About 40 Percent of Bitcoin Is Held By 1,000 Users. If a Few of Them Want To Sell, That Could Tank Values (bloomberg.com) 241
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency. From a report on Bloomberg: Holders of large amounts of bitcoin are often known as whales. And they're becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year. About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.
Show of Hands! (Score:5, Interesting)
Show of hands if you are tired of the bitcoin stories?
Re:Show of Hands! (Score:5, Interesting)
Show of hands if you are tired of the bitcoin stories?
I'm actually not... the responses to the stories are tiresome. It's the same over and over again from both lovers and haters of the coin. I am fascinated by how Bitcoin is doing though.
Re: Show of Hands! (Score:2)
I am trying to estimate the pop. I have my hard guess, and it seems like it might climb to that but then it drops.
So maybe just maybe. That said I don't own any but I expect ether to climb when bitcoin falls so that's my plan.
Re: Show of Hands! (Score:4)
I am trying to estimate the pop. I have my hard guess, and it seems like it might climb to that but then it drops.
So maybe just maybe. That said I don't own any but I expect ether to climb when bitcoin falls so that's my plan.
I've wondered about that too. How many people will transfer their money to Ether when Bitcoin falls. Would be nice to be invested before that happens. I don't think we'll ever see Bitcoin completely collapse, but I think there will be a huge drop at some point where it loses half or more of it's value over a period of days. (and then stabilize).
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I think the problem for Ether will be that any common exchanges will place both at risk. Ether still has a $XX Billion market cap, so I would say it has a long way to fall at this point.
Re: Show of Hands! (Score:4)
Study the history of Goldman Sachs, if you want to know how bubbles are created, inflated, then intentionally popped.
Related note - I hear that G$ has been looking into cryptocurrency as a new investment vehicle...
Re: Show of Hands! (Score:5, Interesting)
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That article was my introduction to the vampire squid; very thorough and well researched.
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I figured 10K would be an inflection point, it would either run or pop. Obviouslly it's run.
Next one is just before 50K and after that 100K
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I'm not and here's why (Score:5, Interesting)
The interesting thing is that the real story seems to be missed entirely. Everyone wonders if it's a bubble or if the valuation is too high. That's not the problem. Bit coin is, in its present algorithmic configuration, doomed by it's algorithmic desgin features. Perhaps it will change but there's two flaws of which I will point out one here.
1. Roughly 2000 transactions can be rolled up into each hash completion event. And by design the system equilibrates towards a difficulty where it take 10 minutes for a hash completion to occur. This means that when this becomes popular it becomes hard to directly record more than 2000 transactions (less due to over heads on side transactions) every ten minutes.
That merely makes it slow. But when it becomes oversubscribed in demand for transactions then people pay bounties to get their transactions at the top of the queue. Right now that bounty is about $20 per transaction.
let's compare this to a visa card. A visa merchant might pay 3% for the service. thus on a $666 transaction you would pay 3% or a $20 fee.
Ergo, for any transaction less than $666 bitcoin is ludicrously expensive.
thus it is slow, expensive and unsuited for ordinary purchases. It could be used to move large sums of money but not simple transactions or even micropayments.
I beleive it is this, not the valuation of the coin that makes bit coin doomed.
We saw the first high visibility retreat the other day when Steam stopped taking bitcoin.
Re:I'm not and here's why (Score:5, Interesting)
I know lots of people who are holding btc riding this thing up everyday. They think they are protecting themselves with standing sell limit orders and or stops.
I wonder if when the big moves come and everyone tries to transact, if they end up getting wiped out because the exchanges can process transactions, and the other side of the transaction sees what's happening and disappears ahead of the order processing.
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I think your numbers might be off somewhere; the peak day BTC transactions to the blockchain were 500k in 24 hours.
I think everyone here understands that the transactional model for BTC is doomed; what (most) of us are surprised at is how many people think it is a store of value. I get that it is inherently deflationary, and that has its advantages... but there are just so many ways for you to be robbed or the value to fall flat... it just doesn't pass the smell test.
As for a substitute for wire transfers
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500E3/24/6 = 3472 per ten minutes. Now nothing says BTC has to close at ten minutes, that's just it's threshold where a dificulty adjustment occurs. When the price rises more miners come on line and the rate of hashing increases. So for a while it's above 2000/ ten minutes. but then the adaptive algorithm kicks in and assumtotes back to that. so 3472 is quite beleivable as would 4000 for a transient peak.
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I wasn't trying to say it compars favorably to VISA cards. indeed I was saying it compares unfavorably. the figure i used, 3% is actually an upper bound on the transaction expense. IN reality VisaCards are less than that for most large transactions. plus all the other advantages you list.
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And credit cards are among the more expensive ways to move money. My bank charges $0.50 for a transfer up to $100 and $1 for transfers larger than that. Business accounts pay $1.50.
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yes. but visa cards are intended for commercial purchases. Like checks use to be. Paypal lets you do ACH over the internet. but relatively few people use wire transfers to buy a McChicken and Shamrock Shake or a game on steam
Re:I'm not and here's why (Score:5, Interesting)
I guess the bitcoin group could always change things to allow more transactions per block.
Right! and there's various schema to do just that which was why I couched my criticism in that caveat. However, they can't seem to decide on that.
My best guess is that with the rise of bitcoin futures (starting next week!) there will be a secondary trading market where you could just sign contracts for bit coin transactions outside of bitcoin. These would be debt obligations not actuall money transfers. But as we saw from CDO's on mortgages these are tradable. TO be specific say you have 1000 BTC. You go through some brokerage house to officially create a contract giving that to boeing in return for a used 727. Thus boeing has a document saying you owe them 1000 BTC. you have not given them 1000 BTC, but you are legally in indebted. Now Boeing can sell that debt obligation to rolls royce to buy new engines. this is exactly what happens with mortgages.
So with the rise of a liquid secondary market for bitcoin denominated obligations there may be no need to actually transact bitcoins directly except every now and then to pay interest on debts.
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Re:Show of Hands! (Score:5, Funny)
They used to be really annoying, but it's actually starting to get interesting; I feel like I'm watching the financial equivalent to a Russian dashcam live video stream.
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Yes. Tagged the story with "nomorebitcoinstories".
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We were tired of them when it was only once a week, aka Bitcoin Tuesday.
Every bloody day is nauseating.
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Show of hands if you are tired of the bitcoin stories?
But not too tired to post a whiny complaint?
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An the same could be said of you posting a whiny complaint about a "whiny" complaint?
An Dragonslicer was a one trick pony. Sightblinder was where it was at.
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Because after 3 days in a row of bitcoin stories I was interested to see if people where as tired as I was of them. Once I found out was in the minority I stopped posting and just started reading. I didn't post anything till someone, you, asked me a question.
Now here is some more useless rubbish. Why Dragonslicer? Of the twelve, with the exception of Stonecutter, I thought it was the lamest of Swords. Well as lame as a 1 meter long indestructible double sided straight razor forged by the gods can
Gold and Silver.... (Score:5, Insightful)
Re:Gold and Silver.... (Score:5, Insightful)
Gold and Silver are for maintaining wealth.
Bitcoin is for gambling with wealth. I think a lot of people are now viewing it as a get-rich-quick scheme. Sure, there are some serious investors in it, and some legitimate money gains by some people; but it doesn't create wealth. (Quite the opposite, since it takes wealth to mine). For one person to get $1,000,000 in bitcoin, other people must collectively give up $1,000,000.
All these people getting rich are doing so at the expense of other people who join later.
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You've just described Bernie Madoff's ponzi scheme.
But this time it's done on/with computers so it's new believe me. I think someone should patent this lol.
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Gold and Silver are inflation resistant currencies. Say you had a silver coin which you could buy a nice suite 80 years ago. A silver coin of the same quality and size, would be able to buy nice suite now.
Having Gold and Silver say worth $1000 today in 100 years it may be worth $20,000 However except for paying $150 a week for groceries you will be paying $3,000 a week, and the average middle class person would be making $100,000 a week.
Having gold and silver doesn't create wealth, it just maintains the we
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They are not pegged to inflation, but their price has normally been on par with it. Because Gold and Silver are a tangible item so their value will be nearly steady with inflation. We get spikes and dips because of a demand surge, or if a new supply is found. But in general you will be getting the same return as inflation.
This isn't bad, because it can help sustain wealth. But it isn't a good way to create wealth.
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Gold and Silver do fluctuate in value when you compare it to inflation. There have booms and busts. Just not nearly as much as BitCoin... or probably any other currency, for that matter.
But if you are worried about something holding value, you are not really investing, just storing wealth.
Re: Gold and Silver.... (Score:2)
Re:Gold and Silver.... (Score:5, Interesting)
Re:Gold and Silver.... (Score:5, Informative)
Hmm. http://www.macrotrends.net/133... [macrotrends.net] disagrees with you - especially if you remove inflation and turn off the log scale.
Since 2000 there's been a lot of volatility - but that's over the course of a decade, not a week.
Even the 10 year daily chart shows the maximum gain is around 10-15% over the course of four weeks (in August 2011), although there was a 15% crash over two days in April 2013 - http://news.goldseek.com/GoldS... [goldseek.com] has some analysis of that.
So no, gold is nowhere near as volatile as Bitcoin. Not even close.
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It is interesting how some of the 2000s spikes look like bitcoin bubbles on a slower timescale though. With the lesson that when gold starts going up fast, it's always come back down just as fast.
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Not atypical for many stock price graphs - most of them exhibit peaks and troughs in a fractal manner.
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To me, gold and silver have been stagnant. You might have some gains if you bought in around 2000 or so, but if you decided to come in around 2008 or later, at best, you likely would break even. Plus, there is one thing about precious metals... they can't be used for much while you own them.
With a chunk of real estate, I can lease it and make money. With a bunch of stocks, I can hold them and get dividends. With a cow, I can get milk from it. Precious metals do zero for me until I sell them, and while
Sounds Scary but.. (Score:2)
Re:Sounds Scary but.. (Score:5, Insightful)
The whales could have much to gain from tanking Bitcoin: Hold the coins to keep the value up, wait for publicly traded companies to form specializing in BitCoin transactions, then (before governments clamp down on cryptocurrencies or any strong signs of a coordinated clampdown are apparent), short those companies and dump the coins. Quickly use the money from the coins to buy even more short orders, and laugh at the collapse all the way to the bank.
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Quickly use the money from the coins to buy even more short orders
You realize that would put in a flow and effectively and potentially create a sqeeze.
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A large enough price dip would trigger a massive selloff among the market as a whole, including many of the "whales." Some irrational actors would indeed buy more, so the scenario assumes that they're a small enough minority not to derail the plan.
Re:Sounds Scary but.. (Score:5, Insightful)
no, the size of the money supply is too massive compared to any billionaire dollar holdings. There are *countries* that could affect the dollar with their holdings, but no individuals
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no, the true big holders, 3 countries, would crush them.
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Not yet, anyway. As inequality worsens and trillionaires arise, that could change.
Re:Sounds Scary but.. (Score:4, Insightful)
nonsense, the banking system and countries will always be the big players and *by design* would grow to quadrillions in holdings as the trillionaires came into existence, it can't be otherwise since the debt the trillions represent are the banking system's asset.
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no, the size of the money supply is too massive compared to any billionaire dollar holdings. There are *countries* that could affect the dollar with their holdings, but no individuals
Not only can it be done. It has been done. I forget who it was (possibly Edison) that used to tank small countries currencies for fun and profit.
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the point is the US is not a small country, the dollar is the global currency. only large countries or the western banking cartel manipulate it
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If Buffet, Gates and Bezos all collaborated they could definitely shift the market in USD.
Shit, Soros managed to shaft the GBP all on his own.
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A few billion from three people would be akin to using a sledgehammer to start a domino rally.
(I suspect they don't have more than a few million lying around in cash, to be fair)
Re:Sounds Scary but.. (Score:5, Interesting)
I was about to say the same, but with some numbers for context:
Currently, about 700,000 people hold 50% of the world's wealth. While that's 700 times the number of people in control compared to BTC, it also $280T or roughly 1000 times the total market cap of BTC.
https://www.usatoday.com/story... [usatoday.com]
https://blockchain.info/charts... [blockchain.info]
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You're equating wealth to bitcoin, a single "currency."
For a fair comparison, figure out how many people hold 50% of the world's US dollars.
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You have to take into account that this isn't a unique situations. If billionaires start dumping all of their dollars they could tank the whole US economy. They don't do that because it would be massively against their own interests, just as it would be against the whale's own interest to tank Bitcoin, they are the folks who have the most to lose in destabilizing it, and are going to do everything they can to stop that from happening.
True, but billionaires can also leverage their billions in non-liquid forms to generate income, whether through loans, interest payments, rents, whatever. So they have no real need or desire to ever pull out all their cash. These 1000 people holding bitcoins, while their coins are accumulating theoretical value they have no way to cash in on that value except by cashing out on their holdings, which would drastically and negatively affect their value. The only way they could really cash out is by growing
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The people at the top of the pyramid (Score:5, Insightful)
...because that's exactly what Bitcoin is. A pyramid.
An investment, but worse than any stock, because it's an investment in nothing.
And yes, it's also a "cryptocurrency" -- congratulations. Blockchain!
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How is it a pyramid when I can buy in, make money, and then cash out?
Re:The people at the top of the pyramid (Score:4, Insightful)
When you can subdivide that finite number into meaninglessness, and any fractional amount can translate at any arbitrary value into conventional currency based on some exchange rate, the fact that it is "finite" and "X amount have been mined" means nothing (including being "inflation proof", which it isn't).
I may use pyramid loosely; no, it's not a pyramid scheme nor a Ponzi scheme in the very strictest sense of those words. But it definitely is in the sense that a very small number of creators and/or early adopters of these schemes/"currencies" will benefit the most, to an inordinate degree. That, and they definitely benefit from new "recruits"...
Re:The people at the top of the pyramid (Score:5, Insightful)
I think what he is getting at is that it has no intrinsic value other than as an idea anymore.
The original idea of bitcoin was a currency. It has failed at that purpose.
What it has turned into is a speculative investment market based on what is essentially nothing.
So in a sense it is pyramid like in that your chances of making any money wholly depend on continued speculation. In addition specifically because there is a fixed amount (which artificially imbues it with "value" due to "scarcity"), that means those that got into it early are likely the only ones that are going to make any money, while those who jump on the bandwagon later are the ones that are going to eventually loose their shirts, much like a pyramid scheme. That said, it isn't exactly like a pyramid or a multi-level marketing BS. It is by it's own a new thing (and already there are copycats), which I can only assume in the future people will refer to an all new not quite illegal gray market framework for profit scam. No doubt it will inherent the "Bitcoin" brand as what they are called. We're witnessing the future of a new type of scammy construct. Heck prior to 2008 no one in the public had really heard about derivatives and debt artificial investment constructs as a way to make (on in the case of the eventual crash, lose) money.
So like a pyramid scheme I have no doubt a small number of investors will make out like bandits, however I see most people loosing. How long that is going to take is the kicker. It is ALL about perception (because the product itself has no real intrinsic value), which if you have enough users and momentum and sheer will to see it work can continue for a longer time than you think it might before it eventually fails. Perfect example is real estate prices, there are a lot of players and parties involved that have a significant motivation to keep things rolling along, so they will, until no matter what or how many folks try to prop it up will usually catastrophically fail. The big difference is that land and or houses is a physical thing that is going to have some sort of real value eventually no matter what. Bitcoin doesn't even have that. Another example is what is the difference between a "true" pyramid scheme and a multilevel marking scam. Bitcoin is "closer" to being a pyramid scheme as there is absolutely nothing of value other than others propping it up as valuable. A multilevel marketing scam tries to skirt this legality by offering "products" that seem to have value, but in reality do not. They are simply there to get around laws preventing it. Things like vitamins and coffee etc... which while they might sell some token amount is all about the financial transactions and getting more people to join (i.e. invest) so as to prop up the value for those already in the scam. So as you see, while bitcoin is different, it isn't all that different. Either way, I wouldn't touch it with a 10 foot pole.
Originally I thought the idea was a good one, simply from a privacy perspective. We are moving away from cash, and into more digital transactions, but by doing so you give up a lot of autonomy as everything you do can be tracked, traced, marketed, examined etc... Which means things like cash will never really go away. Moving towards a much more digital transaction world, the world does really need some sort of crypocurrency to protect consumers against being exploited by just about everyone involved... Too bad that it appears bitcoin is an utter failure at that. Steam said it best the other day (which isn't the only reason, but a good one), is that as a currency it is simply too volatile to be used to buy things anymore. I suspect if a new type is to be introduced and be successful, it will have to build in protections somehow to keep speculators at bay. That said fiscal speculation is a larger problem that haunts all sorts of investment vehicles and is likely a tough nut to crack.
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It's a pyramid scheme in the sense that the people who started it get most of the value while putting in a minimal investment while the people who come later give a lot of money to the earlier people for a tiny, tiny, piece of the game.
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The same thing could be said of company shares.
"But companies make profits and sell products!"
Yes, but they only make profits and sell products because PEOPLE ARE BUYING THE PRODUCTS.
The only REAL wealth being generated is by WORKING PEOPLE.
Bitcoiners and whales (Score:5, Insightful)
Google 'slaying the bearwhale' for lolz; the last time a whale cashed out, Bitcoin nuts actually convinced each other to buy up the coins as fast as they were released in order to keep the coin value up. Obviously the smart move if you really believed in Bitcoin's long term viability would be to let the price crash and buy at the bottom, but the Bitcoin ecosystem isn't exactly chock full of rational players.
This is old hat, and also not (Score:2)
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If own an exchange, you can run a mixing service.
Essentially, you can churn those coins until it takes a major forensic analysis to figure out who owns what, and even then you won't have certainty. Of course, you're going to lose a lot on transaction fees with the current state of Bitcoin if you want to work with smaller amounts...
What part of "Pyramid Scheme" do these idiots.... (Score:2)
Re:What part of "Pyramid Scheme" do these idiots.. (Score:4, Funny)
>So exactly what part of "Pyramid Scheme" do these idiot "investors" not understand.
"Shut up you're just jealous because you didn't get in early and I'm going to be rich for doing nothing while you work like a sucker".
I think that about covers it.
Congratulations bitcoin! (Score:5, Interesting)
Bitcoin currently has about 15 million userrs [statista.com]. So 1000 of them is only 0.0067%.
1% of the world's population owns about half the world's wealth [theguardian.com].
By creating a currency ostensibly free from the corrupting influence of government control of fiat currencies, bitcoin has managed to become a currency which is 150x even more corrupt.
No problem, there is precedent. (Score:2)
For the best deal (Score:4, Interesting)
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange.
Mostly; the online exchanges just aren't equipped to handle massive volumes, as we witnessed Coinbase crashing. If they REALLY wanted to unload such a massive amount, rather than simple trading...... the most efficient way to get the most bang for their $, would likely be to find a large buyer directly ---- for example, sell 25,000 BTC to a major bank or investment firm at a small discount to the exchange price, rather than trying to dump it on the exchange, and getting a lot less $$$, because the price goes down on the exchange the more units you sell, and before you know it the buyer-demand is exhausted and short term price is less than you want to sell for.
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By a select few with large amounts who can manipulate things to cash out together at a certain point. This will leave everyone else holding the bag so to speak and the cycle will repeat as large groups left over try to recoup losses from the first group by doing the same thing.
It's harder for the big guys to get out (with a large % of their money) than the little guys. If you've got one bitcoin, you can sell it at any time. If you've got a few thousand bitcoin, you have to sell them slowly over a long period of time, or your sale of them will cause the price to drop dramatically and you get less of your "value" from the coins.
Re:Potentially tank... (Score:5, Insightful)
"I'm no whale but I've been buying small amounts since 2012 and my bitcoin net worth is greater than all my other assets + cash + stock, but I'm not selling."
Bit Coins are so valuable that they are worthless.
It is like having an infinity dollar bill. No one will be able to give you change so you cannot use it. Bitcoins are growing so fast, that a complete idiot would purchase anything with them. Because you cannot purchase anything with them, then it is just imaginary wealth.
You could sell them, but if the price next year goes up by a factor of 100 again, then you will be kicking yourself for buying that car or house where its value will not match to what you had spent.
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Because you cannot purchase anything with them,
I've been purchasing stuff with them since early 2014. That's actually the only reason I had any. I bought a handful at $500 and have been buying stuff twice a year with them.
I actually just sold off one to break even on my original buy and make everything in my non-MMJ state 'free' for the last 4 years.
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Isnt everything just imaginary wealth? My house is only worth what it is because everyone else around here is willing to pay X amount for any that come up for sale. Paper money is just an IOU from the govt.. and so on and so on..
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Technically that is true for any appreciating asset. What you do is sell enough to cover your initial investment, and take money out periodically leaving some amount that can still grow.
I wouldn't recommend doing it with your 401k, but if the guy has put in $100/month for the last 5 years instead of going out for a nice meal then that is his decision.
"Never [invest | gamble] more than you are comfortable losing."
Comment removed (Score:4, Interesting)
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But if you were the vendor and you got an infinite dollar bill to pay for something, and you had to give it back then you would had given it away for free, and you wouldn't be compensated for the effort. So the money is no good.
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Isn't this an anti-bitcoin story for once? This is the opposite of hype.
Re:We get it, mods.... (Score:5, Interesting)
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they sell when it's high and buy when it's low
The "highs and lows" are only apparent in hindsight.
It is easy to see patterns in past data (even if there are none), but if you try to guess tomorrow's price, you will usually do no better than chance.
If you think otherwise, then please explain why everyone isn't rich.
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Some people are worse at guessing than others?
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Sucks to be you (Score:2)
I've been making money all week. Don't know why everyone here calls it a pyramid scheme or even scam. Don't forget its also a bubble that is going to pop! Said everyone when it hit $100, then $1000, then $10,000. Almost hit $20k but self corrected down to $15k now.
Re:Sucks to be you (Score:4, Insightful)
If you own bitcoin, and haven't converted to other forms of currency, then you're not making money: You're like a homeowner whose house value has gone up a lot: you have value on paper.
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That is quite possibly the worst and most self-incriminating response you could have given from a PR standpoint without crossing the line into cursing or misusing Slashdot records to seek retribution against the AC's post.
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Check the UID, you got trolled, bro.
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They allow those special characters in usernames? Well hell, Slashdot ought to correct that and wipe the troll account.
Amusingly enough, all you have to do to my previous post is change the word 'worst' to 'best' and it applies to the troll perfectly.
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Bitcoin is the complete opposite of anonymity. Anyone on the planet can trace every transaction ever made by all wallets.
And as soon as an exchange associates a person to a wallet, which is needed when you want to cash out, you know that person's transactions history.
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Maybe the guy is buying a 150 million dollars home somewhere.
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You see, Monopoly money is printed by Hasbro, with no natural constraints, much like fiat currencies (e.g., the USD) is printed by their respective governmental institutions.
Bitcoin (in fact, all cryptocurrencies) by contrast are more like gold. They are mathematically constrained to a very well-known limited supply, about 29 million in the case of bitcoin. The supply is well known. The only variable is the demand.
All money is artificial. I don't understand why this point is so hard
Re:wth is bitcoin (Score:5, Interesting)
The big difference is that currencies don't rocket up and down by a factor of 12. That's what speculative instruments do.
Until the bitcoin value stabilizes, it by defintion cannot be properly used as a currency and will not be accepted as such by the public.
It's a fun roller coaster ride, but not a practical means of travel, to extend a metaphor.
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I believe you may have misconstrued the problem with Bitcoin. It's not so much the volatility of fiat currencies... I mean of bitcoin. Whatever. One could just as easily argue that the USD (or whatever other fiat currency one prefers) is ridiculously volatile relative to bitcoin.
But no, that's not the issue. The issue is that an inherently deflationary currency such as bitcoin, any other cryptocurrency, or indeed any commodity with a strictly limited, unmanaged supply, such as gold, is a seriously crapp
Re:wth is bitcoin (Score:5, Informative)
I believe you may have misconstrued the problem with Bitcoin. It's not so much the volatility of fiat currencies... I mean of bitcoin. Whatever. One could just as easily argue that the USD (or whatever other fiat currency one prefers) is ridiculously volatile relative to bitcoin.
No, Bitcoin is the volatile one, not USD, because USD remains relatively stable against all other currencies such as GBP, the Euro, or the Yen. Bitcoin fluctuates wildly against all of them... and it is the odd one out... bitcoin IS the one wildly swinging compared to the others.
The reason it matters is that you'd be silly to purchase anything with bitcoin at the moment, not just because of the charges involved ($20... has to be a fairly big purchase before $20 charge becomes negligible), but also because with bitcoin going up so much, what buys you a burger today will buy you a supersized combo meal tomorrow. A Ford Festiva today or an Aston Martin next week.
At the moment bitcoin is an investment instrument, not a usable currency. That doesn't mean it always will be. It will stabilize eventually... the question is- will it pop before stabilizing or will it plateau gracefully. No-one really knows. Once it's stable- it could be a meaningful exchange for large purchases... fees will probably be too much to use on a trip to Tesco for a bag of mushy peas- but if you're exchanging a million dollar transaction between two major corporations *cough drug dealers* then a $20 fee is chump change.
Re: (Score:3)
It would mean imports would become more expensive, and other countries would find our exports cheaper. That means that the US standard of living would decline. If people from other countries wanted to invest in the US, they'd get more for their money.
It would be a fairly gentle way to force some austerity and stimulate the economy. If we didn't need austerity or economic stimulation, it would just mean we got less stuff, depressing our standard of living.
Re:wth is bitcoin (Score:5, Interesting)
Bitcoin (in fact, all cryptocurrencies) by contrast are more like gold. They are mathematically constrained to a very well-known limited supply, about 29 million in the case of bitcoin. The supply is well known. The only variable is the demand.
Yes, we get the theory, thanks.
All money is artificial. I don't understand why this point is so hard for people to grasp. Money is worth whatever value people collectively ascribe to it.
Real money is worth what important people/organisations/countries ascribe to it.
The only people ascribing any value to Bitcoin so far are the the people who own enough to think they're going to be magically wealthy, for free.