Author Topic: Is it too late [bitcoin]?  (Read 82241 times)

seattlecyclone

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Re: Is it too late [bitcoin]?
« Reply #150 on: November 30, 2017, 04:31:10 PM »
A question for the cryptocurrency proponents on here:

At what price point would you consider a Bitcoin to be overvalued? Why?

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #151 on: November 30, 2017, 04:32:14 PM »

You might disagree about where or how specific types of fraud should be protected, but I think it's pretty inarguable that VISA, etc, already provides that protection (without new regulation), while crypto does not.

Even with new regulation, where is the enforcement mechanism?  Do I have to sue in court to get my $14 back for dead batteries? Right now all I have to do is click a few links on a web-site.  Presto-bingo.  I am protected.
It isn't true that chargebacks are provided without regulation.
Where did I suggest there was no regulations for chargebacks?  Obviously I'm not going to go read a stack of regulations that have nothing to do with the point I made.

Your otherwise fairly thorough description of crypto features make it clear that I cannot get a transaction reversed without a crooked merchant agreeing to do it.

I don't care about fraudulent chargebacks, because I don't commit fraud.  It's not my problem to solve.  And yes, I do understand that the cost of dealing with that is baked into the system that we all pay for in some way or the other, so I don't want to digress about that point, either.

So let's at least agree to stay a little focused on the one point I made, ok?

A chargeback against a fraudster merchant is at least technically feasible to do with credit cards.  Since it's not technically feasible to do that with crypto, what are you suggesting the solution should be?  A law suit?  Call Tony the enforcer? Something else? 

How do I get my $600 back from a merchant I've never done business with before for a software package that won't even install, if the merchant is unwilling to cooperate?
« Last Edit: November 30, 2017, 04:47:02 PM by ILikeDividends »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #152 on: November 30, 2017, 04:44:45 PM »
. . . is at least a scenario where we as consumers can protect ourselves by choosing who we do business with.
No it isn't.  Your so-called "solution" only protects me from getting ripped off a second time, not the first time. Denying future dealings with that merchant will not get my money back.

This, to you, seemingly insignificant protection, has saved me far more dollars over the years than any fraudulent charges against my card (yes, I've had that happen too).

I'm not pretending to be an expert in all the other problems inherent in credit cards.  And I'm not looking at this from the perspective of an industry security specialist.  I'm looking at it as a consumer.  This one single aspect of the CC system is why I never use cash when I have a choice.  And I'll never use crypto, either, until that base is covered.

You are looking at this from a static perspective.  Once you remove that "small problem" protection, it will rapidly mushroom into a "big problem" just as soon as merchants realize that we are, quite literally, at their mercy.

But that isn't what you're understanding. You're not looking at this from a consumer perspective like you say you are. You're only looking at this from your perspective instead of looking at it from the perspective of the system as a whole. Estimates show that fraud costs the average organization more than 5% in revenue every year. Combine that with the fact that VISA charges 2-4% merchant fees and we're looking at between 7-9% that could be returned directly to the consumer for every purchase we make. I understand that you might feel protected because you can chargeback any transaction you want, but the truth is that comes at the hidden cost of 7-9% on every transaction you make with a credit card. I'm sure that would add up to way more than what you'd ever lose in your refund scenario each year.

thenextguy

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Re: Is it too late [bitcoin]?
« Reply #153 on: November 30, 2017, 04:45:59 PM »
This is only the beginning of the bitcoin price drops!

I would think that 30% or 40% drops are right around the corner on thin transactions.

Get ready for a rush to the exit.... It's about to get messy.

This isn't going to age well.

My question to the skeptics. 

Have you ever used bitcoin, studied it, or the ecosystem? Have you read about the banks who are developing their entire future around it?
https://cointelegraph.com/news/koreas-second-largest-bank-building-secure-crypto-wallet-services

https://news.bitcoin.com/japans-sbi-crypto-businesses-mining/

Also, when would you ever considering using bitcoin? What would it take? Or do you just scream ponzi, scam, tulips until you die, regardless of how many people are using it?

Since I am certain that it is B.S., I will never use bitcoin.  I will mock it to the end.

This guy's ancestors: "Horseless carriages?!?!? That's absurd!"

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #154 on: November 30, 2017, 04:49:51 PM »
. . . is at least a scenario where we as consumers can protect ourselves by choosing who we do business with.
No it isn't.  Your so-called "solution" only protects me from getting ripped off a second time, not the first time. Denying future dealings with that merchant will not get my money back.

This, to you, seemingly insignificant protection, has saved me far more dollars over the years than any fraudulent charges against my card (yes, I've had that happen too).

I'm not pretending to be an expert in all the other problems inherent in credit cards.  And I'm not looking at this from the perspective of an industry security specialist.  I'm looking at it as a consumer.  This one single aspect of the CC system is why I never use cash when I have a choice.  And I'll never use crypto, either, until that base is covered.

You are looking at this from a static perspective.  Once you remove that "small problem" protection, it will rapidly mushroom into a "big problem" just as soon as merchants realize that we are, quite literally, at their mercy.

But that isn't what you're understanding. You're not looking at this from a consumer perspective like you say you are. You're only looking at this from your perspective instead of looking at it from the perspective of the system as a whole.

Geez Luise!  Yes, of course I am. It is the same perspective I apply to shopping for groceries, cars, services; pretty much everything.  I, the consumer, get to pick the perspective I use for my own consumer decisions. Guilty as charged. So can we get on with the point I made that you seem so eager to get away from?

I never suggested there aren't 10,000 (however many) more pressing issues from the industry's perspective, so can we please just skip all those other digressions?

How do I get my $600 back from a merchant I've never done business with before for a software package that won't even install, if the merchant is unwilling to cooperate?

You can't regulate a capability into a technology that is incapable of delivering it.  So let's just fast-forward and assume all the new regulations are now in place.  What's the mechanism for execution?  How is that consumer protection delivered to the consumer, in your view?

If your answer is, as it seems to be, "that's just not important, and there is no practical remedy with crypto," then please just say it so we can agree to disagree and wrap this up.  Then I'll happily abstain from opining on any other issues with the CC system that you want to post about.  This is a gaping flaw in the whole BitCoin-as-a-payment-system story, and that's the only point I ever made.
« Last Edit: November 30, 2017, 05:50:35 PM by ILikeDividends »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #155 on: November 30, 2017, 04:58:32 PM »
Geez Luise, yes, of course I am. It is the same perspective I apply to shopping for groceries, cars, services; pretty much everything.  So can we get on with the point I made that you seem so eager to get away from?

How do I get my $600 back from a merchant I've never done business with before for a software package that won't even install, if the merchant is unwilling to cooperate?

If your answer is, as it seems to be, "that's just not important, and there is no practical remedy" then please just say it so we can agree to disagree and wrap this up.

If my choice is between paying 9% more on every transaction I make versus taking the risk that the merchant I am dealing with might not refund me in the way that I'd like, I'd take the latter every time. So we can agree to disagree.

phil22

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Re: Is it too late [bitcoin]?
« Reply #156 on: November 30, 2017, 05:14:44 PM »
As the saying goes... "What the wise man does in the beginning, the fool does in the end."

If someone has made gains in bitcoin (or other cryptos) to date, I see no reasons not to sell it all out now, chuckle to oneself, and walk away richer instead of waiting for a huge wipe-out drop to come along.

or maybe we'll continue holding, just like we did when the bubbles popped and "the end was near" in 2011, 2013, and 2014?

have you made profits on your stock holdings?  how do you convince yourself to not sell your stocks and enjoy a nice chuckle?


harvestbook

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Re: Is it too late [bitcoin]?
« Reply #157 on: November 30, 2017, 05:30:14 PM »
Dogecoin was started as a joke and it now has a market cap of $227 million. So does it really matter if it's "worth" nothing? It's just a faith system like any other, including the US dollar.

Then again, I thought Facebook would die since it's a plaque on the human race, and now Zuck is wanting to run for president. I guess nobody knows nothing, especially me.


headquarters

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Re: Is it too late [bitcoin]?
« Reply #158 on: November 30, 2017, 05:32:51 PM »
I purchased 25 BTC when the price was around 2.60, and sold it at around 12 dollars. A few years later it was at 1,000. Now it's around 10k. Still kicking myself.

gp_

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Re: Is it too late [bitcoin]?
« Reply #159 on: November 30, 2017, 05:41:10 PM »
If someone has made gains in bitcoin (or other cryptos) to date, I see no reasons not to sell it all out now, chuckle to oneself, and walk away richer instead of waiting for a huge wipe-out drop to come along.

because some people realize that things are just beginning...

gp_

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Re: Is it too late [bitcoin]?
« Reply #160 on: November 30, 2017, 05:44:58 PM »
I purchased 25 BTC when the price was around 2.60, and sold it at around 12 dollars. A few years later it was at 1,000. Now it's around 10k. Still kicking myself.

my friend purchased 1,000 btc at $4, and couldn't (and can't) remember his private key!

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #161 on: November 30, 2017, 05:47:10 PM »
A question for the cryptocurrency proponents on here:

At what price point would you consider a Bitcoin to be overvalued? Why?

I think this is the wrong question and it focuses on the price of the currency, when that really should be the focus. I'll refer to my previous post for further details on why in case you missed it here:

https://forum.mrmoneymustache.com/investor-alley/is-it-too-late-(bitcoin)/msg1791232/#msg1791232

The reason why the price of the currency doesn't matter is this. Let's say that the price of the currency has reached $500,000 per bitcoin. Why does that matter? It doesn't. At that point volatility in the price would be miniscule. If you make $50,000 a year (regardless of whether you're paid in crypto or not), if you chose to move that money over into crypto, you'll have $50,000 worth of bitcoin. You own the same amount of monetary value, but the value in that exchange is that you'll be able to use the Bitcoin payment network to make transactions and take advantage of the features it provides.

So I don't think bitcoin can be over or undervalued. It is simply a reflection of the size of the market at that given time. Whether we chose to denominate a bitcoin as Bitcoins or Satoshis or any other unit is irrelevant. The underlying value comes from the bitcoin network, not the currency token. Therefore, the value of the token is irrelevant so long as the network continues to provide value. If it fails to provide value as a payment network, then I would not put money into it since it would not make sense to do so and likely others would see it that same way. So I don't think of it from the perspective of whether the exchange rate is over or under valued. It's more along the lines of whether or not I find value in the bitcoin network itself and whether or not I see it having continued value in the future. In which case, I do find value in it and therefore I chose to put some of my money there so that I can use the bitcoin network. If that someday ceases to be the case, then I will no longer choose to hold any bitcoin.
« Last Edit: November 30, 2017, 05:50:55 PM by lifeanon269 »

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #162 on: November 30, 2017, 05:58:18 PM »

The reason why the price of the currency doesn't matter is this. Let's say that the price of the currency has reached $500,000 per bitcoin. Why does that matter? It doesn't. At that point volatility in the price would be miniscule. If you make $50,000 a year (regardless of whether you're paid in crypto or not), if you chose to move that money over into crypto, you'll have $50,000 worth of bitcoin.
Again, I respectfully disagree.  Your assumption is apparently based on an idea that BitCoin valuation isn't a bubble.  I don't share that view.

If I earn $50,000, and I need to pay my income taxes in dollars, rather than in BitCoin, then it matters a great deal if I can't convert my $50,000 worth of BitCoin back into enough dollars to even cover my tax bill.  Not only am I unable to pay my taxes, I'll have nothing left to live on after I pay what I can.

That matters.

The only way valuation doesn't matter is if BitCoin completely displaces USD for legal tender.  Then I get paid in BitCoin, I pay taxes in BitCoin, all investments are quoted and paid for in BitCoin, and I make all other purchases and cash donations with BitCoin.  If everything else is valued in BitCoin, the question of BitCoin's valuation then becomes moot for anything other than foreign exchanges into other currencies.

Until then, valuation matters.

Then again, if BitCoin does take on the role of legal tender, what happens to the purchasing power of those who "invested" USD to buy into it early is an utterly open question with no precedence, and with no basis for conjecture.  The changeover would be governed by legislation, not by the market.  We all know how predictable and "fair" that is, right?
« Last Edit: November 30, 2017, 06:34:09 PM by ILikeDividends »

seattlecyclone

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Re: Is it too late [bitcoin]?
« Reply #163 on: November 30, 2017, 06:00:36 PM »
I'm actually pretty well on board with the idea that the value is in the network and the technology rather than the tokens. However to me, that speaks to the idea that if you need to use Bitcoins to complete some sort of financial transaction you should just buy the tokens you need at that point, rather than buying them now and holding for some potential future time when you might need them.

When you're buying something as an investment you do so because you believe its market value at some future point when you want to sell would be higher than it is today. By that metric, the question of whether the token is overvalued or undervalued at this moment is very relevant, and you should be able to speak to that question if you want to advocate for purchasing those tokens as an investment.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #164 on: November 30, 2017, 06:31:09 PM »
Again, I respectfully disagree.  Your assumption is apparently based on an idea that BitCoin valuation isn't a bubble.  I don't share that view.

If I earn $50,000, and I need to pay my income taxes in dollars, rather than in BitCoin, then it matters a great deal if I can't convert my $50,000 worth of BitCoin back into enough dollars to even cover my tax bill.  Not only am I unable to pay my taxes, I'll have nothing left to live on after I pay what I can.

That matters.

The only way valuation doesn't matter is if BitCoin completely displaces USD for legal tender.  Then I get paid in BitCoin, I pay taxes in BitCoin, all investments are quoted and paid for in BitCoin, and I make all other purchases with BitCoin.  If everything else is valued in BitCoin, the question of BitCoin's valuation then becomes moot for anything other than foreign exchanges into other currencies.

Until then, valuation matters.

But not being able to convert your $50,000 worth of bitcoin back to USD operates under the assumption that the bitcoin network no longer provides value to people and therefore there are no more people looking to buy tokens in order to use the network. This is why focusing on the price misses the main concept that the value comes from the network, not the token. If you feel that the network is what provides value and you see that people understand that value and there are buyers, then you won't have any problem converting back to USD knowing that there will be people who want to use bitcoin.

With regards to bitcoin as an investment, if you're again focusing on the price, you're going to be mislead. The real answer to the question is whether or not you feel there will be more users of bitcoin tomorrow than there are today. The number of users of bitcoin today is extremely small and the number of new signups at exchanges is rapidly growing every day. Understanding the value that the network provides and knowing that the longer the network operates, the more people will come to realize this value, then the answer to your question is:

"Yes, I feel that tomorow there will be more users of bitcoin than there are today."

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #165 on: November 30, 2017, 06:44:23 PM »
Again, I respectfully disagree.  Your assumption is apparently based on an idea that BitCoin valuation isn't a bubble.  I don't share that view.

If I earn $50,000, and I need to pay my income taxes in dollars, rather than in BitCoin, then it matters a great deal if I can't convert my $50,000 worth of BitCoin back into enough dollars to even cover my tax bill.  Not only am I unable to pay my taxes, I'll have nothing left to live on after I pay what I can.

That matters.

The only way valuation doesn't matter is if BitCoin completely displaces USD for legal tender.  Then I get paid in BitCoin, I pay taxes in BitCoin, all investments are quoted and paid for in BitCoin, and I make all other purchases with BitCoin.  If everything else is valued in BitCoin, the question of BitCoin's valuation then becomes moot for anything other than foreign exchanges into other currencies.

Until then, valuation matters.

But not being able to convert your $50,000 worth of bitcoin back to USD operates under the assumption that the bitcoin network no longer provides value to people and therefore there are no more people looking to buy tokens in order to use the network.
Again, you're reading way more into my statements than what I actually said.  I will not waste time arguing the opposing side of points that you want me to argue against, but that I never made, or even oppose, for that matter.

I am assuming nothing, except that the valuation of BitCoin is a bubble.

It is a fact that the perceived value of BitCoin is priced in USD.
It is a fact that the imputed value of BitCoin is determined by a free and open market.
It is a fact that volatility, regardless of whatever incredulous, and hypothetical future, is very much in play right now.
It is a fact that it lost over $500 in imputed value yesterday.  5%+ in a single day.
It is a fact that you cannot pay your taxes in BitCoin.
It is a fact that the typical honest worker does not get paid in BitCoin.
It is a fact that nothing at any significant scale is priced in BitCoin.
It is a fact that the vast majority of all purchases must be converted into USD to consummate the transaction.
It is a fact that BitCoin is not legal tender for all debts, public and private.
It is a fact that valuation matters.

So tell me, please, which of these facts you regard as assumptions, and how the valuation "doesn't matter." Then we can very quickly, and quite efficiently, agree to disagree.
« Last Edit: November 30, 2017, 07:15:03 PM by ILikeDividends »

GuitarStv

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Re: Is it too late [bitcoin]?
« Reply #166 on: November 30, 2017, 06:48:39 PM »
6) Fraud proof consumer protection

14) Irreversible transactions

These items in your list are contradictory.

How are these items contradictory? Care to elaborate a little on that?

Sure.

If you pay your bitcoin to someone perpetrating fraud, it's gone forever.  One of the benefits of bitcoin that you tout is that here's no way of tracing who has it, and it's anonymous so there's no way of knowing who you've paid.  Since transactions can never be reversed there's therefore no way to protect a consumer in a case of fraud.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #167 on: November 30, 2017, 07:14:53 PM »
When you're buying something as an investment you do so because you believe its market value at some future point when you want to sell would be higher than it is today. By that metric, the question of whether the token is overvalued or undervalued at this moment is very relevant, and you should be able to speak to that question if you want to advocate for purchasing those tokens as an investment.

Actually the only thing that holders do is take more bitcoin tokens out of circulation. All that means is that the amount of bitcoin available to the market to use needs to accomodate the size of that market. Since supply is restricted, the only way it accomodates a bigger market is to have a higher price. But, again, the price doesn't matter, especially for those using the network and simply converting to and from Bitcoin/USD. However, the more people who are using the network, even if you're immediately converting from BTC/USD, then the larger the demand (and thus price) to use the network will be.

So it all comes down to whether or not you feel the network provides value and that you feel people will want that value.

Again, you're reading way more into my statements than what I actually said.  I will not waste time arguing the opposing side of points that you want me to argue against, but that I never made, or even oppose.

I am assuming nothing, except that the valuation of BitCoin is a bubble.

It is a fact that the perceived value of BitCoin is priced in USD.
It is a fact that the perceived value of BitCoin is determined by a free and open market.
It is a fact that it lost over $500 in value yesterday.  5%+ in a single day.
It is a fact that you cannot pay your taxes in BitCoin.
It is a fact that the typical honest worker does not get paid in BitCoin.
It is a fact that nothing of any significant scale is priced in BitCoin.
It is a fact that the vast majority of all purchases must be converted into USD.

So please tell me again which of these facts you regard as assumptions, and how the valuation "doesn't matter."

You said that you wouldn't be able to convert back to USD, which is why I said you're assuming that the network would stop having value because that is what is required for that statement to be true. What do any of those bullet points have to do with whether or not the bitcoin network provides value? Almost everything is priced in USD for Americans since that is our current frame of reference for value. That doesn't mean that those things that we value in reference to USD don't have value (which is ridiculous for me to even say). The fact that bitcoin lost value doesn't mean anything either. With a few million in liquidity for a 5% price movement, that only explains that the network is currently small. So any variation in the number of users in any given direction can have large price fluxuations. Which again is why it is useless to focus on the price when the real trend is to focus on the usage of the network and the number of people using it. When looking from that angle it is clear that the number of users using it grows every day.

Why would one need to be able to pay taxes in bitcoin in order for it to have value? Why would one need to get paid in bitcoin for it to have value?

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #168 on: November 30, 2017, 07:23:15 PM »
Sure.

If you pay your bitcoin to someone perpetrating fraud, it's gone forever.  One of the benefits of bitcoin that you tout is that here's no way of tracing who has it, and it's anonymous so there's no way of knowing who you've paid.  Since transactions can never be reversed there's therefore no way to protect a consumer in a case of fraud.

Actually anonymity is not one of the benefits that I touted and it was not in the list I posted anywhere because bitcoin is not fully anonymous.

Certainly being taken advantage of by fraudsters seeking victims like those today who call you claiming to be someone and asking for credit card info. Done it bitcoin, I agree there is little recourse to get that money back. But, I'd much rather have inherent protections against fraud that I don't have control over (unauthorized transactions and account takeovers) versus having inherent protections from something I do have control over (like being manipulated to make a payment without understanding what I'm purchasing). That's the whole point about bitcoin, I'm the only one who can authorized payments, so it gives us control of our money back instead of the fraudsters.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #169 on: November 30, 2017, 07:24:02 PM »
When you're buying something as an investment you do so because you believe its market value at some future point when you want to sell would be higher than it is today. By that metric, the question of whether the token is overvalued or undervalued at this moment is very relevant, and you should be able to speak to that question if you want to advocate for purchasing those tokens as an investment.

Actually the only thing that holders do is take more bitcoin tokens out of circulation. All that means is that the amount of bitcoin available to the market to use needs to accomodate the size of that market. Since supply is restricted, the only way it accomodates a bigger market is to have a higher price. But, again, the price doesn't matter, especially for those using the network and simply converting to and from Bitcoin/USD. However, the more people who are using the network, even if you're immediately converting from BTC/USD, then the larger the demand (and thus price) to use the network will be.

So it all comes down to whether or not you feel the network provides value and that you feel people will want that value.

Again, you're reading way more into my statements than what I actually said.  I will not waste time arguing the opposing side of points that you want me to argue against, but that I never made, or even oppose.

I am assuming nothing, except that the valuation of BitCoin is a bubble.

It is a fact that the perceived value of BitCoin is priced in USD.
It is a fact that the perceived value of BitCoin is determined by a free and open market.
It is a fact that it lost over $500 in value yesterday.  5%+ in a single day.
It is a fact that you cannot pay your taxes in BitCoin.
It is a fact that the typical honest worker does not get paid in BitCoin.
It is a fact that nothing of any significant scale is priced in BitCoin.
It is a fact that the vast majority of all purchases must be converted into USD.

So please tell me again which of these facts you regard as assumptions, and how the valuation "doesn't matter."

You said that you wouldn't be able to convert back to USD . . . <misdirection snipped>

Why would one need to be able to pay taxes in bitcoin in order for it to have value? Why would one need to get paid in bitcoin for it to have value?
More deflections and digressions.  Stop running away. I never said, or even implied, that BitCoin doesn't have value. Value doesn't equal valuation.

You said valuation doesn't matter:


The reason why the price of the currency doesn't matter is this. Let's say that the price of the currency has reached $500,000 per bitcoin. Why does that matter? It doesn't.
I never said you couldn't convert BitCoin to USD.  I never said the BitCoin network didn't have value.

I'm not going to waste time arguing in opposition or support of points I never made, just because you want to argue the other side, solely for the purpose of deflecting discussion away from the point I actually did make.

That's called a straw man.  It's a weak-sauce tactic employed to avoid debating a point you know you can't win; just like the "consumer protection" debate you've apparently conceded by silently withdrawing from that discussion.

And just so it doesn't get lost behind your latest smokescreen, the only point I did make was that VALUATION DOES MATTER. You said it doesn't matter.  I say it does.  You don't need to write a novel about everything else, excluding that singular difference of opinion.  Stay on point, or agree to disagree (or just silently withdraw again).

At the very least, you should display the courage to back up your own words, or just continue retreating from them.  I don't really care which of those you choose to do.  But I won't allow you to stuff words into my mouth that I never so much as even whispered to myself.  If you actually do have something to say, it really doesn't have to be all so complicated and convoluted.  Just say it, in your own words, and stop pretending that you are qualified to speak for me.

I can assure you that you aren't even remotely qualified to speak for me.  So all of that nonsense is  just a waste of time, and an all-too-obvious ploy to cover your retreat while you run away from your own words.
« Last Edit: December 01, 2017, 03:58:31 AM by ILikeDividends »

waltworks

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Re: Is it too late [bitcoin]?
« Reply #170 on: November 30, 2017, 08:08:35 PM »
This guy's ancestors: "Horseless carriages?!?!? That's absurd!"

I think you can only use this analogy if it goes something like this:
-Horseless carriages are invented. They all kinda suck but the potential is obvious.
-Company A starts selling a horseless carriage that *really* sucks and has obvious problems, but they're first to market.
-Horseless carriages from company A and a variety of other companies (most of which don't even make any cars or know anything about how to make cars) are snapped up as fast as they can be made by ravenous buyers who immediately park them indoors and never drive them, because they're expecting them to sextuple in value in the next week.
-Retired grandmas and gullible people who have never invested in anything in their lives bid Company A's cars up to thousands of times their original value, to the point that to actually drive the car would be pure folly.

My point is that you can be all in on the *technology* involved while still realizing that Bitcoin itself (both the product and the valuation) are a bad joke/bubble and that it's pretty likely that a lot of people will lose their shirts.

-W

surfhb

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Re: Is it too late [bitcoin]?
« Reply #171 on: November 30, 2017, 08:47:09 PM »
At its current rate of growth, in 3 years bitcoin will be worth more than the total US GDP.   Obviously bitcoin cannot survive at its current trajectory and Capital will eventually run out, big investors will bail causing a severe crash.

Blockchain technology may well indeed become a foundation of the future of capital and finance, but that does not mean bitcoin is going to survive...along with the money you people are thinking of putting into it.   

Someone is going to be holding the hot potato.   Don't fuck with your money...its too important.
« Last Edit: November 30, 2017, 08:49:27 PM by surfhb »

seattlecyclone

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Re: Is it too late [bitcoin]?
« Reply #172 on: November 30, 2017, 09:54:14 PM »
When you're buying something as an investment you do so because you believe its market value at some future point when you want to sell would be higher than it is today. By that metric, the question of whether the token is overvalued or undervalued at this moment is very relevant, and you should be able to speak to that question if you want to advocate for purchasing those tokens as an investment.

Actually the only thing that holders do is take more bitcoin tokens out of circulation. All that means is that the amount of bitcoin available to the market to use needs to accomodate the size of that market. Since supply is restricted, the only way it accomodates a bigger market is to have a higher price. But, again, the price doesn't matter, especially for those using the network and simply converting to and from Bitcoin/USD. However, the more people who are using the network, even if you're immediately converting from BTC/USD, then the larger the demand (and thus price) to use the network will be.

So it all comes down to whether or not you feel the network provides value and that you feel people will want that value.

Yes, the price to use the network is quite high. It's been over $5 per transaction for a month now. This is an artifact of the protocol design inherent in the network. The rate of block discovery is predetermined, the size of each block is strictly limited, and transactions take a certain amount of space on the block. The network is basically maxed out. It can't accept any greater transaction volume than it currently has. People keep bidding up the transaction fees to get their transaction accepted by the network, and in so doing they make the network completely useless for small-value transactions. This seems like a major flaw for a so-called "currency."

But that doesn't seem to have any inherent relationship to the value of the currency tokens themselves. People just using the network to facilitate financial transactions don't care what the price is. I think we're all agreed on this point. They'll buy some number of coins and send them to another person, who will immediately sell them again. I'm therefore not convinced that the price of the coins should have anything to do with the number of people using the network. The transaction rate is basically maxed out as is. The price seems to be driven by speculation amongst people who are trying to use the coins as an investment rather than as a currency.

So, it all comes back to my initial question. What is a fair value for a bitcoin? At what price would you agree that the price is too high and sell yours?

BattlaP

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Re: Is it too late [bitcoin]?
« Reply #173 on: December 01, 2017, 02:39:37 AM »
When you're buying something as an investment you do so because you believe its market value at some future point when you want to sell would be higher than it is today. By that metric, the question of whether the token is overvalued or undervalued at this moment is very relevant, and you should be able to speak to that question if you want to advocate for purchasing those tokens as an investment.

what you just described is speculation, requiring a 'greater fool' to sell your whatever to later on.
investments are based on expected returns, such as dividends, rent, capital growth, business expansion, etc. 'fundamentals', if you will. none of which bitcoin possesses.

I know this is probably what you're trying to wring out of the enthusiasts eventually but I'll leapfrog that and just point out the obvious.

mubington

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Re: Is it too late [bitcoin]?
« Reply #174 on: December 01, 2017, 06:38:57 AM »
I'm generally bullish on crypto in general over a 10 year + period, but don't want to keep up with best practices for security and alt coin diversification,  as this seems like quite a skilled and labour intensive job

So is there a recommendation for a managed, security minded trust or fund I can invest in with relatively low costs that will track the industry in general?
« Last Edit: December 01, 2017, 06:40:45 AM by mubington »

sherr

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Re: Is it too late [bitcoin]?
« Reply #175 on: December 01, 2017, 07:11:38 AM »
I already pointed that out. His answer (if I understood it correctly) was that the systemic gains of merchants / financial institutions not having to deal with chargebacks will end up being of greater value to the consumer than actual fraud protection.

I don't buy it personally though. Crypto transactions are irreversible. Which means there is no such thing as fraud protection for the consumer. That alone will prevent cryptocurrencies from ever replacing Visa.

I guess you didn't understand then, because that wasn't my point at all and I said nothing along those lines at all (where did you even get that from?).

Oh I don't know, maybe because you say things like this?

But that isn't what you're understanding. You're not looking at this from a consumer perspective like you say you are. You're only looking at this from your perspective instead of looking at it from the perspective of the system as a whole. Estimates show that fraud costs the average organization more than 5% in revenue every year. Combine that with the fact that VISA charges 2-4% merchant fees and we're looking at between 7-9% that could be returned directly to the consumer for every purchase we make. I understand that you might feel protected because you can chargeback any transaction you want, but the truth is that comes at the hidden cost of 7-9% on every transaction you make with a credit card. I'm sure that would add up to way more than what you'd ever lose in your refund scenario each year.

Almost the entire purpose of chargebacks are to combat fradulent transactions. Almost the entire reason we have fradulent transactions are because are POS systems are designed around giving merchants our identities and "pull" authority over the funds in our accounts. This makes every single merchant we interact with a single point of failure for massive amounts of consumer information. We then try to overlap consumer protection regulation on top of this failed system that doesn't do anything but cost more money. Case in point being the fact that Target was a PCI certified company and yet they were breached which exposed tens of millions of consumer account data and resulted in millions of dollars in damages due to fraud.

Consumers are not the victims in that scenario, the banks are (the consumers will initiate a chargeback and be made whole again, the banks will be out the money if the merchants can't or won't refund it). You are intentionally confusing protecting *merchants* and *banks* from fraud when we are talking about protecting *consumers* from fraud. Protecting merchants /banks from fraud is a valid consideration, sure. But bitcoin offers exactly zero *consumer* fraud protection, which is what we're talking about. So stop saying it does.

GuitarStv

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Re: Is it too late [bitcoin]?
« Reply #176 on: December 01, 2017, 07:35:48 AM »
Sure.

If you pay your bitcoin to someone perpetrating fraud, it's gone forever.  One of the benefits of bitcoin that you tout is that here's no way of tracing who has it, and it's anonymous so there's no way of knowing who you've paid.  Since transactions can never be reversed there's therefore no way to protect a consumer in a case of fraud.

Actually anonymity is not one of the benefits that I touted and it was not in the list I posted anywhere because bitcoin is not fully anonymous.

Because bitcoin does not require identification, this means that anyone with a phone and an internet connection can use the payment network. Capital can simply flow naturally through peer to peer means if needed similar to the way that cash flows into these regions.

?

Certainly being taken advantage of by fraudsters seeking victims like those today who call you claiming to be someone and asking for credit card info. Done it bitcoin, I agree there is little recourse to get that money back. But, I'd much rather have inherent protections against fraud that I don't have control over (unauthorized transactions and account takeovers) versus having inherent protections from something I do have control over (like being manipulated to make a payment without understanding what I'm purchasing). That's the whole point about bitcoin, I'm the only one who can authorized payments, so it gives us control of our money back instead of the fraudsters.

Let's say I want to buy a widget.  I find an online merchant on the global market selling widgets for a good price.

- I pay for it with bitcoin.  No shipment comes.  I have no recourse or options.

- I pay for it with my credit card.  No shipment comes.  I dispute the charges and get my money back.


I'd much rather have protection from things that have occasionally happened to me (items not as described or not shipped from a seller) rather than the imaginary boogeymen (unauthorized transactions and account takeovers) that you're worried about.

simonsez

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Re: Is it too late [bitcoin]?
« Reply #177 on: December 01, 2017, 08:32:25 AM »
If my choice is between paying 9% more on every transaction I make versus taking the risk that the merchant I am dealing with might not refund me in the way that I'd like, I'd take the latter every time.
9% on every transaction?

I get gas at Costco using a credit card that takes 4% off that price.  Costco gas is typically about 20 cents per gallon cheaper than surrounding gas stations.  If a Bitcoin gas station opens up, will it beat Costco's price by 9%?

Is there a Bitcoin grocery store that will be 9% cheaper than current ones?  I also get 3% back on those purchases with a credit card.

Groceries and gas are the bulk of my credit card transactions.  I'm all ears if I can reduce my expenditures by ~5-9%.

Bonus points potential for Bitcoin - lower my non-credit card transactions by 9% as well, e.g. mortgage and student loan payments - that'd be great!

I'm surprised MMM doesn't espouse Bitcoin more often if you can save 9% on every transaction.  It seems like the obvious choice for frugal-minded people, so odd.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #178 on: December 01, 2017, 08:48:46 AM »
sherr and GuitarStv, what you're not understanding however is that even though the fraud costs of unauthorized transactions and account takeovers are "picked up" by merchants and banks, it is a systemic problem with massive costs and those costs are shared by everyone. You may think that you don't pay for it, but you do. It is an externalized cost no different than the bludgeoning costs of poor health or pollution. It doesn't matter whether or not fraud ever happens to you directly much the same way that it doesn't matter if a heart attack doesn't happen to you. You still pay for it. Saying that health care protects the patient from heart attacks because it will cover the costs of treatment and passes those costs on to everyone is no different than saying that our current system of fraud protection protects us from fraud because it covers the costs of individualized fraud and passes those costs on to everyone. Both of which ignores the main idea about what protection should be about: prevention.

To blatantly ignore it and say that the individual consumer isn't paying for it therefore it has no effect on them it absolutely ridiculous. If you both don't want to understand that, that's fine. We can just agree to disagree. I have nothing more to say about it.

Simonsez, no unfortunately you wouldn't save money by switching to bitcoin and shopping at the same locations. This is definitely a notable problem in a transition to bitcoin. It is no different than taking the personal desire to become healthier yourself and wishing for the rest of the country to do the same. In the mean time everyone else will still be having heart attacks for which the costs will still be shared by everyone. The same is true with bitcoin and fraud. So even if I switch to bitcoin and take advantage of its fraud protection, the industry as a whole will still have the financial burden on it and therefore I'll still be paying for it. I'm just espousing the benefits of bitcoin in hopes that we see a world with less systemic fraud in the same way that I hope that one day heart attacks are a thing of the past.
« Last Edit: December 01, 2017, 09:06:00 AM by lifeanon269 »

GuitarStv

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Re: Is it too late [bitcoin]?
« Reply #179 on: December 01, 2017, 09:00:58 AM »
sherr and GuitarStv, what you're not understanding however is that even though the fraud costs of unauthorized transactions and account takeovers are "picked up" by merchants and banks, it is a systemic problem with massive costs and those costs are shared by everyone. You may think that you don't pay for it, but you do. It is an externalized cost no different than the bludgeoning costs of poor health or pollution. It doesn't matter whether or not fraud ever happens to you directly much the same way that it doesn't matter if a heart attack doesn't happen to you. You still pay for it. Saying that health care protects the patient from heart attacks because it will cover the costs of treatment and passes those costs on to everyone is no different than saying that our current system of fraud protection covers the costs of individualized fraud and passes those costs on to everyone. Both of which ignores the main idea about what protection should be about: prevention.

So, you are arguing that you best protect the consumer by creating a mechanism for the fraud to happen predominantly on an individual level?



Sure.

If you pay your bitcoin to someone perpetrating fraud, it's gone forever.  One of the benefits of bitcoin that you tout is that here's no way of tracing who has it, and it's anonymous so there's no way of knowing who you've paid.  Since transactions can never be reversed there's therefore no way to protect a consumer in a case of fraud.

Actually anonymity is not one of the benefits that I touted and it was not in the list I posted anywhere because bitcoin is not fully anonymous.

Because bitcoin does not require identification, this means that anyone with a phone and an internet connection can use the payment network. Capital can simply flow naturally through peer to peer means if needed similar to the way that cash flows into these regions.

?

I'm still confused by this part.  Could you explain this better to me?  Is bitcoin anyonymous like cash (and thus can be used by anyone with a phone and internet connection) . . . or is it not anonymous and easy to trace who has what bitcoins?

seattlecyclone

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Re: Is it too late [bitcoin]?
« Reply #180 on: December 01, 2017, 09:09:17 AM »
Sure.

If you pay your bitcoin to someone perpetrating fraud, it's gone forever.  One of the benefits of bitcoin that you tout is that here's no way of tracing who has it, and it's anonymous so there's no way of knowing who you've paid.  Since transactions can never be reversed there's therefore no way to protect a consumer in a case of fraud.

Actually anonymity is not one of the benefits that I touted and it was not in the list I posted anywhere because bitcoin is not fully anonymous.

Because bitcoin does not require identification, this means that anyone with a phone and an internet connection can use the payment network. Capital can simply flow naturally through peer to peer means if needed similar to the way that cash flows into these regions.

?

I would call bitcoin pseudonymous at best. Every transaction is recorded forever in the public record. Person names are not recorded in the blockchain, but it's possible to trace a Bitcoin from its initial mining through every transaction it's ever been through. If at any point that Bitcoin is involved in a transaction where personally identifying information is collected (such as if you order something to have shipped to you, or you convert to fiat currency on a major exchange that collects this information to comply with local banking laws), your name will become associated with that bitcoin at that point in time, at least in that merchant's database. One could imagine such records (even from legitimate transactions) being collected as part of a criminal investigation, working backwards and forwards along the blockchain to try and identify people involved in illegitimate transactions.

The only way to remain truly anonymous when using bitcoin is to avoid such transactions entirely. Always trade bitcoins for goods or services with people who are keeping no record of your name or address.

Needless to say, this pattern does not fit how most people behave in commerce.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #181 on: December 01, 2017, 09:12:30 AM »
I'm still confused by this part.  Could you explain this better to me?  Is bitcoin anyonymous like cash (and thus can be used by anyone with a phone and internet connection) . . . or is it not anonymous and easy to trace who has what bitcoins?

Bitcoin does not require identification which therefore means it can't be discriminatory against who can use it and who can't use it. Much like anyone can pick up a dollar bill off the ground and spend it at the store. However, bitcoin is not fully anonymous which means that all transactions are tracked and therefore offers a trail behind for investigators to follow. It's as if every dollar bill's serial number was documented each time it exchanged hands on a publicly viewable ledger. There are methods by which law enforcement can use that information to follow the flow of money through the system. If at any point in time identification was leaked for any given transaction, the origin of that bitcoin can be traced through the entire blockchain. So yes, there is a difference between anonymity and the requiring of identification to be able to use bitcoin. They are not mutually bound features and bitcoin does not provide anonymity.

EDIT: seattlecyclone beat me to the answer...

GuitarStv

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Re: Is it too late [bitcoin]?
« Reply #182 on: December 01, 2017, 09:15:35 AM »
Sure.

If you pay your bitcoin to someone perpetrating fraud, it's gone forever.  One of the benefits of bitcoin that you tout is that here's no way of tracing who has it, and it's anonymous so there's no way of knowing who you've paid.  Since transactions can never be reversed there's therefore no way to protect a consumer in a case of fraud.

Actually anonymity is not one of the benefits that I touted and it was not in the list I posted anywhere because bitcoin is not fully anonymous.

Because bitcoin does not require identification, this means that anyone with a phone and an internet connection can use the payment network. Capital can simply flow naturally through peer to peer means if needed similar to the way that cash flows into these regions.

?

I would call bitcoin pseudonymous at best. Every transaction is recorded forever in the public record. Person names are not recorded in the blockchain, but it's possible to trace a Bitcoin from its initial mining through every transaction it's ever been through. If at any point that Bitcoin is involved in a transaction where personally identifying information is collected (such as if you order something to have shipped to you, or you convert to fiat currency on a major exchange that collects this information to comply with local banking laws), your name will become associated with that bitcoin at that point in time, at least in that merchant's database. One could imagine such records (even from legitimate transactions) being collected as part of a criminal investigation, working backwards and forwards along the blockchain to try and identify people involved in illegitimate transactions.

The only way to remain truly anonymous when using bitcoin is to avoid such transactions entirely. Always trade bitcoins for goods or services with people who are keeping no record of your name or address.

Needless to say, this pattern does not fit how most people behave in commerce.

So, then although:
10) Can't be confiscated

is true, it should therefore be possible to set up a system to mark bitcoins as stolen / used in fraudulent transactions so that people are prevented from spending them again in the future?  This would enable a level of consumer protection.

shadow

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Re: Is it too late [bitcoin]?
« Reply #183 on: December 01, 2017, 09:18:10 AM »
Bitcoin is the first cryptocurrency but bitcoin is not all of cryptocurrency. There is a clear distinction. Some of the arguments that apply to bitcoin do not apply to all of cryptocurrency (lack of fundamentals and returns; high electric sourcing vs lower power requirement; un-usability due to high fees, unreliable confirmation times, and replace-by-fee vulnerability; etc).

I do not care for bitcoin, however, cryptocurrency and blockchain is here and now, and will only grow increasingly in momentum, until it is deeply enmeshed with modern society. For reference, powerledger (I don't own any, nor am I advocating for it; just using as an example) is an indication of how consumers will be able to own highly liquid assets and trade them as utilities, such as energy, water, and other resources (selling electricity directly to other consumers in a decentralized manner through cryptocurrency).

There is alot of criticisms against the crypto space and much of it is valid (end user security, centralized fiat gateways, government intervention, etc). However, every system will have its inefficiencies. Credit cards allow chargebacks but crypto do not; for the consumer, this is great protection. On the flipside, this is a push-vs-pull mechanism, and there are processing costs, as well as far greater susceptibility to data-mining. For the provider of services, especially if they are on the other side of the world, they bear risk due to customer chargeback after they provide the service; for much of the world, the credit card system and banking services are inaccessible. There are very real use-cases for crypto, despite its inability to offer chargebacks to customers (which can possibly be offset in the future through blockchain smart contracts).

« Last Edit: December 01, 2017, 09:24:24 AM by shadow »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #184 on: December 01, 2017, 09:23:25 AM »
So, you are arguing that you best protect the consumer by creating a mechanism for the fraud to happen predominantly on an individual level?

I'm simply saying we're better off with a system that prevents the largest brunt of the costs of fraud across the industry (fraudulent transactions and account takeovers) and be left to our own devices to avoid situations where we deal with shady merchants with poor return policies and avoid the will to send money over the phone to some Nigerian Price. If I go to a reputable merchant with decent return policies, I know I'll be able to return my good even without the threat of a chargeback.

If someone sends money over the phone to a Nigerian Price, then I shouldn't be forced to share the costs of that stupidity. That person should just chalk it up to one of life's lessons as harsh as that may sound. Fortunately (or unfortunately depending on your perspective), fraud like this pales in comparison to the fraud I mentioned that's the result of massive data breaches on a regular basis.

sherr

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Re: Is it too late [bitcoin]?
« Reply #185 on: December 01, 2017, 09:35:00 AM »
sherr and GuitarStv, what you're not understanding however is that even though the fraud costs of unauthorized transactions and account takeovers are "picked up" by merchants and banks, it is a systemic problem with massive costs and those costs are shared by everyone. You may think that you don't pay for it, but you do.

I do understand all that, that's what I said and what you took such issue with:

I already pointed that out. His answer (if I understood it correctly) was that the systemic gains of merchants / financial institutions not having to deal with chargebacks will end up being of greater value to the consumer than actual fraud protection.

I don't buy it personally though. Crypto transactions are irreversible. Which means there is no such thing as fraud protection for the consumer. That alone will prevent cryptocurrencies from ever replacing Visa.

I guess you didn't understand then, because that wasn't my point at all and I said nothing along those lines at all (where did you even get that from?).

And I still don't buy it. If consumer fraud protection becomes impossible then consumer fraud will skyrocket. I'd much rather exist in a system where fraud protections exist and we all have to live with a small transactional fee to support those protections than one where they don't exist. And it's not like bitcoin transactions are actually cheaper, they're not and only going to get more expensive.

So, then although:
10) Can't be confiscated

is true, it should therefore be possible to set up a system to mark bitcoins as stolen / used in fraudulent transactions so that people are prevented from spending them again in the future?  This would enable a level of consumer protection.

Yes, but it would only operate by consensus. Which is to say that it wouldn't operate at all.

Telecaster

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Re: Is it too late [bitcoin]?
« Reply #186 on: December 01, 2017, 02:52:04 PM »

Also, when would you ever considering using bitcoin? What would it take? Or do you just scream ponzi, scam, tulips until you die, regardless of how many people are using it?

I basically view all money as illusion.  I don't care if you call it bitcoin, dollars, or seashells.  But I run a business.  Here is when I would consider accepting or using bitcoin when 1) I can pay my taxes and payroll with it, which currently is prohibited by law, and 2) if the price was stable.  For business purposes, you simply can't have your money be as volatile as bitcoin.  Can't do it. 

Little Aussie Battler

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Re: Is it too late [bitcoin]?
« Reply #187 on: December 01, 2017, 02:56:44 PM »
Back to OP's question, it's never too late to take up gambling.

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #188 on: December 01, 2017, 04:02:49 PM »
https://www.reuters.com/article/us-global-markets-bitcoin/bitcoin-loses-over-a-fifth-of-its-value-in-less-than-24-hours-idUSKBN1DU1Z3

IDK if this marks a characteristic fast turnover from the peak of the bubble, but I wouldn't be surprised.

Folks, if this is not your definition of bubble, you have no definition of bubble.

Man, I wish I could buy an options straddle on bitcoin. I'd be all in.
According to this article, you can!

https://www.investopedia.com/articles/investing/033115/it-possible-trade-bitcoin-options.asp

However, with implied volatility sometimes in the hundreds, that may damper your enthusiasm a little.

Maybe playing a straddle on CME Group might be a less nausea-inducing proxy for bitcoin.  Both CBOE and CME launch bitcoin futures contracts on 12/18. Maybe not exactly what you're looking for in a bitcoin straddle (they're going to make money regardless of bitcoin's direction), but you wouldn't even have to wait until the 18th to test-drive that, or some other more directional strategy.

Then again, if a hiccup in clearing bitcoin contracts drives CME into insolvency (as at least one person has warned), maybe a straddle would be an appropriate strategy anyway.  ;)

According to this article, you can trade options on futures contracts as well, but there's probably going to be that implied volatility gorilla there, too.  But you would get the juice from a straddle in both directions.

https://www.investopedia.com/articles/active-trading/052214/trading-options-futures-contracts.asp
« Last Edit: December 01, 2017, 04:46:04 PM by ILikeDividends »

ChpBstrd

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Re: Is it too late [bitcoin]?
« Reply #189 on: December 03, 2017, 08:13:08 PM »
https://www.reuters.com/article/us-global-markets-bitcoin/bitcoin-loses-over-a-fifth-of-its-value-in-less-than-24-hours-idUSKBN1DU1Z3

IDK if this marks a characteristic fast turnover from the peak of the bubble, but I wouldn't be surprised.

Folks, if this is not your definition of bubble, you have no definition of bubble.

Man, I wish I could buy an options straddle on bitcoin. I'd be all in.
According to this article, you can!

https://www.investopedia.com/articles/investing/033115/it-possible-trade-bitcoin-options.asp

However, with implied volatility sometimes in the hundreds, that may damper your enthusiasm a little.

Maybe playing a straddle on CME Group might be a less nausea-inducing proxy for bitcoin.  Both CBOE and CME launch bitcoin futures contracts on 12/18. Maybe not exactly what you're looking for in a bitcoin straddle (they're going to make money regardless of bitcoin's direction), but you wouldn't even have to wait until the 18th to test-drive that, or some other more directional strategy.

Then again, if a hiccup in clearing bitcoin contracts drives CME into insolvency (as at least one person has warned), maybe a straddle would be an appropriate strategy anyway.  ;)

According to this article, you can trade options on futures contracts as well, but there's probably going to be that implied volatility gorilla there, too.  But you would get the juice from a straddle in both directions.

https://www.investopedia.com/articles/active-trading/052214/trading-options-futures-contracts.asp
Thanks for the tip / update, ILD. Unfortunately, the cryptocurrency options company mentioned in the article has some steep qualifications to set up an account. It's essentially limited to institutions.

https://ledgerx.com/trade-on-ledgerx/

The angry mob with torches, pitchforks, and suddenly-outraged-politicians came after financial industry participants who facilitated the dot com and housing bubbles. Perhaps there's some hesitation this time around because everyone in the financial industry knows cryptocurrencies are a bubble.

dougules

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Re: Is it too late [bitcoin]?
« Reply #190 on: December 04, 2017, 10:58:47 AM »

Also, when would you ever considering using bitcoin? What would it take? Or do you just scream ponzi, scam, tulips until you die, regardless of how many people are using it?

I basically view all money as illusion.  I don't care if you call it bitcoin, dollars, or seashells.  But I run a business.  Here is when I would consider accepting or using bitcoin when 1) I can pay my taxes and payroll with it, which currently is prohibited by law, and 2) if the price was stable.  For business purposes, you simply can't have your money be as volatile as bitcoin.  Can't do it.

Can you imagine a store labeling the prices on their shelves in bitcoin?

This is a good a good example of deflation.  A loaf of bread went from 3 millibits to 0.2 millibits in a year.  Now people are hoarding cash hoping goods will be cheaper in the future.  That's not a stable currency.   

shadow

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Re: Is it too late [bitcoin]?
« Reply #191 on: December 04, 2017, 11:26:29 AM »

I basically view all money as illusion.  I don't care if you call it bitcoin, dollars, or seashells.  But I run a business.  Here is when I would consider accepting or using bitcoin when 1) I can pay my taxes and payroll with it, which currently is prohibited by law, and 2) if the price was stable.  For business purposes, you simply can't have your money be as volatile as bitcoin.  Can't do it.

Can you imagine a store labeling the prices on their shelves in bitcoin?

This is a good a good example of deflation.  A loaf of bread went from 3 millibits to 0.2 millibits in a year.  Now people are hoarding cash hoping goods will be cheaper in the future.  That's not a stable currency.

Many businesses that deal with crypto handle volatility by automatically converting to usd through processors like coinbase; and issuing refunds in usd.

Deflation/inflation is subjective in a way. A stable currency precludes a fixed rate: 1 unit of something would always equal one loaf of bread. One of the ways I imagine a stable currency has greater chance to exist is if future automation replaces human labor of food production; and a hybrid system (decentralized crypto algorithm and distribution with centralized governance) issues crypto that suffice to cover daily needs. 1 unit could always be pegged to a loaf of bread or bowl of soup, which is administered through automation.


JAYSLOL

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Re: Is it too late [bitcoin]?
« Reply #192 on: December 04, 2017, 12:12:54 PM »

Also, when would you ever considering using bitcoin? What would it take? Or do you just scream ponzi, scam, tulips until you die, regardless of how many people are using it?

I basically view all money as illusion.  I don't care if you call it bitcoin, dollars, or seashells.  But I run a business.  Here is when I would consider accepting or using bitcoin when 1) I can pay my taxes and payroll with it, which currently is prohibited by law, and 2) if the price was stable.  For business purposes, you simply can't have your money be as volatile as bitcoin.  Can't do it.

Can you imagine a store labeling the prices on their shelves in bitcoin?

This is a good a good example of deflation.  A loaf of bread went from 3 millibits to 0.2 millibits in a year.  Now people are hoarding cash hoping goods will be cheaper in the future.  That's not a stable currency.

This is my issue with Bitcoin too

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #193 on: December 04, 2017, 12:24:05 PM »
Can you imagine a store labeling the prices on their shelves in bitcoin?

This is a good a good example of deflation.  A loaf of bread went from 3 millibits to 0.2 millibits in a year.  Now people are hoarding cash hoping goods will be cheaper in the future.  That's not a stable currency.

There are a couple of misunderstandings in this post that I'd like to point out.

The first being that Bitcoin at the moment is not deflationary. It is inflationary and at the moment it is experiencing inflation at about 4%. The only reason why its price is going up is because demand in outpacing the rate of that inflation dramatically.

The point at which we'd see prices of goods displayed in bitcoin wouldn't happen until critical mass adoption has taken place for an extended period of time and a large portion of our economy is taking place in bitcoin. At that point demand will have likely stabilized which would mean that the volatility of its price would've dramatically decreased as well.

At that point bitcoin will likely be deflationary in nature due to the much lower rate of inflation (mined bitcoins) and the rate at which bitcoins are permanently lost. This will lead to a stable slowly growing value over time.

There are some misconceptions I feel about deflationary currencies that lead people to think that hording will take place with the currency and result in a massive decrease in consumer spending. However, real world economics has shown us that this is not the case. For example, today people line up outside doors on release day to purchase the new iPhone even though they'd be able to purchase that same phone for half the price one or two years later. While this is not currency economics at play, it is psychological economics that would lead a person to make the decision of whether to hold off a purchase knowing their buying power will be higher (2x) in a year or two for the same product. Also, people have basic needs that need to be met such as food, shelter, and clothing that most certainly would not be put off simply because of the deflationary aspect of the currency being used. If a person earns a salary in a deflationary currency, part of their weekly earnings will always go towards those basic needs before any deflationary effects of the currency are even felt. In other words, consumerism is a much more powerful economic force than deflation is.

What deflation does do is help protect worker wages over time as opposed to our current inflationary system that erodes wages over time. Wages are typically sticky which means that they don't adjust as easily to changes in the economic environment. So if worker wages are inherently tied to a deflationary currency, this will help protect the buying power of the working class regardless of whether or not working class citizens are receiving wage increases that meet the rate of inflation over time (and thus promote a more stable economy).

The idea that hording would take place of the currency under conditions where deflation is at or below 4% I believe to be false though. Today's massive price growth for bitcoin is not due to deflation though. If we reach a point where prices of goods are displayed in bitcoin and salaries are earned in bitcoin, then it will likely be the case that mass adoption has taken place in which case the price volatility will have decreased dramatically due to a stabilized demand. At that point the deflationary effect of bitcoin would simply be due to the rate at which bitcoins are lost and permanently removed from the market supply. In the meantime, as shadow said, volatility can be taken out of the equation for good purchases by continuing to peg the price of goods in a more stable currency such as the USD.

Let's not forget, currencies are not a zero-sum game. Bitcoin can become widely adopted and be an integral part of our world economy while perfectly co-existing with fiat currencies. This is a much more likely scenario contrary to what some on both sides of the virtual coin you're on would claim.

zoltani

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Re: Is it too late [bitcoin]?
« Reply #194 on: December 04, 2017, 01:49:38 PM »
I see random people on facebook with no investing experience posting about bitcoin and how to buy "stock" in cryptos. Is this the modern day equivalent of the shoe shine boy?


frozen

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Re: Is it too late [bitcoin]?
« Reply #195 on: December 05, 2017, 09:21:04 AM »
If I were to invest in bitcoin this late in the game, what is your advice?
How would someone who is just learning about Bitcoin and other crypto currencies invest for the first time?
Are Bitcoin futures offered via CME group available to individual investors?

Cwadda

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Re: Is it too late [bitcoin]?
« Reply #196 on: December 05, 2017, 10:01:32 AM »
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I see random people on facebook with no investing experience posting about bitcoin and how to buy "stock" in cryptos. Is this the modern day equivalent of the shoe shine boy?
Yes, it's awful. 

They also post about it being a passive investment opportunity, which is even worse.

Cwadda

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Re: Is it too late [bitcoin]?
« Reply #197 on: December 05, 2017, 10:03:01 AM »
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If I were to invest in bitcoin this late in the game, what is your advice?
Don't.  You won't see people around these forums advocating for it. The point of MMM is to get rich slow.

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How would someone who is just learning about Bitcoin and other crypto currencies invest for the first time?
There is a documentary on Netflix about it. I haven't seen it but have been meaning to.  It got good reviews.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #198 on: December 05, 2017, 11:03:34 AM »
Keep in mind a future is a leveraged bet on the underlying asset.  Leverage increases volatility.  Cryptos are volatile enough as it is.  I don't comprehend why anyone would want to make a leveraged bet on them to increase volatility.

The CME group proposal as best as I can understand it is half-baked since it does not address which bitcoin, bitcoin future contracts are to be settled against if there is an intervening hard fork between when the futures contract is written and when it settles.  This oversight is ripe for manipulation.

What makes you think that volatility will increase when futures markets open up? It is widely expected to decrease volatility.

Leverage works both ways and in CME's futures market, every long position must be matched with a corresponding short position.

Also, CME's futures market will have volatility limits imposed like some of their other markets have in place to limit or halt trading if there are price fluctuations beyond specific thresholds (https://www.investopedia.com/news/could-bitcoin-futures-help-limit-volatility/).

Right now in the bitcoin market, there is no reciprocal pressure on the market when panic selling ensues because there aren't many options out there for shorting your position. This means that investors are completely exposed to volatility which is why panic selling takes place. These futures markets will give investors opportunities to limit their risk in the market and thus this will have an effect on the underlying market.

Also, I don't think CME is making an oversight in regards to hard forks. They state on their website that there will be a policy in place for viable hard forks should one be planned. Also, their reference rate is based on several large exchanges and therefore their pricing in their futures market is directly dependent on how the market itself reacts to the hardfork. I don't think there will be much of a conflict in existing futures contracts in the event of a hardfork.

talltexan

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Re: Is it too late [bitcoin]?
« Reply #199 on: December 05, 2017, 12:29:06 PM »
Can you imagine a store labeling the prices on their shelves in bitcoin?

This is a good a good example of deflation.  A loaf of bread went from 3 millibits to 0.2 millibits in a year.  Now people are hoarding cash hoping goods will be cheaper in the future.  That's not a stable currency.

There are a couple of misunderstandings in this post that I'd like to point out.

The first being that Bitcoin at the moment is not deflationary. It is inflationary and at the moment it is experiencing inflation at about 4%. The only reason why its price is going up is because demand in outpacing the rate of that inflation dramatically.



Can you provide more details about how you calculated this 4% figure? Jargon is fine, I have a graduate degree in economics.