Friday, 13 July 2018

The Voice - Consumer's Voice

Should I join Bitcoin?

Hello Sir I am interested in joining Bitcoin but I need someone who can explain so I understand better. There is this other gal who tried to explain but I really don’t understand her. May you kindly be of help, especially mining the bitcoins.

Bitcoin is a currency, like the Pula, the Rand, the US Dollar and Euro but unlike these conventional currencies, Bitcoin is a “cryptocurrency”. Cryptocurrencies aren’t currencies that you can carry in your pocket, purse or wallet. There are no coins or notes, they exist in cyberspace.

That’s one reason why Bitcoin should never be seen as an investment. Currencies aren’t investments, they’re things we use to trade with, to buy and sell things and the people who trade between currencies are speculators, not investors. They’re more like gamblers.

Data source: Coindesk
Another reason why Bitcoin shouldn’t be seen as an investment is that like all cryptocurrencies, they’re enormously volatile and unpredictable. Their values can go up and down remarkably quickly, much more than real investments and conventional currencies. Bitcoin advocates will often tell you that Bitcoin’s value increased enormously in 2017 and that’s true but what they often fail to explain is that its value then dropped by two thirds. Anyone who “invested” in December last year would have since lost two thirds of their money today.

Consumers should also know that unlike conventional currencies, there are no protections, no safeguards, no regulators overseeing Bitcoin. There’s nobody to turn to if something goes wrong. Nobody at all.

You asked about Bitcoin mining and that’s a complicated issue. Every time someone buys, sells or transfers using Bitcoin, that transaction has to be verified by computers around the world that hold the “blockchain”, the "distributed ledger" of all transactions. That’s basically what Bitcoin mining is and the people running those computers can earn Bitcoins themselves as a result. However, the computing power needed to do this is enormous and huge “server farms” are required to do it. It’s something way beyond you or me.

Perhaps the greatest danger is that Bitcoin and other cryptocurrencies are surrounded by a huge range of scams, pyramid schemes and Ponzi schemes.

Ask anyone who encourages you to join a scheme, how does it benefit them? You’ll soon see that it’s all about recruitment and nothing to do with Bitcoin.

Should I inform them?

I want to ask what happens when all along I have been paying an instalment at furnisher shop, and all of a sudden my contract is terminated and I struggle to pay. It was an instalment of about 14k, and during the period I was working I really pushed to reach half of the sum. Am now owing 7k, and unfortunately our contracts ended.

Should I go to the furnisher shop with letters showing them am still unemployed so that they stop putting more interest in my debt? Am willing to settle the remaining balance, but am still called by finance people reminding me to come pay though am not working. What should I do?

Unfortunately I don’t think I can give you any good news. Very often hire purchase agreements include an insurance policy that covers you for unexpected retrenchment but that’s not what happened to you. From what you say, it seems like you came to the end of your contract and I guess that was something you knew was going to happen? Even if you didn’t know in advance, you presumably knew that your contract could have been terminated like this? Personally, I think that the store should have checked this before they accepted your business. They should have asked you to prove your employment was permanent and not fixed-term or liable to be terminated like this. Before you enter into any financial arrangement you need to be 100% certain that you’ll be able to pay for it all. You need to know that you’ll have income to support the payments you’ll need to make.

What you absolutely must do is exactly what you suggested. Go to the store and explain to them that you are now unemployed and that you’re going to have some difficulties making the remaining instalments. See if you can agree a repayment plan that you can stick to. With luck they’ll be helpful.

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