Coinbase is back and accepting new payment methods now. Seems to have stagnated the past couple of days, hopefully steadying before another rise (it's making CFDs very boring)
Do these currencies (especially the newer ones) have any underlying value? I saw from Reids earlier post that funds are being invested in 'projects', in which case could be equated to a share or unit trust issue; but the hyperbolic increases to me suggest speculation or a giant ponzi scheme. I'd be very cautious.
Ether, the currency of Ethereum, lets you buy computation on the block chain. You write and pick the "smart contracts" you want to execute and someone executes it (for a reward). Part of the selling point of these "smart contracts" is that they can never be stopped and are completely transparent, except when the Ethereum developers find a bug and essentially just decide to roll back and split off the entire project.
Quite right, when the value was about £5, then I can see that I bit like chucking a few quid on a horse that to speculate by buying £20 worth or so isn't going to hurt you. However once these things increase as dramatically as this, considering that there aren't any obvious underlying securities propping up its value, it would be foolish to be spending £100s on a single cyber-coin as the whole thing could collapse into nothing in a very short amount of time.
Can you explain that to a complete numpty (in cyber currency terms) as that went completely over my head.
I'll give it a go. I don't profess to be an expert on this, so I welcome any corrections. First the Blockchain, that is the idea used for both Bitcoin and Ethereum. It's basically just a big public ledger with a series of entries (blocks). You can add stuff to the chain, but you can't go back and change things. We are both free to add an entry to the ledger (or a block to the chain). It might look something like this: ....[Current Block Chain] ..... /..........................\....... [GOBE's block]......[JW's block] (full stops are just to get things to align, should be whitespace). now we have two caused a "split", but we talk about chains which are a single path. So what happens is that the system decides who's block becomes the new head of the chain - this is 'mining'. So basically mining is the process of trying to get your block be accepted as the new head of the chain over any other's, and you do this by 'mining' or investing (computational) time. Suppose you did more mining for your block (invested more time), it would then be accepted over mine. So the block chain would look like this: .....[Old head of the chain] ......./...............................\............. [GOBE's block*] [JW's block**] ........../........\...................................... .........[] ........[]................................... * Your block becomes the new head, and people add entries (blocks) to that. ** My block gets ignored, it's still there in the system, but it's not recognized an being part of the chain. The block chain is basically a big public ledger that is trustworthy because everyone can read the entries, and adding things to the chain requires investment (usually running some kind of computation). How can we use the blockchain? In terms of bitcoin, investing computation to add a block to the chain generates wealth (bitcoins). You pay in terms of computation, and you get back bitcoin. As the blockchain is public and decentralized (no-one 'owns' it), the currency is in a sense "transparent and trustworthy". But in the case of bitcoin, the actual entries or blocks that you add do not contain very much information, the importance is really on adding the block to the chain. Ethereum decides to actually make the information in each block (or the ledger as a whole) more interesting. Instead of just being a record of who generated it (and therefore who generated the bitcoin), you can actually store things like computer program logs, and entire programs themselves (smart contracts). Now there is a way for people to write public and transparent programs, because everyone can read the blockchain, and also verify they were actually executed, because the logs are also in the block chain. The currency ether is used to pay for people to run your smart contract, and in turn, people who volunteer to run the contract for you get an ether reward. I pay the price in ether for a contract (the price is fixed based on the computation, you don't bid), and someone comes along and runs it, shows me the logs in the blockchain and says "here is the proof I've done the work", you pay the ether, and they get an ether reward from the system.
Thank you for trying, but I'm still none the wiser. What do you mean 'computation'? Is that like someone preparing a spreadsheet for me? Where is the actual value underlying this currency? Sounds like those old pyramid chain letter cons whereby you get a letter with a list of 20 names, send £1 to the person at the top, retype the letter deleting the bloke at the top and adding yours to the bottom, then sending it on to 20 people. By the time you get to the top, the theory goes, you'll have 20 to the power of 20 people sending you £1. Needless to say...
Sorry I didn't reply sooner. To address your questions: There is no real underlying value to Bitcoin, its value comes from how strong the network of users is. There are various benefits to Bitcoin as a currency over traditional methods, such as privacy and security, but it does not have a value like the pound whereby you can use it to pay taxes. Ether (the currency of Ethereum) is very different. It's value is that it lets you pay to run programs or services. Much like how pay-as-you-go phones let you use credit to make calls/texts, Ether lets you pay people to run computer programs (on the blockchain). What do I mean by computation? Basically just running a computer program (a task for the computer). In the case of Bitcoin, the computation (or task) is recording payment transactions. In order to mine (generate) bitcoins, you offer to do a task for the network - this task is payment processing. Basically there are a list of payments that people have made and they want them adding to the ledger. A 'miner' will offer to do the work of adding these to the ledger and in return get bitcoins. The 'computation' here is just adding transactions to the ledger, but the way Bitcoin is set up, this is very 'hard' to do. This is why people don't do it themselves, but you get specialist 'miners', or payment processors. The computation for Ether is just that, running an arbitrary program (or task). This is the difference between Bitcoin and Ethereum. Bitcoin is just about currency, Ethereum is about general tasks that anyone can write down as a program. The computation here is just some algorithm that a person want to run. They pay ether, and a 'miner' will come along and run the algorithm and show that they did by pointing to algorithm trace in the ledger (blockchain). Summary: Bitcoin: Computation = payment processing. Ethereum: Computation = Performing any task the customer wants (customer being the person paying ether).
Adding to jw-s good explanations, Ethereum could technically change the world as we know it. It has the ability to replace entire organisations in the near future (http://mashable.com/2017/03/24/ethereum-bitcoin-explainer/#dlGmWga_3aqm) - we're still in the infancy of it at the moment so there's not a lot of actual usable real-world applications right now, but there's plenty of future projects that I like the look of that are based on the Ethereum network (with some very basic descriptions): Storj (https://storj.io/index.html) Think airbnb for your hard-drive. Everyone has a hard-drive and most of us have hard drive space coming out of our ears these days with every new computer coming with at least a terabyte of data. Cloud storage options such as Dropbox and Onedrive have been huge hits recently, but these require huge datacenters that cost millions to install. Storj lets people rent out their hard-drives to the Storj network, people/companies then pay Storj for space and upload their data, Storj encrypts the data and sends it off to lots of different farmers (the people renting out their hard drives) and then pays the farmers based on how often the data is accessed/how much space is used thus creating potentially the world's biggest cloud storage network. Golem (https://golem.network/) Semi-similar to Storj, but instead of hard-drive space it uses computing power to crunch big data, graphics renders etc. Augur (https://augur.net/) A de-centralized prediction market, you make predictions by "staking" the Augur token (aka currency) on particular events, it then gets verified by "reporters" and if your prediction is right, you win more of the token (known as REP). This video explains it better than I could ever possibly: - Personally, I see this potentially revolutionising gambling forever, it's decentralized meaning anyone around the world can use it regardless of gambling laws tapping into a huge market. There's a similar product being launched called Gnosis which garnered a lot of attention on it's launch as well (raising $12.5m in 12 minutes)
What happened to Ether this week. I read something about a flash crash. Also, what is Litecoin compared to Bitcoin and Ether?
And what are Litecoins? By the way - I appreciate you taking the time to explain that @reids and @jw- Really informative in a way that guides I found on the internet have not been.
There's crypto exchanges that work much like the stock market. You can long and short currencies and place buy/sell orders at certain prices. Somebody dumped 30m worth of ethereum that fulfilled every buy order on the entire exchange (including those at 10 cents!) which of course affected the price (although the price didn't really shift a lot on other exchanges) but caused people who had placed shorts on the market a LOT of money (that the exchange have said they'd refund out their own pockets). Wish I was the lucky ******* who had a buy order set for 380 ether at 10 cents each who essentially turned rich overnight! Litecoin is essentially the middle ground between ethereum and Bitcoin. It's essentially the same as Bitcoin but has faster transactions. Litecoin has been around for years but has only increased in price lately due to people essentially using it to protest against Bitcoin (which is having problems with speed etc). Getting it added to coinbase also saw the price go up but that's a bit shifty as I believe the guy who invented litecoin and the guy who owns coinbase are brothers, wouldn't invest imo!
ETH dropped a lot because some idiots on 4Chan started a hoax that it's founder died, that coupled with the crypto market generally taking a $13BN hit.
Yeah, was quite scary watching all the numbers go red on my portfolio and stay red for a few days, but it was time for a market correction due to the sudden boom. Glad I kept the faith though! Bet a lot of weak hands that are new to crypto got shaken and sold off (causing further price drops) as well.
I wanted to buy more but have a stupidly low limit at the moment (£325/week) on Coinbase. I'm not put off by the volatility. That goes hand in hand with the quick gains
Gonna wait for the next dip and buy some more. Still tempted to get some Litecoin. I reckon there's some more growth in them, in a bubble market sort of way, as long as I get out in time.
All crypto currencies seem to be on a steady downward trend from peaking about a month ago. When do people think they will bottom out again?
Not really sure, it's a bit of a lottery. All cryptos are currently pretty much linked to the bitcoin price, Bitcoin is undergoing a huge change on 1st August that could cause a number of different scenarios: - Money could flow out of Bitcoin and into other cryptos (mainly eth) - Money could flow out of all cryptos. - The fork could be a success and all prices rise There's no real news that's causing the price to drop a little bit (Eth is down 16% since last week and BTC is up just under 1%) but such price movements for no reason are pretty standard in crypto, it's an incredibly volatile market.
Yeah. I seem to have bought just before this latest slide, though thankfully not at the very top of the peak. Over time, I suspect it will go through 300 again.
Any ideas why Ether is taking a tumble again? Down £18 over last 24 hours. Wondering whether market is bottoming out or beginning to crumble....
I don't really follow the prices that much, so take what I say as nonsense. What can happen is that someone who bought some of the currency ages ago on a lucky whim checks their account and finds out its actually worth quite alot, and naively decides to dump it all into the market causing the price to drop rapidly. I think that is what happened when ether hit rock bottom recently; maybe this is similar albeit on a small scale.
Still similar to the above, cash flowing out before the 1st August bitcoin fork, also probably all those ICO projects that have raised hundreds of millions probably cashing out to get some fiat reserves that they can use which hasn't helped. Combined with people investing late and wanting to cash out before they "lose loads of money". Time will help, crypto is so ridiculously volatile. At 9.38 this morning I sold my entire stash then bought it back again just 12 minutes later making me an extra 0.6 eth, yet an hour on from then and the price has gone up almost $20 again. The same will happen time and time again, super highs, huge dips - it's like being at Alton Towers! That being said, crypto is the future so unless you desperately need the money, just hold. I'm half tempted to stop checking the price for a week haha
Yeah I just bought a few more at around 150. I read a few articles. I think short term speculators are jumping ship with small gains but I'm thinking of a 12 month hold and see where we are.
Feel the same as you. We're only getting started in the world of crypto, long-term is the best viewpoint.
I think blockchain tech will be the future, but I doubt the systems that go mainstream are those around today. I'd keep an eye out for any new system based on SGX.
Crypto currencies are continuing to take a hammering this week. Ether looks like it might go below 100 quid again. Time to buy big or is the bubble bursting? I tend towards the former.
Likewise (and we've seen a strong recovery since you posted this!) - it's just horrible timing for everything involved (market correction along with something that has long-term investors worried) that has just destroyed the market temporarily. But it's happened before (bitcoin went from £1k down to £200 at one point and people said the bubble had burst then) and I'm sure if 1st August goes well (can't see why it wouldn't - Eth did something similar last year!) money will steadily come back into it.
So, I've started to become obsessed with this topic now!! I've signed up to loads of alerts, follow some groups on FB (full of idiots so will probably unfollow) and been monitoring prices of LTC, XBT and ETH. I am not looking at the fringe stuff for now. I have opened an account with Kraken because unlike Coinbase, it allows me to set a limit for buy/sell so I can put in a low buy price and wait for the market to fall and then, presumably, just set a high sell price and make a profit. Going to go for moderate margins on my first few trades and see if the principle works. Still holding some currency as well for long term hold, but with the trading, I can see making some good turnover, for marginal effort. Let's see how it goes.
It's horribly addictive haha. After seeing Eth skyrocket I ended up buying a mining PC with a bunch of friends...then ended up in me buying hard-drives to mine a coin called Burstcoin....that then led to me buying 2TB sky boxes to gut them for their hard drives and now I have empty Sky Boxes all over the place with the GF moaning at me to chuck them out. Some good places for crypto news/discuession are https://bitcointalk.org/index.php (not solely about bitcoin, they have a lot of topics on all sorts if you scroll down - take caution though - as with every place discussing crypto, lots of scams and uneducated opinion) + reddit is always good https://www.reddit.com/r/CryptoCurrency/ and https://www.reddit.com/r/ethtrader/ are my usual places to visit. I've dabbled with trading but it's so volatile I always worry. That being said when Eth reached £330 and started to fall I said to my friend that I was tempted to sell and buy back when it got lower, when it hit £160 I said to him that's when I would've bought back in, checked the calculations and I would've made a profit of 21 eth (I've got 35 or so at the moment) - gutted I didn't do that but will definitely do that during the next big run I think.
