Bitcoin as a savings account?

[pete6032]

Savings accounts are for savers. Cryptocurrency is for gamblers.

I'd have more respect for Bitcoin and others if they were flat out fiat currencies. Mining as a means of creating coins is a waste of resources.

Somebody has to maintain the ledger though. Nobody would do that without an incentive.

 

[Skunk-Works]

Also, how does interest work? What's the business model behind it?

Bitcoin loans. The interest due is greater than the interest paid to savings accounts.

 

[Skunk-Works]

Better yet, start your own ICO, you can make millions at the very least and billions if you catch any traction.

What is an ICO?

 

[ultimatebob]

The way people are viewing cryptocurrencies now are the same way people must have viewed the early stock markets.

Yeah... if the early stock markets were run by the mafia.

Hey, I get it. I used to mine crypto as well back when you didn't need crazy hardware to do it. It was fun to watch your "currency" double in value every month. I stopped when I took a peek at the dark web markets and saw what people were actually buying with this stuff, though.

 

[ultimatebob]

What is an ICO?

Initial Coin Offering. Basically, you make a clone of Bitcoin or Litecoin, give it new branding and/or add a few new features, and try to pass it off as a new currency.

My favorite of the "clonecoins" had to be Dogecoin. Initially, you got something crazy like a million coin reward every time you solved a block. People who got in early on made mad bank on that, and did crazy stuff with the money like sponsor struggling NASCAR teams.

 

[PottedMeat]

People who got in early on made bad bank on that, and did crazy stuff with the money like sponsor struggling NASCAR teams.

best frivolous use of money
https://www.nascar.com/en_us/news-m...-wise-talladega-superspeedway-aarons-499.html

It began as an effort to fund the necessary $55,000 -- or 100,541,093.89 Dogecoins at time of publication -- to sponsor Wise's Ford Fusion, and they were successful. One user accidentally donated 20,000,000 Dogecoins when he meant to donate just 2,000,000 (a difference of $13,500) -- but he came through and stood by his inadvertent overzealous charity.

 

[Genx87]

OF COURSE big "Central banking" players are going to demonize Bitcoin and friends. So did the buggy whip mfg's. Look where they are now.

Meh the car represented a viable advancement with tangible benefits vs the horse and buggy. Bitcoim is purely speculative and not backed by any real assets. To use it as a savings account is foolish.

 

[Genx87]

The way people are viewing cryptocurrencies now are the same way people must have viewed the early stock markets. They're volatile, they're lacking rules and regulations, they're a waste of time, they have no future, etc. Essentially it's an immature are of finance, but I think many are missing how integrated cryptocurrencies are becoming within the banking system, and through other, more interesting FinTech applications on the horizon.

Yes, there are safer ways to save money. But the safer the saving method, the more likely you are actually losing money thanks to inflation. So as always it's just a matter of picking where on the risk spectrum you are comfortable being, and diversify if you really want to have a little piece of the crypto action while maintaining some level of security and peace of mind.

Like my previous post about the car vs horse and buggy. Stocks back then and now are backed by real assets. So while the regulation was loose. There was real value there.

 

[Yakk]

Bitcoin loans. The interest due is greater than the interest paid to savings accounts.

Much, *MUCH* greater... Depending on market conditions.

 

[ultimatebob]

Meh the car represented a viable advancement with tangible benefits vs the horse and buggy. Bitcoim is purely speculative and not backed by any real assets. To use it as a savings account is foolish.

Don't get me wrong... the blockchain technology is cool, but the actual Bitcoin implementation kind of sucks. Even under the transaction load it was under a few years ago, it took forever (like 20 minutes) for a payment confirmation to complete and be confirmed. I can only imagine how bad it is now.

 

[Capt Caveman]

Today's drop should educate you that it's probably the worst possible instrument to use as a savings account.

Heck, I've making $ from just buying and selling on the ups and downs. Bought at $2500 sold at $4600. Bought more at $3800 than sold at $4800. Plan to buy more today or tomorrow then sell again when it goes up.

 

[tcG]

I think the only danger to Bitcoin is prohibition or at least strangulation through government regulation.

Otherwise, it will continue to increase in value according to supply and demand, it's supply being fixed and demand only increasing.

I bought bitcoin at $800 and have been very pleased so far.

 

[Crono]

...examples of this?

https://www.bloomberg.com/news/arti...oins-has-central-banks-considering-e-versions
https://www.coindesk.com/the-united-nations-wants-to-accept-ethereum-and-bitcoin-and-soon/
http://www.the-blockchain.com/2017/...cies-cbdcs-to-crush-rise-of-cryptocurrencies/

Yeah... if the early stock markets were run by the mafia.

Hey, I get it. I used to mine crypto as well back when you didn't need crazy hardware to do it. It was fun to watch your "currency" double in value every month. I stopped when I took a peek at the dark web markets and saw what people were actually buying with this stuff, though.

You should see what people do with cash. Or any currency, for that matter. If it worries you that much, I'd be glad to relieve you of your burden. 😀

Today's drop should educate you that it's probably the worst possible instrument to use as a savings account.

Versus an actual savings account with a FDIC insured bank, I agree, it's not a good instrument for safety. But those who advocate using index funds as savings, even those looked pretty terrible after 2008 financial crisis. Long term they looked fine, of course, and more than keep abreast of inflation, unlike savings accounts from banks which haven't offered decent interest rates in years.

Cryptocurrencies don't have the same track record as traditional financial instruments so of course there's more risk... but I wouldn't rule them out as one way to save money, even if they aren't the safest way to save money. But people who don't know how to create and use a cold storage (offline) wallet shouldn't invest/save in bitcoin, as most exchanges (with a possible few exceptions like Coinbase and Gemini) are extremely iffy when it comes to security. The ICO situation is rife with scammers now, too.

Bitcoin is very volatile now, but China's actions and the current climate don't bother me for cryptocurrencies as a whole. I have more faith in ethereum long-term than bitcoin, though.

 

[corkyg]

Diversification is good. It might make sense to put a percent or two of your money into something risky like this. But maybe not right now - I hear China may ban Bitcoin soon.

Looks like they have done so . . .

http://www.foxbusiness.com/markets/...r-bitcoin-exchanges-in-crackdown-reports.html

 

[Crono]

Looks like they have done so . . .

http://www.foxbusiness.com/markets/...r-bitcoin-exchanges-in-crackdown-reports.html

That's not a bitcoin ban, but it's interesting to see how many people predictably overreact and panic sell.

 

[Svnla]

Savings account = low yield but safe account for emergency usage only.

Bitcoin = speculation/wild swing =! safe.

 

[Skunk-Works]

Initial Coin Offering. Basically, you make a clone of Bitcoin or Litecoin, give it new branding and/or add a few new features, and try to pass it off as a new currency.

My favorite of the "clonecoins" had to be Dogecoin. Initially, you got something crazy like a million coin reward every time you solved a block. People who got in early on made mad bank on that, and did crazy stuff with the money like sponsor struggling NASCAR teams.

Wow!

 

[Skunk-Works]

Today's drop should educate you that it's probably the worst possible instrument to use as a savings account.

Heck, I've making $ from just buying and selling on the ups and downs. Bought at $2500 sold at $4600. Bought more at $3800 than sold at $4800. Plan to buy more today or tomorrow then sell again when it goes up.

Yep! Lost $12. LOL

 

[ultimatebob]

You should see what people do with cash. Or any currency, for that matter. If it worries you that much, I'd be glad to relieve you of your burden. 😀

Bah, you're just taking a page out of the "how to hype up Bitcoin" playbook with that statement. There is a big difference in having roughly 10% of your currency being used for illegal transactions (like cash), or over 60% of them being used for illegal transactions (like Bitcoin). Nobody has the exact numbers, but most people actually spending their Bitcoin (not hording it or daytrading it) aren't using it for legal purposes.

 

[[DHT]Osiris]

Bah, you're just taking a page out of the "how to hype up Bitcoin" playbook with that statement. There is a big difference in having roughly 10% of your currency being used for illegal transactions (like cash), or over 60% of them being used for illegal transactions (like Bitcoin). Nobody has the exact numbers, but most people actually spending their Bitcoin (not hording it or daytrading it) aren't using it for legal purposes.

I spend mine on steam games and fiat to cover costs of my rig 🙁 I feel positively pedestrian in comparison.

 

[dud]

Bitcoin would be a fine instrument to use as a savings account. If you had $50K in savings and dumped it all into BC at $5K per you would be the proud owner of 10 BCs that day. Fast forward to today, with BC at about $3,800, your "savings" account would still have 10 BCs in it ... worth $38K, a $12K loss in less than a month.

The past performance of BC does not guarantee future losses or gains. BC is a gamble ... when you jump on and off is the key.

 

[Printer Bandit]

CASH IS DEAD BY NEXT YEAR.

 

[Crono]

"ultimatebob, post: 39076425, member: 59478"]Bah, you're just taking a page out of the "how to hype up Bitcoin" playbook with that statement. There is a big difference in having roughly 10% of your currency being used for illegal transactions (like cash), or over 60% of them being used for illegal transactions (like Bitcoin). Nobody has the exact numbers, but most people actually spending their Bitcoin (not hording it or daytrading it) aren't using it for legal purposes.

I wouldn't make an assertion like that if I couldn't back it up. Are you basing your knowledge on something you saw a few years ago before the crackdowns on the silkroad/alphabay, or on the situation right now?

Also, as strange as it might sound, I don't actually like cryptocurrencies for the future - I think regulations and control mechanisms will ultimately give too much power into the hands of the global elite - I just think they are the future.

It's part of the cashless society we are all moving towards, and even if most people never deal directly with cryptocurrencies or blockchain-based technology, a lot of financial systems will use them (and currently are using them, or testing them) for their back-end and settlement processes.

Ethereum, Bitcoin, Ripple, etc aren't just some back-room, drug dealer's payment choice. A lot of the money following into and out of this space is from well-established names in Silicon Valley and Wall Street. Cryptocurrencies and other FinTech may not be all they're cracked up to be, but it's not just a matter of pure hype, it's an evolution of existing technology.

 

[Staples]

Just how anonymous is bitcoin? If I have an account at a seller, it is well known that it is mine. And since the ledger is supposedly public because of the way blockchain works, how hard is it to track my transactions?

 

[edro]

I seriously thought about buying some bitcoins back in the day...
...said everyone.