Bitcoin giveaway! :)

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Re: Bitcoin giveaway! :)

Post by Mdraf » Thu Nov 14, 2013 6:57 am

Gumby wrote:
Marc wrote:
Gumby wrote: Just finished watching.

I'll summarize all 27 minutes... Marc has a lot of money that he can afford to lose, thanks to Bitcoin, and he will speculate with that money in a Variable Portfolio.
I feel irritated when reading your comment.
Likewise, I was irritated when you used a misleading headline in your post to suggest that the PP is somehow "limiting". You rambled on for nearly half an hour telling us what we already knew. Forming a VP is nothing new. Harry Browne purposefully designed the PP to work in conjunction with a speculatory VP, for those who have money that they can afford to lose. We are all very much aware of what a VP is. And the PP has not let you down, in any way, in terms of creating wealth because that was never its intention. HB was quite clear that your wealth is supposed to come from your career and not your investments.

I'm sorry if that irritates you, but I think you are doing people a disservice by suggesting that the PP is limiting them when everyone is already aware of their ability to create a VP.
Gumby, do you consider yourself the Policeman Of All Threads?
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Re: Bitcoin giveaway! :)

Post by Gumby » Thu Nov 14, 2013 7:18 am

Mdraf wrote:Gumby, do you consider yourself the Policeman Of All Threads?
Not at all. I'm just expressing an opinion.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
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Re: Bitcoin giveaway! :)

Post by Rien » Thu Nov 14, 2013 8:18 am

Re: Bitcoin mining

I have looked into mining with a colleague, and the result was that buying mining equipment is a very short term issue. Most of the time you have to pay upfront, but you receive the equipment after about 3-6 months. By then the mining difficulty has gone up so much that the (by then) old equipment will only barely amortize itself (given a constant price for the bitcoins). The sellers of the mining equipment charge prices that pushes the equipment into that region. This is not a coincidence: they will lower prices to compensate for the increased difficulty of mining and probably for declining bitcoin values as well.

We came to the conclusion that bitcoin mining is a leverage play on the price of bitcoins. When you buy the equipment when the price of bitcoins is low (and the price of the equipment also) you can make out handsomely when the price of bitcoins doubles. But only then.
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Re: Bitcoin giveaway! :)

Post by Marc De Mesel » Thu Nov 14, 2013 8:30 am

frommi wrote: I mean its a currency, nothing more. It doesn`t produce anything, nor has the dollar lost so much value in that time. So its clearly only speculation and greed what drives the prices.

Better money does not produce anything but it can have great value for the user. It may go up in purchasing power over time instead of down, it may offer less or no counterparty risk, it may offer more privacy, it may offer faster transactions.


Sure it's speculation that drives the price. And the price is currently going up much faster than the actual usage.

But that is how it always goes with great new discoveries. It was true for tulips, trade with the new discovered America, rail road companies, land in the Wild West (pdf), dotcom companies and will likely be true for crypto currencies as well.

First the speculators see the value this new discovery/invention can bring to society, they bid up the value, not based on current usage but potential usage. It's a risk because if the actual usage does not come, they lose their money. The rise in price gets the attention of the masses and if it truly offers value they will adopt it and pay the price it's worth. Typîcal is that the value overshoots mainly due to the masses also starting to speculate on it way beyond fair value after which it corrects again and the bad speculators lose their money and must find another job.

After the bubble has deflated the new discovery/invention has gone mainstream. And it is thanks to the speculators taking the risk first that it happened, so they get most of the rewards of the discovery, the masses get the rewards of the actual usage, which is much smaller but still worth it. The good speculators have created real value, made money and can do it over elsewhere.
Last edited by Marc De Mesel on Thu Nov 14, 2013 9:44 pm, edited 1 time in total.
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Re: Bitcoin giveaway! :)

Post by dualstow » Thu Nov 14, 2013 8:43 am

This thread makes me smile, especially the first few pages.

Marc,
What did you mean by "cold storage" a few pages back? At first, thought you meant a physical hard drive in a safe or something, but you also mention "Armory"?

I was thinking about setting up a bitcoin wallet so my friend in Italy and I (I'm in the States) could wire each other money. I don't like PayPal.
Does this make sense? I've never been interested in speculating in bitcoins but I like the practicality of it.

I may as well post a friendly reminder to anyone who is reading this thread late: the giveaway stopped several days/pages ago.
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Re: Bitcoin giveaway! :)

Post by Marc De Mesel » Thu Nov 14, 2013 8:57 am

dualstow wrote: This thread makes me smile, especially the first few pages.

Marc,
What did you mean by "cold storage" a few pages back? At first, thought you meant a physical hard drive in a safe or something, but you also mention "Armory"?

I was thinking about setting up a bitcoin wallet so my friend in Italy and I (I'm in the States) could wire each other money. I don't like PayPal.
Does this make sense? I've never been interested in speculating in bitcoins but I like the practicality of it.

I may as well post a friendly reminder to anyone who is reading this thread late: the giveaway stopped several days/pages ago.
Great to hear the thread made you smile  :D

Yes, it's possible to just pay someone, I still have btc to give away, want some to try? :)

Armory is cold storage so installed on an offline computer, but also installed on an online computer so that you can send coins from the cold storage more easily. Normally in order to use the coins from cold storage you have to import the private key on a online computer and that way destroying cold storage as your private key could now have been stolen by a hacker spying your computer.

With Armory you just create the transaction with online computer but then you sign it with the offline computer, using usb stick. That way your private key never touches internet and remains cold storage but you still can send coins from them.

Here is the website: http://bitcoinarmory.com/
Last edited by Marc De Mesel on Thu Nov 14, 2013 9:08 am, edited 1 time in total.
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Re: Bitcoin giveaway! :)

Post by dualstow » Thu Nov 14, 2013 9:04 am

Well, you've made me an offer I can't refuse.  ;)
Just created a wallet a second ago.

Code: Select all

1PeMrJoYaLeQxejAY9y4vDMji5ZBDKs9CM
Thank you for being so generous, and also for the Armory info!
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Re: Bitcoin giveaway! :)

Post by Marc De Mesel » Thu Nov 14, 2013 9:12 am

dualstow wrote: Well, you've made me an offer I can't refuse.  ;)
Just created a wallet a second ago.

Code: Select all

1PeMrJoYaLeQxejAY9y4vDMji5ZBDKs9CM
Thank you for being so generous, and also for the Armory info!
Coins delivered :)

Thank you for your interest as well :)

Hope your Italian connection is open to it.
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Re: Bitcoin giveaway! :)

Post by Marc De Mesel » Thu Nov 14, 2013 9:20 am

Pointedstick wrote:
Marc wrote: You seem to be into it pretty deep too. When did you take the plunge? And why? Were you resistant at first?
I dabbled about a year ago but got in more when I decided on a whim to accept payments for my business in bitcoins. It proved popular since my customers tend to be tech nerds like me, so many of them had bitcoins already. I had one guy who tried to bargain me down on an order because he didn't have enough BTC and I had to remind him about dollars! It's worked very smoothly. Other than the volatility, I think it works very well as a payment method.
Wow :) That's surprising to me that it proved popular in your shop, even in a tech shop I would think just a few would have adopted bitcoin and use it. Many on slashdot are still against bitcoin.

How much percentage of your turnover if you are comfortable sharing?  Or how many people from what total of people? Is it 1%, 10%? Very curious.
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Re: Bitcoin giveaway! :)

Post by dualstow » Thu Nov 14, 2013 9:23 am

Much appreciated, Marc!

Yes, he is into it. In fact, he wanted to partner up for a bitcoin mining operation some months ago, but I had to decline on these grounds:
- my home is too small to host the machines
- I don't want the energy bill
- I figure we can not keep up with the big boys out there and their constantly updated rigs.

Your thread worked, though, in that it definitely piqued my curiosity in a way that merely reading articles never did.
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Re: Bitcoin giveaway! :)

Post by Pointedstick » Thu Nov 14, 2013 9:31 am

Marc wrote: Wow :) That's surprising to me that it proved popular in your shop, even in a tech shop I would think just a few would have adopted bitcoin and use it. Many on slashdot are still against bitcoin.

How much percentage of your turnover if you are comfortable sharing?  Or how many people from what total of people? Is it 1%, 10%? Very curious.
It's not a lot of people, maybe 3 or 4%.

If the volatility settled down, I think it could become a very, very successful currency. In that way, perhaps its built-in deflationary bias is in fact a liability; right now it seems to be encouraging the financially smart people and those who understand how it works technically to just hoard their BTC.
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Re: Bitcoin giveaway! :)

Post by Gumby » Thu Nov 14, 2013 9:42 am

edsanville wrote:The comparison of bitcoins to the Tulip Craze is intriguing, but I don't think it's valid.  Anybody can easily grow tulips, but you can't easily produce more bitcoins.
Actually, that's not true. The tulips that were in demand were extremely limited and difficult to grow. They had to be infected with a very specific virus (that they weren't even aware of at the time) and only florist professionals were able to properly cultivate those bulbs. The seeds from those bulbs could not pass on the desired pattern. And these specific, limited, bulbs became a status symbol as their popularity caught on. Ultimately the total number of those rarest bulbs never increased during tulip mania.

See: http://en.wikipedia.org/wiki/Tulip_mania
Wikipedia.org wrote:The multicolor effects of intricate lines and flame-like streaks on the petals were vivid and spectacular and made the bulbs that produced these even more exotic-looking plants highly sought-after. It is now known that this effect is due to the bulbs being infected with a type of tulip-specific mosaic virus, known as the "Tulip breaking virus", so called because it "breaks" the one petal color into two or more.

The tulip was itself a conspirator in the supply-squeeze that fueled the speculation, in that it is grown from a bulb that cannot be produced quickly. Normally it takes 7–12 years to grow a flowering bulb from seed; bulbs can produce both seeds and two or three bud clones, or offsets, annually, but the "mother bulb" lasts only a few years. Properly cultivated, the "daughter offsets" will become flowering bulbs after one to three years. Before the demand for the "broken" tulips, virus-free bulbs producing ordinary single-color varieties were sold by the pound. Once affected by the virus, the "broken" exotics were an extremely limited commodity because the sought-after "breaking pattern" can only be reproduced through offsets, not seeds, as only the bulb is affected by the mosaic virus. Unfortunately, the virus that produced the sought-after effects also acted adversely on the bulb, weakening it and retarding propagation of offsets, so cultivating the most appealing varieties now took even longer. Taking this into account, quite probably from the time the speculation started until its collapse, the number of rare bulbs that changed hands so feverishly never increased beyond the original number.


Source: http://en.wikipedia.org/wiki/Tulip_mania
Sounds almost exactly like Bitcoins.

Eventually other flowers became more desirable as time went on. For instance, the hyacinth later replaced the tulip as the fashionable flower. The lily was also extremely popular at one time — fetching nearly half-a-million dollars for a few bulbs in today's equivalent of money. The only reason tulips are often singled out is because, unlike the other speculative flowers, tulips experienced a severe and sudden drop in their value — and, to this day, no one really knows exactly why the sudden drop happened.

Bitcoin won't be the last crypto-currency. I'm sure it will appreciate handsomely for a period of time. How long that is, nobody knows. But, just like tulips, Bitcoins can become unpopular. And there isn't anything stopping another crypto-currency from stealing Bitcoin's popularity next year or the year after that. Whether such a drop in popularity would be severe or gradual is anyone's guess. Buying Bitcoins is purely a speculation play on its popularity within a period of time. Nothing more.
Wikipedia.org wrote:By 1635, a sale of 40 bulbs for 100,000 florins (also known as Dutch guilders) was recorded. By way of comparison, a ton of butter cost around 100 florins, a skilled laborer might earn 150 florins a year, and "eight fat swine" cost 240 florins. (According to the International Institute of Social History, one florin had the purchasing power of €10.28 in 2002.)

By 1636 tulips were traded on the exchanges of numerous Dutch towns and cities. This encouraged trading in tulips by all members of society; Mackay recounted people selling or trading their other possessions in order to speculate in the tulip market, such as an offer of 12 acres (49,000 m2) of land for one of two existing Semper Augustus bulbs, or a single bulb of the Viceroy that was purchased for a basket of goods worth 2,500 florins.

Charles Mackay: Extraordinary Popular Delusions and the Madness of Crowds wrote:Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and, one after the other, they rushed to the tulip marts, like flies around a honey-pot. Every one imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them. The riches of Europe would be concentrated on the shores of the Zuyder Zee, and poverty banished from the favoured clime of Holland. Nobles, citizens, farmers, mechanics, seamen, footmen, maidservants, even chimney sweeps and old clotheswomen, dabbled in tulips
Source: http://en.wikipedia.org/wiki/Tulip_mani ... _of_Crowds
Perhaps the question isn't whether you can make money with Bitcoins. Perhaps the question is whether you be able to sell them, in a timely fashion, without getting burned before popularity weans. History suggests that a lot of people tend to get burned by such pump and dump schemes since most people do not know when to exit.
Last edited by Gumby on Thu Nov 14, 2013 10:57 am, edited 1 time in total.
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Re: Bitcoin giveaway! :)

Post by Marc De Mesel » Thu Nov 14, 2013 10:09 am

dualstow wrote: Much appreciated, Marc!

Yes, he is into it. In fact, he wanted to partner up for a bitcoin mining operation some months ago, but I had to decline on these grounds:
- my home is too small to host the machines
- I don't want the energy bill
- I figure we can not keep up with the big boys out there and their constantly updated rigs.

Your thread worked, though, in that it definitely piqued my curiosity in a way that merely reading articles never did.
Sweet he's into it already :)

I think that was a good call. Just like gold mining, lots of money to be made, but you need to be among the best and for that you need to be passionate about it and have the determination and resources, otherwise better focus on something else. And indeed competition is increasing rapidly, it's getting real professional. Basically either you develop a new computer yourself or you are getting the crumbs (which is still a lot more than real world businesses though but nothing compared to holding btc).

Great to hear I succeeded in piquing your interest that articles could not :)
Last edited by Marc De Mesel on Thu Nov 14, 2013 10:10 am, edited 1 time in total.
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Re: Bitcoin giveaway! :)

Post by dragoncar » Thu Nov 14, 2013 11:52 am

Marc wrote:
dragoncar wrote: Still doing this?  If so, much thanks: 1LKRDyKhCweFtjpYLcPnMMiFuZnPtYrvcT

At one point, when BTC was about $0.25, I seriously considered throwing $5-10k into it as a purely speculative play.  What ultimately stopped me was that I just didn't trust mtgox and was daunted by the possibility that a purchase of that size might move the market.  I just kind of forgot about it without doing anything... kicking myself now (I'd theoretically have $16 MM in BTC, but who knows if I could get USD back... I probably would have ended up selling long ago anyways).
There you go dragoncar.


I'm so sorry you missed out on it, yet were so close.

My sympathies for your loss in opportunity. I know that can feel bad :(


I find it admirable part of you did see the opportunity so early.

I hope you succeed in negotiating better with your part that kept you from doing it.

That's how I succeeded in embracing the opportunity, by having an internal conversation and negotiation between my different parts. (I do it every day! :) )


If you want to, I think you still have an opportunity here. The tenfolding every year will likely continue for another 2/3 years but after that it will either stagnate or become bubbly and later lost again.

This bitcointalk thread is very informative. Especially this post, and this post.
Thanks!  Yeah I'm exaggerating the likely outcome because (knowing how often I check my PP) I probably would have tracked BTC prices daily and gotten spooked at one of the earlier drawdowns rather than forgetting about them for a few years.  Kinda like saying "oh man I had the idea for Twitter ten years ago" without evidence that you have the business acumen to make any money off it.

When I dug up my wallet for this, I found some BTC I randomly generated back when nobody had dedicated hardware and the global hash rate was far lower so that's a plus.
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Re: Bitcoin giveaway! :)

Post by Kshartle » Thu Nov 14, 2013 2:21 pm

Marc wrote:
Gumby wrote:
Marc wrote: Thanks for the request :)

I just made a new video:
Bitcoin Accelerating, Limits of the Permanent Portfolio and The Art of Investing
Just finished watching.

I'll summarize all 27 minutes... Marc has a lot of money that he can afford to lose, thanks to Bitcoin, and he will speculate with that money in a Variable Portfolio.
I feel irritated when reading your comment. I also remember feeling irritated when reading your comments in the other big discussion.

I'm going to ignore you from now on. I'm sorry.
That is probably a wise decision. My inability to ignore comments that irritated me and respond in frustration resulted in a two-week ban, which is fine. It actually gave me a chance to reflect on some things other than QE, human rights etc.

One of those things was bitcoin.

First off, congratulations on the big score, the run-up has been remarkable. If I missed the answer to this question then forgive me, but do you have a plan to rotate out some of these gains or are you going to continue holding? If you're going to hold...is there a particular price or event that will trigger selling on your part?

The reason I ask is because I am actually very skeptical of bitcoin and it's price. I can't understand why anyone values it and I think a lot of it is driven by people expecting the price to keep rising. Are you holding your bitcoins because you ever plan to use them to purchase something or is it strictly because you expect the price in dollars or Euros to keep rising?

I don't mean this to be insulting, the price might go to the moon. I just don't understand why people are buying them except to hold them in anticipation of the price rising. I don't see how they are more valuable than any other "crypto" currency that might come along nor do they have any other use or properties people value. I've spent some time thinking about this and I actually do think the current price is unsustainable although it may very well go much much higher.

So...........

Are you selling any at the current price?
Is there a price at which you intend to sell should it be reached?
Is there an event that would cause you to sell at least a portion?
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Re: Bitcoin giveaway! :)

Post by Pointedstick » Thu Nov 14, 2013 2:38 pm

Kshartle wrote: The reason I ask is because I am actually very skeptical of bitcoin and it's price. I can't understand why anyone values it and I think a lot of it is driven by people expecting the price to keep rising.
Given that there is a hard algorithmic limit on the number of bitcoins, this expectation is actually pretty rational. It is sort of the perfect speculation in that it can't help but appreciate as long as enough people believe in the hope that it will someday become non-volatile enough to use as a functional currency. If that eventually happens, then the people with lots of BTC will be rich. If it doesn't, and enough people catch on that its inherent properties make it more suitable for hoarding than spending, I suspect that the party will be over very quickly.
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Re: Bitcoin giveaway! :)

Post by Kshartle » Thu Nov 14, 2013 2:48 pm

Pointedstick wrote:
Kshartle wrote: The reason I ask is because I am actually very skeptical of bitcoin and it's price. I can't understand why anyone values it and I think a lot of it is driven by people expecting the price to keep rising.
Given that there is a hard algorithmic limit on the number of bitcoins, this expectation is actually pretty rational. It is sort of the perfect speculation in that it can't help but appreciate as long as enough people believe in the hope that it will someday become non-volatile enough to use as a functional currency. If that eventually happens, then the people with lots of BTC will be rich. If it doesn't, and enough people catch on that its inherent properties make it more suitable for hoarding than spending, I suspect that the party will be over very quickly.
But what they're hoarding doesn't have any value, that I am aware of. It has a price I know....but what value does it have? What is a bitcoin good for except hoping someone else will want one? I know people will say gold is the same but that would be a mistake. Not only does gold have utility value (it has a useful purpose other than trading) it is also tangible and has properties people value (shiny, pretty, rare).

Bitcoins might be rare, although since they can be broken into billions I'm not so sure. Regardless, even if they're rare, they are just an electronic blip and have no value. You can't do anything with them if you don't have someone else willing to trade for them.

I guess basically it's easy to see that gold will always have value but a bitcoin looks like a fad that can be easily replaced or will collapse when the speculative holders decide the price will not keep going up.


How is better than dollars which also have no intrinsic value? Will a country adopt bitcoin and require tax payments in it? Seems unlikely.
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Re: Bitcoin giveaway! :)

Post by Pointedstick » Thu Nov 14, 2013 2:51 pm

Kshartle wrote: But what they're hoarding doesn't have any value, that I am aware of.
They/we/I are hoarding it on the belief that it will have a future exchange value. It would be the same thing as hoarding any new currency that doesn't yet have a huge market.

Kshartle wrote: How is better than dollars which also have no intrinsic value?
It's the same since they're both unbacked fiat currencies. However BTC does indeed open the door to a truly global currency that's simple to use for electronic exchange, undercutting governments and their taxes.
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Re: Bitcoin giveaway! :)

Post by Kshartle » Thu Nov 14, 2013 2:52 pm

I hope this is taken as an insult Marc. I know you've faced a lot of opposition to your ideas. I'm curious as to your plans and thoughts on bitcoin since you own them. I'd rather here the opinion of someone who has actually purchased since I am skeptical.
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Re: Bitcoin giveaway! :)

Post by Gumby » Thu Nov 14, 2013 3:01 pm

Pointedstick wrote:
Kshartle wrote: The reason I ask is because I am actually very skeptical of bitcoin and it's price. I can't understand why anyone values it and I think a lot of it is driven by people expecting the price to keep rising.
Given that there is a hard algorithmic limit on the number of bitcoins, this expectation is actually pretty rational. It is sort of the perfect speculation in that it can't help but appreciate as long as enough people believe in the hope that it will someday become non-volatile enough to use as a functional currency. If that eventually happens, then the people with lots of BTC will be rich. If it doesn't, and enough people catch on that its inherent properties make it more suitable for hoarding than spending, I suspect that the party will be over very quickly.
I agree with KShartle on this in terms of skepticism. On one hand, I completely agree that the price of Bitcoins will probably rise considerably in the near future (i.e. "Bitcoin mania"). But, in terms of a functional currency, I don't see how the inherent urge to hoard Bitcoins enables the currency to become functional. The hard limit on Bitcoins paradoxically causes people to speculate and hoard them (much like the rare tulips, which never increased in quantity). You would have to be crazy to spend your Bitcoins if you believed they were going to increase in value significantly.

The currency is also really annoying the way it's currency structured, IMO. You have to be a real computer nerd to set up and maintain your wallet properly. Make a little mistake and your money evaporates. I envision average laypeople will make some classic security mistakes and that will cause rampant scams and hackings that deter people from using the currency. And despite all that, I think the "Bitcoin mania" is probably just beginning.
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Re: Bitcoin giveaway! :)

Post by Kshartle » Thu Nov 14, 2013 3:04 pm

Pointedstick wrote:
Kshartle wrote: But what they're hoarding doesn't have any value, that I am aware of.
They/we/I are hoarding it on the belief that it will have a future exchange value. It would be the same thing as hoarding any new currency that doesn't yet have a huge market.

Kshartle wrote: How is better than dollars which also have no intrinsic value?
It's the same since they're both unbacked fiat currencies. However BTC does indeed open the door to a truly global currency that's simple to use for electronic exchange, undercutting governments and their taxes.
Bitcoin is not fiat. I think we've covered this several times. If it were fiat then I could see where the "value" (really the price) is coming from.

It does permit exchange that does not open one up to scrutiny, sort of like digital cash.....but you're trading in something with zero value (that I can see). Why would anyone want them? See my thinking is a huge part of the demand and hence the price, is driven by people collecting or hoarding them in hopes of a higher price. But they are worthless inherently so if the price stops going up and the selling starts what would ever prevent them from collapsing to zero. Who would come in to buy and support the price? Who would ever want them? What prevents them from being completely replaced by something even more secure or rarer or whatever.

The price does not look to be driven by real demand but by people buying expecting the price to rise. What real demand will ever support it? Why would someone want a bitcoin 50 years from now or 100? Why do you think someone will want one then is probably a better question.
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Re: Bitcoin giveaway! :)

Post by Gumby » Thu Nov 14, 2013 3:20 pm

And secondly, I wonder if someone would continue to save their Bitcoins once they perceived that they reached their full potential? I doubt it. Most people are trained to be always looking for a "return" on their savings and would probably rush for the exits to find a currency with a better return once the party was over.

I suppose people could generate a return on their Bitcoin savings by loaning out their Bitcoins in a marketplace, but how would the Bitcoin holders — on a Macro level — pay all the interest on those loans without new Bitcoins being created? Would people be even willing to loan their Bitcoins if there was no way to ensure that people were actually paid back for their loans?

Lots of complexity, but few answers.
Last edited by Gumby on Thu Nov 14, 2013 3:26 pm, edited 1 time in total.
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Kshartle
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Re: Bitcoin giveaway! :)

Post by Kshartle » Thu Nov 14, 2013 3:24 pm

Gumby wrote: I suppose people could generate a return on their Bitcoin savings by loaning out their Bitcoins in a marketplace, but how would the macro Bitcoin holders pay all the interest on those loans without new Bitcoins being created?
Lots of complexity, but few answers.
They would just have to get more bitcoins from other people with bitcoins. This does not require new bitcoins to be created. We've beaten this concept to death with gold if I remember.

The existance of interest and borrowing does make currency expansion neccessary to pay off debts. I don't know what ever started this line of thinking but I hope you can see why it's not correct. Paying off the loan and interest only requires the borrower to aquire enough bitcoins through trade.
Last edited by Kshartle on Thu Nov 14, 2013 3:29 pm, edited 1 time in total.
Gumby
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Re: Bitcoin giveaway! :)

Post by Gumby » Thu Nov 14, 2013 3:30 pm

Kshartle wrote:They would just have to get more bitcoins from other people with bit coins.
Right, but that can be extremely difficult when people are hoarding their Bitcoins — as they currently are :). Anyway, my general question is what would happen if someone defaulted on a Bitcoin loan? Sounds like you'd be up a creek without much recourse. And generally speaking, that would make Bitcoin loans pretty junky.
Kshartle wrote:The existance of interest and borrowing does make currency expansion neccessary to pay off debts. I don't know what ever started this line of thinking but I hope you can see why it's not correct. Paying off the loan and interest only requires the borrow to aquire enough bitcoins through trade.
Again, it's difficult to pay off a loan when the currency is being hoarded and there isn't much trade. That's my main point. I'm sure it's not impossible, but it would take a lot of trade on a Macro level and if the trading wasn't there to support such mandatory payments, people would default.

Anyway, we don't need to argue since it's hypothetical. My main point is that I suppose people wouldn't really be willing to loan their Bitcoins without some kind of physical collateral handed over in case of default.
Last edited by Gumby on Thu Nov 14, 2013 3:34 pm, edited 1 time in total.
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Kshartle
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Re: Bitcoin giveaway! :)

Post by Kshartle » Thu Nov 14, 2013 3:32 pm

Gumby wrote: And secondly, I wonder if someone would continue to save their Bitcoins once they perceived that they reached their full potential? I doubt it. Most people are trained to be always looking for a "return" on their savings and would probably rush for the exits to find a currency with a better return once the party was over.
Yes once the hot money decides the ride is over I expect the crash to be remarkable. I just don't see where the "value" buyers will come in.

Now I could be wrong, but look at gold in 2011.....all the hot money was piling in and driving the price up in hopes the price would keep going. These were not people buying for the long-term. What is the long-term fundamental driver for the price of bitcoin? It can't be based on people buying with the expectation of higher prices, that will end in a crash. My fear with buying is I expect the price will eventually meet the value....zero (my opinion currently).
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