@MrOneLung - Depends how many you bought, or what you did with them.
I know someone who recently found the bit of paper they had their block chain on, after buying some years ago and forgetting about them, he's pretty happy right now.
Remember reading a few years ago about some bloke searching through a council dump looking for his old computers hard drive as it contained his bitcoin wallet on it and had thrown away a fortune. Must be even more gutted now as this was a while ago.
Black tulips have been mentioned. They crashed overnight when a tulip cost the same as a house and the market ran out of buyers with the price of a house in loose change behind the sofa. Bitcoins would have reached a similar limit if you were only able to buy a whole Bitcoin. What I am saying @kings hill addick is that Bitcoin value is only supported by ever increasing demand that will eventually decline when demand shows the fist sign of slowing and everyone starts selling to realise a profit at the same time and there is no one buying.
If Bitcoins were a commodity that had intrinsic value, like all other commodities, including gold which in some ways it resembles, then value would not fall below the price of its utility value. Wheat prices for example can be driven up by speculation, but that speculation is moderated by the fact that bakers must buy wheat for bread even when hedge fund managers stop buying, and there is always a buyer of last resort that sets a floor value.
If you are buying Bitcoins as a baker buys wheat, it means you have found a value for Bitcoins, presumably buying drugs or illegal weapons that can't be bought through normal financial trading. If you are a one man hedge fund manager you need to find out from the drug dealers what's the highest price they would buy your Bitcoins at before it was cheaper to deal in cash like they used to. Otherwise you are speculating in a market that provides no trading information on drug dealing to establish utility value and recognises no upper or lower bounds in price. When participating under the misapprehension that price will only go one way, it's called a bubble.
It's only if you recognise that every £1 profit made on any trade in anything you buy and sell is £1 out of someone else's pocket that you stop and ask yourself who is actually funding the gains being made on Bitcoin trading. The answer is either your gains are never crystallised, or they are met by the losses of those who sell when the market crashes, which may or not include you. If the market is functioning properly they will be met from the gains made on drug dealing, illicit arms trade and identity theft.
If you have moral sensibilities you would obviously not touch a Bitcoin.
I'm tempted myself, as I'm not vegan, but know it would be the highest price before it crashed.
As @newyorkaddick says, it will find a price equilibrium, it will be based on its utility value as a commodity, but as an "investment" you are going to sea in a sieve without a paddle unless and until there could be devised a regulated market.
If you are a one man hedge fund manager you need to find out from the drug dealers what's the highest price they would buy your Bitcoins at before it was cheaper to deal in cash like they used to.
Surely there is no limit, the actual value of a bitcoin is irrelevant to the transaction.
I regularly use bitcoins to buy things I can't get here, I go to the website, I fill my cart and get a price in sterling, I then convert the sterling price, using google, into bitcoins and send that to the vendor, as long as the number of bitcoins I'm sending equates correctly to the sterling price, it doesn't matter if I'm sending 340953457349 or 0.00000000001 bitcoins.
If you are a one man hedge fund manager you need to find out from the drug dealers what's the highest price they would buy your Bitcoins at before it was cheaper to deal in cash like they used to.
Surely there is no limit, the actual value of a bitcoin is irrelevant to the transaction.
I regularly use bitcoins to buy things I can't get here, I go to the website, I fill my cart and get a price in sterling, I then convert the sterling price, using google, into bitcoins and send that to the vendor, as long as the number of bitcoins I'm sending equates correctly to the sterling price, it doesn't matter if I'm sending 340953457349 or 0.00000000001 bitcoins.
Regularly and things. Now I'm intrigued. What sort of "things", I'm, guessing we're not talking Marmite or Twiglets here?
Black tulips have been mentioned. They crashed overnight when a tulip cost the same as a house and the market ran out of buyers with the price of a house in loose change behind the sofa. Bitcoins would have reached a similar limit if you were only able to buy a whole Bitcoin. What I am saying @kings hill addick is that Bitcoin value is only supported by ever increasing demand that will eventually decline when demand shows the fist sign of slowing and everyone starts selling to realise a profit at the same time and there is no one buying.
If Bitcoins were a commodity that had intrinsic value, like all other commodities, including gold which in some ways it resembles, then value would not fall below the price of its utility value. Wheat prices for example can be driven up by speculation, but that speculation is moderated by the fact that bakers must buy wheat for bread even when hedge fund managers stop buying, and there is always a buyer of last resort that sets a floor value.
If you are buying Bitcoins as a baker buys wheat, it means you have found a value for Bitcoins, presumably buying drugs or illegal weapons that can't be bought through normal financial trading. If you are a one man hedge fund manager you need to find out from the drug dealers what's the highest price they would buy your Bitcoins at before it was cheaper to deal in cash like they used to. Otherwise you are speculating in a market that provides no trading information on drug dealing to establish utility value and recognises no upper or lower bounds in price. When participating under the misapprehension that price will only go one way, it's called a bubble.
It's only if you recognise that every £1 profit made on any trade in anything you buy and sell is £1 out of someone else's pocket that you stop and ask yourself who is actually funding the gains being made on Bitcoin trading. The answer is either your gains are never crystallised, or they are met by the losses of those who sell when the market crashes, which may or not include you. If the market is functioning properly they will be met from the gains made on drug dealing, illicit arms trade and identity theft.
If you have moral sensibilities you would obviously not touch a Bitcoin.
I'm tempted myself, as I'm not vegan, but know it would be the highest price before it crashed.
As @newyorkaddick says, it will find a price equilibrium, it will be based on its utility value as a commodity, but as an "investment" you are going to sea in a sieve without a paddle unless and until there could be devised a regulated market.
Very insightful
There was a bit about it in the standard tonight. Must admit I don’t understand some of the terminology, but get that only a finite bitcoins are in circulation and mining them has to be done by ever more powerful computers because of the numbers involved
Also surely in terms of money laundering regulations, proceeds of crime and tax legislation there are barriers to "cashing in" your profits?
OK if you make fifty quid or a grand profit nobody would necessarily be alerted but if all of a sudden you've got tens or hundreds of thousands dropping into your nationwide account after cashing in on your bitcoin speculation then surely you're under scrutiny as it would trigger AML questions etc.
If there's no precedent or checking then criminals will be able to start turning up to launder money claiming they just cashed in bitcoin. (Suppose successful gamblers at casinos must face this scenario and must be some sort of system in place to authenticate their winnings as otherwise if no proof of source of funds is required then it's open to exploitation).
Drilling down a level further if you did say it was from bitcoin profits then would you require proof it was just through pure speculation rather than trading of illicit products etc?
@Dippenhall has summed things up. Perhaps we take things one stage further by looking at houses? The utility value is the opportunity cost of renting if you don't own plus the prospect of future gains in prices. Values have tended to outstrip wage and price inflation due to shortages and the cost of renting plus the availability and cost of capital hasve both improved over time.
Not only is there a floor on house prices but there are varying amounts of liquidity where you can always convert to cash / crystalize your gains. And there is visibility of pricing and transactions.
Bitcoin has no underlying asset or utility value save for the ability to exchange for legal or illicit goods - so no different to cash. And no guarantee of liquidity. Sure people can trade it today - but tomorrow or next week?
The price is going up rapidly now because it is going mainstream with global media coverage especially the recent gains. That's millions of potential purchasers. But there's much less about the potential losses. And there is absolutely no floor so when it goes it could simply disappear. Once people start to bail it has the potential to crash overnight - or perhaps the people behind it will put in a floor... and that begs the question who regulates and for what purpose?
Anybody watching the Big Short will know that when a market becomes really extended those with big exposures start asking about counter-party risk. Whether you hold bitcoins or a new style bitcoin derivative can the other side afford to let you cash out. Can you even find the other side?!
@Dippenhall has summed things up. Perhaps we take things one stage further by looking at houses? The utility value is the opportunity cost of renting if you don't own plus the prospect of future gains in prices. Values have tended to outstrip wage and price inflation due to shortages and the cost of renting plus the availability and cost of capital hasve both improved over time.
Not only is there a floor on house prices but there are varying amounts of liquidity where you can always convert to cash / crystalize your gains. And there is visibility of pricing and transactions.
Bitcoin has no underlying asset or utility value save for the ability to exchange for legal or illicit goods - so no different to cash. And no guarantee of liquidity. Sure people can trade it today - but tomorrow or next week?
The price is going up rapidly now because it is going mainstream with global media coverage especially the recent gains. That's millions of potential purchasers. But there's much less about the potential losses. And there is absolutely no floor so when it goes it could simply disappear. Once people start to bail it has the potential to crash overnight - or perhaps the people behind it will put in a floor... and that begs the question who regulates and for what purpose?
Anybody watching the Big Short will know that when a market becomes really extended those with big exposures start asking about counter-party risk. Whether you hold bitcoins or a new style bitcoin derivative can the other side afford to let you cash out. Can you even find the other side?!
There's a risk of overthinking this - for the timebeing there is significant demand and no natural sellers (and also no way to short ie. bet against it).
Importantly unlike traditional property bubbles, I suspect there's not much leverage involved as it's hard/impossible to borrow against Bitcoin.
There's a risk of overthinking this - for the timebeing there is significant demand and no natural sellers (and also no way to short ie. bet against it).
Importantly unlike traditional property bubbles, I suspect there's not much leverage involved as it's hard/impossible to borrow against Bitcoin.
Sounds like a quote from Fred the Shred when RBS aquired ABN!
Thing is bitcoin has a market cap similar to Coca Cola, the dot com bubble was worth literally trillions, that was a bubble. I don’t think this is currently in bubble territory yet, still a long way to go.
@Dippenhall has summed things up. Perhaps we take things one stage further by looking at houses? The utility value is the opportunity cost of renting if you don't own plus the prospect of future gains in prices. Values have tended to outstrip wage and price inflation due to shortages and the cost of renting plus the availability and cost of capital hasve both improved over time.
Not only is there a floor on house prices but there are varying amounts of liquidity where you can always convert to cash / crystalize your gains. And there is visibility of pricing and transactions.
Bitcoin has no underlying asset or utility value save for the ability to exchange for legal or illicit goods - so no different to cash. And no guarantee of liquidity. Sure people can trade it today - but tomorrow or next week?
The price is going up rapidly now because it is going mainstream with global media coverage especially the recent gains. That's millions of potential purchasers. But there's much less about the potential losses. And there is absolutely no floor so when it goes it could simply disappear. Once people start to bail it has the potential to crash overnight - or perhaps the people behind it will put in a floor... and that begs the question who regulates and for what purpose?
Anybody watching the Big Short will know that when a market becomes really extended those with big exposures start asking about counter-party risk. Whether you hold bitcoins or a new style bitcoin derivative can the other side afford to let you cash out. Can you even find the other side?!
But there is a subtle but important difference. That is that regular cash DOES have an underlying asset. So, all pound notes in circulation are liabilities on the Bank of England's weekly balance sheet. These are balanced out by the assets the Bank holds by way of Gilts or other Commercial debt. The Fed does something similar for US$. In simple terms, too, money that is not actual folding stuff will be a bank's liability to its depositors in its balance sheet with its lending, etc as the balancing asset.
I'm absolutely certain I left maybe 0.4-5 bitcoin on a site a few years ago. Pretty sure they will be long gone along with the site they were on ffs
Your wallet will still exist.
I do wonder how many bitcoins are forever lost, because of people throwing computers out with them on the hard drives (I think I read about one laptop having a few thousand bitcoin on a laptop and threw it out), people dying suddenly and their kin just throwing out the computer etc.
Comments
Thought I'd post it anyway and get some LOLs of my own.
Might as well get in on the action.
I know someone who recently found the bit of paper they had their block chain on, after buying some years ago and forgetting about them, he's pretty happy right now.
Must be even more gutted now as this was a while ago.
The reality is purchases on the dark web are higher than ever and bitcoin has hit the mainstream, big time.
here is the story from November 2013
7,500 bitcoins would now be worth - £88.8m
I feel sick just reading it.
If Bitcoins were a commodity that had intrinsic value, like all other commodities, including gold which in some ways it resembles, then value would not fall below the price of its utility value. Wheat prices for example can be driven up by speculation, but that speculation is moderated by the fact that bakers must buy wheat for bread even when hedge fund managers stop buying, and there is always a buyer of last resort that sets a floor value.
If you are buying Bitcoins as a baker buys wheat, it means you have found a value for Bitcoins, presumably buying drugs or illegal weapons that can't be bought through normal financial trading. If you are a one man hedge fund manager you need to find out from the drug dealers what's the highest price they would buy your Bitcoins at before it was cheaper to deal in cash like they used to. Otherwise you are speculating in a market that provides no trading information on drug dealing to establish utility value and recognises no upper or lower bounds in price. When participating under the misapprehension that price will only go one way, it's called a bubble.
It's only if you recognise that every £1 profit made on any trade in anything you buy and sell is £1 out of someone else's pocket that you stop and ask yourself who is actually funding the gains being made on Bitcoin trading. The answer is either your gains are never crystallised, or they are met by the losses of those who sell when the market crashes, which may or not include you. If the market is functioning properly they will be met from the gains made on drug dealing, illicit arms trade and identity theft.
If you have moral sensibilities you would obviously not touch a Bitcoin.
I'm tempted myself, as I'm not vegan, but know it would be the highest price before it crashed.
As @newyorkaddick says, it will find a price equilibrium, it will be based on its utility value as a commodity, but as an "investment" you are going to sea in a sieve without a paddle unless and until there could be devised a regulated market.
I regularly use bitcoins to buy things I can't get here, I go to the website, I fill my cart and get a price in sterling, I then convert the sterling price, using google, into bitcoins and send that to the vendor, as long as the number of bitcoins I'm sending equates correctly to the sterling price, it doesn't matter if I'm sending 340953457349 or 0.00000000001 bitcoins.
I regularly use bitcoins to buy things I can't get here, I go to the website, I fill my cart and get a price in sterling, I then convert the sterling price, using google, into bitcoins and send that to the vendor, as long as the number of bitcoins I'm sending equates correctly to the sterling price, it doesn't matter if I'm sending 340953457349 or 0.00000000001 bitcoins.
Regularly and things. Now I'm intrigued. What sort of "things", I'm, guessing we're not talking Marmite or Twiglets here?
There was a bit about it in the standard tonight. Must admit I don’t understand some of the terminology, but get that only a finite bitcoins are in circulation and mining them has to be done by ever more powerful computers because of the numbers involved
Who "owns/ runs" the infrastructure this exists within and is there a sort of central bank?
OK if you make fifty quid or a grand profit nobody would necessarily be alerted but if all of a sudden you've got tens or hundreds of thousands dropping into your nationwide account after cashing in on your bitcoin speculation then surely you're under scrutiny as it would trigger AML questions etc.
If there's no precedent or checking then criminals will be able to start turning up to launder money claiming they just cashed in bitcoin. (Suppose successful gamblers at casinos must face this scenario and must be some sort of system in place to authenticate their winnings as otherwise if no proof of source of funds is required then it's open to exploitation).
Drilling down a level further if you did say it was from bitcoin profits then would you require proof it was just through pure speculation rather than trading of illicit products etc?
Not only is there a floor on house prices but there are varying amounts of liquidity where you can always convert to cash / crystalize your gains. And there is visibility of pricing and transactions.
In answer to some points raised above by @RodneyCharltonTrotta
Bitcoin has no underlying asset or utility value save for the ability to exchange for legal or illicit goods - so no different to cash. And no guarantee of liquidity. Sure people can trade it today - but tomorrow or next week?
The price is going up rapidly now because it is going mainstream with global media coverage especially the recent gains. That's millions of potential purchasers. But there's much less about the potential losses. And there is absolutely no floor so when it goes it could simply disappear. Once people start to bail it has the potential to crash overnight - or perhaps the people behind it will put in a floor... and that begs the question who regulates and for what purpose?
Anybody watching the Big Short will know that when a market becomes really extended those with big exposures start asking about counter-party risk. Whether you hold bitcoins or a new style bitcoin derivative can the other side afford to let you cash out. Can you even find the other side?!
Importantly unlike traditional property bubbles, I suspect there's not much leverage involved as it's hard/impossible to borrow against Bitcoin.
Bitcoin derivatives are being launched right now.
But bitcoin has what? Not even a milk bottle top!
Why would you possibly think that?
I do wonder how many bitcoins are forever lost, because of people throwing computers out with them on the hard drives (I think I read about one laptop having a few thousand bitcoin on a laptop and threw it out), people dying suddenly and their kin just throwing out the computer etc.