Bitcoin

Bucky said:

Are you comparing tulip bulbs to currency?

That is a terrible analogy.

Answer this, what make a U.S dollar or any other currency worth more than a bitcoin?

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The fact that it has value due to being able to buy goods with it.

That will be maintained by the governing body which controls it, the US state, which is over seen by the democratic process thus is a trusted mechanism of exchange.

The Swis franc is even more trusted so all billionairs have a stash of them but they are not that usful as they cannot really be used to by oil tankers or other big ticket items due to the Swis economy not being that big.

Bucky said:

Notice, the people trashing bitcoin, like Mark Cuban and the CEO of Chase lose money when bitcoin increases in value.

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The hallmark of a good currency is stability. Bitcoin is not stable. Bitcoin is unregulated and subject to untraceable hacking and theft.

It is nothing more than a speculative financial instrument that makes derivatives and credit default swaps look safe in comparison.

It's value is derived from nothing more than the faith that someone else will be willing to buy into it. The baseless faith that there will be endless strong demand for it.

And frankly, I am very leery of people who pump an investment when it has been on an upward trend for a while..because BC has a ceiling, and when it reaches that ceiling, it's going to be a long hard fall to the bottom for many people.

Hasn't anyone learned from the investing fads that have come and gone? e.g. Day trading, housing bubble, vaporware internet startups, etc.

The only real argument against bitcoin is that it still is not money.

Per example the American dollar is backed by the American GDP. What backs bitcoins other than belief?

Bucky said:

Cryptocurrency threatens the legitimacy of the U.S dollar.

When the U.S keeps printing money, you don't there are any consequences?

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you must have forgotten the question. i will ask it again. here is the post i am referencing:

Bucky said:

Notice, the people trashing bitcoin, like Mark Cuban and the CEO of Chase lose money when bitcoin increases in value.

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please share with us the cite which shows those gentlemen to have incurred a financial loss as a direct result of the appreciation of the bit coin

OldFatGuy said:

The only real argument against bitcoin is that it still is not money.

Per example the American dollar is backed by the American GDP. What backs bitcoins other than belief?

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If you went in your bank account today and saw nothing, you have no guarantee of getting it back.

If nk launched an emp attack, banks would be closed. Crypto currency is far safer.

I put my bitcoin in cold storage. With us dollars what are your options? A physical safe lock box? Under your pillow?

Bucky said:

If you went in your bank account today and saw nothing, you have no guarantee of getting it back.

If nk launched an emp attack, banks would be closed. Crypto currency is far safer.

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lol

Sorry dude, but that is just nonsense. Grade A Tinfoil Hat nonsense.

If my bank has a financial failure, my credit or savings accounts are insured up to $250,000 per financial institution. My cash is safe.

There is nothing that even remotely resembles FDIC insurance for Bitcoin. When MtGox went down, customers lost their currency, and had no recourse or insurance on it. All they could do is sue a bankrupt company.

If someone hacks into my brokerage account, I can contact the brokerage and tell them I'm a victim of fraud, and get my assets back. Similarly, if someone steals my credit card number, I can report the fraud and I won't be held responsible for it. Plus, these financial companies' fraud detection methods will block at least some improper access. Bitcoin has no such protections. If someone steals your wallet, and sends it through mixers and/or tumblers, you are pretty much SOL.

As to the Tinfoil Helmet portion: If North Korea somehow hit the US with an EMP attack, and this shut down the banks, no one is going to accept your Bitcoins. Any device you'd want to use to access your Bitcoin will be fried. Any device that could be used to accept Bitcoin will be fried. Every cell phone and Internet provider will be unable to function, will take weeks (if not months) to recover, and those services rely heavily on the conventional banking industry. So does every retail and grocery store, every gas station, and pretty much everything our society requires in order to function.

Most amusing of all, Bitcoin needs electricity to operate. In fact, the Bitcoin network uses as much power per day as the entire nation of Serbia! So good luck doing anything with your Bitcoins in the aftermath of an EMP attack.

Bitcoin is valueless... not really much real world assets tied to it, rendering it a de facto fiat currency. Same with Ethereum.

The profits that people make on these currencies come from directly taking advantage of the money that other investors have put in, through psychological speculation. In other words the only way to make real money on it is to take someone else's money. It has nothing to do with asset valuation like in other kinds of stocks.

It's for that reason and the fact that it's highly unstable that I don't invest in crypto. It's unethical and unfeasable long term.

Northern Light said:

Bitcoin is valueless... not really much real world assets tied to it, rendering it a de facto fiat currency. Same with Ethereum.

The profits that people make on these currencies come from directly taking advantage of the money that other investors have put in, through psychological speculation. In other words the only way to make real money on it is to take someone else's money. It has nothing to do with asset valuation like in other kinds of stocks.

It's for that reason and the fact that it's highly unstable that I don't invest in crypto. It's unethical and unfeasable long term.

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With the key difference between cryptocurrencies and government fiat being the latter's value deriving from the backing of militaries and economies, and the exclusive ability to settle taxation as well as faith.

That said, there is some inherent value in BTC/ETH in terms of their utility as relatively low cost, fast and increasingly accepted modes of payment, and in general the advantages of their payment networks and in Eth's case, computing resource allocation. I think they can be 'valuated' on the basis of their network activity and participation, which is what I use, in addition to price action and volume, to determine whether or not I want to go long or short. Right now BTC is massively overinflated and Eth is substantially overinflated in terms of price to their network size and activity.

Surrealistik said:

With the key difference being that the US Dollar, besides deriving value from faith, also derives its value from the backing of the biggest military and economy in the world, and exclusive ability to settle US taxation.

That said, there is some inherent value in BTC/ETH in terms of their utility as relatively low cost and fast modes of payment, and in general the advantages of their payment networks and in Eth's case, computing resource allocation. I think they can be 'valuated' on the basis of their network activity and participation, which is what I use, in addition to price action and volume, to determine whether or not I want to go long or short. Right now BTC is massively overinflated and Eth is substantially overinflated in terms of price to their network size and activity.

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People need to understand the dollar is backed by "faith." "In God we Trust." It is backed by our faith in the good ole' U.S financial institution in banks, the U.S government, etc...

The problem is when the FR keeps printing money out of thin air, it will eventually lead to financial ruins.

“Irredeemable paper money has almost invariably proved a curse to the country employing it.” So wrote America’s greatest economist, Irving Fisher, in 1911. Sixty years later President Nixon severed the last remaining link between US dollars and gold, leaving not only the United States but the entire world on an irredeemable paper money standard. Since then paper money has transformed the world we live in by making credit abundant instead of scarce. It has also brought the world to the brink of a new great depression by creating a worldwide credit bubble. Economists and policymakers, however, have yet to understand the full significance of this monetary revolution — neither the dangers it poses nor the opportunities it presents.

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https://www.richardduncaneconomics.com/economics-in-the-age-of-paper-money-2/

People that keep saying bitcoin will crash. Well, the United States has a better chance of going through Hyperinflation before bitcoin crashes.

Relying on the U.S dollar is like a person relying on God for their cancer to be healed. In all industries, we go through 3 main phases - theism, humanism, and than dataism. With medicine, we relied originally relied on faith to heal us. And then we relied on each other - doctors, nurses etc, and then eventually relied upon data.

Theoism - The reliance on faith/god/religion
Humanism - The reliance on human relationships
Dataism - The reliance on data

Our currency is undergoing its 3rd evolutionary stage. Relying on faith to relying on logical data. People missing the boat on cryptocurrency are the same people that thought the internet was a fad.

And seriously, comparing bitcoin with tulips? That is nonsense. The science/data in cyrtocurrency is there.

Bucky said:

If you went in your bank account today and saw nothing, you have no guarantee of getting it back.

If nk launched an emp attack, banks would be closed. Crypto currency is far safer.

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That's not quite true. We have banking insurance by the FDLIC and the FDIC both backed by the Treasury Dept. Certainly, they have limits, but why would anyone bank above those limits other than commercial accounts which used private insurance to guarantee their banking.

Crypto currency exchanges have collapsed with no recovery for account holders, individuals have lost, trashed, failed to register crypto currency and have suffered complete losses.

Besides, in the event of a nuclear attack or worse a nuclear war, all bets are off and no money or currency may have value.

Civilization is a thin veneer. Something we take for granted.

Bucky said:

People need to understand the dollar is backed by "faith." "In God we Trust." It is backed by our faith in the good ole' U.S financial institution in banks, the U.S government, etc...

The problem is when the FR keeps printing money out of thin air, it will eventually lead to financial ruins.

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Yes, I fully understand how fiat currency works. If anything, it seems like you're the one who doesn't understand it, in no small part because you're treating a currency like it's an asset.

What you fail to realize is that even at the moment when you raise the spectre of a hypothetical out-of-control Fed that causes inflation, you're putting your faith in a currency that is undergoing a massive deflation! You can see with your own two eyes not only that the prices are unstable, but the exchanges it's traded on are unstable as well. That's a disaster for any real currency, and with BTC there is no way to stop it.

I mean, really. What would you do, if at 9:00 AM a gallon of milk cost you $4.00, then an hour later it cost $1.00, then an hour later it cost you $10.00? Neither currencies nor economies can work that way.

You can't have a functional monetary policy if the central bank can't control the currency. Management of the USD is a vital component, not a flaw.

People that keep saying bitcoin will crash. Well, the United States has a better chance of going through Hyperinflation before bitcoin crashes.

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Uh... no. Given what's happened in the past 10 years, that is patently ridiculous. Fed critics and know-nothings have screamed for years that Fed policies after the Great Recession would cause inflation. Guess what? It didn't. In fact, the USD deflated slightly, despite efforts to prop it up. We spent years in a liquidity trap, and in that situation actions like QE -- while far from perfect -- did not cause massive inflation.

And again, even as you type this, Bitcoin is dealing with massive deflation! It is laughable how you deliberately ignore decades of stability of the USD, and express fear of a hypothetical hyperinflation that has never happened in the US, managed by an agency that watches inflation like a hawk, while touting a replacement currency that is incredibly volatile and inherently unstable.

In all industries, we go through 3 main phases - theism, humanism, and than dataism.

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Dude? That is complete and utter bull****.

It's just another way of saying "This time, it's different!" which is what everyone says whenever a bubble is in full force.

And seriously, comparing bitcoin with tulips? That is nonsense. The science/data in cyrtocurrency is there.

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Dude? Wake up.

It is very plausible that cryptocurrencies and, more likely, blockchain will be useful. (We still buy and enjoy tulips today.)

However, at this time Bitcoin is completely useless as a currency, as it overwhelmed by speculators. Even your own comments show this. To wit:

The value of BTC is still fluctuating wildly. If you want to buy a computer that costs $1000, right now it might cost you 0.061 BTC -- but even that varies from one exchange to the next. Heck, that number will change by the time I finish writing this post, and again by the time you read it.

What happens when BTC skyrockets in value? Let's say it doubles again, exactly in 1 week from now. Guess what? That 0.061 BTC now has the purchasing power of $2000 USD. That means you've effectively paid $2000 for that computer. Let's further assume that it increases tenfold from the moment of purchase by the end of the year. Now you've paid $10,000 for that computer.

What kind of idiot will purchase anything in Bitcoin right now? If you believe that BTC will continue to rise in value compared to the USD, you'd have to be a complete moron (or utterly desperate for cash) to buy that computer in BTC instead of USD.

There is no question that Bitcoin is in a bubble, and that lots of people are blinded by the promise of Free Money. We've seen this time and again, and it never ends well. Don't worry, you'll see soon enough for yourself.

Relying on the U.S dollar is like a person relying on God for their cancer to be healed.

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Relying on Bitcoin is like relying on a car with a brick on the gas pedal, and a rope tied to the steering wheel.

Bucky said:

People need to understand the dollar is backed by "faith." "In God we Trust." It is backed by our faith in the good ole' U.S financial institution in banks, the U.S government, etc...

The problem is when the FR keeps printing money out of thin air, it will eventually lead to financial ruins.

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It's also backed by guns, US economic participation and taxation.

https://www.richardduncaneconomics.com/economics-in-the-age-of-paper-money-2/

People that keep saying bitcoin will crash. Well, the United States has a better chance of going through Hyperinflation before bitcoin crashes.

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According to what/who? This Richard Duncan doesn't appear to be saying it in the link you provided, even though it seems to imply he's a skeptic of fiat currency.

Bitcoin's price has already crashed several times; I think you mean 'crash and burn' as in fall out of circulation and interest; personally I don't think that's likely to happen in the foreseeable future; less likely than hyperinflation for the US Dollar? Probably not.

Relying on the U.S dollar is like a person relying on God for their cancer to be healed. In all industries, we go through 3 main phases - theism, humanism, and than dataism. With medicine, we relied originally relied on faith to heal us. And then we relied on each other - doctors, nurses etc, and then eventually relied upon data.

Theoism - The reliance on faith/god/religion
Humanism - The reliance on human relationships
Dataism - The reliance on data

Our currency is undergoing its 3rd evolutionary stage. Relying on faith to relying on logical data. People missing the boat on cryptocurrency are the same people that thought the internet was a fad.

And seriously, comparing bitcoin with tulips? That is nonsense. The science/data in cyrtocurrency is there.

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People rely on the USD as a means of transacting and settlement which it does quite well; its value is stable and its inflation is controlled.

Bitcoin may or may not be a fad, and I doubt most people in the thread believe that it is one, and that it will have no enduring value; personally I think it'll survive in some form. I don't think it's appropriate to compare bitcoin with tulips, but it is indeed in a bubble based on the information available to me, as was the internet back in the late 90s, early 2000s. The internet and its associated enterprises held a great deal of real, enduring promise, but the sector absolutely overheated and was overtly optimistic at the time in terms of the speed of adaptation, penetration and rollout.

Surrealistik said:

Bitcoin's price has already crashed several times; I think you mean 'crash and burn' as in fall out of circulation and interest; personally I don't think that's likely to happen in the foreseeable future; less likely than hyperinflation for the US Dollar? Probably not.

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By the way, to be absolutely clear, I think the probability of hyperinflation (and it depends on what you mean; if something like 50% devaluation in a month, then a total collapse and devaluation of BTC is more likely) of the USD, even with someone like Donald at the helm, is exceedingly low as is Bitcoin becoming totally valueless in any and all forms it takes (forks like BitcoinCash and such). The difference in likelihood between the two is essentially academic; they're both infinitesimally small in my estimation.

Further, when I say most people don't believe it to be a fad, I mean they don't believe that BTC will eventually be abandoned/discarded in its entirety in the foreseeable future; I'm sure a majority here, myself included, rightfully believes BTC is in the midst of a bubble.

ludin said:

bit coin is 100% a gamble. it is highly unstable and kinda shady. governments are already cracking down on it.
I do believe that the US government has already labeled it a commodity not a currency so that right there was a huge blow
to it. it also makes sense and is consistent with other federal laws that the only organization that can issue currency is
the treasury department. what this also means is that you cannot buy anything with bitcoins. you would have to sell them off for
dollars just like any other commodity.

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I read an article sometime ago that Russia is also looking into Bitcoin in order to circumvent US sanctions. Personally, I'm not very familiar with bitcoin so my knowledge is close to zippo on this subject.

Prue said:

I read an article some time ago that Russia is also looking into Bitcoin in order to circumvent US sanctions. Personally, I'm not very familiar with bitcoin so my knowledge is close to zippo on this subject.

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The founders of Facebook put their money in bitcoin, and now they are billionaires:

(Bloomberg) Cameron Winklevoss, thought to be one of the largest holders of bitcoin, thinks the cryptocurrency’s blazing gains this year are just the start. He predicts it will rise as much as 20-fold as investors come to view it as an upgrade to gold.

Winklevoss bases his price projection on the market value of gold, which he pegged at about $6 trillion and others calculate at closer to $7.5 trillion. Investors are beginning to embrace the idea that bitcoin, “mined” by computers performing complex calculations, is more portable and divisible than the precious metal, he said.

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Cameron Winklevoss: Bitcoin Could Surge as Much as 20 Times Higher | Money

Bucky said:

The founders of Facebook put their money in bitcoin, and now they are billionaires:



Cameron Winklevoss: Bitcoin Could Surge as Much as 20 Times Higher | Money

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That could be possible but I'm not convinced that the founders of facebook became billionaires by relying on bitcoin. I suspect their role is more of a middleman and if that's the case then it was definitely savvy. Almost like a bookie. (grin) Of course, I've already admitted to knowing practically nothing about bitcoin.

Prue said:

I read an article sometime ago that Russia is also looking into Bitcoin in order to circumvent US sanctions. Personally, I'm not very familiar with bitcoin so my knowledge is close to zippo on this subject.

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It is a crypto currency. Really it is just smoke and mirrors.
Their value comes in the fact that it costs a lot of money to get and mine them.
However they are viewed as a commodity not a currency by he government.

They are looking at more regulations. Not something I would get into.
They are highly volatile and when one of these bitcoin banks go bust people lose everything.

That happens often.

Bucky said:

The founders of Facebook put their money in bitcoin, and now they are billionaires:

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lol

Webvan was worth $1.5 billion at the peak of the Dot Com bubble. I'm sure people were convinced its founders were geniuses, until... they weren't.

Bucky said:

I see bitcoin continuing to surge in value, well over $10,000. People that put money into this will be happy but I always get a sense its value is destined to fall eventually, perhaps crash under $1,000.

Any thoughts on this cryptocurrency?

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Why aren't there a million copycat currencies at this point? Why invest in the extremely pricey Bitcoin at this point when you could start an alternative currency and see people flock to it for better deal? Bitcoin's value could be cut in half in days if an alternative was available. I don't understand why this hasn't happened, and basically destroyed the entire cryptocurrency market.

Cameron said:

Why aren't there a million copycat currencies at this point?

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Coin Market Cap is tracking over 1300 cryptocurrencies. Just FYI.

Why invest in the extremely pricey Bitcoin at this point when you could start an alternative currency and see people flock to it for better deal?

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I'm sure there is a ton of speculation in a variety of cryptocurrencies. The reality is that people will gravitate to a handful of top contenders.

Bitcoin's value could be cut in half in days if an alternative was available. I don't understand why this hasn't happened, and basically destroyed the entire cryptocurrency market.

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It hasn't happened yet, because it's still in the Frothy Bubble phase. As long as people are piling money into Bitcoin, the exchange rate will continue to rise.

Eventually, the market will max out. Either the price will get too high, and/or pretty much everyone who is willing and able to speculate in Bitcoin will have invested. At that point, the price won't be able to continue its rise, the price will start to fall, large numbers of investors will want to take their profits before the price totally collapses, which exerts more downward price pressure, and voila, you've got a crash.

There is no way to know when the crash will come, or how high it will go before it crashes, or whether people will take Bitcoin seriously after it crashes. What we can expect before the crash is a whole bunch of shenanigans, such as people borrowing to invest in Bitcoin (because it's Free Money!), whales manipulating the market, tall tales of virtual millions and more.

Bucky said:

Cryptocurrency threatens the legitimacy of the U.S dollar.

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Not really. It's just another currency. What blockchain technology does threaten is the need for trusted third parties (so, banks). Hell, the US dollar could very well end up becoming effectively crypto (ie, the ledger of ownership of US dollars being maintained via blockchain).

What so many don't realize is that the revolution here isn't bitcoin; it's the blockchain.

Visbek said:

lol

Webvan was worth $1.5 billion at the peak of the Dot Com bubble. I'm sure people were convinced its founders were geniuses, until... they weren't.

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The genius isn't the investor who holds out for the last penny, but the investor who hit a target and got out with the cash. Kind of like realizing the guy who invented the wheel wasn't a genius, but the guy who connected two or four wheels with axles to a cart was a genius.

Visbek said:

lol

Webvan was worth $1.5 billion at the peak of the Dot Com bubble. I'm sure people were convinced its founders were geniuses, until... they weren't.

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Yes but the internet was not a bubble.

Over 900 cryptocurrencies exist. The majority of them will fail.

How many websites online are there? A lot.

Bucky said:

Yes but the internet was not a bubble.

Over 900 cryptocurrencies exist. The majority of them will fail.

How many websites online are there? A lot.

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The froth and excess valuations surrounding the internet were absolutely a bubble though, which I feel is an appropriate parallel for the cryptocurrency craze at the moment: even if the fundamental root of the bubble, the blockchain and cryptocurrency itself is lasting, the valuations of the moment surrounding them may be excessive.