Author Topic: Is it too late [bitcoin]?  (Read 13720 times)

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #50 on: November 20, 2017, 09:34:08 AM »
People are trying to figure out whether it's worth that. So far, I've seen nothing to justify the pricing.

I don't understand this concept. I hear it a lot when it is stated that "people don't know what bitcoin is worth".

The market determines its worth. If 1 million people want to own $1 worth of bitcoin and there are 1 million bitcoins in circulation, then each bitcoin would need to be worth $1 to accommodate that. In other words, the valuation of what 1 bitcoin is worth takes care of itself. The market determines it based on how much stake the market wants to put in bitcoin. If suddenly the market of 1 million people wants to own $2 worth of bitcoin but there are still only 1 million bitcoin in circulation, then each bitcoin needs to be worth $2 to accommodate the market.

This isn't like trying to create a valuation of a company based on revenues, net worth, etc. This is simply supply and demand and if more people want to use the network (ie, own some bitcoin), then the valuation is a simple calculation to determine what each bitcoin needs to be worth in order to accommodate the appropriate level of demand. If someone feels they own too much bitcoin, then they can sell theirs which opens up more supply for those who wish to own more. It is less of trying to determine how much a single bitcoin should be worth and more about how much monies worth of bitcoin any given individual feels they should own. The valuation part is easy and justifying the pricing doesn't really make sense unless you don't believe in free market economics.

runbikerun

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Re: Is it too late [bitcoin]?
« Reply #51 on: November 20, 2017, 09:34:39 AM »
A joint announcement by the US, EU and China of a severe crackdown on cryptocurrency would quite possibly be enough.

...Which is about as likely as Apple burning through its entire cash pile...

There's no point in continuing the conversation if you think a crackdown on crypto is as likely as Apple deliberately destroying itself for no good reason. If you think so, fine, but you're operating under assumptions that render any conversation pointless. A crackdown may not be likely, in the immediate future, but it's orders of magnitude more likely than Apple stock tanking - which was my point. It would take a great deal less to crater cryptocurrencies than it would to trigger US hyperinflation or reduce Coca-Cola stock to nothing.

runbikerun

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Re: Is it too late [bitcoin]?
« Reply #52 on: November 20, 2017, 09:36:05 AM »
People are trying to figure out whether it's worth that. So far, I've seen nothing to justify the pricing.

I don't understand this concept. I hear it a lot when it is stated that "people don't know what bitcoin is worth".

The market determines its worth. If 1 million people want to own $1 worth of bitcoin and there are 1 million bitcoins in circulation, then each bitcoin would need to be worth $1 to accommodate that. In other words, the valuation of what 1 bitcoin is worth takes care of itself. The market determines it based on how much stake the market wants to put in bitcoin. If suddenly the market of 1 million people wants to own $2 worth of bitcoin but there are still only 1 million bitcoin in circulation, then each bitcoin needs to be worth $2 to accommodate the market.

This isn't like trying to create a valuation of a company based on revenues, net worth, etc. This is simply supply and demand and if more people want to use the network (ie, own some bitcoin), then the valuation is a simple calculation to determine what each bitcoin needs to be worth in order to accommodate the appropriate level of demand. If someone feels they own too much bitcoin, then they can sell theirs which opens up more supply for those who wish to own more. It is less of trying to determine how much a single bitcoin should be worth and more about how much monies worth of bitcoin any given individual feels they should own. The valuation part is easy and justifying the pricing doesn't really make sense unless you don't believe in free market economics.

In other words, there is no such thing as an asset bubble, because "justifying the pricing doesn't really make sense unless you don't believe in free market economics".

Finallyunderstand

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Re: Is it too late [bitcoin]?
« Reply #53 on: November 20, 2017, 09:41:31 AM »
I always find the argument "it can't be a store of value when it's supposed to be a currency" funny. 

That doesn't make sense in my mind.  Dollars are a currency but people also use dollars to "store" wealth.  If I currently have $50k in my bank account in US Dollars I don't say, "well it's not storing value because I'm only supposed to use it as currency to facilitate transactions".  It stores value UNTIL I want to use it as currency. 

Cryptos can store value UNTIL you decide to use/sell/trade or whatever and get something out of it.  My couch is currently storing value.  I could sell it if I wanted and fairly easily at that.  I could even trade it for a bike.  Does that make it a currency?  Sort of.

Am I proponent of Crypots?  Nope.  Just stating that something can fit more than one definition at a time and who really gives a shit how other people invest their money.

These threads are like political arguments.  Please state the number of people you've converted one way or the other over threads debating cryptos, religion, or politics?  I would venture to guess it's less than 1.
« Last Edit: November 20, 2017, 09:44:38 AM by Finallyunderstand »

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #54 on: November 20, 2017, 10:00:04 AM »
There's no point in continuing the conversation if you think a crackdown on crypto is as likely as Apple deliberately destroying itself for no good reason. If you think so, fine, but you're operating under assumptions that render any conversation pointless. A crackdown may not be likely, in the immediate future, but it's orders of magnitude more likely than Apple stock tanking - which was my point. It would take a great deal less to crater cryptocurrencies than it would to trigger US hyperinflation or reduce Coca-Cola stock to nothing.

I say this because the US government only has a few months before billions of dollars of institutional money comes into the derivative market for bitcoin. Derivatives are a very messy thing. They're essentially a massive global financial casino. Some institutions take bets in one direction and others take bets in another. Some take bets with the assumption that they'll win some bets. When institutions leverage derivatives markets, they become absolutely dependent on them and the market as a whole is a house of cards. It's the reason why Warren Buffet says they're a financial "weapon of mass destruction".

The reason I state this is because the derivatives market for bitcoin is only a month away and that means that many companies beyond even the crypto-industry will become somewhat financially dependent on Bitcoin one way or the other. This means that democratic nations, like the US and EU will find it politically suicidal and economically infeasible to kill the bitcoin market without also collapsing the derivative house of cards that now depends upon its existence. The market cap of the bitcoin market is one thing, but the market cap of the derivatives market that depends on that market will be several fold larger and will make Apple look small in comparison.

dougules

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Re: Is it too late [bitcoin]?
« Reply #55 on: November 20, 2017, 10:46:28 AM »
Another thing, the thread topic "Is it too late?" is a classic economic bubble question. 

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Re: Is it too late [bitcoin]?
« Reply #56 on: November 20, 2017, 10:50:21 AM »
We got into mining 4 years ago and have made $. We have cashed out some along the way so we have all our original $ back plus more.  I would only risk the amount of $ that you can afford to lose.

ChpBstrd

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Re: Is it too late [bitcoin]?
« Reply #57 on: November 20, 2017, 11:11:08 AM »
Back to the OP's question. I recommend the bitcoin investment, but only after you answer the following questions to yourself:

1) If you had put your entire portfolio in a cryptocurrency like Etherium this time last year, and you were a millionaire (in terms of the current trading value of your cryptocurrency) now, would you still be holding the cryptocurrency, or would you sell and trade them for an investment portfolio? Would you sell in one personal circumstance but not another?

2) Suppose a cryptocurrency will either double or go to zero in a year. Is this the highest-odds double-or-nothing wager in the marketplace? For example, you could buy a put option on Sears (SHLD) that will yield a 100+% return if their stock goes to zero in a year and lose 100% if SHLD only loses X%. Is the rationale for that bet weaker than the rationale for the continuation of a known bubble?

3) Would you do business or make loans to a drug dealer, a person who pimps young girls for prostitution, or a Russian money launderer, or would you have an ethical problem with that? These are the primary use cases for why the world needs cryptocurrencies instead of dollars, you know.

4) How will you know what is a fair value for your cryptocurrency? When will you sell?

5) Would you be a buyer right now if the cryptocurrencies had lost 90% of their value in dollars this year, instead of gaining triple digit percentages? If you bought, and then lost 90%, how would your attitude about cryptocurrencies be affected?

6) If you are only willing to gamble what you are willing to lose - say $2,000, will that amount be enough to change your FIRE date, even if you score a 4-5X return? Would shifting slightly more of your portfolio out of bonds and into equities achieve the same overall effect on portfolio risk and returns? Is tracking e-currency prices the best use for many hours of your time?

7) If you could buy a put option or futures contract on a cryptocurrency that would gain 100% if the cryptocurrency collapsed, would you consider that bet?

8) How much time would you spend at work to earn a bitcoin, assuming you could never sell it for dollars? A week? A month? A year?

9) What made it irrational for investors in 1998-2000 to buy Pets.com? Suppose you had a time machine and you wanted to go back and talk someone out of this investment. They'll never believe your time machine story, so what reasons would you give? How would you respond to their counterarguments, such as how much it's gone up, how online sales are the future, and how they'll have the discipline to sell at the right time?

10) If the bubble bursts while you're still in it, will you feel dumb or just unlucky?


shadow

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Re: Is it too late [bitcoin]?
« Reply #58 on: November 20, 2017, 11:28:06 AM »
3) Would you do business or make loans to a drug dealer, a person who pimps young girls for prostitution, or a Russian money launderer, or would you have an ethical problem with that? These are the primary use cases for why the world needs cryptocurrencies instead of dollars, you know.

Why place moralistic sentiment on a tool when it is the agents themselves who are the problems? A blade, cash, tech, science, medicine can be used for both good or bad. They are tools. Also, we have to consider whether the benefits far outweigh negative uses.


maizeman

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Re: Is it too late [bitcoin]?
« Reply #59 on: November 20, 2017, 11:42:21 AM »
3) Would you do business or make loans to a drug dealer, a person who pimps young girls for prostitution, or a Russian money launderer, or would you have an ethical problem with that? These are the primary use cases for why the world needs cryptocurrencies instead of dollars, you know.

Wait, what? Right now the major use case for bitcoin is when you want to pay money to someone you haven't meet in person (ie over the internet), and conventional credit cards/bank wire transfers are too slow, too expensive, or not available to one or both parties. That last case certainly encompasses a lot of illegal activity, like drug dealing, or trafficking in stolen credit card numbers. Generally there are better solutions available for money launderers, but yes, there may certainly a fair bit of traffic from people in that field.

But what exactly is the use case for bitcoin in prostitution, or specifically in child prostitution? By definition doesn't this require that the parties meet in person? If so I don't see any advantage to bitcoin relative to cash, and several significant disadvantages.
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lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #60 on: November 20, 2017, 11:56:50 AM »
Along those same lines, the internet has provided immense opportunities for child pornographers, drug dealers, money launderers, weapons dealers, and all sort of bad things to now take place much easier than before. But that doesn't make me any less comfortable using the internet or promoting its existence.

talltexan

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Re: Is it too late [bitcoin]?
« Reply #61 on: November 20, 2017, 12:19:21 PM »
Back to the OP's question. I recommend the bitcoin investment, but only after you answer the following questions to yourself:

1) If you had put your entire portfolio in a cryptocurrency like Etherium this time last year, and you were a millionaire (in terms of the current trading value of your cryptocurrency) now, would you still be holding the cryptocurrency, or would you sell and trade them for an investment portfolio? Would you sell in one personal circumstance but not another?

2) Suppose a cryptocurrency will either double or go to zero in a year. Is this the highest-odds double-or-nothing wager in the marketplace? For example, you could buy a put option on Sears (SHLD) that will yield a 100+% return if their stock goes to zero in a year and lose 100% if SHLD only loses X%. Is the rationale for that bet weaker than the rationale for the continuation of a known bubble?

3) Would you do business or make loans to a drug dealer, a person who pimps young girls for prostitution, or a Russian money launderer, or would you have an ethical problem with that? These are the primary use cases for why the world needs cryptocurrencies instead of dollars, you know.

4) How will you know what is a fair value for your cryptocurrency? When will you sell?

5) Would you be a buyer right now if the cryptocurrencies had lost 90% of their value in dollars this year, instead of gaining triple digit percentages? If you bought, and then lost 90%, how would your attitude about cryptocurrencies be affected?

6) If you are only willing to gamble what you are willing to lose - say $2,000, will that amount be enough to change your FIRE date, even if you score a 4-5X return? Would shifting slightly more of your portfolio out of bonds and into equities achieve the same overall effect on portfolio risk and returns? Is tracking e-currency prices the best use for many hours of your time?

7) If you could buy a put option or futures contract on a cryptocurrency that would gain 100% if the cryptocurrency collapsed, would you consider that bet?

8) How much time would you spend at work to earn a bitcoin, assuming you could never sell it for dollars? A week? A month? A year?

9) What made it irrational for investors in 1998-2000 to buy Pets.com? Suppose you had a time machine and you wanted to go back and talk someone out of this investment. They'll never believe your time machine story, so what reasons would you give? How would you respond to their counterarguments, such as how much it's gone up, how online sales are the future, and how they'll have the discipline to sell at the right time?

10) If the bubble bursts while you're still in it, will you feel dumb or just unlucky?

What's missing from this list is consideration of whether you frequently buy goods/services for which merchants are accepting crypto- now.

GuitarStv

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Re: Is it too late [bitcoin]?
« Reply #62 on: November 20, 2017, 12:37:29 PM »
3) Would you do business or make loans to a drug dealer, a person who pimps young girls for prostitution, or a Russian money launderer, or would you have an ethical problem with that? These are the primary use cases for why the world needs cryptocurrencies instead of dollars, you know.

Wait, what? Right now the major use case for bitcoin is when you want to pay money to someone you haven't meet in person (ie over the internet), and conventional credit cards/bank wire transfers are too slow, too expensive, or not available to one or both parties. That last case certainly encompasses a lot of illegal activity, like drug dealing, or trafficking in stolen credit card numbers. Generally there are better solutions available for money launderers, but yes, there may certainly a fair bit of traffic from people in that field.

But what exactly is the use case for bitcoin in prostitution, or specifically in child prostitution? By definition doesn't this require that the parties meet in person? If so I don't see any advantage to bitcoin relative to cash, and several significant disadvantages.

Historically the first people to adopt crypto currencies for actual use have been people doing illegal stuff.  That's why there exists a burning need to keep everything off the books and off the government's radar.  Prostitution and human trafficking has been one of the best use cases of bitcoin and cryptocurrency:

http://www.dailymail.co.uk/indiahome/article-3552796/Bitcoin-India-s-currency-choice-drug-trafficking-illegal-arms-prostitution.html
https://news.bitcoin.com/backpage-effect-sex-industry-thrives-bitcoin/
https://www.weforum.org/agenda/2016/12/fighting-human-trafficking-tracing-blood-diamonds-and-other-surprising-uses-for-blockchain/
http://engineering.nyu.edu/press-releases/2017/08/16/follow-bitcoin-find-victims-human-trafficking
https://cointelegraph.com/news/arkansas-police-generates-its-own-cryptocurrency-to-track-child-porn
 . . . etc.
« Last Edit: November 20, 2017, 12:40:37 PM by GuitarStv »

MrThatsDifferent

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Re: Is it too late [bitcoin]?
« Reply #63 on: November 20, 2017, 12:45:41 PM »
Thanks everyone for sharing your thoughts. When I discovered MMM last year I quickly worked out that my strengths are not in finance and numbers and the only way I was going to make this work was by keeping it simple, doing what the most successful were doing, create a plan and stick to it come hell or high water. So far, so good. Whatís holding me back from bitcoin is it violates my plan: I barely understand it, none of the finance gurus Iíve been following advocate it, itís not a part of my strategy and outside of playing with $3k to experience it, I donít know what else Iíd do with it?  I certainly wouldnít keep investing my paychecks like Iím doing with Vanguard. Iím smart enough to not be too stupid. I think I have missed out and I think itís cause I donít have the tolerance for risk. Iím late to the party as it is, I canít afford to be wrong when Iím finally on a good path financially.  The boat I missed wasnít 3 months ago, it was 7 years ago. If I want to accelerate my FIRE plans Iíll need to do it the old-fashioned wayóthrough side-hustles and bonuses at work.

Telecaster

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Re: Is it too late [bitcoin]?
« Reply #64 on: November 20, 2017, 01:24:27 PM »
I always find the argument "it can't be a store of value when it's supposed to be a currency" funny. 

That doesn't make sense in my mind.  Dollars are a currency but people also use dollars to "store" wealth.  If I currently have $50k in my bank account in US Dollars I don't say, "well it's not storing value because I'm only supposed to use it as currency to facilitate transactions".  It stores value UNTIL I want to use it as currency. 

Cryptos can store value UNTIL you decide to use/sell/trade or whatever and get something out of it.  My couch is currently storing value.  I could sell it if I wanted and fairly easily at that.  I could even trade it for a bike.  Does that make it a currency?  Sort of.

The definition of money is largely philosophical when you get right down to it.  For example rai Stones.   One of which is still traded even though it fell out of a canoe and resides on the bottom of the ocean.  But everyone agree is a rai stone down there somewhere, so it has value.

https://en.wikipedia.org/wiki/Rai_stones

There are any number of even odder things that have functioned as currency over the centuries as well.  But philosophy aside, just being a store of value by itself isn't enough to be considered currency.  It also needs to be a medium of exchange.  The guy with the bike might trade for your couch, but the grocery store won't, and neither will your mortgage company.  There also has to be a unit of account.  I suppose one couch is a unit, but hard to subdivide.  So no, there is no reasonable definition of currency that includes couches. 

Bitcoin clearly is a currency in my view, it ticks all the boxes although the "store of value" thing is admittedly a little hard to pin down.  I also believe the intrinsic value question is moot.  Bitcoin will have value as long as people wish to complete transactions in Bitcoin, and it is a good bet there will always be people who can't or don't want to complete transactions with the traditional banking system.

That said, I think people who are talking about "investing" in bitcoin are barking mad.  Unless you need to complete transactions in Bitcoin it is a fool place to put your money.


ChpBstrd

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Re: Is it too late [bitcoin]?
« Reply #65 on: November 20, 2017, 02:17:37 PM »
The reason one would use a cryptocurrency rather than, say, PayPal, Square, a free ACH transfer, a money wire, a credit card, or a checkout service is so that their transactions are untraceable by governments, who can subpoena financial firms. This privacy is an aspect actively promoted by supporters/sellers of cryptocurrencies, and it has real utility - to some users doing illegal things.

See https://news.bitcoin.com/backpage-effect-sex-industry-thrives-bitcoin/

And no, cryptocurrency speculators don't commit the crime. But their speculation does justify investments in a financial system whose main purpose or advantage over other means of trade is to hide illicit transactions from governments. (The internet, on the other hand, has many noncriminal purposes and noncriminal advantages over other means of communication, such as phone calls or snail mail.).

If you're unbothered by the presence of victims in cryptocurrencies' intended ecosystem, just skip to the other questions, which rely more on self-interest. I think they're more compelling too.

TreeTired

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Re: Is it too late [bitcoin]?
« Reply #66 on: November 20, 2017, 04:29:38 PM »
The top is officially in - or will be within the next 7 days. Bitcoin is a total Ponzi scam, a mania.  My proof of all this is that I bought $100 worth of Bitcoin (via Coinbase) today.  I am notorious for getting in on anything/everything at the top!
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lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #67 on: November 20, 2017, 04:30:48 PM »
The reason one would use a cryptocurrency rather than, say, PayPal, Square, a free ACH transfer, a money wire, a credit card, or a checkout service is so that their transactions are untraceable by governments, who can subpoena financial firms. This privacy is an aspect actively promoted by supporters/sellers of cryptocurrencies, and it has real utility - to some users doing illegal things.

See https://news.bitcoin.com/backpage-effect-sex-industry-thrives-bitcoin/

And no, cryptocurrency speculators don't commit the crime. But their speculation does justify investments in a financial system whose main purpose or advantage over other means of trade is to hide illicit transactions from governments. (The internet, on the other hand, has many noncriminal purposes and noncriminal advantages over other means of communication, such as phone calls or snail mail.).

If you're unbothered by the presence of victims in cryptocurrencies' intended ecosystem, just skip to the other questions, which rely more on self-interest. I think they're more compelling too.

If you think Bitcoin is hiding transactions from governments, then you're a little misinformed. It is a big myth that bitcoin is anonymous. It is pseudo-anonymous and at worst, provides law enforcement and governments a new avenue for tracking illicit transactions that they never had before. All transactions on the blockchain are publicly searchable. With cash, all transactions are completely anonymous. The more money flows out of cash and into bitcoin, the more opportunities governments and law enforcement have to tracing those transactions to who's making them.

Studies have shown that it is possible to track transactions and addresses using a few techniques to who they belong to http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf. It makes for good headlines that illicit markets are using bitcoin, but the truth is that the amount of illicit activity that takes place in cash dwarfs those same markets that are within bitcoin. The IRS already tracking transactions and bitcoin activity with a service called Chainalysis to determine who isn't paying up in taxes.

If you're using bitcoin because you think you can be anonymous and you're conducting illicit activity, then you might want to think again. And if you're judging bitcoin for the illicit activity that takes place because of its capabilities, then you might not want to judge bitcoin so harshly as those capabilities are now being realized to catch those who commit crimes as well.

gp_

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Re: Is it too late [bitcoin]?
« Reply #68 on: November 20, 2017, 04:42:16 PM »
We have different understanding of crypto. Your understanding leads you to believe it's gambling.

no, my understanding has allowed me to profit from it because i work in technology, and know how to connect dots... every commodity in existence by your definition is gambling. i get that this is space is young, but it's internet 3.0. unsure if you get / know the reference.

PDXTabs

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Re: Is it too late [bitcoin]?
« Reply #69 on: November 20, 2017, 04:49:36 PM »
If you think Bitcoin is hiding transactions from governments, then you're a little misinformed. It is a big myth that bitcoin is anonymous. It is pseudo-anonymous and at worst, provides law enforcement and governments a new avenue for tracking illicit transactions that they never had before. All transactions on the blockchain are publicly searchable. With cash, all transactions are completely anonymous. The more money flows out of cash and into bitcoin, the more opportunities governments and law enforcement have to tracing those transactions to who's making them.

I would add that there is ~1.2T USD in cash circulating the world (https://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html), and that ~50% of it is unaccounted for (https://www.npr.org/templates/story/story.php?storyId=99147699). Let's call that ~600B USD in unaccounted for currency. The total market cap for BTC is only ~138B USD. What do you think those $600B is being used for? I promise you that large amounts of it is for criminal enterprises.

For the people that think that cryptocurrency is only good for crime, please take a trip to Venezuela or Zimbabwe.
« Last Edit: November 20, 2017, 06:03:11 PM by PDXTabs »

gp_

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Re: Is it too late [bitcoin]?
« Reply #70 on: November 20, 2017, 04:53:33 PM »
I promise you that large amounts of it are for criminal enterprises.

definitely. cash in general is also more anonymous than bitcoin.

maizeman

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Re: Is it too late [bitcoin]?
« Reply #71 on: November 20, 2017, 05:29:46 PM »
Well it depends. If I'm meeting a dealer to buy something, cash is definitely superior to bitcoin. If I'm a minor drug dealer and I want to buy a pound of pure fentanyl from a chinese chemical factory (enough to make ~3,000 fake doses of heroine) and have it delivered by mail without ever meeting (or even knowing) my supplier, there certainly are advantages to being able to work with cryptocurrencies.

@ChpBstrd, I read through that link. There are sourced links to people using bitcoin to buy pornography (where I could see it having definite advantages relative to credit cards), and it sounds like people were using it to pay for backpages (a legal service) when it was cut off by the major credit card processors because some of the services advertised on the website were illegal. But the only reference to actually paying for sex with a cryptocurrency in the article was a quote from one sex worker that being paid in cash felt dirty and it would be nice if they could be paid in cryptocurrency instead.

Don't get me wrong, I don't doubt that someone, somewhere has paid for sex with bitcoin. I just don't think that the existence of cryptocurrencies makes it any easier for people to pay for sex then if they're paying with cash.
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Mr Mark

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Re: Is it too late [bitcoin]?
« Reply #72 on: November 21, 2017, 06:06:07 AM »
I'm still waiting for my tulip bulbs to go back to their old highs.  Then I'll cash out and put it all into bitcoin.

👍

+1

It really has been a lost 4 centuries for the tulip market.
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GuitarStv

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Re: Is it too late [bitcoin]?
« Reply #73 on: November 21, 2017, 07:20:25 AM »
I'm still waiting for my tulip bulbs to go back to their old highs.  Then I'll cash out and put it all into bitcoin.

👍

+1

It really has been a lost 4 centuries for the tulip market.

I think you mean that it has been a fantastic buying opportunity.

dougules

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Re: Is it too late [bitcoin]?
« Reply #74 on: November 21, 2017, 10:58:32 AM »
We have different understanding of crypto. Your understanding leads you to believe it's gambling.

no, my understanding has allowed me to profit from it because i work in technology, and know how to connect dots... every commodity in existence by your definition is gambling. i get that this is space is young, but it's internet 3.0. unsure if you get / know the reference.

Actually, yes, buying any commodity with the idea you're going to make money on the price going up is gambling.  The risk is a lot lower with something that's had a long-standing value like real estate or gold, but it is still gambling. 

Mr Mark

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Re: Is it too late [bitcoin]?
« Reply #75 on: November 21, 2017, 11:10:56 AM »
I get the usefulness of block chain tech. Bitcoin just uses a block chain. As a semi-anonymous and low friction medium of cyber exchange also ok. But there is no need for anyone to own the stuff for that exchange to happen. You go to an app that converts $ to btc, do the transaction,  And (almost) immediately the other party converts btc to $.

The value of 1 btc will be determined by whatever the transaction cost is (in fractional btc and real world costs) And some profit for a few market makers to enable the transaction.

The rest is speculation as that real intrinsic value is quite small, no?

Unless you need bitcoin to launder money and enable sightless transfer from place to place.
Mr. Mark

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #76 on: November 21, 2017, 12:53:27 PM »
I get the usefulness of block chain tech. Bitcoin just uses a block chain. As a semi-anonymous and low friction medium of cyber exchange also ok. But there is no need for anyone to own the stuff for that exchange to happen. You go to an app that converts $ to btc, do the transaction,  And (almost) immediately the other party converts btc to $.

The value of 1 btc will be determined by whatever the transaction cost is (in fractional btc and real world costs) And some profit for a few market makers to enable the transaction.

The rest is speculation as that real intrinsic value is quite small, no?

Unless you need bitcoin to launder money and enable sightless transfer from place to place.

Converting the funds directly between BTC and fiat requires a central custodial account set up with a third-party to handle the conversion at the time of the transaction. This effectively loses one of the primary benefits of Bitcoin and the blockchain.

Bitcoin is a permission-less system where transactions are push instead of pull. Permission-less in the sense that anyone can use it without the need to verify identity first and "push" in the sense that the merchant does not receive any authority of the funds in the account. As with credit card and ACH transactions, the merchants have full authority to withdraw funds from the account and must also maintain the consumer identification information on their systems to allow for this. This is the crux of the problem with today's payment systems. They require identification to be used because they're pull based systems that give whichever merchant the authority to pull funds from the account. In doing so, every single merchant you deal with must be trusted to handle not only your funds, but your identity. The very act of being a consumer in the market means that our identities and wealth are carelessly handled by any merchant you interact with. There isn't a month that goes by without another data breach in the news. Fraud is a multi-billion dollar problem that costs everyone in the economy massive amounts of money and hardship. This is a systemic failure based on the fact that we are approaching consumer protecting from the wrong angle and we put band-aid regulations in the name of consumer protection that are ineffective and just cost even more money.

Bitcoin fixes all this. By not requiring identity, no merchant receives the identity of who's funds are being spent (similar to using cash). They're also push transactions which means that the only person who has authority to spend those funds is the one who owns them. This whole security concept would bring massive protections to the consumer and save billions of dollars for everyone involved.

Using custodial accounts to make transactions with Bitcoin might be a partial resolution to this problem, but it doesn't take full advantage of what bitcoin can provide with regard to consumer protections. I do see custodial accounts being a primary solution in developed countries at first, but I think the non-developed world that is struggling with creating proper institutions to serve their consumers and that lack the consumer protections will leap frog that approach and go directly to bitcoin or another crypto-currency instead much like they skipped landline phones and went straight to cell phones.

You make the argument that it doesn't make sense to hold BTC to simply partake in economic transactions with it, but if economic transactions are being made in BTC, then my question to you would be why would it make sense to convert to USD (assuming volatility stabilized by that time)?
« Last Edit: November 21, 2017, 01:08:45 PM by lifeanon269 »

shadow

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Re: Is it too late [bitcoin]?
« Reply #77 on: November 22, 2017, 10:59:29 AM »
We have different understanding of crypto. Your understanding leads you to believe it's gambling.

no, my understanding has allowed me to profit from it because i work in technology, and know how to connect dots... every commodity in existence by your definition is gambling. i get that this is space is young, but it's internet 3.0. unsure if you get / know the reference.

Are you referencing L.A.S?

Speculation and gambling have very different meanings. Speculation: taking a calculated risk on the expectation that fundamentals will drive demand. Gambling: you hope for a return base on luck. I don't view crypto as gambling.

dougules

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Re: Is it too late [bitcoin]?
« Reply #78 on: November 22, 2017, 11:28:30 AM »
We have different understanding of crypto. Your understanding leads you to believe it's gambling.

no, my understanding has allowed me to profit from it because i work in technology, and know how to connect dots... every commodity in existence by your definition is gambling. i get that this is space is young, but it's internet 3.0. unsure if you get / know the reference.

Are you referencing L.A.S?

Speculation and gambling have very different meanings. Speculation: taking a calculated risk on the expectation that fundamentals will drive demand. Gambling: you hope for a return base on luck. I don't view crypto as gambling.

There's a pretty big gray area in the middle; a lot of people seem to be low on the "calculated."  Whether you call it speculation or gambling, it seems like a much better idea to skip hording bitcoins and buy something that will get you a return.  Bitcoins may or may not be the next big thing, but it's still a form of holding cash and risky cash at that. 

frozen

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Re: Is it too late [bitcoin]?
« Reply #79 on: November 22, 2017, 01:54:20 PM »
I donít get why Bitcoin is valued so high. Not being critical, but I donít get the appeal.
And what are people really investing in when the invest in Bitcoin?
Who even uses Bitcoin for transactions? Drug dealers? Criminals who hack a website and hold it hostage for a large Bitcoin ransom (like the recent Greys Anatomy episode)

If you invest in real estate and rent out a home, you help provide someone with housing.
If you invest in a drug stock like Pfizer, you are investing in an American Company and in healthcare.
If you invest in Apple, you are investing in an American company who provides us with technology.

Why give your money to Bitcoin?

samustache

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Re: Is it too late [bitcoin]?
« Reply #80 on: November 22, 2017, 02:50:27 PM »
It's never too late to flip a coin and bet on the outcome. None of what I read in this thread convinces me the return is any more stable than that. That the technology might become commonplace is no guarantee that any one coin will generate a return.
I'm reminded of a bunch of investor letters I got saying 3d printers were the next big thing simply because they were cool - only, just like led tvs, everyone jumped in and they became commodities. They are still cool, but no one can actually make huge money making them...


frozen

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Re: Is it too late [bitcoin]?
« Reply #81 on: November 22, 2017, 05:44:56 PM »
CME Group - (The Chicago Mercantile Exchange & Chicago Board of Trade) , is launching Bitcoin futures on Dec. 11:
http://www.cmegroup.com/trading/bitcoin-futures.html?itm_source=cmegroup&itm_medium=flyout&itm_campaign=bitcoin&itm_content=tech_flyout

https://www.coindesk.com/cmes-bitcoin-futures-likely-start-trading-december-11/


I have not yet read through this, but considering it is launching on Dec 11, do you think it might be a good option to get in?

ILikeDividends

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Re: Is it too late [bitcoin]?
« Reply #82 on: November 22, 2017, 06:08:54 PM »
CME Group - (The Chicago Mercantile Exchange & Chicago Board of Trade) , is launching Bitcoin futures on Dec. 11:
http://www.cmegroup.com/trading/bitcoin-futures.html?itm_source=cmegroup&itm_medium=flyout&itm_campaign=bitcoin&itm_content=tech_flyout

https://www.coindesk.com/cmes-bitcoin-futures-likely-start-trading-december-11/


I have not yet read through this, but considering it is launching on Dec 11, do you think it might be a good option to get in?
Christopher Giancarlo, chairman of Interactive Brokers, warns this could destabilize the CME's ability to perform its function as a clearing house for ALL of its products. 

http://www.businessinsider.com/interactive-brokers-chairman-warns-about-dangers-of-bitcoin-futures-wall-street-journal-ad-2017-11

"If the Chicago Mercantile Exchange or any other clearing organization clears a cryptocurrency together with other products, then a large cryptocurrency price move that destabilizes members that clear cryptocurrencies will destabilize the clearing organization itself and its ability to satisfy its fundamental obligation to pay the winners and collect from the losers on the other products in the same clearing pool."

Systemic risk, anyone?
« Last Edit: November 22, 2017, 06:34:14 PM by ILikeDividends »

gp_

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Re: Is it too late [bitcoin]?
« Reply #83 on: November 23, 2017, 02:10:04 PM »
Speculation and gambling have very different meanings. Speculation: taking a calculated risk on the expectation that fundamentals will drive demand. Gambling: you hope for a return base on luck. I don't view crypto as gambling.

agreed 100%.

seeing how an emerging technology can transform anything/everything is simply connecting dots; it just makes sense. i wouldn't expect people who are new to this space to always agree, but if you've followed bitcoin/adoption of blockchain closely for at least a couple years, it's obvious... this argument to me is no different than brick and mortar businesses vs. the internet, automobile vs. horse & buggy, etc. those examples however, are probably a little easier to comprehend.

gp_

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Re: Is it too late [bitcoin]?
« Reply #84 on: November 23, 2017, 02:17:23 PM »
Who even uses Bitcoin for transactions? Drug dealers? Criminals who hack a website and hold it hostage for a large Bitcoin ransom (like the recent Greys Anatomy episode)

over 250,000 merchants (regular businesses) in japan accept bitcoin as payment. i use this example because japan is typically a forward thinking country when it comes to the adoption of new technology. there are many retailers in the united states who accept bitcoin as payment too (amazon is rumored to be the next huge one). with any new technology, there will always be hiccups. the unfortunate one with bitcoin is arguing over which bitcoin is the "true" bitcoin (bitcoin cash vs. bitcoin core/legacy (the original). there are many reasons for this... i believe this has stifled many from using it daily, as well as more businesses and individuals from adopting it as a form of payment. 2018 will be a huge year for cryptocurrency, and i hope the average person gains a better understanding of what cryptocurrencies are, the benefits of using them, and the myths behind them.


YttriumNitrate

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Re: Is it too late [bitcoin]?
« Reply #85 on: November 24, 2017, 08:40:35 AM »
@Shadow: I hear you. I however do not believe for a second that bitcoin is the next internet or electricity. I think it is far more likely to be the next dotcom bust. In 1999 an online toy company had a larger market cap than Toys R Us, even though ToyRUs did more sales.... even online sales. It didn't make sense. It was stupid. That online toy store went under when the tech bubble burst. Fast forward to 2017 and Toys R Us is filing bankruptcy. The technological predictions of the tech bubble are coming true, just 18 years too late. Toys R Us also wasn't brought down by an online toy store. They were brought down by Amazon, which in 1999 was an online bookstore. Blockchain tech might improve how we transfer money, it might also improve other technology, but that doesn't mean Bitcoin's price will continue to go up over time. For that to happen Bitcoin has to start replacing currencies, which for the reasons I've listed, I don't see happening... ever.
But, with Etoys you got to say cool things like "They have the internet in their DNA" and "Brick and Mortar is so last century." Nobody seems to talk about business DNA anymore as it's all about "disruptive" technologies these days (which 20 years from now will undoubtedly seem quaint as the business jargon moves on).

Also, Toy 'R Us decline is far more complicated than just "the internet killed it" and involves massive debt as a result of a leveraged buy out.
https://www.youtube.com/watch?v=4JYUo9WKkao

thenextguy

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Re: Is it too late [bitcoin]?
« Reply #86 on: November 27, 2017, 08:09:20 AM »
Bitcoin is up 25% since OP asked "Is it too late?"

fattest_foot

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Re: Is it too late [bitcoin]?
« Reply #87 on: November 27, 2017, 09:37:52 AM »
6) If you are only willing to gamble what you are willing to lose - say $2,000, will that amount be enough to change your FIRE date, even if you score a 4-5X return? Would shifting slightly more of your portfolio out of bonds and into equities achieve the same overall effect on portfolio risk and returns? Is tracking e-currency prices the best use for many hours of your time?


I think this is what's keeping me from getting in on Bitcoin. Even if Bitcoin hits $100k in the next 3 years, I'd never have enough money into it to make that worthwhile. $2,000 is probably accurate for what I'd be willing to put in, so I'm looking at $20k by 2021. $20k, however, would be pretty insignificant to my financial goals.

I just don't have enough "fun money" to put into Bitcoin that would make it worthwhile.

talltexan

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Re: Is it too late [bitcoin]?
« Reply #88 on: November 27, 2017, 09:53:52 AM »
Translation: in my gut, I realize that the risks are too great for that chance at an extraordinary return.

dougules

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Re: Is it too late [bitcoin]?
« Reply #89 on: November 27, 2017, 10:25:29 AM »
Who even uses Bitcoin for transactions? Drug dealers? Criminals who hack a website and hold it hostage for a large Bitcoin ransom (like the recent Greys Anatomy episode)

over 250,000 merchants (regular businesses) in japan accept bitcoin as payment. i use this example because japan is typically a forward thinking country when it comes to the adoption of new technology. there are many retailers in the united states who accept bitcoin as payment too (amazon is rumored to be the next huge one). with any new technology, there will always be hiccups. the unfortunate one with bitcoin is arguing over which bitcoin is the "true" bitcoin (bitcoin cash vs. bitcoin core/legacy (the original). there are many reasons for this... i believe this has stifled many from using it daily, as well as more businesses and individuals from adopting it as a form of payment. 2018 will be a huge year for cryptocurrency, and i hope the average person gains a better understanding of what cryptocurrencies are, the benefits of using them, and the myths behind them.

Yes, but how many of the people exchanging money into bitcoin are actually planning to use it to buy from one of those merchants?  If most people are buying it just to cash in when it goes up, then it is a bubble.  That doesn't mean that bitcoin won't be useful in the future, but just that the exchange rate is way out of whack. 

shadow

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Re: Is it too late [bitcoin]?
« Reply #90 on: November 27, 2017, 12:23:12 PM »
There is huge risk in the space right now. Especially for bitcoin, due to potentially fraudulent tether. Proceed with caution.

ChpBstrd

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Re: Is it too late [bitcoin]?
« Reply #91 on: November 27, 2017, 12:29:58 PM »
Bitcoin is up 25% since OP asked "Is it too late?"

So are my UVXY put options. I'll know it's too late when I lose 100% of my investment in them. :))

Translation: there are all sorts of time bombs that will pay a person double-digit returns to hold them. There's a whole marketplace for stratospheric risk/rewards. Next example: Venezuelan bonds could rapidly increase if the Russians or Chinese essentially buy out the country, or the government is overthrown. Some of these scenarios are arguably more likely than "bitcoin will increase another 1,000X."

I just saw article on Fortune.com titled "Bitcoin for beginners: 3 things to know before you invest". Another on CNBC reports that 'Buy Bitcoin with credit card' is spiking as a google search term. These red flags will be obvious in hindsight.

Cassie

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Re: Is it too late [bitcoin]?
« Reply #92 on: November 27, 2017, 12:53:20 PM »
The transaction fees are high to use Bitcoin to buy things. Bitcoin is speculation but when you mine like we are you are earning the bitcoin even after paying the high electricity costs.   The  other thing is it is very complicated and you really have to know what you are doing. My son is the brains of this operation and we all have made $.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #93 on: November 27, 2017, 01:12:31 PM »
A lot of people misunderstand that bitcoin isn't just a currency and so they place too much emphasis of its value on the idea about using it to purchase their daily coffee. Bitcoin isn't just a currency, it is both a currency and a payment network. In the modern world, where we already have payment services such as VISA, using Bitcoin to purchase coffee doesn't see like an exciting value proposition.

But, Bitcoin's value doesn't just come from being able to purchase coffee. By being both a payment network and a currency, its true value comes from the fact that it can be used to send value and thus the network itself is the value. The currency's price is just the result of that value and the connecting of people through this network.

How many here think VISA, as a company has value? It is a widely adopted payment network. If you own S&P index funds, you likely hold VISA stock, so I'm guessing most would feel that VISA as a company holds value. VISA's value therefore is derived from the idea that allowing companies and individuals to send monetary value through its network provides value.

Bitcoin is no different, in the same value proposition that VISA holds, except that it goes even further than that. Above and beyond what VISA offers, it provides the following additional value:

1) Decentralized
2) Global
3) Permission-less (anyone, anywhere can use it)
4) Counterfeit proof
5) Peer-to-Peer
6) Fraud proof consumer protection
7) Nearly unhackable
8) Immutable
9) Extensible for use with smart contracts
10) Can't be confiscated
11) Low cost/fast transactions

...And more...

If you feel that VISA has intrinsic value as a company, then you have to agree that the Bitcoin network itself, also has value. The use of this network and all those features takes place through the currency Bitcoin. The idea that the bitcoin blockchain can be decoupled from the currency bitcoin is false. The two go hand-in-hand and the bitcoin network is a one of a kind and therefore this network has value. Bitcoin is both a currency and payment network and the two are inseparable of each other. The more people who choose to use this network (and thus own its currency), the more value this network has. This value recognition is true of all networks (the internet, phones, Facebook, etc).

The price of a bitcoin token is essentially irrelevant when determining the value of what bitcoin is. If bitcoin and all of the features list above have value to people (which they do), then the network has value because of that. This is bitcoin's "intrinsic" value. The price of a single bitcoin is simply a reflection of how many people wish to use the network and how much of one's worth they'd like to be a part of this network. There are less than 16.5 million bitcoin in circulation (something like 20-30% of which is estimated to be lost for good). Therefore if the world begins to recognize the value proposition that the bitcoin network can provide the world, then to support the monetary needs of the world, a single bitcoin must be valued according to the network's utilization. That is to say that the supply of bitcoin must meet the monetary demands of its network's users.

In this sense, bitcoin today is extremely undervalued today. The number of outside people that want to be a part of this network far exceeds the number of people that are currently utilizing it. Bitcoin will have value for the foreseeable future and I can say this with great confidence because of the fact that all of the above listed features are, together, all features that only bitcoin can provide today. People won't suddenly stop demanding or wanting those features in a payment network and this is why Bitcoin will continue to exist...because it is demanded and there is a need for it in this world.

I highly recommend these reads:

http://www.runtogold.com/the-great-bitcoin-bull-market-of-2017/
https://fee.org/articles/what-gave-bitcoin-its-value/
« Last Edit: November 27, 2017, 01:18:49 PM by lifeanon269 »

effigy98

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Re: Is it too late [bitcoin]?
« Reply #94 on: November 27, 2017, 02:09:20 PM »
No.

Crypto is not going away and bitcoin has first mover advantage. There is a good chance something like ETH will take off too. There is massive misinformation on this forum. Please go watch most of these videos as he wrote the book on bitcoin.

https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ

If you have decided you still want to invest (it is an investment no matter how many people call it gambling) here are the basics. This is highly speculative however, so only put in money you plan on holding long and not cash out because you need the money. You should probably limit yourself to no more than 10% of all your assets. Rebalance into other uncorrelated assets as it sky rockets so you do not relive the fun times of the dotcom crash and loose almost everything. Keep in mind, most of this negativity was around in the mid 90's for something called the "internet". People resist change, it is natural.

Go to coinbase and start dollar cost averaging in with money you are comfortable loosing. Once you get more comfortable, start using gdax for lower fees (same company).
https://www.coinbase.com/

Get a hardware wallet (or paper) and get it off the exchange since like banks, they are vulnerable to greed and hacking, but not backed up by the government printing presses. Bitcoin has never been hacked, but exchanges have.
https://www.ledgerwallet.com/products/ledger-nano-s

« Last Edit: November 27, 2017, 02:16:40 PM by effigy98 »

shadow

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Re: Is it too late [bitcoin]?
« Reply #95 on: November 27, 2017, 02:49:49 PM »
Ledger is definitely recommended. It's safe to use even if you plug it into a virus-infected pc. However, you have to pay attention to the addresses you are sending to (triple check the addresses are correct) before you click on the physical ledger hardware to confirm. There are viruses that can change copy-paste addresses to look similiar to the addresses you use.

sherr

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Re: Is it too late [bitcoin]?
« Reply #96 on: November 27, 2017, 02:51:14 PM »
Above and beyond what VISA offers, it provides the following additional value:

I'm not claiming that Bitcoin or similar will not have a place in the long-term world, but let's look at a few of these.

1) Decentralized
5) Peer-to-Peer

These are actually the same thing, are they not? And you are presuming that this is a good thing. All other considerations being equal (like availability and legality) downloading something from a central location is typically much easier / faster / better than bittorrenting it. There is a reason that the internet routes traffic through a few high-capacity backbones instead of forcing all traffic to bounce from computer to computer in some sort of crazy mesh peer-to-peer network.

2) Global

Practically speaking, so is Visa.

3) Permission-less (anyone, anywhere can use it)
10) Can't be confiscated

Okay, but that seems to have limited utility in first-world nations outside of illegal activity.

4) Counterfeit proof
7) Nearly unhackable
8) Immutable

I wouldn't really call these benefits, that's just what allows cryptocurrencies to exist as an electronic-only currency. There may be some value to the fact that it's counterfeit proof, but that's a direct contradiction to this next one.

6) Fraud proof consumer protection

No, no it's not. If I the consumer am defrauded by an online merchant (intentionally or on accident), with Visa I can initiate a charge-back and my money will reappear in my account in a mater of days. With Bitcoin I have no recourse and have just lost whatever Bitcoin I have irrevocably transferred. This in-and-of itself is an enormous advantage that traditional payment networks have over Bitcoin.

9) Extensible for use with smart contracts

Okay, great I guess. There may be an extremely limited use-case for that. I'll get really excited when the software industry learns how to always write bug-free code.

11) Low cost/fast transactions

No, it's not. Visa transactions have always been faster and are already cheaper.

No one is saying that Bitcoin / cryptocurrencies / blockchain technology doesn't have legitimate uses. But the question of "should I 'invest' in Bitcoin" requires a lot more then that.

1) You have to justify why cryptocurrencies are better enough than the existing solutions to overthrow large, well-established players. Bitcoin (in particular) can't come anywhere close to the transaction rate that Visa currently handles, so even if there are specialized uses for Bitcoin it's not looking to unseat the major financial players anytime soon.

2) You have to justify why even if Bitcoin does come into its own and find a long-term market the price of a Bitcoin should increase. The built-in deflationary nature maybe? But rising transaction costs could counteract that. That the future market is much larger than the current market? Maybe, but that remains to be seen.

3) You have to justify why Bitcoin in particular is going to be the long-term winner over other cryptocurrencies, including those that have yet to be invented. I see no particular reason other than momentum. While that may be a reason it's not a particularly good one. The transaction cost / rate alone could cause everyone to jump ship to a newer crytocurrency when the difficulty gets too high. And again to a new one after that. Forever. Even if cryptocurrencies have a long-term use, there's no reason it always has to be the same one. And at every transition the "investors" will be left with a lot of worthless 1s and 0s.

In this sense, bitcoin today is extremely undervalued today. The number of outside people that want to be a part of this network far exceeds the number of people that are currently utilizing it.

It seems completely obvious to me that the vast majority of people who "want to be a part" today really want to be a part of the huge speculative price surges, not the actual currency / transaction network.

schneider

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Re: Is it too late [bitcoin]?
« Reply #97 on: November 27, 2017, 03:12:52 PM »
We have different understanding of crypto. Your understanding leads you to believe it's gambling.

no, my understanding has allowed me to profit from it because i work in technology, and know how to connect dots... every commodity in existence by your definition is gambling. i get that this is space is young, but it's internet 3.0. unsure if you get / know the reference.

Actually, yes, buying any commodity with the idea you're going to make money on the price going up is gambling.  The risk is a lot lower with something that's had a long-standing value like real estate or gold, but it is still gambling.

I agree with this. A bitcoin, like a kilogram of gold, a flat in London (when you live in Moscow), or a 1967 1/2 Mustang, does not generate value even in the loosest sense. You may have a reason to buy any of those things that makes sense to you, but the question is how you would know when it makes sense to sell? But then, I'm one of those people who gets stressed out trying to decide how to feel about the P/E ratio of VXUS vs VTI. :)

Since this thread has been short on stories like this: I bought some BTC in the past for reasons that, in hindsight, were immature. Expressed as a fraction of my disposable income, the figure was small but large enough that I would have been mad at myself for more than a few minutes if my investment had gone to zero. Some time passed, I came to my present opinion, and I decided to liquidate my position, making a profit of, I dunno, something between one hundred and one thousand percent. That number would be more like ten thousand percent if I had held onto it today. I don't regret my decision: I did the best I could with the information I had available.

lifeanon269

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Re: Is it too late [bitcoin]?
« Reply #98 on: November 27, 2017, 04:28:39 PM »
1) Decentralized
5) Peer-to-Peer

These are actually the same thing, are they not? And you are presuming that this is a good thing. All other considerations being equal (like availability and legality) downloading something from a central location is typically much easier / faster / better than bittorrenting it. There is a reason that the internet routes traffic through a few high-capacity backbones instead of forcing all traffic to bounce from computer to computer in some sort of crazy mesh peer-to-peer network.

They're similar, but not quite the same. Peer-to-peer I mentioned in reference to the network itself. But, decentralized I mentioned in reference to not just the network, but everything in regards to the bitcoin ecosystem. For example, there is no one single person who created it. No one knows who Satoshi Nakamoto is or if it is even a single person. This was done on purpose as a truly decentralized network needs to not have a central authority over it. The development team is decentralized. There is no central exchange. There is no central wallet software that's required to use it. There is no central media authority over what bitcoin is or isn't. Decentralization runs so much deeper than just the peer-to-peer aspect of the network itself. This is what ultimately makes it so resistant to government control.

It is funny that you mention BitTorrent. It isn't true that BitTorrent is slower than centralized connections. BitTorrent can not only offer faster downloads, but can do it for cheaper. There is a reason why many large downloads (such as OS images) offer BitTorrent links as an option for download. Not only is it usually faster, but it can be offered that way for very cheap. Downloading a 5GB file from 1000 seeders that are each offering 200Kb/sec speeds will be a lot faster than downloading from an entity that you can download from at 100Mb/sec. Also, the fact that you're talking about internet routing over backbones as an argument against decentralization tells me you don't have any idea how internet routing and BGP work. If everything on the internet needed to be routed over the backbones of the internet, then the internet would not function and could never handle the total aggregate data sent daily across the network, so your argument against decentralization fails miserably here.

2) Global

Practically speaking, so is Visa.

Practically doesn't mean anything here. Only about 30 countries have what would be considered modern financial services. Roughly 4 billion people don't have access to modern financial services such as credit, savings, and insurance. So while VISA may make the claim that they offer services in 200 countries, as they do, that doesn't mean that the people of these countries has the capability to access their services. All one needs to have access to the bitcoin network is a phone and an internet connection. This is true regardless of the geographic location of that individual. Thus, by having access to the bitcoin network regardless of geographic location, you can therefore participate freely in the global economy. Therefore, Bitcoin is global, VISA is not.

3) Permission-less (anyone, anywhere can use it)
10) Can't be confiscated

Okay, but that seems to have limited utility in first-world nations outside of illegal activity.

As I said, there are 4 billion+ that lack access to banking services. Being permission-less means that they can have access to the financial services that bitcoin offers without discrimination. The fact that bitcoin can't be confiscated also means that many of the world's high net worth individuals will also be looking to bitcoin as a safe haven asset much like gold. But, instead of needing their own gold vault to store physical gold bars in, they can simply store their wealth digitally. High net worth individuals like to use safe haven assets like that because once an individual becomes rich, they like to ensure that they'll always be rich even when the sh*t hits the fan. The fact that bitcoin offers this is an extremely enticing benefit to the world's rich.

4) Counterfeit proof
7) Nearly unhackable
8) Immutable

I wouldn't really call these benefits, that's just what allows cryptocurrencies to exist as an electronic-only currency. There may be some value to the fact that it's counterfeit proof, but that's a direct contradiction to this next one.

These are all benefits. Just because you don't see them as such, doesn't mean anything. Being counterfeit proof doesn't just extend to the currency token itself. Anything digital can be make immutable and counterfeit proof. The rootstock network can be used for smart contracts that will allow for a massive amount of possibilities. Essentially the future need for notaries will become a thing of the past. Anything notarized can simply be put on the blockchain and become as immutable as bitcoin's blockchain itself. Bitcoin's blockchain will change how we handle digital information in the future. All other blockchains from other alt-coins don't offer the same level of security and immutability that bitcoin's blockchain provides. This is a huge advantage to bitcoin and a massive feature that can't be overstated.

How is being nealy unhackable not a benefit? Not sure how or why you lumped that one in there. The fact that it is decentralized and immutable makes it an extremely difficult to attempt to alter or compromise the network. It is also virtually quantum computer proof with the use of public keys that are hidden until after wallet addresses are emptied.

6) Fraud proof consumer protection

No, no it's not. If I the consumer am defrauded by an online merchant (intentionally or on accident), with Visa I can initiate a charge-back and my money will reappear in my account in a mater of days. With Bitcoin I have no recourse and have just lost whatever Bitcoin I have irrevocably transferred. This in-and-of itself is an enormous advantage that traditional payment networks have over Bitcoin.

I'll reference my previous post on this one in case you missed it:
https://forum.mrmoneymustache.com/investor-alley/is-it-too-late-(bitcoin)/msg1781165/#msg1781165

As someone who works in Information Security in the financial services industry, I understand first-hand the shortcomings of how our traditional financial systems operate. Furthermore, as you mention chargebacks can occur due to the fact that our current centralized financial intermediaries must act as mediators to all financial transactions that take place. This comes at great cost to the consumer. On top of that, merchants that offer irreversible services are always at risk of chargebacks. This leads to another benefit of bitcoin that I didn't list in the sense that all transactions are irreversible. This allows merchants who offer irreversible services to receive irreversible transactions. There is a reason why many contractors today look to receive some type of down payment for services requested prior to doing any work.

9) Extensible for use with smart contracts

Okay, great I guess. There may be an extremely limited use-case for that. I'll get really excited when the software industry learns how to always write bug-free code.

Saying "Okay, great I guess." shows how little innovative foresight you have into how new technologies can transform the way we do things today. There is a reason why Overstock's stock has sky-rocketed recently with the announcement that they're looking to reissue their stocks via their own blockchain to counter the damage that was done to their stock via naked short selling. The bitcoin network will be used in ways that are completely revolutionary and unforeseen today. Writing bug-free code is irrevelant to this fact. Putting innovation on hold until bug-free code is presentable is a stifling attitude to take.

11) Low cost/fast transactions

No, it's not. Visa transactions have always been faster and are already cheaper.

Yes, it is fast and it is low cost. I sent $80k dollars last week on a Friday late at night after-hours for only $5. No traditional financial institution could've provided that same capability with as low of a cost. VISA transactions cost 2-4% and while those transactions don't show up on your receipts, they are baked into the costs of all purchases we make at merchants that accept VISA. Finally, merchants who accept VISA transactions, don't receive payment for those transactions until the end of the month. Meanwhile, during that time they're at risk of chargebacks. Therefore, finality of payment for VISA transactions is a month whereas with Bitcoin it is typically at most a day before confirmation and transactions that take a day to confirm are much cheaper than 2-4%.

I find this infographic very informative about the state of bitcoin's ecosystem. When discussing what bitcoin is and everything that goes with it, this provides good insight to it. Much of this ecosystem is specific to bitcoin itself and is something that no other alt-coin provides. The fact that several derivatives markets are opening up soon specifically for bitcoin futher puts all other alt-coins at a severe disadvantage when competing against bitcoin.

EDIT: I shrunk the image below since it was massive and here is a link to the full size image so people can look at the details without taking up so much space in this thread...

http://www.runtogold.com/images/bitcoin-ecosystem.jpg
« Last Edit: November 27, 2017, 06:17:26 PM by lifeanon269 »

GuitarStv

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Re: Is it too late [bitcoin]?
« Reply #99 on: November 28, 2017, 08:11:01 AM »
2) Global

Practically speaking, so is Visa.

Practically doesn't mean anything here. Only about 30 countries have what would be considered modern financial services. Roughly 4 billion people don't have access to modern financial services such as credit, savings, and insurance. So while VISA may make the claim that they offer services in 200 countries, as they do, that doesn't mean that the people of these countries has the capability to access their services. All one needs to have access to the bitcoin network is a phone and an internet connection. This is true regardless of the geographic location of that individual. Thus, by having access to the bitcoin network regardless of geographic location, you can therefore participate freely in the global economy. Therefore, Bitcoin is global, VISA is not.

What exactly are the requirements you're referring to that are necessary to access VISA services?

What exactly are the requirements you're referring to necessary to access bitcoin services?
Off the top of my head, I'm thinking:
- reliable computer
- reliable internet access
- reliable power
- translation services
- vendors and people who accept bitcoin

Which countries specifically meet the requirements for bitcoin, but not VISA?