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Tales from the crypto: Is bitcoin a fraud?

  1. Bitcoin
    Francois Badenhorst

    Francois Badenhorst Deputy Editor Staff Member

    Posts: 91 Likes: 18
    18 |

    This article was initially posted on our sister site, AccountingWEB.

    If there was any doubt left that Jamie Dimon wasn’t a fan of bitcoin, JP Morgan’s CEO laid them to rest when he spoke at a conference recently.

    The cryptocurrency, Dimon said, “doesn’t exist” and was only fit for use by criminals and people marooned in failed economies. There was even something for fans of 17th-century financial bubble references, with Dimon calling bitcoin “worse than tulip bulbs”.

    This isn’t Dimon’s first attack on bitcoin. Actually, he has campaigned tirelessly against bitcoin’s perceived volatility and fraudulent nature. Dimon’s criticisms practically merit an entire genre of their own by now.

    But that’s not to say he’s some sort of wild-eyed outlier. Indeed, his point of view resonates with many. One AccountingWEB member recently admitted that while “bitcoin has delivered good returns to investors”, it is “too slow to confirm transactions to merit serious consideration for a day to day currency”.

    “Its USP seems only to appeal to the criminally minded,” the member wrote, echoing Dimon’s aspersions on bitcoin’s legitimacy.

    It would seem, too, the effect of Dimon’s latest tirade proved his point about the bitcoin’s volatility. By yesterday, bitcoin’s value had dipped 10% since his speech, falling below $3,800 per bitcoin.

    But according to Baroness Michelle Mone, founder of the wildly successful lingerie brand Ultimo and now a bitcoin investor, the timing of the drop is purely coincidental. In fact, Dimon’s past criticisms actually precipitated a rise in bitcoin’s value.

    The drop, Baroness Mone explained, actually relates to the Chinese government closing down illegal bitcoin exchanges. She added: “On a lighter note, every time Mr Dimon makes a comment it seems to be a great time to purchase bitcoin. I believe that people shouldn't throw stones in glass houses, if I recall JP Morgan suffered $20bn in fines not so long ago.”

    As far as the accusations of bitcoin’s inherent criminality, she was unconvinced. “The blockchain protects users from fraud because the decentralised network confirms each transaction on the blockchain to be valid and true. This also means that no chargebacks can occur within bitcoin. Once your transaction has taken place and is confirmed, it is placed on the public ledger and can never be undone.”

    HMRC guidance

    According to Mone and many other crypto partisans, bitcoin is the future of currency. But if it is indeed the future, HMRC will need to catch up quickly. Up until now, the tax authority has remained very circumspect on its interpretations of cryptocurrencies.

    The latest guidance on offer was published in 2014. That’s aeons ago in the fast-moving world of cryptocurrencies. HMRC’s guidance does seem a tad inadequate for a topic involving billions of pounds, with the advice saying whether any profit or gain is chargeable or any loss is allowable will be looked at on “a case-by-case basis”, and the “relevant legislation and case law will be applied to determine the correct tax treatment”.

    AccountingWEB user Jonathan Smith from Aiteo Consulting notes that: “The preliminary view is that [bitcoin] mining isn’t an economic activity for VAT purposes, based upon a draft EU view. However, they do view the holding of cryptocurrency as any other currency, so it could be treated as a gain when it is translated into (say) GBP.”

    Of course, if you ask Jamie Dimon he’d tell you that new legislation isn’t needed since the crypto bubble is fixing to burst. “The currency isn’t going to work,” he said flatly. He might, however, have to tell his own daughter the bad news: “My daughter bought bitcoin, it went up and now she thinks she's a genius.”

    #0
  2. Clinton

    Clinton UKBF Ace Full Member

    Posts: 2,911 Likes: 930
    If you think Bitcoin's a fraud wait till you see the number of ICOs around and the huge investments flowing into ICOs.

    Bitcoin has/had an inherent flaw, and a serious one at that, which was always destined to impede its expansion - the 1 MB limit. That resulted in a hard fork and I'm not impressed by Bitcoin Cash, the offshoot from the fork.

    But for a longer term bet, I'd rather put my savings in BTC, or even BCH, than in Euros ;)
     
    Last edited: Sep 19, 2017
    Posted: Sep 19, 2017 By: Clinton Member since: Jan 17, 2010
    #2
  3. Mark T Jones

    Mark T Jones UKBF Enthusiast Free Member

    Posts: 1,069 Likes: 259
    I'd say it's almost definitely not a fraud, though the way it is often sold via MLM borders on pyramid selling.

    The real issue, highlighted in your article is that it is currently being sold and viewed as an investment, not as a working currency, as such it should be regulated as an investment (The FCA have expressed concerns of their own)

    It's artificially high value is wholly dependent on the availability of mugs to buy into MLM investment schemes, hence the value will collapse either when it is regulated or when the sucker bandwagon is full
     
    Posted: Sep 20, 2017 By: Mark T Jones Member since: Nov 4, 2015
    #3
  4. Mikehills101

    Mikehills101 UKBF Newcomer Free Member

    Posts: 3 Likes: 0
    Nope. I have bitcoin investment. It is not fraud. It only a matter of what company you're dealing with.
     
    Posted: Sep 20, 2017 By: Mikehills101 Member since: Aug 19, 2017
    #4
  5. Ibrahim S

    Ibrahim S UKBF Newcomer Free Member

    Posts: 8 Likes: 0
    Well, I tend to disagree with the others over here, it's ambiguous to be honest, as there's no real value behind it, how in the world you would digital numbers a value!!? based on what!? If you go back in time, the real money was Gold and Silver and this what I believe in till this day.

    Nowadays governments create money out of nothing, and here we came to something even worse money out of an algorithm which has no value.

    The real money is Gold & Silver and anything goes under the same category.
     
    Posted: Sep 20, 2017 By: Ibrahim S Member since: May 1, 2017
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  6. Ibrahim S

    Ibrahim S UKBF Newcomer Free Member

    Posts: 8 Likes: 0
    how in the world you would give digital numbers a value!!?
     
    Posted: Sep 21, 2017 By: Ibrahim S Member since: May 1, 2017
    #6
  7. webgeek

    webgeek UKBF Big Shot Full Member - Verified Business

    Posts: 3,862 Likes: 1,418
    Proof the dinosaurs saw the extinction on the horizon and didn't take a single step in the right direction. I'm sure these people still use fax machines and Rolodex organisers, listen to 8 track tapes and have a massive collection of VHS tapes. It's why the younger generations think old people are clueless - because many of them are....

    Cybercurrency is huge and growing at an incredible pace.

    I'm surprised it isn't being taught about in schools by now. Not like this is cutting edge - we've been using BTC for a long time now.
     
    Posted: Sep 21, 2017 By: webgeek Member since: May 19, 2009
    #7
    gravity and apache4trak like this.
  8. apache4trak

    apache4trak UKBF Newcomer Free Member

    Posts: 2 Likes: 0

    Agreed , People are tired of the diemons of the world stealing form us now without even a shred of pretense . Can you imagine banks and goverments ran on block chain with all transactions available for scrutiny no wonder the real corrupt criminals are scared but its coming and fast .
     
    Posted: Sep 21, 2017 By: apache4trak Member since: Mar 29, 2013
    #8
  9. Ibrahim S

    Ibrahim S UKBF Newcomer Free Member

    Posts: 8 Likes: 0

    I disagree with both of you, there's no such thing as a cryptocurrency, this just new term to take people from paper currency to electronic currency, and it's all BAD.

    I asked a question and nobody answered me, how do you give anything a value without a base!? it's like saying here are A4 papers for a BMW, or even here's a hash key for this product or that product, it doesn't make any sense!

    I said this once, and I'll say it again there's only one kind of materials can be used as REAL money which has a stable value and that is Gold & Silver. And stop convincing people into something isn't REAL.
     
    Posted: Sep 22, 2017 By: Ibrahim S Member since: May 1, 2017
    #9
  10. Ibrahim S

    Ibrahim S UKBF Newcomer Free Member

    Posts: 8 Likes: 0
    I'm not sure about this. Did you go back in time to witness this?
     
    Posted: Sep 22, 2017 By: Ibrahim S Member since: May 1, 2017
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  11. gravity

    gravity UKBF Newcomer Free Member

    Posts: 18 Likes: 0
    Is it a fraud... Well my £26 invested is worth £3127 today... I think ill take the risk and leave it invested.
     
    Posted: Sep 29, 2017 By: gravity Member since: Sep 27, 2017
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  12. gravity

    gravity UKBF Newcomer Free Member

    Posts: 18 Likes: 0
    Anything that is rare can & will be used as currency. Currency = a store of value and a unit of account to transfer value...
    Gold, Silver, Gemstones, Shells, Cryptocurrency.
    Crypto cannot be controlled by a central authority and therefore will flourish.
     
    Posted: Sep 29, 2017 By: gravity Member since: Sep 27, 2017
    #12
  13. gravity

    gravity UKBF Newcomer Free Member

    Posts: 18 Likes: 0
    $144 Billion market cap...
     
    Posted: Sep 29, 2017 By: gravity Member since: Sep 27, 2017
    #13
  14. Karimbo

    Karimbo UKBF Ace Free Member

    Posts: 1,587 Likes: 156
    banks can't own or control bitcoin, you dont NEED a bank when youre dealing with large numbers of bitcoin. That's why banks will take the position they do, bitcoin is against their interests.
     
    Posted: Sep 30, 2017 By: Karimbo Member since: Nov 5, 2011
    #14
    gravity likes this.
  15. gravity

    gravity UKBF Newcomer Free Member

    Posts: 18 Likes: 0
    Very true.
    Makes me laugh when people who obviously have no knowledge of bitcoin try to play it down
     
    Posted: Oct 1, 2017 By: gravity Member since: Sep 27, 2017
    #15
  16. gravity

    gravity UKBF Newcomer Free Member

    Posts: 18 Likes: 0
    And what of the current UK bank notes... are they made of gold/silver or even backed by gold/silver... I think you'll find not
     
    Posted: Oct 1, 2017 By: gravity Member since: Sep 27, 2017
    #16
  17. webgeek

    webgeek UKBF Big Shot Full Member - Verified Business

    Posts: 3,862 Likes: 1,418
    Funny that JP Morgan CEO speaks out publicly while ordering his minions to take up positions in Ethereum. Speak out against cybercurrency while you take a long position in it. Funny, like rubber crutches.
     
    Posted: Oct 2, 2017 By: webgeek Member since: May 19, 2009
    #17
  18. webgeek

    webgeek UKBF Big Shot Full Member - Verified Business

    Posts: 3,862 Likes: 1,418
    Update: Between 5,000,000 and 10,000,000 users currently use BTC. Even luxuries like condos at Trump's and art at Dadiani's accept bitcoin, and other cybercurrencies.

    http://edition.cnn.com/style/article/bitcoin-luxury-market/index.html

    The naysayers here are like those hollering at Tesla drivers, warning them to, "Buy a horse" because that newfangled automobile will never catch on.
     
    Posted: Oct 2, 2017 By: webgeek Member since: May 19, 2009
    #18
  19. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Regular Free Member

    Posts: 123 Likes: 23
    No one really technically "accepts" crypocurrency as payment. They just offer customers a simple way to convert their crypto into USD or other currency. Do those businesses use the bitcoin they take as payment to pay suppliers, rent or staff wages? No, they immediately convert it to USD.
     
    Posted: Oct 9, 2017 By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #19