Discussion in 'Business, Careers & Education' started by mikeman, Feb 2, 2011.
If you bought $100 in bitcoin 7 years ago, it would be worth 72 million.
Serious question, do you think it's 'worth' buying in now? Like I could throw 4-5K at it and just leave it for 10 years and see what happens. Worst case it's zero, best case it's a potentially huge return. Thoughts?
That's tough, it's doubled, and Etherum has gone up 1700%. These are insane moves.
If it was my money, I would wait for a crash, but it might hit 4,000 and then crash to 2700, so you'd miss out.
I would buy small bits, that way you spread out the risk, if you get a crash in that time, put the rest in.
I am worried a cryptocurrency bubble is forming, but my strategy here has always been to swing for the fence. Long term, I think this is what money will eventually be.
The risk to crypto currency is government cracking and tracking it (they probably have but just hasn't become public yet). That or big thefts that shake trust in the platform and people move to the next one.
I think the biggest risk is different, though you do point out 2 valid ones, in that so many cryptocurrencies get put out there that it waters down the value across the board.
I've seen some discussion of risk of certain chinese mining pools getting enough power to start forging transactions/creating fake coins because they control the blockchain. Not that they would necessarily actually do it (once there is evidence of faked transactions, the currency would probably crash as people flee), but once that specter is there....how much can you really trust it?
I think the issue is something along the lines of: The returns to mining have become so low, that fewer and fewer hobbyists are dedicating significant resources to it. At the same time, the transaction fee thing isn't significant enough to compel people into mining with the intention of receiving those fees (rather than mining for the value of the coin itself).
False transactions are immediately purged. It's not really possible to control the block chain unless every computer keeping it up is compromised.
There are fewer bitcoin available every day, so the cost of retrieving them gets higher, the logic is that they're worth more.
That's incorrect. The bitcoin structure is at risk if any single group has control of just over half of the processing power. It happened once a few years ago that a group temporarily had 51% of the power...and it was a big deal.
The biggest mining pools out there are chinese, and there is supposedly a lot of connection between them. A year ago, those pools accounted for like 70% of the hashing power. Obviously those pools are made up of individuals, many of whom would not like to see bitcoin destabilized...but who knows. There are also some fears of chinese government intervention...using force to gain control of those pools. They are not super open to the ideals of Bitcoin...and a grab like that would be a great way to destabilize and destroy the whole thing (while leaving room for corrupt officials to skim a bunch of personal profit in the interim).
Also, I think you are missing the fact that over time the "returns to mining" are supposed to come from transaction fees, not from the value of new coins. Sure, the coins become worth more, which means that despite decreasing mining rate, you can still earn profit--but if the currency is ever to become viable as a transaction medium, then it can't actually grow in value at a rate that would make mining profitable.
That's where the transaction fees come into play...but if there aren't enough people paying transaction fees to entice widely distributed entry into the mining market, then the risk of a 51% attack increases.
That doesn't make sense. Just because it is harder to mine bitcoins doesn't somehow make them more valuable. Gold prices don't go up because it gets more expensive to mine gold.
The cost of mining bitcoins is growing rapidly, so if prices stop climbing, the mining will just stop.
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