Are bitcoins safe to buy?
I know very little about bitcoins. But two things I do know are:
1) The value of bitcoins compared to the US Dollar has skyrocketed in the last few months: https://gold.net/chart/currency/BTCUSD/
2) The US government seems to be doing whatever they can to eliminate them.
So I was wondering... are bitcoins safe to buy?
Will we probably continue to see huge market fluctuations in their value? Legally, will they eventually be outlawed in the US? Do I run the risk of losing all of my money if I buy some?
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Mar 5, 2018
I am writing a lot of educational material and information about Bitcoin regulations in each country (including i the US) . and i can tell you that Bitcoin is here to stay. Many countries have welcomed Bitcoin including Switzerland, Sweden, Singapore, Iceland and many others. For the most part most countries institute regulation which usually consist of KY C (Know Your Customer) policies when you sign up to a cryptocurrency exchange in order to buy Bitcoin or any other coin.
You can find a lot of information on Bitcoin at bitcoinprice.org
Sep 4, 2014
When Bitcoins only developed as a currency and handing out free 5 pcs for registering on the site, even if I got those first 5 Bitcoins. After half a year, they began to rise sharply in price, and I realized that I needed to buy more. Now I'm always in control of price changes on http://mining-profit.com/bitcoin and say that after a sharp fall will be a sharp rise.
May 10, 2014
No. They are like being part of a barter bank. Great idea until you realize that the conversion fees to buy and sell are far more than a credit card processing fees and you can't readily convert your barter dollars to cash. With cash, it isn't a problem.
I regard Bitcoins as similar to junk bonds and penny stocks.
Nov 28, 2013
I would not buy it. Safe to buy? Relatively yes. Once you have it though, you can't convert it to cash, you can only sell it to other bitcoin buyers. Bussiness Insider had an article claiming that bitcoin value is now at 700 USD, but it fluctuates easily like a heartbeat. There is even another bandwagon rider, called the Litecoin and trying to cash in from all the speculative propaganda being run to make bitcoin valuable. Litecoin on the other hand has another angle:
http://www.businessinsider.com/introduction-to-litecoin-2013-11
http://www.businessinsider.com/litecoin-price-2013-11
Once the taxes and regulations move in, the value will fall like apples on top of Newton's head.
Bitcoin is like the Emperor's new clothes.
Litecoin is like the Emperor's imaginary friend's new clothes.
Bitcoin owners claim they lost thousands and even millions of bitcoin and there is no way to trace or take it back.
Waiting for the bubble to burst.
Nov 28, 2013
Bitcoins featured in wired magazine
http://www.wired.com/wiredenterprise/2013/11/bitcoin-survival-guide/#!
this may help you clarify your doubts
Nov 26, 2013
IMHO they are about as safe as crossing a busy street with your eyes shut. All those bandwagons!
Did you know you can generate your own bitcoins?
I'd treat bitcoins like any bubble economy. All you have to do is figure out when the bubble is going to burst.
Nov 26, 2013
Clive, you might want to amplify your comment about mining for bitcoin by adding that the average person using the average desktop PC will need about 50 days of non-stop computing to mine one coin with the rigs running 24/7. You could become part of a pool to share the work, but you share the profits as well.
Nov 26, 2013
Adam, you're quite right. Generating bitcoins is a technical challenge, and by their design, bitcoins become progressively harder to mine and there is a finite limited supply of them. Bitcoins are a nice idea, but as others have pointed out here, there is a risk that governments will move in to nullify its benefits.
Nov 27, 2013
Just read an article giving some flesh to your comment. When bitcoin mining began, the average guy with average computer could mine up to 100 a month. Now it is 1 in 2 months. As you point out, it is going to get harder by the very nature of the currency itself. If you got in on the ground floor, so to speak, and mined a couple hundred in the infancy of bitcoin, you're set. If not, the cost of the power necessary to mine for bitcoin eats at least 25-50%% of the value of each coin depending on your area. This will continue to creep upwards as time goes on.
Nov 27, 2013
That sounds about right. When all the bitcoins have been mined, the currency should expect to undergo rebasing if it hasn't already. This doesn't devalue the bitcoin, it just divides its value into manageable amounts. If a bitcoin is worth $500, you can't pay for a pizza with a whole bitcoin.
All that aside, surely the better option for investors (like Chris) wanting first options on a bandwagon is to fund a startup to create a new virtual currency scheme of their own?
Nov 25, 2013
I think the biggest issue with bitcoin value going forward is going to be regulation as an approved currency. I don't think the US wants to eliminate them, I think the US wants to regulate them. There is money to made there and I think Uncle Sam wants a piece.
As Johnathan points out, a reputable source for bitcoin is safe, but watch for fraud.
As Mary-Alice points out, "official" steps are already being taken to remove bitcoin's "rogue" currency status. Part of the value of bitcoin is its relative privacy (similar to cash) and the lack of bank interference (no fees or the like to qualify for it or use it). If the US decides to start regulating bitcoin, then value will most likely drop precipitously.
Bit coin for the average Joe is going to be a speculative investment. The chances you would ever actually use bitcoin are slim considering Walmart and the like don't take it. But if that changes, while your ability to use it grows, the value decreases.
In my mind, bitcoin is like day trading penny stocks. The fluctuations are huge and you have to keep a close eye on what is happening to profit. The big difference is that unloading bitcoin in a crash may prove much more difficult than unloading a pumped stock on the way down before you lose your shirt. Still the lure of big returns makes it very attractive.
Nov 25, 2013
I'm not an expert on money and regulation so this could be way off but is part of the Chinese bitcoin appeal related to how the US isn't able to regulate it? I mostly heard this through Internet comment boards so my mileage may vary but the feeling was that China liked it because of the lack of US interference.
And definitely agreed with the rest of your points. For actually purchasing power, it's basically useless in the US right now. And even if you could pay at stores, the pain/annoyance to deal with them right now is much more than a debit/credit card.
I guess the angle I come from is the investing angle. Could an unregulated currency be worth more than bitcoins currently are?
Nov 25, 2013
I think US regulation (read that "taxing") and bank interference are the two things that will have the biggest impact on where bitcoin goes in the future. So yes, if I am China, I love that the US isn't regulating. One of the driving forces keeping US prices from skyrocketing is our position as the world's reserve currency. I am sure China would love to be trading crude in yuans instead of dollars.
As for purchasing power, you are also correct. The best way to use it like for now is to invest on Monday @ $60 sell on Thursday @ $125 and then go to the store and go on a shopping spree.
Could an unregulated currency be worth more? I suppose yes. But how many unregulated currencies can you name? It took bitcoin years to reach this point, so even if another were to pop up, it would years before competition would effect it.
Dec 18, 2013
And it looks like Chase is getting ready to release their own version of Bitcoin soon.
Dec 18, 2013
Thanks for the update. This article from 12/17/2013 is a pretty big smackdown against bitcoins: http://www.businessinsider.com/williams-bitcoin-meltdown-10-2013-12
Dec 18, 2013
Interestingly, Chris, since I uttered that comment to you, "how many virtual currencies can you name," 5 have sprung up if you count Chase's. I don't know if that makes me visionary, or a day late and a dollar short.
Dec 18, 2013
Never too late! I just launched my own currency called ChrisCash. Now accepting investments. :)
Dec 18, 2013
LOL. Good call. I'd like to get in for $2 million Adamloeans. Hook me up!
Nov 22, 2013
Here is a link to an article I read recently on the subject:
http://readwrite.com/2013/10/23/i-bought-bitcoin-in-person-and-heres-what-happened#awesm=~onXX6MbHhceYnz
I hope it will help answer you question.
Nov 21, 2013
Bitcoins are a very speculative investment / currency. Given the amount of appreciation, anyone that has spent a bitcoin probably feels like a Google employee pre IPO that gave away their options.
They are safe to buy from reputable folks - any too good to be true offer is probably a fraud.
Other than the novelty or speculative investment / collection, I'd stay away. Bitcoins aren't going to be outlawed - perse - but they are trying to find ways to monitor them as they are being used for tax avoidance and other illegal activities. Feds don't care about bit coins used for pizza.
Nov 21, 2013
Great question. I know the US Senate confirmed it is a legal form of currency. That said, there are a lot of discussions starting around how to regulate it. For example, institutions trading in bitcoins need to comply with anti-money laundering laws, but how this will be enforced will be interesting to see. Also, how will various tax laws apply and be enforced? My guess is this is a risky investment, but am interested in hearing what others think.
Good points. There's definitely a chance Bitcoin doesn't even become the Internet currency of choice. Add that as another risk factor. And I assume taxes and regulation would hurt things.