© copyright       Created and Developed by Thorsen Services
design
website
The net is yours to conquer
Thorsen Services
A Note on Cryptocurrencies
A Brilliant Concept One of the most interesting characteristics of Cryptocurrencies is that they are currently unregulated. If you own Bitcoin or any one of more than 1,000 varieties of cryptocurrency, you can very easily bypass your country’s foreign exchange regulations. Another interesting characteristic is that there is no intrinsic value to these ‘coins’. If you wish you can obtain actual physical coins to represent your Bitcoins, and you can probably obtain physical coins to represent your investment in other crypto currencies as well. But basically these ‘coins’ are not real. See this short YouTube introduction to Bitcoin. View this incredible graphical representation of different cryptocurrencies. Bitcoin is probably the most well known crypto currency. You can buy and sell it on an exchange, or “mine” it with a dedicated computer. It’s not that simple to mine, you will need a very expensive top end video card, and other associated costs are not trivial. The pursuit of bitcoin (or any other crypto currency) is a matter of faith, a belief that somebody is going to want your bitcoin and will be prepared to pay more for it than what it cost you to obtain. Whether you have mined it or bought it on an exchange, it cost you real money, and you are betting that what you have paid is less than what you can get when you want to sell. Think of precious metals like gold and platinum - these are actual physical metals that have industrial use, with a value based largely on supply and demand. Coins made with precious metals can be worth a great deal more than face value, such as the American Gold Eagle and the South African Kruger Rand. Diamonds, on the other hand, have have an entirely artificial value, determined by De Beers and other diamond miners. You can of course buy anything with cryptocurrency, providing that the seller is willing to accept your currency in exchange for the goods or services rendered. It is a risk, the rated value might drop before the seller has a chance to sell the cryptocurrency given to him in return for his goods or services rendered, but it is more likely to appreciate in value. Bear in mind, however, that regulation could devalue these imaginary coins, and people might eventually become aware that these ‘coins’ have nothing of value backing them. There is no actual value attached to this computer record other than faith that other people will pay you more for it than what you paid for it. Another aspect of cryptocurrencies is it’s impact on the environment. According to Randi Zuckerberg in a LinkedIn feature, if you looked at every single Visa transaction for a year (USA only?) processing these billions of transactions would be the equivalent to the energy use of about 50,000 households. Bitcoin transactions are a tiny fraction of the number of Visa transactions, yet the energy requirements for those Bitcoin transactions is far greater than that required by the Visa transactions. In fact, each Bitcoin transaction consumes 4,000 times the energy of a single credit card transaction. South Africa still depends on coal fired power stations, and mining any of the available cryptocurrencies increases the electricity account and, more importantly, increases the pollution from our power stations.
© copyright             Created and Developed by Thorsen Services        President: Bob Thorsen   Vice President: Trevor Thorsen
design
Thorsen Services
The net is yours to conquer
website
A Note on cryptocurrencies
A Brilliant Concept One of the most interesting characteristics of Cryptocurrencies is that they are currently unregulated. If you own Bitcoin or any one of more than 1,000 varieties of cryptocurrency, you can very easily bypass your country’s foreign exchange regulations. Another interesting characteristic is that there is no intrinsic value to these ‘coins’. If you wish you can obtain actual physical coins to represent your Bitcoins, and you can probably obtain physical coins to represent your investment in other crypto currencies as well. But basically these ‘coins’ are not real. See this short YouTube introduction to Bitcoin. View this incredible graphical representation of different cryptocurrencies. Bitcoin is probably the most well known crypto currency. You can buy and sell it on an exchange, or “mine” it with a dedicated computer. It’s not that simple to mine, you will need a very expensive top end video card, and other associated costs are not trivial. The pursuit of bitcoin (or any other crypto currency) is a matter of faith, a belief that somebody is going to want your bitcoin and will be prepared to pay more for it than what it cost you to obtain. Whether you have mined it or bought it on an exchange, it cost you real money, and you are betting that what you have paid is less than what you can get when you want to sell. Think of precious metals like gold and platinum - these are actual physical metals that have industrial use, with a value based largely on supply and demand. Coins made with precious metals can be worth a great deal more than face value, such as the American Gold Eagle and the South African Kruger Rand. Diamonds, on the other hand, have have an entirely artificial value, determined by De Beers and other diamond miners. You can of course buy anything with cryptocurrency, providing that the seller is willing to accept your currency in exchange for the goods or services rendered. It is a risk, the rated value might drop before the seller has a chance to sell the cryptocurrency given to him in return for his goods or services rendered, but it is more likely to appreciate in value. Bear in mind, however, that regulation could devalue these imaginary coins, and people might eventually become aware that these ‘coins’ have nothing backing them. There is nothing of value other than faith that other people will pay you more for it than what you paid for it.