Let's Bitcoin - Part 1: Why is it Valuable? Is it legal? An introduction

Recently, bitcoin has been the talk of the town again due to a group of people trying to promote bitcoin farming or scheme.

Let's start with the very basic. And what is it exactly?

As of this writing, the conversion rate of 1 Bitcoin is at 431.63 US Dollar. The highest price it have ever reached was USD 1216.73. Why is it so valuable?
The price is set by the market. The demand and supply effect. What's so special about it that there's a demand in the market?

First of all, lets understand the very basic of human nature. Why human nature?
Anything human perceive any object as valuable will have values. Gold would not be valuable if we don't perceive it as valuable. If no one perceived gold as valuable, gold will have no value at all.
There are many reason on why we perceive something as valuable. The main basic reason the need to live. Food and air are basic needs.Without them, we would die.

Next, is psychological needs. We are attracted to things which we feel as beautiful, gold and diamonds gained their value because of that. Then, as demand starts to increase and the value start to increase, it becomes more of needs for our pride. Psychologically also, we love rare items as we feel we are among the few chosen people who have obtained them.

Paintings is perceived valuable with first the artistic beauty in it, then it becomes part some one's collections which also could become a rare item. Each of this stages increases the values.

The next level of adding value is attaching a believe to it. The believe can be supernatural, believe that the value will go up in term of price, the believe that it's good for your health and so on. I'm sure you would have heard of people being cheated of money because they believed certain stone will give them good fortune only to realize that it's fake.

The last reason why we perceive it as valuable is because the society or the system make us to think of it as valuable. Our paper money is perceived valuable due to the system made it valuable. It was made as a legal tender. If you want to buy something, you need the money. Prior to that we were using gold and silver as currencies. We were also using barter system with values attached to it by general public or the government. We can still do barter system based trading, but it's very rare.

This values attached to an object can go up and down depending on how the individual and public perceive them. Collectible items such as toys and comics would only be valuable for a small community who appreciate them, while majority would declare them non-sense. This is how we humans have been living by giving values based on our perceived value. Then, of course speculation could push the price higher that what it supposed to be.

Now, lets look at bitcoin.

Bitcoin is a digital currency (better known as cryptocurrency) which is created by solving certain mathematical algorithm which was created in 2009 by Satoshi Nakamoto. Satoshi Nakamoto is a very mysterious figure as no one really knows who he really is, his true identity has been a question.


So, what you basically own is a piece of encrypted solved mathematical code which have been perceived as valuable. How the heck this was perceived as valuable?  It makes sense if some math geek values it.

It was because a system was enforced by certain group of powerful traders, the underground traders. Instead of transferring physical money, they used bitcoins to do the trading. They created the value and somehow spread to the world we known well. There's 3 other factor on why the bitcoin price is so high. It's getting tougher to mine bitcoin, some merchants recognize it as legal tender and of course, speculation.

Wait. Mine?!? As in mining? Bitcoin is not even physical object, how to mine them? Well, that's the term used to solve the mathematical equation to generate the bitcoin codes.

So, is it legal? Bitcoin is not recognized as legal tender by world's governments. So, there is no government back up to it. The paper money or currencies are actually backed by governments. But not bitcoin. Now, you know the reason underground businesses and tradings is done by using bitcoin. No government tracks them. There is no central bank to monitor any transactions.

Anyway, bitcoin have values and there's no sign of it dying off yet. There are many new similar cryptocurrency came up these recent years. They are only valuable if somebody is using them and they are perceived valuable.

In PART 2, I will explain on how you can invest in Bitcoin, or better how to do your own bitcoin mining. Till then, ciao.

SCAM ALERT 2: FX United Capital Guaranteed Auto Trading - CONTINUATION

This is continuation of  my previous blog on FX United scam: http://moneyburp.blogspot.com/2015/02/scam-alert-fx-united-capital-guaranteed.html

There have been many new evidence that FX United's Capital Guaranteed Auto Trading or CGAT is indeed a scam. Thanks to one of the reader, Anthony who commented in the blog. He made more research on it and it truly points out that FX United is a very dubious entity.

Here is his comment:

"Someone approached me with FX United and I did some research online. Here's my consolidated finding, included some points from this blog: 

1. Guarantee 12% monthly return is too good to be true. Why don't someone just take up a bank loan to do this? 

2. They claimed to be a NZ company, but seems like there's no NZ traffic to their website: http://www.statscrop.com/www/fxunited.com 

3. Check the website for contact details, company headquarter address at: 228, Queens Street, Central Business District, Auckland, New Zealand. If you do a google map search and look at the street view, it doesn't seems like an big office. Refer to: https://www.google.com.my/maps/@-36.8493196,174.7651942,3a,42.7y,136.4h,87.44t/data=!3m6!1e1!3m4!1sduQCzUDGAzS778khL1TVrQ!2e0!7i13312!8i6656!6m1!1e1?hl=en 

4. If you the number of company registered under the said address, you'll be suprised: http://www.coys.co.nz/search/?a=228+QUEEN+STREET+AUCKLAND 

5. Apparently the address made into the news few years ago: http://www.stuff.co.nz/business/money/6613134/RBNZ-issues-warning-over-Auckland-firm

6. And it's available for rental: https://www.bayleys.co.nz/Listing/Auckland/Auckland-City/Auckland-Central/1680909 "

So, let's dissect his points. The first point is pretty obvious. I have already mention about it so mnay times in my blog, yet many still believes in it. So, let's start from second point.

" 2. They claimed to be a NZ company, but seems like there's no NZ traffic to their website: http://www.statscrop.com/www/fxunited.com " 

I was surprised to see that vistors from Malaysia is the highest. We are 85.7% of total daily visitors to fxunited.com. Does that mean the scam is targeted to Malaysia? Could it be the scam initiator is a Malaysian or resides in Malaysia? FX United is being promoted like crazy in Malaysia and many have joined it. And as Anthony mentioned, why there are no traffics from New Zealand itself.
The most important thing is, when I wrote the first blog on FX United, if my memory is right, the address wasn't New Zealand. It was Australia. Can anyone verify this with me?

 "3. Check the website for contact details, company headquarter address at: 228, Queens Street, Central Business District, Auckland, New Zealand. If you do a google map search and look at the street view, it doesn't seems like an big office. Refer to: https://www.google.com.my/maps/@-36.8493196,174.7651942,3a,42.7y,136.4h,87.44t/data=!3m6!1e1!3m4!1sduQCzUDGAzS778khL1TVrQ!2e0!7i13312!8i6656!6m1!1e1?hl=en "

 That's the street view of FX United for you. Errr..Where is the front entrance? Oh, it's a staircase at the side. Isn't this supposed to be their headquarter? Well, it does look pretty small for a company which can give return of 12% a month. Maybe they prefer to be on low profile. Does it make sense. Here's a closer view.

Compare this with the image they are trying to potray on their website.

 That's totally different look, and do you know what building is that?

That looks familiar. It's the same building shown on FX United website. Here's another image.

The building is called the Bastion Tower, which is located at Brussel, Belgium. Yes, it's thousands of miles away from New Zealand. They were just using this image to show a false image about themself. No shame at all.

"4. If you the number of company registered under the said address, you'll be suprised: http://www.coys.co.nz/search/?a=228+QUEEN+STREET+AUCKLAND "

There have been or had been a total of 83 companies registered at that location. Out of this 83, 35 are registered and still active.
Why there have been so many company and still 35 companies resides at that location? Is FX United only occupying a cubicle to run their business. The next evidence by Anthony tells us the WHY.

"5. Apparently the address made into the news few years ago: http://www.stuff.co.nz/business/money/6613134/RBNZ-issues-warning-over-Auckland-firm"

 There are many shell companies registered there. There already been cases on such companies operating at the same location as FX United. Isn't it obvious that FX United is operating dubiously? It is a scam.

And wait.. it's available for rental. Any takers?
"6. And it's available for rental: https://www.bayleys.co.nz/Listing/Auckland/Auckland-City/Auckland-Central/1680909"

An entire floor is available. Hope it wasn't FX United moved out of this floor.

Okay, so out of 6 floors, half floor is confirmed vacant, one is occupied by Burger King and Skechers. That mean 4 and a half floor occupied by 33 companies (35 if include Burger King and Skechers. Not sure if they are in the list)

So, don't you all think, you all should be wary of FX United? If you still believe it's not a scam and real. Only God can save you.

I do have family and friends who have invested in FX United. I am worried for them. Some of them opened multiple accounts and invested up to the max. I hope they would be able to take out their without any loses before FX United shut down. Yet, thousands others still would lose their money.

Thanks a lot to Anthony for making this research and providing the evidence.

PLEASE UNDERSTAND HOW SCAM WORKS

Read some of this links. Ignorance is what makes people easy to get cheated. Knowledge is what will help you to identify them.

Please check this: SCAM 101: The Big Devil, Little Devils: Scammers at all scale to understand how people end up recruiting others even thou they knew it's a scam.

And this as well: 7 Things You Don't Know About Scam. 

I have a better investment opportunity. It can give guaranteed return of 20% per month and up to 1000% per year. Check this out to understand how scam works: POTENTIAL RETURN OF UP TO 1,000% - LOOKING FOR INVESTORS