171

Anybody that guarantees a monthly (for example 5%,11%,16%, 20%) return that would be great if that was a annual return, is running a scam. If they guarantee they could take your 20K euros and make enough money to pay you a guaranteed 24K euros 30 days later and keep the rest for themselves, then they are running a scam. If they are legitimate then they ...


163

Apologies for the brevity and avoidance of in-depth discussion in this answer, for simplicity's sake. To understand Bitcoin and its failures, we must understand what a 'currency' is, and why it is important. Prior to currency, people bartered for goods - I give you 4 chickens, you give me a goat. What if you don't want my chickens? How do I get my goat? ...


118

Question: if I could guarantee 20% monthly, why would I let you in on it? I wouldn’t. I’d mortgage my home, take out the biggest loan I can, and keep the 20% myself. And that’s how you know it’s a scam. If it was true, it would not be offered to you.


69

Here's the question, what I don't understand and I haven't been able to find the answer to, is if I own some bitcoin, how does that help me buy groceries at the market, or gas for my car? The market I go to doesn't accept bitcoin and neither do the gas stations. If I can't do that, how is bitcoin worth anything to me? The market you go to probably doesn't ...


52

How is Bitcoin useful as a currency if so few services accept it? That's the point. It's not useful as a currency because so few services accept it. So far, it has some other uses - international transfers, storage of value, speculation object. Just because it was intended to be a currency doesn't mean it's useful as one. Like gold. Gold is not useful as ...


43

A $100,000 (US) compounded monthly at 20% would become a $5.6 billion in 5 years. Unfortunately, if this was a non sheltered account, you'd be in the maximum tax bracket and you'd only make a 'mere' $4.6 billion. TANSTAAFL (There ain't no such thing as a free lunch) If it sounds too good to be true, it usually is Money doesn't grow on trees How do you ...


38

Financial institutions are subject to additional reporting requirements where they deal with U.S. persons (→ FATCA). Many institutions therefore decline potential customers that are U.S. persons, either because the effort is uneconomical or because they are not allowed by local laws to report that data to the U.S. U.S. persons are not only U.S. citizens, ...


34

Aside from the points everyone else has made, consider this: if they fail to live up to their guarantee to return 5% a month, what are you going to do about it? Do they live in the same country as you do? Do you really even know who they are and where they are actually located? If you go to your local police and tell them "Some folks on the Internet talked ...


29

(Assuming US based on profile) Welcome to the world of income taxation. Your $1,000 in short-term gains will be treated as "normal income" and subject to your marginal tax rate. So there is fundamentally no difference in this and "I just got a $1,000 bonus - how can I reduce the tax on that income". The answers would be the same: Do something to increase ...


19

There are a lot of details involved in the answers to your question. Some of them would require specialized knowledge and is institution dependent...you would need someone who writes or oversees code for a particular transaction. I will do my best to give you the big, economic, picture. Neither I nor most people in this stackexchange are CS experts. How ...


17

Bitcoin or any other crypto currency is an incredibly volatile place to put your money. Its value fluctuates significantly, increasing its risk, and its value proposition is entirely unclear. In my opinion,the only true value of bitcoin is (a) hype; and (b) a tool for money launderers and organized crime. That is only my opinion, but to buy an asset I ...


16

It actually works a lot like gold. You even mine it in a similar way to gold: spend some regular currency for the mining equipment and cost of running the equipment, and hope you mine enough to make it worth it. (Sidenote: These days it's quite difficult to mine bitcoin at a rate that doesn't cost more in electricity than you make from mining) When it comes ...


15

My big gripe with the ICO name and corresponding mania is that it has no similarity to an IPO. At best an ICO is a seed stage investment in a wholly unproven technology/idea/theoretical use. A developer team gets together to write a fancy whitepaper, then build out a nifty website to display the idea they are working on. Generally this idea has no ...


15

At face value, 'Market Capitalization' is a simple calculation: Number of units in the market * market price = Market Capitalization So the market capitalization of Apple is equal to the number of shares outstanding (860 Million) * the share price ($175) = 150 Billion. [I am ignoring complications regarding other non-common share instruments outstanding ...


14

I think you are misunderstanding how capital gains work. It's not about the difference in value between the property you're selling and the property you're receiving at the time of the exchange. It's the difference between your basis in that property (basically its "initial value"), and the value of the property you get in exchange. We don't have enough ...


12

Forex. I will employ my skill for "suspension of disbelief" and answer with no visceral reaction to Bitcoin itself. The Euro is not an 'investment.' It's a currency. People trade currencies in order to capture relative movements between pairs of currencies. Unlike stocks, that have an underlying business and potential for growth (or failure, of course) a ...


11

In 2014 the IRS announced that it published guidance in Notice 2014-21. In that notice, the answer to the first question describes the general tax treatment of virtual currency: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. As it'...


10

Like other users have pointed out, the returns are very high. High returns come with high risk (think about winning a lottery v/s buying a government bond.) If someone actually can make 20% monthly with a low risk, they wouldn't need your money. The best hedge fund in the world (Renaissance) is not open to the public---you have to be working there to invest ...


10

There are currently two problems which prevent the widespread adoption of Bitcoins as a currency for everyday business. The system doesn't scale. Due to the limited size of each block in the blockchain, there is a hard limit on the number of transactions which can be processed. The Bitcoin network can only handle up to 10 transactions per second. This is ...


9

The market I go to doesn't accept bitcoin and neither do the gas stations. If I can't do that, how is bitcoin worth anything to me? Without getting too deep into the particulars, folks aren't buying gas and groceries with it. One example of a common purchase is lightly controlled, gray market pharmaceuticals. Things like viagra. Also, in countries like ...


9

Let me actually answer the question asked, not rant: How is Bitcoin useful as a currency if so few services accept it? There are plenty of people actually living with Bitcoin. There are TONS of services that ULTIMATELY accept bitcoin. The trick is not to look for bitcoin prices. You can use services like BitPay (https://bitpay.com/card/) to get a ...


8

There are many exchanges (not only for cryptos) that use a "Maker-Taker" model. In this model: A taker is the party whose order tends to be filled on demand (i.e. does not has to wait). This part also tends to pay higher fees. A maker is the party whose order tends to stay in the market for some time, waiting for a counterpart (a taker) to complete the ...


8

Does this mean that double entry book-keeping is practically a blockchain, with each block being a transaction? Not exactly. In double entry book-keeping, every institution keep its own accounts that reflects the truth. This means there are 2 version of truth and there is reconciliation between these 2 truths to agree on actual truth. In blockchain, there ...


7

There is no sure thing in investing. Everything has a risk component. Sure, people talk about these cryptocurrencies like they have nowhere to go but up, but there are massive risks with these. For example, they could be declared illegal, the exchanges could go bankrupt (and some have), the backing companies off the ICOs could fail, the algorithms behind ...


7

The big issue is that there has to be a buyer. If BTC (or whatever you trade in) drops 20% very suddenly, your order might not be filled. There has to be someone willing to buy at that price, so a sudden decrease can leave orders unfilled. Your stop-orders can and many times will work to protect your gains, but they are not guarantees.


6

All the crypto currencies are currently riding mostly on FOMO, as there is no other value behind them (FOMO = Fear Of Missing Out). People see that they are rising, so they are afraid of missing the big thing, so more and more get into them (which makes them rise even more, etc.) This mood is pretty much identical for nearly all of them, so they all move in ...


6

You have "ask" and "bid" the wrong way around in your second paragraph. "Ask" is the amount someone is asking you to pay them in exchange for one of their units of whatever. "Bid" is what someone is currently offering (bidding) in "real" money to purchase one of anyone else's units of something. The "price" is just whatever the most recent transaction ...


6

For a trade to happen, there must be a buyer and a seller. The buyer could have placed an offer to buy, which the seller took. Or the seller could have placed an offer to sell, which the buyer took. These are the only two possibilities. If the buyer placed the offer which the seller later took, the buyer is the maker (he made liquidity available) and the ...


6

Can a digital currency omits cryptography? Yes. A digital currency could be a "bank" with an electronic ledger of who owns how much of the digital currency. With a purely digital currency, the bank would want some way of authenticating it's customers but this need not be an intrinsic part of the digital currency itself. The customers might want their ...


6

The stock market returns about 10% a year. This doesn't happen every year some years might be below (or even a negative return) but typically over longer spans of time (like 5 or 10 years) you can expect a 10% return. Anything else is probably a scam, even mutual funds that advertise 20% returns only do this for a few years and over the long run fail. This ...


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