Blockchain technology like Bitcoin is being overhyped: analyst

[Thor]

If it can be transferred to cash somehow or bought with cash, it's classed as a capital asset.

Souce

 

[C4Cat]

Due to their unregulated status, virtual currencies cannot be classified as legal
tender as any merchant may refuse them as a payment instrument without being in
breach of the law. In addition, virtual currencies cannot be regarded as a means of
payment as they are not issued on receipt of funds. The use of virtual currencies
therefore depends on the other participant’s willingness to accept them.
While virtual currencies can be bought and sold on various platforms, they are not
defined as securities in terms of the Financial Markets Act, 2012 (Act No. 19 of
2012). The regulatory standards that apply to the trading of securities therefore do
not apply to virtual currencies.

http://www.treasury.gov.za/comm_media/press/2014/2014091801 - User Alert Virtual currencies.pdf

 

[Thor]

If it can be transferred to cash somehow or bought with cash, it's classed as a capital asset.

Doesn't really matter. The IRS at least treats digital currency as capital assets. I'm sure locally it's something similar. Same rules apply as trading in any other good.

See below that's how I also understood it.

http://www.treasury.gov.za/comm_media/press/2014/2014091801 - User Alert Virtual currencies.pdf

 

[werneravr]

Back to the title of this thread. I don't think that Bitcoin is overhyped, it has barely begun, but blockchain is 100% definitely being overhyped (and mostly misunderstood). Or let me rephrase: private blockchains proposed by financial institutions.

Every other day we're reading about someone else trying to build a private blockchain system (or in some instances, private coins). This is rather comparable to the time when Microsoft, AOL and others tried to make private versions of the Internet. Didn't work so well for them. They saw the potential of a borderless, permissionless network, but they wanted to have it for themselves.

 

[Vrotappel]

When somebody steals bitcoin everybody's bitcoins reduce in value.

Bitcoin Plunges After Hacking of Exchange in Hong Kong

Before the hacking was made public, that number of Bitcoins would have been worth about $72 million. Now that the currency has slumped, the figure is closer to $65 million. The exchange, one of the world’s largest, said in a blog post that any outstanding settlements would be made at the price before the hacking. “As we account for individualized customer losses, we may need to settle open margin positions, associated financing, and/or collateral affected by the breach,” Bitfinex said in the post. It added that customers’ losses would be addressed later.

Security breaches of this type have raised questions about the viability of Bitcoin. The most notable episode was the collapse in 2014 of Mt. Gox, an exchange based in Tokyo, in which hundreds of thousands of Bitcoins were stolen in a heist that experts and law enforcement officials are still trying to unravel. This past June, a hacker stole more than $50 million worth of Ether, another digital currency, from an experimental virtual currency project called the Decentralized Autonomous Organization.

 

[MrGray]

When somebody steals bitcoin everybody's bitcoins reduce in value.

Bitcoin Plunges After Hacking of Exchange in Hong Kong

Huh?

A year ago BTC was around $250. It's currently at $610. It was ~$650 before the theft, so not really a price variation greatly inconsistent with it's historical velocity.

In any case, the theft had nothing to do with any intrinsic weakness in Bitcoin - it wasn't substantially different from bank hacks where normal currency is stolen. The exchange got hacked, not Bitcoin.