BitCoin is just another credit system- a way of transferring money, but unregulated and heavily used by criminal syndicates, which will eventually incur the next tax scheme which Governments will enforce. You could lose so much, as with other market trades and shares, and big companies like Goldman Sachs,JP Morgan decline to reveal if they are dealing in BitCoin. The BitCoin Ponzi Scheme??? Read on and decide for yourself.

I was sceptical about 'BitCoins', because it sounds like a ponzi scheme waiting for the collapse to happen. Firstly it starts small, then grows into company portfolios, trading and even gambling circles. People believe it is safe because it is 'unregulated'. And that's the catch. For how long will BitCoin remain unregulated?

If crime cartels can use it, then the financial big-wig cartels will also absorb BitCoin to the point where they own the majority of BitCoin wealth, sell it, trade it, loan it, swap it, and then when the big financial companies have absorbed people's wealth through BitCoin then Governments will introduce capital gains tax on the BitCoin- which probably won't affect big companies who pay little capital gains tax per year as it is. The small traders will collapse under the tax bills, the big companies will buy remaining BitCoins for pennies on the original value of the BitCoin, furthur draining small investors of their gains/profits. The Government will end up the 2nd biggest beneficiary through the taxation of the BitCoin, and people will realize that they were sucked into a BitCoin ponzi-scheme. Governments could introduce a post-profit taxation on BitCoins...that is if you will be taxed for trades and profits made from the use of BitCoin transactions.

BitCoins only suit criminal cartels and foolish investors at the moment- and digital money is the least secure investment you can have- like owning paper gold contracts- BitCoin can be deleted, blocked, go missing during peer-to-peer trade, be sold multiple times through derivatives and could end up collapsing economies one by one, leaving people with no guarantee from their banks that they will get money back that is lost through BitCoin value collapse. BitCoin is like paying thousands of dollars for a credit card so that you can use the credit card whenever you want, hoping that the credit card company stays in business.

If the credit card was introduced by a company who then deliberately expanded operations by using the customer money paid onto the cards, then that money is no longer available to those cardholders- but only exists as digital balances which might not be available to the customer if the pre-paid credit card scheme went bust..BitCoin could go that way- towards big companies who absorb as much wealth as they can to create derivative schemes and profitting greatly until it becomes regulated- and as I already pointed out- Governments and big business will only benefit, small investors will be taxed at the income-tax rate of their own country...and lose great chunks of their profits. I say stay clear of BitCoin- the Japanese and Taiwanese are right. BitCoin is a ponzi scheme disaster waiting to happen...Anyone plugging BitCoin as a good thing is a fool and is promoting a ponzi-pyramid scheme where there is no guarantee from your banks if you lose all your BitCoin wealth. Just like all other ponzi schemes in the markets- It's 'BUYER BEWARE', because today you might have one million in BitCoins- tomorrow your coins are worth a thousand bucks...and the speculation of the BitCoin is the driving the value up or down depending on the speculation of the user/buyer.

It's a digital game of Monopoly, unsecured and with no guarantee. No bank or Government can assist you if you lose your wealth via BitCoin, because currently there is no law on the usage of BitCoin. A bit like lending your neighbour ten grand without a witness knowing you lent it...try get your money back in Court and the Judge will scoff at you loudly. What- did you think BitCoin was for 'the little guy' and that the banksters will be somehow kept in the dark about the million ways that BitCoins can be used (legally and illegally)? In the article posted below by arstechnica.com, these paragraphs say it all:-

'Ars contacted three major investment banks to inquire if they had any bitcoin holdings—Goldman Sachs, JP Morgan Chase, and Credit Suisse.
“We have no comment,” said Andrew Williams, a spokesperson for Goldman Sachs.
JP Morgan Chase and Credit Suisse did not respond.

'Bitcoin’s biggest asset is also its biggest liability—no government or regulator controls what people are willing to pay for a little piece of nearly-anonymous computer code. That fact may partially explain why the price of one bitcoin has shot up in recent days and weeks, only to come crashing down again...

...Bitcoin’s largest exchange, Mt. Gox, suddenly suspended trading for 12 hours as part of what it described as a “market cooldown.”...

'...It certainly doesn’t help matters that there’s a new Mt. Gox-look-alike site serving malware. Also on Thursday, entrepreneurs Cameron and Tyler Winklevoss told the New York Times that they hold approximately 1 percent—roughly $11 million—in bitcoins. In short, Bitcoin may be poised to rise even further, or crash even deeper and faster than ever before.'

So while the drug and human trafficking cartels click their heels while they suck wealth from people via BitCoin banking, keep a thought of what happens when the markets crash. Will BitCoin rise or fall? It might be regulated into obscurity-and become a Facebook 'Farmville' currency, which is where I feel it should only be used...Personally I have trouble in trusting an invisible digital credit system, when we have enough credit cards and banksters cluttering up the World financial system as it is. At least when our big banks crash they are propped up by the taxpayer. Nobody is going to bailout the BitCoiners... If you want to rub shoulders directly with the criminal syndicates and risk going to jail or being taxed to your grave, then BitCoin is for you...I prefer the idea of owning physically tangeable collateral, not invisible, theoretical electronic wealth.

With the World economy in flux, so many people are flocking to digital currencies, with BitCoin being just one of them. You only have to use your imagination to picture the digital currency collapse like a pyramid of playing cards stacked up without glue holding them together, waiting for the gust of wind.

by Russell S.Wyllie

http://arstechnica.com/business/2013/04/taming-the-bubble-investors-bet-on-bitcoin-via-derivatives-markets/

http://letstalktrading.com/2013/07/14/trading-bitcoin-derivatives-yes-there-is-such-a-thing/