Harringay, Haringey - So Good they Spelt it Twice!
Bit coin / lite coin
Lite coin was made by one of the google guys and will 'print' four times as much currency than bit coin, uses slightly more advanced code and is marketed as the 'silver' to the bit coin 'gold' and has lots to go to catch up with the bit coin price relatively so some think offer an incredible investment.
Bit coin cashpoints have been rolled out in Canada. Lite coins will be supported by more platforms in the coming months.
Anyone temped ? Bit coins are almost at. $500 each. Lite coins are around $5. It's essentially just computer code that can very easily and cheaply sent around the world. You can also mine the coins by letting your computer be used to support the currency and earn coins whilst doing it.
You can buy from ebay easily enough or lots of other peer exchanges.
Also you can buy tiny fractions of a bit coin which comes as a card with a QR code. Thought it would make a pretty cool Christmas present ....
Replies to This Discussion
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Permalink Reply by Hugh on
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This from Dominic Frisby in my mailbox the other day:
The one big speculative story of the last few years - bitcoin
Forget prime central London property or the US stock market. Forget the prospector who struck gold or oil. Forget the entrepreneur who brought you this widget or that website. The game to have been playing these last few years is bitcoin.
Back in 2009 I was approached by a number of people about it. From presenting a legitimate challenge to existing monetary models, to freeing up trade and exchange, it did everything a form of money should and more.
"Yeah," I said. "It's a crypto... what? Digital... right, ok." The sales pitch wasn't hooking me. As soon as I heard it had doubled and more, I lost interest. I don't like chasing things that have doubled, particularly if I am not sure I understand them.
I switched my focus back to gold. I'm a bloke. I can only concentrate on one thing at a time.
More fool me. What I was shunning at a dollar because it had doubled, is now trading at $390! Me, Mr Monetary Reform, missed the wretched bitcoin boat.
There's the story of Kristopher Koch, the Norwegian student who bought 5,000 bitcoins for $27 in 2009 as part of his thesis. He forgot all about them, and only found them last month. Now he's rich: 5,000 times $390 is $1,950,000!
I could have invested five hundred quid and ended up with enough to buy a house in Chelsea, a holiday home in Cornwall, funded my dad's West End musical, my own zombie film, and had enough left over to start a foundation to rehabilitate bankrupt junior mining companies.
Oh, well. Time to get over what might have been and look forward. Should we be buying bitcoin now?
In spite of everything, I'm still not a big buyer of bitcoin
Barely a month ago I wrote about bitcoin. I admired its brilliance, but I also recommended caution. It was $130 or $140 then, or just above. It's pretty much tripled since. Wrong again.
But I'm not changing my mind now.
People get very passionate about their investments. And when the investment has a political overtone to it – which alternative forms of money such as gold and bitcoin certainly do - that passion goes into overdrive. Pass a negative opinion about gold or bitcoin and you risk the wrath of their owners.
Still, I have to say, for all its qualities, I think there is too much speculative excess in bitcoin at the moment. People find it hard enough to value gold – but how do you value bitcoin? It's got a limited supply in its favour (there are about 12 million so far, and an upper limit of 21 million). But could someone find a way of replicating them? I'm told not, but who knows?
And there are plenty of other risks. Quite apart from the recent closure of online black market Silk Road, bitcoin heists are a fairly regular occurrence. Tech website Pando Daily notes that a bitcoin exchange in China shut down last month, taking about $4.1m in users' money with it.
I'm not saying it is, but it could turn out to be a huge bubble, a Ponzi scheme even. If it does all unravel, it will look obvious after the event.
The bigger problems facing bitcoin
But assuming bitcoin is here to stay, there are two bigger issues. The first is that bitcoin is meant to be a medium of exchange. That's what it's so useful for.
Trouble is, I hang on to the few bitcoins I have. They're rising in value so fast, I'd rather spend my pounds or dollars. I've also made it possible to buy my book with bitcoins – in fact, I'd rather receive bitcoins than pounds.
This is a form of Gresham's Law at work: bad money driving out the good. In Sir Thomas Gresham's time (the 16th century), this referred to people's tendency to hoard currency with a higher precious metal content, and spend 'bad' money instead.
Clearly, this is one of the issues with being an independent currency in a world where central banks are hell-bent on devaluing their own paper. I don't think it's entirely coincidence that bitcoin's recent surge in value coincides with the European Central Bank cutting a key interest rate from 0.5% to 0.25%. There's also the recent International Monetary Fund report which suggested it would be a good idea to impose a one-off wealth tax to recapitalise debt-ridden nations. Perhaps that has driven some bitcoin buying too, as Europeans seek to hide wealth.
But if bitcoin is to become useful as a more mainstream medium of exchange – rather than one that is preserved for transactions of a shifty nature – its value has to at least stabilise, if not fall. So that argues against its stellar rise continuing forever.
The second concern is that people are starting to take bitcoin seriously. One of the senior economists at the Chicago branch of the US Federal Reserve Bank has even written a research report on them. And it's not dismissive either – in fact, it shows a very good understanding of the currency and its potential.
This is all very good. But as I mentioned before, the more seriously bitcoin gets taken, the more that governments will come after it. They may not be able to crush the crypto-currency concept now that it's out there. But they may well be able to tame it with regulation. When push comes to shove, there's no way that governments are going to cede control over one of the key things that gives them their legitimacy and power – the monopoly over currency issuance.
All in all, I'm sticking with my call of last month. Own some bitcoins. Accumulate more if you can, but only with speculative funds you can afford to lose. I suspect a rollercoaster ride lies ahead.
It's actually quite easy to buy bitcoins, though it looks quite daunting at first. In most cases you open an account, deposit some money and you're off. The world's largest exchange is Mt Gox. Blockchain lays it out conveniently for UK users.
Bitbargain also has an online tutorial. It takes a bit of getting used to – start with very small amounts while you get to grips with the process – but it's actually wonderfully simple.
Dominic Frisby's first book, Life After The State, is now available to buy at Amazon or Unbound.
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Permalink Reply by Justin Guest on
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Yeh FPR, with the criminal fraternity acting as the Reserve Bank as their tool to launder money??? Just saw that they busted £1,000, but would I really want to invest in anything that I did not know what it was, who was behind it, and looked to be entering some form of speculative bubble phase?
I find it amazing that such a parallel currency universe can exist, with nothing substantive behind it than speculation.
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You are right, I do not understand it. I seem to remember reading that something like half of them are owned by crims using the dark net, no?
I understand how a £ I hold may have a value, even without a gold standard/reserve system in place, but a bit of computer code? There is no intrinsic value, beyond speculation. Democratic or not. What am I missing?
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But it does, it has a promise to pay the bearer, which means that at the end of the day the UK Gov will step up and make good on that promise- though you take a view individually as to how they can do this if it all goes wrong.
The point I am making is that the value of a bitcoin can be here today, and (poof) gone tomorrow before you know what has hit you. Both are based on confidence, the question is how assured can you be?
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Permalink Reply by John McMullan on
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Money is a complete mind-fook if you think about it. Bitcoin is more closely related to gold than Sterling. It is mined, it gets harder to mine as it is mined, it is rare, it is a store of value, it is a medium of exchange.
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Sure, but where does the confidence in its value come from John? I feel gold is a bit of a red herring too, but folks seem to cling to it in times of dread, and you can physically hold it (gold has some tangible uses and hence does have some intrinsic use value).
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Permalink Reply by John D on
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So, if say £1 was = 1 lite coin last week, the house I could have bought last week for £800 000 will this week cost me £3 000 000 ? Sounds like Weimar hyperinflation
How much would a wheelbarrow cost in lite coin ?
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FPR. Appreciate what you are saying, but your argument here is more of an argument against the confidence in Sterling and other conventional currencies, rather than an argument for confidence in bit coin...
Your point to John below (or is it above?) about volatility and the fact several crypto millionaires have been created is interesting because it make me thing of two things:
- Given there is no fundamental value or security/confidence basis in virtual currencies and some folks are making mucho money out of it already then this starts to quickly look like a massive Ponzi scheme, and if you are the last one holding the bit coin when the music stops you are screwed
- The fact that ordinary punters like you and I may be 'piling into' bit coins is classic bubble behaviour, those ramping the asset class have or are already taking profit and getting out, meaning that (again), when the music stops...
Basically, investment in a baseless asset class such as bit coins is a zero sum game- the question is on which side of the equilibrium will you find yourself? Good luck with your pension planning etc with this, I will happily watch from the sideliners and we can come back to this in 12 months and we can see if I have made a fatal error. Don't get me wrong, I do not disagree with your analysis about how the current banking system works, but I do not think this bit coin phenomena is really ready to replace it with something more equitable and transparent.
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I notice this thread has gone quiet in the last 14 days, so I though I would liven it up again. those of you who invested have been thoroughly shagged, those of you that did not can sit back smug that you have not thrown your money at various organised criminal gangs globally.
http://www.bbc.co.uk/news/technology-25428866
Essentially- "Bitcoin has fallen to less than half the value it recently traded for, following reports of fresh action by Beijing to restrict trade in the virtual currency".
Now, you could state (with some justification) this is just short term volatility. I would suggest it is in fact a reflection of the bit coin's true value given the fact it has no safety net and is at the whim of politicking like this... Caveat emptor (OAE would be proud I managed to get some Latin in there!)
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Well if you're bored, you could watch it in real-time here. Not much in finance is that volatile.
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Out of interested, whilst recommending to others to buy, how much did you buy yourself FPR?
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FPR- I wish you the best of luck, and feel free to come back to me when you have cashed in and paid off your mortgage etc. No doubt if you do you will take flight and it'll be off to Crouch End for you..
You will forgive my cynicism, but as a financial professional and having worked in the city I see so many parallels here with the way that ordinary folks are effectively mugged of their hard earned cash.
PS, don't forget when investing, you do not invest as much as you can afford, but as much as you can afford to lose!
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