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Bitcoin Foundation Boss Urges Cautious Investment (bbc.com)

Posted by msmash on from the beware dept.

The head of the Bitcoin Foundation, Llew Claasen, has urged people to invest "no more than they can afford" in the crypto-currency. From a report: He was speaking at the TEDGlobal conference in Tanzania about the potential for Bitcoin in Africa. Billions lack access to formal banking, but the uptake of mobile money means many are willing to embrace alternatives. Bitcoin had been adopted in Nigeria, South Africa and Kenya, he said. The digital currency had particular resonance in countries with volatile economies, he said. "It offers people a chance to protect their savings from government abuse of monetary policy. A lot of people in Zimbabwe are interested in it as an alternative financial system, but that is not an easy thing to do formally as we don't want to be perceived as wanting to disrupt economies," he told the BBC. The Washington-based Bitcoin Foundation is a non-profit organisation that promotes the use of Bitcoin around the world.

35 of 59 comments (clear)

  1. Note by war4peace · · Score: 2

    Bitcoin isn't any less volatile than said countries' volatile economies. While I certainly hope it's going to become very stable, I doubt it.

    --
    ...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
    1. Re:Note by Howitzer86 · · Score: 3, Insightful

      It's not stable, it's inconvenient, and it's easy to steal. Sounds about right.

    2. Re:Note by GLMDesigns · · Score: 2

      Peoples accounts are hacked. Bitcoin is not.

      The fact that a bank or an exchange is robbed does not devalue the currency. Bitcoin, unlike any fiat currency, has not be counterfeited.

      Bitcoin is going up because people see it as a store of value, as a way of taking their money out of an unstable market (Venezuela, China are two prime examples). If BTC is ever adopted on a large scale it's value will be 100 times if not 1000 times as much as it is now.

      Personally I think there will be multiple currencies, each with it's own niche.

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    3. Re:Note by geekmux · · Score: 1

      Peoples accounts are hacked. Bitcoin is not. The fact that a bank or an exchange is robbed does not devalue the currency. Bitcoin, unlike any fiat currency, has not be counterfeited.

      And how exactly does any of this reduce the risk for using bitcoin?

      If banks were getting robbed A LOT, resulting in people losing their money, then using banks would be a considered a high risk. Victims could care less about the value of a dollar when all of their dollars are stolen. People also aren't investing in bitcoin for it's anti-counterfeiting crypto, which tends to be a moot point when sizeable exchanges are getting hacked.

    4. Re:Note by GLMDesigns · · Score: 1

      The answer is to not keep your BTC in an exchange for a long period of time.

      Use Case: You want to convert your fiat money into BTC (or another cryptocurrency)
      - Send fiat to exchange
      - Wait the 4 day hold
      - Convert to BTC
      - Send BTC to your wallet (don't keep it in the exchange).

      As time goes on, and more professional exchanges are created, thefts will become fewer. You can't compare the sophistication of Gemini with say Mt. Gox. Regardless Gemini and all the others do not have FDIC protection (and never will) hence you will NEED to send your BTC to your wallet in order to be safe.

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    5. Re:Note by GLMDesigns · · Score: 1

      Bitcoin has a hardcoded limit to the amount of coins that can circulate. As coins are lost or wind up in the hands of criminals, their value as a currency for legitimate purposes diminishes.

      And if criminals horde gold or US dollars how does that affect gold or the US dollar? It doesn't.

      BTC's hardcoded limit was to mimic gold where the amount of new gold found is dwarfed by the amount of gold held in reserve (and in circulation).

      Best figures I have are that gold reserves and in circulation are around 200,000 tons and the amount found each year is around 2500 tons.

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    6. Re:Note by GLMDesigns · · Score: 1

      that is only true where the quantity remaining hold a utility value, if the supply dries up significantly then people simply stop using it which causes the opposite, a massive downward spiral in price.

      Why would the utility value drop if supply dries up even by 10%.

      Right now BTC is divisible to 100,000,000 (a satoshi). It would be a trivial fork to allow subdivisions of a satoshi.

      So, imagine BTC = $1,000,000. In that case a satoshi would be worth a penny.

      Let's say that is too great a value for operations. (I would assume other coins would be handling minor transactions such as a cup of coffee.) As said earlier, it would be trivial to change the definition of a satoshi from 1/10^8 to 1/10^16

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    7. Re:Note by FlamingGuts · · Score: 1

      Agreed. Just like US Dollars.

  2. We??? by THE_WELL_HUNG_OYSTER · · Score: 2

    "we don't want to be perceived as wanting to disrupt economies" Who is this "we" that you speak of? Bitcoin had no central spokespeople.

    1. Re:We??? by DontBeAMoran · · Score: 1

      Maybe Llew Claasen is Satoshi Nakamoto.

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    2. Re:We??? by Gonoff · · Score: 1

      "we don't want to be perceived as wanting to disrupt economies".

      He might not intend to do that but I am not wholly convinced that it would be a bad thing...

      --
      I'll see your Constitution and raise you a Queen.
  3. Too late by DontBeAMoran · · Score: 1

    The head of the Bitcoin Foundation, Llew Claasen, has urged people to invest "no more than they can afford" in the crypto-currency.

    Damn. Now you tell me? I just invested 2.38 MILLION Dogecoins to buy a single Bitcoin!

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    #DeleteFacebook
  4. errybody buy BitCoin now! by PopeRatzo · · Score: 2

    Don't hesitate. Cash in your 401k and buy BitCoin. Ask your parents to give you your inheritance in advance and buy BitCoin. Get a second mortgage and buy BitCoin. Do it now and you will be rich beyond dreams of avarice.

    And please don't sell any until at least the close of business a week from Friday. KTHX

    --
    You are welcome on my lawn.
    1. Re:errybody buy BitCoin now! by DontBeAMoran · · Score: 1

      Don't listen to him. I have a much better deal available.

      You've heard of Bitcoin, right? You know how expensive a Bitcoin is? It's now at USD$4600 for a single coin!

      You like dogs? Well, did you know there's a crypto-currency called Dogecoins? The mascot is a nice Shiba Inu dog! And here's my deal: unlike those expensive Bitcoins, my Dogecoins are really much cheaper! What if I told you that for a small investment of USD$1000 can give you 550 Dogecoins? Wouldn't you be interested? If you are, send me an email at totallynotascam@gmail.com

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    2. Re:errybody buy BitCoin now! by GLMDesigns · · Score: 1

      Don't listen to DontBeAMoran he's scamming you.

      I'll give you 1101 Dogecoins for your $1000.00 investment. That's two for each DogeCoin that scammer offered you plus one because I'm such a nice guy.

      Please email me at not_a_scam_like_the_other_guy@gmail.com

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  5. No More than You Can Afford TO LOSE by eepok · · Score: 4, Insightful

    I always get annoyed when investment-prodders say "Never invest more than you can afford." It's impossible to do so anyway. If i have $100, I can't invest $10,000 in anything. What they need to say is, "Don't invest more than they can afford to lose," but they don't want to because that would make the product they're selling seem like a bit of a gamble. Which it is.

    1. Re:No More than You Can Afford TO LOSE by ceoyoyo · · Score: 2

      You can borrow money to invest it. That practice was a contributor to the great depression and strict controls were put on it afterward. But you can buy bitcoin on your credit card, which is the same thing.

      If you've got $100 and you lose it you might have to go to the food bank this month. If you've got $100 and you lose $1000 you paid for with your credit card, you've got a problem that's at least a hundred times worse.

    2. Re:No More than You Can Afford TO LOSE by GLMDesigns · · Score: 1

      BTC is a currency AND can be used as a store of value (same as all currencies).

      As a store of value it can be considered an investment. It's an "investment" for those people trying to hedge against their currency collapsing (see Venezuela).

      --
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      Vote 3rd Party in 2016 and beyond
    3. Re:No More than You Can Afford TO LOSE by gravewax · · Score: 1

      people borrow money from banks, families, credit cards etc to bet on sure fire ways that can't possibly go wrong to make money, it happens every day all over the world.

    4. Re:No More than You Can Afford TO LOSE by DontBeAMoran · · Score: 1

      "$1000 divided by $100 equals a hundred times worse."

      Epic Pivot.

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    5. Re:No More than You Can Afford TO LOSE by mikael · · Score: 1

      Exchanging currency is a gamble too. Even stable currencies like the pound, dollar, euro and norwegian kronor can double or half relative to each other. Used to be £2 = 1$, now it is around £1 = $1.20. The pound and euro used to be £1 = 1.5 euros, now they are almost the same. The Kronor has bounced between £1 = 8 NOK and 12 NOK

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    6. Re:No More than You Can Afford TO LOSE by Anonymous Coward · · Score: 2, Insightful

      Going from "I can't afford to eat today" to "I've had my possessions repossessed due to a debt I couldn't pay, and I still can't afford to eat today" is a lot more serious than just a numerical factor derived from $1000/$100.

    7. Re:No More than You Can Afford TO LOSE by Gonoff · · Score: 1

      If i have $100, I can't invest $10,000 in anything

      Perhaps he is talking to banks? That is exactly what they do. For every $ they get, they invest many times. That is why, when banks fail, they do so big!

      --
      I'll see your Constitution and raise you a Queen.
    8. Re:No More than You Can Afford TO LOSE by Gonoff · · Score: 1

      It fluxates (sic) worse than Zimbabwean Dollar.

      Not at all. The Zimbabwe dollar looses value every day. The Bitcoin gains value every day.

      Hyper inflationary loss may be easier for some to understand but it is far worse than something that becomes more valuable every day.

      The only concern is "Will it last? I expect not. Not forever anyway. I wonder how long it will continue going up and what it will do when it finishes.

      --
      I'll see your Constitution and raise you a Queen.
    9. Re:No More than You Can Afford TO LOSE by Gonoff · · Score: 1

      Early last year, I put a little into bitcoin to see what would happen and sat back and watched. Yesterday, I took back my initial payment plus interest. It now owes me nothing and is still worth $700. I wish I had put in more.

      If it goes down the pan, I will have lost nothing. If it carries non at this rate or goes down, I will still only have a bit of a Bitcoin that cost me nothing.

      --
      I'll see your Constitution and raise you a Queen.
  6. Free infrastructure = rent seekers by HBI · · Score: 1

    Here are the rent seekers.

    Lesson: Don't do anything for free.

    --
    HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
  7. Came here to say that... by gatfirls · · Score: 3, Informative

    Day Low 4,201.1899
    Day High 4,616.8999
    52 Week Low 571.6600
    52 Week High 4,616.8999

    I know some countries are *relatively* unstable when compared to Dollar/Euro/etc but compared to bitcoin they are relatively stable. They may take big hits on occasion and suffer unreasonable inflation but those are usually singular events or extend over months/years. With bitcoin your gas and grocery money could become just grocery money on the way from the bank to the grocery store.

    Not to mention all of the other issues surrounding bitcoin logistics in a 'developing economy'.

    1. Re:Came here to say that... by ShanghaiBill · · Score: 2

      If I am going to have a currency that is unstable, I would rather have Bitcoin, which tends to be unstable in an upward direction, than in any government fiat currencies, which tend to be unstable in a downward direction. Since its introduction in 1973, this is the number of years that the Nigerian naira has risen in value: 0.

    2. Re: Came here to say that... by KGIII · · Score: 1

      It's amazing to see how rapidly the price has risen. When BTC started, I mined 24 of them and promptly forgot about them. When the price hit $600, there was a story on this site and I donated them to EFF instead of realizing the asset and dealing with the tax issues. I don't regret donating them, but I do see that it would have been more valuable to have waited and donated the later. EFF doesn't really get the coins, as I understand it. They get the dollar value of the coins from a third party processor.

      --
      "So long and thanks for all the fish."
    3. Re:Came here to say that... by RuffMasterD · · Score: 1

      For a bit of historical context, Zimbabwe had 79.6 billion percent inflation in November 2008. That was AFTER declaring inflation illegal and arresting a bunch of people for raising prices. They abandoned their currency completely and use US$ now, but I wouldn't blame Zimbabweans for being a bit skittish of government controlled currencies since then. Bitcoin would have been an attractive alternative if it was available at the time.

      --
      Human Rights, Article 12: Freedom from Interference with Privacy, Family, Home and Correspondence
  8. He forgot the most important part... by gatfirls · · Score: 1

    "Never invest more than you can afford."

      "To lose"

  9. Re:Money laundering by GLMDesigns · · Score: 1

    Actually the blockchain would make it easier to catch theft of this kind. It would make it easier to see if a charity actually uses the money for its stated purpose or if it funnels the money to its Board of Directors through "overhead" costs.

    --
    If you're scared of your govt then you need to further restrict its powers
    Vote 3rd Party in 2016 and beyond
  10. Meanwhile... by VeryFluffyBunny · · Score: 1

    ...arms dealers urge their customers to be nicer to their neighbours, credit card companies urge shoppers to only buy what they can afford, and drug cartels recommend not letting recreational drug use become habitual.

    --
    Debate is a form of harassment. Do not question my truth.
  11. Re:It offers nothing by Anonymous Coward · · Score: 1

    Simple, buy guns with bitcoins after the local fiat goes into an inflation spiral.

  12. Re:Citations required by ElizabethGreene · · Score: 1

    >> That's without even looking at the point that the Bitcoin network can handle, at most, seven transactions per second, under ideal conditions.

    This IS a huge issue, and one that needs to be fixed. Generating fixed sized blocks every 10 minutes was and is a major design flaw in the protocol. It doesn't fit with the scale required to meet the financial needs of 8 billion people.

    I'm hesitant to call 30 seconds an acceptable window for initial transaction confirmation. 10 minutes is a joke, and the hours it takes for full confirmation now isn't funny at all.