Bitcoin
Posted by: Kevin Richardson on 06 August 2017
I'm selling all my material possessions, equities and bonds. So... I'll be back in 5 years once I have my Statement system up and running. Until then, thanks for all the good advice.
It amazes me that people who can afford to buy such high end audio gear, and usually do so after a process of careful deliberation, are carrying on about this obvious bubble as if it’s a legitimate investment. I’m not trying to be a Debbie Downer. I’m making that comment more from an anthropological point of view.
Is bitcoin actually a 'currency'?
I mean, genuinely don't understand (not that I'm going to 'buy' any, as we say in the real world).
ngarritson posted:It amazes me that people who can afford to buy such high end audio gear, and usually do so after a process of careful deliberation, are carrying on about this obvious bubble as if it’s a legitimate investment. I’m not trying to be a Debbie Downer. I’m making that comment more from an anthropological point of view.
An asset can be both in a bubble and legitimate. Just look at Amazon.
Salmon Dave posted:Is bitcoin actually a 'currency'?
I mean, genuinely don't understand (not that I'm going to 'buy' any, as we say in the real world).
Legally Bitcoin might be a currency depending on where you are located on the globe. In the US, the IRS does not consider Bitcoin a currency.
Bitcoin can function as a currency (I know a guy who bought a Lamborghini with Bitcoins) but has yet to achieve mass adoption. Still early days.
kuma posted:Did you?
As Simon said, I also did (at the bottom yesterday), and will watch carefully for another correction cycle.
Good for you!
I'd be betting on it for sure if I were 20 years younger.
Peter Dinh posted:kuma posted:Did you?
As Simon said, I also did (at the bottom yesterday), and will watch carefully for another correction cycle.
https://www.bloomberg.com/news...-a-blockchain-cruise
The people you gave your money to are spending it in stuff like this. And Lamborghinis.
winkyincanada posted:Peter Dinh posted:kuma posted:Did you?
As Simon said, I also did (at the bottom yesterday), and will watch carefully for another correction cycle.
https://www.bloomberg.com/news...-a-blockchain-cruise
The people you gave your money to are spending it in stuff like this. And Lamborghinis.
Unlikely that people buying Lambos were the panic sellers this week. Even if they were selling what does that have to do with anything? What's wrong with people buying Lambos? Would it make you feel better if they were selling their Amazon stock to fund their Lambo purchases?
Kevin Richardson posted:winkyincanada posted:Peter Dinh posted:kuma posted:Did you?
As Simon said, I also did (at the bottom yesterday), and will watch carefully for another correction cycle.
https://www.bloomberg.com/news...-a-blockchain-cruise
The people you gave your money to are spending it in stuff like this. And Lamborghinis.
Unlikely that people buying Lambos were the panic sellers this week. Even if they were selling what does that have to do with anything? What's wrong with people buying Lambos? Would it make you feel better if they were selling their Amazon stock to fund their Lambo purchases?
There's nothing wrong with people buying Lambos. But where do you think the money came from?
This is great!
Bitcoin has me more excited than when I discovered gluten-free bread. Here's everything you need to know about it so you don't get left behind...
Also pretty good. This makes a lot of sense to me.
Subject: Bitcoin Explained
Have you ever wondered about "bitcoin". . . . . . .
Well, here's a full explanation in terms everyone can understand.
A lot of monkeys lived near a village. They ran loose all over the place.
One day a merchant came to the village to buy these monkeys!
He announced that he would buy the monkeys @ $100 each!
The villagers thought that the man was mad.
They thought how can somebody buy stray monkeys at $100 each?
Still, some people caught some monkeys and gave them to the merchant and, sure enough, he gave $100 for each monkey!
This news spread like wildfire and people caught monkeys and sold them to the merchant.
After a few days, the merchant announced that he would now buy monkeys @ $200 each!
Even the lazy villagers ran around to catch the remaining monkeys!
And they sold those monkeys @ $200 each!
Then the merchant announced that he would buy monkeys @ $500 each!
The villagers started to lose sleep! ... They caught six or seven monkeys, but that was all that were left, and got $500 each!
The villagers were waiting anxiously for the next announcement.
Then the merchant announced that he was going home for a week. But when he returned, he would buy monkeys at $1000 each!
He asked his employee to take care of the monkeys he had already bought. He, alone, was taking care of all the monkeys in a cage.
The merchant went home.
The villagers were very sad as there were no more monkeys left for them to sell at $1000 each.
Then the employee told them that he would sell some monkeys, privately, @ $700 each in secret.
This news spread like fire. Since the merchant would buy monkeys @ $1000 each, there was a $300 profit for each monkey!
The next day, villagers made a queue near the monkey cage!
The employee sold all the monkeys at $700 each. The rich bought monkeys in big lots. The poor borrowed money from money lenders and also bought monkeys!
The villagers took care of their monkeys and waited expectantly for the merchant to return.
But nobody came! ...So they ran to the employee...
But he had already left, too !
And then the villagers realized that they had just bought useless stray monkeys @ $700 each and were unable to sell them!
The Bitcoin probably will be the next "monkey business".
It will make a lot of people bankrupt, but a few people filthy rich in this-"monkey business".
Skip posted:Also pretty good. This makes a lot of sense to me.
Subject: Bitcoin Explained
Have you ever wondered about "bitcoin". . . . . . .
Well, here's a full explanation in terms everyone can understand.
A lot of monkeys lived near a village. They ran loose all over the place.
One day a merchant came to the village to buy these monkeys!
He announced that he would buy the monkeys @ $100 each!
The villagers thought that the man was mad.
They thought how can somebody buy stray monkeys at $100 each?
Still, some people caught some monkeys and gave them to the merchant and, sure enough, he gave $100 for each monkey!
This news spread like wildfire and people caught monkeys and sold them to the merchant.
After a few days, the merchant announced that he would now buy monkeys @ $200 each!
Even the lazy villagers ran around to catch the remaining monkeys!
And they sold those monkeys @ $200 each!
Then the merchant announced that he would buy monkeys @ $500 each!
The villagers started to lose sleep! ... They caught six or seven monkeys, but that was all that were left, and got $500 each!
The villagers were waiting anxiously for the next announcement.
Then the merchant announced that he was going home for a week. But when he returned, he would buy monkeys at $1000 each!
He asked his employee to take care of the monkeys he had already bought. He, alone, was taking care of all the monkeys in a cage.
The merchant went home.
The villagers were very sad as there were no more monkeys left for them to sell at $1000 each.
Then the employee told them that he would sell some monkeys, privately, @ $700 each in secret.
This news spread like fire. Since the merchant would buy monkeys @ $1000 each, there was a $300 profit for each monkey!
The next day, villagers made a queue near the monkey cage!
The employee sold all the monkeys at $700 each. The rich bought monkeys in big lots. The poor borrowed money from money lenders and also bought monkeys!
The villagers took care of their monkeys and waited expectantly for the merchant to return.
But nobody came! ...So they ran to the employee...
But he had already left, too !
And then the villagers realized that they had just bought useless stray monkeys @ $700 each and were unable to sell them!
The Bitcoin probably will be the next "monkey business".
It will make a lot of people bankrupt, but a few people filthy rich in this-"monkey business".
Nobody is forcing anybody else to buy bitcoins. Some people get involved because they see it as a short cut to wealth generation. The reality is that you need to be able to hold them for years if you want to "get rich". Those who are investing with debt are unlikely to be able to ride out the volatility and are usually the panic sellers.
This "monkey business" analogy is just typical anti Bitcoin propaganda created by bitter nocoiners.
Time will tell if it is a bubble. Btw, Peter Thiel is pro bitcoin, and his record is remarkable.
Peter Dinh posted:Time will tell if it is a bubble. Btw, Peter Thiel is pro bitcoin, and his record is remarkable.
Time will indeed tell. Peter Thiel is well-known because of his remarkable record. See also - survivorship bias.
Kind regards,
Bitter Nocoiner
If it’s to be a bubble, it will need to grow hugely more... the global nature of crypto takes it into uncharted territories which makes it interesting ... also in the U.K., the relatively large growth of hitec jobs in the Ciry of London around crypto currencies and block chain...which suggests the type of adoption is evolving... the other things about bubbles is that they grow and grow... well this is not the case so far with cryptos... at least in monetary value terms... there has been quite a cooling off since early December... which seems to follow a fairly consistent annual pattern... a kind of correction. I think a lot of people who jumped on the media bandwagon of getting rich quick have become very disillusioned.... they have realised it doesn’t work like that... perhaps they should buy tulips instead....
it will be interesting to see how this mainstream adoption evolves.... it still feels a bit like the explosion of the web in the 90s... although this unlike cryptos was mostly based in Europe and the US... and cryptos ate totally international with different adoption cultures and behaviours globally... both from populations and governments...
Simon-in-Suffolk posted:If it’s to be a bubble, it will need to grow hugely more... the global nature of crypto takes it into uncharted territories which makes it interesting ... also in the U.K., the relatively large growth of hitec jobs in the Ciry of London around crypto currencies and block chain...which suggests the type of adoption is evolving... the other things about bubbles is that they grow and grow... well this is not the case so far with cryptos... at least in monetary value terms... there has been quite a cooling off since early December... which seems to follow a fairly consistent annual pattern... a kind of correction. I think a lot of people who jumped on the media bandwagon of getting rich quick have become very disillusioned.... they have realised it doesn’t work like that... perhaps they should buy tulips instead....
it will be interesting to see how this mainstream adoption evolves.... it still feels a bit like the explosion of the web in the 90s... although this unlike cryptos was mostly based in Europe and the US... and cryptos ate totally international with different adoption cultures and behaviours globally... both from populations and governments...
The thing that strikes me regarding Cryptos as "currencies" (or underpinning contracts) is that they don't need to be fundamentally worth very much at all. Just as a dollar note doesn't cost anything like a dollar to make, the crypto-coin doesn't have to be expensive to make. In fact most regular dollars don't exist in a physical sense at all, so they are essentially costless to make; and they are just a means of quantifying the promise/contract. They are effectively just a derivative, of which as many can be assumed to exist as is necessary to denominate all contracts in place. They are arguably more like a language, in that they are just a trusted means of conveying information about a contract (the value of it). Trust still needs to exist between the parties until settlement. In our societies, that trust is underpinned by trusted intermediaries and by the rule of law. I send you money using a credit card, you send me stuff. That sort of thing. I send you bitcoin, you send me a Lamborghini seems riskier to me somehow.
So, expensive-to-make crypto-coins make no sense to me, and nor does inflated prices on these virtual objects well in excess of even that cost. The success of blockchain ledgers will not depend on speculatively inflated pricing of the underlying units of contract. In fact, the opposite is perhaps true. A crypto needs to be trusted (high certainty of being legitimate) for them to become accepted more generally, but that's not a function of their price. In fact, while the crypto-coins are subject to speculation, greed and organised crime and hackers, they are unlikely to be widely chosen as a trusted means of pricing a contract. I guess what I'm saying is that blockchain doesn't make sense to me until it is cheap and trusted. That's not how I see the current sentiment in the markets. Touting future wide acceptance as a justification for inflated prices is an oxymoron.
Kind regards,
Bitter Nocoiner
Quite.
winkyincanada posted:Simon-in-Suffolk posted:If it’s to be a bubble, it will need to grow hugely more... the global nature of crypto takes it into uncharted territories which makes it interesting ... also in the U.K., the relatively large growth of hitec jobs in the Ciry of London around crypto currencies and block chain...which suggests the type of adoption is evolving... the other things about bubbles is that they grow and grow... well this is not the case so far with cryptos... at least in monetary value terms... there has been quite a cooling off since early December... which seems to follow a fairly consistent annual pattern... a kind of correction. I think a lot of people who jumped on the media bandwagon of getting rich quick have become very disillusioned.... they have realised it doesn’t work like that... perhaps they should buy tulips instead....
it will be interesting to see how this mainstream adoption evolves.... it still feels a bit like the explosion of the web in the 90s... although this unlike cryptos was mostly based in Europe and the US... and cryptos ate totally international with different adoption cultures and behaviours globally... both from populations and governments...
The thing that strikes me regarding Cryptos as "currencies" (or underpinning contracts) is that they don't need to be fundamentally worth very much at all. Just as a dollar note doesn't cost anything like a dollar to make, the crypto-coin doesn't have to be expensive to make. In fact most regular dollars don't exist in a physical sense at all, so they are essentially costless to make; and they are just a means of quantifying the promise/contract. They are effectively just a derivative, of which as many can be assumed to exist as is necessary to denominate all contracts in place. They are arguably more like a language, in that they are just a trusted means of conveying information about a contract (the value of it). Trust still needs to exist between the parties until settlement. In our societies, that trust is underpinned by trusted intermediaries and by the rule of law. I send you money using a credit card, you send me stuff. That sort of thing. I send you bitcoin, you send me a Lamborghini seems riskier to me somehow.
So, expensive-to-make crypto-coins make no sense to me, and nor does inflated prices on these virtual objects well in excess of even that cost. The success of blockchain ledgers will not depend on speculatively inflated pricing of the underlying units of contract. In fact, the opposite is perhaps true. A crypto needs to be trusted (high certainty of being legitimate) for them to become accepted more generally, but that's not a function of their price. In fact, while the crypto-coins are subject to speculation, greed and organised crime and hackers, they are unlikely to be widely chosen as a trusted means of pricing a contract. I guess what I'm saying is that blockchain doesn't make sense to me until it is cheap and trusted. That's not how I see the current sentiment in the markets. Touting future wide acceptance as a justification for inflated prices is an oxymoron.
Kind regards,
Bitter Nocoiner
A USD note == USD bank deposit == $1 value
If I want to send 1,000,000 USD in value using USD's I need to send 1,000,000 USD. This is possible because there are trillions of USD floating around the world.
If bitcoins were worthless then I could never send 1,000,000 USD value. If Bitcoin is successful it will have to grow in value relative to USD. It will eventually need market cap in the trillions of USD. So the difference between USD and BTC is USD solution is to create more USD; BTC solves the problem by increasing value of the finite number of BTC.
Any contract that settles in USD could be rewritten to settle in BTC. There is the possibility for entrepreneurs to create businesses providing some of the features of credit cards into a BTC payment system. I predict we will eventually see blockchain based asset transfers that allow for escrow and title transfer.
Crypto is not going to take over Global finance overnight. This is just the beginning..... It might take 20 years but it'll happen.
Kevin Richardson posted:winkyincanada posted:Simon-in-Suffolk posted:If it’s to be a bubble, it will need to grow hugely more... the global nature of crypto takes it into uncharted territories which makes it interesting ... also in the U.K., the relatively large growth of hitec jobs in the Ciry of London around crypto currencies and block chain...which suggests the type of adoption is evolving... the other things about bubbles is that they grow and grow... well this is not the case so far with cryptos... at least in monetary value terms... there has been quite a cooling off since early December... which seems to follow a fairly consistent annual pattern... a kind of correction. I think a lot of people who jumped on the media bandwagon of getting rich quick have become very disillusioned.... they have realised it doesn’t work like that... perhaps they should buy tulips instead....
it will be interesting to see how this mainstream adoption evolves.... it still feels a bit like the explosion of the web in the 90s... although this unlike cryptos was mostly based in Europe and the US... and cryptos ate totally international with different adoption cultures and behaviours globally... both from populations and governments...
The thing that strikes me regarding Cryptos as "currencies" (or underpinning contracts) is that they don't need to be fundamentally worth very much at all. Just as a dollar note doesn't cost anything like a dollar to make, the crypto-coin doesn't have to be expensive to make. In fact most regular dollars don't exist in a physical sense at all, so they are essentially costless to make; and they are just a means of quantifying the promise/contract. They are effectively just a derivative, of which as many can be assumed to exist as is necessary to denominate all contracts in place. They are arguably more like a language, in that they are just a trusted means of conveying information about a contract (the value of it). Trust still needs to exist between the parties until settlement. In our societies, that trust is underpinned by trusted intermediaries and by the rule of law. I send you money using a credit card, you send me stuff. That sort of thing. I send you bitcoin, you send me a Lamborghini seems riskier to me somehow.
So, expensive-to-make crypto-coins make no sense to me, and nor does inflated prices on these virtual objects well in excess of even that cost. The success of blockchain ledgers will not depend on speculatively inflated pricing of the underlying units of contract. In fact, the opposite is perhaps true. A crypto needs to be trusted (high certainty of being legitimate) for them to become accepted more generally, but that's not a function of their price. In fact, while the crypto-coins are subject to speculation, greed and organised crime and hackers, they are unlikely to be widely chosen as a trusted means of pricing a contract. I guess what I'm saying is that blockchain doesn't make sense to me until it is cheap and trusted. That's not how I see the current sentiment in the markets. Touting future wide acceptance as a justification for inflated prices is an oxymoron.
Kind regards,
Bitter Nocoiner
A USD note == USD bank deposit == $1 value
If I want to send 1,000,000 USD in value using USD's I need to send 1,000,000 USD. This is possible because there are trillions of USD floating around the world.
If bitcoins were worthless then I could never send 1,000,000 USD value. If Bitcoin is successful it will have to grow in value relative to USD. It will eventually need market cap in the trillions of USD. So the difference between USD and BTC is USD solution is to create more USD; BTC solves the problem by increasing value of the finite number of BTC.
Any contract that settles in USD could be rewritten to settle in BTC. There is the possibility for entrepreneurs to create businesses providing some of the features of credit cards into a BTC payment system. I predict we will eventually see blockchain based asset transfers that allow for escrow and title transfer.
Crypto is not going to take over Global finance overnight. This is just the beginning..... It might take 20 years but it'll happen.
My point is not that a bitcoin should be worth zero. To be a language for contracts it obviously needs a non-zero value. But the expectation that a severely deflationary unit of value is a basis for replacing currency is flawed. Yet that is what the crypto-speculators insist will happen. Huge transaction costs are a further drag on Bitcoin. There does not need to be Bitcoin of equivalent value to some notion of the number of USD. The use of derivatives means that contracts, anchored in the price of a trusted entity can be written and settled between parties that trust each other without ever troubling the US treasury. For example, at any given time, the notional value of gold contracts far, far exceeds the "market cap" (ounces in existence x price per ounce) of gold.
I don't know whether or not distributed ledgers are the future. They certainly have some appeal. But picking a "winner" for the purpose of speculation is a fool's errand in my view.
Peter Dinh posted:Time will tell if it is a bubble. Btw, Peter Thiel is pro bitcoin, and his record is remarkable.
I think I am going to consider investing in Bitcoin when Warren gives his thumbs up. :/
Guess I am pretty old school when it comes to investing. Altho, if I were a whipper snapper Millennial, I would probably play since it doesn't matter if I lost it all.
Another dreary day for crypto. Hopefully we can get past this in a few weeks. Not much to do right now except ride the wave.
Kevin Richardson posted:Not much to do right now except ride the wave.
Some days you ride the wave. Other days the wave ... .
Pretty grim out there right now. Even ETH which had been fairly resilient is now getting hammered.
winkyincanada posted:Pretty grim out there right now. Even ETH which had been fairly resilient is now getting hammered.
The short-term volatility and volume is currently unbelievable. I think someone may have figured out an arbitrage trade and are buying and selling at a high frequency.