Cryptocurrencies

[Royston]

I'm by no means savvy with economics but, I very recently invested in some Ripple Coins (XRP). This was partly through curiosity and, of course, to see if I can make some money.

 

The Ripple network is unique due to decentralized currency conversion and trade. This drastically speeds up transactions and significantly reduces charges (a charge being a tiny fraction of an XRP).

 

You can use the RippleTrade UI to bid and ask via an order book. This is as far as my dabbling goes i.e exchanging Bitcoins for Ripples and vice versa depending on their relative strengths.

 

It's most likely due to my lack of knowledge, but I find cryptocurrencies rather abstract. This is for several reasons, but I don't wish to write a lengthy OP.

 

I've managed to more than double my money, however it is, to all intents and purposes, gambling !

 

So, I was wondering, has anyone here dabbled in the cryptocurrency market (beyond making a purchase with, say, Bitcoins) ?

 

Is it right to consider cryptocurrencies as quite an abstract entity ? Or are they no more or less abstract than any other currency ?

 

 

[arc]

An "abstract" way to judge this would be to imagine your own measured willingness to hold onto this currency for a determined period of time.

 

Are you using a crocodile's back to step across a stream or to ride across a river?

 

Whereas in comparison most federal currencies would hopefully resemble an iron hulled ship. Bon Voyage!

[Yoseph]

Cryptocurrencies just like real currencies are trust based systems where the value of the currency is just to do with consensus. They are therefore as abstract as each other. The two main differences at the moment are 1. Real currencies are more secure from hackers because they are in the bank. Ironically they therefore have their own threat, which are the banks themselves and in some countries the government, where the tax man can forcefully empty your bank, or the government can go bust and take your money to bail itself out. 2. Cryptocurrencies are only accepted by certain providers and retailers, which limits it's usefulness and therefore value. The more places accept cryptocurrencies, the more they'll be worth. Some countries have banned the use of cryptocurrencies (because they can't do the things mentioned in point 1) so this is an apposing force to their growth. I believe that cryptocurrencies will go up in value (although I don't have money myself to invest), but only time will tell!