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"It's much smarter to invest in Bitcoin directly." Let's assume that bitcoin is a currency, which is highly debatable, but let's put that aside for now. One d

by lingben 13y ago

"It's much smarter to invest in Bitcoin directly." Let's assume that bitcoin is a currency, which is highly debatable, but let's put that aside for now. One does not 'invest' in a currency. One either uses a currency or one speculates in a currency. Now, returning to the fact that bitcoin is far from a true currency, as much as its proponents wish to purport to its practical usage, the fact is that 'investing in bitcoin' is very little removed from taking a punt on a race horse or a penny stock or beani-babies or any other highly dubious 'investments' which have come along so far. What kind of currency has fluctuations +109% in a less than a month's time? (October 1st to October 23rd 2013) The only difference in the case of bitcoin is that it has the allure of technology, cryptography and all the mysteries connected with it. All great hustles have that. Madoff did it with the 'mystery' of the stock market. Ponzi did it with the 'mystery' of the then still recent international stamp post delivery system.

drcode 13y ago
> One does not 'invest' in a currency. Someone in Venezuela putting USD under his mattress isn't investing? > What kind of currency has fluctuations +109% in a less than a month's time? A new currency that emerges out of nowhere, in an emergent fashion, such as bitcoin. You don't think gold prices fluctuated wildly in ancient Sumeria when gold was first used as a currency? > All great hustles have that. Madoff did it with the 'mystery' of the stock market. Ponzi did it with the 'mystery' of the then still recent international stamp post delivery system. Yes, and Uncle Sam with the USD. That said, I agree with you it is bad for people to extol the "smartness" of investing in bitcoin- It's impossible to predict future prices of a commodity that is speculated upon. People should instead simply explain the value that bitcoin has to offer to the world.
- XorNot 13y ago
  > Someone in Venezuela putting USD under his mattress isn't investing? No they're not. They're trying to lose money against inflation more slowly. 10 years from now that $1000 USD will still be a $1000 USD, but it'll buy a lot less.
bobbygoodlatte 13y ago
I'll concede on semantics. It's smarter to speculate on the currency itself than invest in mining hardware. To be fair, there's disagreement over the difference between investment and speculation: http://en.wikipedia.org/wiki/Speculation http://en.wikipedia.org/wiki/Speculation I disagree that Bitcoin's value is nebulous, or beanie-baby-esque. I believe Bitcoin can become valuable in 3 distinct ways: 1. Store of value A universal store of value not controlled by governments. This isn't merely a hedge against USD inflation—it's a global means of protection against currency devaluation. Bitcoin is attractive to anyone living in a country with an unsound monetary base. This is already happening. 2. International money remittance Existing players in international money remittance charge exploitive fees. Western Union often charges more than 10%. Bitcoin offers a viable low-fee alternative. Bitcoin remittance services like http://buttercoin.com http://buttercoin.com are now starting to come online. 3. Programmable money The true value of money as a protocol is difficult to predict today. I believe this could be absolutely massive. At minimum, this means native cash for the Web. Merchants have an incentive to adopt it — they bypass Visa/MC/Amex's 3%+ transaction fees. But the ease-of-use isn't there yet. The margin on many consumer goods is very slim — an additional 3% profit could be huge for many online retailers. At Bitcoin's extreme, we could see self-sustaining profit-seeking algorithms. Corporations that don't employ people — algorithms providing services and collecting profits. We've never been able to wire up software so directly with the flow of money. I think that could lead to exciting things. Dismiss Bitcoin as get-rich-quick speculation if you want. But I think you'll find most Bitcoin fans aren't just in it for the money. They realize Bitcoin can be massively disruptive to the financial industry — an industry begging for disruption. I think that's worth investing in.

by lingben 13y ago

drcode 13y ago

> One does not 'invest' in a currency. Someone in Venezuela putting USD under his mattress isn't investing? > What kind of currency has fluctuations +109% in a less than a month's time? A new currency that emerges out of nowhere, in an emergent fashion, such as bitcoin. You don't think gold prices fluctuated wildly in ancient Sumeria when gold was first used as a currency? > All great hustles have that. Madoff did it with the 'mystery' of the stock market. Ponzi did it with the 'mystery' of the then still recent international stamp post delivery system. Yes, and Uncle Sam with the USD. That said, I agree with you it is bad for people to extol the "smartness" of investing in bitcoin- It's impossible to predict future prices of a commodity that is speculated upon. People should instead simply explain the value that bitcoin has to offer to the world.

XorNot 13y ago
> Someone in Venezuela putting USD under his mattress isn't investing? No they're not. They're trying to lose money against inflation more slowly. 10 years from now that $1000 USD will still be a $1000 USD, but it'll buy a lot less.

bobbygoodlatte 13y ago

I'll concede on semantics. It's smarter to speculate on the currency itself than invest in mining hardware. To be fair, there's disagreement over the difference between investment and speculation: http://en.wikipedia.org/wiki/Speculation http://en.wikipedia.org/wiki/Speculation I disagree that Bitcoin's value is nebulous, or beanie-baby-esque. I believe Bitcoin can become valuable in 3 distinct ways: 1. Store of value A universal store of value not controlled by governments. This isn't merely a hedge against USD inflation—it's a global means of protection against currency devaluation. Bitcoin is attractive to anyone living in a country with an unsound monetary base. This is already happening. 2. International money remittance Existing players in international money remittance charge exploitive fees. Western Union often charges more than 10%. Bitcoin offers a viable low-fee alternative. Bitcoin remittance services like http://buttercoin.com http://buttercoin.com are now starting to come online. 3. Programmable money The true value of money as a protocol is difficult to predict today. I believe this could be absolutely massive. At minimum, this means native cash for the Web. Merchants have an incentive to adopt it — they bypass Visa/MC/Amex's 3%+ transaction fees. But the ease-of-use isn't there yet. The margin on many consumer goods is very slim — an additional 3% profit could be huge for many online retailers. At Bitcoin's extreme, we could see self-sustaining profit-seeking algorithms. Corporations that don't employ people — algorithms providing services and collecting profits. We've never been able to wire up software so directly with the flow of money. I think that could lead to exciting things. Dismiss Bitcoin as get-rich-quick speculation if you want. But I think you'll find most Bitcoin fans aren't just in it for the money. They realize Bitcoin can be massively disruptive to the financial industry — an industry begging for disruption. I think that's worth investing in.