As Value of Cryptocurrencies Falls, a Lot of New and Risk-Taking Investors Are Suffering Immensely (nytimes.com) 559
After the latest round of big price drops, many cryptocurrencies have given back all of the enormous gains they experienced last winter. The value of all outstanding digital tokens has fallen by about $600 billion, or 75 percent, since the peak in January, according to data from the website coinmarketcap.com. The New York Times: The virtual currency markets have been through booms and busts before -- and recovered to boom again. But this bust could have a more lasting impact on the technology's adoption because of the sheer number of ordinary people who invested in digital tokens over the last year, and who are likely to associate cryptocurrencies with financial ruin for a very long time. [...] By many metrics, more people put money into virtual currencies last fall and winter than in all of the preceding nine or so years. Coinbase, the largest cryptocurrency brokerage in the United States, doubled its number of customers between October and March. The start-up Square began allowing the users of its mobile app, Square Cash, to buy Bitcoin last November.
[...] Kim Hyon-jeong, a 45-year-old teacher and mother of one who lives on the outskirts of Seoul, said she put about 100 million won, or $90,000, into cryptocurrencies last fall. She drew on savings, an insurance policy and a $25,000 loan. Her investments are now down about 90 percent. "I thought that cryptocurrencies would be the one and only breakthrough for ordinary hardworking people like us," she said. "I thought my family and I could escape hardship and live more comfortably, but it turned out to be the other way around."
[...] In the United States, Charles Herman, a 29-year-old small-business owner in Charleston, S.C., became obsessed with virtual currencies in September. He said he now felt that he had wasted 10 months of his life trying to play the markets. While he is essentially back to the $4,000 he put in, he has soured on the revolutionary promises that virtual currency fanatics made for the technology last year and has resumed investing his money in real estate. "I guess I thought we were 'sticking it to the man' when I got on board," Mr. Herman said. "But I think 'the man' had already caught on, and had an exit strategy."
[...] Kim Hyon-jeong, a 45-year-old teacher and mother of one who lives on the outskirts of Seoul, said she put about 100 million won, or $90,000, into cryptocurrencies last fall. She drew on savings, an insurance policy and a $25,000 loan. Her investments are now down about 90 percent. "I thought that cryptocurrencies would be the one and only breakthrough for ordinary hardworking people like us," she said. "I thought my family and I could escape hardship and live more comfortably, but it turned out to be the other way around."
[...] In the United States, Charles Herman, a 29-year-old small-business owner in Charleston, S.C., became obsessed with virtual currencies in September. He said he now felt that he had wasted 10 months of his life trying to play the markets. While he is essentially back to the $4,000 he put in, he has soured on the revolutionary promises that virtual currency fanatics made for the technology last year and has resumed investing his money in real estate. "I guess I thought we were 'sticking it to the man' when I got on board," Mr. Herman said. "But I think 'the man' had already caught on, and had an exit strategy."
It's just a get rich quick scheme (Score:5, Insightful)
Those two anecdotes are stories of people hoping to magically get rich quick. The outcome is unsurprising.
Re:It's just a get rich quick scheme (Score:5, Insightful)
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That's basically the business model of internet startups. Build something, then hope that one of the big players actually thinks it has value and buys it before funding runs out because you have exactly zero idea how to monetize it.
Re: Interestingly, taxation shifted stocks to GFT (Score:2, Insightful)
The Greater Fool has been in practice long before the stock market and has been part of the stock market from its very beginning. It's your idiotic "it's the government's fault" thinking that leads to so many making the most basic investment mistakes like the two noted (all eggs in one basket).
Just to set the record straight, taxes in the US are geared toward long term investing and savings for retirement. It would be nice if it was also geared toward saving for higher education & primary residence own
Re: Interestingly, taxation shifted stocks to GFT (Score:5, Informative)
Actually, short term capital gains and unqualified dividends are taxed at ordinary income rates. Long term capital gains (stocks held longer than 1 year) and qualified dividends (stocks held for more than 60 days in a 121 day window around the dividend distribution) are taxed at preferential rates, as low as 0% depending on your income bracket but at 15% for a good portion of the population.
https://finance.yahoo.com/news... [yahoo.com]
Re: It's just a get rich quick scheme (Score:5, Insightful)
Re: It's just a get rich quick scheme (Score:5, Insightful)
They didn't walk away, exactly. They're still out there, mining, and manipulating the prices to suck in the remaining fools.
Re: It's just a get rich quick scheme (Score:5, Informative)
Blockchain isn't an improved version of a hash chain at all. It IS a hash chain. If you want to be generous, it adds some conventions so that a bunch of people can all agree on who gets to write the next node on the chain.
If you set up a public git account and came up with a system to assign a one time use password to a random registered accounts that they could use to make the next commit, you'd have a blockchain.
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Duh.
Re:It's just a get rich quick scheme (Score:5, Interesting)
I want to know where the hundreds of people who used to post here about how Bitcoin had no limits, that every last Bitcoin would soon be worth a million bucks went to. They've been embarrassingly silent lately.
Come back! We want to say "told you so!".
Seriously, where are they now?
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Reddit support groups telling each other to HODL until the values goes back up enough to afford that lambo.
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I am sure they will reappear next time the price goes up a little to tell us all how as 16 year olds they were buying ferraris and dating supermodels.
That was before they invested in bitcoin. Now they're sacking at Walmart.
Re:It's just a get rich quick scheme (Score:5, Funny)
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Those who opposed bitcoin from the start ignored this and instead declared that early investors making money automatically translated into a Ponzi scheme. They are good with Zuckerberg making insane money for his early Facebook investment but somehow it isn't okay for the bitcoin guys to do it because venture capital firms didn't get a piece?
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Technically, I think it's 20:-20,
Risk not understood. (Score:3)
Risk-Taking Investors take risks. News at 11.
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The headline is missing three words (Score:5, Insightful)
Surprising Exactly Nobody...
Well, OK, surprising the poor suckers who bought into this high-tech reinvention of the classic pump-and-dump I guess, but no-one else.
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Wait, are you seriously saying Bitcoin is basically the same as the US dollar?
That's kinda batshit. I'm not sure what angle you're going for with the Federal Reserve comments either.
Re:The headline is missing three words (Score:4, Insightful)
Re:The headline is missing three words (Score:5, Informative)
Are you sure?
Yup. The US Federal Reserve System is a stand-alone government entity, like the National Park Service or the IRS. What trips some people is the fact that the Fed uses multiple private banks to perform its duties instead of a single government bank like in most of other countries. This is no different from Pentagon using Boeing or Lockheed to build its planes.
Re:The headline is missing three words (Score:4, Informative)
Are you sure?
Yup. The US Federal Reserve System is a stand-alone government entity, like the National Park Service or the IRS.
I can see where you're confused. I checked the Federal Reserve Act [federalreserve.gov]. The Government part is the Board of Governors, the rest is corporate. Otherwise you wouldn't have a "Chairman of the Board". Nor would you have Section under the Federal Reserve Act for appointing a board [federalreserve.gov]. I was only trying to point out it was privately owned, which it clearly is, not that it was privately controlled - which it looks like it is according to the act.
What trips some people is the fact that the Fed uses multiple private banks to perform its duties instead of a single government bank like in most of other countries.
Well that's the privately owned part I was talking about. The thing that *really* trips me up is Section 4, Part 4 of the Federal Reserve Act [federalreserve.gov]
refers to its organization as a corporation:
4. General corporate powers
Upon the filing of such certificate with the Comptroller of the Currency as aforesaid, the said Federal reserve bank shall become a body corporate and as such, and in the name designated in such organization certificate, shall have power--
First. To adopt and use a corporate seal.
Second. To have succession after the approval of this Act until dissolved by Act of Congress or until forfeiture of franchise for violation of law.
Third. To make contracts
Fourth. To sue and be sued, complain and defend, in any court of law or equity.
Fifth. To appoint by its board of directors a president, vice presidents, and such officers and employees as are not otherwise provided for in this Act, to define their duties, require bonds for them and fix the penalty thereof, and to dismiss at pleasure such officers or employees.
It goes on with directors and so on then Section 24 [federalreserve.gov] talks about how to qualify shareholders. If it wasn't privately owned, which is true otherwise Section 24 would not exist however I wasn't trying to claim it was a corporation, which now I've had a look at the Act, it clearly is arranged that way, a Chartered Corporation (I think).
Btw - I already pointed out the List of federal reserve shareholders [slashdot.org] (The private owners) to Mr AC in case you were interested.
This is no different from Pentagon using Boeing or Lockheed to build its planes.
So the government uses the banks to set its monetary policy for the taxpayer. hmmmm, I'm not sure that's such a good idea.
Perhaps it is time to question your assumptions?
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"Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations."
https://www.federalreserve.gov/faqs/about_14986.htm
That took literally less than 30 seconds to check.
Re:The headline is missing three words (Score:5, Insightful)
Whole lotta crazy there. The 'board' is a federal agency, appointed by the president and confirmed by the senate.
Any net income (profit) the banks earn goes directly to the US Treasury, not the 'shareholder' banks.
There is no such thing as 'the 12 shareholders'. Every bank that is part of the federal reserve system is a shareholder - there are approx 3000 of them.
I have no idea what you think is in that link you sent that supports your position in any way. Is this one of those things where if you take the third letter of every word it spells out a secret message or something?
Re: The headline is missing three words (Score:4, Interesting)
You haven't solved the problem of money supply, management of which is what central banks specifically do. The cryptocurrency experience proves that just holding the money supply constant is not a solution, because since the stock of goods that money exchanges for increases with time, a fixed money supply just turns your currency into a hoarded investment, no longer useful as money.
The value of every fiat currency depends on how well its central bank keeps the money supply in track with the stock of fungible assets in the national economy. Producing slightly too much currency every year, as our Federal Reserve does, is a better approach than any of the cryptocurrencies out there.
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How is bitcoin different to gold? Most gold isn't actually used -- it's just stored.
Re:The headline is missing three words (Score:5, Insightful)
How is bitcoin different to gold?
Gold has a much longer history as a store of value, so it may have a much longer future as well.
Historically, gold has been a poor investment. A century ago, gold was worth $20 per ounce, which was enough to buy a nice tailored suit. Today, gold is worth $1200 per ounce, which is enough to buy a nice tailored suit. Correcting for inflation, the ROI has been roughly 0%.
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"Gold has a much longer history as a store of value [...] Historically, gold has been a poor investment"
Which is only good, as that's exactly what we want good money to do: store and represent value, but not creating value on itself.
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The reason Free Silver was a thing back in the 19th century was the economy was growing so fast that debtors were getting crushed by deflation. If the economic production of the US increases by 50% while the supply of gold only increases by 10%, then money-is-gold squeezes economic growth.
There is no particular reason to expect gold to be mined at the "correct" amount in any given decade. Obviously it does not have to precisely match economic growth, but it would be useful if there were any reason to bel
Re:The headline is missing three words (Score:4, Interesting)
How is bitcoin different to gold?
Gold has a much longer history as a store of value, so it may have a much longer future as well.
AND gold is actually usable for stuff other than as a currency. People like and buy gold jewelry. Gold also has industrial applications, so there will be a market for it. You will always find a buyer. The usability of bitcoin other than as a currency? Hmm... I just can't think of anything.
Historically, gold has been a poor investment. A century ago, gold was worth $20 per ounce, which was enough to buy a nice tailored suit. Today, gold is worth $1200 per ounce, which is enough to buy a nice tailored suit. Correcting for inflation, the ROI has been roughly 0%.
I would not call that a poor investment. I call that a stable saving strategy. Will it make you rich quick? No, but it won't make you poor either.
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Gold is far from the best electrical conductor. In fact copper is significantly better, with the best conductor with a higher conductivity is silver. Gold is prized because it does not oxidize so it is great for none switching contact surfaces where both copper and silver oxidize and create high resistances. Note however silver is generally better in a switch than gold where the oxide layer can be broken through by the mechanical action of the switch and/or where an arc can be expected (anything higher than
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Because the supply of gold increases at a percent or two a year with physical mining, the gold stock tracks the value of fungible goods more closely than any of the cryptocurrencies, causing its price to stay more in line with long-term reality. All cultures have accorded it value since the beginning of history, and because of its high density it is relatively easy to assay.
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Re: The headline is missing three words (Score:4, Interesting)
Except I can buy things with a dollar, ruble or euro.
I can't buy stuff with 99.99% of crypto currency . Companies stopped accepting it, as the value flycated to much,and transaction times took days.
Banks,credit cards process hundreds of million of transactions a day. Bitcoin could barely do 3 orders of magnitude less.
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You are making a serious mistake. You are confusing a technology with a particular product that uses that technology. Cryptocurrency (blockchain) is the technology, Bitcoin is a product that uses the technology.
While there may be very good reasons to think that in 10, 20, or 30 years cryptocurrency will be in widespread use, there is ZERO reason to believe that Bitcoin will be the particular cryptocurrency in widespread use.
'We' have not decided that BTC has any value. 'We' may have decided that cryptocu
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It doesn't matter how easy it is to switch to another competing coin. The fact that a competitor can exist means supply has increased. If demand for a competitor is high, that affects the value of your coin whether or not you can sell it. And that makes it even worse because you can't do anything about it. At least with "real" money in a stock market, y
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There's a definite limit to how much gold is on Earth, and it's surprisingly small:
https://www.bbc.com/news/magaz... [bbc.com]
Re:The headline is missing three words (Score:5, Informative)
There's a definite limit to how much gold is on Earth, and it's surprisingly small:
https://www.bbc.com/news/magaz... [bbc.com]
The key is "mineable" gold. There may be only 175 thousand tons that are extractable from land, but there is an estimated 20 million tons in seawater; it's the cost to extract it that makes it uneconomical. If a way could be found to extract it cheaply, gold would follow the same path as aluminum.
Re:The headline is missing three words (Score:5, Insightful)
Ponzi scheme.
Bitcoin may be a bad investment, and likely it is, but it is NOT a Ponzi Scheme. If you think it is, you don't understand Bitcoin, you don't understand Ponzi Schemes, or both.
There are many profound differences, but one obvious difference is that Ponzi Schemes are inherently fraudulent. Bitcoin is not. Investors know exactly what they are buying. All the information is on the table.
In the Pantheon of con men, no one is on a higher pedestal than Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi [wikipedia.org]. He has no equal among swindlers. Satoshi Nakamoto isn't even in the same class.
Re:The headline is missing three words (Score:5, Interesting)
A Ponzi scheme is one where returns for early investors are paid out by later investors.
That is a necessary, but not sufficient condition for a Ponzi Scheme. Ponzi schemes masquerade as legitimate investments, generating dividends. They are frauds. Bitcoin does NOT do this. There are no dividends and EVERYBODY KNOWS THAT. If you own a stake in a Ponzi scheme, you make money from the dividends, and you have no incentive to sell your stake. With Bitcoin, you can ONLY make money by selling to a "greater fool" at a higher price, and EVERYBODY KNOWS THAT.
Ponzi schemes have a single authority. Bitcoin does not.
Ponzi schemes are fraudulent, with hidden information. Bitcoin is not, it is transparent.
Ponzi schemes pay dividends. Bitcoin does not.
Ponzi schemes do not rely on "greater fools". Bitcoin does.
Ponzi schemes go up in value, and then suddenly collapse to zero once the truth comes out. Bitcoin is declining slowly, and no "truth" is being hidden.
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Ponzi schemes have a single authority. Bitcoin does not.
Ponzi schemes are fraudulent, with hidden information.
Let me introduce you to MMM. It's a decentralized completely transparent Ponzi scheme! Buy now!
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I had a few (supposedly) smart people tell me last December that you only had to but 1 bitcoin now and you had your retirement totally sorted out.
But wait! (Score:5, Insightful)
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Always a pleasure to be of service. Here ya go: https://www.brecks.com/categor... [brecks.com]
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Hah. Forget tulips. I heard that someone had a bridge in Genoa.
Better hurry. There was a big price drop and the bridge is half off. It won't last long.
My heart (Score:2)
Pumps piss for them. I would just settle for getting my eight bitcoins back.
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ooooh, is this one of those facebooky "please ask me about what I'm referring to"?
There's one born every minute... (Score:2)
High potential returns means high risk (Score:3)
Whether stock market or a casino, gambling is taking high risks so nobody should be surprised if they lose their shirt. If you buy into something that returns significantly more than what you can borrow money at, of course it's high risk (or else the bank lending you money would buy those same investments instead of lending you money).
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But if it's a bubble based on speculation on something that has no inherent worth, it's no longer a risk - it's a certainty.
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Not true. There is plenty of money to be made on speculation bubbles, just like in a casino, it is not impossible possible to win, just unlikely.
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No, it works like a casino. And our casino-style capitalism. Anyone can win. But not everyone.
Stupidity is supposed to be painful (Score:5, Informative)
I kinda hate jumping onto the bandwagon, but investing in anything on the basis of "someone dumber than me will buy it for more than I paid" always leads to the greatest number of people learning the hard way that they're the dumber someones.
Tuition can be wickedly expensive in the school of hard knocks.
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Yes, I am. Stock markets also "experience corrections." Every three to seven years, on average.
Re: Stupidity is supposed to be painful (Score:5, Informative)
but investing in anything on the basis of "someone dumber than me will buy it for more than I paid" always leads to the greatest number of people learning the hard way that they're the dumber someones.
You are aware that is how the stockmarkets work, right?
No, it is not.
When you invest in stocks, you're buying a share of a (hopefully) productive company which is making and selling stuff, contributing to the economy and thereby generating profits for you. Some of those companies distribute your share of those profits in the form of dividends, others plow the profits into growth or stock repurchase plans, increasing the value of the shares you hold. Either way, you're buying a chunk of an enterprise you expect to be productive and therefore give you a positive return.
Sure, stock markets have ups and downs, sometimes running values above their realistic levels, and then correcting back downward, but over time and over a broad enough portfolio of stocks, you can absolutely expect positive returns on your investment. Not because you can sell to people dumber than you, but because you're buying pieces of real, productive enterprises that generate real value.
Cryptocurrencies are not the same. To the extent that cryptocurrencies are currencies, they're like "investing" in any other currency -- speculating on the relative strengths of different segments of the overall economy, which are wildly unpredictable and provide no engine of long-term predictable gains like that of healthy companies. Trading in "real" currencies takes two forms: arbitrage which attempts to profit from short-term changes and serves to provide liquidity for currency exchanges while smoothing out spurious differences, and hedging, which helps to limit the effects of currency swings on companies that trade in multiple currencies. No on "invests" in currencies by buying and holding (well, other than central banks, which do it for reasons other than generating profits), because there's no reason to believe that will work.
The reason people have "invested" in cryptocurrencies is because they have not been behaving like currencies. But there's also no real growth engine behind them beyond pure speculation: buying on the basis that "someone dumber than me will buy it for more than I paid". There was one reason to expect the continual increase in cryptocurrency values: the fact that most of them (especially BTC) have a hard upper limit on the number of coins that can be created. But the problem with that "hard upper limit" is that there is no limit on the number of cryptocurrencies that can be created. Not only that, but they don't actually work well as currencies, for numerous reasons.
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Tuition can be wickedly expensive in the school of hard knocks.
Speaking of tuition, I read somewhere that a lot of college kids were taking out cash advances on credit cards to try and make money off of bitcoin. To the point where credit card companies revised their cash advance policies to specifically forbid such a practice (not that they can stop it from a practical perspective). So there were a lot of dumb kids who probably already had crushing student loan debt who now have crushing credit card debt as well.
No, but look at the benefits (Score:3, Interesting)
It's not all bad.
All these crypto-miners have fostered better GPUs, and have driven demand for more generating capacity in the power grid. And now that it's over, the rest of us can use these for useful purposes.
So thank you, early adopters. Sorry that the inevitable happened to your wasted energy.
Re:No, but look at the benefits (Score:5, Insightful)
and have driven demand for more generating capacity in the power grid.
Yes by consuming the same energy as the industry, commercial and residential activities of a nation with 18million people at a time where emisisons and energy waste is considered critical, all the while bolstering the startup of decommissioned dirty power while the world is being screwed.
This planet is fucked. I just hope Elon builds the rocket in time.
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Ordinary, hard working? (Score:5, Insightful)
"I thought that cryptocurrencies would be the one and only breakthrough for ordinary hardworking people like us,"
And yet you were throwing debt at what was essentially a "get rich quick" scheme? That's not ordinary nor hardworking, that's just idiocy.
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And yet you were throwing debt at what was essentially a "get rich quick" scheme? That's not ordinary nor hardworking, that's just idiocy.
It's an ordinary - as in, nobody of significance - hard working guy thinking a Nigerian prince will give him millions and millions of dollars. You'd be surprised how many people suddenly go off on a tangent and think this is it, I've struck gold when in reality they're the scam victim or they're the fall guy in some money laundering / drug smuggling / pyramid scheme. I mean one thing is whether or not crypto-currencies have a market, another thing is to believe this is like free money for everybody. After t
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With maybe the difference that gold, platinum, silver and the rest of the non-ferrous metals actually do have a value due to them actually having some useful application.
Re:Ordinary, hard working? (Score:4, Interesting)
No, know what you're doing instead of jumping a bandwagon you don't even remotely understand the mechanics behind.
I want to get rich like a CEO, so I go and create a business without knowing the first thing about running one. Then, after the inevitable crash, I come crying why I can't use the markets to my advantage like Musk and Bezos and that the bad ruling class wants to keep me down and it totally isn't my fault.
I am curious... (Score:5, Interesting)
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Some analyses of the size of the bubble have been performed:
https://www.moneyweb.co.za/news-fast-news/bitcoin-the-biggest-bubble-in-history-is-popping/
I'm not aware of any comparisons of the nature of the press surrounding it though. That is quite an interesting question.
Bitcoin has real problems. (Score:3, Informative)
Transaction times and transaction fees are awful and not at all competitive with credit (let alone cash), and there is no clear way to address either problem. In fact, it looks like both problems will only get worse as bitcoin becomes more popular. Until both problems are solved, bitcoin is worthless as a currency because it can't be used like other currencies can.
Re: Bitcoin has real problems. (Score:2, Troll)
FUD.
Transaction times are faster than ACH or credit transfer and fees are laughably low. You can even send without a fee, but it might take a bit longer then.
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This just is not true at all. You can send without a fee, in which case your transaction will never be processed. Therefore actually, you can't. Here in NZ, I can transfer between banks essentially instantly and it costs nothing. I'm not sure how Bitcoin is cheaper or faster.
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The reason why it takes a while for large sums is protection against money laundering. Without that in place some of the powers that are will quickly come down upon you and end your financial game.
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Interbank-transfers are actually massively cheaper than bitcoin transfers and have assured low execution times. For example, a SEPA transfer of unlimited (!) volume costs around 25 cent for the end-customer.
I have seen too many of those patterns (Score:5, Informative)
in the last 47 years of my life. It always comes down to this. once the mass media hype starts and ordinary people are dragged into the next financial get rich quick scheme in the masses, it is better to get out if you are into something.
The pattern is usually that you get lots of press reports, that you should invest, that this thing is a totally new economy which works differently, that you are stupid if you do not invest. Once those reports crawl up, you can expect a crash between the next three months and a year.
I have seen this with the dot bomb bust, with the housing bubble etc... and the patterns 1929 were exactly the same, when Kennedy went out of the stock market 1928 because he got stock advices from people working on the street.
Also the bomb cycle always is the same, it starts to go down, the financial press and others are screaming hold... then it recovers slightly everyone is yelling it just was a hickup and then it goes down again everyone screams you have to hold and then over and over again with a few upwards pumps along the road. The people screaming hold, usually are the ones connected to the big investors selling big time to get out while everyone thinks they can recover.
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I agree with you, which makes the post directly after yours so hilarious!
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Why does one of the best analysis of the whole mess come from an AC? You have a faint idea how many are actually going to read this now? Log in next time!
Because this is spot on. The hallmark of a bubble-bust is usually when mass media reporting starts dragging in the uninformed who think they could get a share of the cake. From then on, it's a cycle of greed, fear and greed until the inevitable bubble-popping.
I dare say that you can even go so far as to kill any market that way, simply by hyping it in the
Bitcoin is UP over 5% the last 24 hours. (Score:2)
Don't believe short sellers FUD.
Elon? (Score:2)
Don't believe short sellers FUD.
Didn't your doctor say you need to get more sleep?
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Who can sleep with most of his house's mortgage invested in bitcoins?
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Don't believe short sellers FUD.
And global warming is hoax because it's colder today than yesterday. Don't believe the alarmists.
Woot! Cheap GPUs again (Score:3)
At the rate the miners were going they were actually putting out as much carbon dioxide as a small country, not good. Let's hope for our sakes that crypto currencies won't created another bubble for our wallet's sake and our environment's.
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bubble (Score:4, Insightful)
Whenever taxi drivers start giving you investment tips, it's a bubble.
"The Man" was selling in February (Score:3)
A fool and his money are soon parted (Score:2)
EoM
I was right. (Score:2)
It's not immesurable (Score:5, Insightful)
If you borrow money to invest (loans or leveraging), or short stocks (where the maximum gain is the value of the stock, while the maximum loss is potentially infinite - the inverse of buying stock) without understanding the risks involved, it's your own fault.
I've bailed out friends and family members with loans - basically invested in them. But it's never affected me financially if they don't pay me back because I made each loan assuming they wouldn't pay me back and I would take a 100% loss. If they do end up paying me back, that's a bonus.
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If you lend someone $250 and they start avoiding you to pay you back, it was money well spent.
My grandfather used to say that.
This just in (Score:3)
People joining pyramid game late are taking heavy losses while those at the top cash out.
Ponzi schemes are... (Score:2)
Ponzi schemes are built on the greed of their victims.
It's not rocket science, but some people are just too dumb to ever learn even when it's spelt out in the simplest terms.
I got out at the top (Score:4, Interesting)
What really scared me was the number of people that were throwing big money in at the top. Some of these people were very smart people and they basically dropped $30-50k.
They don't talk about Bitcoin so much anymore, and I don't ask.
Re:I got out at the top (Score:4, Interesting)
FOMO'ing and buying the top is something that happens in all markets. It is false to say this is because bitcoin is a scam and all that usual FUD.
The problem is not crypto. It's people. The same trading errors they make in FX or stocks are repeated in crypto.
Trading is not hard logically. It is challenging emotionally. Most people are afraid to buy when the price is low "what if it goes to 0??" and they then fear they won't "make a killing" as the price increases. With money on the line they fail to make good decisions based on compelling risk/reward calculations.
They can be really smart but if they never traded before, never had skin in the game then they're just noobs. Noobs do noob things and when there's money on the line they lose it.
Why people cannot bring themselves to paper trade for a year or so is beyond me. You do not need to lose money. Write $100k on a piece of paper. Risk no more than $2k loss on any one trade. Write your trades down, calculate fees. Write entries & exits. See if over a period of 1 year you can keep your $100k - most people cannot.
What makes people think they can just sink $50k into something at random, no really knowing what it is they are buying, if the market is trending and expect to make large gains in a short period of time is simply beyond me.
Trading is about taking other people's money. It's not nice and it's not fair. No one forced anyone to play the game.
To address your post directly; it's not scary, it's one of the signs it's time to cash out and this ALWAYS happens when a market turns parabolic. That steep rising curve that looks like a sheer cliff drop...too many people that don't know what they are doing buy there.
They will talk about bitcoin soon enough...when the next bull cycle starts.
Where are those slashdotters? (Score:2)
So where are they guys on /. who were advocating buying in February, March, and April, stating that BTC was worth north of $100,000?
Did they cash out? Are they still buying now? What are their outlooks for the currency now?
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The value of a commodity is what someone else is willing to pay for it.
Are you willing to pay 6 grand for a bitcoin? If not, why do you think someone else is?
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Bitcoins is a bit like pumpkins. Pumpkins are also a great investment, but you want to sell before Halloween.
Re:The bird may have flown... (Score:5, Insightful)
No. People selling at 20k is smart. Greed is people buying at 20k.