9 ms·

I've been watching bitcoin since $30, bought at $80, and sold last night. I think that Stefan Molyneux (or however you spell it) is right on when he says that

I've been watching bitcoin since $30, bought at $80, and sold last night. I think that Stefan Molyneux (or however you spell it) is right on when he says that bitcoin is "a revolutionary protocol for information synchronization." However, it is by no means unique, and as we've seen, anyone can start their own bitcoin-type cryptocurrency. Apparently, the Canadian government is working on their own, and I don't think it will be long before other central banks begin to follow suit by adapting the bitcoin protocol for their own purposes and presumably solving some of its myriad problems in the process. And of course, when given the choice between a new-and-improved cryptocurrency that's guaranteed by a central bank and the old one that's guaranteed by nothing, Joe Blow is going to pick the former. Bitcoin is an amazing idea and I do believe that the idea behind it it will revolutionize transactions, but it won't be alone for long, and once the improved versions begin showing up, those who've held on to bitcoin because it's an amazing idea (it is) without realizing that bitcoin itself has only a very thin economic moat are probably going to have a bad day. I've been trading and investing stocks for about 7 years now, and I think I've learned a thing or two in that time, but one of the most important things I've learned is that if holding onto something is making me uncomfortable, it's time to sell. Holding my bitcoin was making me uncomfortable as of a couple of days ago, so I sold. On the other hand, I've also learned that if everyone is expecting something to do one thing, it usually does the opposite, and it seems that pretty much everyone agrees that bitcoin is in a bubble. If it does crash, I'll get back in, but if it doesn't, I won't regret selling. I've been on the emotional rollercoaster of watching relatively large sums of money invested in a volatile asset fluctuate wildly, and I'd rather not go through that again. Just my two cents.

3pt14159 13y ago
I just put a sell order in for a percentage of my bitcoins because I think that there will be a pull back, but with that in mind I have the following response: Some of us don't want the help of a government. The revolutionary thing about Bitcoin is that it is a (nearly) zero trust method of transacting. The value is in the fact that there is no central bank to be afraid of. Most of the wealth my parents have lost in their savings was due to inflation and debt backed asset bubbles. Both of which are symptoms of a debt-prone central banking system. There might be arguments that these central banks stabilize the economy for the betterment of everyone, but that is irrelevant when it comes time to choose a currency. Do you want inflation, meddling, and regulation? Serious question. The uninformed should say "yes" and the informed might want to say "no". As for whether or not people are right about Bitcoin being a bubble, I think that bitcoin has a highger likelihood of 20 year success than Twitter and a lower market capitalization. It's a bubble when the baby boomers get involved with their dumb money. When there are ETFs that get traded on the exchanges that are backed on Bitcoin. Then it can be a bubble. Right now, its just an inelastic supply curve and a couple million dollars.
- chad_oliver 13y ago
  I agree with the majority of your post, but I'm not convinced that inflation should be included in your list of bad things ("do you want inflation, meddling, and regulation?"). A moderate amount of inflation is a very good thing, and this isn't really even open to debate among economists. Its importance has been empirically and theoretically proven many times. Inflation is important because economics is all about creating incentives. We have property rights because it gives people an incentive to work hard and takes risks. We have patents because they give people an incentive to explain how their invention works. We have a market economy because it means that if a company wants to gain market share, it has to create value for the consumer. In the same way, central banks try to maintain low levels of inflation (~3%) because it encourages people to invest their money in profitable ventures, rather than just leaving it under the mattress. Investment is the way wealth is created, so it should be pretty obvious that deflation is bad for the economy. Notice that I'm talking about the economic health of the country, not the individual citizen. If you're only concerned about immediate short term benefits, you should push for zero taxes, high deflation, and the gold standard. But that's penny wise and pound foolish. You're shooting yourself in the foot. Better by far is to support actions which improve the economy, because a rising tide lifts all boats.
  - stretchwithme 13y ago
    Inflation is not essential. If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods. Inputs for other ventures are cheaper. If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead. Resources are not infinite. When someone accepts a piece of paper and just holds on to it instead of immediately consuming what he could buy, the resources are available for other things. And when there are more people deferring their consumption, its cheaper to borrow money/resources and cheaper to grow new industries. Countries don't become rich and powerful by consuming everything as soon as they get it. They do it by growing their industries.
    - chad_oliver 13y ago
sillysaurus2 13y ago
I wanted to buy right when it hit $850 a few days ago. I redeemed my $11k mutual fund, but the wire transfer took until Friday to go trough. By the time I was able to buy bitcoins, they were $1111 on coinbase. Bought anyway. Got 9.89BTC. Just lost $2k of that investment, according to the markets. Though it seems to be recovering somewhat. Ow. Anyway, I'm long on bitcoin. Maybe it will crash and I'll lose everything. Twice it's crashed, then the recovery has eclipsed the previous peak by several X. So I don't know. I do know that if banks hasn't been so slow, then I would currently be telling the story of "I was able to grow $11k into $13k." One problem BTC solves is moving money around instantly. It doesn't close for Thanksgiving holiday. Mtgox needs to become wiser as well. There's currently no trade fees, because they wanted to participate in BTC Black Friday. That kind of thing encourages people who are holding onto $15k coins to sell all of them if they think the market will go down. An extra 0.4% on that much money is significant. Mtgox really shouldn't be so willy nilly.
- nkuttler 13y ago
  I hope those 11k aren't all your savings. I have coins, am bullish long term, but buying bitcoin is speculation, and bitcoin can fall back to $0.01, even if I don't think it's likely.
  - sillysaurus2 13y ago
    It is indeed all my savings. But I was saving it anyway, so I won't be out in a doghouse if it vanishes. I guess I'm dumb, but at this stage in my life I'd rather have 9.89BTC than $11k. My theory is, everyone's expecting it to crash. So therefore it's more likely to do the opposite. Not much of a theory, but it seems to have been historically true.
    - alaskamiller 13y ago
      I spent all my savings back in 2011 on bitcoins. I get what you mean. Good luck.
    - notdrunkatall 13y ago
gnaritas 13y ago
> but it won't be alone for long It isn't alone now[1]. > and once the improved versions begin showing up They already have[1]. [1] http://coinmarketcap.com/ http://coinmarketcap.com/
ljd 13y ago
I actually think the decentralized nature of bitcoin is what gives it all it's value. The fact that no bank can control it, inherently holds value. Currency manipulation is a really big problem right now, and knowing that you can buy a currency that won't be artificially controlled by it's issuer is an asset in itself. Having the currency centrally controlled again isn't special and it doesn't deviate enough from a credit card transaction for anyone to use it.
- notdrunkatall 13y ago
  What gives Bitcoin its value right now is speculators, and what speculators are betting on is widespread adoption. If that never materializes because some other currency has taken its place, bitcoin's value will decline. And it is only a small subset of the population which ascribe value to monetary decentralization. I count myself among them, but I don't delude myself into thinking that the majority feels the same way.
- nayefc 13y ago
  A central authority needs to control money supply. This is crucial in all advanced economies. It has to be capped somehow (currently, it's obviously exploited), but a decentralised currency will never work.
  - ericb 13y ago
    Under what definition of won't work. Won't be adopted? Would cause economic calamity? I think this is a crucial distinction.
    - XorNot 13y ago
      With nothing anchoring the value of the currency, it'll fluctuate wildly (and then crater to zero, and that'll be the end of it). Regular currency is legally enforced by governments as the way to pay taxes, and settle debts in that currency - ergo you always need some or need to buying some, even if you don't want to deal in that currency day-to-day. BTC does not have these things. The only thing holding it up is irrational speculation. Every person who holds bitcoin needs to sell it to a greater fool for a currency which does extinguish debts/tax obligations locally. Consider: a population of people in the US dealing solely in BTC, and earning income, have to pay income tax. The IRS can assess income taxes as the relevant fraction of their income (easy enough: assess an approximate USD market wage that they have worked, declare they have to pay USD % of that in taxes). The effect would be BTC craters in North America, because every member of that population would have to somehow sell BTC for USD - only none of them hold USD, so they can't trade amongst each other, which means they need to convince someone else to accept BTC for USD (and I mean, why would you? You can't pay taxes with it which is why they're selling)?
man_bear_pig 13y ago
gold = bitcoin parity is a major resistance point. if you look at charts. huge volume but downward moving from 1240 level. traded as low as 840. that level 1 fibonacci retracement. there's a huge chance this thing will revert below 600 quickly. also from game theory perspective, lots of people take profits year-end. they don't want q1 of next year to start with down 50% on a trade.
foxhedgehog 13y ago
"the Canadian government is working on their own" is there a citation for this?
- sprice 13y ago
  Maybe http://en.wikipedia.org/wiki/MintChip http://en.wikipedia.org/wiki/MintChip which isn't really going anywhere

3pt14159 13y ago

I just put a sell order in for a percentage of my bitcoins because I think that there will be a pull back, but with that in mind I have the following response: Some of us don't want the help of a government. The revolutionary thing about Bitcoin is that it is a (nearly) zero trust method of transacting. The value is in the fact that there is no central bank to be afraid of. Most of the wealth my parents have lost in their savings was due to inflation and debt backed asset bubbles. Both of which are symptoms of a debt-prone central banking system. There might be arguments that these central banks stabilize the economy for the betterment of everyone, but that is irrelevant when it comes time to choose a currency. Do you want inflation, meddling, and regulation? Serious question. The uninformed should say "yes" and the informed might want to say "no". As for whether or not people are right about Bitcoin being a bubble, I think that bitcoin has a highger likelihood of 20 year success than Twitter and a lower market capitalization. It's a bubble when the baby boomers get involved with their dumb money. When there are ETFs that get traded on the exchanges that are backed on Bitcoin. Then it can be a bubble. Right now, its just an inelastic supply curve and a couple million dollars.

chad_oliver 13y ago
I agree with the majority of your post, but I'm not convinced that inflation should be included in your list of bad things ("do you want inflation, meddling, and regulation?"). A moderate amount of inflation is a very good thing, and this isn't really even open to debate among economists. Its importance has been empirically and theoretically proven many times. Inflation is important because economics is all about creating incentives. We have property rights because it gives people an incentive to work hard and takes risks. We have patents because they give people an incentive to explain how their invention works. We have a market economy because it means that if a company wants to gain market share, it has to create value for the consumer. In the same way, central banks try to maintain low levels of inflation (~3%) because it encourages people to invest their money in profitable ventures, rather than just leaving it under the mattress. Investment is the way wealth is created, so it should be pretty obvious that deflation is bad for the economy. Notice that I'm talking about the economic health of the country, not the individual citizen. If you're only concerned about immediate short term benefits, you should push for zero taxes, high deflation, and the gold standard. But that's penny wise and pound foolish. You're shooting yourself in the foot. Better by far is to support actions which improve the economy, because a rising tide lifts all boats.
- stretchwithme 13y ago
  Inflation is not essential. If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods. Inputs for other ventures are cheaper. If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead. Resources are not infinite. When someone accepts a piece of paper and just holds on to it instead of immediately consuming what he could buy, the resources are available for other things. And when there are more people deferring their consumption, its cheaper to borrow money/resources and cheaper to grow new industries. Countries don't become rich and powerful by consuming everything as soon as they get it. They do it by growing their industries.
  - chad_oliver 13y ago

sillysaurus2 13y ago

I wanted to buy right when it hit $850 a few days ago. I redeemed my $11k mutual fund, but the wire transfer took until Friday to go trough. By the time I was able to buy bitcoins, they were $1111 on coinbase. Bought anyway. Got 9.89BTC. Just lost $2k of that investment, according to the markets. Though it seems to be recovering somewhat. Ow. Anyway, I'm long on bitcoin. Maybe it will crash and I'll lose everything. Twice it's crashed, then the recovery has eclipsed the previous peak by several X. So I don't know. I do know that if banks hasn't been so slow, then I would currently be telling the story of "I was able to grow $11k into $13k." One problem BTC solves is moving money around instantly. It doesn't close for Thanksgiving holiday. Mtgox needs to become wiser as well. There's currently no trade fees, because they wanted to participate in BTC Black Friday. That kind of thing encourages people who are holding onto $15k coins to sell all of them if they think the market will go down. An extra 0.4% on that much money is significant. Mtgox really shouldn't be so willy nilly.

nkuttler 13y ago
I hope those 11k aren't all your savings. I have coins, am bullish long term, but buying bitcoin is speculation, and bitcoin can fall back to $0.01, even if I don't think it's likely.
- sillysaurus2 13y ago
  It is indeed all my savings. But I was saving it anyway, so I won't be out in a doghouse if it vanishes. I guess I'm dumb, but at this stage in my life I'd rather have 9.89BTC than $11k. My theory is, everyone's expecting it to crash. So therefore it's more likely to do the opposite. Not much of a theory, but it seems to have been historically true.
  - alaskamiller 13y ago
    I spent all my savings back in 2011 on bitcoins. I get what you mean. Good luck.
  - notdrunkatall 13y ago

gnaritas 13y ago

> but it won't be alone for long It isn't alone now[1]. > and once the improved versions begin showing up They already have[1]. [1] http://coinmarketcap.com/ http://coinmarketcap.com/

ljd 13y ago

I actually think the decentralized nature of bitcoin is what gives it all it's value. The fact that no bank can control it, inherently holds value. Currency manipulation is a really big problem right now, and knowing that you can buy a currency that won't be artificially controlled by it's issuer is an asset in itself. Having the currency centrally controlled again isn't special and it doesn't deviate enough from a credit card transaction for anyone to use it.

notdrunkatall 13y ago
What gives Bitcoin its value right now is speculators, and what speculators are betting on is widespread adoption. If that never materializes because some other currency has taken its place, bitcoin's value will decline. And it is only a small subset of the population which ascribe value to monetary decentralization. I count myself among them, but I don't delude myself into thinking that the majority feels the same way.
nayefc 13y ago
A central authority needs to control money supply. This is crucial in all advanced economies. It has to be capped somehow (currently, it's obviously exploited), but a decentralised currency will never work.
- ericb 13y ago
  Under what definition of won't work. Won't be adopted? Would cause economic calamity? I think this is a crucial distinction.
  - XorNot 13y ago
    With nothing anchoring the value of the currency, it'll fluctuate wildly (and then crater to zero, and that'll be the end of it). Regular currency is legally enforced by governments as the way to pay taxes, and settle debts in that currency - ergo you always need some or need to buying some, even if you don't want to deal in that currency day-to-day. BTC does not have these things. The only thing holding it up is irrational speculation. Every person who holds bitcoin needs to sell it to a greater fool for a currency which does extinguish debts/tax obligations locally. Consider: a population of people in the US dealing solely in BTC, and earning income, have to pay income tax. The IRS can assess income taxes as the relevant fraction of their income (easy enough: assess an approximate USD market wage that they have worked, declare they have to pay USD % of that in taxes). The effect would be BTC craters in North America, because every member of that population would have to somehow sell BTC for USD - only none of them hold USD, so they can't trade amongst each other, which means they need to convince someone else to accept BTC for USD (and I mean, why would you? You can't pay taxes with it which is why they're selling)?

man_bear_pig 13y ago

gold = bitcoin parity is a major resistance point. if you look at charts. huge volume but downward moving from 1240 level. traded as low as 840. that level 1 fibonacci retracement. there's a huge chance this thing will revert below 600 quickly. also from game theory perspective, lots of people take profits year-end. they don't want q1 of next year to start with down 50% on a trade.

foxhedgehog 13y ago

"the Canadian government is working on their own" is there a citation for this?

sprice 13y ago
Maybe http://en.wikipedia.org/wiki/MintChip http://en.wikipedia.org/wiki/MintChip which isn't really going anywhere