[Daily Speculation Poll] :: Is bitcoin a risky invesment ?

[adamstgBit]

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[tvbcof]

Lamentable I vote high risk, but it is tempered with a few qualifiers.  I think that BTC retains the ability to produce an extremely high monetary reward (not to mention political and others.)  Tempering that, however, is a belief that one will have to be knowledgeable, agile, and fairly lucky to boot in order to make the most of the various fruit which it could bear.

[casascius]

If this is CATAN, here comes the robber!

[bulanula]

Why can't I vote ? Are scammers not allowed to vote either

I only see the options and that is it ...

[adamstgBit]

When it all started to take shape bitcoin was regarded as a high risk investment with Huge potential.

1) Its well understood that the bitcoin economy, regardless of its size ( a highly speculative figure ), will not be affected by price fluctuation. ( 1$ / BTC or 10$ / BTC, for merchants this is meaningless).

2) Speculation as to bitcoins huge potential growth as the #1 online payment solution, appears to have been short lived ( the bubble   )

3) Speculation as to bitcoin price movement is still very much alive, and so we have a high number of day traders trading bitcoins

4) Investors have no reason to fear bitcoin will fail anymore, the claims of bitcoins secure transactions and being impossible to counterfeit have been time tested and proven true


With all this said and done, bitcoin has proven itself.
The market is growing and has reached an equilibrium.

I would say bitcoin has become a medium risk investment while keeping its Huge potential.

But!

this Huge potential isn't priced into today's market rate. because Speculators have become skeptical as to bitcoin ever reaching main stream.

Most bitcoin Speculators agree, bitcoin will not suddenly grow100times its size in a matter of weeks. they belevie bitcoin will grow in a limited and gradual manner from now on.

They're jumping the gun on this one!
yes, Bitcoin will grow gradually, but it will also have grow spurts, as new technologies and ideas enable bitcoin to be more easily used and accepted

[da2ce7]

Low Risk...

p2p network enforcing the rules.

Credible and extremely capable development team backing project.


Bitcoin is lower risk than every other financial asset in existence.  However that says nothing about it's trading rate.

[adamstgBit]

I would like to see a post about why bitcoin is a high risk investment

2 years ago i would have agreed; bitcoin could of maybe gone back down to pennies, but that was 2 years ago.

so ya someone post your thoughts please.

[Garr255]

Bitcoin is trending upward, obviously, so I'd buy now regardless of (low) risk!

If this is CATAN, here comes the robber!

[waspoza]

I would like to see a post about why bitcoin is a high risk investment

Cuz its very small. Single person can crash the market.

[istar]

Bitcoin is not that high risc as it used to be. At $5 I would say its between high and low risc in the medium term.

The potential far outweights the risc.

The risc I see is that governments will outlaw Bitcoin, but that is acctually very hard and not so good thing to do since they would risc being left behind as the world starts to adopt Bitcoin and their value increase.



 

[anu]

My impression is that my Euros lost against everything, my $ lost against most and my Bitcoins gained.

[Cluster2k]

The risc I see is that governments will outlaw Bitcoin, but that is acctually very hard and not so good thing to do since they would risc being left behind as the world starts to adopt Bitcoin and their value increase.

Governments have nothing to gain from bitcoin.  There is no being left behind here.

Outlawing bitcoin is actually quite easy: show examples of drug dealers/pedophiles/terrorists using it (real or not), write a law, pass it, ban bitcoin use by citizens of the country where the government governs.  This would automatically prevent that nation's banks from dealing with bitcoin exchanges, thus frustrating most ordinary users' ability to use bitcoin.  No need to block actual bitcoin use.  Just threaten users with penalties similar to money laundering.

Bitcoin isn't very useful to most people without free and open ability to transfer money to/from exchanges and the subsequent funds to/from banks.  Try to sell 10000 bitcoins for USD$ on the internet without using an exchange to see how difficult it can be.

[Serge]

it's high risk on many fronts

- high risk on exchange rate
- high risk on lending
- high risk on investments
- high risk with 3rd party services and their security

[cheat_2_win]

The risc I see is that governments will outlaw Bitcoin, but that is acctually very hard and not so good thing to do since they would risc being left behind as the world starts to adopt Bitcoin and their value increase.

If government bans bitcoin, value of bitcoin will go up substantially just like any other banned item. Only remedy is to destroy. How? I don't know.

[Technomage]

I think that Bitcoin is definitely high risk. At the same time it has massive potential, so the overall balance is quite positive in my opinion.

[anu]

it's high risk on many fronts

- high risk on exchange rate
- high risk on lending
- high risk on investments
- high risk with 3rd party services and their security

Wow, thank you. Without this help, I would just own my Bitcoins and spend them without loosing much sleep. Now thanks to you I know that my brain wallet has a high risk of lending and investment. And when I sell or buy something on Bitmit, the operators will likely run with the coins in escrow.

Man, you made my day :-D

[Vandroiy]

Bitcoin is high risk. Many things could go wrong at this point. A simple failure to reach critical mass, scaling problems with the block chain, loss of faith due to some large theft (e.g. a security breach in some widely used software causing a large fraction of all online wallets to be emptied) ... there's a lot that can cause trouble.

If it were not high risk, we couldn't possibly be around 5 USD/BTC.

[Serge]

it's high risk on many fronts

- high risk on exchange rate
- high risk on lending
- high risk on investments
- high risk with 3rd party services and their security

Wow, thank you. Without this help, I would just own my Bitcoins and spend them without loosing much sleep. Now thanks to you I know that my brain wallet has a high risk of lending and investment. And when I sell or buy something on Bitmit, the operators will likely run with the coins in escrow.

Man, you made my day :-D

wear a helmet. it's good for your brain wallet 

[anu]

wear a helmet. it's good for your brain wallet 

You jack of all trades, thanks for pointing out another high risk of Bitcoin. And even sharing a solution. A helmet, wow!   

[miscreanity]

Governments have nothing to gain from bitcoin.  There is no being left behind here.

Established governments are in danger of being pared back, but the benefits are enormous. It's just a shame they're so hard to recognize from within traditional systems.

• Reduction or elimination of expenditure for currency management
• Increased transactional currency stability
• Preservation of purchasing power
• Long-term stability and viability

Outlawing bitcoin is actually quite easy: show examples of drug dealers/pedophiles/terrorists using it (real or not), write a law, pass it, ban bitcoin use by citizens of the country where the government governs.  This would automatically prevent that nation's banks from dealing with bitcoin exchanges, thus frustrating most ordinary users' ability to use bitcoin.  No need to block actual bitcoin use.  Just threaten users with penalties similar to money laundering.

It is impossible to legislate anything out of existence, especially anything making use of advanced technology. What you're describing is a smear campaign, which must be maintained and increased in proportion to the elimination target's growth. Because of this, the resources thrown at a 'problem' can rise to exhaust the ability of a government to manage it; time is not a factor in any centralised government's favor.

Currency exchanges are currently the weakest link, but that does nothing to stop internal growth in the Bitcoin economy - in fact, it paradoxically hastens the growth of Bitcoin. Increasing disincentives in fiat systems spur users to flee to alternatives. If the fiat restrictions are great enough, users may completely switch to selected alternatives instead of remaining exposed to liabilities in the former.

Enforcement of Bitcoin prohibition is completely laughable. This would be akin to attempting to directly control every cell in your body all the time using conscious thought. Growth in use can by slowed, much like an infection. If a finger is gangrenous, it can be amputated, but would you incarcerate one of your arms by tying it behind your back or losing it altogether? Both arms? A leg?

Bitcoin isn't very useful to most people without free and open ability to transfer money to/from exchanges and the subsequent funds to/from banks.  Try to sell 10000 bitcoins for USD$ on the internet without using an exchange to see how difficult it can be.

Not yet, but the transfer to/from banks becomes irrelevant when internal Bitcoin economy growth expands. As payment in BTC is accepted more readily, there is no need for conversion to fiat. This transition is all but guaranteed now.

Familiarity with the operation of precious metals as currencies lays the groundwork for comprehension of Bitcoin. By the end of this decade, prices might be primarily denominated in bitcoins and gold/silver grams instead of fiat; one-world currencies completely different from the totalitarian fears imagined during the 20th century.

[anu]

Bitcoin is high risk.

Good that there are alternative. German Government Bonds, for example. Guaranteed 0% interest and guaranteed monetizing of debt, little risk of default. This is my winner for this month. Low risk. Guaranteed loss.

[cytokine]

Yes it is risky, but the upside is nearly unlimited.

[floeti]

Does outlawing Bitcoin still sound easy?

What about surveillance with the help of ISPs? What about banning tunneling-techniques for private end-users?

[anu]

Does outlawing Bitcoin still sound easy?

What about surveillance with the help of ISPs? What about banning tunneling-techniques for private end-users?

Does that mean I can't log in to my customer's network via VPN just because i am a contractor?

[Rygon]

If governments made it illegal for banks to do business with companies that specialize in trading bitcoins, it would certainly be a big stumbling block for bitcoins. Denying that fact is silly. Banks will follow the law, the MtGox, Intersango, etc won't be able to open up real world bank accounts with which to transmit tens (or hundreds) of thousands of dollars a day in and out of. The exchanges in their current form would cease to exist.

Now, there are plenty of other options for exchanges, but laws like the one above would make it so the "Average Joe" would have a difficult time getting started on Bitcoin.

One option, as previously mentioned, is an exchange that trades bitcoins for commodity money that can't be regulated as much as fiat money. An exchange that solely used silver and gold, for instance. Of course, shipping around silver in order to get bitcoins would add risk for more people, and require them to be knowledgeable about several currency types.

[miscreanity]

What about surveillance with the help of ISPs? What about banning tunneling-techniques for private end-users?

That hasn't worked so well with I2P & Tor - and those are just the two most popular darknets. Deep packet inspection isn't effective for detecting properly encrypted tunnels, and is incapable of operating outside of its own network reach. Encrypted traffic can be made to look like HTTPS and a direct connection can be avoided by adding proxies.

[tvbcof]

What about surveillance with the help of ISPs? What about banning tunneling-techniques for private end-users?

That hasn't worked so well with I2P & Tor - and those are just the two most popular darknets. Deep packet inspection isn't effective for detecting properly encrypted tunnels, and is incapable of operating outside of its own network reach. Encrypted traffic can be made to look like HTTPS and a direct connection can be avoided by adding proxies.

Effectively hiding would necessitate a lot of bandwidth overhead (my theory mostly) which means that whatever traffic one wishes to transfer better be a smallish fraction of what one uses.  Streaming porn might be a good carrier.

Secondly, it might take balls of steel to risk getting caught if the penalty is being hauled off to some work camp somewhere.

While these are theoretical issues at this point, and probably will remain so, they are not improbably enough to completely ignore.   IMHO.

[tvbcof]

Does outlawing Bitcoin still sound easy?

What about surveillance with the help of ISPs? What about banning tunneling-techniques for private end-users?

Does that mean I can't log in to my customer's network via VPN just because i am a contractor?

I would conjecture that VPNs and similar solutions for secure communications might be authorized to be run only by licensed operators (and that part of the licencing requirements would include a functional back-door for what's known as lawful intercept.)

I also suspect that one may need to establish identity via bio-metrics or some other fool-proof method prior to being able to access the internet at all.  It'll be sold as big brother's helpfulness in overcoming the problems of identity theft and stopping those bad bad terrorists and the massive amounts of kiddie porn hiding out in the ether.  And I figure that it will be massively popular with the sheeple.

I'm not saying that such things are eminent or certain, but it does seem to me very possible that attempts in those directions will be made.  In conjunction with draconian penalties they probably could be fairly effective.  Certainly enough so to put a damper on so-called 'intellectual property theft' which is driving corp/gov crazy and something like Bitcoin in it's current implementation.

[anu]

I would conjecture that VPNs and similar solutions for secure communications might be authorized to be run only by licensed operators (and that part of the licencing requirements would include a functional back-door for what's known as lawful intercept.)

I also suspect that one may need to establish identity via bio-metrics or some other fool-proof method prior to being able to access the internet at all.  It'll be sold as big brother's helpfulness in overcoming the problems of identity theft and stopping those bad bad terrorists and the massive amounts of kiddie porn hiding out in the ether.  And I figure that it will be massively popular with the sheeple.

I'm not saying that such things are eminent or certain, but it does seem to me very possible that attempts in those directions will be made.  In conjunction with draconian penalties they probably could be fairly effective.  Certainly enough so to put a damper on so-called 'intellectual property theft' which is driving corp/gov crazy and something like Bitcoin in it's current implementation.

Any of this is plausible and may be required in any legislation. But when it comes to Bitcoin, it's quite easy to find a legal solution to get rid of if or pervert it:
Just add a requirement that VAT & friends can be processed in real time:
http://bitcoinmedia.com/the-brave-new-world-of-mobile-payment/
This would IMHO take care of Bitcoin, without even targeting it. It would force the payment providers to implement an RTPay gateway.

[tvbcof]

Any of this is plausible and may be required in any legislation. But when it comes to Bitcoin, it's quite easy to find a legal solution to get rid of if or pervert it:
Just add a requirement that VAT & friends can be processed in real time:
http://bitcoinmedia.com/the-brave-new-world-of-mobile-payment/
This would IMHO take care of Bitcoin, without even targeting it. It would force the payment providers to implement an RTPay gateway.

Interesting read.  Thanks!

[dreamwatcher]

I voted low risk, but I see it more low-medium risk.

I see the world economies on the verge of economic crash unlike anything we have see.

Fiat currency ,reserve systems and fractional banking are all unsustainable systems in themselves and almost every country in the world uses at least 2 with major economies having all three (Reserve system).

I believe the "official" push-back against bitcoin is because TPTB, want to have their "new" currency to take hold as soon as possible after they have completely sucked the current systems dry.

Bitcoin is currency TPTB cannot effectively control and as soon as more people have knowledge of bitcoin and have seen through the BS propaganda, it will appear more attractive and its use will grow exponentially.

If not bitcoin, some form of currency based on the principles of bitcoin will take hold.

Just my .002 Btc...take or leave it...

[miscreanity]

Any of this is plausible and may be required in any legislation. But when it comes to Bitcoin, it's quite easy to find a legal solution to get rid of if or pervert it:
Just add a requirement that VAT & friends can be processed in real time:
http://bitcoinmedia.com/the-brave-new-world-of-mobile-payment/
This would IMHO take care of Bitcoin, without even targeting it. It would force the payment providers to implement an RTPay gateway.

Yes and no. As always, what we end up with will be more complex than it appears. There is an incentive structure that makes Bitcoin appealing no matter what stigma is projected on it.

Very similar to tax havens and countries friendly to international business corporations or trusts, there will be regions that openly offer the flexibility and freedom to use Bitcoin without backlash. Much discussion has been made about how Bitcoin reduces 'friction' in finance. When benefits and 'a better way of doing things' become apparent, they will eventually be adopted even in spite of opposing pressure.

There might always be VAT and government interference, but legislation can only delay or mask beneficial ideas and practices. No gathering of politicos can wave their collective magic fountain pen wands and make Bitcoin disappear any more than they've been successful at making Bittorrent vanish, because time is not on their side.

[anu]

There might always be VAT and government interference, but legislation can only delay or mask beneficial ideas and practices. No gathering of politicos can wave their collective magic fountain pen wands and make Bitcoin disappear any more than they've been successful at making Bittorrent vanish, because time is not on their side.

Agreed, Bitcoin would not go away. But the use of exchanges would be difficult, maybe impossible. If all money is electronic and all transactions are known by the government through something like the RTPay gateway, then you can't do an illegal transaction without getting caught immediately.

This setup would make Bitcoin the choice of payment for any illegal transaction, but also any transaction which might be legal, but people prefer not to leave a paper trail. On second thoughts, this may even help Bitcoin grow, but it would push it into a niche where we don't want it.

[miscreanity]

On second thoughts, this may even help Bitcoin grow, but it would push it into a niche where we don't want it.

Who's 'we'?

[anu]

On second thoughts, this may even help Bitcoin grow, but it would push it into a niche where we don't want it.

Who's 'we'?

Very obvious, isn't it? It's the group of people who doesn't want Bitcoin to be limited to only illegal business. I count myself to that group. Therefore I say 'we'.