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I'm not convinced. Like gold, Bitcoin isn't an investment. Warren Buffet will tell you that investing is putting your money into something which creates real va

by gexla 13y ago

I'm not convinced. Like gold, Bitcoin isn't an investment. Warren Buffet will tell you that investing is putting your money into something which creates real value, like a business. He would also tell you that you should stick to what you know, otherwise its just gambling. For me, that's investing my time and money into building my own income streams. I don't really care that I could possibly get a return of 10x or more on my money in Bitcoin (or I could lose that much.) I could do the same with my businesses if I do them right, and having everything in Bitcoin would keep me from being able to allocate those resources elsewhere. While the rise in Bitcoin could be a one time thing before it stabilizes (or tanks,) my efforts elsewhere will provide me an income for a lifetime. I'm more interested in using Bitcoin as a currency. A temporary hold for my most liquid assets which I can use to pay bills and other expenses. If I really believe in Bitcoin and want it to succeed, then I know I should try to run some of that activity on what's possible with Bitcoin now. The more mainstream and the larger the Bitcoin market, the more stable it should become. But I'm not interested in risking a large amount of assets to be a revolutionary or financial martyr. ETA: To me, a currency is a place I can park my cash and know that it will hold approximately the same purchasing power as when I put it in there in the first place. I don't care to see it go up (as I said, I have other schemes for making it grow) and I really don't want it to go down. I just want it to be relatively stable. Living in the Philippines for a number of years and working with people around the world, there is 6 different currencies that regularly affect me or the people paying me. Since I have been here, the Peso has gained as much as 20% on the dollar. This sucks and it's not something I want to deal with. Bitcoin would drive me crazy.

ronaldx 13y ago
Strictly speaking, you would only lose 1x your money on Bitcoin ;) Otherwise, I agree with what you said. I would prefer to invest in something where their assets will be used to make the world a better place. Not only do I (hopefully) gain long-term value, but also moral satisfaction. If you happen to believe that there will be human value in Bitcoin-as-a-currency, consider investing in the infrastructure rather than the coins.
JumpCrisscross 13y ago
>Warren Buffet will tell you that investing is putting your money into something which creates real value, like a business. Warren Buffet is an investor, i.e. someone seeking returns from interest, dividends, or capital gains from the reasonable expectation of future interest or dividends. Healthy markets have three other fundamental actors: hedgers, who trade to offset a preëxisting risk, arbitrageurs, who trade to profit from establishing the Law of One Price, and speculators, who absorb excess risk and illiquidity other participants do not want. Speculators absorb the error term. Healthy markets don't function without a proper amount of speculation. So if you believe Bitcoin has fundamental value as an asset and think the upside at least fairly compensates you for the risk, go ahead and absorb that risk. By boosting the asset's value you make it more attractive to others to hold and possibly transact with, thereby giving you a return on your risk. Point is, you may want to speculate or not. I do not. But that doesn't mean we need to moralise investing over speculating any more than an arbitrageur need find himself intellectually superior to investors.
- gexla 13y ago
  Thanks for taking the time to make such a well written reply to my comment. This further backs up one of my main points. I'm not a sophisticated trader (nor do I wish to become one) so I probably shouldn't be speculating.
rglullis 13y ago
> The more mainstream and the larger the Bitcoin market, the more stable it should become. But I'm not interested in risking a large amount of assets to be a revolutionary or financial martyr. So don't risk a large amount of assets. Risk a small amount. I too want to see BTC succeed as a currency and global payment system, so I've been buying $25 every month worth of BTC and just putting aside. It can go to zero tomorrow and I wouldn't care. It can go to $10000 and I wouldn't sell. But every new opportunity that I get to use BTC as a currency, I use them - namecheap domains come to mind. I think in this way you are not risking much, but you are contributing to reduce the volatility and turn this into an actual currency, without ruining yourself if this experiment fails.

by gexla 13y ago

ronaldx 13y ago

Strictly speaking, you would only lose 1x your money on Bitcoin ;) Otherwise, I agree with what you said. I would prefer to invest in something where their assets will be used to make the world a better place. Not only do I (hopefully) gain long-term value, but also moral satisfaction. If you happen to believe that there will be human value in Bitcoin-as-a-currency, consider investing in the infrastructure rather than the coins.

JumpCrisscross 13y ago

>Warren Buffet will tell you that investing is putting your money into something which creates real value, like a business. Warren Buffet is an investor, i.e. someone seeking returns from interest, dividends, or capital gains from the reasonable expectation of future interest or dividends. Healthy markets have three other fundamental actors: hedgers, who trade to offset a preëxisting risk, arbitrageurs, who trade to profit from establishing the Law of One Price, and speculators, who absorb excess risk and illiquidity other participants do not want. Speculators absorb the error term. Healthy markets don't function without a proper amount of speculation. So if you believe Bitcoin has fundamental value as an asset and think the upside at least fairly compensates you for the risk, go ahead and absorb that risk. By boosting the asset's value you make it more attractive to others to hold and possibly transact with, thereby giving you a return on your risk. Point is, you may want to speculate or not. I do not. But that doesn't mean we need to moralise investing over speculating any more than an arbitrageur need find himself intellectually superior to investors.

gexla 13y ago
Thanks for taking the time to make such a well written reply to my comment. This further backs up one of my main points. I'm not a sophisticated trader (nor do I wish to become one) so I probably shouldn't be speculating.

rglullis 13y ago

> The more mainstream and the larger the Bitcoin market, the more stable it should become. But I'm not interested in risking a large amount of assets to be a revolutionary or financial martyr. So don't risk a large amount of assets. Risk a small amount. I too want to see BTC succeed as a currency and global payment system, so I've been buying $25 every month worth of BTC and just putting aside. It can go to zero tomorrow and I wouldn't care. It can go to $10000 and I wouldn't sell. But every new opportunity that I get to use BTC as a currency, I use them - namecheap domains come to mind. I think in this way you are not risking much, but you are contributing to reduce the volatility and turn this into an actual currency, without ruining yourself if this experiment fails.