Why Bitcoin so high?

Discussion in 'Free Thoughts' started by Saint, Jan 3, 2021.

  1. Saint Valued Senior Member

    Messages:
    4,752
    Why so high?
    What we we do with bitcoin?
    How to keep bitcoin in my wallet and never lose it?
     
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  3. exchemist Valued Senior Member

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    12,451
    Why Maraysian so stupid?
     
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  5. scorpius a realist Valued Senior Member

    Messages:
    1,350
    Bitcoin is a BIG CON a Ponzi scheme,it has no real value as fiat curency which is based on
    GDP of each country.

    If you want to invest try Tesla largest EV car maker now and it will only grow bigger,its also energy storage systems and tech and solar roofs co.

    Real estate is also good investment depending on location obviously.
     
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  7. Saint Valued Senior Member

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    4,752
    If I do mining and get 1 bitcoin, how to sell it and get cash?
     
  8. James R Just this guy, you know? Staff Member

    Messages:
    39,397
    Supply and demand.

    Trade it. Use it as currency.

    Let me help you find out
     
  9. Schmelzer Valued Senior Member

    Messages:
    5,003
    You can make payments which cannot be controlled by the government. At least if you do it in a safe way following the instructions (using laundries if you have bought the bitcoin using an official, government-controlled exchange market). So, those who regularly make or receive illegal payments, or simply payments which they prefer to remain hidden, will use bitcoin. Once there is such a market where it is the optimal way to pay, it gains some value. How much depends on the turnover, and on the amount of money the participants have to hoard to make those payments. Say, if a drug user uses a darknet platform to buy drugs, he may have what is necessary for him for a week or a month or so. The turnover, together with that holding time, defines some minimal value of all the available bitcoins. Say, if there are 1000 drug users paying with bitcoin, and if they exchange bitcoin once a month, and spend during this month 1000 dollar for drugs in bitcoin, they all together have 1 million dollar in bitcoins. As long as those 1000 drug users use bitcoins in this way, all bitcoins of the world together cannot be worth less than 1 million dollars. But illegal trade is only one field, it is simply the field where bitcoin will rule until there will be even better ways for illegal payments. Given that governments are fighting cash, which is the other important thing used for illegal payments, many will have to switch from cash to bitcoin. This increases the value of what is used in bitcoin, but once the amount of bitcoins is limited (21 million IIRC), such an increase leads to a raising value of bitcoins.

    Once it is raising in value, and the base of its value (illegal trade) itself is sufficiently secure (you can destroy this base only with a new digital currency which is better / safer than bitcoin), and there will never be an inflation (by construction, mining gives less with time, so the amount remains the same), there appears another application for bitcoin: savings. Today fiat money themselves on bank accounts give no income, there is at least some inflation, and all the classical ways to invest money are today totally overvalued (inflation happens first for the items bought by those who get the newly created money, that means the superrich, and they buy stocks and commodities, so these have high inflation rates, and are far too expensive to buy them now). So buying bitcoin as a way to hoard money becomes an alternative. Once this is recognized by many people, and they start to save at least some of their money in bitcoin, then you can expect a serious rise of the value of bitcoin. If, say, 1% of the population stores 10000 dollar in bitcoin, this gives 800 000 000 000 dollar in bitcoin savings. Divide by 20 million and you have at least 40 000 dollar for a bitcoin. Think about what happens if firms start to use bitcoins not to buy and sell something with them, but simply for savings.

    To keep it, all you have to do is to keep it, so that nobody can steal it. So store it on some encrypted device. If you lose the stick with the wallet, and have no security copy, you have lost it, no recovery possible.
     
  10. Saint Valued Senior Member

    Messages:
    4,752
    I read that you can keep bitcoin in your hard drive/SSD with very long password, is that true?
    If you lost the password the bitcoin will be lost forever.
     
  11. Saint Valued Senior Member

    Messages:
    4,752
    I read that:

    21 million bitcoin maximum quantity:

    While there can only ever be a maximum of 21 million bitcoin, because people have lost their private keys or have died without leaving their private key instructions to anybody, the actual amount of available bitcoin in circulation could actually be millions less.
     
  12. Schmelzer Valued Senior Member

    Messages:
    5,003
    Yes, I have seen an estimate of 20% of the bitcoins already lost.
    Correct.
     
  13. Saint Valued Senior Member

    Messages:
    4,752
    If I save the bitcoin in my hard drive, and my drive spoiled and re-formated, I will lose all my coins.
    Is it the same as I keep cash in my cupboard, and my house caught fire and burned the cash, and so I lost all my money.
    Is it similar?
     
  14. Schmelzer Valued Senior Member

    Messages:
    5,003
    Almost. You can have several security copies of your hard drive. All encrypted, of course. There are alternatives, namely to save it on paper. I have done this some time. It was not really trivial to recover the bitcoins from the paper, I had to find the actual version of the software able to handle what was written on that paper, but I succeeded. In this case, that paper was really similar to cash.

    If there are many copies, and you find one, you better use the bitcoin immediately, if only to transfer them to another account (you can easily create a new account). Who of the owners of the copy does this first gains them. So, make copies but encrypt them all.
     
  15. Saint Valued Senior Member

    Messages:
    4,752
    In Malaysia, I can buy bitcoin from https://www.luno.com/en/my
    Which is legal.
    How the website can sell you bitcoins, where does it store the bitcoins?
    From where they get bitcoins?
    Maybe it is not real bitcoin, just like META Trader, you can buy the pair BTC/USD, not the real bitcoin.
    So I wonder how can I buy the "real bitcoin"?
     
  16. Schmelzer Valued Senior Member

    Messages:
    5,003
    They can use whatever they want, like everybody else too, namely a wallet, to store bitcoins. They will not tell you where. They get them by bying bitcoin themselves.
    Usually there is some trading platform, you can make an offer "I buy 1 bitcoin for xxxxx dollar", and wait if you find somebody who wants to sell for this amount. The platform then registers this, you have to send the money, once they arrived you get the bitcoin. This has usually taken some time. Then the bitcoin trading platform has established a connection with a bank, so that transfers from and to that bank will be handled immediately, and the bank was happy to get a lot of new customers who wanted to buy and sell bitcoin. Those with accounts on other banks can nonetheless buy and sell bitcoins there, but those interested in fast transactions will use only that bank. The platform automatically creates a wallet for your bitcoin there. And you have a web interface for sending bitcoins to some other wallet.
     
  17. Saint Valued Senior Member

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    4,752
    But it can be the platform does not have real bitcoin, they only sell bitcoin by its price, because you only can trade the bitcoin on its platform, not elsewhere.
     
  18. sculptor Valued Senior Member

    Messages:
    8,466
    I read recently that many of the wealthy and money managers are going to bitcoin instead of cash when they exit securities.........This is, most likely a bubble that will burst.
     
  19. Saint Valued Senior Member

    Messages:
    4,752
    No bitcoin will not be bubble, it has become more and more versatile and acceptable.
    There is no limit up.
     
  20. Schmelzer Valued Senior Member

    Messages:
    5,003
    On https://www.luno.com/wallet/accounts I see four buttons, buy, sell, send, receive. So, all what you need. buy and sell for exchange, send and receive to use the bitcoins to pay. Or you can send it to your own wallet at home.

    One cannot exclude the existence of fake exchange platform, so it is your risk to try it.

    As explained, it has a real base - illegal markets which actually can be used only with bitcoin. And it has the value that there will be no inflation, given that the maximal amount of bitcoins is fixed. The actual value of increase - factor 2 in one month - looks of course like a bubble. But if firms really make the choice to use some bitcoins as security, they don't have to bother - if many firms start to do it now, this is a real increase of the value of the bitcoin which will not go away. I would not wonder if that temp does not last long and will be followed by a correction. But here I expect something comparable to the 2017 bubble - Bitcoin was raising from 1000 Euro to 12000 Euro, and then falling back to 6000 Euro, and 2019 even down to 3000 Euro. But, first of all, there was an objective reason for the correction - the Chinese had created the boom by using bitcoin to transfer money out of China, and then the Chinese government fought seriously back and stopped this. So that this was not a bubble which crashed, but a change in the real value, given that the use of bitcoin in China had heavily increased and then heavily decreased. Nonetheless, during that time Bitcoin has become much more popular, and so it was used by new people. I have heard that in particular all those corrupt Ukrainian politicians, forced to declare their income, have claimed to have speculated successfully in bitcoin.

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    In other words, the modern corrupt politician will be paid in Bitcoin. This has not been stopped, those successful bitcoin "speculators" in the Ukraine and elsewhere will accept bitcoin payments for whatever they have to offer. Once those transactions are now made in bitcoin, the value of bitcoin increased, and therefore it did not fall back to 1000 Euro.

    Actually, the situation is different, some countries have explicitly regulated Bitcoin in such a way that using it as a reserve is allowed. And its use as a reserve is a reasonable thing given the inflation of the fiat currencies and in particular the dangers of hyperinflation. And if this is really what the firms do with the bitcoins, to use them as a security, there is no necessity to fight this, it would harm the firms of your country if you forbid them to have good securities. And if they do this, the real value increases. (It may go down if all those firms who use bitcoin as securities will have big problems and have to sell them because the big coming crisis hits them - but this would not be what one has to expect, given that they have reserves, and these reserves were a good investment before, so they were good prepared for the crisis.)
     
  21. Saint Valued Senior Member

    Messages:
    4,752
    You can only send and receive within Luno platform.
    Whether Luno really got real bitcoin, I do not know.
     
  22. Schmelzer Valued Senior Member

    Messages:
    5,003
    If you can send and receive it, its all you need. Try sending it to your own pocket at home. If the bitcoins arrive at your wallet at home, its real bitcoin.
     
  23. Sarkus Hippomonstrosesquippedalo phobe Valued Senior Member

    Messages:
    10,355
    You will, though, continue to get inflation as more and more bitcoin become lost. The maximal amount of bitcoin may be fixed, but the amount of bitcoin in circulation will gradually diminish.
     

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