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Why I'm Putting All My Savings into Bitcoin (2011)
- 9nGQluzmnq3M 6y agoHe bought in at $3, and as of 2017 he had a 1000x return on his investment. Today that would be circa 3000x. https://falkvinge.net/2017/06/11/right-money-bitcoin-hits-3000-1000x-entry-point-six-years-ago/ https://falkvinge.net/2017/06/11/right-money-bitcoin-hits-30... Interestingly, he was very wrong about the 2nd reason to buy BTC (it hasn't exactly replaced the existing financial system), but the other two -- past performance and "civil liberties" (for drugs, ransomware etc) were close enough.
- netsharc 6y agoDidn't read the links completely, but isn't this just a case of survivorship bias? In 2011 maybe what he spotted was how human greed was going to make the whole thing skyrocket, but over-analyzing it made him think BTC is a solution for the future, etc, etc.
- 9nGQluzmnq3M 6y agoIt was a pretty ballsy bet either way, and I could see it being reposted even if BTC had crashed and burned to $0 like many expected it to. Meanwhile, we're still waiting for John McAfee to consume his reproductive organs on TV: http://dickening.com/ http://dickening.com/
- microtherion 6y agoAs for past performance, absent a rational basis for the price, you could equally write a post "Why I'm Putting All My Savings into Tulips (1635)". And as for civil liberties — Ross Ulbricht might want to have a word with the author regarding the drug use case. And I don't think even the most hardcore libertarians would consider the ransomware business a civil liberty.
- anoraca 6y agoWhat's more free market and "personal responsibility" than allowing ransomware to weed out the weak/unfortunate? That sounds exactly like libertarianism to me.
- 3pt14159 6y agoI bought it at the roughly same price, but sold like 80% of it once it hit $200. Once I actually made 50x my money the price just seemed way too high. Shrug. At least I got a decent return. Calling the top is hard.
- subpixel 6y agoThis is how I (and perhaps others) console myself for not buying at all. With the capital and risk appetite I had at the time, I would have made a nice five-figure profit before selling thinking 'this is the top, for sure'.
- callamdelaney 6y agoThe question is - did he keep it in bitcoin or not?
- quicklime 6y agoLooks like the answer is yes: https://falkvinge.net/2017/06/11/right-money-bitcoin-hits-3000-1000x-entry-point-six-years-ago/ https://falkvinge.net/2017/06/11/right-money-bitcoin-hits-30... Although now he seems unhappy with where bitcoin has ended up: https://falkvinge.net/2017/11/17/new-google-management-decided-search-cost-20-take-eight-hours-deliberately-unreliable-bitcoin/ https://falkvinge.net/2017/11/17/new-google-management-decid...
- Stevvo 6y agoHe later forked the bitcoin network creating the competing "Bitcoin cash".
- HermanMartinus 6y agoIf bitcoin were as useful as pundits suggested, we'd be using it by now. 12 years is a long time to validate an idea. The mobile phone was adopted by pretty much the entire world in under 7 years.
- deleted 6y ago[deleted]
- oleganza 6y agoBitcoin is being used by everyone who held long enough to see over 5x return. Both as savings account, an investment, and a checking account for occasional purchases. It is also being used by all sorts of international freelancers being paid in Bitcoin, although, most of them convert into fiat swiftly to pay bills. So they are not contributing to holding. But Bitcoin is useful for them, as it's a much cheaper and safer way to pay and get paid internationally. Everyone else is a speculator, sitting on their stash, waiting for price to climb up. That's pure speculators/investors, who use Bitcoin to diversify their porfolio of whatever else they got. And as such, Bitcoin is highly useful, as it provides virtually unlimited upside with limited downside.
- cwhiz 6y agoThe value of Bitcoin as an investment/security ruins the usefulness of Bitcoin as a currency. If Bitcoin were stable enough to be used as a currency, it would ruin the value of Bitcoin as an investment/security. Personally, I don't think most people care about Bitcoin as a currency. There is some sizable percentage of people who bought in the run up to $20k who are just waiting to make their money back.
- jhoechtl 6y agoBitcoin inherently is unsuitable to ve used as a currency. Transaction fees are to high and the hash rate means waiting for to long for a transactiom to be approved. Imagine standing in the queue at your supermarket waiting for a bitcoin transaction approval.
- framecowbird 6y ago> Use case: the key advantage for bitcoin is that it does away with all bureaucracy, all transaction fees, and perhaps foremost, all transaction delays and gatekeepers in the financial system. Can anybody comment on the state of this today, right now? Personally it seems like bitcoin would involve _more_ bureaucracy and delays for me than using the regular banking system. However I'm sure I'm not representative. Are there other situations where bitcoin does, right now, reduce bureaucratic overhead?
- motorcycleman9 6y agoBuying drugs online. Sending money to venezuela. Keeping millions of dollars untouched by intermediaries by memorizing a secret phrase and deleting all other records.
- fafk 6y agoNot just Venezuela, it's being utilized for money transfers among some African countries where the banking system doesn't support it well.
- sparkie 6y agoBitcoin eliminates card fraud. Once a seller has received the payment and had it confirmed, which takes approximately 1 hour, there is no way it can be reversed. In the current banking system, transactions can be reversed at any time - typically up to 6 months, but there's no definite finality. Anyone who has sold goods online has probably experienced fraud at some point, and has had to price their goods accordingly to account for potential losses. Of course, seller fraud is still possible - the complete opposite of how PayPal works, where the buyer is always right. Seller fraud is mostly preventable with reputation systems. A seller accumulates more feedback than a buyer, but it requires the consumer take responsibility in checking who they're buying from. (People being responsible for their own purchases, imagine that?)
- imtringued 6y ago>(People being responsible for their own purchases, imagine that?) Why would you ever want to defend fraud? There is no justification for fraud on either side. Especially when first parties like Amazon stand to profit off of it and therefore do nothing to stop it.
- oleganza 6y agoInterestingly, past performance of the last 9 years did not change much in terms of perception: 1. People who believe that Bitcoin can eat the world, do not care when it goes up and down. Periodic rallies are unsurprising and upper limit is still to be reached (at very least, the entire mass of gold - about $8 trillion). It's still early and cheap at current $200 bln capitalization. 2. People who do not buy the premise ("displace fiat and physical moneys"), or don't think that Bitcoin is going to deliver ("something better will come along"), do not care about the price either - it's just a giant bubble waiting to pop. 3. Plus a crowd of short-term speculators who are no different than Forex people, just with higher volatility at hand.
- sparkie 6y agoOne thing that has changed is that the number of people who've gone from 2 to 1 has increased, and the number of people who've gone from 1 to 2 has decreased.
- paulgb 6y agoFrom my point of view, it seems like the net movement has been in the opposite direction. - I used to see brick-and-mortar and online businesses accept Bitcoin, and ATMs; these have all but dried up. - As the mining difficulty has increased, more people are genuinely concerned about the carbon footprint. - I've seen more pessimism about scalability, as off-chain solutions have failed to meaningfully materialize. - Post the big bubble of 2018, the public Bitcoin "brand" is basically tied to get-rich-quick scams and ransomware. Even if insiders believe that it's more than that, the public perception is important if it is to be adopted beyond current insiders.
- sparkie 6y ago> I used to see brick-and-mortar and online businesses accept Bitcoin, and ATMs; these have all but dried up. People were accepting bitcoin for payments under a flawed assumption that a zero-confirmation transaction was in some way "secure," despite this not being enforced in any way by bitcoin's consensus rules. The introduction of RBF made it clearer to people who had made this bad assumption, and they revised their policies about accepting unconfirmed payments. ATMs are still around, and growing in number, but they seem to be getting more expensive to use. See coinatmradar.com. There are magnitudes more now in 2020 than there were in 2015. > As the mining difficulty has increased, more people are genuinely concerned about the carbon footprint. People who think this need to ask themselves: "what can I do about it?" The answer to this is absolutely nothing. People are going to mine bitcoin, and you're going to have to get over it, because you can't change their decision. If it is inevitable that people are going to mine bitcoin, then rejecting bitcoin because you don't agree with that is simply self-harm. You are foregoing potential benefits (of price appreciation, technological improvement, etc) because of a religious-like belief that humanity would be better off using less electricity. (Ironically while spending half the day in front of a computer, having a TV in every room, carrying a smartphone around 24 hours a day and cooling down with the aircon.) > I've seen more pessimism about scalability, as off-chain solutions have failed to meaningfully materialize. They are materializing. The Lightning Network is running now, and improving frequently. I suspect people who are pessimistic about this have not actually attempted to run their own node yet and are waiting for adoption to grow first. Kind of reminds me of people who were waiting for Bitcoin adoption to rise in 2011, and failed to capitalize on an enormous opportunity. > Post the big bubble of 2018, the public Bitcoin "brand" is basically tied to get-rich-quick scams and ransomware. It was associated with this way before 2018. When I first heard of it in 2011 it was being branded as a ponzi scheme. It was tied with the silk-road for buying drugs. WannaCry was just the case that brought it to more people's attention. Bitcoin is still doing as it always was, and in many ways it being distinguished from other get-rich-schemes (known as shitcoins), by focusing on the fundamentals of its finite supply and network effects. The shitcoiners are doing bitcoin a favour by dissociating themselves with it and trying to promote their scams.
- siddMahen 6y agoBitcoin is by no means “an undetectable and untrackable financial system”.
- garbagetime 6y ago>by no means Actually, it is, by some means.
- redog 6y agowhich means
- nimchimpsky 6y agoyou can't track a wallet address to a person.
- kuroguro 6y agoIt's definitely harder to track as wallets don't have your name written on them. With good practices you can keep anon if you'd wish. Hard to do for non tech-savvy users I assume.
- unalakleet 6y agoCoinJoin, PayJoin, CoinSwap, L2
- ha4fsd3fas 6y agoHis arguments for investing in it in 2011 made sense but in 2020 they no longer do. - Past performance has plateaued for years. - Use cases are niche instead of regular transactions. - Since the use cases are niche there is few uptake drivers.
- paulpauper 6y agogoes to show how being early is so important for being successful .
- 300bps 6y agoHe also in the article nudged people into using MtGox to buy BTC which doesn’t make much sense in hindsight either. https://en.m.wikipedia.org/wiki/Mt._Gox https://en.m.wikipedia.org/wiki/Mt._Gox
- redog 6y agoThere was nothing inherently wrong with Mt. Gox as a place to buy BTC. It was trading it and storing it on Gox that got you burned. I lost 0.6 BTC because I was planning on margin trading some but that was only a fraction of my holdings at the time.
- Bang2Bay 6y agowhat happened to the lost money? it was worth 450 M bucks then. probably a lot more today. was it ever recovered by end users?
- simiones 6y agoIt's not clear why the article is claiming that there are no transaction fees in Bitcoin, my understanding was that high transaction fees was one of the main reason that Steam, for example, dropped Bitcoin support (I think it was something to the tune of several dollars per transaction, targeting for the transaction to be finalized in <30 minutes?).
- sireat 6y agoIn the beginning there were no transaction fees. Miners were happy to include your transactions because of the mining rewards alone. Plus there were just not enough transactions to charge a fee. It was cool to use Bitcoin in 2013 as a currency and sadly the number of useful things you could buy then are about the same as today. These days Bitcoin is too expensive and too slow to be used as actively used currency for every day transactions. Lighting Network is not looking too hot either.
- xur17 6y ago> Lighting Network is not looking too hot either. In what way?
- lgl 6y agoIf I recall correctly, transaction fees went through the roof when everybody was fomoing to buy and trade bitcoin starting at around 2017 and low-fee transactions were getting stuck in the pool as there weren't enough blocks being mined to confirm them as miners were obviously prioritizing the higher fee ones. You can still transact with very low fees, but this is kind of directly related with the amount you want to move. For instance, somebody transferred $2.2bn by paying a $7 fee [0]. That seems super cheap, but if you wanted to transact $2, paying $7 would be ridiculous. I believe this was at least one of the motivators for the big-block/small-block debate and subsequent forks. [0] https://news.bitcoin.com/bitcoin-whale-transfers-2-2-billion-worth-of-btc-for-just-7/ https://news.bitcoin.com/bitcoin-whale-transfers-2-2-billion...
- mr_woozy 6y agoIt's slightly more complicated than that. Steam was using a payment processor called Bitpay which at the time had gone to one side of the small blocks vs big blocks political issue (big blockers went on to form Bitcoin Cash {BCH} and Bitcoin Satoshi Vision {BSV }with Roger Ver and Craig S. Wright, make of that what you will). Coinbase at that time was spamming the blockchain with dust right before the halving and finally got called out on it over twitter. Transaction fees went back down shortly after that.
- notacoward 6y agoI guess diversification is for losers, then? Even if Bitcoin were the best investment out there, putting all of one's savings into one asset is gambling. If one has financial responsibility to/for others (e.g. dependents or clients) it's malfeasance. Even the people with the very best ability to predict the future hedge those bets.