# Warnings on Bitcoin



## Early Riser (13 Sep 2017)

I don't know anything about Bitcoin, but those who do may have an interest in these (critical opinions) :

https://www.theguardian.com/technol...n-fraud-jp-morgan-cryptocurrency-drug-dealers

https://www.theguardian.com/busines...-investors-bitcoin-could-lose-money-fca-warns


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## Brendan Burgess (13 Sep 2017)

Make sure not to keep your Bitcoin in South Korea! 

*North Korean hackers target Bitcoin to bypass US and China sanctions, claim researchers*


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## Pugmister (13 Sep 2017)

Brendan Burgess said:


> Make sure not to keep your Bitcoin in South Korea!
> 
> *North Korean hackers target Bitcoin to bypass US and China sanctions, claim researchers*



I came across that article the other day. I was actually keeping mine in an online wallet and some for trading in an exchange. The article spurred me to order an offline wallet, hopefully be hear in the next few days


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## goosebump (28 Sep 2017)

Early Riser said:


> I don't know anything about Bitcoin, but those who do may have an interest in these (critical opinions) :
> 
> https://www.theguardian.com/technol...n-fraud-jp-morgan-cryptocurrency-drug-dealers
> 
> https://www.theguardian.com/busines...-investors-bitcoin-could-lose-money-fca-warns



https://99bitcoins.com/bitcoinobituaries/


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## fpalb (8 Dec 2017)

Duke of Marmalade said:


> These days they do, like BTC, inhabit a digital world, they are mere numbers in our bank accounts.  But these numbers mean something, they are evidence that we have a debt from society.


A bitcoin balance means something too, it means someone either directly went to the expense to mine them, or someone else exchanged some fiat, item or service of value for them. We know a balance can't be obtained any other way. I take your point though, they represent something different, they are not born out of debt (which some take as a positive!). 



Duke of Marmalade said:


> Now with BTC *ALL *you have is a number in an account.  Other than the entitlement to transfer this number to another account there is no other claim on society or anybody else, implicit or otherwise.


Correct.


Duke of Marmalade said:


> Is it a fraud?  I certainly would not accuse its enthusiasts including those in this forum of being frauds in the colloquial sense.  But its terminology is borderline fraudulent.  Calling itself a currency in the first place is a  bit shaky but where things get distinctly suspect is in the "mining" metaphor.  _fpalb _has given us an excellent and stark description of the process.  Here's how the metaphor goes.  The miners expend enormous amounts of electricity and CPU power to extract as the reward for this effort fresh new BTC.  This is highly suggestive and seductive.  It suggests that an awful lot of effort was needed to find something of value.  In fact nothing of value is found.  At the end of the effort, if they win the race against other miners, they are alloted new BTC as a simple number in their account.  The BTC could have been added without any of this effort.  Its a game, an incredibly crude brute force game of trial and error, totally artificially devised to manage the development of the BTC supply.  There is no added value whatsoever here, though I will not get on the high horse of the negative environmental value of the electricity usage (after all I am not convinced of that one either).


I really hope I have not mislead anyone with any of my comments, I've aimed to be clear about technical facts, but have also shared some of my own opinions, which are just that. I agree with what you've said about mining but I have a couple of comments.

Firstly bitcoin originally never called itself a currency, the whitepaper (https://bitcoin.org/bitcoin.pdf) never calls it a currency and I'm not actually sure of the origin of the term crytocurrency, but I think myself and many bitcoiners would agree by now that it perhaps isn't the best term, though it's unlikely to change by now. If they had just been called blockchains instead of cryptocurrencies maybe it would have been better.

Secondly, we would prefer mining wasn't so energy intensive, we would prefer there was an equally reliable way to ensure the integrity and immutability of the blockchain and the fairness of the distribution of new coins, but no one has figured one out yet. Another blockchain, Ethereum is planning to move from proof-of-work mining to proof-of-stake where the integrity of blocks mined is based on the balance of the ethereum you hold rather mining work. Some people think is a valid approach, others are skeptical, I guess we might find out when/if they try it for real.

You can somewhat imagine the wastage of energy for gold too. We expend a lot of energy to dig it up, melt it into bullion bars only to bury it underground in vaults again. If those bullion bars are never melted down again to be used for industrial purposes (as many are not) then was the mining and expense of storing them useless and waste of energy? Or does the fact that they sat in the vault acting as a store of value act as a valuable service itself. 

Duke, I think you've made half of the journey, you've understood the gist of what bitcoin is technically, a decentralised, immutable, transparent digital ledger with a built in transactional system. You can see how it can be used to make transactions and to maintain balances. Though complex to explain this is mostly factual so I would say it might be the easy part. The next part of grasping bitcoin is making the leap to understand that if something can act as a money, and enough people decide to use it as money, then for all intents and purposes it is money, regardless of any unrelated industrial, ornamental uses or backing by an authority. I can't factually prove this, and I'm not confident that I can convince you, but many of us came to this conclusion once we understood how it worked and tried it out. Indeed I see bitcoin as an experiment to see the extent to which it is true. I will make a longer post about this in the "bitcoin is not like gold" thread, I think the discussion belongs there.


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## joe sod (8 Dec 2017)

fpalb said:


> The next part of grasping bitcoin is making the leap to understand that if something can act as a money, and enough people decide to use it as money, then for all intents and purposes it is money, regardless of any unrelated industrial, ornamental uses or backing by an authority.



maybe, but when so much of the money supply is controlled by governments and central banks then bitcoin will need to be used and accepted by governments, highly unlikely that govenments will give up using currencies they issue and control for one they dont. For example many people receive most of their income as welfare issued in £,$ etc, they are not going to convert to bitcoin, thats a big stream not going to bitcoin. On the other side you must pay your tax in £,$ etc, so even if you receive income in bitcoin it must be converted out to £,$ etc, thats another bitcoin chain that drys up when it meets government. So governments still hold the key to how far bitcoin goes.


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## fpalb (8 Dec 2017)

joe sod said:


> maybe, but when so much of the money supply is controlled by governments and central banks then bitcoin will need to be used and accepted by governments, highly unlikely that govenments will give up using currencies they issue and control for one they dont. For example many people receive most of their income as welfare issued in £,$ etc, they are not going to convert to bitcoin, thats a big stream not going to bitcoin. On the other side you must pay your tax in £,$ etc, so even if you receive income in bitcoin it must be converted out to £,$ etc, thats another bitcoin chain that drys up when it meets government. So governments still hold the key to how far bitcoin goes.


Bitcoin can survive just fine without governments endorsing or accepting it, just as it does today. There's some people out there buying their first bitcoins today with income they received in fiat, and there's guys like me who've been holding for a few years selling off some into fiat to pay taxes. I get what you're saying, there isn't a closed loop of bitcoin transactions and there won't be any time soon. As I mentioned in another thread the bigger concern for bitcoin right now is scaling the transaction capacity anyway. 
Millions of people are already using bitcoin as money, primarily as a speculative store of value, without governments endorsing or accepting it and I believe this can continue indefinitely.


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## Merowig (12 Dec 2017)

Jordan Belfort, the Wolf of Wall Street, warns about Bitcoin 
https://www.facebook.com/questCNN/v...LCgGZub7Kse62gjcfhIrdU1gLrMlhMD1fApPneXEXmagQ


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## MrEarl (13 Dec 2017)

You mean you'd trust what the Wolf of Wall Street is saying ?

.. or you'd not trust him and do the opposite of whatever he's suggesting ?


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## Gus1970 (13 Dec 2017)

Brendan, do you really think bitcoins are in a physical location? LOL


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## PaddyBloggit (13 Dec 2017)

Gus1970 said:


> Brendan, do you really think bitcoins are in a physical location? LOL



I think he was being facetious (read his contributions on the other threads re. Bitcoin) ... LOL


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## TheBigShort (13 Dec 2017)

The piece from the Wolf is compelling. Given his track record, and accepting he is a smart guy who certainly knew how to play markets, it is worth taking his warning on board.
But!
While he makes a convincing arguement, his arguement is fixed on the price mania of bitcoin, and not bitcoin or crypto itself. The presenter makes a salient point in that the futures markets will act as the price discovery mechanism and that crypto is here to stay. To me, this is an acknowledgement that bitcoin has a price. We just dont know what that price is yet. The Wolf, I think, is talking about the price mania eventually tanking - that is fair enough, as distinct to him saying bitcoin or crypto currencies themselves are worthless.


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## Brendan Burgess (13 Dec 2017)

TheBigShort said:


> the price mania eventually tanking - that is fair enough, as distinct to him saying bitcoin or crypto currencies themselves are worthless.



Shortie

If something is $18,000 today and it falls to $100 eventually but stabilises and is widely used at $100, is that not effectively the same thing for owners today?   I will say "I told you so" when it falls to $100.  Having lost $17,900, you will get cold comfort from reminding me that I said it would be "worthless". I will be wrong by $100. You will be wrong by $17,900. 

Brendan


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## Dan Murray (13 Dec 2017)

Hi Brendan,

Just to advise that "wrong" is an absolute state - it is not subject to gradation.

This is explained in a short clip from the Big Bang - worth watching (before getting mad with me!) 

https://www.youtube.com/watch?v=F_1zoX5Ax9U


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## Brendan Burgess (13 Dec 2017)

Dan 

You are welcome to label me as wrong, especially if I can manage to bet against Bitcoin at the present price. 

Brendan


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## TheBigShort (13 Dec 2017)

Brendan

Yes you are correct, if it goes from $18,000 to $100. But you, or I, dont know if that is what will occur.
Watching the The Wolf video, its clear he expects bitcoin to spurt in price some more before it crashes. How high or how low, we dont know.
So if it goes to $20,000 and crashes back to $1,000, then lots of people will be able to say 'I told you so'. 
But bitcoin will still be here, with value.
And thats my point, in that video clip, at no point does either the presenter or the Wolf declare that bitcoin is worthless, what they appear to be talking about is that the current price is part of a market frenzy (its hard to disagree).
But in fact, the presenter alludes to the notion that cryto currencies will be part of eco-space in the time ahead.


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## Dan Murray (13 Dec 2017)

Ah Brendan,

You didn't watch the video, did ya?!

It was intended as a bit of _life relief_ in a serious discussion. It's mostly self-deprecating! The argument that "wrong" is an absolute state is undermined and it contains the added bonus of taking the MeHall out of those stubborn "chat-room" warriors!! Does anyone spring to mind, perchance?


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## Dan Murray (14 Dec 2017)

Dan Murray said:


> Just to advise that "wrong" is an absolute state - it is not subject to gradation.



I must admit that I'm a little heartened that at least some posters enjoyed my reference to the Big Bang!

For the avoidance of doubt, I don't believe that "wrong" is an absolute state - like, it must be just only a little wrong to have fleeting thoughts of taking Penny   up on her offer for coffee?! YMMV!


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