Wisdom of Bitcoin

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bobcat2
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Wisdom of Bitcoin

Post by bobcat2 » Sat Jan 27, 2018 8:22 pm

I was a skeptic of bitcoin, until I watched this exteremely thoughtful video on the plusses and minuses of bitcoin. How could I have been so wrong. :shock: :oops:

Link - https://www.youtube.com/watch?v=g-zIbVE ... e=youtu.be

Tip of the hat to Greg Mankiw for directing me to this bitcoin wisdom :!:

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Alexa9
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Re: Wisdom of Bitcoin

Post by Alexa9 » Sat Jan 27, 2018 8:24 pm

Bitcoin is hindsight bias in full effect. No one can predict the next Bitcoin. It is pointless to try to.

petscii
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Re: Wisdom of Bitcoin

Post by petscii » Sat Jan 27, 2018 8:55 pm

As long as you actually understand the utility of bitcoin is the inherent value, not the fact that the drooling masses ran up the price.

If you understand that, then it is not too late. If you don't then yes, it is in fact too late.

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Re: Wisdom of Bitcoin

Post by Sockpuppet » Sat Jan 27, 2018 8:56 pm

petscii wrote:
Sat Jan 27, 2018 8:55 pm
As long as you actually understand the utility of bitcoin is the inherent value, not the fact that the drooling masses ran up the price.

If you understand that, then it is not too late. If you don't then yes, it is in fact too late.
What is the inherent value of bitcoin?

petscii
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Re: Wisdom of Bitcoin

Post by petscii » Sat Jan 27, 2018 8:58 pm

Being able to transfer money to any point on the planet with an Internet connection with out censorship.

thx1138
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Re: Wisdom of Bitcoin

Post by thx1138 » Sat Jan 27, 2018 8:59 pm

Sockpuppet wrote:
Sat Jan 27, 2018 8:56 pm
petscii wrote:
Sat Jan 27, 2018 8:55 pm
As long as you actually understand the utility of bitcoin is the inherent value, not the fact that the drooling masses ran up the price.

If you understand that, then it is not too late. If you don't then yes, it is in fact too late.
What is the inherent value of bitcoin?
Didn't you watch the video? Scarcity makes nothing worth something!

I forgot all about that channel, a bunch of other great ones on there.

thx1138
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Re: Wisdom of Bitcoin

Post by thx1138 » Sat Jan 27, 2018 9:00 pm

petscii wrote:
Sat Jan 27, 2018 8:58 pm
Being able to transfer money to any point on the planet with an Internet connection with out censorship.
Because no one has figured out how to censor the internet yet...

...oh wait.

Momus
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Re: Wisdom of Bitcoin

Post by Momus » Sat Jan 27, 2018 9:03 pm

There is no scarcity if there is a new crypto just the same if not better than bitcoin every month...

It's like picking the right stock out of 1500 Cryptos at dot.com bubble. 99% is worthless.

am
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Re: Wisdom of Bitcoin

Post by am » Sat Jan 27, 2018 9:11 pm

I like the idea of bitcoin as a portable store of value which can evade government control, confiscation, collapse, etc. Years ago when family immigrated to America, all their valuables had to be left behind. It would be nice to have say 1/2 of networth stored in something that could be protected and accessed anywhere in the world there is an internet connection. In the case we needed to move somewhere because of a crisis and leave our valuables behind, it would be nice to have a pot of money waiting somewhere.

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Re: Wisdom of Bitcoin

Post by nisiprius » Sat Jan 27, 2018 9:15 pm

petscii wrote:
Sat Jan 27, 2018 8:58 pm
Being able to transfer money to any point on the planet with an Internet connection with out censorship.
For a fee of $40.

And as of 2018 it's not really accurate to call it "money" because of the great difficulty in using Bitcoin for transactions. All of the momentum of "so-and-so accepts Bitcoin," circa 2014, has ground to a complete halt, and in fact places that once accepted Bitcoin (online gaming company Steam, payment processor Stripe) have stopped accepting it. It is some kind of weird commodity that cannot be transacted directly. A supermarket won't accept gold, you have to take it to the local coin and stamp shop and sell it to them for fiat money and take that to the supermarket. In like manner, Bitcoin must first be sold to a willing buyer who is willing to pay you in fiat money.

Bitcoin is not money. Not yet. And less so than four years ago. Maybe it was supposed to be money, maybe people hoped it would become money, maybe the rhetoric of "coin" and "cryptocurrency" were meant sincerely. In 2014, maybe Bitcoin was starting to look as significant as Disney Dollars or BerkShares. But if so, Bitcoin has failed. And because the mining hardware is, apparently, purpose-built to mine bitcoin only, the large and expensive mining installations can't be repurposed to anything else.
Last edited by nisiprius on Sat Jan 27, 2018 9:36 pm, edited 2 times in total.
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Re: Wisdom of Bitcoin

Post by scottinmet » Sat Jan 27, 2018 9:18 pm

On the way in to work the other morning I was listening to a radio ad where some guy was selling his bitcoin services. He said just imagine what will happen to the value of bitcoin if Amazon and Ebay begin accepting bitcoin in transactions.

I thought about it and concluded yes, if they began accepting bitcoin the value of bitcoin would go through the roof.

Then I thought about it for a second longer and concluded, if amazon and ebay' began accepting bitcoin then their stock would probably crash through the floor. What major corporation would accept such a volatile form of currency in trade for real goods and how would they explain that to their shareholders?

I then turned the radio off and thought about my boring old index funds for the rest of the way to work.

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in_reality
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Re: Wisdom of Bitcoin

Post by in_reality » Sat Jan 27, 2018 9:32 pm

petscii wrote:
Sat Jan 27, 2018 8:58 pm
Being able to transfer money to any point on the planet with an Internet connection with out censorship.
I personally think it's a disservice to investors to allow comments like this, but when you post on how that transferring ability can and is misused and harmful to society so thus liable to be subject to regulation, the post gets deleted by the mods.

Evil has existed since the beginning of time, but I don't agree with making it's sale easier. I think that Martin Luther King Jr's quote applies "The ultimate tragedy is not the oppression and cruelty by the bad people but the silence over that by the good people.".

https://cacm.acm.org/magazines/2017/3/2 ... b/fulltext

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Re: Wisdom of Bitcoin

Post by fortfun » Sat Jan 27, 2018 9:38 pm


thx1138
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Re: Wisdom of Bitcoin

Post by thx1138 » Sat Jan 27, 2018 9:43 pm

am wrote:
Sat Jan 27, 2018 9:11 pm
I like the idea of bitcoin as a portable store of value which can evade government control, confiscation, collapse, etc.
So the problem with bitcoin specifically is that it isn't anonymous at all. It takes not too much effort to track who owns coins by a variety of means. Hence in the case you outline there's a big problem - converting your savings or valuables to bitcoins is traceable to you by the very government you fear. Not likely to work out well...

This whole "bitcoin avoids capital controls" thing is often oversold. Indeed it is a different way to attempt to avoid capital controls but it was never engineered as such and has limitations.

Again in the above example once you've been flagged as having bitcoins in Unfriendlyland it is quite easy to ensure the coins "stay" in Unfriendlyland as a condition of you being allowed to leave. In general the idealist boosters of crypto anything overlook the realities of the physical world, as well illustrated by XKCD:

Image

am
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Re: Wisdom of Bitcoin

Post by am » Sat Jan 27, 2018 9:58 pm

thx1138 wrote:
Sat Jan 27, 2018 9:43 pm
am wrote:
Sat Jan 27, 2018 9:11 pm
I like the idea of bitcoin as a portable store of value which can evade government control, confiscation, collapse, etc.
So the problem with bitcoin specifically is that it isn't anonymous at all. It takes not too much effort to track who owns coins by a variety of means. Hence in the case you outline there's a big problem - converting your savings or valuables to bitcoins is traceable to you by the very government you fear. Not likely to work out well...

This whole "bitcoin avoids capital controls" thing is often oversold. Indeed it is a different way to attempt to avoid capital controls but it was never engineered as such and has limitations.

Again in the above example once you've been flagged as having bitcoins in Unfriendlyland it is quite easy to ensure the coins "stay" in Unfriendlyland as a condition of you being allowed to leave. In general the idealist boosters of crypto anything overlook the realities of the physical world, as well illustrated by XKCD:

Image
So how come we still don’t know who the creator of bitcoin is? He owns millions of dollars worth of coins. He could go anywhere in the world, get on the internet and sell.

Sockpuppet
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Re: Wisdom of Bitcoin

Post by Sockpuppet » Sat Jan 27, 2018 10:12 pm

thx1138 wrote:
Sat Jan 27, 2018 8:59 pm
Sockpuppet wrote:
Sat Jan 27, 2018 8:56 pm
petscii wrote:
Sat Jan 27, 2018 8:55 pm
As long as you actually understand the utility of bitcoin is the inherent value, not the fact that the drooling masses ran up the price.

If you understand that, then it is not too late. If you don't then yes, it is in fact too late.
What is the inherent value of bitcoin?
Didn't you watch the video? Scarcity makes nothing worth something!

I forgot all about that channel, a bunch of other great ones on there.
No, I didn’t.

I disagree that scarcity makes nothing worth something. Nothing is worth nothing.

thx1138
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Re: Wisdom of Bitcoin

Post by thx1138 » Sat Jan 27, 2018 10:14 pm

am wrote:
Sat Jan 27, 2018 9:58 pm
thx1138 wrote:
Sat Jan 27, 2018 9:43 pm
am wrote:
Sat Jan 27, 2018 9:11 pm
I like the idea of bitcoin as a portable store of value which can evade government control, confiscation, collapse, etc.
So the problem with bitcoin specifically is that it isn't anonymous at all. It takes not too much effort to track who owns coins by a variety of means. Hence in the case you outline there's a big problem - converting your savings or valuables to bitcoins is traceable to you by the very government you fear. Not likely to work out well...

This whole "bitcoin avoids capital controls" thing is often oversold. Indeed it is a different way to attempt to avoid capital controls but it was never engineered as such and has limitations.

Again in the above example once you've been flagged as having bitcoins in Unfriendlyland it is quite easy to ensure the coins "stay" in Unfriendlyland as a condition of you being allowed to leave. In general the idealist boosters of crypto anything overlook the realities of the physical world, as well illustrated by XKCD:

Image
So how come we still don’t know who the creator of bitcoin is? He owns millions of dollars worth of coins. He could go anywhere in the world, get on the internet and sell.
Because no one was watching bitcoin when he made his coins nor has he transacted them. He never actually "bought" any bitcoins. (Or she perhaps)

Try to "buy" a bitcoin in a police state with run of the mill internet monitoring and controls and well... remember the whole point to the block chain is that the entire thing is public! Academics with no extraordinary resources have ID'd many holders and specific transactions. With a surveillance state much easier.

Now clearly something like bitcoin is going to be easier to get out of a country than physical gold - so don't get me wrong I see exactly why you see the potential appeal. I'm pointing out bitcoin doesn't do a particularly good job of it because it lacks anonymity in any real sense of the word because it was never actually designed to preserve anonymity.

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Re: Wisdom of Bitcoin

Post by thx1138 » Sat Jan 27, 2018 10:16 pm

Sockpuppet wrote:
Sat Jan 27, 2018 10:12 pm
thx1138 wrote:
Sat Jan 27, 2018 8:59 pm
Sockpuppet wrote:
Sat Jan 27, 2018 8:56 pm
petscii wrote:
Sat Jan 27, 2018 8:55 pm
As long as you actually understand the utility of bitcoin is the inherent value, not the fact that the drooling masses ran up the price.

If you understand that, then it is not too late. If you don't then yes, it is in fact too late.
What is the inherent value of bitcoin?
Didn't you watch the video? Scarcity makes nothing worth something!

I forgot all about that channel, a bunch of other great ones on there.
No, I didn’t.

I disagree that scarcity makes nothing worth something. Nothing is worth nothing.
Then you might take a moment to watch at least the first 30 seconds of the video to realize it is actually a parody video. :wink:

You'll follow sarcasm a lot better if you actually look at linked content...

EDIT: I can't really blame you for not watching if you thought it was a serious bitcoin video - that would be a waste.
Last edited by thx1138 on Sat Jan 27, 2018 10:38 pm, edited 2 times in total.

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Epsilon Delta
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Re: Wisdom of Bitcoin

Post by Epsilon Delta » Sat Jan 27, 2018 10:20 pm

am wrote:
Sat Jan 27, 2018 9:58 pm

So how come we still don’t know who the creator of bitcoin is? He owns millions of dollars worth of coins. He could go anywhere in the world, get on the internet and sell.
He hasn't done anything the goverments you fear seriously object to. And the governments you fear tend to frown on other people using drugs and wrenches.

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Re: Wisdom of Bitcoin

Post by Dottie57 » Sat Jan 27, 2018 10:32 pm

bobcat2 wrote:
Sat Jan 27, 2018 8:22 pm
I was a skeptic of bitcoin, until I watched this exteremely thoughtful video on the plusses and minuses of bitcoin. How could I have been so wrong. :shock: :oops:

Link - https://www.youtube.com/watch?v=g-zIbVE ... e=youtu.be

Tip of the hat to Greg Mankiw for directing me to this bitcoin wisdom :!:

BobK


Wisdom indeed!

Sockpuppet
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Re: Wisdom of Bitcoin

Post by Sockpuppet » Sat Jan 27, 2018 10:38 pm

thx1138 wrote:
Sat Jan 27, 2018 10:16 pm
Sockpuppet wrote:
Sat Jan 27, 2018 10:12 pm
thx1138 wrote:
Sat Jan 27, 2018 8:59 pm
Sockpuppet wrote:
Sat Jan 27, 2018 8:56 pm
petscii wrote:
Sat Jan 27, 2018 8:55 pm
As long as you actually understand the utility of bitcoin is the inherent value, not the fact that the drooling masses ran up the price.

If you understand that, then it is not too late. If you don't then yes, it is in fact too late.
What is the inherent value of bitcoin?
Didn't you watch the video? Scarcity makes nothing worth something!

I forgot all about that channel, a bunch of other great ones on there.
No, I didn’t.

I disagree that scarcity makes nothing worth something. Nothing is worth nothing.
Then you might take a moment to watch at least the first 30 seconds of the video to realize it is actually a parody video. :wink:

You'll follow sarcasm a lot better if you actually look at linked content...
Oh, lol.

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camillus
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Re: Wisdom of Bitcoin

Post by camillus » Sat Jan 27, 2018 10:44 pm

The problem with bitcoin is this: it can be replaced by an infinite number of other potential cryptocurrencies with the same or improved characteristics.

It's strength, being digital, is also it's weakness. All it takes is a programmer to develop another cryptocurrency (precisely what is happening in ten thousand places at this very moment). No acts of a sovereign government, no raw ore needs to be mined.

It is pure speculation based on "the greater fool."

mega317
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Re: Wisdom of Bitcoin

Post by mega317 » Sat Jan 27, 2018 10:59 pm

petscii wrote:
Sat Jan 27, 2018 8:58 pm
with out censorship.
Forgive me for not understanding, but what is the value of that? Other than doing illegal things. I don't really care who knows I sent 10 bucks over to China for a POST test card.

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Re: Wisdom of Bitcoin

Post by zaboomafoozarg » Sun Jan 28, 2018 12:13 am

An old friend put thousands of dollars into bitcoin in 2011 and urged me to do the same. He insisted that the government was going to collapse and only bitcoin would withstand the hyperinflation.

Instead, I bought VTSMX.

My investment has doubled since then... and his investment made him a retired multi-millionaire by the time he was 30.

Was he wise or lucky? Was I foolish or unlucky?

I don't know. But I'd much rather be in his shoes right now than mine.

Haven't talked to him in a few years now. Having that much money took him up a few social circle levels.

hilink73
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Re: Wisdom of Bitcoin

Post by hilink73 » Sun Jan 28, 2018 2:39 am

Momus wrote:
Sat Jan 27, 2018 9:03 pm
There is no scarcity if there is a new crypto just the same if not better than bitcoin every month...

It's like picking the right stock out of 1500 Cryptos at dot.com bubble. 99% is worthless.
Well, if nobody is using the new blockchain, it won't be worth anything.
Bitcoin is Bitcoin and stays Bitcoin. The Bitcoin blockchain is unique.
We had this discussion so many times. When will people understand?

Also, there are other blockchains, even Bitcoin forks, but Bitocin still didn't decrease in market cap.

So something with your assumption seems to be wrong here.
That said, I really liked the "Passive Aggressive Relationship Techniques" episode. :mrgreen:


Disclaimer: I'm not a Bitcoin fan. My Bitocoin holdings are negligible compared to my other holdings.

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Re: Wisdom of Bitcoin

Post by hilink73 » Sun Jan 28, 2018 2:48 am

camillus wrote:
Sat Jan 27, 2018 10:44 pm
The problem with bitcoin is this: it can be replaced by an infinite number of other potential cryptocurrencies with the same or improved characteristics.
Still, Bitcoin price increased over all those years despite all alternatives.
It's strength, being digital, is also it's weakness. All it takes is a programmer to develop another cryptocurrency (precisely what is happening in ten thousand places at this very moment). No acts of a sovereign government,
The algorithm is the law. The users are the sovereign.
no raw ore needs to be mined.
The miners put (a lot of) work into securing the blockchain.
Funny enough, this is called mining.
It is pure speculation based on "the greater fool."
We will see.

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Kalo
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Re: Wisdom of Bitcoin

Post by Kalo » Sun Jan 28, 2018 3:07 am

I think Britain should come out with a crypto currency and call it Britcoin. And if it goes up too high in price and people can't sell it because the price is so high, they can come up with a mechanism to get out of it and call that Brexit (an amalgamation of Britcoin and Exit). The marketing practically writes itself.

Kalo
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Re: Wisdom of Bitcoin

Post by nisiprius » Sun Jan 28, 2018 8:25 am

zaboomafoozarg wrote:
Sun Jan 28, 2018 12:13 am
An old friend put thousands of dollars into bitcoin in 2011 and urged me to do the same. He insisted that the government was going to collapse and only bitcoin would withstand the hyperinflation.

Instead, I bought VTSMX.

My investment has doubled since then... and his investment made him a retired multi-millionaire by the time he was 30.

Was he wise or lucky? Was I foolish or unlucky?

I don't know. But I'd much rather be in his shoes right now than mine.

Haven't talked to him in a few years now. Having that much money took him up a few social circle levels.
And my personal circle of some hundreds of acquaintances includes two state lottery jackpot winners, one of $30 million, one of just under $1 million.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 8:51 am

Kalo wrote:
Sun Jan 28, 2018 3:07 am
I think Britain should come out with a crypto currency and call it Britcoin. And if it goes up too high in price and people can't sell it because the price is so high, they can come up with a mechanism to get out of it and call that Brexit (an amalgamation of Britcoin and Exit). The marketing practically writes itself.

Kalo
;-)

My friend, the tenor of the political "debate" right now about Brexit is more or less.

For example, a big "plus" of Brexit is that we can have blue passports again. Instead of the ugly red EU ones.

Seriously. I am talking politicians in national newspapers stuff, here.

And the punchline? We could have blue passports if we were in the EU anyways-- it's a total non issue.

Talking to voters, I think there is absolutely no understanding or awareness of the issues. It seems totally abstract to them.

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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 8:52 am

nisiprius wrote:
Sun Jan 28, 2018 8:25 am
zaboomafoozarg wrote:
Sun Jan 28, 2018 12:13 am
An old friend put thousands of dollars into bitcoin in 2011 and urged me to do the same. He insisted that the government was going to collapse and only bitcoin would withstand the hyperinflation.

Instead, I bought VTSMX.

My investment has doubled since then... and his investment made him a retired multi-millionaire by the time he was 30.

Was he wise or lucky? Was I foolish or unlucky?

I don't know. But I'd much rather be in his shoes right now than mine.

Haven't talked to him in a few years now. Having that much money took him up a few social circle levels.
And my personal circle of some hundreds of acquaintances includes two state lottery jackpot winners, one of $30 million, one of just under $1 million.
I wonder what the odds are of that? being that close to not 1, but 2 winners?

I have a friend whose sibling won several hundred thousand as part of a consortium in a lottery - haven't seen the sibling for about 40 years.

So that's as close to as I come.

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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 8:57 am

hilink73 wrote:
Sun Jan 28, 2018 2:48 am
camillus wrote:
Sat Jan 27, 2018 10:44 pm
The problem with bitcoin is this: it can be replaced by an infinite number of other potential cryptocurrencies with the same or improved characteristics.
Still, Bitcoin price increased over all those years despite all alternatives.
It's strength, being digital, is also it's weakness. All it takes is a programmer to develop another cryptocurrency (precisely what is happening in ten thousand places at this very moment). No acts of a sovereign government,
The algorithm is the law. The users are the sovereign.
property rights are given to you by the state. The state can take them away. You don't have a universal right to live in other countries, so if your state takes them away, you may not be able to move yourself or your money someplace where it does not.

I cannot move to the USA-- as many of your current residents are finding out. You would not find it easy to move here as a permanent resident (UK).

The nation state is the most durable and powerful construct in our personal universe, emerging in early modern Europe (although Absolutist states are at least 3,000 years old). Indeed in the case of Russian citizens (legally) resident in the UK, the long arm of the state reaches even there, a number of prominent critics of Mr. Putin and his circle have turned up dead of late-- heart attack whilst running, hung self in locked bathroom, ingested Polonium 120, stabbed themselves to death with a breadknife (I am serious on that one), suffocated after locking themselves in a suitcase (no, not kidding), etc.

We no longer have a Universal Church. We don't have a common agreement as to what constitutes civilization. The State can, and does, rewrite our contractual and property arrangements unilaterally.
no raw ore needs to be mined.
The miners put (a lot of) work into securing the blockchain.
Funny enough, this is called mining.
It is pure speculation based on "the greater fool."
We will see.
[/quote]

I think the long arm of the State is full at work on this one.
Last edited by Valuethinker on Sun Jan 28, 2018 9:01 am, edited 1 time in total.

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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 8:59 am

hilink73 wrote:
Sun Jan 28, 2018 2:39 am
Momus wrote:
Sat Jan 27, 2018 9:03 pm
There is no scarcity if there is a new crypto just the same if not better than bitcoin every month...

It's like picking the right stock out of 1500 Cryptos at dot.com bubble. 99% is worthless.
Well, if nobody is using the new blockchain, it won't be worth anything.
Bitcoin is Bitcoin and stays Bitcoin. The Bitcoin blockchain is unique.
We had this discussion so many times. When will people understand?
Never. Or maybe it's a warning of the top if we all come to accept it?

Maybe you ought to discuss this on other internet Forums where people are more receptive?

Rather than trying to educate us closed-minded folk here? Wasting your precious minutes of your life preaching to the unconvertable, a bunch of anonymous folk on the Internets?

After all, there's lots of things we reject-- like active equity fund management.

thx1138
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Re: Wisdom of Bitcoin

Post by thx1138 » Sun Jan 28, 2018 9:00 am

zaboomafoozarg wrote:
Sun Jan 28, 2018 12:13 am
An old friend put thousands of dollars into bitcoin in 2011 and urged me to do the same. He insisted that the government was going to collapse and only bitcoin would withstand the hyperinflation.
Being "right" for the "wrong" reasons. No stronger an example for being careful not to confuse strategy and outcomes. Douglas Adams was particularly fond of including somewhat ridiculous scenarios akin to this in his stories.
nisiprius wrote:
Sun Jan 28, 2018 8:25 am
And my personal circle of some hundreds of acquaintances includes two state lottery jackpot winners, one of $30 million, one of just under $1 million.
I know a fair number of "Microsoft Millionaires" - though really more like >$10M for the folks I'm thinking of. They didn't do anything other than start working as coders there in the early 90s and stick around for a bit. Very happy for them. At least one though attempted to parlay his good fortune into his own startup to make even more money. That didn't go so well. He said though his only regret was not paying off his mother's mortgage when he had the chance. It was a few $100K. I recall that moment when my brain and mouth couldn't stop itself and I blurted "you couldn't have put all of your money into your startup??!?" There followed an awkward quiet moment.

I also knew a handful of folks at Etoys. The most amusing one was an early "executive" who got kicked out due to unimaginable incompetence but got kicked out early enough that his shares were actually not restricted at the time of the IPO. Sold somewhere north of $30M before it crashed. Most everyone else got zilch because shares were restricted until after the crash. This guy did the whole "entrepreneur" lecture circuit for awhile after despite the fact he actually had no knowledge or experience about the topic but since he "led" a startup at one point and was now rich clearly he was someone to listen to!

It's been so long I can't remember if Etoys was NQSO or ISO - probably a mixture I expect - but also know a few people who got reamed by AMT on NQSO from various companies that had hugely taxed paper gains but zero actual realized gains.

Point is there are always people around you getting "lucky". Some of it seems well deserved. Some of it seems an injustice. And at the same time there are plenty of nice folks with very sour "luck". When you here the details of many of these situations you start to better understand the phrase "lottery like rewards" that comes up in behavioral finance.

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JoMoney
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Re: Wisdom of Bitcoin

Post by JoMoney » Sun Jan 28, 2018 9:01 am

Economist Allan H. Meltzer once said, "We don’t have the gold standard. It’s not because we don’t know about the gold standard, it’s because we do."

*replace [gold] with [Bitcoin or whatever digital or physical commodity you wish]
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Valuethinker
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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 9:07 am

in_reality wrote:
Sat Jan 27, 2018 9:32 pm
petscii wrote:
Sat Jan 27, 2018 8:58 pm
Being able to transfer money to any point on the planet with an Internet connection with out censorship.
I personally think it's a disservice to investors to allow comments like this, but when you post on how that transferring ability can and is misused and harmful to society so thus liable to be subject to regulation, the post gets deleted by the mods.

Evil has existed since the beginning of time, but I don't agree with making it's sale easier. I think that Martin Luther King Jr's quote applies "The ultimate tragedy is not the oppression and cruelty by the bad people but the silence over that by the good people.".

https://cacm.acm.org/magazines/2017/3/2 ... b/fulltext
The libertarian argument (which I have some sympathy with) is that the state and authorities (religious, etc.) have always extended "evil" to include a whole pile of things that aren't actually harmful to other people, but which they don't like.

Use of drugs. Abortion. Commercial transactions with Iran. Owning guns. Pornography is entirely a societal/ cultural definition, as a consideration of what is considered pornographic in Saudi Arabia (pictures of unveiled women) or Iran, vs. what is available in Japan (a pretty extraordinary culture) will tell you.

All of the above are "evil" in someone else's definition, but harder to show harm to other people.

And there's nothing that tells me that say restricting gun ownership is bad, but restricting what someone else defines as obscene media is good. But my jurisdiction happens to restrict both quite heavily-- which would enrage someone living in many parts of the USA (the former, not the latter). BTW marijuana is still a Class B drug here, which it is not in many US states now (but the US Federal Government disagrees).

I think what is wise to observe in the case of cryptocurrencies is that states abhor a power vacuum, and tend to fill it. It is abundantly clear now that the Search & Social Media functions of the internet can be controlled- China manages it for 1.4 billion people pretty effectively.

Thus, ways will be found to track and catalogue crypto transactions.

Valuethinker
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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 9:11 am

JoMoney wrote:
Sun Jan 28, 2018 9:01 am
Economist Allan H. Meltzer once said, "We don’t have the gold standard. It’s not because we don’t know about the gold standard, it’s because we do."

*replace [gold] with [Bitcoin or whatever digital or physical commodity you wish]
;-)

Good one. One of those (definitely in the minority) cases of quoting an Authority, where there's actually content in that quote and it's not just an example of poor or unpersuasive logic*.


* if an immunologist or medical doctor tells me vaccines are good, or that this drug has these known effects, by and large it's right to accept their view. Or if a nuclear physicist or arms control researcher tells me "nuclear war would be devastating". But in a lot of human interaction, there's a degree of opinion. When a well recognized economist says "economic theory says X" or "empirical research says Y" then I tend to pay attention, it's when they go off into general opinions (uncaveated) that I get sceptical.

Milton Friedman said "inflation is everywhere and always a monetary phenomenon". But in fact that's not true, or it's true in a way that is not particularly helpful.

Valuethinker
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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 9:15 am

thx1138 wrote:
Sun Jan 28, 2018 9:00 am


Point is there are always people around you getting "lucky". Some of it seems well deserved. Some of it seems an injustice. And at the same time there are plenty of nice folks with very sour "luck". When you here the details of many of these situations you start to better understand the phrase "lottery like rewards" that comes up in behavioral finance.
Sounds like we both lived through the same internet era?

There were just some extraordinary clowns. You see that also with people who run active funds- some are really sharp, but others seem to have just been lucky.

It's good to be reminded of the capriciousness of life and fortune. And survivor bias, in that we only remember the ones that got rich, not the ones who failed.

In the same way but the opposite direction, if you have ever had a friend who in youth or middle age has a terminal illness, you realize that maybe one is not so unfortunate after all.

Friends have MS, have died in plane crashes, have or have had cancer or died of sudden cardiac arrest.

We don't buy time from Death, we only rent it. And Death will always collect its payment.*


* someone is going to write "when he arrives on his horse, Binky" ;-). But Terry Pratchett himself died of early onset Alzheimer's. So extraordinary success and talent, and being loved by millions, did not hold Death up.


Tweets from Sir Terry himself
Terry Pratchett

@terryandrob
AT LAST, SIR TERRY, WE MUST WALK TOGETHER.

3:06 PM - Mar 12, 2015
752 752 Replies 29,283 29,283 Retweets 19,428 19,428 likes
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Terry Pratchett

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Terry took Death’s arm and followed him through the doors and on to the black desert under the endless night.
Last edited by Valuethinker on Sun Jan 28, 2018 9:24 am, edited 1 time in total.

hilink73
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Re: Wisdom of Bitcoin

Post by hilink73 » Sun Jan 28, 2018 9:22 am

Valuethinker wrote:
Sun Jan 28, 2018 8:59 am
hilink73 wrote:
Sun Jan 28, 2018 2:39 am
Momus wrote:
Sat Jan 27, 2018 9:03 pm
There is no scarcity if there is a new crypto just the same if not better than bitcoin every month...

It's like picking the right stock out of 1500 Cryptos at dot.com bubble. 99% is worthless.
Well, if nobody is using the new blockchain, it won't be worth anything.
Bitcoin is Bitcoin and stays Bitcoin. The Bitcoin blockchain is unique.
We had this discussion so many times. When will people understand?
Never. Or maybe it's a warning of the top if we all come to accept it?

Maybe you ought to discuss this on other internet Forums where people are more receptive?

Rather than trying to educate us closed-minded folk here? Wasting your precious minutes of your life preaching to the unconvertable, a bunch of anonymous folk on the Internets?

After all, there's lots of things we reject-- like active equity fund management.
Well, we heard that argument over and over again and it's objectively not true.


You can start as many blockchains you want but it's a different blockchain and not Bitcoin.
Which voids the scarcity argument.

So, I do not need other more receptive forums on the Internet and I do not need to preach.
Just explaining a fact here.

And again: my Bitcoin holdings are negligible and I do not need to convert anybody.
Just facts, right?

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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 9:25 am

hilink73 wrote:
Sun Jan 28, 2018 9:22 am
Valuethinker wrote:
Sun Jan 28, 2018 8:59 am
hilink73 wrote:
Sun Jan 28, 2018 2:39 am
Momus wrote:
Sat Jan 27, 2018 9:03 pm
There is no scarcity if there is a new crypto just the same if not better than bitcoin every month...

It's like picking the right stock out of 1500 Cryptos at dot.com bubble. 99% is worthless.
Well, if nobody is using the new blockchain, it won't be worth anything.
Bitcoin is Bitcoin and stays Bitcoin. The Bitcoin blockchain is unique.
We had this discussion so many times. When will people understand?
Never. Or maybe it's a warning of the top if we all come to accept it?

Maybe you ought to discuss this on other internet Forums where people are more receptive?

Rather than trying to educate us closed-minded folk here? Wasting your precious minutes of your life preaching to the unconvertable, a bunch of anonymous folk on the Internets?

After all, there's lots of things we reject-- like active equity fund management.
Well, we heard that argument over and over again and it's objectively not true.


You can start as many blockchains you want but it's a different blockchain and not Bitcoin.
Which voids the scarcity argument.

So, I do not need other more receptive forums on the Internet and I do not need to preach.
Just explaining a fact here.

And again: my Bitcoin holdings are negligible and I do not need to convert anybody.
Just facts, right?
You are bashing your head against the proverbial brick wall.

And that leads to the interesting question as to why you are doing it? Who are you trying to persuade of the truth?

Yourself? Or someone else here?

Which audience are you aiming yourself at?

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Re: Wisdom of Bitcoin

Post by hilink73 » Sun Jan 28, 2018 9:40 am

Valuethinker wrote:
Sun Jan 28, 2018 8:57 am
hilink73 wrote:
Sun Jan 28, 2018 2:48 am
camillus wrote:
Sat Jan 27, 2018 10:44 pm
The problem with bitcoin is this: it can be replaced by an infinite number of other potential cryptocurrencies with the same or improved characteristics.
Still, Bitcoin price increased over all those years despite all alternatives.
It's strength, being digital, is also it's weakness. All it takes is a programmer to develop another cryptocurrency (precisely what is happening in ten thousand places at this very moment). No acts of a sovereign government,
The algorithm is the law. The users are the sovereign.
property rights are given to you by the state. The state can take them away. You don't have a universal right to live in other countries, so if your state takes them away, you may not be able to move yourself or your money someplace where it does not.

I cannot move to the USA-- as many of your current residents are finding out. You would not find it easy to move here as a permanent resident (UK).

The nation state is the most durable and powerful construct in our personal universe, emerging in early modern Europe (although Absolutist states are at least 3,000 years old). Indeed in the case of Russian citizens (legally) resident in the UK, the long arm of the state reaches even there, a number of prominent critics of Mr. Putin and his circle have turned up dead of late-- heart attack whilst running, hung self in locked bathroom, ingested Polonium 120, stabbed themselves to death with a breadknife (I am serious on that one), suffocated after locking themselves in a suitcase (no, not kidding), etc.

We no longer have a Universal Church. We don't have a common agreement as to what constitutes civilization. The State can, and does, rewrite our contractual and property arrangements unilaterally.
no raw ore needs to be mined.
The miners put (a lot of) work into securing the blockchain.
Funny enough, this is called mining.
It is pure speculation based on "the greater fool."
We will see.
I think the long arm of the State is full at work on this one.
[/quote]

Valuethinker, I'm not sure if I understand what you mean.

What I'm saying is: Bitcoin has no government. That's what the OP said ("No acts of a sovereign government")
Not sure how the Russians come into play here.

Also, if you do not completely censor the Internet (by every state in the world), you cannot control a blockchain technology.
Even if there would be 100% control, you could still establish rogue networks.

You could also create offline transactions, which could be fed into the system "in the underground".
Also, you could pay offline with Bitcoin, giving away the private key on a piece of paper.
The only choke point for control would be centralized exchanges (exactly what we have today), where cryptocurrencies are converted back into regular currencies. Legal exchanges have a KYC procedure, so "washing" cryptocurrencies is more difficult with legal exchanges.
So, you could probably pawn your paper Bitcoin wallet for cash if you want to stay in the underground.

I'm not here to defend Bitcoin.
But some posts show their lack of understanding of the underlying technology, which makes discussions of such a technical topic quite difficult.
Especially, if you presume me needing to preach or whatever. I normally appreciate your comments very much.

Larry2623
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Re: Wisdom of Bitcoin

Post by Larry2623 » Sun Jan 28, 2018 9:46 am

And what % of law abiding people need to go "anywhere in the world" to move money in secret?

hilink73
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Re: Wisdom of Bitcoin

Post by hilink73 » Sun Jan 28, 2018 9:48 am

Valuethinker wrote:
Sun Jan 28, 2018 9:25 am


You are bashing your head against the proverbial brick wall.

And that leads to the interesting question as to why you are doing it? Who are you trying to persuade of the truth?

Yourself? Or someone else here?

Which audience are you aiming yourself at?
Valuethinker, thanks.

I think there's a difference between the talk if crypto is an investment or speculation and technical facts.
I know that many here do not like Bitcoin/crypto and I try not to argue about that anymore, because I know it leads to nowhere.

But I think correcting the misunderstanding of a technical fact is completely different from opinions (like the favourites here: Intl allocation or factor investing). No winner there.

Normally, if someone corrects me on a technical fact, I take that as on opportunity to think about it and its implications.
Maybe this is a much to high standard and I should quit these discussions altogether, as people probably won't change their opinion (read misunderstood fact) anyway. Sad. But probably true.

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JoMoney
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Re: Wisdom of Bitcoin

Post by JoMoney » Sun Jan 28, 2018 9:50 am

Larry2623 wrote:
Sun Jan 28, 2018 9:46 am
And what % of law abiding people need to go "anywhere in the world" to move money in secret?
Among the odd things, given all the talk of 'anonymity', is it's not even secret. The blockchain pretty much openly advertises to everybody every single transaction going back forever. Unless the owner is willing to jump through 'money laundering' like hoops every time they trade to attempt compartmentalization of everything they do, there are some pretty severe privacy concerns. If people actually used it as currency, it would open up a whole new world to stalkers (and worse).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Wisdom of Bitcoin

Post by hilink73 » Sun Jan 28, 2018 9:55 am

Valuethinker wrote:
Sun Jan 28, 2018 9:07 am
Thus, ways will be found to track and catalogue crypto transactions.
Yes, of couse.
That's what a blockchain is there for. Immutable is the keyword here.
And there is some scientific research about transaction relationscships on the blockchains.
Doesn't look good for anonymity.

(Another fact, which is often completely misunderstood. Especially by our great media outlets who are more on the "Drugs!" "Crime!" bandwaggon.)

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Re: Wisdom of Bitcoin

Post by Valuethinker » Sun Jan 28, 2018 10:15 am

hilink73 wrote:
Sun Jan 28, 2018 9:40 am
Valuethinker wrote:
Sun Jan 28, 2018 8:57 am
hilink73 wrote:
Sun Jan 28, 2018 2:48 am
camillus wrote:
Sat Jan 27, 2018 10:44 pm
The problem with bitcoin is this: it can be replaced by an infinite number of other potential cryptocurrencies with the same or improved characteristics.
Still, Bitcoin price increased over all those years despite all alternatives.
It's strength, being digital, is also it's weakness. All it takes is a programmer to develop another cryptocurrency (precisely what is happening in ten thousand places at this very moment). No acts of a sovereign government,
The algorithm is the law. The users are the sovereign.
property rights are given to you by the state. The state can take them away. You don't have a universal right to live in other countries, so if your state takes them away, you may not be able to move yourself or your money someplace where it does not.

I cannot move to the USA-- as many of your current residents are finding out. You would not find it easy to move here as a permanent resident (UK).

The nation state is the most durable and powerful construct in our personal universe, emerging in early modern Europe (although Absolutist states are at least 3,000 years old). Indeed in the case of Russian citizens (legally) resident in the UK, the long arm of the state reaches even there, a number of prominent critics of Mr. Putin and his circle have turned up dead of late-- heart attack whilst running, hung self in locked bathroom, ingested Polonium 120, stabbed themselves to death with a breadknife (I am serious on that one), suffocated after locking themselves in a suitcase (no, not kidding), etc.

We no longer have a Universal Church. We don't have a common agreement as to what constitutes civilization. The State can, and does, rewrite our contractual and property arrangements unilaterally.
no raw ore needs to be mined.
The miners put (a lot of) work into securing the blockchain.
Funny enough, this is called mining.
It is pure speculation based on "the greater fool."
We will see.
I think the long arm of the State is full at work on this one.
Valuethinker, I'm not sure if I understand what you mean.

What I'm saying is: Bitcoin has no government. That's what the OP said ("No acts of a sovereign government")
Not sure how the Russians come into play here.
Governments decide what is "yours" and what is not. And, in the case of the Russian government, they decide that outside their national borders.

"Property rights" is this fiction, because laws are made by, and enforced by, governments. People talk like they are immutable, or somehow God-given, and they are anything but. They are just a construct of our current phase of civilization and our culture.
Also, if you do not completely censor the Internet (by every state in the world), you cannot control a blockchain technology.
Even if there would be 100% control, you could still establish rogue networks.

You could also create offline transactions, which could be fed into the system "in the underground".
Also, you could pay offline with Bitcoin, giving away the private key on a piece of paper.
The only choke point for control would be centralized exchanges (exactly what we have today), where cryptocurrencies are converted back into regular currencies. Legal exchanges have a KYC procedure, so "washing" cryptocurrencies is more difficult with legal exchanges.
So, you could probably pawn your paper Bitcoin wallet for cash if you want to stay in the underground.
I'll take your word for it but I can tell you, from a pure political science point of view (informed by history) that if the world's powers want to shut something down or regulate it on the internet, they will do so.
I'm not here to defend Bitcoin.
But some posts show their lack of understanding of the underlying technology, which makes discussions of such a technical topic quite difficult.
Especially, if you presume me needing to preach or whatever. I normally appreciate your comments very much.
OK. that's fair. I am taking it here that you feel a need to persuade.

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vitaflo
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Re: Wisdom of Bitcoin

Post by vitaflo » Sun Jan 28, 2018 12:46 pm

zaboomafoozarg wrote:
Sun Jan 28, 2018 12:13 am
An old friend put thousands of dollars into bitcoin in 2011 and urged me to do the same. He insisted that the government was going to collapse and only bitcoin would withstand the hyperinflation.

Instead, I bought VTSMX.

My investment has doubled since then... and his investment made him a retired multi-millionaire by the time he was 30.

Was he wise or lucky? Was I foolish or unlucky?
Obviously he was lucky. If he was wise he wouldn't have cashed out into multi-millions of Dollars if he actually thought the government was going to collapse and here would be hyperinflation.

Your friend is the type of person I find funny...people who have no faith in fiat currencies until they end up with a lot of fiat currency. All of a sudden, fiat isn't so bad to be in. Funny that.

finite_difference
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Re: Wisdom of Bitcoin

Post by finite_difference » Sun Jan 28, 2018 1:10 pm

nisiprius wrote:
Sat Jan 27, 2018 9:15 pm
petscii wrote:
Sat Jan 27, 2018 8:58 pm
Being able to transfer money to any point on the planet with an Internet connection with out censorship.
For a fee of $40.

And as of 2018 it's not really accurate to call it "money" because of the great difficulty in using Bitcoin for transactions. All of the momentum of "so-and-so accepts Bitcoin," circa 2014, has ground to a complete halt, and in fact places that once accepted Bitcoin (online gaming company Steam, payment processor Stripe) have stopped accepting it. It is some kind of weird commodity that cannot be transacted directly. A supermarket won't accept gold, you have to take it to the local coin and stamp shop and sell it to them for fiat money and take that to the supermarket. In like manner, Bitcoin must first be sold to a willing buyer who is willing to pay you in fiat money.

Bitcoin is not money. Not yet. And less so than four years ago. Maybe it was supposed to be money, maybe people hoped it would become money, maybe the rhetoric of "coin" and "cryptocurrency" were meant sincerely. In 2014, maybe Bitcoin was starting to look as significant as Disney Dollars or BerkShares. But if so, Bitcoin has failed. And because the mining hardware is, apparently, purpose-built to mine bitcoin only, the large and expensive mining installations can't be repurposed to anything else.
1. A fee of $40 is not that much more than a wire transfer fee, especially considering the bank may also be charging FEX fees. So while higher fees suck for small purchases it’s not such a big deal for larger transactions. Also the high fees are I think correlated with gains so that kind of pays for itself.

2. The volatility of Bitcoin is the worst drawback, and way worse than the fees. You could end up having your money be worth 10% of it’s value in USD in a day or week (or 200%). I think that’s why it’s not generally being accepted for direct payment. Kind of like how Apple stopped accepting Rubles not so long ago.

3. Another drawback which sucks now (I think) is that it’s being treated as a commodity for tax purposes, so you’ll have to pay taxes on gains when you convert to USD.
And you have to track all of that.

4. It is not correct to call Steam an “online gaming company”. They do make online games, but they also offline games, and they created the biggest online PC marketplace for selling video games. And they are also getting into the PC gaming hardware business.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

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JoMoney
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Re: Wisdom of Bitcoin

Post by JoMoney » Sun Jan 28, 2018 1:12 pm

vitaflo wrote:
Sun Jan 28, 2018 12:46 pm
... Your friend is the type of person I find funny...people who have no faith in fiat currencies until they end up with a lot of fiat currency. All of a sudden, fiat isn't so bad to be in. Funny that.
There does seem to be paradox there. Assuming he did cash out to legal tender, I wonder if others expect they'll be able to do the same, and who will be left holding the bag when it becomes widely realized that since some people have taken out more than they put in, not everyone will get what they put in back out. There's not even a clear government entity to "bar the door" or try to stem the tide and bring order (should a mass exodus occur).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Wisdom of Bitcoin

Post by garlandwhizzer » Sun Jan 28, 2018 1:21 pm

Bobcat2, I'm wondering if you're serious or joking about Bitcoin. You have always been a champion of very low risk investing with guaranteed income like annuities or TIPS ladders rather than accepting the risk of equity. Bitcoin is at the opposite end of the risk spectrum, IMO pure speculation although there is no denying it has thus far worked very well for those who got in early. Those who get in now may in the long run do very well or very poorly IMO. Larry, among others, wrote an insightful piece about Bitcoin, describing its hidden risks which are considerable. Speculation can be wildly successful or the opposite of that, a lot like the roulette wheel. Bitcoin could in time go to $100,000 or alternately it could go to zero if governments whose currency it is attempting to replace, regulate it and/or refuse to accept it in exchange for their legal tender. There is a lot of enthusiasm for it among millennials on social media but that seems to me inadequate reassurance for its long term value. If you wish to gamble with a few percent of your portfolio, that's okay I suppose, but personally I prefer more traditional investing to gambling.

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JoMoney
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Re: Wisdom of Bitcoin

Post by JoMoney » Sun Jan 28, 2018 1:23 pm

garlandwhizzer wrote:
Sun Jan 28, 2018 1:21 pm
Bobcat2, I'm wondering if you're serious or joking about Bitcoin....
I think you need to actually follow the link and watch the video. Hopefully that will answer you're question :wink:
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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