Crypto currency

If I pay for everything on my debit card or through standing orders and direct debits and never make a transaction with physical cash does that make GBP a digital currency?

Cos that's literally how I've been living for the past year.

 

I head a couple of people say crypto to crypto counted in the UK , but I don't think authorities are as clued in as they are in the States yet?

I haven't been rich enough to worry about any of this yet!

 

Interesting question. I would tend to have a fairly traditional view of savings and investment. A good multiple of income in 'safe' locations, even if the return may be negligible. And a smaller percentage in stuff aimed at some growth, namely stocks and shares ISA's. Happy enough with that, and crucially the risk is minimal.

 

What underlying asset is sterling tied to? You do know there’s no gold standard any more, right?

 

A currency is backed by a government - even if it's value is subject to some fluctuation. A cryptocurrency is guaranteed by no-one, so far as I can see.

 

The responses to this original message show exactly why you should seriously think about investing in cryptocurrency. So many folk clearly with absolutely zero clue of what they’re talking about means that anyone investing now is still an early adopter, and consequently the potential to make many multiples on an investment should adoption become widespread.

Of course there is underlying risk, and more than in a traditional investment, and I wouldn’t advocate having more than say 10% of your net wealth in crypto, but despite the incredible gains of the last ten years there’s clearly still huge growth potential.

What I find interesting is that BTC seems to have moved from being a potential form of transacting to more and more becoming an asset store of value - effectively its more and more being used as a digital form of gold. The fact that there is and will only ever be a finite amount means it should act as a hedge against inflation, particularly while the lunatic currently in charge of the USA has printed nearly as many dollars in the few months of his term thus far as the whole of US history preceding that. Surely that can’t end well for fiat currencies.

 

I’ll ask again - what underlying asset do the Bank of England back your five pound note with? What happens when a nutter like Biden just decides to print more and more and more and more and more of it? What happens to how much goods and services you can purchase with your five pounds?

 

Happy and can afford, best of both worlds. Some people seem quite happy losing money they can’t afford to lose.

 

If you are referring to a physical asset - none, as I suspect you well know. But the value of the currency is guaranteed by the issuing government, who are bound to maintain it's value in order to preserve their ability to borrow at workable rates and finance their future economic activity. Where there is no such underlying interest in guaranteeing the value of a currency then you would look to something else to act as some sort of guarantee that the value would be maintained. So far as I can see, cryptocurrency has no backing 'government' or organisation - it has just been invented by a person or persons unknown. Nor does it have any secure base in terms of being linked to any underlying asset. In the absence of both of those reassurances, it wouldn't be for me. Good luck if you dabble with it - I hope you don't get your fingers burned!

As for President Biden, what a refreshing change to have a grown-up in charge of the world's biggest economy. Anyone who followed the history of the Tory austerity period will know that cutting spending in a recession leaves your economy fundamentally weakened, and it's public services hampered in dealing with a pandemic or other emergency. And it's not as though the dollar has tanked in the wake of the President's stimulus programme. So we'll have to disagree on that one as well, I'm afraid.

 

A colleague of mine used to say only with money you're not fond of!

 

I see it this way. I'd rather trade stocks then chuck money at the lottery and traditional gambling.

If you're clued up and do your own due diligence you won't be caught out and lose money.

I have very little in crypto because of the volatility but happy to buy low and make some on a pump and dump.

 

When you say 'cryptocurrency', do you mean Bitcoin? In that case, the fact that it is 'trustless' is the reason it is attractive to investors as it is set to a fixed algorithm that no-one is in control of with decreasing supply. One downside to this is that a lot of the coin is in the hands of a few people/ organisations who can manipulate the price.

 

Yeah I know that, but it’s not an amount that’s going to change my life. My wage goes down in real terms every year anyway, I’ve never had an at inflation pay rise in my life. I’ve had plenty of pay freezes though. Risking hundred or thousands of pounds on this to offset my bank balance being worth ever so slightly less each year, that I realistically won’t notice, isn’t a sensible idea to me.

 

That's fair enough. I'm really trying to explain the allure of deflationary currencies given the economic situation and policies related to that. I'm in education too. I think we will notice though as these policies haven't even got going yet in response to the pandemic

 

QE and stimulus cheques for punters has nothing to do with austerity/Government spending - the UK’s disastrous austerity programme can’t be characterised as the opposite of what Biden is doing.

You can still finance government spending and avoid austerity policies through debt monetisation. QE is a whole different type of gambling on the level at which it is currently being performed in the USA.

And the biggest irony of all in your argument is that loads of the young people receiving stimulus cheques in the US are spending that money on crypto, thus driving prices higher against the USD!!

 

I wasn't suggesting anything, just curious how people did it [me having had no experience of that side of things]

 

Not something you could possibly know!

 

www.forbes.com/sites/billybambrough/2021/03/17/millions-tempted-by-stimulus-check-bitcoin-bet/amp/

 

Like to enough sterling first £££