BITCOIN versus GOLD

This needed a new thread - one that relates Gold to Bitcoin in terms of risk and viability....



Bitcoin isn't a scam... but it is being slowly outlawed around the world because it attracts a strong criminal element and it bypasses many government regulators and tax schemes that are otherwise applied to other forms of currency and trade.  Bitcoin was created by someone using the pseudonym of "Satoshi Nakamoto"... although nobody knows who this is and more than 8 different people claim to be him. It gained prominence on Silk Road, an Ebay-styles website that sells Heroin, Guns, Human Slaves and even Children... because it's basically untraceable as a form of payment. Even the massive world-wide Ransomware attack last year required all victims to pay in Bitcoin.  According to Scott Phillips, "No one can agree on what exactly Bitcoin is: a currency, or a store of value like gold bars?"




https://www.youtube.com/watch?v=t5JGQXCTe3c

Right now, people with Bitcoin aren't even spending it.  They're hoarding it on digital wallets and on their computers where they expect it will go up in value.  Even now, "as it's touted as the currency of the future, it hasn't so far proven very popular as a way to pay for goods or services" - according to ABC News Australia.

The creators and gatekeepers of Bitcoin state that it has a 20% chance to drop to zero value without warning.
That's a 1 in 5 chance of complete failure. Would you invest in anything that could fail at those odds?


Bitcoin under attack in CHINA as they push the Gold-backed Yuan for the new Petrodollar.
Bitcoin is being shut down as a form of exchange in China and most BTC exchanges were closed on the mainland with several more running on overseas servers now scrambling to re-position themselves. The laws were introduced earlier this year.  There's a possibility that China will reverse their stance but don't hold your breath... especially since China wants to use the Yuan to replace the US dollar for Petrodollar dealings.  That's why China has been buying up the world's going supplies as other countries sell off their Gold Reserves.  Confirmed by Australia's Financial Review, China recently blocked all bitcoin 'executives' from leaving the country, pending an investigation.

China hits booming cryptocurrency market with coin fundraising ban, Bitcoin value slides
Whenever a country acts to ban Cryptocurrency like Bitcoin, the value of the currency drops.  This happened in China recently and Canada and Singapore (as well as the United States) are warning that ICOs may be outlawed or severely regulated.




Starting in 2018, it will be ILLEGAL to use Bitcoin in Vietnam with a US $9,000 penalty for each offense.
Bitcoin was only this week banned in several Asian countries with new laws imposing a US $9,000 fine that become active in 2018.  That's a $9,000 fine per offence each time someone uses Bitcoin in those countries to purchase ANYTHING.

https://blockexplorer.com/news/starting-2018-using-cryptocurrencies-like-bitcoin-vietnam-will-illegal-subject-9000-fine/

The US Government has drawn up a bill forcing people entering the United States to declare any Cryptocurrency that they might own.  Failing to do so will result in confiscation under the guise of defrauding the government with taxes and funding criminal enterprise.  Another aspect of this bill is that it will give customs officers the "right" to check your personal effects for codes and passwords written on pages of literature that might be used to access and transfer Bitcoin etc.



The flare that nearly hit us in 2014.. with the Earth for scale.

The Danger of complete Bitcoin Collapse from Coronal Mass Ejection from the Sun:  Odds are 12.5% every 10 years.
A strong CME (Coronal Mass Ejection) from the Sun will erase all Bitcoin Wallets and any computer holding it.  NASA says that there's a 12.5% chance of an CME hitting the Earth every 10 years.  We VERY narrowly missed getting struck in 2014 (see pic of Earth NEXT to a picture of the outburst for scale).  Even if the CME was minor enough that it only struck a small amount of the Earth's bitcoin storage wallets and computers, the planet would the thrown into chaos long enough that it would be a useless currency.  A Faraday cage will not protect Bitcoin credits from destruction and an EMP is also a likely result in future years with Terrorism, Solar Bursts and Future Economic Warfare.

Bitcoin typically isn't instant as a transfer. Typically a Bitcoin transaction takes 10 minutes but it can also take up to 30 minutes if there is congestion at the Bitcoin network. Hence there are delays that would prevent anyone from cashing in their Bitcoins even if they knew there was going to be a disaster of this scale.  But, if something like this did hit us (like it did back in 1859 when a monster called The Carrington Flare struck Earth), we'd lose all our satellites and computers, and planes, cars and ships etc.  Some put the estimates of recovery at 80 to 100 years.  The flare in 2014 would have set us back at least 10 years before we could get things up and running again. NASA says an extremely powerful solar storm comparable to the one of 1859 missed the Earth by 9 days in July 2012.


An example of a CME that would have knocked us down just a few years ago if it was aimed in our direction.

U.S. Law Labels Cryptocurrency an Illicit Finance Trend
"A new foreign sanctions bill signed by President Trump could spell a very difficult future for cryptocurrency as a whole. Under the law, specific foreign governments are asked to monitor cryptocurrency circulation to combat terrorism and illicit financial trends.

The recently passed law calls for discussion of trends in illicit finance including forms of value transfer such as cryptocurrencies. Additionally, it requires the collection of data regarding cybercrime or other threats that may be identified by the U.S. government in the future. This is not the first time we have seen such a directive, as a similar proposal was made by the U.S. Department of Homeland Security in May 2017.

All of this goes to show that the U.S. government is willing to attack cryptocurrency as a whole. Specifically, the country continues to impose its vision on other nations where Bitcoin can make a big difference, such as Iran, Russia, and North Korea. Having a global currency that could remove the need for the dollar is understandably a significant concern for the U.S. It will be interesting to see how this law impacts cryptocurrency in the future if at all."

https://themerkle.com/us-congress-house-bill-3364-labels-cryptocurrency-as-an-illicit-finance-trend/

In May, the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017 sought to introduce a provision that would require anyone in possession of more than $10,000 in cryptocurrency to disclose it when passing a U.S. customs checkpoint — this is problematic given that a virtual currency like bitcoin is always considered to be on someone’s person.



Bitcoin isn't the ONLY cryptocurrency out there.  
Bitcoin's nearest rival is Etherium.  And there's numerous others out there fighting for recognition - ZCash, Litecoin, Ripple etc. Take a look at something called Bitcoin Cash.  The group launching it promises faster transactions with more choices.  And yet most experts predict that owners of Bitcoin Cash will simply trade it in for Bitcoin.  Some digital currency exchange operators - including Coinbase and Bitstamp - have said they won't support bitcoin cash.

Bitcoin Robbery:
The infamous MtGox Bitcoin Robbery was allegedly masterminded by a 38 year old man (Alexander Vinnik) and over $4 Billion USD is said to have been trafficked through the operation since 2011. At $4B this would have the be the world's biggest heist.

BASICS: In September 2011, the MtGox BitcoinBank hot wallet private keys were stolen, in a case of a simple copied wallet.dat file. This gave the hacker access to a sizable number of bitcoins immediately, but also were able to spend the incoming trickle of bitcoins deposited to any of the addresses contained. Over time, the hacker regularly emptied out whatever coins they could spend using the compromised keys, and sent them to wallet(s) controlled by Vinnik. This went on for long periods, but also had breaks — a prominent second phase of thefts happened later in 2012 and 2013.


Using the popular TREZOR Bitcoin and Cryptocurrency Digital Wallet.

By mid 2013 when the funds spendable from the compromised keys had slowed to a near halt, the thief had taken out about 630,000 BTC from MtGox. (Given that they’re worth about 3 grand each now, that’s rather a lot, isn’t it?).  Many of the people who's Bitcoins were stolen didn't even report the loss and theft because they were criminals themselves who use Bitcoin for nefarious uses.  I've since read that MtGox then spread out their losses across all their Bitcoin Clients to make the theft more bearable without bankrupting the exchange... unleashing fury from those who's Bitcoins were unaffected by the robbery. Since the MtGox incident there's been Bitcoin Robbery in Australia and other countries. Bit this wasn't the first time MtGox had been hacked!  They were robbed back in 2011 for $8.75 Million (in 2014 prices).

Is Bitcoin safer than Cash or Gold?
An unidentified 28-year-old man was robbed of more than $1,100 in bitcoin at gunpoint in New York City in June 2015. The robbery took place after the man, from Crown Heights, Brooklyn, met up for an in-person bitcoin sale arranged over online classifieds platform Craigslist on 27th May, according to a report by DNAinfo. A representative for the New York Police Department (NYPD) confirmed the report when reached. The NYPD said that the seller was led to a vehicle after meeting up with the presumed buyer. He was subsequently forced, at gunpoint, to transfer his bitcoins to the two assailants. The identities of those involved in the incident are unknown at this time.

https://www.coindesk.com/bitcoin-stolen-new-york-gunpoint-robbery/



GOLD Vs Bitcoin:
Bitcoin has been said to be the new gold.  But gold is a risk to carry on your person and it's inappropriate for small transactions. This is where Bitcoin excels in both arenas. NEWSBTC has this to say about Gold Vs Bitcoin: "Judging from the current panorama and within a cautious approach, I would say that gold still comes out as a winner as a long-term investment because of its real intrinsic value, it’s a tangible asset with a stable price, and because people will always accept gold. And we have the history that proves it. All in all, bitcoin also can be considered as a winner on the speculative side of investment simply because its volatility offers speculators far more profitable trading chances than any other asset."

APMEX Investments had this to say: "Perhaps the most obvious difference between Gold and bitcoin is this: Gold is physical and bitcoin is digital. Yet the distinctions between the two run much deeper. Gold is a Precious Metal used by mankind as a medium of exchange for millennia. It is also useful in technology and manufacturing, and is appreciated for its beauty in the form of jewelry, art and keepsakes. Gold is widely regarded as a sound long-term investment and a hedge against market volatility. Bitcoin, on the other hand, is a coded, crowdsourced currency that did not exist until 2009. "

Hearn stated in his blog post that investing in bitcoin was never guaranteed to yield returns. “Bitcoin is not intended to be an investment and has always been advertised pretty accurately: as an experimental currency which you shouldn’t buy more of than you can afford to lose,” he explained.

https://www.apmex.com/education/investing/gold-vs-bitcoin

On the other hand: Spencer Bogart, an analyst with Blockchain Capital and formerly of Needham & Company, told CoinDesk:
"If we think about the qualities that make gold a respected 'money' or store of value, bitcoin is actually superior in many regards."

https://www.coindesk.com/bitcoin-gold-better-long-term-bet/

From the same link above: "The clear advantages that gold has over bitcoin are trust and reliability, according to those surveyed for this article. However, a change in consumer preferences, new technological disruption or a crackdown by a government could easily kick bitcoin to the end of the bench.

"Gold has something very important that bitcoin lacks: a more than 1,000-year history of being a decent store of value. This is very important for trust and people's willingness to store value in that particular asset," said Bogart.

Gold has also proven itself to be of value even when governments attempt to restrict its usage or outlaw it completely."

"People forget that gold is not a pet rock or a speculative asset, it's an element. Gold is a very low-risk store of value. Fifty years from now it’s going to still be valuable." - [Josh Crumb, co-founder of GoldMoney and a former commodities strategist at Goldman Sachs]

From what I can see from the available scope of material in October 2017, Bitcoin has far more risks associated with it. How does an invisible "virtual" digital currency go from $5 to $4,200,000.00 in just a few years?  Yes the value is now super-inflated but it's simply sold as a "scarce virtual commodity" and that's literally its only appeal.  It's highly volatile (as evidence by massive price inflation) and yet Bitcoin isn't found in nature and can only be used as digital investment or transaction tool - where it can (and probably will) be either regulated by future governments or wiped out on a whim or via several potential national disasters.  Gold is impervious to natural disasters and can only be regulated temporarily.



We know that the major banking cartels (the world's Central Banks) have admitted to collusion to manipulate the value of precious metals.  We know that Gold is a hard-won mineral of extraordinary values.  For an element to stand alone as a Premium Currency, it must meet four qualities:  It can't be a gas, it can't be corrosive or reactive, it can't be radioactive - and this leaves about 30 elements to consider.... but then comes the fourth quantity:  It must be rare enough to be valuable but not so rare that it can't be found.

That brings us to five elements: rhodium, palladium, platinum, silver and gold.  All of these are traded as bullion today.  Since silver tarnishes and oxidizes upon contact with Hydrogen in the air, it's not ideal as a currency in the modern era although it is a popular investment metal.  Rhodium and Platinum were only discovered recently in the 1800s so they weren't used by ancient civilizations.  Platinum has an obscenely high melting point of 1,768C - which leaves gold - which melts at 1,068C.  Although metals like Silver have industrial value and over 16,000 uses, gold has around 32 significant uses with 7 major applications.  it's sole benefit is as an investment.  And most of the world's gold bullion is only traded and preserved as an investment.


All the gold in the world (if melted) will produce a 70 foot wide cube.

Virtually all the world's gold is still in circulation or stockpiled.  There's plenty at the bottom of the ocean in shipwrecks but we don't tend to dispose of our gold.  Other metals like silver are not valued highly enough to inspire people to recover it from trash etc.  And we consume it at such a high rate compared to our ability to mine it that Silver will eventually be trading much higher than it presently does.  But gold is tangible.  Wealthy people don't buy big houses or fast cars to impress themselves, they do it to celebrate their wealth and to impress others.  You can't even begin to do this with bitcoin.  So as popular as bitcoin may seem today, it's only worth is as an exchange medium for online purchases.  Essentially it's imaginary as a valuable commodity.  It can't be held and it can't be weighed.  Can it be stolen?  Yes.  Can it be reproduced? It's artificially created using an algorithm so yes.  But can it be forged?  It was supposed to be impervious to forgery but the servers and storage vaults online can (and have) been hacked.

Clearly Bitcoin is more volatile than gold (which is why its value is soaring so quickly)... but it's never going to be an assured safe-haven like gold or at least the cash currency of the day is.  And the way gold is created (by the merging collision of two Neutron Stars) ensures that it is presumably as rare in the universe as it is on Earth.  Gold simply can't be forged or replicated.  

The History channel ran an interesting article that you can see on YouTube that shows how important gold has always been:

https://www.youtube.com/watch?v=Fdg1kvv__X8

When Hitler invaded Poland he did so to capture their Gold bullion stocks... since Germany was bankrupted after WW1.  The Polish resistance held off the Nazis until 75 tons of Gold were taken out of Poland and sent to France for safety.  In June 1940, Hitler invaded Luxembourg, Holland and France.  France surrendered without a fight but the Nazi Gold Squad found the Bank Of France's vaults empty.  The $3B of Gold had already been hidden in 51 caches by French Central Bankers... all of which were within a day's drive from a major port.  83 million ounces of French and Polish gold was smuggled out of Germany and sent to England, Canada and the USA.  When it became probable that Hitler might overrun Britain, Winston Churchill knew that America was remaining steadfastly neutral... so to keep it out of Hitler's hands, Britain sent their gold to Canada.  Using the HMS Belfast, England's entire fortune was hidden in over 2,000 wooden boxes - The gold Gold (worth over $9.9 Billion Dollars) was secretly evacuated under Operation Fish and placed in the Bank of Canada.

Asia, China, Russia and India are presently buying up all the gold stockpiles that Canada, America and Australia have so eagerly sold off.  China is now attempting to manipulate the Saudis into dropping the US Petrodollar and adopting the Yuan as its replacement... fully backed by gold.  Their gold. The same gold they've been stockpiling so eagerly since 2004.

As the saying goes:
"Gold Goes Where The Wealth Is Being Created".

One other thing comes to mind: Bitcoin was designed to self-replicate at a very specific rate.  Bitcoin mining computers can be set up to "mine" the bitcoins but they still reproduce at the same pre-set rate.  Ebay is now awash with Bitcoin mining computer accessories and Miners compete for the tiny bonuses that are created when their combined computer strength releases new bitcoins and their related Block-chain transaction fees.  


https://www.youtube.com/watch?v=GmOzih6I1zs

I think you'll find that it can be fun to "dabble" in Cryptocurrency but real value and investments are likely to remain physical.  Be warned though - that any user error mistakes can result in the loss of Bitcoins and there's no bank or public entity that you can approach in order to resolve a problem.  An error in the receiving address when sending Bitcoin can (and has) resulted in the loss of those Bitcoins.  If you lose your Private Key (used to make transactions with Bitcoin) though the loss of a hard drive or the failure of a Digital Wallet,   These losses eventually means that Bitcoin Currency will eventually be a deflationary one.  And if Wealthy people buy up all available Bitcoin then it will also become impossibly hard for people to transact in future. Right now, Bitcoin Miners operate for the 'free' transaction fees and the Block-reward... but eventually these transactions will attract fees.  Every 4 years the Block-chain is cut in half so that eventually no more bitcoins will be generated or released.  There can only be a total of 21 million Bitcoins in existence with the last Bitcoin being created/mined in 2140.  The smallest unit of exchange is 0.00000001 BTC (called a "Satoshi") - which is one one-hundredth of a million.

Bitcoin, like fiat currency (banknotes) is literally created from thin air.  It's not backed by any asset. In the past, most money was based on how much gold the government had in its coffers yet this method was discontinued when nations went off the Gold Standard. This means Bitcoin is created the same way most currency is produced in the Western world... it's just created from nothing.  And there's no transaction reversals on the Bitcoin network - with is a worry... but it might take the wind out of PayPal for being such a disreputable entity.

As i said before, it might be fun to dabble with but the risks of Cryptocurrency like Bitcoin are considerable.  And I'm personally far more drawn by the allure of Gold.  Perhaps someone could let me know when they have a reasonably priced solid-gold Cryptowallet.  Something that annoys me is the way Bitcoin are selling themselves as identical in value to actual Gold bullion/coinage.  I find this to be dihonest and in someway very scam-like.  Bitcoin is far from a physical element like actual gold and yet the only way it's represented in the news or on websites today is with a token coin (see first image at the top of this article) or by showing it next to solid gold bars and ingots ... or NUGGETS of all things.  That's deceptive.  





The purpose of these images is quite clearly to sway the observer into believing that Bitcoin is like cash in the hand. It's not even a physical asset. And quite a few of the tech-savvy prospectors I've spoken to can't wait for Bitcoin to fail.  

Do you want to know what the real kicker here is?  Google the following Phrase: "How to buy Gold with Bitcoin" and see how many fascinating links there are. I've placed a few below.  It turns out many of the major bullion companies are selling physical Gold and precious metals in exchange for Bitcoin. And there's a very good reason why people are doing this.  Because they trust physical gold more than they trust Cryptocurrency (and I'm sure the Bullion companies would like you to spend big as well).

https://suissegold.com/page/buying-gold-with-bitcoin

https://www.jmbullion.com/investing-guide/buying-physical-metals/bitcoin/

http://www.bitgild.com/

https://www.ainsliebullion.com.au/

nero_design wrote:Perhaps someone could let me know when they have a reasonably priced solid-gold Cryptowallet.

looks like I spoke WAY too soon....






https://www.youtube.com/watch?v=BZREU_0W9FU

https://www.justcryptonews.com/81/hardware-wallet-18k-solid-gold-nano-s-litecoin-and-bitcoin

Thanks for the interesting read. Like prospecting for gold , you can never do enough research. The guy that does the most research can end up being the winner .

My self , Nero and others are trying to make other members aware of Bitcoin and cypto currencies . Money can be made , lots , but you have to be aware of the risks . Only put in what you can afford to risk ,or loose ... The other strategy is to remove you seed money as soon as possible , then you are only playing with your gains .

Bitcoin is trading at over AUD$8,000 it is only going up .

Bitcoin to day AUD$8,495 USD$6228 .

Now $9800

Now AUD$9,969   USD$7,415    last sale  from Independent Reserve .   I bought a little  Bitcoin last night  at AUD$9,000.10    so I have already made 10 %  .

Just remember Bitcoin was about AUD$2,400 in May of this year .

I am not going to be " a smart A*s* " and say I told you so . Read my off topic Bitcoin from the beginning . I could "see" "cense " " feel " that it was going to go up . No government can stop it . It is too big . O.K. the nay sayers would have had a field day if I had been wrong . I would have coped all their flack . They are not saying much these days ... I hope some members of this forum have made some profit from my posts , Nero and others .

I blinked and it went to AUD$9.999.90 going to crack 10 k. soon .

Minermike wrote:I blinked  and it went to  AUD$9.999.90    going  to crack 10 k.  soon .

************"THERE COMES A TIDE IN THE AFFAIRS OF MEN WHICH WHEN TAKEN AT THE FLOOD LEADS ONTO FORTUNE.....................



This is your tide cobber !

sandy2010 wrote:

Minermike wrote:I blinked  and it went to  AUD$9.999.90    going  to crack 10 k.  soon .

************"THERE COMES A TIDE IN THE AFFAIRS OF MEN WHICH WHEN TAKEN AT THE FLOOD LEADS ONTO FORTUNE.....................



This is your tide cobber !

Bring on high tide, I got in back in june you can't wipe the smile off my face

There is a guy that has 3 Bitcoin for sale at AUD$500,000 each ! I wounder how long he will have to wait ???

"People Are Now Searching How to Buy Bitcoin More Than How to Buy Gold"

http://fortune.com/2017/11/07/bitcoin-asset-buy-gold-cme/

(see link above for video)
"More people are now searching online for how to buy bitcoin than they are expressing interest in buying gold, according to a new report.

Per Bloomberg, the surge in the cryptocurrency’s attraction is coinciding with a well-performing U.S. stock market to reduce interest in gold, that traditional safe haven. The news service looked at Google Trends to discover that “buy bitcoin” is now a more popular search term than “buy gold.”

It’s not hard to see why. Gold has appreciated this year by 11%, while bitcoin has gone up more than 600%, hitting $7,400 on the weekend before retreating below $7,000 (it’s $7,193 at the time of writing on Tuesday morning).

According to a New York Times report, big Wall Street investors are also “pouring their money” into the virtual coin, with the number of hedge funds focusing on cryptocurrencies increasing this year from 30 to almost 130.

The Chicago Mercantile Exchange (CME) Group said last week that it wanted to start trading bitcoin futures—a move that appeared to give the cryptocurrency greater legitimacy, but that also prompted some to express fears over the implications of bitcoin derivatives, given the low level of regulation in the market.

CME chair Leo Melamed said Tuesday that bitcoin will probably become an asset class like gold or stock. “We will regulate, make bitcoin not wild, nor wilder. We’ll tame it into a regular type instrument of trade with rules,” he told Reuters.

However, regulators still have to give their approval before CME’s plans can go ahead. And there are plenty of people, such as JPMorgan chief Jamie Dimon, who say the whole thing is a bubble that will blow up in investors’ faces."

The experts in finance claim that  Bitcoin is definitely a bubble and is one of the rare Bubbles you can see well in advance of any pending disaster.  The true value of the "rare digital commodity" is controlled why the "Whales" who own most of Bitcoin.  As soon as a Whale has to cash in, the price will cascade and the bubble will commence bursting.  There's possibly another dozen scenarios which will cause it to pop.  Even the "creators" claim there's a 20% chance of Bitcoin becoming worthless overnight and that it could happen at any time.  The question will then be: When will you sell?  




Three thousand Bitcoin ATMs to launch across Australia

https://www.itnews.com.au/news/three-thousand-bitcoin-atms-to-launch-across-australia-472448

Almost 3000 Bitcoin automatic teller machines will launch across Australia as part of a venture between an ATM operator and a blockchain service provider.

The joint venture between StarGroup and DigitalX will see 2900 existing ATMs across Australia equipped with technology that will allow Bitcoin enthusiasts to buy and sell the digital currency. StarGroup has 500 ATMs and a further 2400 through its StarLink subsidiary nationally.

The machines will be "two-way" ATMs, meaning users can acquire Bitcoin as well as convert their holdings to AUD cash instantly.
The companies say this will solve a pain point for Bitcoin enthusiasts, who generally need to wait days using existing digital currency exchanges to cash out.



BUSINESS INSIDER AUSTRALIA:
Bitcoin's 'bubble' is unlike anything we've seen before


https://www.businessinsider.com.au/bitcoin-price-bubble-unmatched-2017-6?r=US&IR=T

There are still some question marks about whether bitcoin is in a bubble. But the speed of its price growth is already nearly unmatched. The cryptocurrency has surged 162% in very volatile trading this year amid continued demand. But as the chart below illustrates, bitcoin’s longer-term rally by as much as 1,000% was swifter than homebuilder stocks in the lead up to the housing crash.

Jeffrey Kleintop, the chief global investment strategist at Charles Schwab, said that “the 10-year buildup is important to how embedded the bubble becomes and how much impact the bursting has on the economy and markets.”

In other words, this is simply unprecedented. But arguably, a bitcoin crash probably won’t have the same ripple effect on the economy as some other assets would.  Billionaire Marc Cuban is among those who have said bitcoin prices are in a bubble. “When everyone is bragging about how easy they are making $=bubble,” he tweeted.

Ethereum, another cryptocurrency, is up by more than 3,000% this year.



Bitcoin is a 'speculative bubble' and unlikely to become a real currency, UBS says

https://www.cnbc.com/2017/10/17/bitcoin-is-speculative-bubble-and-unlikely-to-become-a-currency-ubs.html

Bitcoin is a 'speculative bubble' and unlikely to become a real currency, UBS says

   *Cryptocurrencies like bitcoin are in a "speculative bubble," according to UBS
   *The investment bank said that it is "highly doubtful" that these will ever become mainstream currencies
   *But blockchain technology could have a "significant impact" on many industries, UBS says

Published 7:08 AM ET Tue, 17 Oct 2017 NBC


Cryptocurrencies like bitcoin are in a "speculative bubble" and are unlikely to become mainstream currencies, according to UBS.

There are over 1,000 cryptocurrencies, bitcoin being the biggest by market capitalization, and many have seen huge rises in value over the past few years. Bitcoin for example is up over 470 percent year-to-date.

"We think the sharp rise in cryptocurrency valuations in recent months is a speculative
bubble," UBS wrote in a white paper published last week.

The investment bank said that it is "highly doubtful" that these will ever become mainstream currencies.

"The need for companies and individuals to pay tax receipts in government-issued currency, and the potentially unlimited crypto-money supply, pose significant barriers to widespread adoption," the note said.

UBS said that governments set taxes and this is the largest single income for almost any economy. Therefore, people will always want government-backed currencies to pay tax. Even though a company could accept cryptocurrency as payment, it would need to pay different taxes in government-backed currency. And so the company would be taking an exchange rate risk.

"If governments refuse to accept cryptocurrencies for tax payments, the single most important transaction in an economy, that significantly reduces demand for cryptocurrencies. Governments are highly unlikely to ever take this step," UBS said.

Currencies also act as a store of value, which is achieved when supply of currency matches demand, according to the note. But this is not possible with cryptocurrencies as supply cannot go down. And while the supply of individual cryptocurrencies cannot be readily changed, the overall supply of them can be "infinitely increased" by the creation of new virtual currencies.



"The possibility of limitless supply of different cryptocurrencies creates the risk of further collapses in value. If a new cryptocurrency were created which is easier to 'mine,' and which allows more transactions to take place more quickly, demand for that cryptocurrency might naturally increase," UBS analysts said.

"Existing cryptocurrencies would likely see demand fall; a cryptocurrency that has been superseded by a new cryptocurrency with superior technology has little value. As the supply of existing cryptocurrencies cannot fall to match the decline in demand, the result would be a collapse in the value of existing cryptocurrencies."

'Almost certainly a bubble'

UBS described what makes a "bubble" in any asset and concluded that cryptocurrencies, with their massive price rises, meet the definition.

"The relatively high volume of cryptocurrency turnover, against limited real-world use, suggests that many buyers are seeking speculative gain, never intending to use cryptocurrencies to make a real-world transaction," the investment bank said.

"With each of the other characteristics of typical bubbles in evidence, a twenty-fold increase in bitcoin prices in just two years, and an absence of any fundamental economic backing, cryptocurrency prices are almost certainly a bubble."

UBS is not the only organization in the banking world to pour cold water over cryptocurrencies. JPMorgan Chase's CEO Jamie Dimon has previously called bitcoin a "fraud" that "won't end well."

Blockchain 'significant impact'

Despite its skepticism on cryptocurrencies, UBS said blockchain technology is likely to have a "significant impact" on a number of industries.

The blockchain is the technology that underpins cryptocurrencies. In the case of bitcoin, its a distributed ledger that records all transactions. It is tamper-proof and the technology is hailed as something that could be used in a number of different processes across many industries.



Bitcoin is “Clearly in a Bubble”: Societe Generale Deputy CEO


https://www.cryptocoinsnews.com/bitcoin-clearly-bubble-societe-generale-deputy-ceo/

CryptocoinsNews
Samburaj Das on 06/11/2017

As bitcoin price continues to trade at unprecedented levels near $7,500, the deputy chief executive of French banking giant Societe Generale has opined the cryptocurrency is in a bubble.

In an interview with Bloomberg, Societe Generale deputy CEO Severin Cabannes was asked about bitcoin’s market valuation in a year where the decentralized cryptocurrency has gained over 650% in value, so far.

The banking executive claimed bitcoin is in a bubble while adding that the bank is neither investing nor interested in the cryptocurrency.

Cabannes stated:

  "Bitcoin today, is in my view, clearly in a bubble…very clearly. But we don’t know very well what are the market drivers behind this price valuation."

Cabannes comments mirror those offered by Swiss banking giant Credit Suisse CEO Tidjane Thiam who claimed bitcoin was “the very definition” of a bubble, last week.

Bitcoin’s ongoing rally is fueled by the CME group’s plan to introduce bitcoin futures before the end of the year. The world’s largest exchange owner’s intention to list a bitcoin futures contract has led speculators to bullishly predict the “opening of floodgates of institutional demand”, making bitcoin “attractive” to Wall Street.

Still, bitcoin continues to have detractors despite growing awareness and adoption of cryptocurrencies globally as a method of payment and a store of value among retail everyday investors. JP Morgan chief executive Jamie Dimon dismissed bitcoin as a “fraud” and threatened to fire employees adopting or trading the cryptocurrency.

Meanwhile, Cabannes revealed Societe Generale is “very interested, not in bitcoin, but in blockchain technology” pointing to endeavors such as trialing a blockchain-powered trading of liquified natural gas in the global trading arena as well as other prototypes “within the bank.”

He went on to add:

   "We are not really very keen to invest in bitcoin, but we are very keen to invest in blockchain technology."

[BELOW] This is a very interesting (and recent) video that points out the weaknesses of Cryptocurrencies and how they have been problematic in the past.  Catalyst number 2 (in the video) demonstrates that another Cryptocurrency could easily crash, pulling down all the others with it as it falls.  Cryptocurrencies are linked directly to Fiat currencies for market value (eg US dollar) ... so if the channels which link them to determine value are removed, the system Cryptos will tumble and burn.




https://www.youtube.com/watch?v=uyoABcfdyAA

Thanks for the post, Nero , the more info. we get the better our judgment .

Minermike wrote:Thanks for the post, Nero ,   the more info.  we get the better  our  judgment  .    

Thanks Minermike. There's a few members here that I suspect have money in both Gold AND Bitcoin.
I created this thread seperate to your own because i wanted to post a large number of links and sources and it didn't seem right to dump it on your own Bitcoin thread.

I'm quite interested to see how Bitcoin will fare. There's so much that could go wrong with it and yet it's immensely popular. I've been hot and cold for it myself but I can't see it as a viable investment while it's so obscenely volatile.

Over dinner last Saturday with friends, the subject of bitcoin came up in the restaurant and the people I was with included people with careers as militarily and political tactical advisory roles. These guys have years of experience with international markets from a military perspective - and they were somewhat amazed but puzzled by Bitcoin. One asked how people could convert bitcoin to cash when it was simply being hoarded by Whales who were trying to push the prices up. The only reason Whales would want to push to prices of Bitcoin up is if they intend to sell in order to maintain their profit gains. The conversation quickly turned back to more mundane things but it was interesting to see how many people at the table had a cursory curiosity in Bitcoin but deeply distrusted its liquidity compared to precious metals.

Hey Nero
Bravo once again on an awesome thread !!! you appear to be somewhat of a perfectionist with things you do, eg your photos, your posts, your research.
Good job,

I'm amazed with Bitcoin I also keep hearing that the "Experts" say /predict it's going to crash & that it's not a legitimate currency.

These same experts probably all claimed that "Y2K" was going to destroy everything, which had a lot of folks convinced it was the end as we knew it .

What I'm getting at is that experts are just that, experts in their own field until they encounter something so different & hard to comprehend so they denounce it!

Big Banks & other institutions, Investement houses, denounce it because they can't control it !!!
I read somewhere recently that Bitcoin is likened to a "Social Media" such as FB & as such is basically controlled by the people I guess that's why the Bankers denounce it !!!! because they are use to controlling the people

On the point Bitcoin is not a legitimate currency hmmmm, lets look at the younger cousin "Etherium" you see there's this thing called the "Etherium Alliance" which is made up of 100 or so of the top corporations in the world, who use it as a legitimate trade currency there are many businesses I'm sure using cryptocurrencies for legitimate trade.

As you can see I'm not in the same league as you mate when it comes to adding the info
Keep the info coming it's very informative, thanks.

I hold Bitcoin, Ethereum , Monaco and Wagerr . Like a lot of people , I am waiting to see what happens with this Bitcoin fork that is coming up .

Minermike wrote:I hold  Bitcoin, Ethereum , Monaco and Wagerr .    Like a lot of people , I am  waiting to see what happens with this Bitcoin fork that is coming up .

Hey Mike.

It was just announced that the fork has been cancelled !!!!!!!!!!!!!!!!!!!!

Not exactly sure what that will mean for the market???

Thanks for that , I had not seen it . Had a bit of a read and I think the price of Bitcoin will go down in the short term . People will be selling Bitcoin and buying into the others. Did read at one time the price of Ethereum will go higher than Bitcoin , who knows ???

Minermike wrote:Thanks for that , I had not seen it .   Had a bit of a read  and I think  the price of Bitcoin will go down in the short term .  People will be selling Bitcoin   and buying into  the others.   Did read at one time the price of  Ethereum   will go higher than  Bitcoin  , who knows ???

Mike,
The little that I have learned about ETH, is that age for age it almost matches BTC, with ETH being much younger, I'm tipping that it will at least reach similar heights as BTC IMHO there has to be another crypto that reaches those levels & ETH is well placed to do just that, once I have reached considerable profit well more than present I will be buying a reasonable amount of ETH to sit on

I have more Ether than Bitcoin. Looks like it will be a good idea to hold onto it ...

This story may be of interest...

https://www.wired.com/story/i-forgot-my-pin-an-epic-tale-of-losing-dollar30000-in-bitcoin/

DrDuck wrote:This story may be of interest...

https://www.wired.com/story/i-forgot-my-pin-an-epic-tale-of-losing-dollar30000-in-bitcoin/

G'day folks,
Don't post much these days..nothing much of interest to post about as i'm dealing with a health issue at the minute,but that's ok

Just had a read of the story in Dr Duck's link,and wow that is one hell of a story right there I don't fully understand the Bitcoin thing but reading that story scares the bejeezus out of me..i'll stick to gold

Bitcoin cash has gone from AUD$869 to last sale AUD$1,380 max. AUD$1,540 in the last 24 hours. No, I do not have any ....

A new hardfork from the bitcoin blockchain has been ifficially lauched. Its called bitcoingold, so as anyine who owns a bitcoin gets one of these for free the arguement has been settled...Bitcoin is now gold...

https://finance.nine.com.au/2017/11/14/07/25/bitcoin-rebounds-after-value-dropped

Saw this today.

Cheers

Doug