Bitcoin Killer App: High Yield Investments

[Mageant]

I really like Bitcoin and find it very promising, but when I initially found out about Bitcoin last year there was no compelling reason for me (other than to try it out) to actually use Bitcoin.

In the past few months it has changed.

Bitcoin is now really useful to me and enables me to do something new which I would otherwise not be able to do.

That is namely, to make more money from investments than I usually could in the 'fiat world'.

I see this as a great opportunity and quite persuasive reason for people to get into Bitcoins.

I'm not only counting BS&T (Pirate) but if you look on GLBSE there are plenty of investment opportunities which yield very high interest rates: 1% per week is common, and you can easily diversify your investment to protect against risk.

This is a staggering annualized rate of 67% which you would not otherwise easily get, at least not with the amount of capital most people have available.

So what do you think? Is this the "killer app" for Bitcoin we have been waiting for?

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[BadBitcoin (James Sutton)]

 I don't think anyones been "waiting" for that, its been widespread since it began a few months back, it certainly is helping the economy, though.

[Frankie]

I agree that there's a potential consumer of this "killer ap" born every minute.

Not sure it's good for bitcoin, however.

[defxor]

So what do you think? Is this the "killer app" for Bitcoin we have been waiting for?

If you ask and get a rational explanation back as to how that high yield is reached - sure. If not, then you're just going to a casino.

[Vitalik Buterin]

Every time you see a really good investment that's handed to you on a silver platter, you should immediately ask yourself one question: why isn't everyone else doing it?

If the answer is "because the investment just got created a few weeks ago and you got lucky enough to see it first", ask a follow up question: why didn't the guy just max out his credit card at 21% instead of seeking your money at 60%?

The only high-yield investments that can possibly be justified are those within the Bitcoin community - ie. those where the debt is denominated in BTC, and which traditional investors would not be willing to touch due to currency risk. So Bitcoin is not really enabling anything outside of itself.

[kjlimo]

I agree that GLBSE seems like it has some great opportunities, but I'm limiting my exposure in case it's a ponzi within a ponzi...

[CoinCidental]

I agree that GLBSE seems like it has some great opportunities, but I'm limiting my exposure in case it's a ponzi within a ponzi...

Inside 12 months most of these "great investment opportunitys" will have collapsed into  failure

the rewards are far too big to be sustainable

if real world  saving investments are paying 5% -8% per year its unlikely that BTC can continue to pay 67%-3400% without some people losing their principal ,i would love to be wrong about this but i think  the decisions of a few are  going to change the community forever

[conspirosphere.tk]

I keep invested about 70% of my BTC on the GLBSE from some time, but it is just play money, since I am quite worried that it may vanish in the air, be hacked, or taken down for a reason or the other.
Otherwise, the biggest mining companies seem quite a solid investment to me.

[finkleshnorts]

Some of the more transparent deposits and also personal loans are the main reason I keep buying bitcoins. I'd rather my money be working for me than having it sit in an interest-free checking account.

[CoinCidental]

Some of the more transparent deposits and also personal loans are the main reason I keep buying bitcoins. I'd rather my money be working for me than having it sit in an interest-free checking account.

there are term deposits and fixed rate acounts that pay % of interest and guarantee the principal

nothing like the rates of BTC investments though

[Bitcoin Oz]

If you leave money in a bank in Australia you get negative interest by the time fees are taken out. This is one reason I keep btc and invest some on glbse.

[markm]

Okay lets walk through it.

I start a nice little 1%/day HYIP, minimum "investment" $1000 USD.

Say I get only 1000 takers initially, thats only $1,000,000 USD.

1% for 365 days multiplies that up to $37,780,000.00 USD.

Now if I have been using all that money to buy bitcoins, how much would bitcoins be worth by then?

(I am assuming here that I actually rake in $37,780,000.00, on the greater sucker theory. That is, each $1000 someone wants to withdraw is obtained by selling another $1000 unit to someone else, so no withdrawals happen and the basic $10,000 raked in does grow up to a full  $37,780,000.00 raked in and turned into bitcoins.)

Now continue into a second year of operation... Bitcoins would have to go up in value in order for me to have raked in an additional 1% per day for another year and bought bitcoins with it all...

-MarkM-

[kangasbros]

Bitcoin Killer App: Ponzi Schemes

Yep, it is what people really want. People don't want to invest in interesting startups, who build products with long-term focus. They want to risk their life savings with gambling and ponzi schemes. Nothing wrong with that, people will get what they want  

[Vladimir]

Bitcoin Killer App: Ponzi Schemes

Ohh this is indeed a killer app, the only questions are who/what will be killed and when.

So far I see only common sense got killed, but surely the list of killee's will expand.

[FlipPro]

Bitcoin Killer App: Ponzi Schemes

Ohh this is indeed a killer app, the only questions are who/what will be killed and when.

[waspoza]

Bitcoin Killer App: Ponzi Schemes

Yep, it is what people really want. People don't want to invest in interesting startups, who build products with long-term focus. They want to risk their life savings with gambling and ponzi schemes. Nothing wrong with that, people will get what they want  

+1

[herzmeister]

Many more Bitcoin bubbles have been predicted, and this one's probably gonna be the next. It will not so much be through the Bitcoin price this time, the community seems to have learnt that, but it will be through a Black Friday on the stock markets, like in 1929. History keeps repeating, although perpetuating faster. It seems we only really learn when we experience.

[Gavin Andresen]

Good advice that I expect will be widely ignored: only invest in what you know.

So-called high yield investments are (almost?) always dressed-up Ponzi schemes. If you "invest" in them then please lick your wounds quietly when they implode. And if you're one of the lucky few who make money on them, don't expect me to admire your investing wisdom, any more than I'd admire the number-picking brilliance of a lottery winner.

[crazy_rabbit]

I don't think anyones been "waiting" for that, its been widespread since it began a few months back, it certainly is helping the economy, though.

Until of course some "unplanned" dramatic collapse which decimates the BTC price, makes normal people more wary, grossly enriches a sneaky moraless few, wipes out the gullible or naive and consumes the forums posts with re-incriminations, accusations and disgust.

So, I don't know, yes-and-no. :-)

[sunnankar]

the rewards are far too big to be sustainable

if real world  saving investments are paying 5% -8% per year its unlikely that BTC can continue to pay 67%-3400% without some people losing their principal ,i would love to be wrong about this but i think  the decisions of a few are  going to change the community forever

Not necessarily.

The interest rate an economy can support is directly related to the health of the underlying economy and stability of the currency (See The Theory of Money). In Bitcoin's case one can reasonably infer from the interest rates and limited currency supply that the Bitcoin economy is extremely strong.