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Why is it bizarre to use it as an investment choice? If you have a sense for what makes a technology prevail and think that bitcoin will, it isn't a big leap to

by ericb 12y ago

Why is it bizarre to use it as an investment choice? If you have a sense for what makes a technology prevail and think that bitcoin will, it isn't a big leap to look at the value that can be transferred through bitcoin and say "in the success scenarios, it will have to grow to be many times larger." Like any investment, you have to be prepared to be wrong, though.

hawkice 12y ago
That's remarkably similar to saying: 'If you have a sense for what makes a trade deficit occur and think that one will, it isn't a big leap to look at the value that can be transferred through international trade and say 'in the scenarios where I am right, it will have to grow many times larger''. The analysis above is completely correct... and also available to precisely everyone, and is how the price is set globally. You aren't buying at a nerds-only price. So what you are really saying is that you are a more accurate speculator on currencies than people who do it for a living and have large trading and research apparatuses at their disposal. Could be true, but if you haven't attempted to speculate on currency before, there's no way for you to know that (and the prior probability is low).
- ericb 12y ago
  Bitcoin is more than a currency, so reducing opinions about it solely to "speculating on currency" is disingenuous. Bitcoin is a technology. I've made my career by picking winning open source technologies and betting my career on them. If you think some people who spend their lives predicting day-to-day price movements are better at making technology predictions than I am, I question your assumption. There's a reason I don't speculate in international currency, but that I am willing to express my fiscal-opinion on bitcoin. I also question your assumption that these groups are anywhere near representing the primary driving forces in the thinly traded bitcoin market at this point. There is no such thing as a nerds-only price for any investment in so much as you believe a given market is efficient. Fundamentally, what I would argue about investing in bitcoin is that small differences in the estimate of the success scenario produce wide differences in fair value estimates of this asset (because the outcomes possibilities are asymmetrical), so if you have a strong opinion on the different weighting of the possibilities it is no more unreasonable than buying an individual stock, and in fact may be the more rational choice.
  - Nursie 12y ago
    You know what, I have a number of disagreements with BTC as it currently is instantiated - the limited number, rewards skewed to a few early folks etc etc. But I agree, the tech is really interesting.

by ericb 12y ago

hawkice 12y ago

That's remarkably similar to saying: 'If you have a sense for what makes a trade deficit occur and think that one will, it isn't a big leap to look at the value that can be transferred through international trade and say 'in the scenarios where I am right, it will have to grow many times larger''. The analysis above is completely correct... and also available to precisely everyone, and is how the price is set globally. You aren't buying at a nerds-only price. So what you are really saying is that you are a more accurate speculator on currencies than people who do it for a living and have large trading and research apparatuses at their disposal. Could be true, but if you haven't attempted to speculate on currency before, there's no way for you to know that (and the prior probability is low).

ericb 12y ago
Bitcoin is more than a currency, so reducing opinions about it solely to "speculating on currency" is disingenuous. Bitcoin is a technology. I've made my career by picking winning open source technologies and betting my career on them. If you think some people who spend their lives predicting day-to-day price movements are better at making technology predictions than I am, I question your assumption. There's a reason I don't speculate in international currency, but that I am willing to express my fiscal-opinion on bitcoin. I also question your assumption that these groups are anywhere near representing the primary driving forces in the thinly traded bitcoin market at this point. There is no such thing as a nerds-only price for any investment in so much as you believe a given market is efficient. Fundamentally, what I would argue about investing in bitcoin is that small differences in the estimate of the success scenario produce wide differences in fair value estimates of this asset (because the outcomes possibilities are asymmetrical), so if you have a strong opinion on the different weighting of the possibilities it is no more unreasonable than buying an individual stock, and in fact may be the more rational choice.
- Nursie 12y ago
  You know what, I have a number of disagreements with BTC as it currently is instantiated - the limited number, rewards skewed to a few early folks etc etc. But I agree, the tech is really interesting.