Sign in to follow this  
Followers 0
Ghjhero

Cryptocurrencies

93 posts in this topic

We had lunch today with some friends and the husband wanted my opinion (as an investment guy) on the wife’s suggestion that they take all their savings out of the stock market — where a crash must be imminent — and invest in bitcoin instead. 

These are two very well educated and business-savvy people.  I hope there aren’t many others like them.  It’s all fun and games if people are throwing some (relative) loose change at it, but if people allocate a large chunk of their savings to any crypto currency there will be unfortunate consequences.  And it’s a bad sign that people are starting to talk about Bitcoin now like flipping houses in 2006 and tech stocks in 1999. 

Share this post


Link to post
Share on other sites
2 hours ago, Iskaral Pust said:

We had lunch today with some friends and the husband wanted my opinion (as an investment guy) on the wife’s suggestion that they take all their savings out of the stock market — where a crash must be imminent — and invest in bitcoin instead. 

These are two very well educated and business-savvy people.  I hope there aren’t many others like them.  It’s all fun and games if people are throwing some (relative) loose change at it, but if people allocate a large chunk of their savings to any crypto currency there will be unfortunate consequences.  And it’s a bad sign that people are starting to talk about Bitcoin now like flipping houses in 2006 and tech stocks in 1999. 

Yikes yeah this is definitely the worst case attitude to have with something this volatile, bubble or not. I’ve only thrown some breadcrumbs into it to see what happens at this point. Nothing I can afford to lose. As @Altherion mentioned, Bitcoin is not being utilized as Nakamoto had envisioned. To realize his vision, might the bubble popping be a good thing? If it were to stabilize around say $2000 it’s slightly more likely to be attractive to retailers who’d consider accepting it I’d have to think. 

Share this post


Link to post
Share on other sites
1 hour ago, Ghjhero said:

Yikes yeah this is definitely the worst case attitude to have with something this volatile, bubble or not. I’ve only thrown some breadcrumbs into it to see what happens at this point. Nothing I can afford to lose. As @Altherion mentioned, Bitcoin is not being utilized as Nakamoto had envisioned. To realize his vision, might the bubble popping be a good thing? If it were to stabilize around say $2000 it’s slightly more likely to be attractive to retailers who’d consider accepting it I’d have to think. 

There is a hard maximum of (nearly) 21 million bitcoin. So a stable exchange rate of $2000 that would give a market of 42 billion only. Which would be too niche to matter for most retailers I imagine.

For comparison, in 2001 just before the euro there was approximately €10 billion worth of paper money circulating in the Netherlands for 16 million people.

Share this post


Link to post
Share on other sites
7 hours ago, Seli said:

There is a hard maximum of (nearly) 21 million bitcoin. So a stable exchange rate of $2000 that would give a market of 42 billion only. Which would be too niche to matter for most retailers I imagine.

For comparison, in 2001 just before the euro there was approximately €10 billion worth of paper money circulating in the Netherlands for 16 million people.

Gotcha that makes sense, although I’m now confused as to what Nakamoto’s intentions were. From what you’re saying it sounds like Bitcoin would be better suited as “digitial gold” that was described earlier in the thread. But that seems to fly in the face of what Nakamoto wanted. It’s hard for any peer to peer system to catch on if it’s too much of a niche creation. 

Edited by Ghjhero

Share this post


Link to post
Share on other sites
10 minutes ago, Ghjhero said:

Gotcha that makes sense, although I’m now confused as to what Nakamoto’s intentions were. From what you’re saying it sounds like Bitcoin would be better suited as “digitial gold” that was described earlier in the thread. But that seems to fly in the face of what Nakamoto wanted. It’s hard for any peer to peer system to catch on if it’s too much of a niche creation. 

In principle you can pay with tiny fractions of a bitcoin. So a very high (stable) value for a single coin is not an issue. The practical implementation with the energy-intensive incentive for people to process all payments (the mining), is a wee bit more impractical.

Of course bitcoin is likely the myspace or AltaVista of cryptocurrencies. An early implementation that will be surpassed by better developments.

Share this post


Link to post
Share on other sites
12 hours ago, Iskaral Pust said:

We had lunch today with some friends and the husband wanted my opinion (as an investment guy) on the wife’s suggestion that they take all their savings out of the stock market — where a crash must be imminent — and invest in bitcoin instead. 

These are two very well educated and business-savvy people.  I hope there aren’t many others like them.  It’s all fun and games if people are throwing some (relative) loose change at it, but if people allocate a large chunk of their savings to any crypto currency there will be unfortunate consequences.  And it’s a bad sign that people are starting to talk about Bitcoin now like flipping houses in 2006 and tech stocks in 1999. 

Yea, that's bad. I invested some in crypto back in May but it was money I could afford to lose. Anything else is just reckless and asking to get burned.

Share this post


Link to post
Share on other sites
3 hours ago, Seli said:

In principle you can pay with tiny fractions of a bitcoin. So a very high (stable) value for a single coin is not an issue. The practical implementation with the energy-intensive incentive for people to process all payments (the mining), is a wee bit more impractical.

Of course bitcoin is likely the myspace or AltaVista of cryptocurrencies. An early implementation that will be surpassed by better developments.

That would make sense to me. From what I’ve heard altcoins such as Ethereum and Litecoin are supposed to be improvements upon Bitcoin although I can’t say I understand all the technical implications behind them. 

Share this post


Link to post
Share on other sites
On 12/10/2017 at 11:12 AM, maarsen said:

Think of bitcoin as digital gold. It doesn't do anything but sit there, as does gold but it can be used as a medium of exchange for actual goods. There is one vital difference. No matter how many times an ounce of gold trades hands, the weight remains the same. The bitcoin gets more and more cumbersome due to the energy required to maintain the block chain that preserves its value. Imagine a ounce of gold that increases in mass with every transaction and you have a bitcoin. Take your cue from that as to the valuation of bitcoin. 

The problem here with this I see is:

1. If you accept that use of money started by libertarians trading gold, way back when, before the rise of states, then at least gold has some use besides a a mean of payment. I mean you can make it for rings or necklaces and such. Now, I'd admit, I'm not much of fashion guy, being barely able to match my socks on a good day, but I don't think you can make jewelry out of bitcoin, except of the course it may be useful to make transactions you want to keep private. But, I have no idea of how to measure the demand for those kind of transactions.

2. If you go with story that the reason states used precious metals as money because they tended to be harder to forge, then at least the value of is backed by the fact it could be used to pay taxes.

If its sole value is that it is a means of payment, then it seems like were in some kind beauty contest situation, where everyone thinks it's valuable because they think everyone else thinks everyone else thinks its valuable.

Anyway, as far as an investment, I think I'd be more comfortable putting my money into the lottery or maybe going to the blackjack or craps table.

Edited by OldGimletEye

Share this post


Link to post
Share on other sites
23 hours ago, OldGimletEye said:

The problem here with this I see is:

1. If you accept that use of money started by libertarians trading gold, way back when, before the rise of states, then at least gold has some use besides a a mean of payment. I mean you can make it for rings or necklaces and such. Now, I'd admit, I'm not much of fashion guy, being barely able to match my socks on a good day, but I don't think you can make jewelry out of bitcoin, except of the course it may be useful to make transactions you want to keep private. But, I have no idea of how to measure the demand for those kind of transactions.

2. If you go with story that the reason states used precious metals as money because they tended to be harder to forge, then at least the value of is backed by the fact it could be used to pay taxes.

If its sole value is that it is a means of payment, then it seems like were in some kind beauty contest situation, where everyone thinks it's valuable because they think everyone else thinks everyone else thinks its valuable.

Anyway, as far as an investment, I think I'd be more comfortable putting my money into the lottery or maybe going to the blackjack or craps table.

I was trying to cast aspersions on bitcoin by comparing it to gold. I guess I should have been more clear that I find  investing in gold to be a less than brilliant move. Bitcoin is even more so of a silly investment. It has all the disadvantages of gold and then its own on top. 

Share this post


Link to post
Share on other sites

A guy I work with who owns a large collection of domestic turtles asked me if it would be a good investment "to buy some of that bite (sic) coin".

Share this post


Link to post
Share on other sites
25 minutes ago, larrytheimp said:

A guy I work with who owns a large collection of domestic turtles asked me if it would be a good investment "to buy some of that bite (sic) coin".

At least it would be worth 8 times more than a bitcoin. B)

Share this post


Link to post
Share on other sites

Scientific American has a great series of articles on crypto currencies this month. Well worth the read.

If you are going to use non government issued currencies, I have to say the best one around is still Canadian Tire money. You stick it in a drawer for years and it still holds its value. 

http://www.insidevancouver.ca/wp-content/uploads/2014/09/5c_a.jpg

Share this post


Link to post
Share on other sites

In another sign that cryptocurrencies, at least the big name bitcoin, isn't quite there yet is the nice crash today.

Which can happen, a bit more troubling for the ideal is that come big trading centres couldn't handle the pressure and had to shut down at times.

http://www.bbc.com/news/business-42457983

Share this post


Link to post
Share on other sites

Yeah, very sharp decline yesterday and big drop all week.  Bitcoin has had much larger % drops before, but there was a lot less money at stake then and less reliance on investors who think they’re getting rich quick. 

It may still rebound from this.  People like to believe in something, and greed is hard to resist.  But it still pains me to see people chase stuff like this. 

Share this post


Link to post
Share on other sites

Pretty volatile day.  I did very well in BC, sold out when it hit about $8500 USD or around $12k CDN.  I had purchased a lot back years ago, used some, kept some, bought some more...did very well in fact.   Even though I took a haircut selling part of my investment for liquidity/cash with a local place in Toronto that offers such, and is one of the larger online brokers.

I wish we had stuck it out a bit longer, I could have made another 80% had I been a bit more patient, however, after today, I really feel a bit better about our decision to bail when we did, heh.  As per above posts, several exchanges shut down due to the volatility/etc, I'm glad I'm not eating that stress today.

Edited by SerHaHa

Share this post


Link to post
Share on other sites

I read an article in the BCC a few days ago that mentioned with as volatile as the price of Bitcoin is, it is hardly worth reporting on the price as that isn't anywhere near as important as other aspects of BTC such as the ever increasing transaction fees. Two days ago I moved the roughly $60 worth of BTC I have off of Coinbase and into a wallet only to discover it now takes me more than half my BTC to move it should I want to send it to an address in the future. So I'm kinda screwed and don't really have much choice but to let it sit there until this mess is given the attention it needs.

Share this post


Link to post
Share on other sites
On ‎12‎/‎12‎/‎2017 at 10:35 AM, OldGimletEye said:

The problem here with this I see is:

If its sole value is that it is a means of payment, then it seems like were in some kind beauty contest situation, where everyone thinks it's valuable because they think everyone else thinks everyone else thinks its valuable.

I always thought any particular currency was only valuable because people are sure it is valuable, Wouldn't there be self fulfilling hyperinflation if people lost faith in a currency. 

So I would argue an inherently worthless investment could become stable if people grew it thinking it worthwhile , An example are Picasso painting, You can get a tv to display the same image but they HAVE to sell for millions because everyone Knows they will sell for millions, 
Currently plenty of people think Bitcoin is a scam so it is not inherently worthwhile. 

 

Share this post


Link to post
Share on other sites

I've seen this BTC decline a 100 times. You can't make a move up like it did without a correction. It's necessary for a healthy market. And now there is an alt pump, which also tends to happen following a correction and stabilization of BTC prices. Fun times in the crypto world.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0