Bitcoin Refuses To Just Die Already

Bitcoin, somehow, continues to persist despite mounting evidence that it's not the best use of your money. The digital "cryptocurrency" hit a record high on Thursday, trading above $US1,200 ($1,557) according to several exchanges.

Image: AP

Financial experts have largely cast aside the web-based currency as a legitimate investment, calling it too volatile, too risky, and in some cases, a scam. The Financial Times also reported in 2015 that bitcoin has all of the attributes of a pyramid scheme. The cryptocurrency has long been embroiled in a history of fuck-ups and controversies, including a half-a-billion-dollar heist from the world's largest bitcoin exchange in 2014.

It doesn't help that the currency's origin story is murky, too. Bitcoin was supposedly created by an unidentified programmer (or group of programmers) under the name Satoshi Nakamoto. Although several news outlets have tried in the past to identify Nakamoto, the creator still remains unknown.

Invented in 2008, bitcoin has continually beat the odds as its value has consistently risen despite escalating criticism from wealth experts. According to a CNBC report, bitcoin "performed better than any other currency in every year since 2010 apart from 2014, when it was the worst-performing currency." And, of course, it's already been declared dead dozens of times.

So what's been propping up bitcoin's value?

The currency's price saw a sharp uptick this week due to an increased amount of speculation that the first bitcoin ETF, an investment fund traded on stock exchanges, is closing in on approval from US regulators, according to recent CNBC and Bloomberg reports.

But as the New York Times reported last year, a small group of Chinese companies have effectively gained control of bitcoin, making it vulnerable to market manipulation. Add that on top of the fact that bitcoin exchanges are prone to collapsing (as they have in the past) and you have a digital currency that is, according to the Financial Times, essentially worthless. At least it's good for entertainment.

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Comments

    Why the value continues to rise is the same for pretty much any deflationary currency. Limited supply failing to meet demand causes consistent increases in value, which encourage saving rather than spending. Saving decreases supply further, exacerbating the problem and driving value up more. Eventually top savers lose faith and cash out, potentially causing a crash in the process.

    I've been using it for awhile now to pay for my VPN and sundry other accounts I want kept secret. Coinjar for instance, seems to be very legit, at least I've had no issues with them.

    Bitcoin went public in January 2009. Since then it is just kept increasing in price and journalists continue issue almost daily predictions of its crash.

    a small group of Chinese companies have effectively gained control of bitcoin, making it vulnerable to market manipulation.

    Exactly. Currency without regulation is a recipe for disaster.

    I've always liked the notion of a globally-recognised currency, forgoing exchange rates and conversions - unless it's regulated like traditional currency, I wouldn't trust it.

      Why is it a "recipe for disaster"? What is your basis for that claim?

        As per my quoted text earlier, based on the fact that reported claim is true.

        However as mentioned by an earlier reply, the currency has increased in value...

        I'm still hesitant to get into Bitcoin, at least for now.

          Don't just assume its true, you can't know this yourself, you are just taking their word for it. Better listen to the other side of the story first, and then use your own sound judgement to make a conclusion what could be true and what not.

          Also be very wary when people from within the system tell you to trust the system and that anything other than them is bad, fake, scam, etc. Most likely they are trying to keep you in dark and oblivious to the reality, which they do not want to show you.

            Also be very wary when people from within the system tell you to trust the system and that anything other than them is bad, fake, scam, etc. Most likely they are trying to keep you in dark and oblivious to the reality, which they do not want to show you.

            Like all the Bitcoin promoters?

              People who treat Bitcoin as an investment do have an incentive to attract more users, because it increases demand and accelerates value growth. The actual benefits of Bitcoin as a currency are largely exaggerated and mostly limited to use as a transactional currency (as it was designed and intended), not as an investment/storage currency.

              Let me repeat: no one owns Bitcoin network, it is decentralised completely. Private central bankers DO control Fiat currency system because governments have allowed them to do so. Think about this for a minute... the government is the one that makes all the laws, it is also the one that has the right to create and print national currency, yet they don't do this and instead they said some non-government individuals will be in full control over the national currency.

              It means when government wants to do something and they need revenue and taxation doesn't cover it, they will need to ask these individuals to create new money (because they use FRACTIONAL LENDING which is also legalised by the government) and LEND it to them and government (actually the people) will have to work to create this money that bankers created out of thin air, give it to the government in form of tax, which the government will give to the bankers.... PLUS INTEREST.

              WHY DOES THE GOVERNMENT NEED TO DO THIS? THEY DON'T, BUT THEY THEY STILL DO IT. Why does government make people pay more for something then they need to? If it was the government creating new fiat money, there would be no need for them to ask people to pay interest... the fiat money they would create would be used to pay something that people themselves would need.

              THIS IS WHAT SCAM IS.

              Bitcoin is open source... if you want and you know what it al means (if you are programmer I guess) you are free to check it out, and so it everyone else, including bankers, governments... anyone. Anyone can see how it works and no one owns it. If there are any changes to be made in its code, vast majority of the miners would need to agree and accept the changes, which makes Bitcoin impossible to control by some government, or individual or group of individuals.

              If you think there are some bad sided to Bitcoin, you are free to show it.
              One thing I see at the moment (this can change in the future of everyone supporting the network agree - in democratic way) is that with current transaction limit of 3 per second, is not enough for quick small transaction, which would be needed if Bitcoin is to be used as general every day use currency. This limit would need to be increased, and it might be one day. Till then, Bitcoin is not ideal to be used as general currency, most people agree to this, but is however great way to store/save indivudual's wealth, same as people do with buying gold, silver etc.

    The Financial Times also reported in 2015 that bitcoin has all of the attributes of a pyramid scheme

    Doesnt this comment apply to every major financial sector globally?

    Some experts. They are bullshit artists trying every bit of propaganda to block something that is in direct competition with their existing monopoly of the monetary system.

    1. Bitcoin is not a pyramid scheme. In pyramid scheme there are people at the end of the chain, that would have bought into the scheme, spent money and have no new people to find to sell them the scam further and make a profit. This way in pyramid scheme those that start it profit and those at the end lose money, and those that profit do so at the expense of those that lose. Bitcoin is no such thing. People that buy the Bitcoin at any given time, will be able to buy something with it, hence will not lose their money. Those that would buy Bitcoin to trade can indeed lose money but this is not because Bitcoin is a scam (which is not) but because trading always has risks, and in trading majority of people lose money (this is true for any trading).

    2. Bitcoin will not die... it has only started. It will eventually replace the whole fiat money, which is what is true scam legalised by governments world wide. This is true beauty of Bitcon, it is limited in amount hence it won't depreciate (unless all governments of the world ban it, which I am very certain will never happen) and it is no longer centralised by any body, individual or group of individuals.

    3. Bitcoin cannot be hacked. Anyone that says so is lying and trying to scare people (because they don't want to see Bitcoin gaining momentum).

    4. Bitcoin will eventually be regulated by the government, but they will not own it or control it, they will only be able to regulate its use in their own nation, and that's it.

    5. Chinese government stepping in to stop margin trading and no-fees transaction was in fact a GOOD thing as it stopped people making fake volumes, and therefore manipulating the price to some extend.

    Fact that even after this and 1 month ban on withdrawal of Bitcoin from Chinese exchanges, did not affect Bitcoin price much at all, yes it did make a drop, but it very quickly recovered, which means people see it as good time to buy it cheaper, when people panic and sell (which is wrong thing to do with Bitcoin. Buy and hold and use it only when you really need it, this is my advice and what I am doing personally).

    So, don't listen to these mainstream media and "journalists" any more, haven't you learned anything from all the fake news and propaganda they were doing all this time? They are doing the same with Bitcoin as they see it as a threat to their monopoly in the financial system. Just ignore them.

    Fiat currencies have unrestricted supply and restricted borders: Bitcoin has the opposite: restricted supply and unrestricted borders. With one will be better for all human species on a planet with a finite supply of resources?

    For a tech site, this article is remarkably low on technical details. And the beauty of bitcoin is in the technical details. The reason the financial or journalist professionals continue to get bitcoin wrong is because they do not understand the software fundamentals that make bitcoin unique, or fail to appreciate the value of a truly decentralized currency system. Instead of getting info from the NYT or FT, can I suggest a reading of the bitcoin original paper as a starting point.

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