Has anyone dabbled in Bitcoin?

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Has anyone dabbled in Bitcoin?

Post by shawnd1984 »

I've been doing some research about Crytocurrencies, and am in the middle of reading "The Age of Cryptocurrency: How Bitcoin, and Digital Money are Challenging the Global Economic Order". I'm not really a techie, but am curious if anyone has dabbled in acquiring bitcoin? There's actually a convenience store down the road that has a bitcoin ATM. Not finished with the book yet, but I can anticipate wanting to acquire some.


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Re: Has anyone dabbled in Bitcoin?

Post by Gergall »

Could be a fun hobby of sorts, definitely not a substitute for a more reliable retirement plan :)
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Re: Has anyone dabbled in Bitcoin?

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Gergall wrote:Could be a fun hobby of sorts, definitely not a substitute for a more reliable retirement plan :)
Yeah, I wouldn't treat it as an "investment" per se...but I'm only 1/3rd away from the book. I already work in finance, and it is baffling how fragile everything is, it's all just based on trust...take it away, and it's worthless.
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Re: Has anyone dabbled in Bitcoin?

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shawnd1984 wrote:it's all just based on trust...take it away, and it's worthless.
Isn't that true of all currency?
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Re: Has anyone dabbled in Bitcoin?

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puck71 wrote:
shawnd1984 wrote:it's all just based on trust...take it away, and it's worthless.
Isn't that true of all currency?
All currency except bitcoin and other crypto currencies

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Re: Has anyone dabbled in Bitcoin?

Post by Gergall »

Please explain what value bitcoin has if no one cares about it.

At least gold and platinum have practical engineering uses.
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Re: Has anyone dabbled in Bitcoin?

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caldred wrote:
puck71 wrote:
shawnd1984 wrote:it's all just based on trust...take it away, and it's worthless.
Isn't that true of all currency?
All currency except bitcoin and other crypto currencies
The difference with these currencies is there is no true "Third party" verifying this currency as "trust worthy". I may be butchering this point, but the book illustrated the amount of parties involved with a standard credit card transaction. Also does a great job discussing how currency involving third parties can become "Untrustworthy", citing the case with Argentina a few years back. Turns out that simply printing money isn't a solution (which we all know, but for political reasons, we tend to ignore).
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Re: Has anyone dabbled in Bitcoin?

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Gergall wrote:Please explain what value bitcoin has if no one cares about it.

At least gold and platinum have practical engineering uses.
It's more widely used than you'd think, but very much in it's infancy. Here is a "value proposition" from the creator.

"Satoshi created Bitcoin not with a set inflation rate for eternity, but with a fixed supply. The value proposition of having a fixed supply is a defining characteristic and sets it apart from fiat. Bitcoin represents the value of gold but with the power of the internet."

Here is some other arguments for it:

"Irrevocability
Payments are not subject to the whims of a third party to overrule the transaction. This allows for greater fraud protection for the receiver. In transactions where the payer is unknown and the merchant is well-known and trustworthy, this works well. It also works well when the transaction can be handled directly and clearly.
Cheap Payments
One of the draws of many to Bitcoin is the value proposition of cheap payments. Bitpay and Coinbase are prominent in pushing this as the value proposition to merchants. Accepting Bitcoin is cheaper than accepting a Credit Card.
Fundamental Values
While the first two value propositions do exist fundamentally within Bitcoin and encoded in the protocol, the final one is not one that can be guaranteed. Users should not be surprised when this value proposition changes. Distributed consensus is expensive to maintain, and while this is paid through by inflation and diluting existing supply, it is partially offset by transaction fees. This is guaranteed to change with time, where the network security will be provided more and more by transaction fees."
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Re: Has anyone dabbled in Bitcoin?

Post by Gergall »

Those are interesting tidbits of information but I don't feel that they addressed my post. Not even a little bit, really.

Also: There would be nothing wrong with saying "If nobody cares about it, it has no value." That would be, like, a totally normal thing that you can say about anything. It wouldn't be disparaging to bitcoin.

I'm interested to hear what caldred was trying to say, though.
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Re: Has anyone dabbled in Bitcoin?

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Gergall wrote:Those are interesting tidbits of information but I don't feel that they addressed my post. Not even a little bit, really.

Also: There would be nothing wrong with saying "If nobody cares about it, it has no value." That would be, like, a totally normal thing that you can say about anything. It wouldn't be disparaging to bitcoin.

I'm interested to hear what caldred was trying to say, though.
Wasn't taking offense or even defending it as valuable. The truth is that vendors are starting to accept it, so the brain behind those institutions see it as something to at least recognize. Agree on what Caldred has to say as well.
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Re: Has anyone dabbled in Bitcoin?

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Much to my surprise, a lot of big time companies accept bitcoin or gift cards purchased with bitcoin....

Microsoft, Subway, Dell, Overstock, Gamestop, JcPenney, Whole Foods...and oh, Amazon has a strong market of gift cards in exchange of bitcoin. The book I have is from 2015...
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Re: Has anyone dabbled in Bitcoin?

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shawnd1984 wrote:
Gergall wrote:Those are interesting tidbits of information but I don't feel that they addressed my post. Not even a little bit, really.

Also: There would be nothing wrong with saying "If nobody cares about it, it has no value." That would be, like, a totally normal thing that you can say about anything. It wouldn't be disparaging to bitcoin.

I'm interested to hear what caldred was trying to say, though.
Wasn't taking offense or even defending it as valuable. The truth is that vendors are starting to accept it, so the brain behind those institutions see it as something to at least recognize. Agree on what Caldred has to say as well.
I guess now I will now say that it is valuable haha
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Re: Has anyone dabbled in Bitcoin?

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shawnd1984 wrote:The difference with these currencies is there is no true "Third party" verifying this currency as "trust worthy".
the US dollar is backed by the full faith and credit of the US gov't. that is a verification of its trustworthiness. of course, gov'ts can fail and lose their trustworthiness. but bitcoin has yet to gain trustworthiness.

i mean, ALL currency (not just fiat currency) is conceptual. it's a representation (and method of storage) of labor or a natural resource (or any kind of value, really). it's interesting to me that if you google "bitcoin" one of the recommendations is "bitcoin to usd" which means bitcoin is not useful as a method of storage for value, since really it's just pegging to the dollar.

i don't want to disparage bitcoin too much, because really a cryptocurrency isn't a bad idea, and it might be very useful in the future. but you often see a lot of things correlating among its proponents - conspiratorial distrust of institutions (govt and/or financial institutions), advocacy for the gold standard/criticism of fiat currency, and so on. these are silly positions and people that hold them are silly people. fiat currency is crucial to create stable markets and protect consumers from bad actors. with representative or commodity currency, huge swings in the currency's market or the markets it represents can destroy consumer confidence in the currency, create huge volatility, and crash markets. let alone the question of foreign meddling which is why the US finally abandoned the gold standard in 1971.
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Re: Has anyone dabbled in Bitcoin?

Post by maxbeedo »

My company has had to change its policy on returns of video cards because of a very recent rash of people trying to jump into bitcoin mining. None of these people did their research first and thought that they could make their money back super fast, when in reality you're lucky to get your money back for the hardware needed to do the mining in 1.5-2 years (assuming nothing breaks when at 100% usage for that long, which usually requires a special AC room kept at 55-60 degrees). We've had multiple people buy a cheap $60 computer case and then wonder why it won't fit 4 triple-fan video cards. One person bought 13 GTX1080Tis ($700+ each), then realized how long it was going to take just to earn 1 bitcoin and returned them all (plus I think that card isn't great for mining anyway). A former employee of mine built one system for this about 3 years ago and has made about $800 profit in that time, so it can be "worth it" eventually.

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Re: Has anyone dabbled in Bitcoin?

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maxbeedo wrote:My company has had to change its policy on returns of video cards because of a very recent rash of people trying to jump into bitcoin mining. None of these people did their research first and thought that they could make their money back super fast, when in reality you're lucky to get your money back for the hardware needed to do the mining in 1.5-2 years (assuming nothing breaks when at 100% usage for that long, which usually requires a special AC room kept at 55-60 degrees). We've had multiple people buy a cheap $60 computer case and then wonder why it won't fit 4 triple-fan video cards. One person bought 13 GTX1080Tis ($700+ each), then realized how long it was going to take just to earn 1 bitcoin and returned them all (plus I think that card isn't great for mining anyway). A former employee of mine built one system for this about 3 years ago and has made about $800 profit in that time, so it can be "worth it" eventually.
Yeah, I feel like I have a semi-decent grasp on this after reading that book, but I think the mining bubble is a bit too late. There are entire warehouses that were created a few years ago just to house these computers who do nothing but mine for bitcoin. From my understanding, there is a unique "code" whenever a bitcoin transaction occurs, and these super computers are simply generating trillions of random combinations per second hoping to stumble on this code, thus verifying the transaction as legitimate and adding it to the giant ledger (blockchain) and thus get the reward of bitcoin (at the time of my reading, it was 25, but I think it's less now). It is essentially a lottery where tons of people are hoping to use their random generator computers to match a code to a transaction and thus "mine" new bitcoin. If I remember the book correctly, I think this will only happen until 2130 or so, so there will eventually be a finite supply of bitcoin. The energy required to 'mine' these coins is very costly in the form of electricity, so there is a very real value to bitcoins themselves (much like how US money used to be tied to the gold supply). I might be totally butchering this, but I think I'm kind of close.
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Re: Has anyone dabbled in Bitcoin?

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The energy required to 'mine' these coins is very costly in the form of electricity,
Yeah my understanding was that if you just set up a computer in your house, you'll never break even if you remember to factor in your electric bill. The price of bitcoin is driven down by people with more efficient operations, and also by people in other parts of the world where electricity is cheaper (but bitcoin is no less valuable). You don't really want to be in a 1st world country for this.
If you live in an apartment where electricity is included, then I guess you may as well mine bitcoin. But unfortunately it's not as simple as just downloading a program and running it (unless things have changed since when I looked into it years ago).

It is essentially a lottery where tons of people are hoping to use their random generator computers to match a code to a transaction and thus "mine" new bitcoin.
Yes, if you go it alone you are going all-or-nothing. If you manage to hit a bitcoin you get a lot of money, otherwise you get 0. My talk about breaking even above is based on the expected average over a very long period of time. You could get really lucky and find a bitcoin in 5 minutes.
I understand that there are groups to provide a steadier income. You join a group and as a team you all find bitcoin at a more reliable rate and the value is automatically distributed based on each team member's contributed efforts. Over a very long period of time the result is the same, but over a short period of time you get a small steady income instead of lottery tickets.
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Re: Has anyone dabbled in Bitcoin?

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Gergall wrote:
The energy required to 'mine' these coins is very costly in the form of electricity,
Yeah my understanding was that if you just set up a computer in your house, you'll never break even if you remember to factor in your electric bill. The price of bitcoin is driven down by people with more efficient operations, and also by people in other parts of the world where electricity is cheaper (but bitcoin is no less valuable). You don't really want to be in a 1st world country for this.
If you live in an apartment where electricity is included, then I guess you may as well mine bitcoin. But unfortunately it's not as simple as just downloading a program and running it (unless things have changed since when I looked into it years ago).

It is essentially a lottery where tons of people are hoping to use their random generator computers to match a code to a transaction and thus "mine" new bitcoin.
Yes, if you go it alone you are going all-or-nothing. If you manage to hit a bitcoin you get a lot of money, otherwise you get 0. My talk about breaking even above is based on the expected average over a very long period of time. You could get really lucky and find a bitcoin in 5 minutes.
I understand that there are groups to provide a steadier income. You join a group and as a team you all find bitcoin at a more reliable rate and the value is automatically distributed based on each team member's contributed efforts. Over a very long period of time the result is the same, but over a short period of time you get a small steady income instead of lottery tickets.
I think a popular strategy is to do what people in offices do when the Powerball gets high. They pool their money together and then split the winnings (except they never get to, because it's the lottery and it suckers poor people into spending money for the slim chance of 'making it', but that's another thread). So they essentially pull their resources together and any successful mining that occurs gets split among everyone in the pool. I think a more consistent strategy would be simply exchanging bitcoin on the market, which is obviously less volatile now than in the past. I think ethereum (sp?) just crashed, which was bitcoins biggest crypto-competitor. I work for a very large bank, and cryptocurrency/blockchain technology is just starting to be explored here.
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Re: Has anyone dabbled in Bitcoin?

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shawnd1984 wrote:I think a popular strategy is to do what people in offices do when the Powerball gets high. They pool their money together and then split the winnings (except they never get to, because it's the lottery and it suckers poor people into spending money for the slim chance of 'making it', but that's another thread). So they essentially pull their resources together and any successful mining that occurs gets split among everyone in the pool.
I thought that was exactly what I described.

Except that unlike a manually organized office pool that probably has 20 people going in together, an automated bitcoin pool could at least theoretically have tens of thousands of users, so many users that instead of being anything like a lottery it's more of just a small steady income stream (if your rig operates efficiently enough). The more users that join, the steadier it gets.
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Re: Has anyone dabbled in Bitcoin?

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Gergall wrote:
shawnd1984 wrote:I think a popular strategy is to do what people in offices do when the Powerball gets high. They pool their money together and then split the winnings (except they never get to, because it's the lottery and it suckers poor people into spending money for the slim chance of 'making it', but that's another thread). So they essentially pull their resources together and any successful mining that occurs gets split among everyone in the pool.
I thought that was exactly what I described.

Except that unlike a manually organized office pool that probably has 20 people going in together, an automated bitcoin pool could at least theoretically have tens of thousands of users, so many users that instead of being anything like a lottery it's more of just a small steady income stream (if your rig operates efficiently enough). The more users that join, the steadier it gets.
You did...i just didn't read the second part of your post.
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Re: Has anyone dabbled in Bitcoin?

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shawnd1984 wrote:Much to my surprise, a lot of big time companies accept bitcoin or gift cards purchased with bitcoin....

Microsoft, Subway, Dell, Overstock, Gamestop, JcPenney, Whole Foods...and oh, Amazon has a strong market of gift cards in exchange of bitcoin. The book I have is from 2015...
So being a financial planner and a fiduciary, it is interesting to note that I am not allowed to buy bitcoin if I wanted to. My employer will not allow me to (finra technically might allow it, but I would not be able to get that far).

My assumption is the issue with money laundering issues and it being anonymous. They cannot monitor it so who knows. I also know FINRA has put some notices about the risks. Obviously you need to be careful. When something goes up/down regularly 10-20% in a day, that is high on the scale. I would assume its similar to penny stocks.
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