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The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion so the least regulated exch

The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion so the least regulated exchanges are going to draw a lot of volume. As a store of value, you’re depending on its continued use as a tool for criminals for it to appreciate in value beyond pure beanie baby-style speculation, so you depend on you still depend sketchy exchanges to drive the price. When the futures contracts come out, there is going to be a massive price correction as bitfinex isn’t going to be able to print enough tether to counteract all the shorts. Once the price of bitcoin starts dropping, people are going to try and cash out of bitfinex en masse, causing a run on the bank and collapsing the whole house of cards. I wouldn’t be surprised to see sub-1000 bitcoins by January.

bonestamp2 9y ago
> The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion Bitcoin is actually terrible for these use cases since the blockchain is public and more traceable than your credit card. If you're really trying to hide your financial transactions then a better option would be something more anonymous like cash, or one of the other cryptocoins that actually does provide anonymity. Your inaccurate and misconceived perception of what bitcoin's use case is would be laughable if it weren't so popular and wrong. I fear you're completely misunderstanding the new world economy. You think that bitcoin is a sideshow for criminals, and seemingly failed to see that maybe a large parallel economy is being created digitally. You see, Bitcoin was created after the 2008 crash where the banks, the organizations we've trusted with our money for a century, made some deliberate and knowingly poor decisions and they lost a lot of money for many of us. Bitcoin was invented so that never has to happen again, so that we can have a secure storage for our money without someone else controlling that money. You might say that bitcoin was created to get away from the wall street criminals. I suggest you pick up some cryptocoin (of any kind) so you're not completely left in the dust as the centralized banks lose power and the decentralized economy reigns.
- amarkov 9y ago
  > You see, Bitcoin was created after the 2008 crash where the banks, the organizations we've trusted with our money for a century, made some deliberate and knowingly poor decisions and they lost a lot of money for many of us. I hadn't heard about that. Which banks lost their customers' money in the 2008 crash?
  - rlpb 9y ago
    The banking system deliberately removed value from all holders of EUR, GBP and USD: https://en.wikipedia.org/wiki/Quantitative_easing https://en.wikipedia.org/wiki/Quantitative_easing
    - sanxiyn 9y ago
      This is false. During QE, inflation rate was below target, so less value than normal was removed from EUR, GBP, USD, etc.
      - rlpb 9y ago
        You can't measure value like that during a recession. Whichever way you look at it, QE removed value from those currencies. If I were to rob you, claiming that the overall robbery rate was lower that year, so you weren't robbed by others, so your expected losses were lower does not change the fact that I robbed you.
      - revmoo 9y ago
        This is the most hilarious defense of the Fed's counterfeiting system I've ever heard.
    - amarkov 9y ago
      If the money in my bank losing value is robbery, isn't Bitcoin robbing me all the time? Bitcoin price changes may not be intentional, but I don't see why that should matter to me.
  - tarsinge 9y ago
Nothorized 9y ago
As someone who has dozens of thousands of dollars (not in Bitcoin, I sold some of them) on an exchange, what should I do with that money ? Should I ask the website to verse everything on my bank account ?
- empath75 9y ago
  If you’re on a legit exchange you should be able to withdraw everything. You should never use an exchange as a bank. Have exactly the money on there that you intend to trade with and no more.
- racont 9y ago
  It's basically the opportunity cost of being able to trade quickly (xc->bank->xc would take 10+ business days) versus the risk of having co-mingled funds in an unregulated exchange. The reason banks are regulated in the US is because the banking system pre 1930s wasn't too dissimilar from crypto now.
stevenj 9y ago
>The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion so the least regulated exchanges are going to draw a lot of volume. I think it's somewhat realistic to envision a future where there is substantial transaction value of legitimate, legal uses. Maybe that future isn't probable, but the idea that the price of bitcoin would ever reach its current price seemed rather unlikely at one point, too.
JauntyHatAngle 9y ago
Not really true, there are legitimate use cases for bitcoin. E.g. Cross Border payments, settlement between untrusted parties in a low amount of time, Transaction Settlement Layer etc. Not saying there aren't a lot of dodgy transactions going on, or that the legitimate use cases will take off, but ignoring the practical use cases is misleading.
zebraflask 9y ago
I'm not conversant on the first part, but as soon as I heard about futures, I thought a correction would be likely. I suppose we'll see.
jnordwick 9y ago
The CME futures won't mean a thing if the spot price they settle against is being manipulated. The future predicts the spot price so the spot moves the future not the other way around. Since the CME futures will be financially settled against the spot index look out for another LIBOR type problem where the future doesnt do anything except predict an artificial number.
- pgwhalen 9y ago
  It seems you misunderstand both derivatives as well as the Libor rigging. The price of a future absolutely can affect the price of its underlying, and the Libor rigging has nothing to do with any of this - the problem was that the value was not determined by the market, it was basically just a “vote.”
  - jnordwick 9y ago
    I work in derivatives trading (well did, recently fx). I see you do too. Fun huh. I meant libor as in a futures price that was disconnected from anything meaningful not a direct comparison. The comparison was to how libor was easily rigged by those submitting quotes that weren't correct. Libor wasn't just a vote but a collection of informal (and incorrect) quotes. When financially settled against a manipulated number the standard ways a future affects the spot (by taking delivery) doesn't apply. Go read the proposed contacts for the future and real time BTC index. If the index is being manipulated the future doesn't stand a chance at correcting it.
    - pgwhalen 9y ago
      Ah I see what you mean, that makes sense. I took quickly jumped to assuming ignorance regarding the Libor thing. I definitely agree with the concept. This reminds me of potential VIX options manipulation. Not quite the same thing, and probably not as susceptible to manipulation, but a similar concept nonetheless: https://www.bloomberg.com/view/articles/2017-05-24/vix-trading-hoaxes-and-blockchain https://www.bloomberg.com/view/articles/2017-05-24/vix-tradi... My experience is equity options, btw.
user5994461 9y ago
Amateur mistake! Bitcoin cannot crash because you cannot sell and cash out in timely manner.

bonestamp2 9y ago

> The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion Bitcoin is actually terrible for these use cases since the blockchain is public and more traceable than your credit card. If you're really trying to hide your financial transactions then a better option would be something more anonymous like cash, or one of the other cryptocoins that actually does provide anonymity. Your inaccurate and misconceived perception of what bitcoin's use case is would be laughable if it weren't so popular and wrong. I fear you're completely misunderstanding the new world economy. You think that bitcoin is a sideshow for criminals, and seemingly failed to see that maybe a large parallel economy is being created digitally. You see, Bitcoin was created after the 2008 crash where the banks, the organizations we've trusted with our money for a century, made some deliberate and knowingly poor decisions and they lost a lot of money for many of us. Bitcoin was invented so that never has to happen again, so that we can have a secure storage for our money without someone else controlling that money. You might say that bitcoin was created to get away from the wall street criminals. I suggest you pick up some cryptocoin (of any kind) so you're not completely left in the dust as the centralized banks lose power and the decentralized economy reigns.

amarkov 9y ago
> You see, Bitcoin was created after the 2008 crash where the banks, the organizations we've trusted with our money for a century, made some deliberate and knowingly poor decisions and they lost a lot of money for many of us. I hadn't heard about that. Which banks lost their customers' money in the 2008 crash?
- rlpb 9y ago
  The banking system deliberately removed value from all holders of EUR, GBP and USD: https://en.wikipedia.org/wiki/Quantitative_easing https://en.wikipedia.org/wiki/Quantitative_easing
  - sanxiyn 9y ago
    This is false. During QE, inflation rate was below target, so less value than normal was removed from EUR, GBP, USD, etc.
    - rlpb 9y ago
      You can't measure value like that during a recession. Whichever way you look at it, QE removed value from those currencies. If I were to rob you, claiming that the overall robbery rate was lower that year, so you weren't robbed by others, so your expected losses were lower does not change the fact that I robbed you.
    - revmoo 9y ago
      This is the most hilarious defense of the Fed's counterfeiting system I've ever heard.
  - amarkov 9y ago
    If the money in my bank losing value is robbery, isn't Bitcoin robbing me all the time? Bitcoin price changes may not be intentional, but I don't see why that should matter to me.
- tarsinge 9y ago

Nothorized 9y ago

As someone who has dozens of thousands of dollars (not in Bitcoin, I sold some of them) on an exchange, what should I do with that money ? Should I ask the website to verse everything on my bank account ?

empath75 9y ago
If you’re on a legit exchange you should be able to withdraw everything. You should never use an exchange as a bank. Have exactly the money on there that you intend to trade with and no more.
racont 9y ago
It's basically the opportunity cost of being able to trade quickly (xc->bank->xc would take 10+ business days) versus the risk of having co-mingled funds in an unregulated exchange. The reason banks are regulated in the US is because the banking system pre 1930s wasn't too dissimilar from crypto now.

stevenj 9y ago

>The only practical use cases for bitcoin as a currency are money laundering, selling drugs, evading capital controls and tax evasion so the least regulated exchanges are going to draw a lot of volume. I think it's somewhat realistic to envision a future where there is substantial transaction value of legitimate, legal uses. Maybe that future isn't probable, but the idea that the price of bitcoin would ever reach its current price seemed rather unlikely at one point, too.

JauntyHatAngle 9y ago

Not really true, there are legitimate use cases for bitcoin. E.g. Cross Border payments, settlement between untrusted parties in a low amount of time, Transaction Settlement Layer etc. Not saying there aren't a lot of dodgy transactions going on, or that the legitimate use cases will take off, but ignoring the practical use cases is misleading.

zebraflask 9y ago

I'm not conversant on the first part, but as soon as I heard about futures, I thought a correction would be likely. I suppose we'll see.

jnordwick 9y ago

The CME futures won't mean a thing if the spot price they settle against is being manipulated. The future predicts the spot price so the spot moves the future not the other way around. Since the CME futures will be financially settled against the spot index look out for another LIBOR type problem where the future doesnt do anything except predict an artificial number.

pgwhalen 9y ago
It seems you misunderstand both derivatives as well as the Libor rigging. The price of a future absolutely can affect the price of its underlying, and the Libor rigging has nothing to do with any of this - the problem was that the value was not determined by the market, it was basically just a “vote.”
- jnordwick 9y ago
  I work in derivatives trading (well did, recently fx). I see you do too. Fun huh. I meant libor as in a futures price that was disconnected from anything meaningful not a direct comparison. The comparison was to how libor was easily rigged by those submitting quotes that weren't correct. Libor wasn't just a vote but a collection of informal (and incorrect) quotes. When financially settled against a manipulated number the standard ways a future affects the spot (by taking delivery) doesn't apply. Go read the proposed contacts for the future and real time BTC index. If the index is being manipulated the future doesn't stand a chance at correcting it.
  - pgwhalen 9y ago
    Ah I see what you mean, that makes sense. I took quickly jumped to assuming ignorance regarding the Libor thing. I definitely agree with the concept. This reminds me of potential VIX options manipulation. Not quite the same thing, and probably not as susceptible to manipulation, but a similar concept nonetheless: https://www.bloomberg.com/view/articles/2017-05-24/vix-trading-hoaxes-and-blockchain https://www.bloomberg.com/view/articles/2017-05-24/vix-tradi... My experience is equity options, btw.

user5994461 9y ago

Amateur mistake! Bitcoin cannot crash because you cannot sell and cash out in timely manner.