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I don't have a strong opinion on Bitcoin, but seeing the price double repeatedly over the course of 12 months gives me a physiological feeling that I can only d

I don't have a strong opinion on Bitcoin, but seeing the price double repeatedly over the course of 12 months gives me a physiological feeling that I can only describe as FOMO. I know it's irrational, and I'm not going to buy any Bitcoins just based on my gut feeling, but it's still disturbing that seeing a chart go up and to the right makes my brain think that I ought to be buying a piece before it's too late. I bet this is what it felt like to be in the middle of the Tulip Bubble.

oleganza 13y ago
1. You will never miss out. Even if you never by bitcoins and it becomes world money, you'll benefit from it indirectly (and taking no risk in the process). 2. It's never too late. The bet is that Bitcoin becomes world money. If so, all the wealth stored in cash, gold, silver, bonds and other low-risk less liquid assets will go into Bitcoin. This will make it worth more than 10 million of today's USD per BTC.
- sillysaurus2 13y ago
  2. The bet is that Bitcoin becomes world money. It's also worth noting that the US government now owns 0.686% of all bitcoins that will ever be created. (They seized 144k coins in the Silk Road raid, and eventually there will be 21 million total coins.)
  - oleganza 13y ago
    They must be motivated to preserve that wealth now.
    - mcv 13y ago
      I think they intend to sell it. Now seems like a good time for that.
      - greenlander 13y ago
        It seems likely that they'll be required to AUCTION them off through an approved process rather than sell them themselves on an exchange. And they probably won't do that until they've convicted "Dread Pirate Roberts"
    - gcb0 13y ago
      > right time to sell it And plummet the price back to sub dollar values
      - oleganza 13y ago
        There are enough of private investors willing to buy without crashing prices on the open exchange. Financially, it'll be a good deal for both a buyer and a seller. I heard SecondMarket's BIT (bitcoin investment trust) can't buy new bitcoins fast enough from private hands to satisfy the demand.
  - toomim 13y ago
    And they have said that they will liquidate (sell) all of that back to USD, like they do any other seized asset.
  - fastball 13y ago
    Was there every any concrete evidence that they did in fact have access to the wallet DPR was using?
    - shocks 13y ago
      Supposedly these ones. http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GN...
- endriju 13y ago
  ...all the wealth stored in cash, gold, silver, bonds and other low-risk less liquid assets will go into Bitcoin This is rather utopic vision. None of the gold owners would sell significant part of their gold for btc - gold is used to store value for ages, bitcoin is a currency.
  - oleganza 13y ago
    I personally know a gold owner who dumped all his gold (accumulated over past several years) for Bitcoin in February. Bitcoin has different risks than gold, but you can 1) move it cheaply and quickly to a safer location any time 2) you can buy stuff with it directly. Gold sits there and you always have to fear that government or someone else confiscates it, to makes it PITA to sell a portion of it.
  - dredmorbius 13y ago
    Both are commodities and containers for wealth. If there's an arbitrage opportunity in exchanging one for the other, they'll likely be exchanged. The thing about "store of value" principles is that the ascribed value of things changes. It generally has a floor of the marginal cost of production / extraction / acquisition, though sometimes it can fall below even that (viz: inflated currency literally not worth the paper it's printed on). If someone's willing to pay more for bitcoin than gold, or you're betting that that the value of bitcoin will increase, trading gold for BTC makes sense. In terms of tangible value -- Gold is more likely a persistent store of value than BTC, but where you need to move wealth quickly and easily (say, you're fleeing an unstable situation), a BTC wallet somewhere else might be a lot easier than smuggling out gold ingots. Even a (moderately) modest amount of wealth, say, $50m, would be somewhat over a ton of gold. Hard to run with that in your pockets. If you want to limit yourself to a maximum of 45# of weight, you could carry slighltly under $850,000 at current market prices. Not insignificant, but depending on the loot you're trying to, well, loot, possibly less than you might hope.
  - mike_esspe 13y ago
    Silver was demonetised in 20th century relative to gold, though it was used as a store of value. It can happen with gold too. http://www.dailyreckoning.com.au/silver-a-brief-history-of-de-monetisation/ http://www.dailyreckoning.com.au/silver-a-brief-history-of-d...
grey-area 13y ago
The price has gone up by 20% in 24 hours, not just doubled in the last 12 months - I think in twelve months (according to bitcoin charts) it has gone from around $10 to around $600 - 4900% increase. That's clearly unsustainable and yes it does look like a speculative bubble, particularly when people expect it to continue to grow indefinitely in price without a commensurate rise in usage as a currency. It'll be interesting to see this play out as it's a great example of a completely unregulated market at work. http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g25zvzlzp http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g... I don't see bitcoin becoming a world currency without some large changes to the protocol - for example to track users and link them with real world IDs, reversible transactions etc, and there are also political reasons which would make it very difficult - governments enjoy being able to fund deficit spending and control the economy by manipulating the currency, they won't easily give up that power.
- deleted 13y ago
  [deleted]
- lettergram 13y ago
  I remember looking at it when it was below a dollar... at the time I had no money and told everyone I know to buy. I also managed to mine 50 coins, but have since lost the wallet. Now, my brain melts when I see the current price.
  - sillysaurus2 13y ago
    Obligatory horror story from 'mcantelon: https://news.ycombinator.com/item?id=6687580 https://news.ycombinator.com/item?id=6687580 I was going to buy $300 worth when they were 30 cents each. I didn't, though, as it involved travel to a nearby town and I was working on a book and thought I should be practical and spend the weekend on that. Ah well, one less house.
  - QuasiAlon 13y ago
    what does it mean you lost your wallet? #noob_here
mcv 13y ago
It is already too late. You should buy when it's low, not when it's high. Wait for the next crash, and then buy, if you want.
- kaolinite 13y ago
  I thought that last week when it was $300.
  - mcv 13y ago
    It's better to get out too early than too late. Quit when you're ahead, is the big rule of gambling. (Which is what this is.)
    - obiterdictum 13y ago
      This reminds me of a story of Sir Isaac Newton and South Sea Company bubble. He got out early, then watched all his friends get rich, jumped back in again with both feet, lost a fortune. Even smart people are not immune to bubbles. http://www.businessinsider.com.au/isaac-newton-and-the-south-sea-bubble-2013-4 http://www.businessinsider.com.au/isaac-newton-and-the-south...
    - VMG 13y ago
      It's quite the opposite of gambling. In a casino, the odds are are exactly defined, and the ROI is negative. This investment has unknown ROI.
      - mcv 13y ago
        Okay, maybe it's more like a pyramid scheme. As long as more people keep flocking to it, prices will go up. But you don't know how long people will keep flocking to it.
        VMG 13y ago
        Under this definition, every currency is a pyramid scheme
mattm 13y ago
It could be the S-curve https://www.youtube.com/watch?v=qHUPPYzzZrI&feature=youtube_gdata_player https://www.youtube.com/watch?v=qHUPPYzzZrI&feature=youtube_...
andyhmltn 13y ago
I feel exactly the time. I talked to a friend of mine when it hit $200 and I said I didn't think it was worth investing to make cash at this point. Had I put $500 in then I would have $1500 now :(
- aaren 13y ago
  No, you would have $1500 in bitcoins. This feels completely different to having the same in $, because you've already made the leap. Only if you had invested and cashed out would you have $1500. And then you might feel exactly the same as you do now in a weeks time. Then again bitcoin might crash and you would feel good for getting out now. If you want to invest you have to be entirely willing to lose all of that money. You can't lose money that you didn't invest so it is pointless thinking about the past.
  - tehaugmenter 13y ago
    Honestly I would withdrawl $1000 from it so you have that $500 again. You pull your winnings and keep your base invested. That's the safe play. Doubled your money, you have it secured. Let that extra winnings be the gamble. If you lose you still won.
    - aaren 13y ago
      I agree. Zero risk is excellent. I just think that you should be willing to lose it all to get to a situation where you can zero your risk (whilst keeping a reasonable amount in).

oleganza 13y ago

1. You will never miss out. Even if you never by bitcoins and it becomes world money, you'll benefit from it indirectly (and taking no risk in the process). 2. It's never too late. The bet is that Bitcoin becomes world money. If so, all the wealth stored in cash, gold, silver, bonds and other low-risk less liquid assets will go into Bitcoin. This will make it worth more than 10 million of today's USD per BTC.

sillysaurus2 13y ago
2. The bet is that Bitcoin becomes world money. It's also worth noting that the US government now owns 0.686% of all bitcoins that will ever be created. (They seized 144k coins in the Silk Road raid, and eventually there will be 21 million total coins.)
- oleganza 13y ago
  They must be motivated to preserve that wealth now.
  - mcv 13y ago
    I think they intend to sell it. Now seems like a good time for that.
    - greenlander 13y ago
      It seems likely that they'll be required to AUCTION them off through an approved process rather than sell them themselves on an exchange. And they probably won't do that until they've convicted "Dread Pirate Roberts"
  - gcb0 13y ago
    > right time to sell it And plummet the price back to sub dollar values
    - oleganza 13y ago
      There are enough of private investors willing to buy without crashing prices on the open exchange. Financially, it'll be a good deal for both a buyer and a seller. I heard SecondMarket's BIT (bitcoin investment trust) can't buy new bitcoins fast enough from private hands to satisfy the demand.
- toomim 13y ago
  And they have said that they will liquidate (sell) all of that back to USD, like they do any other seized asset.
- fastball 13y ago
  Was there every any concrete evidence that they did in fact have access to the wallet DPR was using?
  - shocks 13y ago
    Supposedly these ones. http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GN...
endriju 13y ago
...all the wealth stored in cash, gold, silver, bonds and other low-risk less liquid assets will go into Bitcoin This is rather utopic vision. None of the gold owners would sell significant part of their gold for btc - gold is used to store value for ages, bitcoin is a currency.
- oleganza 13y ago
  I personally know a gold owner who dumped all his gold (accumulated over past several years) for Bitcoin in February. Bitcoin has different risks than gold, but you can 1) move it cheaply and quickly to a safer location any time 2) you can buy stuff with it directly. Gold sits there and you always have to fear that government or someone else confiscates it, to makes it PITA to sell a portion of it.
- dredmorbius 13y ago
  Both are commodities and containers for wealth. If there's an arbitrage opportunity in exchanging one for the other, they'll likely be exchanged. The thing about "store of value" principles is that the ascribed value of things changes. It generally has a floor of the marginal cost of production / extraction / acquisition, though sometimes it can fall below even that (viz: inflated currency literally not worth the paper it's printed on). If someone's willing to pay more for bitcoin than gold, or you're betting that that the value of bitcoin will increase, trading gold for BTC makes sense. In terms of tangible value -- Gold is more likely a persistent store of value than BTC, but where you need to move wealth quickly and easily (say, you're fleeing an unstable situation), a BTC wallet somewhere else might be a lot easier than smuggling out gold ingots. Even a (moderately) modest amount of wealth, say, $50m, would be somewhat over a ton of gold. Hard to run with that in your pockets. If you want to limit yourself to a maximum of 45# of weight, you could carry slighltly under $850,000 at current market prices. Not insignificant, but depending on the loot you're trying to, well, loot, possibly less than you might hope.
- mike_esspe 13y ago
  Silver was demonetised in 20th century relative to gold, though it was used as a store of value. It can happen with gold too. http://www.dailyreckoning.com.au/silver-a-brief-history-of-de-monetisation/ http://www.dailyreckoning.com.au/silver-a-brief-history-of-d...

grey-area 13y ago

The price has gone up by 20% in 24 hours, not just doubled in the last 12 months - I think in twelve months (according to bitcoin charts) it has gone from around $10 to around $600 - 4900% increase. That's clearly unsustainable and yes it does look like a speculative bubble, particularly when people expect it to continue to grow indefinitely in price without a commensurate rise in usage as a currency. It'll be interesting to see this play out as it's a great example of a completely unregulated market at work. http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g25zvzlzp http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgSzm1g10zm2g... I don't see bitcoin becoming a world currency without some large changes to the protocol - for example to track users and link them with real world IDs, reversible transactions etc, and there are also political reasons which would make it very difficult - governments enjoy being able to fund deficit spending and control the economy by manipulating the currency, they won't easily give up that power.

deleted 13y ago
[deleted]
lettergram 13y ago
I remember looking at it when it was below a dollar... at the time I had no money and told everyone I know to buy. I also managed to mine 50 coins, but have since lost the wallet. Now, my brain melts when I see the current price.
- sillysaurus2 13y ago
  Obligatory horror story from 'mcantelon: https://news.ycombinator.com/item?id=6687580 https://news.ycombinator.com/item?id=6687580 I was going to buy $300 worth when they were 30 cents each. I didn't, though, as it involved travel to a nearby town and I was working on a book and thought I should be practical and spend the weekend on that. Ah well, one less house.
- QuasiAlon 13y ago
  what does it mean you lost your wallet? #noob_here

mcv 13y ago

It is already too late. You should buy when it's low, not when it's high. Wait for the next crash, and then buy, if you want.

kaolinite 13y ago
I thought that last week when it was $300.
- mcv 13y ago
  It's better to get out too early than too late. Quit when you're ahead, is the big rule of gambling. (Which is what this is.)
  - obiterdictum 13y ago
    This reminds me of a story of Sir Isaac Newton and South Sea Company bubble. He got out early, then watched all his friends get rich, jumped back in again with both feet, lost a fortune. Even smart people are not immune to bubbles. http://www.businessinsider.com.au/isaac-newton-and-the-south-sea-bubble-2013-4 http://www.businessinsider.com.au/isaac-newton-and-the-south...
  - VMG 13y ago
    It's quite the opposite of gambling. In a casino, the odds are are exactly defined, and the ROI is negative. This investment has unknown ROI.
    - mcv 13y ago
      Okay, maybe it's more like a pyramid scheme. As long as more people keep flocking to it, prices will go up. But you don't know how long people will keep flocking to it.
      - VMG 13y ago
        Under this definition, every currency is a pyramid scheme

mattm 13y ago

It could be the S-curve https://www.youtube.com/watch?v=qHUPPYzzZrI&feature=youtube_gdata_player https://www.youtube.com/watch?v=qHUPPYzzZrI&feature=youtube_...

andyhmltn 13y ago

I feel exactly the time. I talked to a friend of mine when it hit $200 and I said I didn't think it was worth investing to make cash at this point. Had I put $500 in then I would have $1500 now :(

aaren 13y ago
No, you would have $1500 in bitcoins. This feels completely different to having the same in $, because you've already made the leap. Only if you had invested and cashed out would you have $1500. And then you might feel exactly the same as you do now in a weeks time. Then again bitcoin might crash and you would feel good for getting out now. If you want to invest you have to be entirely willing to lose all of that money. You can't lose money that you didn't invest so it is pointless thinking about the past.
- tehaugmenter 13y ago
  Honestly I would withdrawl $1000 from it so you have that $500 again. You pull your winnings and keep your base invested. That's the safe play. Doubled your money, you have it secured. Let that extra winnings be the gamble. If you lose you still won.
  - aaren 13y ago
    I agree. Zero risk is excellent. I just think that you should be willing to lose it all to get to a situation where you can zero your risk (whilst keeping a reasonable amount in).