Trading bitcoins?

Ask your investment, budget, and other money related questions here
riparian
Posts: 650
Joined: Tue Oct 25, 2011 4:00 am

Trading bitcoins?

Post by riparian »

What do y'all think? It seems ironically appealing to make money with fake money.

ether
Posts: 214
Joined: Sat Nov 17, 2012 1:50 am
Location: Tempe AZ
Contact:

Re: Trading bitcoins?

Post by ether »

Bitcoins are hoarded by just a few people who can easily manipulate the market:

http://www.businessinsider.com/927-peop ... ns-2013-12
http://bitcoinrichlist.com/top500

Tread carefully, and remember the tulip

A Brit
Posts: 56
Joined: Sun Sep 26, 2010 1:38 pm

Re: Trading bitcoins?

Post by A Brit »

riparian wrote:What do y'all think? It seems ironically appealing to make money with fake money.
Well I bought a few (too, too few) when they cost about $5. I reckon that trade's appealing!

As I don't "trade" with any asset class, I'm not about to start with anything as volatile as BTC. It's a fascinating economic and financial experiment - and I'm glad to have skin in the game - but it could all evaporate to nothing.

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: Trading bitcoins?

Post by Dragline »

Good for you! Just don't pull an Isaac Newton, who first gained then lost a fortune trading shares in the South Seas company.

tylerrr
Posts: 651
Joined: Tue Dec 13, 2011 3:32 am
Location: Boston

Re: Trading bitcoins?

Post by tylerrr »

i've tripled my money so far....:)

i'm holding and will probably buy a few more. I'm looking for bitcoin to hit at least 5,000 per bitcoin in the future.

It's a risk, but i'm willing to take it with some of my money....I think bitcoin could stick around for long term and Wall Street is about to get onboard in a big way from what I've been reading.....

I think wall street will run the price up dramatically and then probably bail out making bitcoin crash big time eventually....

I'm just seeing if i can ride the wave....:)

vivacious
Posts: 428
Joined: Sat Jun 08, 2013 8:29 am

Re: Trading bitcoins?

Post by vivacious »

It's a scam. People have lost coins in bitcoin "banks" and most people simply burn out their graphics card trying to mine them etc.

I'm open to other potential currencies but this isn't the right one.

Ozymandias
Posts: 14
Joined: Sun Sep 08, 2013 1:18 am

Re: Trading bitcoins?

Post by Ozymandias »

One could also participate in bitcoin mining by pooling resources with friends to buy/rent bitcoin mining hardware and produce actual bitcoins for later resale value. I have a friend who recently put in about $5000 to help buy a bitcoin miner that's expected to produce 3 bitcoins/month. As time goes on, it'll get harder to mine more coins, but it seems like it'll pay off handsomely at current prices.

Beyond a little arbitrage fun, I wouldn't bet any more on bitcoin. As others have stated, bitcoin is extraordinarily risky in several ways: (1) the majority of bitcoins are owned by a small number of individuals, subjecting the markets to the occasional highly volatile swing in prices; (2) bitcoins are a pure trading/forex instrument without any state backing its other characteristics as money; (3) governments can regulate bitcoin away. Caveat emptor.

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: Trading bitcoins?

Post by Dragline »

No kidding. You never know what will happen day-to-day:

http://www.zerohedge.com/news/2013-12-1 ... etals-rise

tylerrr
Posts: 651
Joined: Tue Dec 13, 2011 3:32 am
Location: Boston

Re: Trading bitcoins?

Post by tylerrr »

i've bought mine through Coinbase.

JohnnyH
Posts: 2007
Joined: Thu Jul 22, 2010 6:00 pm
Location: Rockies

Re: Trading bitcoins?

Post by JohnnyH »

Trading = paying spread repeatedly without edge?
riparian wrote:What do y'all think? It seems ironically appealing to make money with fake money.
Instructions unclear. Which is real, which is fake and why? :geek:
vivacious wrote:It's a scam. People have lost coins in bitcoin "banks" and most people simply burn out their graphics card trying to mine them etc.

I'm open to other potential currencies but this isn't the right one.


You mean they forgot their password?... No offense, but I don't think you understand bitcoin.

riparian
Posts: 650
Joined: Tue Oct 25, 2011 4:00 am

Re: Trading bitcoins?

Post by riparian »

Johnny I was hanging out at the local place where you hang out for Internet and electricity if you don't have it at home, and I met a guy who said he made 3%/day trading mostly between bit coins and light coins. In his 90 second overview it seemed like it might be brilliant or he might be completely failing to consider the bit coin -> USD exchange.

ether
Posts: 214
Joined: Sat Nov 17, 2012 1:50 am
Location: Tempe AZ
Contact:

Re: Trading bitcoins?

Post by ether »

riparian wrote: I met a guy who said he made 3%/day trading mostly between bit coins and light coins. In his 90 second overview it seemed like it might be brilliant or he might be completely failing to consider the bit coin -> USD exchange.
Sounds like you want to be a day trader. The main problem I see with bitcoin for day trading is the sheer volatility. [here is a good example, bitcoin crashed 50% today and people are posting the suicide hotline number in bitcoin communities: http://www.reddit.com/r/Bitcoin/comment ... 00273talk/] Do you have previous experience day trading? Could you handle the emotional drain of losing 50% in a day, and the joy of making 25% the next? Do you have a trading methodology that you want to implement? I ask this because it's a tough market to consistently make money, and something like forex, stocks, or commodities may be a "nicer" introduction into day trading, but you will have to pay taxes if you make money in those markets, versus the benefits of cash money in bitcoin.

jacob
Site Admin
Posts: 13084
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Re: Trading bitcoins?

Post by jacob »

@ether - You will also pay capital gains taxes if you trade bitcoins.

JamesR
Posts: 940
Joined: Sun Apr 21, 2013 9:08 pm

Re: Trading bitcoins?

Post by JamesR »

I thought the suicide hotline post was a bit of a troll post in order to encourage people to panic sell. In fact it was posted 2 hours before a major $150 drop in price.

jacob - at this point there isn't much regulatory oversight, so I doubt many if any would be paying taxes.

nawor
Posts: 28
Joined: Wed Nov 14, 2012 3:07 am

Re: Trading bitcoins?

Post by nawor »

I must admit that I originally laughed at the concept of bitcoin and dismissed it as worthless. However my view is now changing. There is huge activity surrounding bitcoin by venture capital firms, service providers, merchants, etc. Too much to ignore.

The current volatility is crazy which is damaging its potential as a useful currency. It is also quite US centric and I believe it is still difficult to make deposits and withdrawals in other countries outside of the US.
Even with these negatives I think it has great potential and is worthwhile watching.

jomby
Posts: 11
Joined: Wed Jul 10, 2013 7:30 pm

Re: Trading bitcoins?

Post by jomby »

It seems like people here aren't really taking bitcoins seriously enough. I remember early on Jacob was kind of dismissive of them, and I was a little surprised.

Here is my take on them. As far as I can tell, they are the first store of wealth to satisfy the following 3 properties:

1) They are rare (only 21 million will ever be mined).
2) They are decentralized, so it would be very hard for a government or some other entity to confiscate your bitcoins.
3) They can be moved anywhere in the world almost instantly, as long as there is Internet.

When something like this doesn't exist, and then someone invents it, there is value there. Nothing fake about it. Now, I have no idea if the current price is too high or too low, and if other cryptocurrencies gain ground, then property (1) is going to go away. But it certainly is no joke.

JohnnyH
Posts: 2007
Joined: Thu Jul 22, 2010 6:00 pm
Location: Rockies

Re: Trading bitcoins?

Post by JohnnyH »

@riparian: Hmm... Sounds like he would have to have an awesome system to cover the spreads. Buy him a beer, then take his idea. ;)

sleepnot
Posts: 13
Joined: Thu Jul 25, 2013 6:03 am

Re: Trading bitcoins?

Post by sleepnot »

jomby wrote:it would be very hard for a government or some other entity to confiscate your bitcoins.
That largely depends on how you handle your bitcoins. If you leave them all in one place, then you're taking a big risk! They can be hacked or confiscated...

http://www.wired.com/wiredenterprise/20 ... bi_wallet/

"Satoshi stores his wealth in a large number of bitcoin addresses, most of them holding just 50 bitcoins. It’s a bit of a logistical nightmare, but most savvy Bitcoin investors spread out their bitcoins across multiple wallets"

http://www.theguardian.com/technology/2 ... ed-bitcoin

And your computer or a memory stick can be confiscated too

jacob
Site Admin
Posts: 13084
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 73
Contact:

Re: Trading bitcoins?

Post by jacob »

I remain wary simply because governments don't like to have any of their monopolies challenged. While it may be technologically hard or impossible to regulate the currency itself, it's certainly easy enough to regulate the users. New technologies/systems tend to be ignored until they get big enough and then ... bam!

For examples, see
http://en.wikipedia.org/wiki/E-gold
http://en.wikipedia.org/wiki/Liberty_Dollar

I'll be inclined to accept bitcoins as a viable currency once the following two conditions are met
1) You can use bitcoins to pay for stuff at amazon online and walmart in person.
2) Bitcoins are fully treated in the tax code indicating government acceptance.

vivacious
Posts: 428
Joined: Sat Jun 08, 2013 8:29 am

Re: Trading bitcoins?

Post by vivacious »

JohnnyH wrote:
vivacious wrote:It's a scam. People have lost coins in bitcoin "banks" and most people simply burn out their graphics card trying to mine them etc.

I'm open to other potential currencies but this isn't the right one.


You mean they forgot their password?... No offense, but I don't think you understand bitcoin.

I do actually. But there have been widespread reports of hackings, money going into banks and never coming out, various services collapsing economically, etc. Definitely wouldn't trust it at least how it is now.

Post Reply