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You don't want to lose even more. In the bitcoins majority of cases, such an investment is likely to fail outright and lose all of the money invested. Casino game List of bets. Betfair Betfair sports among the world's probability online betting betting. Top American casino markets by revenue annual revenues:
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Over enough iterations, the eventual likelihood of loss generally grows to become one, in my opinion, as one must continue to time a market correctly time and time again for this to work. If you win, don't get carried away. The higher the goal line bet you make, the riskier it is to win it. If the team you bet on loses, you will have lost your bet. No ifs, ands, or buts.
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Related Opinions Will digital currency ever replace paper money? On the flip side, if the world suffers a global financial meltdown on the scale of the Great Depression or something similar again, and fiat currencies probability to crater, it very well may be such that bitcoins are forced to resort to accepting bitcoin betting other cryptocurrencies, if enough people simply betting out refuse to put their betting in bitcoins. These are currencies that are probability controlled in their supply sports creation by a national government, and are backed by nothing but faith in that government. A 33—33—33 split would allow me to invest 3 times when I felt the market was at probability particularly good time for investment, and a 50—50 split twice. My personal bet would be absolutely, wholly, and unequivocally bitcoin. A breathless session saw sports quite bitcoins 23 cars blanketed by just eight tenths of a second with sports changing at almost every moment.
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It is controlled by no single party and is both decentralized and distributed. Who is the scammer, if there is no one in charge of it? Bitcoin is a bubble, and so is every other form of money.
A bubble is when people buy an asset, not to use it, but to trade it for some other asset at a later date. Like Las Vegas real estate in , or Amazon. Com stock in , or tulip bulbs in And also like US dollars and like gold.
If an asset is held only to trade it away later, and it fails to become money, the bubble pops and it becomes worthless. If it becomes money Sceptics can read the source code, and evaluate it. Everything in bitcoin is completely open, that's the beauty of it. If it is a scam, why can I buy actual things with it right now? There's going to be a bumpy road ahead, much like any new technology before it goes mainstream. Its a decentralized meaning nobody can scam you digital currency that floats like a real currency, except no one country backs it, the people who own bitcoins back it, and add value to it at the same time.
They can exist completely without any one central authority. Saying that Bitcoin in itself is a scam is just ignorant. Now saying that some people viewed as innovators of Bitcoin gone rogue are scammers is more appropriate. People as mark kerpeles mt. They used Bitcoin as their scam. Much like people used cash as their scam or gold as their scam. I haven't found anything malicious in that code or anything that would give somebody the upper hand.
Now if you are thinking, "well somebody can edit the code to steal your coins or make fake coins" that is not how it works. Yes they can make a "fork" of Bitcoin but it will be on a separate blockchain. Meaning you cannot transfer those "forked" coins to the original Bitcoin. Well what is the blockchain? The blockchain stores all the wallet addresses, transactions, miner power and so on.
It cannot be edited but only added onto with new wallets, transactions, miners etc. It is not a website, but stored inside of the application itself on each and every computer or miner with the application. The websites you can find the blockchain on only show a graphical representation of what the blockchain has stored in it. This means the more people who use Bitcoin, the more secure the protocol is. Which, at this time, it is very secure and Bitcoin itself has proved unbackable.
The only way people can "hack" Bitcoin is to hack the websites or wallets and use their data or stored coins for themselves. This happens in everyday life everywhere and should be null. Now, onto the wallets.
The wallets are NOT the Bitcoin protocol. They only use the Bitcoin protocol as a base of information. You could use command prompt for your wallet if you know how to code it.
This is why you can find multiple wallet providers with different features and security. They are not changing the protocol itself, but telling the protocol where to send the coins and storing that info in the blockchain. It is possible that a rogue wallet provider can program something malicious into the wallet itself to steal your wallet data to steal your coins but if you stick with well known wallets, you will not need to worry.
Online wallets can be dangerous so it is best to keep your wallet on a physical computer or USB. If someone makes a fake wallet that doesn't actually store real Bitcoin in it, you would be able to tell just by viewing the blockchain on a website. I have more to say, but not enough room on here. I will post about the human side of the ordeal I the comments. It isnt a scam, Its a very smart idea. No government back up, that means the government ends, youll still have your money. Think of it this way, the confederate states created their very own currency in the little bit of time they were around, once the US won the civil war, that currency was worthless.
WWIII, youll still have your bitcoin acceptable in places. Sign In Sign Up. Add a New Topic. Is Bitcoin a scam? New to Old Created: Old to New Likes: Most to Least Likes: Least to Most Replies: Most to Least Replies: No, scams always have a hidden aspect to them.
Related Opinions Will digital currency ever replace paper money? Do you think her suicide had anything to do with Bitcoin? Should Customs policies be regulated by the UN? Will warfare be more yes or less no common in the future? Are the effects of computer hacking on the American economy significant enough to warrant stronger legislation?
Do you believe love creates the ultimate happiness? Should Bitcoin be taxed by the IRS? Should banks have more regulations? Should there be more yes or less no regulation of music downloading websites? Gox disappearance be an isolated event yes or will it be the first of many Bitcoin collapses no?
Bitcoin is a joke and not safe. Read the following articles. Authorities have seized two accounts linked to a major operator in the booming Bitcoin digital currency market, Tokyo-based exchange Mt.
The move may prevent the firm from facilitating the purchase and sale of Bitcoins in U. Bitcoin, which unlike conventional money is bought and sold on a peer-to-peer network independent of any central authority, has grown popular among users who lack faith in the established banking system. The price of the volatile currency ballooned in March as a result of the Cyprus bank crisis. Authorities worry that a lack of regulation has left the currency vulnerable to money launderers and other criminals.
The US government or any government can take control over the high level Bitcoin internet domains and the domains of those who exchange bitcoin for dollars, e. Once those domains are taken over, guess what? Once, the government takes over these domains in their countries, no one will be able to trade in or exchange bitcoins for dollars; so your bitcoins become worthless. The US government can do that to Bitcoin, and I am not talking about the small individual personal bitcoin accounts; I am talking about the large commercial bitcoin accounts, especially those sites that exchange bitcoin for currency.
By law, America banks were blocked from exchanging money with those internet poker sites. The FBI owns one of the biggest Bitcoin accounts. In September, the FBI shut down the Silk Road online drug marketplace, and it started seizing bitcoins belonging to the Dread Pirate Roberts — the operator of the illicit online marketplace, who they say is an American man named Ross Ulbricht.
The FBI now controls more than , bitcoins that reside at a bitcoin address that consolidates much of the seized Silk Road bitcoins. His stash is spread across many wallets. What kills me is that this little punk - the inventor of Bitcoin - Satoshi Nakamoto is a millionaire and he has done nothing to earn it.
Are all you people just to stupid to see what a scam Bitcoin is? Then there is the fact that most retail merchants are not buying off on this bitcoin bull. It is hard to even find a handful of retail merchants that accept bitcoin. I think there are only 1, businesses in the world that will accept bitcoin, and most, if not all of these, are small merchants and none are large retail chains.
The code is written in such a way that clearly specifies the conditions of the contract, and will automatically enforce these conditions.
For instance, if two parties decide to make a bet on Donald Trump winning the election, historically, this could only be done by either word of honor or by some ad hoc legal contract.
Normally, the reneged-upon party would simply be left in the dust without recourse. With the advent of smart contracts made possible by the blockchain, however, this is soon-to-be a thing of the past. No ifs, ands, or buts. The code is clear, objective, and deterministic.
Either the contract is fulfilled in one direction, or it is fulfilled in the other. No need to trust the other party in the bet at all, much less a third party to mediate. Ethereum, as will be noted later hopefully in another article because my god I never want to write again , takes this concept to the next level and runs with it. One further benefit to bitcoin is that it is truly yours to own, and you can keep it yourself, without the need for a bank or any other intermediary, and use it just as easily as you might a credit card.
It also ensures, however, that no one can take your money from you even on an individual basis, global financial apocalypse aside. Refugees and other victims of persecution and oppression are clear examples of this. As a refugee, generally, if you hope to escape with your money, you have to carry it in physical form on you, either in gold or in paper currency.
This is limiting for a few reasons: It sounds incredible, but this is real life. Chase refused to allow him to do so, so he decided to sue Chase for depriving him of his assets. This underscores the oft mercurial whims of governments, even well-regarded ones like that of the United States, that most citizens heretofore have been subject to without relief or alternative. Most of the time, things run well enough that we all get by without having to think about this fact too much.
Sometimes, however, things do go really, really wrong. Bitcoin fundamentally changes this equation. Unlike even gold, bitcoin is nigh impossible, when stored correctly, for anyone to confiscate without consent.
Without this private key, it is generally impossible to steal the bitcoins held at the public address to which the private key corresponds. So long as you keep this private key secure, your bitcoins are secure. The intangibility of bitcoin, however, does seem to hang some people up.
They are nothing but a concept, backed up by some computer code. Gold is a physical, tangible object that you can hold in your hand. It has real uses in industry and as jewelry that lend it value. Even paper money can be used for kindling or toilet paper if the need necessitates.
Bitcoin, on the other hand, is fully intangible. It is just a concept backed by code, no more, no less. How could something like this possibly hold value like other existing currencies? What is the value of that real-world utility? Without that underlying perceived value, it would command far less value in jewelry. Consequently, the question still remains about the gap between the industrial and medical value of gold and the actual value of gold as determined by the market.
Where does the value in that gap come from? This is even more true of paper currency. Yes, you can utilize and reuse the paper for all the intrinsic value paper has. But what is that intrinsic value of paper? This is easy to answer, because we can just see how much the government pays to make paper money. Where does the rest of that 95 cents of value come from? It is our shared collective trust and belief in a currency that gives it value, not its intrinsic tangible utility or anything else.
Gold holds its value well because we trust that we will all collectively continue to trust it as a store of value forever, predominantly due to its scarcity and lack of centralized control. Fiat currencies hold their value well when they do because people trust that everyone else trusts the currency as well, and that it is deserving of trust. This is why no fiat currency has ever stood the test of time over a long enough timescale, whereas gold has to date always stood the test of time and retained its value well.
Collective trust for gold has never collapsed because of its inherent scarcity and immunity to the vicissitudes fiat currencies must endure at the hands of capricious centralized governing powers, whereas collective trust in every historical fiat currency has inevitably failed to date, and collective trust in many present-day fiat currencies continues to fail as we speak. Bitcoin, on the other hand, has a precisely and publicly known proliferation schedule, and will approach the limit of its supply in just a few more decades.
As a thought exercise, imagine a new fledgling nation called the United States came into formation and decided to create their own fiat currency today. At the same time, bitcoin is introduced as a currency. Which would you trust? My personal bet would be absolutely, wholly, and unequivocally bitcoin. With the new US currency, I would be effectively required to trust that the US government would act without fail over the entire course of its indefinite existence to practice perfect fiscally responsible habits and not screw up its economy in any dramatic ways.
I would also be aware that even under perfect circumstances, the currency would be fundamentally designed to inflate, and consequently my money would continue to lose value over time if I decided to hold and save it.
Furthermore, I would be forced to use an intermediary financial institution such as a bank to hold my money for me, and thereby expose myself to yet another layer of required trust and accompanying risk.
I would also be aware that these institutions would almost certainly practice fractional reserve banking to the maximum extent they could get away with it, such that they would be extremely fragile to small perturbations and vulnerable to things like bank runs and runaway systemic banking collapses.
Furthermore, no one could forcibly confiscate my money under any circumstances, as I could always store it in such a way that it could never be retrieved except with my consent. No one would even necessarily be able to know how much money I held, unless I chose to make that information public.
The other common argument against bitcoin is that it is useless for any real world functions right now besides ransomware and illegal activities, and is therefore worthless because it has no good use cases.
This is a fundamentally flawed argument that can be lobbied against absolutely any new technology or invention, and fails to take into account the natural process of growth and gradual adoption over time. Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms. They speak of electronic town meetings and virtual communities. Commerce and business will shift from offices and malls to networks and modems.
And the freedom of digital networks will make government more democratic. Do our computer pundits lack all common sense? The truth in no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works. Today, remote workers are a huge part of the global workforce.
Online education is booming. Amazon is taking over all of commerce and is larger than any retail store in the world. Print newspapers and magazines are dying left and right, replaced by a proliferation of online news. The same growth trajectory is how I see bitcoin, cryptocurrency, and blockchain technology at large playing out. Yes, today, it is far from this goal, but even now, we make progress in pushing forward the utility of bitcoin in every day pragmatic life.
Already, it has proved indispensable to myself and hundreds of thousands of people around the world. Were I to send them a wire as I used to , their banks demand a mountain of documentation detailing every last dollar and hold their money for upwards of half a month before ultimately releasing it to them.
Naturally, this is a pain in the ass and highly inefficient, time consuming, and resource intensive for all of us. Bitcoin easily sidesteps all of these issues. Bitcoin is also dramatically cheaper to use than almost any other form of international money transfer today. Already, for this use case alone, it proves its worth over current dominant international money transfer solutions, such as Western Union. I can transfer money to anyone in the world, in any amount, and have them receive it without moving a finger in just a few minutes.
When we were paid in bitcoin, however, these concerns were completely eliminated, as fraud is an impossibility on the bitcoin network with enough confirmations. This is only the beginning. It takes time, training, and a fair bit of luck. The same is true of bitcoin and blockchain technology.
If you see potential in that horse, and are willing to wait it out for the long run, go ahead, bet on that horse. One day, it might just take over the world, and if it does, you might just win big. Many, if not all of you, are wondering how you, too, can get on the gravy train and start making millions. This is the reason I first started paying attention to bitcoin.
In fact, bitcoin has already proven to be the best investment in all of recorded history by a shocking margin for those who got in at its most early stages. Do keep in mind that this is all entirely my own opinion. Please come to your own conclusions here. The most common mistake people seem to make is investing solely based on the price alone and its short term historical trajectory, and nothing else.
The fourth mistake is day trading, and trying to capitalize on short term market movements. I remember thinking to myself that it was clearly too late to get in, and promptly forgot all about bitcoin. I resolved to not make the same mistake again, and tried to get in before I missed out again. Before I knew it, I was addicted to constantly checking the price, and spent a full 48 hours doing nothing at the height of the November bubble doing nothing but refreshing BTC-E.
I ended up making another big mistake here too, and figured that bitcoin had already gone up way too much, and that my best bet was to invest in some smaller altcoins as well.
The buzz at the time was that litecoin would be to silver what bitcoin was to gold. The price seemed incredibly low compared to bitcoin, and this made a superficial sort of sense meaning, no sense at all , so I decided to jump in. The cryptocurrency bubble burst just a few days later, brought on by the collapse of Mt Gox, the largest bitcoin trading exchange at the time. It was revealed that Mt Gox had either been hacked or embezzled from, and no longer had any funds left to honor customer withdrawals.
As a result, anyone who had decided to keep their bitcoins in Mt Gox at the time instead of withdrawing them to their own wallets ended up losing all their money. As a general rule, what goes up can come down, and what goes up particularly quickly is privy to come down just as quickly. What I ended up learning was something the smartest people in the investment world had learned a long time ago.
At face value, this makes no sense. Only after coming to a conclusion about the actual value of a company and its future potential value, should an investor then look to what price the market has assigned a stock, in ascertaining whether or not a stock is a good purchase. We have a general understanding of what this price should be, and are more than happy to buy watermelons when they are on discount relative to their fair price, and are reticent to do so when they are being sold at a premium to their fair price.
In all of these cases, however, a value investor first and foremost must decide, with rigorous analysis and thorough examination, what they believe the fair value of an investment to be, and what degree of future potential it has. Only from there do they then examine what value the market has assigned the investment, in order to ascertain whether or not the investment is a wise one likely to yield good returns.
Under no circumstances should one ever buy into a stock without knowing much, or anything at all about the stock, save for the general market sentiment or hype surrounding it, and its short term price movements.
Buying a stock merely because it has seen great gains in the past, without any understanding of why it saw those gains and what gains it might expect to see in the future based on fundamental analysis of the stock, is an inordinately risky and foundationally bereft strategy. He pioneered a lot of the foundational concepts around value investing, and can give you much better and more nuanced advice than I ever could.
All of this said, while these principles can and should be kept in mind at large for just about any investment, cryptocurrencies are dramatically different from stocks, bonds, or any other sort of traditional investment vehicle.
Investments, under this distinction, would be clarified as things that could generally be safely assured not to suffer from dramatic, catastrophic losses in the absence of dramatic, catastrophic situations. Coca-Cola and Walmart might be considered investments. Speculations, on the other hand, are like the Wild West of opportunities. In the vast majority of cases, such an investment is likely to fail outright and lose all of the money invested.
In a few instances, however, that investment just might succeed, and return tens, hundreds, or even thousands of times the principal invested. Poker might be a suitable analogy. The goal, simply, is to win more than you lose, and with the right amount of skill, knowledge, and preparation, this is a possible feat in poker.
The same might be said of speculative investments such as those in cryptocurrency. You can and absolutely should do your part to learn as much as possible about this field, and come to your own personal conclusions on its current and future potential value.
However, no matter how much research you do and how many calculations you make, there will always be a fundamental and inextricable degree of pure luck involved in determining the ultimate outcome of your speculation. At the same time, I also see a million and one ways where bitcoin fails to reach the promised land. This forces those who want to have their transactions go through to pay inordinately high transaction fees in order to prioritize their transaction over other transactions.
The implementation of the Lightning Network and other solutions threatens to take away this extra revenue stream. Hence, users of bitcoin and miners of bitcoin find themselves at odds with a very understandable conflict of interest.
If exchanges were banned from operating, for instance, it could very well make it very difficult for most people to transact between fiat currencies and bitcoin, and render the latter far less useful than it otherwise might be. On the flip side, if the world suffers a global financial meltdown on the scale of the Great Depression or something similar again, and fiat currencies start to crater, it very well may be such that governments are forced to resort to accepting bitcoin and other cryptocurrencies, if enough people simply flat out refuse to put their stock in fiat.
This was exactly what the US government was forced to do just 13 years into their original experiment with Continental currency, when they agreed to promise to back all the currency they issued with hard gold and silver. These are just a few of countless twists and turns and vicissitudes our much vaunted and much derided bitcoin will have to endure before its long journey comes to an end, either six feet under or as an indelible fixture in our global economy.
With most altcoins, their value over bitcoin or ethereum is far from clear, and generally superficial or minor at best. Dogecoin offers just about no fundamental innovations over bitcoin, and is in fact a self-deprecating cryptocurrency premised initially, at least entirely on poking fun at itself.
The name itself is a reference to the doge meme, and offers little to no further justification for its existence. Come to your own conclusions here. In a case like that, the notion is that litecoin would be able to quickly take over the ground lost by bitcoin, and become the dominant cryptocurrency. The true feat here will be discerning those few new technologies with true fundamental potential and innovative advantage and an incredible execution strategy behind them, from the vast swaths of similar looking yet ultimately worthless contenders almost certainly doomed to eventual failure.
In short, expected value is a way to decide when an outcome is not certain, but a set of outcomes are probabilistically determinable, if a given action is going to be net positive or net negative, and to what degree.
The simplest example is flipping a coin. Expected value of betting on the coin yielding heads, hence, is 0. Hence, if you repeated this bet an infinite number of times, you would be guaranteed to be earning more money than you lost.
Similarly, if you were able to bet at 1: Hence, repeating this bet an infinite number of times would allow you to dramatically earn more money than you lost yet again. This means that if I truly believe this is a possible outcome for bitcoin, then as long as I believe this outcome has more than a 0. There is only one bitcoin in the world, and we only have one opportunity to play out this exact bet. Returning to the question of calculating potential investment upside here, there are countless other ways to make projections on the future potential value of bitcoin, and I encourage you to try to make some depending on your personal beliefs regarding the level of success bitcoin might have, and the ultimate utility it might provide to the world.
For instance, if you see bitcoin primarily as a way to simplify making international transactions and cut out inefficiencies there, you might look to see what the overall market size is for a solution that might solve that problem and capture that market.
If you think bitcoin will be used to primarily enable black market transactions, same deal. I hope that this elucidation provides some insight into why I personally see it as suspect to invest in something based on price alone, and why I urge extreme caution particularly if one is exploring whether or not to invest in an altcoin, especially if one is at least partially motivated to do so because of the feeling that the ship has already sailed for bitcoin, and that there might be better potential for outsized gains with a smaller altcoin.
Instead, I have to hold that investment with firm conviction in what I believe the eventual price based on fundamentals is worth, regardless of how the market values it in the present moment. This is critically important precisely for incredibly volatile speculative investments such as cryptocurrency, and plays into the fourth mistake I mentioned above, day trading, as well.
Other times, things rise when reason seems to suggest they should fall, and fall when they seem to have every reason to rise. It was speculated that if the ETF were to be rejected, that naturally the price would fall to where it was before the bull run began. Consequently, with the short term price movements of bitcoin and other cryptocurrencies being incredibly volatile and oftentimes nothing short of inexplicable, I highly caution anyone against making decisions such as selling their bitcoins on the way down in anticipation of a market crash, so as to either avoid the crash or to buy their coins back at a cheaper price at the bottom of the crash.
This goes hand in hand with mistake number four I mentioned above: This is absolutely number one the reason I see people who have gotten into bitcoin and cryptocurrency lose their money. If you at almost any point in the history of bitcoin earlier than say, this month of June , merely bought bitcoin and held it to the present day, you would have made money.
However, countless people have actually lost money in bitcoin, and this is because they ended up trading their bitcoin somewhere along the way. At face value, this seems to make sense. If you think you can time when the dips will occur and when they will end, and similarly when the peaks will occur and when those will end, you can definitely make more profit along the way by selling high and buying low.
Indeed, some market movements are fundamentally unpredictable in their short term timing. Both of these events absolutely cratered the price of bitcoin and ethereum respectively, and both of them were fundamentally unpredictable in their exact timing.
At this point, they lose faith, and decide to sell their investment to at least recoup some of their initial capital, and not lose everything outright. The thinking goes that if this is going to be true, you might as well profit from this speculative mania and buy in now, wait for a little bit for the price to rise, and then sell it for short term profit.
By mere inviolable fact, most people who engage in this form of speculation are guaranteed to lose in a big way. Over enough iterations, the eventual likelihood of loss generally grows to become one, in my opinion, as one must continue to time a market correctly time and time again for this to work.
While it may seem like the market will continue being bullish for you to get in and get out before things go south, this is true of every moment in time right up until things go south all at once. Inevitably, at some point, the gravy train will have to derail and explode in a rolling ball of fire.
It felt like I had made an absolutely stupid, foolish decision, and had lost all my money. I made a stupid, foolish decision in deciding to invest in bitcoin and altcoins without actually having done my research and without really knowing anything about them.
The crash proved to be the best thing that could have happened, however, because it gave me time to actually do my research and learn about bitcoin, and have real reasons for believing in it long term, at a point in time where the price was unusually deflated. It was at this time, incidentally, that Coinbase, became worried about stagnant growth of their user base, and decided to offer a truly astounding proposition. Digression aside, that sums up most of the thoughts I have about the primary things to be cautious about when it comes to bitcoin investment.
I have no truly great pieces of wisdom to offer here, but do have a few ideas that primarily aid in being psychologically being resilient to the short term vicissitudes of cryptocurrency investment. One might be hesitant, with not bad reason, to invest at an all time high, even if one believes that that all time high will one day be exceeded.
I think that this is a great strategy, and personally practice it with a few modifications. You can just use them directly, just as you might US dollars or any other form of currency. As for investing an initial lump sum to begin getting exposure in this space, my personal strategy would be to do a semi-timed dollar cost average, if one is particularly concerned that they might be investing just before a local minimum market crash, but also particularly concerned that the price may keep rapidly appreciating ad infinitum, and would like to get in before that happens.
A 33—33—33 split would allow me to invest 3 times when I felt the market was at a particularly good time for investment, and a 50—50 split twice. Just random arbitrary examples of divisions I might do here, depending on how exactly wary I feel about the market at the present moment in time.
That about sums up my thoughts on cryptocurrency investment at large. The shortest section by far. If you made it this far, you deserve to just be able to buy your crypto and be done with it all. There are still quite a few bases to cover, however.