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Fretting over savings, Asia's moms and pops turn to bitcoin

11 Comments
By Minami Funakoshi and Joyce Lee

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11 Comments
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Seems incredibly risky business.

3 ( +3 / -0 )

They would be better putting a percentage of their savings into Precious Metals - the Chinese and Russians Governments are, it appears Japanese Criminals seem to be with all the recent high profile gold robberies

0 ( +0 / -0 )

Bitcoin is largely unregulated across Asia

The Bitcoin is self-regulating, due to it's fixed supply. There are two ways at looking at the value of things like the Bitcoin or precious metals, one being that they are increasing in value, or that the currency used to buy them is decreasing in value.

"Regulated" currencies like the yen, dollar, and euro are not being regulated very well, as countries continually devalue their currencies to facilitate more deficit spending, and to manage their staggering sovereign debts. Regulations which formerly applied to national currencies (like prohibitions of buying one's own debt) are largely ignored, as governments and central banks continue to look for further strategies to pump up their economies in absence of genuine economic growth.

0 ( +1 / -1 )

Bitcoin is pure speculation, no investment. How long is it until the next cryptocurrency becomes more popular than it, and it's value plunges? A matter of months probably.

That said I doubled my playing money after buying a satoshi earlier this year, but it was just a speculation to give it a whirl.

-1 ( +0 / -1 )

Bitcoin is pure speculation, no investment.

So is every currency. The fundamental concept of bitcoin is no different than any other currency - it only has value based on people's confidence in the currency. 'Normal' currencies are backed by a government, so the confidence in the currency is largely based on people's confidence in the government. So currencies like the yen and the USD will have confidence based on the strengths of those countries. Bitcoin on the other hand has no backer, so the confidence is built on the strength of the currency itself. Bitcoin offers a few points that give people confidence in the currency:

It's essentially unhackable. Now, it's pretty hard to say something is unhackable. For accuracy, the closest you can really say is that it's never been hacked. Bitcoin has never been hacked, even with there being immense financial motivation for people to try to hack it. If someone ever figured out how to hack it, they would be able to make themselves extremely wealthy.

It bypasses banks. Money can be transferred world-wide with no fees other than the regular transaction fee of every bitcoin interaction. For those wishing to keep costs down, bitcoin provides a highly secure yet inexpensive way to move money around.

As the currency is decentralized, economic collapses of any other currency will not affect the value of bitcoin. Bitcoin will just cost more in any countries whose currency collapses.

These points lead people to place value in bitcoin, by purchasing it at whatever its given price is. Anytime someone buys a bitcoin, they literally put value in the system. They are saying that the currency has that value at that moment

How long is it until the next cryptocurrency becomes more popular than it, and it's value plunges? A matter of months probably

Another cryptocurrency could theoretically gain popularity, however it's both very unlikely, and even if it did, bitcoin wouldn't lose its own popularity based on that. First it wouldn't likely happen because Bitcoin already has a degree of confidence - about $2000/coin's worth. What could a different cryptocurrency offer to provide confidence in the new currency? It would be less widespread, less established, with less people placing value on it. And being new, it could disappear making it more risky than bitcoin, which will only disappear if the internet does.

Now even if another currency did overcome this to create a new currency that people place value into, it wouldn't take away from the value that people have alreadty attributed to bitcoin. Remember, they've put actual money into bitcoin. Billions of dollars. They aren't going to suddenly say that bitcoin has no value. At the most, the currency would lose value. Same as traditional currencies fluctuate in value, so would Bitcoin, alongside a different cryptocurrency.

The only thing that could crash bitcoin is if the underlying technology were able to be hacked. But that's extremely unlikely as well, do the strength of the system. It's not just the code and the encryption that provide bitcoin's strength, it's the process behind which transactions are recorded. It's a little too technical to explain here. All that can be said about the strength and of the technology is that it is out there on the open internet, unregulated, with no external protections, and it's never been hacked in almost a decade.

-3 ( +0 / -3 )

Already there are alternatives to bitcoin gaining traction.

As a transaction mechanism I think cryptocurrencies are good and interesting, but they are not an investment. Just speculation. Listen my own bitcoin doubled in value in a matter of months. Then I sold it and the price doubled again just like that. This is tulip style speculation, and looks like a bubble to me.

0 ( +0 / -0 )

I remember the debacle at Mt Gox!

Id rather put my money into gold.....

0 ( +1 / -1 )

Personally I put 2:1 odds at cryptocurrency becoming the standard currency of the world within 30 years.

I remember the debacle at Mt Gox!

Id rather put my money into gold.....

Mt Gox was a problem with an inidividual that was using bitcoin. Not with bitcoin itself.

-1 ( +0 / -1 )

As usual, the time to invest was about six months ago. Anyone jumping on the bandwagon now risks losing big. Still, the maximum number of Bitcoin is fixed, unlike the number of Yen.

The Bitcoin protocol might be difficult to hack, but the wallets people store them in are not. If someone can get into your computer and guess your password they can steal your Bitcoins. I hope "mom and pop" are taking the necessary precautions to prevent this.

0 ( +0 / -0 )

"The fundamental concept of bitcoin is no different than any other currency - it only has value based on people's confidence in the currency. "

Seems legit. Sure. And no politicians and governments to fool around with it and mess up the value, so bitcoin is better than fiat currency, right?

I don't buy it. Bitcoin does not have UNDERLYING value that is greater than our governments and social systems. It has value that can only exist ON TOP OF our layers of civility, national systems, agreements, and yes even computing power and international communications. It is not going to be a world currency. EVER. ... simply because no government is going to give up its power or responsiblity to control its own destiny.

And that is a good thing. At least it is if you do not live in some third world hell hole. Come on. Gold has been traded freely since 1972, and it is not "a world currency." People will play with Bitcoin, and some really poor people will scam and scheme with bitcoin, but teh wealth of the world will stick to Swiss Francs and bearer bonds and oil contracts. And the day that changes, Bitcoin will be worthless because the society that makes that "playtime" possible will have crumbled.

Ooops. Did I say "playtime"? Yes. Go back and read the article. Huge risk. No guarantees. Etc. Worse than a casino. People who play with bitcoin are going to lose it all someday, probably to some dumb virus or worldwide hiccup. I won't have any sympathy at all. And life will go on because real money is not going to be invested in Bitcoin.

-1 ( +0 / -1 )

Difference between gold and bitcoin. There is only one gold. There can be many cryptocurrencies. Bitcoin doesn't have a monopoly.

0 ( +0 / -0 )

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