Mining as a part of prepping

[peejay]

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Please forgive my genuine question and technical ignorance. How do you turn this currency into something you can actually spend?
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No ignorance, it's not an easily understood subject TBF & I barely understand the basics, but essentially you can trade coins for coins, i.e. one type for another (such as Bitcoin for Ethereum), or you can sell coins for cash, which also attracts a transaction fee which can vary wildly from one coin to another and lastly you can actually purchase items with /some/ coins, for example Tesla recently announced that they will start accepting Bitcoin as payment for their cars. so at current prices, roughly 3 bitcoins (BTC) would buy you a half-decent Tesla.

To put it in perspective, I recently saw a copy of an old internet post where one of the earliest "miners" of Bitcoin was selling them - they were selling somewhere like 1700-odd bitcoins for $100 in 2009. Today, 1700 Bitcoins would be valued at just under £69 million.

[peejay]

Yeah the way Bitcoin algorithms were designed basically meant that the amount of "work" to produce each coin increases (not sure if it's exponential) so for example, in the early days a moderate computer might be able to "mine" (generate) multiple coins per day whereas today you likely require a room full of computers to run for days/weeks to generate a single coin. In reality they use dedicated mining hardware these days (designed purely for number-crunching) so yes, the net effect is that more & more energy is expended to create them.

However, the way Bitcoin was designed (and not all cryptocurrencies are designed the same way) is that there's fundamentally a finite number of Bitcoins that can possible be created - something like 21m or 21b, can't remember but remember the number 21, so it isn't something that will go on forever fundamentally, but also. who knows what will happen once the last one is created &. no more can be, it'll generate scarcity that I guess can go either way, create demand or shy people away.

[grenfell]

However, the way Bitcoin was designed (and not all cryptocurrencies are designed the same way) is that there's fundamentally a finite number of Bitcoins that can possible be created - something like 21m or 21b, can't remember but remember the number 21, so it isn't something that will go on forever fundamentally, but also. who knows what will happen once the last one is created &. no more can be, it'll generate scarcity that I guess can go either way, create demand or shy people away.

Back of my mind that 21 figure vaguely rings a bell too . I seem also to vaguely recall that the mining is something along the lines of calculating prime numbers hence why it becomes more difficult with each subsequent number? To be honest i don't really understand why the number of coins is infinite when numbers are the one thing that is truely infinite ?
It's an interesting question about what happens after the last coin is mined. If i had to guess i'd say they would go the way of gold and silver coins. Some gold and silver coins are technically legal tender but for all intents and purposes effectively useless as a purchasing medium as no one uses or accepts them as legal tender. But useful as a store of wealth . Perhaps bitcoin will be the same? Don't know , just guesswork.

[peejay]

I reckon if you offered a gold sovereign (face value of £1 I think?) for a couple of loaves of bread, you'd have your hand snapped off, but doesn't mean it's sensible to do! I think it's more around the tax situation that it really becomes relevant.

The thing with crypto is that they can be massively sub-divided, e.g. to buy 100 Mana (another "coin") might cost 0.000000012 bitcoins and that's an easy transaction to make.

The bigger issue will be the cost of the transactions themselves which will likely render them useless for the smallest of payments, e.g. a transaction fee for a cup of coffee might be more than the value of the coffee but as a percentage of a car purchase it would be negligible.

[korolev]

I reckon if you offered a gold sovereign (face value of £1 I think?) for a couple of loaves of bread, you'd have your hand snapped off, but doesn't mean it's sensible to do! I think it's more around the tax situation that it really becomes relevant.

I seem to remember a few years ago a loophole where a company paid some of it's employees a paltry wage but paid in sovereigns at face value so were, on paper, earning three quid a week but actually getting nearer a grand.
The Inland Revenue* were onto that like a seagull on a bag of chips and the loophole was closed sharpish.


*Totally irrelevant but when Ken Dodd got collared for tax evasion, he said "I told the Inland Revenue I didn't owe them a penny because I lived near the seaside."

[grenfell]

The bigger issue will be the cost of the transactions themselves which will likely render them useless for the smallest of payments, e.g. a transaction fee for a cup of coffee might be more than the value of the coffee but as a percentage of a car purchase it would be negligible.

it actually costing me to spend my own money is something that would rankle me . I won't use atm's that charge for the very same reason. I suppose that there could be some way of making transactions below 20 quid or so free but then i equally suppose that would be abused by people buying , say a car or house , with hundreds or thousands of little transcations ? I don't know , i don't know anywhere near enough. Would we need to keep our present currency alongside?
One thing that seems ironic to me is that we have talked about the unpleasant possibilities of a cashless society yet here we are talking about the potentials of a currency that exists only in comp world...

[jansman]

To each his own I guess. I cannot comment on this new currency, as I have no real knowledge of it. I will stick with the tangible notes in my wallet. To be honest, I am not even a big user of plastic - only when I have to. I will use readies until the bitter end - and that is still a long way off.

[peejay]

In my mind, sitting there with a pile of millions of pounds of bitcoin makes little sense (as a preppier) as they could disappear in a major IT situation. I have some coins that have a /very slight/ potential to take off over time like Bitcoin has, but I also have in mind a value which, should it be reached, I'll sell the lot & turn it into tangible value.

[grenfell]

Eggs and baskets i suppose. There's an old saying with regards to stocks and shares about only investing what you can afford to lose. Follow that mantra with regards to cryptos and to a lesser degree pm's and i don't think you'll go far wrong.

[Bosworth]

In my mind, sitting there with a pile of millions of pounds of bitcoin makes little sense (as a preppier) as they could disappear in a major IT situation. I have some coins that have a /very slight/ potential to take off over time like Bitcoin has, but I also have in mind a value which, should it be reached, I'll sell the lot & turn it into tangible value.

I would argue that both cash and stocks and shares are in the same bucket. They only have value whilst others believe they have value bad are prepared to exchange them for value.

Good, however?