thermionic said:
Seriously.... think about that? Cyprus has demonstrated that even banks with deposits in a major international currency (Euro) can be risky... There is no FDIC insurance on bitcoin accounts. What happens if you wake up tomorrow and your bitcoin acct has been hacked? Who you gonna call... Bit busters?
It is another variant on barter but with a digital angle.
If you don't trust your country's currency, convert it to hard assets. Farm land seems like a good investment. People will always need to eat. I was telling a guy at the gym last night who values my investment advice more than my political advice, 8) to put his windfall burning a hole in his pocket into rental property. Under the old maxim buy low and sell high, property seems relatively low at the moment.
If bit coin is convenient to buy drugs or hookers, maybe convert enough for your short term needs but I do not see any intrinsic value to make this an investment or backing to be a stable currency.
It is not crazy to be apprehensive about our central bankers and government monetary policy, but this is no solution, IMO
Bit coins are not a ponzi scheme per se, but the structure with an upper limit of total number of possible bitcoins fixed at 21m (?) means it will ultimately behave following simple supply and demand, to increase in price (not value) if the supply is fixed and the demand increases. So yes like any asset bubble the early buyers will be rewarded, as long as there are more convenient later fools to follow them into the expanding bubble. Unlike a real currency whose amount of money supply is varied based on the economic activity it is used in connection with, to maintain a relatively constant exchange rate (vs commodities), these bit coins are very funny money indeed and apparently engineered to increase in nominal price as long as there is new demand.
With no real value, at a minimum this is a scam to transfer wealth from late adopters to early adopters with the engineered in price behavior. There is probably a small handful of people secretly behind this counting their real money on some tropical island. Worst case, the late entrants will just transfer their wealth in and run out of new guys to pay them a profit. I think the news recently was about a significant price correction. Nothing ever goes up forever. but I do not know where supply is relative to the cap yet. I don't think this is actually illegal, but it probably should be. Apparently this is engineered to be easy to divide into smaller pieces to deal with price appreciation. This is Ok if people only use it as a surrogate currency, but if human greed takes over (like with all asset bubbles), and people pile in like an investment they will be disappointed. i suspect the easy money has already been made by the founders and cashed in.
I wonder if you can buy bitcoins with food stamp charge cards?
JR
PS: I almost forgot, last night at the gym while I was trying to give another player advice about rental property, another guy was bragging about some HUD program where if you get the rental properties approved the government guarantees the rent payments.. He said he had something like 8 or 10 properties. Oh boy. My tax dollars at work.
