My newspaper – an unimpeachable source of truth, objectivity and honesty, with no connection to current events at the Old Bailey, relates the following: “Norwegian buys a flat for nothing “. This story refers to the existence of an unsuspected world of commercial transactions the nature of which – unless it is already familiar to the more sophisticated members of this forum – I could not ever have imagined.
There ‘exists’ a virtual currency, a cyber currency used for ordinary every day, commercial transactions. This currency is called a Bitcoin. A Norwegian gent by the name of Kristoffer Koch bought Bitcoins to the value of 150 Kroner (£16) then forgot about them for around four years.
Koch then bought a further 5,000 Bitcoins in 2009 and then forgot about these until April this year when he discovered they had ‘appreciated’ to a sterling value of just under £450,000 (Yes, I put the noughts in the right place!) He then cashed in part of his newly acquired wealth (£116,000) and bought an apartment.
The story goes that Bitcoins can be exchanged for ‘real’ money or be used to buy goods and services online. Users of Bitcoins are attracted because transactions are anonymous and not controlled by any central bank or organisation. Bitcoin value can wildly fluctuate.
Reading this, my incredulity took wing. Does anyone know anything about this astonishing but on reflection, unsurprising development ? It is of course an out and out gamble – someone’s gain is someone’s loss etc.
I did look at the date of the paper to check as to whether April 1st hadn’t come early.
I can see the flaw or, one of them; If the Bitcoin looks like becoming too popular, the attention of Govt. agencies will focus and manipulation will take place to insert instability into an already volatile situation.
By: TwinOtter23 - 8th November 2013 at 20:47
Bitcoin theft – but was it an inside job?
By: charliehunt - 4th November 2013 at 10:55
I agree and market traders especially suffer from that risk.
By: trumper - 4th November 2013 at 09:13
Cash is viewed at times with suspicion now, turn up at the bank with a bag full of money and the staff will probably call the cops, unless they know you fairly well and are in some business were cash is still the usual currency.
I had the misfortune to be in a queue in the post office the other week when the person infront of me was dealing with alot of cash he bought in from the weekends takings.I would’ve been scared to death to have carried around that much money.We have got so used now to bits of plastic and pin numbers that money is almost second choice.
By: silver fox - 3rd November 2013 at 22:41
Cash is viewed at times with suspicion now, turn up at the bank with a bag full of money and the staff will probably call the cops, unless they know you fairly well and are in some business were cash is still the usual currency.
By: charliehunt - 3rd November 2013 at 13:28
I agree.
By: hampden98 - 3rd November 2013 at 12:48
It’s an interesting thought to consider how we will be buying and selling in another 20/30 years, now that we can use our phone to make purchases.
I am sure you are right and we are beginning to see the demise of coinage and paper money.
Have you noticed how inconvenient real money has become. Having to find some coins for parking, or a few quid for a sandwich at work because they don’t take card.
I have to plan ahead or go out of my way to get real money. Virtual money is instant. The way to go in my opinion.
By: charliehunt - 3rd November 2013 at 11:36
It’s an interesting thought to consider how we will be buying and selling in another 20/30 years, now that we can use our phone to make purchases.
I am sure you are right and we are beginning to see the demise of coinage and paper money.
By: hampden98 - 3rd November 2013 at 11:16
Isn’t this a precursor to paper money finally dis-appearing? I would guess 95% of most peoples money is already in `bits` on a computer somewhere.
Bit-coin is no different from trading conkers for sweets or allotment carrots for cabbages.
You can already trade in virtual commodities online. Online gamers have been selling their virtual wares for years and in some instances converting virtual money for real money.
As for being a conduit for fraud. I had 192’000 shares in a company that continued to trade knowing the shares were worthless and managed it legally.
By: Moggy C - 3rd November 2013 at 08:30
Indeed the latest cryptolocker ransomware, a virus that encrypts your document files so that you cannot access them, and then gives you 90 hours countdown to pay a ransom for their release takes the payment, currently around $300, in bitcoin.
Moggy
By: Creaking Door - 1st November 2013 at 16:24
I doubt it will make much impact on mainstream currencies, as you say, it is too volatile; who would bank on it?
I can see its novelty value, especially for those that rebel against the controls of ‘big government’, but I can also see its appeal to those involved in criminality. There may be big winners but surely there would need to be big losers too (or a lot of small losers) and, as I’ve said, it would seem to be wide-open to a major fraud by those that control the supply of the currency. I imagine that if a naïve investor lost a lot of money on such a currency…
…they’d be crying-out for the sort of ‘big government’ involvement (compensation) that they were so keen to avoid!
By: charliehunt - 1st November 2013 at 15:10
Sorry CD – that whole sentence was a mess. I have edited it accordingly.
Well you might be right about that. I was quite interested in it a year or so ago but then other things intervened and until today’s thread had not given it another thought. I wonder how widespread its use will become.
By: Creaking Door - 1st November 2013 at 15:05
My apologies, you didn’t say it was impossible…..you said it was ‘not possible’! 🙂
My worry with such a cryptocurrency would be that something that has been created at a low exchangeable value (for real currency) and that had subsequently increased in value markedly would be very tempting for the originator to create more of this something at its new higher value and exchange it for real currency. I do not see that there would be any controls whatsoever in place (apart from the honesty of the originator of the currency) to prevent this from happening.
By: charliehunt - 1st November 2013 at 14:53
I didn’t say it was IMPOSSIBLE. Nothing is…..
With “cash” or on the internet, where most transactions are carried out?
By: Creaking Door - 1st November 2013 at 14:43
…as it is a cryptocurrency bitcoins are not issued conventionally so fraudulent issue is not possible…
Cryptocurrency or not, anything that can be ‘made’, can be forged.
While I will agree the levels of encryption available today make fraudulent duplication of a virtual currency extremely difficult it does not make it impossible; particularly if the fraud is carried-out by those that originated the currency.
Physical transactions are rare anyway…
Well, some bloke in Norway bought a flat! 🙂
By: charliehunt - 1st November 2013 at 13:59
It’s been around for about 4 years, so hardly new. And as it is a cryptocurrency bitcoins are not issued conventionally although fraudulent issue is not impossible. Physical transactions are rare anyway, the majority of transactions being made via the individual’s “wallet”.I believe the bitcoin has increased in value over sterling but it is quite a “flaky” currency in that respect.
By: Creaking Door - 1st November 2013 at 11:21
Well, ‘bitcoins’ may be real but they sound the perfect vehicle for somebody (whoever controls the issue of new bitcoins) to perpetrate the most almighty fraud…
…and walk away with millions! :dev2:
By: TwinOtter23 - 1st November 2013 at 11:08
😉 No it must be ‘real’ it’s on the BBC http://www.bbc.co.uk/news/technology-24756030
By: Lincoln 7 - 1st November 2013 at 11:04
It’s Monopoly money John in any other words.
Jim.
Lincoln .7
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November 1, 2013 at 10:55 am