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BTC Very Volatile

Tue 17 December 2013

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As I've mentioned in the past, BTC is very volatile. Good news or bad news can send the value of BTC up or down 20% to 30% in a day. The latest bad news comes out of China - Bitcoin dipped to its lowest price in a week, following yesterdays reports that the Peoples Bank of China had banned third-party payment firms from dealing with bitcoin exchanges. What does that mean? It appears it might be more difficult to buy BTC with cash or get cash in exchange for BTC in some places in China.

Of course banks all over are leery of BTC because it will take business away from them, their branches and of course their credit card monopoly. Some banks think BTC is a good addition to the finical world. BTC will continue to flourish and grow but as we've seen will have wild swings. There for a week it was pretty steady at about $875 but not today!

The bottom line is BTC is not a place to "save " money if you are looking at a short time frame. But over the months and years I'm convinced it will continue to go in value. When and how much is anyone's guess.

Cameron Winklevoss Thinks Bitcoin Price Will Hit $40k

Posted at 12:39 pm in Uncategorized | Comments (0)

More About Bitcoin

Mon 16 December 2013

A talented investor friend of mine has offered me "tips" on stock buys and his batting average is good. He does not and has not worked for about 20 years but rather derives his income through his stock trading system. I know a little about it but can't begin to explain it here.

So I offered him two tips about investments since I've known him (about 13 years). One was to buy and hold Tanzanite over a long period which I did. Most Tanzanite I bought I still own but occasionally someone finds my web site - TanzaniteAmerica (which accepts Bitcoin for Tanzanite purchase). Thus far Tanzanite is working well for me but it is not very liquid like gold. Nevertheless I'm in it for the long hall - maybe 10 more years? The value of Tanzanite of the same quality I have is back up over $1200/carat on reputable online dealers.

Recently I told him about Bitcoin (aka BTC). He knew nothing about it until I told him and had many of the same questions others have. I decided to put a copy of my e-mail back to him here in case you many want to know more as well.

You can "Google" the total limit on BTC and find the answer is 21 million. There are about 11 million BTC in circulation and the only way new Bitcoins are generate is via the "mining process" which is nothing more than absolute confirmation of the validity of any coin or part of a coin when transfered. "Miners" get fees in fractions of a BTC for contributing to the verification process which is the source of new coins until 21 million are in circulation. Best video I've found on BTC.

The whole BTC process is created by an open source (anyone can read it) software package and not controlled by anyone. The Bitcoin network (Forbes article) is running the software. BTC can be used to .00000001 BTC size. Thus, as demand for BTC goes up and we get closer and closer to the limit, the value of BTC must go up.

I've researched this extensively and found the software to be a pure stroke of genius. BTC can not be counterfeited but coins can be stolen from "wallets" by hackers. Where and how you keep your coins is important. There are many online exchanges that will host a user's wallet. I choose to keep my wallet privately on my computer and encrypted with a backup. Most users keep their coins in an exchange.
Great News Source

Posted at 04:26 pm in Uncategorized | Comments (0)

Reality Check

Wed 11 December 2013

Hashing 1 photo BTC-results.png

It's time for a reality check so I'm going to briefly explain BTC mining. This is the process where by a complicated series of calculations are needed to verify a transaction of person A sending a coin to person B. The calculations are done to prove "A" actually had a coin to send to "B". At this point I won't go into how that is done except to say it takes a tremendous amount of computing power to confirm the transaction. "Miners" are those who use their computers to verify the transaction.

By design, the genius behind Bitcoin designed the software to make the verification process harder and harder based on the amount of the total computing power in the Bitcoin network. That total power is called the "difficulty". A week ago the "difficulty" was at 700+ million calculations. Today it's over 900+ million! Why such a jump in just a week you ask? It's because more and more powerful machines like the one Mike and I own are contributing to the calculations. That translates to a lower payout for hashing machines.

The result is our BTC awards are not as large and will get smaller over time. We have the top machine but unfortunately one of the 4 boards is dead so we are running at 75% of capacity. This morning we have been awarded a total of 1.88 BTC and will likely hit 2 BTC sometime today. Still not bad at all given we were down 2 days because of the ice storm in Dallas which cut internet service. But since Dec. 6th we are work steady on 3 boards. We've sent the burned board back for replacement on Saturday but it's not even left the US because of all the bad weather in Dallas and in the northeast shutting down airports.

We are still having fun!!! Every day there is something in the news which makes BTC go up or down. It has swung $250 this week. Bad news makes it go down of course but it has been rebounding as well. We believe by month's end we will have paid for our machine and maybe made a little. Of course it depends on the total coins and the exchange rate. Stay tuned.

The company no longer makes our machine but is coming out with a much more powerful one (6 times faster). They announced the new machine to their customers only giving them first shot at the first 1500 machines. We got the e-mail a week ago. Mike called and asked my opinion - of course I said let's go for it. They had thousands of orders but only accepted the ones paying with BTC. Mike was busy so I set out to buy $10,000 with of BTC and amazingly I found a guy who would sell me the coins. Because of risk, BTC owners usually will only sell $500 to $1500 worth at a time. With my incredible power of persuasion I got him to agree after sending photo ID's - driver's license, passport, and my original pilot's license. He said OK so I transferred $10,000 to him immediately. He transferred the coins which took about 70 minutes to "verify" then I sent the coins to the company. We have a confirmed order for one Neptune coming out next year. People who sent wire transfer cash lost out and are pissed. More updates to come.

Posted at 03:34 pm in Uncategorized | Comments (0)