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Thread: Bitcoin?

  1. #31
    Quote Originally Posted by Barry Richardson View Post
    My son got into it early, and is pretty much an expert on it, but I still can't understand it. He has made himself a good chunk of money, but IMO he needs to get out now, It is speculation, AKA gambling, and in the end, the house always wins.... I'm trying to gently convey this to him, but he has the optimism of youth....
    Whatever it is, the market rule never fails: No risk, No gain.

    My brother-in-law made a fortune from trading gold (and later silver), but when he turned 55, he called it quits and became an average guy. He now invests most of his fortune in fixed terms, no risk but peace of mind, all without transactions in millions of dollars(!) to worry about.

    Tell your son knowing when to leave the hot kitchen is the key to keeping his wealth. My brother-in-law has had many "boom and bust" real stories he had witnessed in his circle to share.


    Simon
    Last edited by Simon MacGowen; 12-12-2017 at 9:46 AM.

  2. #32
    At one time in our lives gold set the standard for currency and governments had to have gold to back the paper "money". This requirement virtually doesn't exist now and we put our "cash" in banks on faith that our country's economy stays strong.

    Look at the number of countries that have had financial problems and devalued the currency, "based on world markets". We live in a world economy, but the playing field is uneven as we have third world countries that millions do not have access to a banking system or markets.

    The world cash finance system is run by the few and the rest of us are along for the ride. Bit Coin changes that as your smart phone can do your transactions, banks make a fortune off of us. Bit Coin is another form of currency that is a world money based on the US dollar.

    If Bit Coin helps drug dealers and crooks, I think we can say the same about "CASH". There is always growing pains in anything new, but we have come along way from "signed playing cards were a form of currency" 200 years ago being acceptable as a cash currency, for gold and coin transactions.

    I am 69 year old and found scams in all form of currency or precious products, Bit Coin being no different. Look at the past to help in the future. I would not put my life savings in it, but would you put all yours into one stock not expecting an up and down trend?

    We older people don't fully understand this concept and likely never will. This is the future "change" and we being creatures of habit hate change. Whether this fails or succeeds change is inevitable.

    This could go on forever arguing over Bit Coin but the fact being it is becoming relevant in this day. My son does well in this currency and it will not replace money just another world currency.

    Through the eyes of John, just my opinion. It is always easy to look for the bad, knowledge gives you the understanding to logical make an informed decision. Articles on this are a just an opinion like mine.

    John

  3. #33
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    it will not replace money just another world currency.
    As I understand the whole topic,,,that right there is the crux of the matter.
    Right now, the US dollar isn't just "another world currency".....it IS the world currency.
    If you want something - like oil - on the world market, you have to pay for it in US dollars.
    Since we here in the US have the dollars, we don't have to buy the dollars first, then buy the item we want to buy - we just buy what we want.

    If Bitcoin - or any other currency - replaces the US dollar, it could prove to be a financial disaster for the common citizen.
    My granddad always said, :As one door closes, another opens".
    Wonderful man, terrible cabinet maker...

  4. #34
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    Quote Originally Posted by Perry Hilbert Jr View Post
    A few eastern european families had platinum cast into frying pans and traveled across to the new world with only a few meager possessions and some cookware. Cookware easily worth a hundred thousand dollars a piece today.
    Interesting about that. Good idea they had.
    I had an amount of platinum and sold it back in 2008 or 09 when it was $2k/ounce. Did that at the right time. The value dropped soon after, along with gold and silver.
    I never did trust the stock market, and stayed out of it. Thought about Bitcoins when they first came out. I figured it was too much like the stock market.
    Never, under any circumstances, consume a laxative and sleeping pill, on the same night

  5. #35
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    Certainly people who bought bitcoins at the right time have made a huge profit, at least on paper. There still isn't much you can buy with bitcoins so you have to take that profit in some other form of "currency".

    At this point, bitcoins as a genuine alternative to normal currency, not just as an investment, mostly appeals to people who trust technology more than governments (any government).

  6. #36
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    Quote Originally Posted by Frank Drew View Post
    At this point, bitcoins as a genuine alternative to normal currency, not just as an investment, mostly appeals to people who trust technology more than governments (any government).
    About as genuine as a lottery ticket.

    You can say it is a great thing to gamble on (probably better than a lottery ticket), but suggesting it has any similarity to currency is absurd.

  7. #37
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    Dan is absolutely right. Money is only worth what people believe it is worth. The world is full of examples. I was alive during the Jimmy Carter inflation era when the purchasing power of money declined at a rate of 22% a year for a while. A majority of people simply lost faith in the government and the value of the dollar. I have read that during the Great Depression, money actually grew in purchasing power as people lost their jobs and nobody had money to buy anything. Even the amount of money varies with time. The Federal Reserve Bank just lends money that doesn't exist in an effort to manipulate the economy. Eventually, that action is going to dilute the value of the currency as more of it is manufactured out of nothing.

    Quote Originally Posted by Wade Lippman View Post
    Either you already know better than this, or you are incapable of understanding. Either way, there is no point to answering.

  8. #38
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    Quote Originally Posted by Art Mann View Post
    Money is only worth what people believe it is worth.
    You're aware that is true about everything; but some things are better grounded than others. Food is essential for life, so it should be well grounded, while bitcoins are nothing but a computer entry. One can intelligently discuss what food should be worth, but no reasonable person would speculate on the real value of bitcoins. One cent? Ten Million Dollars? There is no particular reason to choose one over the other.

    Money has become worthless, as is happening in Zimbabwe now; but it is fair to say that if the USD ever declines significantly, no one will give you a slice of bread for a bitcoin.

  9. #39
    Quote Originally Posted by Wade Lippman View Post
    One can intelligently discuss what food should be worth, but no reasonable person would speculate on the real value of bitcoins.
    Wade,

    How can you intelligently discuss what food or anything else is worth other than in terms of something else (say dollars)?

    I'm not agreeing or disagreeing with you, but it seems to me that most every commodity's worth is established by a market balance point between supply and demand. Of course, some markets are more efficient than others, but my point is value in a modern economy is a market driven concept not an intrinsic measure like your comment about food vs bitcoins implies. At least that's what I was taught in university (the tuition for which was denominated in dollars, but the intrinsic value received is questionable to this day!).

    Sorry if I'm misunderstanding your point about food being essential for life thus well grounded versus a virtual asset.

    Edwin
    Last edited by Edwin Santos; 12-20-2017 at 12:40 PM.

  10. #40
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    Wouldn't a Bitcoin be like currency? You use the bitcoin to "purchase" something tangible, right? (I don't know what). If there are a limited number of Bitcoins then their individual value can go up or down. The value is in terms of what you get for it. Lets say you are buying a woodworking tool with Bitcoin. If the value of a Bitcoin skyrockets, then you will need less Bitcoins to purchase that tool. If the value of the Bitcoin goes down, then you will need more Bitcoins to purchase that tool. That's all basic stuff. There are people who speculate on the future value of Bitcoins and there is a marketplace to capture and manage that speculation. Lets say Bitcoin is a stock. The value of the stock goes very high - so much so that not many people can afford the stock price, so Bitcoin company decides to do a 1:2 or 1:10 split. This happens all the time with stocks. Now your $1700 Bitcoin may be only worth $170 after a 1 for 10 split. Now lets say that woodworking tool cost 1 Bitcoin ($1700) before the split. After the split the same tool will cost you 10 Bitcoins (still $1700). Its easy to make the jump that you don't need dollars anymore, just like we no longer need gold or whatever was the basis for bartering before that.

    I agree that its foolish (for me) to speculate on the future value of a Bitcoin, but that doesn't mean its not a useful tool for performing transactions.

    How soon, for example, will LV advertise tools in their catalogs in terms of Bitcoin value? Maybe never, maybe they will always advertise in CAD?? Maybe though, they will accept payment in Bitcoin based on the spot market price of a Bitcoin. Maybe even the grocery store will. Why not?

  11. #41
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    Quote Originally Posted by Edwin Santos View Post
    Wade,

    How can you intelligently discuss what food or anything else is worth other than in terms of something else (say dollars)?

    I'm not agreeing or disagreeing with you, but it seems to me that most every commodity's worth is established by a market balance point between supply and demand. Of course, some markets are more efficient than others, but my point is value in a modern economy is a market driven concept not an intrinsic measure like your comment about food vs bitcoins implies. At least that's what I was taught in university (the tuition for which was denominated in dollars, but the intrinsic value received is questionable to this day!).

    Sorry if I'm misunderstanding your point about food being essential for life thus well grounded versus a virtual asset.

    Edwin
    Obviously the value of something can only be discussed in terms of other things; be they tons of rice, euros, or bitcoins. But that is besides the point.


    The value of rice has an intrinsic value. If the price gets too low, supply will dry up as farmers switch to wheat and the price will go up. If the price gets too high, demand will drop as consumers switch to wheat. Thus it can be said that a ton of rice is worth between $1,000 and $4,000 (picking numbers at random, as I know nothing about rice) Knowing the current farming situation, weather forecasts and consumer aptitudes, economists can pretty accurately determine what the price will be a year from now; perhaps between $2,000 and $2,250. Now, if the monsoon unexpectedly fails, or China attacks India, they will be wrong; but price can be intelligently discussed, and the economists are usually somewhat accurate.

    Now, what will the price of a bitcoin be next year? There is absolutely no way to have any idea at all. Naturally it is based on supply and demand (and unlike rice, the supply is know with near certainty) but the demand next year is based on pure whimsy, and no one can make a meaningful prediction until the day in question. It could get even hotter and go to $1m, or people could decide to take their profit and the price will collapse to $1.
    Since it has no inherent cost or use, it has no intrinsic value that would restrain it's price.

    Predicting the price of a bitcoin next year is like predicting who will be president in 50 years; any guess will be foolish.

  12. #42
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    Quote Originally Posted by Pat Barry View Post

    I agree that its foolish (for me) to speculate on the future value of a Bitcoin, but that doesn't mean its not a useful tool for performing transactions.
    You can give prices in eggs, and even pay for them in eggs (assuming anyone is willing to accept them) but that doesn't make eggs currency.

    Admittedly eggs break and spoil, so they are probably a bad choice for transactions, but you can't prove you paid anyone in bitcoins, so that makes them nearly worthless for transactions.

  13. #43
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    Quote Originally Posted by Wade Lippman View Post
    ....you can't prove you paid anyone in bitcoins, so that makes them nearly worthless for transactions.
    Are you sure about this Wade? It seems strange that this would be true. It seems this would make them 'play money' and I don't think that is the case at all. I need to do more research.

  14. #44
    Quote Originally Posted by Pat Barry View Post
    Are you sure about this Wade? It seems strange that this would be true. It seems this would make them 'play money' and I don't think that is the case at all. I need to do more research.
    Pat, I'm not sure you need any more research.

    Here's what comes to my mind - Let's say there was a Macroeconomics discussion forum frequented by economists and financial professionals. And let's say that forum had an Off Topic sub-forum where some of their users started up a thread on woodworking. I would bet the Sawmill Creek members would find parts of their woodworking thread as comical as the economists might find parts of this one.
    Edwin

  15. #45
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    Quote Originally Posted by Edwin Santos View Post
    Pat, I'm not sure you need any more research.

    Here's what comes to my mind - Let's say there was a Macroeconomics discussion forum frequented by economists and financial professionals. And let's say that forum had an Off Topic sub-forum where some of their users started up a thread on woodworking. I would bet the Sawmill Creek members would find parts of their woodworking thread as comical as the economists might find parts of this one.
    Edwin
    Thanks Edwin. I appreciate the off handed dismissal of my posting. It's funny, to me anyway, that you really didn't say anything other than to paint me as ignorant. If anything, this thread points out we are all apparently ignorant about this subject.

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