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Bitcoin The Almighty Buck Stats United Kingdom

Bitcoin Was 2016's Best-Performing Currency (newsweek.com) 104

Posted by EditorDavid from the stable-currencies dept.
The co-founder of Blockchain published an opinion piece in Newsweek today mocking predictions about the death of bitcoin, saying "each is more wrong than the last... Bitcoin was again declared the world's best performing currency in 2016 by Bloomberg. In fact, it's held that title every year since 2010, with the notable exception of 2014, when it was the worst." An anonymous reader writes: Bitcoin president Nicolas Cary writes that bitcoin has become more stable than many of the world's top currencies, while the British pound "has dropped by more than 17% in a colossal collapse of confidence... In Africa, the Egyptian pound dropped 59% and the Nigerian naira fell 37%. In South America, the Argentine peso plummeted over 17% and the Venezuelan bolivar tumbled so far off a cliff it's difficult to measure -- even bricks of cash are worthless for everyday purchases there. Perhaps most dramatically of all, India, the world's second most populated country, introduced a stunning policy of demonetization declaring banknotes illegal overnight...

"During this time period, and partially in response to it, the price of bitcoin surged... Bitcoin also trounced the stock market from a performance perspective. Brand names like McDonald's, Home Depot and Disney grew at a paltry 1.6% or less; bitcoin outpaced them by over 70 times."
In 2009 one man in Norway bought $27 worth of bitcoin while writing a thesis on encryption, then forgot about them. Six years later, he discovered they were worth nearly $500,000.
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Bitcoin Was 2016's Best-Performing Currency More

Bitcoin Was 2016's Best-Performing Currency

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  • Um no... (Score:5, Insightful)

    by Anonymous Coward on Saturday January 07, 2017 @04:52PM (#53625071)

    " has become more stable than many of the world's top currencies" and "the price of bitcoin surged" contradict each other.

    If it's surged then it wasn't stable...

  • What do you want to be ? (Score:4, Interesting)

    by Fly Swatter ( 30498 ) on Saturday January 07, 2017 @04:54PM (#53625075) Homepage

    Brand names like McDonald's, Home Depot and Disney grew at a paltry 1.6% or less; bitcoin outpaced them by over 70 times.

    Is bitcoin trying to be a currency, or an investment scheme ?

    • Re: (Score:1, Insightful)

      by Anonymous Coward

      bitcoin is almost by definition a pure ponzi scheme

      • Actually, it's not. Its a commodity designed to make untraceable (and mostly illegal) economic transactions easier, everything from evading oppressive government rules, to drug deals, to ransomware payoffs. The only reason why it's not used for tax evasion is that due to it being a commodity, it quite literally can't handle the scale that that criminality; it'd be like a minnow swallowing a whale.

        • Re: (Score:3, Informative)

          by JasonVergo ( 101331 )

          It wasn't designed to do any of those things. The problem that Bitcoin was designed to solve was how to transfer value without needing to rely on a central authority. The most common central authority for transferring of value is a bank.

          • Re: (Score:2)

            by murdocj ( 543661 )

            Remind me, when was that a problem?

            • Re: (Score:3, Informative)

              by JasonVergo ( 101331 )

              An example of when that was a problem was when banks imposed a bank deposit levy in Cyrpus in 2012.

              https://en.wikipedia.org/wiki/2012%E2%80%9313_Cypriot_financial_crisis

              Another example is when you sell something online and ship the item and the buyer used a stolen credit card or the buyer called their credit card company and asks for a chargeback.

            • One third of Americans are "unbanked", and higher numbers in less-developed countries. One bout of unemployment or illness, and your credit and bank accounts can be lost for years. Or has happened in my case, Bank of America decided to make the automatic credit card payment twice in one month, for no reason. Fortunately I caught it right away, but I was overdrawn for two days and still had to pay a fee. Someone who doesn't catch it could run up all kinds of fees from bounced checks, and then banks don't

          • It wasn't designed to do any of those things. The problem that Bitcoin was designed to solve was how to transfer value without needing to rely on a central authority.

            Which it fails miserably at. Due to its volatility, unless you're a speculator/gambler, you don't want to hold Bitcoin. Which means you're going to pay to convert your fiat currency into Bitcoin, then you'll pay a mining fee when initiating the Bitcoin transfer, and finally, the merchant has to eat the cost of getting their Bitcoin converted back into fiat. The only people willing to deal with all that hassle are speculators and criminals.

            Cryptocurrency is predominately a stock trading simulation that pe

            • ...and people who are happy to pay fees for transferring money but don't want to pay those fees to Paypal or VISA. That doesn't make you a criminal.

        • Re: (Score:1)

          by Anonymous Coward

          If tax evasion is such a large-scale problem, then maybe you cannot possibility consider it criminal; maybe taxation itself is the wrongheaded idea.

          • Or maybe neither is the problem it is made out to be. Just how big a problem the original poster thinks it is really wasn't specified, just that Bitcoin wasn't suitable to do it with. Or maybe being criminal isn't the problem it is made out to be. I hear it's great to be a big-time criminal, but lousy to be a two-bit one.

      • It doesn't even begin to resemble a Ponzi scheme. A Ponzi scheme is any investment instrument that pays dividends to its investors based entirely off of the funds given by later investors rather than its own intrinsic value. Bitcoin doesn't do this at all.

        Bitcoin is, by all definitions, a fiat currency. That is, it's only worth whatever people think it's worth, and trades accordingly. Practically all of the world's currencies today do exactly this, as opposed to commodity backed currencies of the past (the

        • > Bitcoin is, by all definitions, a fiat currency.

          No, that's not what a fiat currency is. "Fiat" is Latin for "let it be so", as in "Fiat Lux" (let there be light) from the Bible. A fiat currency is one that a government authority says is a currency. Commodity money is the kind based on a commodity that has value. Cattle, sea shells, gold, and silver have all been commodity money at one time or another. Usually the most easily traded and widely accepted good ends up that way. Bitcoin is easily trad

    • Actually traditional businesses are doing quite well now. With a booming economy Home Depot and Disney are growing as they actually make money by providing a product or service.

      • The service that the Bitcoin Network provides is transfer of value, without restrictions from borders, lack of bank accounts, or high fees, and it does this fairly fast. It's better than bank wire transfers, PayPal, or Western Union in many cases, so some people use it. Bitcoins as value tokens are a necessary part of the Network they are part of, they are the accounting units for transactions. The usefulness of the Network is what gives the coins value, since they are scarce and necessary to perform the

    • Is bitcoin trying to be a currency, or an investment scheme ?

      Is neither, is, and always has been, an opaque transfer system, with added storage. Changes in value are simply a sub-product of the structure of the transfer units.

    • Bitcoin is not a company or a sentient being so it's not trying to be anything. It's a platform for storing value and transferring value. How people use it is up to those people. Your question is like asking, Is the Internet trying to be a currency, or an investment scheme. Or is the internet trying to be a library, or a card catalog.

      Bitcoin is a limited resource. Only 21 million bitcoins will ever exist. So, some people see that and think that there is a potential that a significant number of people(signif

      • Re: (Score:2)

        by Jeremi ( 14640 )

        One use case, imagine I'm a US company and I ship worldwide. A customer wants to buy $5000 of product. I ship the product. They contact their credit card company and say it was a fraudulent charge and they issue a chargeback. My company is out of $5000 and there is not much recourse

        If I'm not mistaken, the flip side of this is if you take the customer's Bitcoins and decide not to ship their product. What recourse would your customer have then?

        • ...if you take the customer's Bitcoins and decide not to ship their product. What recourse would your customer have then?

          You are describing the "eBay problem" and it seems to have been solved by them. There is something called "reputation" online and it works. The thing about credit cards is that you pay their fees whether or not you want the protection. For example, Amazon is a company for which I would not pay these "protection fees". If I order from Amazon, I know that I will get the product in a reasonable time frame, it will be the product I expected and it will work as described. If something is wrong, I know Amazon wil

      • Bitcoin is a limited resource.

        So are used pairs of Miley Cyrus's underwear, but you don't see people investing in those. Bitcoin's value is based on the same "bigger fool" dynamics which power pyramid schemes. As long as someone out there thinks they can turn around and re-sell it to someone else at a profit, the the scam keeps churning...

        • Bitcoin is a limited resource.

          So are used pairs of Miley Cyrus's underwear.

          I purchased a pair of underwear where the digital signature stitched into the strap did not match any on the public ledger and I heard about a friend who purchased a counterfeit pair of undies where the stitching was copied from a real pair.

          The Miley Cyrus underwear currency has many valid uses, but it does not provide any defence against fraud or duplication the way that Bitcoin does.

          The moral is that if you want to compare Bitcoin to another payment method, then you should know the features and benefits o

      • Accepting cash into your hand is a payment option where there is no risk of chargeback.

        You are correct. The Credit Card companies love chargebacks. It is the best way to convince consumers that the Internet is dangerous and full of fraud and that the consumer needs to pay the additional 2%-5% credit card service tax and reveal all your purchasing habits to 3rd parties without compensation. Also, the credit companies do not pay for fraud. First they blame the customer and try to just make them pay. If that f

  • Wow (Score:4, Funny)

    by kamapuaa ( 555446 ) on Saturday January 07, 2017 @04:58PM (#53625095) Homepage

    It's a stable currency, and it went from $27 to $500,0000 in 8 years! Everybody, buy, buy, buy! We're all going to get rich!

    • Mostly the people who "forgot about them" got really rich from BTC, or people with very large amounts selling slowly on the way up. Most others have unloaded after gaining a "modest" profit (10 - 100x), thinking that surely the limit must have been reached.

      • I never forgot about them, but mined or accumulated steadily from mid-2011 to mid-2016. When the price and my accumulation goal were met, I started selling, which I will do for the next few years, so as not to take a big capital gain all at once. I've already covered my original investment, so it's all profit at this point. I can't predict what the price will do in the future, so it might end up a small or a large gain. We'll see.

    • Outperformed the ruble!

  • Why would you be surprised? (Score:2, Insightful)

    by Anonymous Coward

    Why would you find this surprising? The volatility in those other currencies is driven by political factors and economic conditions in the countries that produce those currencies. Bitcoin isn't tied to a particular nation, so it is somewhat shielded from the political and economic factors in individual countries that can drive changes in the value of other currencies. However, the rapid increase in the value of Bitcoins concerns me that it may be a bubble and, at some point, there may be more significant co

  • How can a currency be an investment"? (Score:5, Insightful)

    by Billly Gates ( 198444 ) on Saturday January 07, 2017 @05:21PM (#53625183) Journal

    I listen to Dave Ramsey who is very anti gold and find the whole concept bizaare.

    Gold and bitcoins don't actually produce anything. Investing in a property give you rent as you supply a service. Investing in a company provides you income as that company provides and product or service that other people pay money for

    If a few people got rich from either than it is not an investment anymore than casino chips are. Like casino chips they are for betting and speculating. The whole concept of Gold is the government can not do something stupid and it will always retain value .... well people only get rich if it fluctuates. Therefore it is a TERRIBLE currency and negates the whole purpose of bitcoin or gold over a dollar which is stable.

    What a dollar doesn't do anything? No shit. It is a currency, not an investment tool.

    • Because capital preservation can be a component of investing. And historically gold has done that in the fact of economic and government failures. Of course "past performance is not an indicator of future results"...

      • Re: (Score:1)

        by Anonymous Coward

        It's more than that. Investing in a currency is investing in the economy that denominates its activities in that currency.

        Man you people are as stupid as fuck.

        • It's more than that. Investing in a currency is investing in the economy that denominates its activities in that currency.

          Man you people are as stupid as fuck.

          Right so that means inflation which decreases the value in said currency.

      • That is not investing. That is hoarding betting on a disaster.

        Investing to me is using that money to gain more money through a product or service. I could be wrong on this as Gold has performed terribly compared to housing or the S&P 500 which both make money by economic activity and not just speculation

        • Being 100% in gold is hoarding betting on a disaster. Just like being 100% in oil futures is gambling. Or 100% in miami apartments is gambling.

          Having some of you holdings in gold, however, is not.

          Pick the right start and end dates and you can have any one of gold, housing, and the S&P 500 perform better than both of the other two.

          • Here is the difference betting on Miami apartments or oil actually generates revenue in addition to being able to trade. Yes downs happen but one creates money consistently. Gold and bitcoins do not. Only if someone wants to buy it more than what you paid hoping the value can go up. Yes housing got hit by this too but the prices are going up again. Why? Even if the value goes down you can collect rent.

            Gold is terrible and I am not a financial guru. Dave Ramsey has a point in investing in something that gene

            • You are free to pretend that wealth preservation isn't a valid form of investment.

              Yes gold is not going to generate income, in fact it is going to have holding costs. It is a terrible thing to put large amounts (in relative terms) of money in, it is not however betting on disaster when it isn't large amounts. It is hedging against downturns in the asset classes that historically have had a negative correlation with gold. No every part of an investment has to be income generating.

              And no you can't always coll

        • Re: (Score:2)

          by djinn6 ( 1868030 )
          Investing is more than trying to make the most money long term. It must also take into account when you need to spend that money. If you're on the verge of retirement and you suspect there's disaster coming, then putting 20% of your money in gold is perfectly reasonable, because if the economy crashes, then you have something to fall back on.

          The idea that you can diversify away all risk using traditional investment vehicles is provably false. Bonds depend on the issuer not going bankrupt, currency depend

    • Does PayPal provide a service? If so, doesn't it reason that Bitcoin provides a service?

      The two obvious services that bitcoin provides are the ability to transfer value and to store value. Venezuela's currency is experiencing hyper inflation. If I lived in that country, I would be trying to convert from holding value in that currency to something else.

    • right. That's why no one trades on the Forex ... or do they?

    • Gold and bitcoins don't actually produce anything.

      Try sending gold pseudonymously across the globe in 10 minutes. Now try the same with Bitcoin. Observe which one provides a useful service.

      • Re: (Score:1)

        by Anonymous Coward

        Try to store gold for your great grand children. Now try to store bitcoins for your future self within 20 years. Gold has been the default choice to protect your capital for thousands of years.

        • Try to store gold for your great grand children. Now try to store bitcoins for your future self within 20 years. Gold has been the default choice to protect your capital for thousands of years.

          A share in a company historically has a much much better rate of return as a company actually provides value and creates wealth rather than speculators jerk the price up. Also if you bought gold lets say in 1890 the value even if it goes up is eaten away by inflation by the dollar.

          True some companies go out of business but the majority do not after they make it to the stock market as a trade

        • Then use gold for that. Use the right tool for the job; when you want to store money, Bitcoin isn't it.

          (I'm not convinced that gold is either, but Bitcoin definitely isn't. Bitcoin is for moving money around, not for keeping it.)

          • Bitcoin is safer than gold for long term storage. At least in some respects. So what is your prediction for Bitcoin in 20 years? And why will it be less safe than gold stored for an equal amount of time?

            I agree with your opinion that Bitcoin competes more with cash, checks and credit cards than gold, but bitcoin also has strong points in terms of storing value. For example, you can create "paper wallets" where the keys are never stored on a computer so it cannot be stolen by hacking a digital device that yo

            • Cool cryptography stuff is cool, but it only protects the coins, not their value. And who knows where that's going to go; if China and the US made it illegal or impractical to run a Bitcoin exchange then that would remove a lot of the speculation that's currently pushing Bitcoin's price up.

              I don't really have any idea how good gold is for storing money either, it's just that the AC clearly thought it was a good idea so I figured I'd run with it. You're free to bet on whatever you think will work out well. I

      • Providing a service vs a currency is different. Yes a service generates money. Having a piece of paper called a dollar does not and goes down in value over time because of inflation.

        My point is there is a big difference between investing and gambling. Sure McDonalds might not be doing well at hte present moment due to intense competition, but it generates consistent revenue from customers. You won't see the wild swings and historically has grown more than gold or other commodities. Even housing is going bac

  • For as long as it remains this volatile, its importance will remain minor.

  • ... being operative.

  • No, it wasn't (Score:4, Interesting)

    by Sycraft-fu ( 314770 ) on Saturday January 07, 2017 @06:23PM (#53625429)

    Not just because it doesn't work as a currency, but because for currencies big swings in valuation, up or down, are no "good performance". Ideally a currency would be completely stable. What $1 buys now would be what $1 buys tomorrow, and what it buys in a thousand years. Of course in reality none of them are totally stable, but the good ones are pretty stable. They move a very small amount, and do so very gradually. They function as a good store of wealth for that reason, and more importantly make for a useful medium of exchange. Since their value is pretty constant, people have a good feeling for how much they are "worth" and can mentally price things.

    Bitcoin did well as a speculative bet. If you want to play financial speculation, Bitcoin is a good target as it moves like a very thinly traded stock. That means it can swing bit and make you a lot of money. Also means it can swing big the other way and lose you a lot. So like any sort of speculation, you need to know what you are getting in to and understand the risks.

    You BTC promoters can't have it both ways: If Bitcoin is a good currency then it needs to be stable. If Bitcoin is a good investment, then it isn't a currency.

    • Bitcoin is unstable because it the market is small, and the market is small (mostly) because it is new. It won't always be new, and it won't necessarily always be small. It also doesn't have any laws favoring it the way that, for example, the dollar does in the US.

      It does, however, have the advantage that no bank or government can devalue it by inflation. Instead, the inflation function is well known up front.

      At any rate, bitcoin is just math. It has no more influence over what people say about it than

    • So it dumped 30% in two days a bit like Sterling (GBP) in June 2016

      • Well two things there BTChead:

        1) Some currencies DO move large amounts and that is NOT considered successful. When the pound was experiencing instability, that was a big cause for concern. It was not considered a "success" as people seem to think for BTC.

        2) It was 8%, not 30%. Bit of a difference there.

        Like I said before: You can't have it both ways. If you want it to be a good currency, then stability is what you want. If you are happy with rapid fluctuations, then it is a speculative betting opportunity.

  • Performing? (Score:3)

    by thegarbz ( 1787294 ) on Saturday January 07, 2017 @06:27PM (#53625441)

    The ideal currency doesn't bounce around, it moves back and forth only to provide economic stimulus or a break on the economy. The "ideal" currency shouldn't rise or fall and I think McDonalds shares would form a far better currency than bitcoin.

    • The ideal currency doesn't bounce around, it moves back and forth only to provide economic stimulus or a break on the economy.

      So you think a "ideal currency" does this without the hands of a 3rd party manipulating it in order to benefit the economic needs of one nation over another? Or do you think a "ideal currency" just does this naturally?

      Is it your opinion that these fluctuations help to stimulate or slow an economy when the country needs it? Or are do those fluctuations happen to allow more of the "ideal currency" to fall into the hands of those 3rd party manipulators?

      I am guessing what you are saying is that Bitcoin needs a

      • So you think a "ideal currency" does this without the hands of a 3rd party manipulating it in order to benefit the economic needs of one nation over another?

        No quite the opposite. An idea currency provides a handle on the economy.

  • Which is worth $2,355 per 0.2 grams.

    Wake me up when Bitcoin gets even close to that value. Meanwhile, I'll sit on my 500 carats of Lightning Ridge.

  • Unbiased source says... (Score:3)

    by JustAnotherOldGuy ( 4145623 ) on Saturday January 07, 2017 @07:32PM (#53625689) Journal

    "Bitcoin president Nicolas Cary writes that bitcoin has become more stable than many of the world's top currencies"

    Bitcoin guy says "Bitcoint is awesome!". Film at 11.

    Except as others have pointed out, its volatility means it is in NO WAY "stable" by any use of the word that I'm familiar with.

  • Wait, what? (Score:3)

    by rebelwarlock ( 1319465 ) on Sunday January 08, 2017 @04:53AM (#53627461)
    You compare it against "many of the world's top currencies", and then reveal those currencies to include the Egyptian pound and the Nigerian naira? You ignore the wild surges and plummets that take place in very short time spans, then call it stable? You call it a currency at all, then compare it to stock? What is going through your head, the Meow Mix jingle on loop?

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