The devastating bit coin bubble

[base698 1]

I don't understand why people keep saying you can't do anything with them....

https://bitcoin.it/wiki/trade

+ Silk Road, Word Press, and Reddit.

Quote

We've been around the block a few times already, seen this dance before.

Only the investment side. Sending money anywhere without an intermediary, to my knowledge, has never been tried.

This is the closest thing: http://en.wikipedia.org/wiki/Hawala

[westcoastSD 0]

Quote

i dont think the derivatives that make it possible to insure my home are gambling....

What I am saying is, that guessing what the price of something will be in the future, slapping a contract on it and paying that price is gambling.

You know this but are trying to avoid it.

You my friend are a shill right now. The derivatives market is in a bubble, just like the stock market is in a bubble... or maybe you are in denial?

These things burst and when that many people get it that wrong...the effects can be devastating.

This puts the figures into perspective;

Quote

9 Biggest Banks' Derivative Exposure - $228.72 Trillion

http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html

For the record this is a random website, this chart has been used on several, this was the first I found it on.

[westcoastSD 0]

Quote

These are exactly tulip bulbs...except for the fact that you can actually do something with tulip bulbs.

Well you and your buddies can think what you like, but in as little as 4 years this phenomenon has grown.

Many places accept Bitcoin directly, the number is growing and Bitcoin can be traded for $ Euro$ or commodities.

EVERYONE that purchased Bitcoin more than a week ago have made gains... only those that purchased at over $130 lost (but maybe even they will make gains in thehsort future, who knows)... Some bought for $0.20

https://www.spendbitcoins.com/places/

You may be able to say "I told you so" in a week, maybe I will be able to do so...

The thing is, nobody knows.

Faith in the status quo is dwindling.

[weekender 0]

Quote

Quote

i dont think the derivatives that make it possible to insure my home are gambling....

What I am saying is, that guessing what the price of something will be in the future, slapping a contract on it and paying that price is gambling.

You know this but are trying to avoid it.

You my friend are a shill right now. The derivatives market is in a bubble, just like the stock market is in a bubble... or maybe you are in denial?

These things burst and when that many people get it that wrong...the effects can be devastating.

This puts the figures into perspective;

Quote

9 Biggest Banks' Derivative Exposure - $228.72 Trillion

http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html

For the record this is a random website, this chart has been used on several, this was the first I found it on.

what you described are what farmers have done for ion's to buy seeds to plant crops for a later harvest. what shipping companies do to protect them from fluctuations in oil and gas prices. what insurance companies do to provide you homeowners insurance. you do not understand derivatives and their uses.

calling me a shill is humorous since i have clearly stated numerous times, i am neutral on Bitcoins success or not. it impacts my life zero either way. They are NOT new, they are no threat to any other currency. they are a cute novelty that people with a limited understanding of world finance are excited about. the more you post the more you prove my point. your understanding of derivatives is evidence of your financial knowledge.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[kelpdiver 2]

Quote

I don't understand why people keep saying you can't do anything with them....

https://bitcoin.it/wiki/trade

+ Silk Road, Word Press, and Reddit.

Great... a black market, an good blogging editor, and a publish your own shit website. So really...you can use it to buy illegal shit. Could also use it to fund online gambling accounts which is a nice twofer - first gambling on the price fluctuations, and then gambling itself on the site.

But again...there is no underlying value in a bitcoin. As soon as people decide they're silly or just for money laundering, the price drops to zero. Despite claims to the contrary, the dollar and Euro have much stronger foundations.

As much as westcoast likes to talk about how far its come in 4 years, presuming the trajectory continues, it could also die out like any fad.

[kelpdiver 2]

Quote

Quote

These are exactly tulip bulbs...except for the fact that you can actually do something with tulip bulbs.

Well you and your buddies can think what you like, but in as little as 4 years this phenomenon has grown.

Many places accept Bitcoin directly, the number is growing and Bitcoin can be traded for $ Euro$ or commodities.

EVERYONE that purchased Bitcoin more than a week ago have made gains... only those that purchased at over $130 lost (but maybe even they will make gains in thehsort future, who knows)... Some bought for $0.20

Just some assistance with math....since the highest price at any exchange has been 105 since last night, I'd say the people buying at 130 are losers too. At least the range has narrowed to only 10% (95-105), rather than the 50% overnight range (65-105) of the 4 major US exchanges.

We buddies are pushing around trillions of dollars. You're pushing around millions. Guess who's more relevant?

[ManagingPrime 0]

http://rt.com/op-edge/bitcoin-store-value-cotsikis-773/

I think this guy summed it up quite nicely.

Note how he shared his opinion that bitcoins are not a good store of value at this time, yet was not dismissive or condescending.

Joe six-pack is starting to wake up to the reality that we are in the middle of a currency war. Through the internet people are discovering some of darker implications of central banking. Should those people sell their houses and invest in bit coins? HELL NO. Should they explore alternatives to fiat currencies and pick a favorite such as bitcoin? It's not a bad start IMHO.

I think those that dismiss developing alternative currencies are just as shortsighted as those who are willing to plow in all of their assets into something like bitcoin.

The debate of if it's a good investment or not is just dumb. The interesting debate is will we start to see a move away from central banks and will a "crypto-currency" emerge as the predominant challenger to the existing hegemony.

[base698 1]

Quote

As soon as people decide they're silly or just for money laundering, the price drops to zero.

I think that's where we disagree. If it's actively used for money laundering or illicit things it will always have some value if the volume is high enough to offload.

The biggest positive use is transmitting money to the third world without getting screwed by Western Union or warlords.

[kelpdiver 2]

Quote

Quote

As soon as people decide they're silly or just for money laundering, the price drops to zero.

I think that's where we disagree. If it's actively used for money laundering or illicit things it will always have some value if the volume is high enough to offload.

The biggest positive use is transmitting money to the third world without getting screwed by Western Union or warlords.

The key is - can you offload to a more usable currency? If it were demonized as 'that money for drug lords' and people avoid it, then how does it still function? It can't endure as a closed loop of drug sales. At some point Scarface needs to buy his Miami palace and "his little friend," and clothes for Michelle. The daily volume right now looks like only about $20-25M USD out of 1-2B, so a .2% float. This is extremely illiquid and if the number of traders drops to just the true believers, then there would be virtually no exchange going on.

Look at how effectively the West squashed funding of WikiLeaks. I think it would be hard for them to scare enough people away from bitcoins, but they could get enough to legislate, particularly if people already hold such an low opinion.

[quade 3]

This just in...
http://www.theverge.com/2013/5/15/4332698/dwolla-payments-mtgox-halted-by-homeland-security-seizure-warrant

So, how's that investment looking now?

quade -
The World's Most Boring Skydiver

[kelpdiver 2]

quade

This just in...
http://www.theverge.com/2013/5/15/4332698/dwolla-payments-mtgox-halted-by-homeland-security-seizure-warrant

So, how's that investment looking now?

the story seems a bit overblown - MtGox is still running and still by far the dominant exchange, with roughly 3x the volume of all other exchanges combined.

[ayevee8toryear 0]

This thread is funny,

I have a comrade that recently taught me about bit-coin.

He started buying them in February and chucked a few grand at them each month for a while..

At the peak of the 'bubble' his $20k investment was worth over $80k... obviously he missed out on the $80k but he has since taken his $20k back out and still has $15k worth.

Not a bad investment if you ask me... $15 k for free (well a little bit of work) in only 3 months.

I have one for now just for shits and giggles... might get one each pay and see how it goes over the next year.

[kelpdiver 2]

ayevee8toryear

Not a bad investment if you ask me... $15 k for free (well a little bit of work) in only 3 months.

I have one for now just for shits and giggles... might get one each pay and see how it goes over the next year.

bingo is fun too, and sometimes you win nicely.

[ryoder 1,384]

Well, *that* was a hell of an investment return!!!

http://www.news.com.au/money/money-matters/norwegian-student-kristoffer-koch-buys-27-in-bitcoin-in-2009-now-he-owns-an-apartment/story-e6frfmd9-1226748159679

"There are only three things of value: younger women, faster airplanes, and bigger crocodiles" - Arthur Jones.

[SkyDekker 1,122]

kelpdiver

Quote

Quote

As soon as people decide they're silly or just for money laundering, the price drops to zero.

I think that's where we disagree. If it's actively used for money laundering or illicit things it will always have some value if the volume is high enough to offload.

The biggest positive use is transmitting money to the third world without getting screwed by Western Union or warlords.

The key is - can you offload to a more usable currency? If it were demonized as 'that money for drug lords' and people avoid it, then how does it still function? It can't endure as a closed loop of drug sales. At some point Scarface needs to buy his Miami palace and "his little friend," and clothes for Michelle. The daily volume right now looks like only about $20-25M USD out of 1-2B, so a .2% float. This is extremely illiquid and if the number of traders drops to just the true believers, then there would be virtually no exchange going on.

Look at how effectively the West squashed funding of WikiLeaks. I think it would be hard for them to scare enough people away from bitcoins, but they could get enough to legislate, particularly if people already hold such an low opinion.

Sure you can...just go the the ATM

http://www.cbc.ca/news/technology/world-s-first-bitcoin-atm-opens-in-vancouver-1.2286877

[kelpdiver 2]

Quote

As of Tuesday morning, Bitcoiniacs reported that it was buying bitcoins for $183.21 each and selling them for $207.37 to $211.32.

Ouch. A 13% bid spread. 17% with the high value. That's what low liquidity does to you.

[base698 1]

It hit $900 a piece today briefly. Settling around $750.

http://bitcoincharts.com/

The senate had a hearing about bitcoin today that was very positive. Likely part of the increase.

[kelpdiver 2]

Iago

The people making the real money on this are the ones selling the parallel servers that do the 'mining.'

any long term holders are making great money to the buyers right now who will likely, in the short term, lose a ton. Seems like a fantastic way to launder money.

It's interesting - looking at the charts now, the liquidity for bitcoins is up substantially from when we talked about this earlier in the year. Mt Gox has been passed by a Chinese market - each doing over a million trades per month, and the entire float is around 12M. It looks like volume is now close to 1% of the float per day on average.

Still staying clear, for the same reasons I'm not interested in gold. It only has the value that its holders believe it should have.

[weekender 0]

the entire thing seems so risky. everything about them is sketchy and speculative. I suppose if someone is a gambler and willing to risk it all, go for it. I would not put any money into them i was not willing to lose completely.

I know nothing about mining for them but i bet that is a safer investment. buy a fancy computer and create the coins. then immediately dump them into this highly speculative market for a quick profit. worse case scenario, if the whole thing implodes, you are left with a very good usable computer.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[Rick 67]

One of our project managers left last year to become a miner. He has a hell of a computer system set up... well 2 actually 1 here in Orlando and 1 up in Kansas City. He is riding high on it now. I am way to conservative with my money to invest in these.

It looks like they are a lot better of an investment than the Iraqi Dinar scams going on now. Of course at $750 they may have peaked. Who knows, thats why it's called speculation right?

You can't be drunk all day if you don't start early!

[weekender 0]

Rick

One of our project managers left last year to become a miner. He has a hell of a computer system set up... well 2 actually 1 here in Orlando and 1 up in Kansas City. He is riding high on it now. I am way to conservative with my money to invest in these.

It looks like they are a lot better of an investment than the Iraqi Dinar scams going on now. Of course at $750 they may have peaked. Who knows, thats why it's called speculation right?

I think you should strongly reconsider your "investment" strategy if its between Bitcoins and Iraqi Dinar's. I am not a CFP but i bet you have more and better choices out there. Hah

"The point is, I'm weird, but I never felt weird."
John Frusciante

[Rick 67]

weekender

***One of our project managers left last year to become a miner. He has a hell of a computer system set up... well 2 actually 1 here in Orlando and 1 up in Kansas City. He is riding high on it now. I am way to conservative with my money to invest in these.

It looks like they are a lot better of an investment than the Iraqi Dinar scams going on now. Of course at $750 they may have peaked. Who knows, thats why it's called speculation right?

I think you should strongly reconsider your "investment" strategy if its between Bitcoins and Iraqi Dinar's. I am not a CFP but i bet you have more and better choices out there. Hah


Not my strategy. My friend is trying to get me to invest in Bitcoins. My Wife's Uncle has bought a shit load of Iraqi Dinar and tells me he will be a millionaire any day now. He says if I don't invest now I will miss the boat.

I believe in the saying " If it seems to good to be true it probably isn't."

You can't be drunk all day if you don't start early!

[kelpdiver 2]

Rick

He says if I don't invest now I will miss the boat.

I believe in the saying " If it seems to good to be true it probably isn't."

When friends say that, they may be well meaning.
When strangers say it, it's because they want to sell the product to you and lock in their gains.

But you only have to look at the price chart for bitcoins to see the gigantic risk in entering now.

Mining made good money a few years ago, now I suspect it's tough going. Each subsequent bitcoin is harder to create than the one before, and at $685 or $750 you have to battle a bunch of existing miners. On the plus side - you get 1 and you've already paid for a top end GPU.

[weekender 0]

i knew you were kidding. so was i. the way you worded it was humorous though. i imagine anytime your comparing an "investment" to Iraqi currency you have made a series of poor decisions.

I find the mining aspect interesting. I would enjoy speaking to anyone who is involved in it. Def worth buying them a few drinks to learn more. im a bit of a mining groupie. i've fished with coal miners and find everything they say fascinating. also, i never miss an episode of Gold Rush or Bering Sea Gold. there is something bad ass about mining. since im basically a sissy, mining with a computer might work. hah.

"The point is, I'm weird, but I never felt weird."
John Frusciante

[base698 1]

Quote

the entire thing seems so risky. everything about them is sketchy and speculative. I suppose if someone is a gambler and willing to risk it all, go for it. I would not put any money into them i was not willing to lose completely.

I don't understand this line of thought. Why is it all or nothing? Can't you just invest 1% in it and hold? If you'd of bought at previous highs and held for a few years your return would be astronomical. Three years ago some friends from work and I bought $300 worth when it was at $12. Over time it sunk down to $3 and I bought a few more. He sold when it went down and lost then his shit when it skyrocketed. I had kept it and offloaded it at $200.

If you think through the issues of today's money and understand the problems bitcoin solves, then it isn't that sketchy. One of the problems is how to loan $100 to a goat herder without the bank taking 50%, or how to keep bankers from over leveraging your money. It has insane practical value, but it is speculative and risky, but risk is something that can be managed.

Mining requires a huge investment now, and you'd never mine a block of bitcoins without being part of a mining pool.