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Here's a tip I've picked up from the stock market. If everyone is talking doom and gloom, buy in. If everybody is talking about how bitcoin is the greatest thin

Here's a tip I've picked up from the stock market. If everyone is talking doom and gloom, buy in. If everybody is talking about how bitcoin is the greatest thing ever and people are starting bitcoin investing clubs and "the price is going to keep skyrocketing!!!!1"...it's time to sell. So, it's going to be slightly more regulated. Big deal. People say it has no value, but it does. A bitcoin, at this very moment, is worth ~732USD. That sounds like value to me. On top of the value people give it, it has value in that nobody owns the network, nobody can regulate transactions used with it, and anybody with access to a computer can trade it for goods or "real" currency. I think people who don't like it a) are uninterested and sick of hearing about it b) lost all their money by buying on peaks (or just never bought in when it was $0.20 and are pissy about it) or c) don't have a clue what they're talking about. At this point, it has to be treated like a volatile stock. Does it have value? As much value as someone is willing to buy it off of you for. Will the price go up or down? Impossible to tell. Is it going anywhere? Doubt it. I predict that as more people adopt it and as it becomes more mainstream, the value will increase logarithmically and stabilize.

MichaelDickens 13y ago
> If everyone is talking doom and gloom, buy in. If everybody is talking about how bitcoin is the greatest thing ever and people are starting bitcoin investing clubs and "the price is going to keep skyrocketing!!!!1"...it's time to sell. Right now there are plenty of people in both camps. What do we do then? If we're just talking about predicting Bitcoin's price, I don't see that we have much reason to believe we can do better than chance.
- orthecreedence 13y ago
  That's probably why the multi-hundred-dollar fluctuations lately. There's also not really enough chart data (or volume) to facilitate technical trading. You're right. If you have your money in bitcoin right now, you are taking a pretty big risk. However, I personally think that if the past year is any indication, there's not really a cap to the value it has at this point. It could add another few 0s to it's value by next year (subsequently taking other altcoins with it). At the very worst I think it could drop down to ~100USD, but to go past there would be really difficult as it spent a lot of time building that base between 100-150. Still, that's about 80-90% loss if you were to buy today. You'd be stupid to put in your life savings, but if you like high-risk, high-reward investments, it might be worth it to throw a few grand in.
  - mkramlich 13y ago
    Agreed that in the long term Bitcoin will either add a few 0's, in terms of say USD/BTC price (and equiv gov fiat), or, it will go towards 0. But I think the 0 scenario will only happen if a massive exploitable flaw is found, or, if a clearly better replacement/successor (most likely another digital/crypto-currency) to Bitcoin comes along, and everybody clearly and can easily switchover to it. I'm not sure if Bitcoin is perfect. But I do think it's like the Internet was to a lot of older tech, but with respect to money. That says a lot about its potential and its niches. I know that as an engineer it's been frustrating for years, if not decades, being aware that money is essentially just a score, just bits of information, a number, and that moving money around is just like incrementing/decrementing two money fields in a database, but somehow the government banking and paper monetary systems seemed to make it so much more complex and slower and bureaucratic that in needed to be. (Also taxation has been made ridiculously over-complex, partly by malicious intent, I think, and partly and innocently by the momentum of the less tech available in an earlier age, the age before electronics, computers and the Internet.) In short, Bitcoin is one particular way of letting money be as simple as a shared distributed scoreboard, as just bits in a database. It's not perfect. But it's much closer to what money fundamentally is at its heart.
    - MichaelDickens 13y ago
      > But I think the 0 scenario will only happen if a massive exploitable flaw is found, or, if a clearly better replacement/successor (most likely another digital/crypto-currency) to Bitcoin comes along What about something like this: * A sufficiently large group of people decide for whatever reason to sell their Bitcoin. * Prices drop. * In response, tons of people start selling their Bitcoin. * Positive feedback loop. Bitcoin loses almost all its value. Since Bitcoin has no fundamental value, there's nothing to stop its price from plummeting. I think the above scenario is fairly probable.
      - orthecreedence 13y ago
        This happens in the stock market all the time. Generally what happens is buyers start challenging the sellers once the price drops enough. I'm not saying a crash is impossible, but it's going to take a lot more than a lot of people selling to bring the perceived value down to 0. I think something like an exploitable flaw is a much more likely reason.
stephenbez 13y ago
"Be fearful when others are greedy, and be greedy when others are fearful." -Warren Buffett

MichaelDickens 13y ago

> If everyone is talking doom and gloom, buy in. If everybody is talking about how bitcoin is the greatest thing ever and people are starting bitcoin investing clubs and "the price is going to keep skyrocketing!!!!1"...it's time to sell. Right now there are plenty of people in both camps. What do we do then? If we're just talking about predicting Bitcoin's price, I don't see that we have much reason to believe we can do better than chance.

orthecreedence 13y ago
That's probably why the multi-hundred-dollar fluctuations lately. There's also not really enough chart data (or volume) to facilitate technical trading. You're right. If you have your money in bitcoin right now, you are taking a pretty big risk. However, I personally think that if the past year is any indication, there's not really a cap to the value it has at this point. It could add another few 0s to it's value by next year (subsequently taking other altcoins with it). At the very worst I think it could drop down to ~100USD, but to go past there would be really difficult as it spent a lot of time building that base between 100-150. Still, that's about 80-90% loss if you were to buy today. You'd be stupid to put in your life savings, but if you like high-risk, high-reward investments, it might be worth it to throw a few grand in.
- mkramlich 13y ago
  Agreed that in the long term Bitcoin will either add a few 0's, in terms of say USD/BTC price (and equiv gov fiat), or, it will go towards 0. But I think the 0 scenario will only happen if a massive exploitable flaw is found, or, if a clearly better replacement/successor (most likely another digital/crypto-currency) to Bitcoin comes along, and everybody clearly and can easily switchover to it. I'm not sure if Bitcoin is perfect. But I do think it's like the Internet was to a lot of older tech, but with respect to money. That says a lot about its potential and its niches. I know that as an engineer it's been frustrating for years, if not decades, being aware that money is essentially just a score, just bits of information, a number, and that moving money around is just like incrementing/decrementing two money fields in a database, but somehow the government banking and paper monetary systems seemed to make it so much more complex and slower and bureaucratic that in needed to be. (Also taxation has been made ridiculously over-complex, partly by malicious intent, I think, and partly and innocently by the momentum of the less tech available in an earlier age, the age before electronics, computers and the Internet.) In short, Bitcoin is one particular way of letting money be as simple as a shared distributed scoreboard, as just bits in a database. It's not perfect. But it's much closer to what money fundamentally is at its heart.
  - MichaelDickens 13y ago
    > But I think the 0 scenario will only happen if a massive exploitable flaw is found, or, if a clearly better replacement/successor (most likely another digital/crypto-currency) to Bitcoin comes along What about something like this: * A sufficiently large group of people decide for whatever reason to sell their Bitcoin. * Prices drop. * In response, tons of people start selling their Bitcoin. * Positive feedback loop. Bitcoin loses almost all its value. Since Bitcoin has no fundamental value, there's nothing to stop its price from plummeting. I think the above scenario is fairly probable.
    - orthecreedence 13y ago
      This happens in the stock market all the time. Generally what happens is buyers start challenging the sellers once the price drops enough. I'm not saying a crash is impossible, but it's going to take a lot more than a lot of people selling to bring the perceived value down to 0. I think something like an exploitable flaw is a much more likely reason.

stephenbez 13y ago

"Be fearful when others are greedy, and be greedy when others are fearful." -Warren Buffett