Bitcoin - Part 2

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Ron_Tomkins said:
First of all: Do I need to invest actual money to mine bitcoins?
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You don't need any money to 'mine' Bitcoins, just a computer and an Internet connection. But just like your chances of finding gold by digging for it with a shovel are next to nil, so you need expensive mining equipment to have a reasonable chance of 'finding' a Bitcoin. And that equipment needs vast quantities of electricity - which doesn't come free.

That is if you want to stay on the right side of the law. But if you are willing to steal mining machines then that problem is solved, and if you also steal the electricity then you might not need any actual money!

Is it something where if I have, say, 20 dollars that I wanna "play" as if this was a lottery ticket, I can just try it with that amount of money and then see if that eventually grows into something bigger?
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Yes. You can purchase Bitcoin in any amount larger than one 'Satoshi' - then all you have to do is wait for the price to go up and sell it again. Just be prepared for a very long wait...

Or is it a system that requires that I'm constantly feeding it money so it can produce money?
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Not exactly. It's a system you have to constantly feed money into so it can produce money for someone else.

OMG! While I was typing this, Bitcoin dropped below $7000! Right now it's $6,745.43. HODLers get your barf-bags ready, that sinking feeling is about to get a lot worse!
 

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phiwum said:
I'm not sure about Target, but the ransomware guys are demanding six bitcoins from Atlanta, I hear. So that's value.
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If Bitcoin becomes the currency of ransom attacks, I expect government might want to get involved.
 
Ron_Tomkins said:
Ok, so lets try again: I'm a very dumb person when it comes to this topic. Work with me step by step, as if I was a complete moron (Because chances are, that's not entirely far from the truth in some way)

First of all: Do I need to invest actual money to mine bitcoins?

If so: Is it something where if I have, say, 20 dollars that I wanna "play" as if this was a lottery ticket, I can just try it with that amount of money and then see if that eventually grows into something bigger? Or is it a system that requires that I'm constantly feeding it money so it can produce money?

Because if so, then this is something I'm definitely not even gonna bother trying.
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Yes, you need money to mine for bitcoins - lots of it! You need to buy some seriously heavy duty computing equipment that consumes enormous amounts of electricity to run. So not only is there a massive capital cost but also a large ongoing running cost as well (much greater than $20). You would be lucky if the amount of bitcoin that you mined would cover the cost.

I don't know if there are any mining companies that sell shares. Assuming that there are and that they pay decent dividends, it might be an easier way to get into bitcoin mining.

You could always just buy bitcoins and hope that the price rises. The advantage of buying shares or bitcoins is that it is a one-off cost.

Finally, don't listen to anybody on this forum (including me). You will only get confused by the contradictory advice you get.
 
Ron_Tomkins said:
Ok, so lets try again: I'm a very dumb person when it comes to this topic. Work with me step by step, as if I was a complete moron (Because chances are, that's not entirely far from the truth in some way)

First of all: Do I need to invest actual money to mine bitcoins?

If so: Is it something where if I have, say, 20 dollars that I wanna "play" as if this was a lottery ticket, I can just try it with that amount of money and then see if that eventually grows into something bigger? Or is it a system that requires that I'm constantly feeding it money so it can produce money?

Because if so, then this is something I'm definitely not even gonna bother trying.
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To mine bitcoins you need a vast warehouse of the hundreds of the latest and most powerful computers. That warehouse will need air-conditioning. It will consume as much electric power as a small town - daily. And will increase all the time.

You need actual money to buy and run the equipment. You might have been able to buy a stake in one of these for a small investment a few years ago, but not today. These are really big players.

It is uncertain whether the investment will pay off. The capital cost and the ongoing expenses are huge, and with price of bitcoin falling, the rewards are falling.

You could do your own ICO (Initial Coin Offering) of some coin (RonTomCoin) and just create them yourself. If you make a billion coins (hit a computer button) and offer them at 5 cents each, you can make money. People pay you actual cash (dollars) and when the value falls to zero because you run out of buyers, you can just keep the cash.

Legally as far as I can make out. There is no rule that you must back up the currency. If retailers do not accept your coin, you do not have to worry either. But the rules are changing and regulation is being proposed.
 
Good. Thanks, guys. Based on this information, I can finally make the final decision that I will definitely not even bother investing in bitcoins.

But to those who are doing it, let me know how it goes.
 
I wonder what happens below 6000.
The very heavy 4 hour chart pattern looks like a continuation down that will get to 6000 quite easily.
Will we see another vicious short covering rally?
Is the break even price for the most efficient miners 4000?
 
Ron_Tomkins said:
Good. Thanks, guys. Based on this information, I can finally make the final decision that I will definitely not even bother investing in bitcoins.

But to those who are doing it, let me know how it goes.
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Fairly catastrophic, right now. But my gambling addiction algorithm compels me to keep buying that thang.
 
Bitcoin price 'inexplicably' drops? Must be Market Manipulation!

OKEx to Roll Back ‘Irregular’ Futures Trades After Bitcoin Price Crashes Below $5,000
Cryptocurrency exchange giant OKEx is rolling back a series of Bitcoin futures transactions in response to an “irregular” sell-off that was localized to the trading platform.

The Hong-Kong based exchange announced on Friday that it would reverse transactions that occurred this morning between 4:47 am and 6:30 am Hong Kong Time (HKT) when Bitcoin futures inexplicably plunged as low as $4,755 on OKEx even as the global average Bitcoin price remained closer to $7,000.
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'Inexplicably'? Yet nobody rolls back trades when the price 'inexplicably' shoots up!

Noting that prices on OKEx varied dramatically from other exchanges during this period, users alleged that market manipulation must be at play. Some even pointed the finger at the exchange itself.
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There's market manipulation alright, but not in the direction they think. If traders are simply buying and selling then any volatility is perfectly legitimate. OKEx better have strong evidence of something more sinister, or it will become obvious that the only 'manipulation' occurring was their own intervention.

The irregular trades had caused many futures traders to get margin called, liquidating their holdings... But though this specific sell-off was isolated to OKEx, the wider market has been in a steady downtrend that has quickened its pace in recent days.
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The price continues to slide despite all efforts to keep it pumped up. What will bitcoiners say when it goes below $5000? Will every trader who bailed out be accused of 'manipulation'?
 
Samson said:
I enjoyed this article and the comments.

https://www.coindesk.com/bitcoin-eyes-bottom-after-50-day-low-below-7k/

Everything says 1300 soon, and this is a very high price leaving Winkelvoss with spectacular wealth, say 100 million. But they dare not sell. Do not scare the horses.
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All of this analysis is based on the behavior of "investors". And it works up to a point because of the manipulation.

When they say that the price is reaching a "bottom" of about $6,630 this is hype to pretend bitcoin is an investment asset. The true bottom is zero, as many have pointed out.

To get the price to rise dramatically they need fresh investors. That will not happen. It will bump along, getting lower and lower.
 
PartSkeptic said:
All of this analysis is based on the behavior of "investors". And it works up to a point because of the manipulation.

When they say that the price is reaching a "bottom" of about $6,630 this is hype to pretend bitcoin is an investment asset. The true bottom is zero, as many have pointed out.

To get the price to rise dramatically they need fresh investors. That will not happen. It will bump along, getting lower and lower.
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The zero value is inevitable because supply is infinite.
No law will stop idiots starting ICO's.
It is vital to understand how the tide lowers all ships.
There is only one "gold", but there are infinite "bitcoin"s.
 
Samson said:
The zero value is inevitable because supply is infinite.
No law will stop idiots starting ICO's.
It is vital to understand how the tide lowers all ships.
There is only one "gold", but there are infinite "bitcoin"s.
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Did you forget that we already had this discussion? Bitcoin is not litecoin/etherium/dogecoin/XRP/XLM/etc.

Of all the myriad of cryptos that can and have been created, only a very small fraction will ever be worth anything and the money invested in them is nothing compared to the money invested in bitcoin itself.

But try this argument again in a few weeks. Maybe, if everybody's memory is as short as yours, they will have forgotten that your silly argument has been soundly refuted time and time again.
 
psionl0 said:
Did you forget that we already had this discussion? Bitcoin is not litecoin/etherium/dogecoin/XRP/XLM/etc.

Of all the myriad of cryptos that can and have been created, only a very small fraction will ever be worth anything and the money invested in them is nothing compared to the money invested in bitcoin itself.
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Bitcoin has two unique attributes: its name and the fact that some people have invested a lot of money in it.

Those who have bought into bitcoin don't want to sell at a lower price -- giving it some value, but that is a weak incentive for anyone new to buy into it.

And as you have stated, each time in the past that bitcoin hit a peak and dropped, it eventually came back to hit a higher peak. That will continue to be true...until it isn't. There were external factors behind each rise and fall in price. Unless there is a specific reason for the price to rise to a new peak, it won't.
 
psionl0 said:
Of all the myriad of cryptos that can and have been created, only a very small fraction will ever be worth anything and the money invested in them is nothing compared to the money invested in bitcoin itself.
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Surely you meant wasted instead of invested.
 
jrhowell said:
Bitcoin has two unique attributes: its name and the fact that some people have invested a lot of money in it.

Those who have bought into bitcoin don't want to sell at a lower price -- giving it some value, but that is a weak incentive for anyone new to buy into it.

And as you have stated, each time in the past that bitcoin hit a peak and dropped, it eventually came back to hit a higher peak. That will continue to be true...until it isn't. There were external factors behind each rise and fall in price. Unless there is a specific reason for the price to rise to a new peak, it won't.
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It is nice to see a sensible argument against bitcoin for a change. :)

I don't disagree with anything you say but mainly because I am not into divining the future.

kayle said:
Surely you meant wasted instead of invested.
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A "wasted" investment is still technically an investment (assuming that any money spent on bitcoin is ultimately wasted).
 
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