I am having a hard time finding solid ground and reason to invest in bitcoin.
- First, yes, it's mined, so as to not dilute its value.
- Second, there is no guarantee it won't be diluted in the future; and who controls the mining - it's all in software.
- Third, what if it's diluted and the creators keep most of it? Recall, it's all done in software with no formal auditing.
- Fourth, it's open to the internet, and therefore, hacking - lots of bitcoins have been stolen in the past.
- Fifth, according to Bloomberg yesterday, the underlying blockchain technology for a distributed ledger system is secure enough, based on long-term tests run by big banks; but the benefit therein is reducing the settlement time of all trading transactions, not necessarily making a case for cryptocurrency.
- Sixth, I've been reading up on blockchains, and they are secure as an algorithm - the problem, again, is that these distributed servers are open to the internet, and moreover, controlled by China and in general, untrusted entities.
- Finally, who's to say cryptocurrencies won't be regulated by governments at some point, whether this mean taxed or even completely outlawed as possibly a pyramid scheme.
Al, Al, Al.... You need to read up on this stuff because your post basically shows that you know nothing at all about cryptocurrencies. I'm going to refute your post some now.
1. Yes
2. You understand that everyone who runs a mine and a node must agree all at the same time. Look up Bitcoin2X, and NO2X. It's very hard to change it. It's harder to change than you think. Compared to USD it's basically written in stone.You can have your own wallet that no one can touch, because it could be a piece of paper. What's written on
3. The creators are all over the globe. The original man who wrote the original code is a mystery to the entire world. There is no "creator" to keep anything anymore. The creator can only have what they mined already. It's LITERALLY IMPOSSIBLE for anyone who has ever written any code that has made it to the main blockchain, to ever benefit them specifically. This is terrible question really. It's one of those "what if" questions that scares the hell out of everyone because no one understands it's a meaningless question.
4. The blockchain itself has never been hacked and today's technology isn't even remotely good enough to even ATTEMPT to hack it. You have to understand that you don't "hack" one computer, you have to hack THE ENTIRE GLOBE ALL AT ONCE.
What has been hacked is custodians. Websites and places that offer services that involve holding onto your Bitcoin for you have been hacked. Bitcoin itself remains unhacked since it was created. That's something no bank or government or money service business can claim, NOT ONE. We can look forward to better use of the blockchain in ways that many potentially elevate the common day hacking, since only traditionally coded things are target-able.
5. Who cares what they have to say? If you can't see the implications you're blind. The reason bloomhole is going to say stuff like this is so they price will stay low while they buy. Seriously, if you can't understand the value in something that cannot be manipulated like traditional fiat, doesn't require clearing houses, and only moves the true value instead of "IOUs" between banks, well... anyone in a real financial position is FLAT-OUT LYING if they're claiming the value isn't there. The second biggest reason they have to say this is because it reduces money laundering and double spending, if they aren't lying in order to accumulate their own.
6. Utter nonsesnse. You obviously need to read more on how the blockchain works.
Start here. The fact that they are "open to the internet" is a half true fact. It's not like you think, at all. The computers still use firewalls etc that run a node or a miner, but the ledger is open to the internet. The ledger, again, isn't hackable with current technology. Again every "brick wall" on the planet that handles any form of money has been hacked at some point, where as Bitcoin has never been hacked and cannot be hacked with today's technology. You would need a computer that could bend time and space to do it at this point (quantum beyond anything we understand).
China isn't "in charge" of anything. They have some miners, but miners can't just implement anything they want. And you know where the trust is at? IN THE VALUE. Yes everyone could erase Bitcion overnight from computers all over the globe. Why would they? There is less reason for them to do that than for a government to dissolve itself. Bitcoin is more stable than governments, and it gives incentives to keep its value unlike fiat in struggling countries. It's like asking why you should buy a cell phone because tomorrow everyone might throw theirs the trash...
Finally. Some governments already have. But it's a meaningless gesture. First off we'd have to see a global shutdown of all internet, cellphones w/data, and satellites in space to see it disappear. If that happens the absolute least of your problems will be where your Bitcoin went...
In the US there is way too much interest for it to go under. But in general this is the most valid concern you have because taxes are meaningless and invalid for cryptos, entirely. They are so new that governments don't understand them correctly at all. Reality check is that governments will end up competing for business with them etc, so we'll get a very low common denominator of "interference" from them.
Truthfully most government stand to benefit massively from crypto tehnology. But in general I don't think there is any risk of a pyramid scheme for mainstream cryptos. ICO's have a potential for pyramid schemes, but they are the wave of future investing.
You're welcome to call me so you can get the information very fast, to get you up to date.
I totally understand, and that is exactly how I would normally evaluate something like this. I am one of the dimwits who early on could not understand how Facebook could ever make a net profit.
But in this particular case I am able to come at the question from a different perspective, and so I think your questions are inapposite. I have this perspective only as a result of being an executive in the alternative investments industry and understanding how that industry matured since 1992.
I don't have to evaluate all of your valid questions with which I ordinarily would agree. In this particular case all I have to know is that investment banks are establishing cryptocurrency trading desks; that commercial banks are preparing to accomodate Bitcoin and to use it in transactions; that Jamie Dimon and other "establishment" bankers are saying people are stupid for buying Bitcoin; that the CME is listing Bitcoin futures; and that the SEC is approving Bitcoin ETFs.
This horse has already left the barn, and no government can outlaw Bitcoin. The whole concept of Bitcoin includes a scepticism about government financial controls. No government can eliminate Bitcoin, and I don't think any government wants to outlaw it, to push it underground and to create another black market.
Furthermore, regulation of Bitcoin, like any other commodity, is good for Bitcoin as an investment asset. Regulation will legitimise Bitcoin and enable institutional investors to be authorised by their boards of trustees to purchase it.
This means to me that, rightly or wrongly, Bitcoin is being dignified as an alternative investment asset. I believe I understand the significance of people viewing Bitcoin as an alternative investment.
This means that, sooner or later, institutional investors and individual investors will probably want to commit some portion of their portfolio to this asset.
PS: While I do not understand Bitcoin itself, Ethereum seems to me to be completely brilliant.
I think you understand a little more than you think. But I have to say, while it's neat that investment groups are interested... There is something insanely ironic about traditional investment regulations being applied to Bitcoin.
Let me see if I can explain this
really shortly.
If I hand you an IOU, it makes since to have a regulation, and for me to have enough money to not only make the transaction but back it up if it was lost. - That's traditional regulation.
Now let's say I walk up to you, and hand you a gold brick. Do I need to have extra gold bricks in storage, in order for you to believe I just handed you a gold brick, and it was a 100% known for sure it was as perfect gold brick? - The answer is obviously no, the very idea is utterly comical. But that is how Bitcoin works, and that's why it's utterly comical that traditional investment channels have to go through all the same - utterly meaningless - regulations for Bitcoin.
That is the uphill battle that cryptos face, is dealing with things like that. Ron I really think if you'd spend the time you'd get something out of my
article on Ripple (a blockchain company, but not necessarily a cryptocurrency company). Al you might enjoy it too, once you read up more.
Oh, and I must agree, Ethereum is amazing. It is where the technology will really get used for applications. Bitcoin is mostly just a store for value.
