Friday, December 29, 2017

BITCOIN

A lot of people are supposedly making lotsa money outa Bitcoin.   To my 'uneducated' eye it works something like this .....

A lot of monkeys lived near a village.

One day a merchant came to the village and announced he would buy the monkeys @ $100 each.

The villagers thought the man was mad.

Why would anyone pay $100 for stray monkeys?

Still, some villagers caught some monkeys and gave them to the merchant who paid them $100 for each monkey as promised.

The news spread like wildfire and soon the whole village was out catching monkeys and selling them to the merchant for $100.

After a few days the merchant announced he would now pay $200 for each monkey.

Monkeys were in hot demand and the merchant paid $200 for each monkey caught.

Monkeys were now in short supply and the merchant said that he would pay $500 for a monkey.

The villagers forgot about the little things like work and sleeping and eating and hunted the monkeys down to near extinction.   The merchant paid $500 for the few monkeys that were caught.

The villagers waited anxiously for the next announcement.

Then the merchant announced he was going home for a week but when he returned he would now pay $1,000 for each monkey caught.

He left all the monkeys he had purchased in charge of his assistant who housed them in  a very big cage.

He then went home.

The villagers were very sad that all the stray monkeys had been caught.    They needed monkeys to sell at $1,000 each to the merchant when he returned but there weren't any monkeys to be found.

Step up the merchant's assistant.   He said he would do a dirty on his boss and sell them monkeys from the cage at $700 per monkey.

The news spread like wildfire.    Buy the monkeys @ $700 and you will make $300 profit on top of what you have already received.

The next day the villagers made a queue near the monkey cage. 

The merchant's assistant sold all the monkeys @ $700 each.  Rich villagers bought monkeys in big lots.  Poor villagers borrowed money from money-lenders and also purchased monkeys.

They all took great care of their monkeys and waited for the merchant to return.

But he never did.  

They went to the house where his assistant had been living.   He was gone too.

The villagers realised they had bought a lot of useless stray monkeys @ $700 each and they were not worth a penny.

That's all you need to know about Bitcoin.     Now, I can get a bridge cheep for you if you're interested.



8 comments:

Noel said...

It's determined by the miners not monkeys.
https://www.quora.com/Number-of-miners-of-Bitcoin-with-time-will-decrease-so-how-Bitcoin-will-survive-that

The Veteran said...

Noel ... you sound like a believer. Sorry, I don't believe in Santa Claus either.

Adolf Fiinkensein said...

Dutch Tulips, West Australian 1970s mining companies and now Bitcoin.

Anonymous said...

Veteran......you missed the bit about the finite number of monkeys and those who bought monkeys at $300 and sold for $500. In this respect it is better than printed money because governments control the speed of the printing press whereas bitcoin is finite. As long as the major governments of the world don't try and regulate it it will continue with us for a long time yet hiding dirty money.

Troll Adolf DLT......Confused as usual.

Lord Egbut Nobacon

Noel said...

Nah not a believer, just interested in observing blockchains.
I'm guessing it will be some dark hacker, not speculators, that will eventually find a way in and crash it.
You haven't factored in the orignal purpose. Secure movement of money with you getting the fee. Yup probably a lot of dirty money but hey been a few reports of laundering at Auckland Casino regardless of the scrutiny this year.

Gerald said...

No bank fees!
https://www.coindesk.com/information/what-is-bitcoin/

The Veteran said...

Egbut ... your point about bitcoin being the perfect medium for washing dirty money is 'on the money'. That would suggest that sooner rather than later sovereign countries will combine/connive to shut bitcoin down.

I note that every 'investor' who successfully creates a 'hash' is rewarded with 25 bitcoins ... that reminds me to bone up on 'Ponzi Schemes'.

Anonymous said...

I'm not convinced either way of the crypto currencies' potential for boom/bust for 'investors'. The loudest flapping is coming from sources who have most to lose. Central banks lose their transaction fees fx and other rent - all from fiat currency, which is backed by exactly jack. Except for the confidence of billions of people who believe that the economist gnomes have somehow got it right.
Both the fiat and private crypto currency have only confidence to sustain them.
From my viewpoint they're both as fragile as fairy dust.

Mick