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Bitcoins to Stabilize Retirement.
07-11-2016, 12:13 PM
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#1
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Recycles dryer sheets
Join Date: Jun 2014
Posts: 100
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Bitcoins to Stabilize Retirement.
That somebody would suggest this completely floored me:
Will Bitcoin Be the Leg That Stabilizes a Failing Retirement System?
I don't buy this whole '401k is failing us' line when the problem is not saving. Seems almost criminal to suggest people invest in bitcoins.
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07-11-2016, 01:09 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Posts: 3,046
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I remember watching Bitcoin at $13 but could not figure out how to actually buy them. Now they are $650.
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Bitcoins to Stabilize Retirement.
07-11-2016, 01:38 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,306
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Bitcoins to Stabilize Retirement.
Huh. I'm confident that my investment in Beanie Babies will stabilize my returns in retirement better than Bitcoin. ;-)
Seriously- I've always believed you shouldn't Invest in stuff you don't understand and that rule has served me well. I just don't "get" Bitcoin so I can't really understand its potential risks vs. rewards.
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07-11-2016, 02:07 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Sep 2012
Posts: 1,568
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It's almost criminal what the Central Banks of the world are doing to "real" currencies. Who would've believed Negative interest rates?
From my limited understanding, an attraction of Bitcoin is that, similar to gold, the supply cannot be manipulated like "real" currencies can, but it's in digital form.
Gold/Bitcoin seem like high volatility ways to diversify your cash holdings.
__________________
You know that suit they burying you in? Thar ain’t no pockets in that suit, boy.
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07-11-2016, 02:13 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Quote:
Originally Posted by gcgang
Snip..
From my limited understanding, an attraction of Bitcoin is that, similar to gold, the supply cannot be manipulated like "real" currencies can, but it's in digital form.
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So digital things are safe and no one can break the algorithm.
I say that and realize our future is based on dollars that exist only by the presence of zeros and ones on several mainframe computers.
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07-11-2016, 03:01 PM
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#6
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Bitcoin is a very dangerous place to put your money in. Huge tail risk, impossible to predict what will happen.
I've been following it since late 2012, have owned it and sold it, and looked into the underlying principles fairly deeply.
There are multiple vulnerable points, just two that are overlooked easily:
- The central community developing bitcoin is fairly small. Think the federal reserve consisting of a few key programmers.
- Although the system is distributed, in practice the ownership of the key resources (miner pools) are concentrated. If anyone gets control of 50%, all bets are off. At that point one party basically has the power to authorize double spending, just to give one example. Three pools have >55% already, so can collude if they want too. Oh, and most of the pools are located in China ..
And that's next to the usual suspects of governments stepping in, another coin getting more traction, and the fact that this is not a fiat currency nor a valuable commodity. In addition to plenty of thefts and fraud that has occurred in various places.
Just one quick look at the exchange rate chart and stability is not the word I would use in any sense.
Stick to pieces of stable companies. Like tobacco
[Edit] Not saying you can't get rich with it. It's just an extremely risky speculation.
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07-11-2016, 03:22 PM
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#7
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Moderator
Join Date: Oct 2010
Posts: 10,622
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The article sounds like it's throwing the idea out there to expand the base of users into the retirement set. Right now, I'm not sure I like a goodly fraction of bitcoin holders. I certainly don't like everyone with dollars in their pockets either, but at least the bad guys are diluted with everyone else.
I'm not sure how having bitcoins concentrated over 50% in one place would allow double spending. How would concentration affect the blockchain?
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07-11-2016, 04:09 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2008
Posts: 13,127
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I just checked my calendar. Nope, the day not April 1st. Almost had me fooled .
__________________
Have you ever seen a headstone with these words
"If only I had spent more time at work" ... from "Busy Man" sung by Billy Ray Cyrus
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07-11-2016, 05:55 PM
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#9
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Full time employment: Posting here.
Join Date: Aug 2015
Posts: 550
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There are a few problems with Bitcoins: the price looks like ballooned to purchase currently, any computerized based currency could be hacked into and stolen (without FDIC there is no compensation), Government could outlaw it because a wide spread of bitcoins would challenge the US$ use. FDR Gold confiscation paid at $20 per Oz, while within a year they raised Gold price to $35 per Oz, but with bitcoin it may not be the case.
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07-11-2016, 11:23 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,501
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Who accepts it for payment? I haven't bought anything where the price was listed in BitCoins.
I remember Silk Road was listed as a major outlet for suppliers accepting bit coins when the Feds / InterPol shut it down, but I wasn't in the market for weapons, drugs, or slaves at the time.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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07-12-2016, 06:54 AM
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#11
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Quote:
Originally Posted by sengsational
I'm not sure how having bitcoins concentrated over 50% in one place would allow double spending. How would concentration affect the blockchain?
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Not the bitcoins, but the miners.
Miners are the computers that validate the blockchain transactions. Validation is basically a voting process, where >50% of the votes 'win' in case of disagreement (who sent what to whom).
Roughly how it works: you send a bitcoin to a merchant, announce that to the network. Merchant sends you the goods or services as soon others confirm (typically 4 to 6 others) and agree on the transaction. This is what miners do.
In parallel however you create a separate transaction where you send that same bitcoin somewhere else.
Two different versions of reality are in the world now. Agreeing on which version is 'real' happens by majority voting, to keep the entire blockchain consistent. Since you control the majority of the resources, you have the majority vote.
The merchant loses his bitcoin after losing the majority vote.
Does that make more sense?
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07-12-2016, 03:50 PM
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#12
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Moderator
Join Date: Oct 2010
Posts: 10,622
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Yeah. But wouldn't a double transaction destabilize the currency for the guy that has the most to lose? It would all be a part of the public record, so analyzed. The 51% guy would be worth pennies on the bitcoin over night. What would be the motivation?
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07-13-2016, 11:01 AM
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#13
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Depends.
The mining pool can get hacked. Bitcoins can be shorted if the mining pool operator isn't that profitable for a huge one-time gain. A government can seize the assets and force a collapse. A few options.
It's a single point of failure, so it creates a vulnerability. Just like (and even more so than) fiat currencies.
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