Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by mining them?

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Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by mining them?

Post by Webscout » Mon Oct 16, 2017 6:48 am

Dilbert: Monday-Oct 16, 2017
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A bitcoin ETF may be the next big thing on U.S. exchanges

Post by Webscout » Thu Oct 19, 2017 11:06 am

A bitcoin ETF may be the next big thing on U.S. exchanges
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Big money stays away from booming bitcoin

Post by Webscout » Mon Oct 23, 2017 7:19 am

Big money stays away from booming bitcoin
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Bitcoin retreats as another cryptocurrency offshoot appears

Post by Webscout » Tue Oct 24, 2017 7:34 am

Bitcoin retreats as another cryptocurrency offshoot appears
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Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by mining them?

Post by Dude » Wed Oct 25, 2017 1:23 pm

I bet the people who sold their bitcoins at $60 are crying now that it's at $6000
There are only 10 kinds of people in this world,
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Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by mining them?

Post by Webscout » Wed Oct 25, 2017 2:00 pm

With crazy things like this I always suggest sell 1/2 if you made a good profit, keep the other. Crazy/wild money ...it is for a crap shoot.

It's nice to dream of a woulda, coulda, shoulda...
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Gold vs. bitcoin: A look at which holds more promise for your investment dollars

Post by Webscout » Thu Oct 26, 2017 4:07 pm

One of the odder aspects of today's markets is that bitcoin is soaring but gold, the original alternative currency, isn't.

At first glance, this disparity doesn't make a lot of sense. Both commodities are essentially bets against government-backed paper currencies. If you're a libertarian or an economic pessimist who believes that dollars, euros and yen are doomed to ultimately fail, it makes sense to load up on substitutes such as bitcoin and gold. However, it's not immediately clear why you would prefer one of those alternative assets to the other.

So what accounts for their different paths in recent months? Bitcoin's value in U.S. dollars has rocketed more then 450 per cent this year, while the price of gold has risen only 11 per cent since January.

Price change: Bitcoin vs. gold

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The enormous gains in bitcoin's value no doubt owe a lot to its cool factor – cryptocurrencies are the trendy thing to buy, especially for those who consider themselves online cognoscenti. But it's also possible something more is going on here than simply the thrill of the new. Perhaps the market is deciding, on quite rational grounds, that bitcoin is better than gold. If so, that decision would hammer gold miners and precious-metals investors.

Let's not rush to judgment, though. Before we conclude that gold is defunct, it makes sense to compare the two alternative currencies, head to head. Here is how they match up on six important criteria.

SECURITY

Both gold and bitcoin resist physical decay, but, according to a recent Goldman Sachs report, there is an important difference when it comes to storing the two commodities: How safe you can feel that what is there today will be there tomorrow.

Bitcoin is vulnerable to being hacked, no matter whether it's held in an online wallet or in a computer. Some of the world's biggest bitcoin exchanges – such as Bitfinex in Hong Kong or Mt. Gox in Tokyo – have been looted in recent years, as have numerous smaller operators.

Say what you will about boring old gold, but it is far more difficult to steal the stuff, especially if it's held in a secure vault.

Advantage: Gold

PORTABILITY

To be sure, the same qualities that make gold hard to steal also make it hard to transport and use. Among other drawbacks, it's infernally heavy and also difficult to spend in small amounts: Try buying a chocolate bar with bullion.

By comparison, bitcoin is immaterial and, therefore, weightless. It can be transferred from one user to another in privacy, over the internet, in small or large amounts, anywhere in the world. While not widely accepted by Main Street businesses right now, that could change with time.

Advantage: Bitcoin

SCARCITY

Gold bugs like to remind us of the rarity of their favourite metal. They calculate that all the gold mined in the history of the world would fill only slightly more than three Olympic-sized swimming pools.

For their part, bitcoin advocates point out the total supply of their digital alternative is also limited because of technical factors having to do with how new coins are "mined."

But, as the Goldman report pointed out, bitcoin is only one of hundreds of cryptocurrencies already in the market. It's relatively easy to launch new ones, meaning the supply of cryptocurrency as an asset class is theoretically without limits.

Advantage: Gold

COMPREHENSIBILITY

Consumers typically want to understand why a currency has value. In the case of paper currencies such as the Canadian dollar, the presence of a government sponsor is crucial. Coloured pieces of government-issued paper become valuable, at least in part, because citizens know they can use those pieces of paper to pay taxes.

It's much more difficult to explain why bitcoin should be worth anything. Many people buying bitcoin have only the murkiest understanding of the underlying blockchain technology. Even those who understand the blockchain tend to stammer when called upon to explain why the system should result in a usable currency rather than merely being a superefficient method of bookkeeping and money transfer.

Of course, gold's ultimate value is also debatable, since the metal has only limited functional uses. To make matters worse, it offers no yield, which reduces its appeal at times such as now, when interest rates on competing assets appear to be on the upswing. But at least there's a long history of considering gold to be upscale and expensive.

Advantage: Gold

DARK APPEAL

One of the key attractions of both gold and bitcoin is that they exist outside government's control.

Honest, idealistic libertarians prize that characteristic. So, unfortunately, do people in the dark economy – tax evaders, criminals and anybody trying to evade currency controls.

To be sure, the dark economy has never been able to make much use of gold because the metal is too heavy and too noticeable to be attractive to people who are trying to avoid detection. However, bitcoin seems ideally suited to people skirting the law.

For those rebels, the digital currency offers the online equivalent of a shadowy alley. A public register records every transaction, but participants are identified only by strings of letters and numbers that aren't linked to specific users.

Bitcoin enthusiasts play down or even deny the criminal aspect of the cryptocurrency boom. However, the Australian Criminal Intelligence Commission doesn't seem so convinced. It reported in August that "virtual currencies, such as bitcoin, are increasingly being used by serious and organized crime groups as they are a form of currency that can be sold anonymously online, without reliance on a central bank or financial institution to facilitate transactions."

For now, anyway, the dark economy has to be counted as one of the possible factors supporting the recent run-up in many cryptocurrencies.

Advantage: Bitcoin

VOLATILITY

One of the prime functions of a currency is to store value. Gold enthusiasts laud the metal's supposed ability to maintain its worth even during times of economic stress. In contrast, bitcoin, which launched in 2009, has seen its price soar, then plummet, then soar again.

But is that a feature or a bug? If you're seeking to protect your wealth, gold may be your preferred choice. However, if you're a momentum investor or simply an active trader who sees big price swings as an opportunity to make money, bitcoin is undeniably attractive.

Advantage: It depends

So what's the conclusion? Gold, despite its old-fogey status, appears to have several telling advantages. Its appeal is not going to go away. But it lacks a compelling story right now. In particular, its lack of yield makes it an also-ran at a time when interest rates are on the rise.

In contrast, bitcoin has its own selling points, not the least of which is promoters' ability to construct a compelling narrative around such a little understood asset. On the other hand, the most obvious threat to its current rise is the possibility that governments may crack down on its use because of its dark-economy potential.

Those who want a chance to cash in on today's hottest trend may want to gamble on bitcoin climbing even higher. But those who want to protect their wealth from future shocks should probably choose a different path.
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Bitcoin passes more milestones as market cap tops $100-billion

Post by Webscout » Mon Oct 30, 2017 1:19 pm

Bitcoin passes more milestones as market cap tops $100-billion
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Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by mining them?

Post by Dude » Mon Oct 30, 2017 8:15 pm

$100 billion that's a lot of bitcoins.
There are only 10 kinds of people in this world,
those that understand binary and those that don't. 

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Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by mining them?

Post by Webscout » Tue Oct 31, 2017 7:02 am

[QUOTE=Dude;920229]$100 billion that's a lot of bitcoins.[/QUOTE]

Yes....all those bits add up..
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Bit Me

Post by Webscout » Thu Nov 02, 2017 11:38 am

Bitcoin skyrockets above $7,000 as Credit Suisse CEO calls it 'very definition' of a bubble
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Big investors are taking sides in bitcoin’s great bubble debate

Post by Webscout » Fri Nov 03, 2017 7:22 am

Big investors are taking sides in bitcoin’s great bubble debate
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Why bitcoin enthusiasts need to be fearful of the five-year rule in investing

Post by Webscout » Fri Nov 10, 2017 8:08 am

Why bitcoin enthusiasts need to be fearful of the five-year rule in investing


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16 HOURS AGO
NOVEMBER 9, 2017 FOR UTOPIA
There's an old rule in investing that insists whatever asset is red hot right now will be ice cold in five years. The latest evidence for that maxim comes from the gold sector.

Appetite for the precious metal hit a peak in 2012. It has since slumped to its lowest point since 2009, according to a World Gold Council report published on Thursday. Demand for bullion slipped to 915 tonnes in the third quarter, which is 23-per-cent less than the frenzied level reached five years ago.

The most recent reasons for the sliding demand were the impact of Indian taxes and a decline in buying by exchange-traded funds during the past quarter. The more fundamental issue, though, is fashion. To many eyes, gold now looks like a fusty relic when matched up against the more contemporary glories of bitcoin.

Linking the two assets is no accident. Both appeal to the same group: folks who believe there's something rotten in the state of the global financial system and want a way to profit from what they believe will be the inevitable decline of paper currencies.

Since gold and bitcoin appeal to similar audiences, many of the same promoters and brokers who used to peddle shares of small gold miners to retail investors are now busily selling that same audience on the opportunities in cryptocurrencies.

Frank Giustra, the Vancouver-based promoter who made a fortune bringing junior miners to market, is now backing Hive Blockchain Technologies Ltd., which uses data servers to mine for digital riches.

Meanwhile, Canaccord Genuity Corp., the Canadian investment bank with deep roots in mining, is leading a financing for a cryptocurrency startup with the beguiling name of Global Blockchain Technologies Corp. Even tiny players such as MX Gold Corp. are getting into the game. The Vancouver miner recently signed a letter of intent to buy a blockchain business in Manitoba.

There's a certain element of hilarity in watching mining executives and promoters rejig their usual narratives to suit the times. ("Did we say you had to own real assets? What we really meant to say was that you have to buy immaterial electronic tokens instead.") But it's hard to blame the promoters for giving the public what it wants. Google searches for "buy bitcoin" have now overtaken "buy gold," according to Bloomberg.

The shift in popular taste poses a big problem for the major gold miners and other issues don't help. One headwind is the prospect of higher interest rates ahead. Rising rates reduce the appeal of gold because the metal doesn't pay any dividend or produce any yield. As the payoff from other investments grows, the lure of gold diminishes.

To add to gold's challenges, recent events have underlined the sector's vulnerability to politics. Acacia Mining PLC, an African gold miner, was recently hit with a massive tax bill by Tanzanian authorities and will have to shell out $300-million (U.S.) in a settlement brokered by its controlling shareholder, Barrick Gold Corp. Meanwhile, Eldorado Gold Corp. has announced that it's mothballing its Skouries project in Greece after years of frustrating permit delays.

Compared with prospecting for gold in remote locations and wrangling with local authorities for permission to mine it, peddling bitcoin and other cryptocurrencies seems like a sweet deal indeed. But investors who are hearing the digital hype may want to remember how fickle the market can be.

Rising interest rates are going to challenge bitcoin just as much as they do gold since both are non-yielding assets. As for politics, bitcoin has yet to face a full-scale regulatory assault, but you can be sure one will be coming if cryptocurrencies continue to attract money and keep on being linked to tax evaders and other members of the dark economy.

Then there's the fundamental question of what makes any asset valuable. Gold at least has the force of tradition behind it. Bitcoin, at the moment, seems to be riding nothing more than a dim sense that blockchain technology may turn out to be useful.

Remember the five-year rule: My bet would be that investing in bitcoin in 2022 will seem just as unappealing as gambling on gold does now.
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Bitcoin slides by over $1,000 in less than 48 hours

Post by Webscout » Fri Nov 10, 2017 11:20 am

Bitcoin slides by over $1,000 in less than 48 hours
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“We are moving from the age of information to the age of value.â€

Post by Webscout » Fri Nov 10, 2017 4:21 pm

“We are moving from the age of information to the age of value.â€
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