programming expressed in some digital blips. The long term winners will be the "Bitcoin Bookmakers" - the developers and techies.
|
|
And how does that differ from other currencies?
|
Major currencies - US$, Euro, £, Yen etc - are managed by central banks which are given generally clear objectives with regard to money supply, inflation, interest rates etc.
The actions taken reflect economic activity - growth, unemployment, trade balance, public sector borrowing/surplus etc.
The value of a currency against another tends to move in fairly small steps as underpinning economic realities tend to change slowly. Exchange rates reflect current and anticipated future changes.
They don't always get it right but there is some effective control. This can of course be upset by the unexpected - eg: Ukraine, or crystallisation of the unknown - eg: outcome of Brexit referendum.
Cryptocurrencies have none of these linkages. Even horses are more predictable - at least they have some previous form which may be relevant, and the odds tend to reward higher risks with higher rewards.
|
My concern with Cryptocurrencies stem from the apparent lack of control but in reality it's not quite like that.
With the major currencies, users can see the holdings in any account, it's all within the blockchain.
What you don't know is who owns the account.
As will any other "commodity" sales and purchases can impact the pricing or perceived value of said "commodity". If an account that holds a huge value of BTC for example, account 16ftSEQ4ctQFDtVZiUBusQUjRrGhM3JYwe which holds 168,791 worth about USD 7 billion! If that account holder decided to sell all their BTC then the price would likely plummet.
Imagine if BTC became a de-facto currency and a bad actor (country or criminal or organisation) had a huge holding, they could easily manipulate the world economy. I know similar things can be done with national currencies but there are levers (like interest rates) that can be brought in to play to protect the currency. There are none with cryptocurrencies.
|
|
A currency is not an investment.
|
>Major currencies - US$, Euro, £, Yen etc - are managed by central banks
>which are given generally clear objectives with regard to money supply,
>inflation, interest rates etc.
Ah, I see. Crypto are bad because they aren't "managed". By trustworthy people,.. like politicians.
|
Announcement from HM Treasury today.
Sunak wants the UK to become a "global technology hub for crypto-assets" and has asked Royal Mint to create a government-backed NFT.
Grab the popcorn, this should be a laugh a minute.
|
|
I can't say i follow this too closely but there's a lot of headlines about this type of thing taking a beating. Anyone effected on here?
|
No, but every time this thread pops up I remember it and revalue the £193 odd I quoted back at the start - £138 odd at the minute.
I'd not be the happiest if I'd put 50k in back then.
|
>>I'd not be the happiest if I'd put 50k in back then.
I know peops that have (rellies) :(
|
On the radio they've said a few people have lost their life saving due to the crash today... really would find it it odd that some one would put every penny they own into BC.. can't say it's a thing that I would remotely invest in.
|
|
I know someone who thought investing in Russian shares was a good idea.
|
|
I saw a report somewhere today suggesting that the fall in BTC and other virtual currencies is foreshadowing a similar fall in the stock markets.
|
And just now on R4's business news the BC expert said that the major 'brand' of BC is actually backed-up with hard cash... I thought that was the exact opposite of what BC was about?
|
>> And just now on R4's business news the BC expert said that the major 'brand'
>> of BC is actually backed-up with hard cash... I thought that was the exact opposite
>> of what BC was about?
Not quite "backed up with hard cash" but supposedly pegged to the dollar. Well it was, it isnt now.
|
>> I saw a report somewhere today suggesting that the fall in BTC and other virtual
>> currencies is foreshadowing a similar fall in the stock markets.
The latest fall in BTC followed the failure of another crypto.
There is a circumstance in which almost everything is correlated which is when investors trust nothing and would rather hold cash.
There is nothing more certain than that there will be another stock market crash. But when?
|
Bitcoin is backed by nothing. It has value only because it can be exchanged for other currencies or goods. This is no different in many ways to other currencies - eg: $, £, Euros.
The supply of Bitcoin is limited by the algorithms originally established.
Conventional currencies are normally controlled by a central bank. Their value is backed by some economic realities - inflation, interest rates, economic competitiveness, political credibility.
Bitcoin has none of this - the founder/inventor has neither been seen or heard of since 2011.
Most other assets are backed by some substance - property, mineral rights, brand, intellectual property etc. These can fluctuate in price depending on supply, demand, government regulation, legislation etc. Bitcoin is backed only by market confidence (or lack of it).
Bitcoin, launched in 2008, has grown to a value of over $1 trillion based purely upon a confidence trick - the belief that it can be traded for "real" assets. It is backed by nothing but confidence in a set of algorithms developed by its absent founder.
|
The supposed great strength of BC is its security and transparency, but what's so good about that? It won't abolish financial crime, in fact it seems to have found a niche as the currency of extortion and blackmail presumably because ownership is not actually traceable. And despite its supposed limitations, national currencies have served us reasonably well where the underlying economies are more or less orderly.
But the overwhelming reason BC and similar cryptos should exist is the ludicrous amount of electricity involved in their generation and in transaction processing which must surely write it off as regards having a meaningful share of real transactions. Electronic payments generally cost a few pence but BT is somewhere around £100 a go.
|
>> But the overwhelming reason BC and similar cryptos should (not) exist is the ludicrous amount of
>> electricity involved in their generation and in transaction processing which must surely write it off
>> as regards having a meaningful share of real transactions. Electronic payments generally cost a few
>> pence but BT is somewhere around £100 a go.
>>
All of the major UK banks and others around the world are investigating using blockchains for financial security.
The electricity usage for generating BTC will not be required, but there will be an overhead for managing the blockchain.
|
Bitcoin as an investment - Crankcase
