I am a novice investor and looking for something worthwhile to invest in. Of late, cryptocurrencies like bitcoin, dogecoin, litecoin etc have caught my fancy. I am looking at these as an alternative to the stock market. Since I still lack an understanding of the finer nuances of cryptocurrencies, it would be most splendid if any seasoned investors here on gog( I know that it is a gaming site but still) would have any advice to offer.

What is the nature of the risk involved other than the wild fluctuations in value? Are they easily convertible?

What is the best alternative to bitcoin in your opinion?

Damn, and I was sure this would be a plead to add GOG support for Bitcoin and other quasi-currencies (in order to buy games from here). :)

That would be like super awesome. Still, GOG could probably have its own currency. It might also lead to a more creative gaming catalog.

Just looking at the past 6 months of bitcoin I don't see it has a good investment. Since last November the price of Bitcoin is stable so making any money from it could be hard.

Also if any country tries to control or put stop the sale of Bitcoin it could have a negative effect on the Bitcoin price.

Ps The information I have is off XE

Why are you looking into these alternatives right now? Didn't the Bitcoin just crash quite heavily, or are you expecting it to recover? Are you thinking of a longer time investment (like at least months), or do daily speculation with them, trying to reap small profits every day?

EDIT: Ninja'ed.

I am not looking at bitcoin specifically(That ship has sailed). Just wondering if any of the other alternatives are viable at least in the short term. Yet so far, the RBI (India's central bank) mandate hasn't indicated any sense of dissent towards cryptocurrencies.

I have no knowledge - nor much interest - in investment as a way to make money - but, surely, if you want to profit from investment then running after / following 'a trend' isn't the great way forward. You'd have to find the next big thing, that's currently undervalued and not yet 'appreciated'. The cryptocurrency investment is a trend, now, with loads of folks seeing it as an 'easy' way to invest. It's a bit akin to the gold rush, really; not least that suddenly there's all sorts of other 'potential pits' / alternative crypto currencies popping up. I don't think you'll see a repeat of BitCoin. Long term there's no point (and little value) to a huge variety of different virtual currencies. I'd also guess that - long term - there'll be some regulations on all this coming along.

[And it's also all oh, so ironic - part of the public raison d'etre for crypto currencies was to escape those that speculate on fluctuations in the 'value' of money.]

More like on an intermittent speculative basis. Not looking at long term, too much of a risk there. I intend to start with only a small amount just to test the waters - there is so much about cryptocurrencies that I do not understand. So I need to brush up my knowledge on that first.

Maybe I will be the only one on here, but for me, Bitcoin looks like a great Ponzi scheme. Or at least I do not see any advantages compared to normal currencies.

I think the idea of a currency that cannot hyperinflate and is not tied to a single nation state and isn't - from the get go - based / tied to a 'real' value [as many 'real' currencies increasingly are] is interesting. I don't think the whole implications of it are clear; nor is BitCoin, necessarily, the way forward / explore that idea. I don't think it is a well constructed crypto currency on that end.

True that. There are too many variables to account for to resort to speculation. Still, a virtual currency isn't a bad idea(paper currency is becoming increasingly more anachronistic) and might need more mechanisms to make it more tenable. Since the general consensus is so very divided.

They are not currencies really, anymore than coke cans would be if someone needed them and accepted them as payment. What makes a currency is government backing, international government acceptance, regulation to allow for stability etc, etc.

They are just trade "items", on the same level as CSkeys on steam but worth more. Nothing wrong with that though if you don't mind any risk.

Cryptocurrencies are a good market for speculation, and a risky long term market but that could pay off big time.

I know someone who made a bit of money off bitcoin, and I've been following the market for a while (haven't invested in it, though I mined a little). At every point people said it's not worth investing: when it was $15, when it was $40, when it was $100, ... The bitcoin has yet to show any sign that it's a bubble that's about to burst. Sure it varies wildly in dollar value, but it keeps going up on the whole, and it still has a way to go up. The more places accept it, the more countries accept it, the more it's likely to go up. Of course, countries banning it will make it go down. That's why it's risky, but on the whole it still has potential to become a lot more valuable.

Alternate currencies are mostly bullshit, except for litecoin. Litecoin is the only other one that's directly convertible to dollars, and if it does catch up to the bitcoin in terms of use (such as Mt. Gox trading it, which has been rumoured), then it could go up. Also scrypt mining hardware (scrypt is the algorithm used for litecoin and most other currency) should be out this year and might raise prices. The rest of the coins are mainly a way to gain a short term mining advantage, and are extremely unstable. They are easily exchangeable through trading sites such as Cryptsy.

As for speculating, both bitcoin vs. dollar and bitcoin vs. litecoin go up and down significantly enough that it should be possible to make some money with buy/sell orders. Not tons of money, but if you like this kind of thing you can probably invest enough to make it worthwhile.

Generally the best dollar value for bitcoin is at Mt. Gox, but I've heard that it's not that easy to actually get the money from Mt. Gox.

The short of it is, if you like playing with investments (it seems that you do) and you don't mind a bit of risk, cryptocurrency is a very interesting market. If you have an Android device, you can install Bitcoin Checker and get an up to date picture of currency prices vs. other currencies at various markets, set alarms based on conditions (reached certain value, went down a certain percent, ...) and generally lose your life to cryptocurrencies.

I am no expert on this. So I will ask:

1. How do you know, that it cannot hyperinflate? What I have understood, it is mined by solving a difficult algorithm, which ensures only a finite amount of currnecy. Which would cause theoretical inflation-resistance. But what if somebody changes that algorithm to enlarge the amount? I would sell all my Bitcoins at a peak and change the algorithm next day.

2. I always thought, that the problem with current currencies is, that nearly all of the are fiat currencies. Which Bitcoin is too. So I do not understand the advantage/ interesting feature.