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Bitcoin: Be prepared to lose all your money, FCA warns consumers

theguardian.com

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Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#91

Post by thegreatpeter »

trident5000 wrote: post #43
grey-area wrote: post #34

Earlier quoted context omitted.

Here are some possibilities for malpractice with Bitcoin: Exchanges lying about transactions, pricing, Exchanges refusing to allow or unable to allow extracting wealth stored in bitcoin, Exchanges front-running, Exchanges stealing money, 51% attack by miners, Governments expropriating wealth 10 years later claiming back taxes for undeclared earnings, Developers changing the rules of the currency (which are encoded in…

Theres a lot of inaccuracies in here and it just kind of looks like things being thrown at a wall and hoping they stick. For instance front running is done by HFT in the equity markets so I see a double standard there. "exchanges lying about transactions" - what? 51% attack by miners, do you actually know what that is? What the impact is and how much it would cost to carry and sustain that? Nursie: Oh sure, I thought…

Volumes are constantly faked on exchanges in an effort to make it look like there's demand for a higher price.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#92

Post by benibela »

agumonkey wrote: post #47
tebbers wrote: post #40

In London they are advertising bitcoin on the side of buses and in the Underground with the slogan 'when you see bitcoin on the side of a bus, it's time to buy'. I thought that was outrageous and actually was a sign to sell. I mentioned this to a foreign exchange trader friend and we even finished each other's sentence with the above!

It's a sad possibility that people are actively getting newcomers to join the game at the worst of times.

I bought some millibitcoins in 2018, at almost the worst time

Last week it has become my best investment so far

Although now I wonder if I should sell them

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#93

Post by eloff »

graeme wrote: post #72
eloff wrote: post #48

Earlier quoted context omitted.

I don't think fiat currency has terribly much more going for it, in terms of intrinsic value, other than you do need it day to day because there aren't alternatives for buying things and paying your taxes. If here in Canada the US dollar became legal tender and I could use it for all my transactions, would the Canadian dollar hold its value? I don't think so.

1. You can use dollars to pay taxes. Big difference from bitcoin 2. No one expects fiat currency to be an investment asset! Why anyone expects the value of bitcoin to increase like stock ownership of a corporation is beyond me. And it has no intrinsic value like gold.

Gold doesn't have that much intrinsic value either. It's hard to obtain, but so is bitcoin. Gold has the advantage that it has some use in personal adornments - but I believe that's a marginal use. Bitcoin is easier to buy, sell, and store. I've said many times that the best description for bitcoin is electronic gold, not a currency.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#94

Post by agumonkey »

benibela wrote: post #92
agumonkey wrote: post #47

Earlier quoted context omitted.

It's a sad possibility that people are actively getting newcomers to join the game at the worst of times.

I bought some millibitcoins in 2018, at almost the worst time Last week it has become my best investment so far Although now I wonder if I should sell them

Yes long term it's no biggie, the thing is, as a newcomer, good luck sitting on big losses when you never experienced that before.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#95

Post by lupinglade »

kolbe wrote: post #75

You should be prepared to lose all your money in any investment. This PSA is a pretty lame scare tactic. Sure, BTC seems riskier than say AAPL stock, but both can go to zero. So, a PSA like this one seems like propaganda more than level-headed investment protips.

So much riskier, though.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#96

Post by danans »

nabla9 wrote: post #42

Bitcoin speculation is an almost pure Keynesian beauty contest. https://en.wikipedia.org/wiki/Keynesian_beauty_contest As long as most people think everyone else thinks BTC is the prettiest girl, it can have substantial value and the sky is the limit. It's a pure speculation asset. You don't need bitcoins to pay taxes. The value has a very weak link anchored to anything in the real economy (limited number of coins an…

> The value has a very weak link anchored to anything in the real economy

I think it has a pretty strong link to the degree of fear in the real economy (just like gold at the margin) and more fundamentally the degree of loss of confidence in governing institutions.

In that way it's useful as a hedge, but within limits. If the economy and governing institutions totally collapse, Bitcoin won't be very useful because most of our modern large scale and complex society, including security, shared infrastructure, and the goods and services we consume are built on the foundation provided by those institutions.

Bitcoin has no answer for the needs provided by those (admittedly imperfect) institutions, and it seems to have the historical goal of deconstructing them. Indeed, it can only exist if those institutions exist.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#97

Post by grey-area »

trident5000 wrote: post #43
grey-area wrote: post #34

Earlier quoted context omitted.

Here are some possibilities for malpractice with Bitcoin: Exchanges lying about transactions, pricing, Exchanges refusing to allow or unable to allow extracting wealth stored in bitcoin, Exchanges front-running, Exchanges stealing money, 51% attack by miners, Governments expropriating wealth 10 years later claiming back taxes for undeclared earnings, Developers changing the rules of the currency (which are encoded in…

Theres a lot of inaccuracies in here and it just kind of looks like things being thrown at a wall and hoping they stick. For instance front running is done by HFT in the equity markets so I see a double standard there. "exchanges lying about transactions" - what? 51% attack by miners, do you actually know what that is? What the impact is and how much it would cost to carry and sustain that? Nursie: Oh sure, I thought…

While you could argue with some specific points I'm sure, this was just a laundry list off the top of my head of reasons why btc is not some inert commodity which can't possibly allow malpractice - the bitcoin ecosystem is overflowing with bad actors and shady companies all trying to profit from the goldrush, from mtgox in the past to bitfinex now.

I agree there are bad actors all over finance, which is precisely why finance and banking is so heavily regulated, in a way that btc is not, and that lack of proper auditing and controls is what makes btc incredibly risky as some sort of investment IMO and utterly unlike commodities like oil or corn as an asset.

Bitcoin is neither a useful currency, nor a reliable store of value, nor a good way to share data, nor a foundational layer for an app ecosystem, nor a commodity. It has been sold as all those things and more, but it has succeeded at none of them and I fear in this latest mania a lot of people will lose much of their money.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#98

Post by phil21 »

tebbers wrote: post #40

In London they are advertising bitcoin on the side of buses and in the Underground with the slogan 'when you see bitcoin on the side of a bus, it's time to buy'. I thought that was outrageous and actually was a sign to sell. I mentioned this to a foreign exchange trader friend and we even finished each other's sentence with the above!

With lockdowns I've been wondering when this tipping point was going to hit, it's been really hard to judge the 'taxi driver' phenomenon not going out often or being able to overhear conversations.

Makes it a lot harder to time any bubbles, which I honestly think may be contributing a bit to how high this one got.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#99

Post by wpietri »

Reedx wrote: post #64
wpietri wrote: post #17

Earlier quoted context omitted.

You were right. It was risky. It's even more risky now. Hindsight is a terrible way to value assets.

> It's even more risky now How so? The bigger it gets and the longer it lasts, the more it's derisked. It was more risky 10 years ago (i.e., odds of going to 0, finding a critical problem, lack of adoption, would've been easier for governments to ban it).

For approximately the same reason it's more dangerous to climb on the roof of a hundred-story building than a one-story building: there's much farther to fall.

I also think its price has become thoroughly decoupled from actual use value. Back in the day one could plausibly (if optimistically) argue that it was going to become the new cash, the new credit/debit transaction. But it has obviously failed at being the digital cash it set out to be. (With the exception of the untraceable envelope/briefcase of cash popular with criminals of various sorts.) There's also now a much richer market manipulation apparatus. That increases risk directly, but also indirectly via increased regulatory interest. Tether, for example, is under heavy investigation.

Re: Bitcoin: Be prepared to lose all your money, FCA warns consumers

#100

Post by Jimmc414 »

These HN bitcoin threads sure do garner a disproportionate amount of downvotes. My opinion and advice would be to stop listening to opinions and advice on Bitcoin do your own research and follow the money. https://bitinfocharts.com/bitcoin/explorer
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