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dennis thompson
12-10-2017, 4:24 PM
Anyone own bitcoin? Anyone understand what it is? I don't.:confused:

Mel Fulks
12-10-2017, 4:51 PM
I don't have any. But I know people who do. Think the easiest way to start to get how it works is just compare a one dollar fed note to the old "silver certificate" dollars. Bit coin is like the Fed note .....without you having to accept it under penalty of law. Silver and gold have always been widely accepted ,paper money is easily faked since its all made of same stuff. The strength of bit coin is that those getting involved have a good understanding of why governments want to control money.

Wade Lippman
12-10-2017, 7:55 PM
Remember tulipmania, when tulips were being bought and sold for hundreds of thousands of dollars?
This is pretty much the same thing, except that instead of tulips, you have nothing. People buy them in expectation that other people will be willing to pay more for them in the future. So far it has worked great, as did tulips, until the day it didn't work. Then it will collapse and people will lose everything. Except of course the people who got out in time, and that is the key to the collapse. No one wants to get out late, so when it starts to go down everyone will want to get out. Collapse.

One big difference between bitcoins and tulips is that bitcoins are widely used to pay for illegal drugs and ransoms (ie. ransomware). It has no other use; at least tulips gave pretty flowers.

Jim Becker
12-10-2017, 8:38 PM
There is great risk in Bitcoin and other "electronic currencies". They are purely market-based and speculative, IMHO. There was a lot of volatility this week alone.

Here's an interesting article that talks a little about potentially why Bitcoin is "hot" at the moment.

https://www.nbcnews.com/business/consumer/bitcoin-keeps-breaking-records-should-you-invest-year-s-hottest-n827906

Michael Weber
12-10-2017, 9:58 PM
Considered it about a year ago and in fact joined an exchange. Watched it for a few days and decided not to get any. Because of volitility and the fact it really represents nothing of any value except to drug dealers, gun dealers, kidnappers, slavers and other criminals to operate internationally totally transparent to any government knowledge or ability to track. I would have expected governments to shut down exchanges before now but I guess,ours at least, is too busy squabbling to attend to the interests of the people. That, or worse, have a vested interest in cyber currency surviving if you'll excuse my cynicism. Rant off

John Terefenko
12-10-2017, 10:41 PM
sounds like a ponzi scheme to me

Wade Lippman
12-10-2017, 11:15 PM
Considered it about a year ago and in fact joined an exchange. Watched it for a few days and decided not to get any. Because of volitility and the fact it really represents nothing of any value except to drug dealers, gun dealers, kidnappers, slavers and other criminals to operate internationally totally transparent to any government knowledge or ability to track. I would have expected governments to shut down exchanges before now but I guess,ours at least, is too busy squabbling to attend to the interests of the people. That, or worse, have a vested interest in cyber currency surviving if you'll excuse my cynicism. Rant off

I agree it should be illegal. Serves no purpose except to facilitate crime. But maybe is the issue is whether making it illegal would help. Everything would go on as before, except it would be illegal. So what? It is not like being legal gets you anything; somebody just stole $85M worth of them and there is nothing to be done about it; you can't sue anyone because there is no one to sue, and you can't prove you owned them anyhow.

It will be something to see when they crash.

Edwin Santos
12-10-2017, 11:23 PM
sounds like a ponzi scheme to me

Funny, a lot of cryptocurrency fans believe it is the cold hard cash in your wallet that is the ponzi scheme.
Gold bugs tend to be in the same camp.
I guess time will tell who's right.

One thing I'm quite sure about - the world your kids or grandkids will grow up in will look radically different than the one you grew up in.
Your world and the world of your parents will look quite similar to each other in comparison.

Mel Fulks
12-10-2017, 11:56 PM
Fort Knox is full of gold....the Feds think it's valuble. Somebody asked them "why gold"? Turns out there just are not enough Honus Wagner baseball cards to fill the place up.

Perry Hilbert Jr
12-11-2017, 7:28 AM
there were some community based swap currencies started a few years ago. They went something like, you trade a step ladder for a 3 credit certificate. A carpenter who has time on his hands might repair your front steps for the three credits certificate, and a farmer might accept the three credit certificate for three bushel of apples. The worth is not guaranteed or regulated by any government and floats on the credibility given to it by the public. Bitcoins are an electronic credit that are only worth the credibility the public gives them. When it comes down to it, all commodities, including dollars can be manipulated by others. Gold fluctuates. The value of a dollar fluctuates against foreign markets Even the old practice of keeping a stash of gems to sell if necessary. 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. All commercial currencies whether public or private, come down to the worth and "credit" people put on them. Just like futures in pork bellies.

Barry Richardson
12-11-2017, 9:43 AM
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....

Dan Friedrichs
12-11-2017, 9:57 AM
Remember tulipmania, when tulips were being bought and sold for hundreds of thousands of dollars?
This is pretty much the same thing, except that instead of tulips, you have nothing.

Oh, and what is the intrinsic value of dollars? Or GBP? Or yen? Or gold?

Bitcoins are valuable because people mutually agree they have value. Just like dollars, pounds, yen, or gold.

Dan Friedrichs
12-11-2017, 9:59 AM
Considered it about a year ago and in fact joined an exchange. Watched it for a few days and decided not to get any. Because of volitility and the fact it really represents nothing of any value except to drug dealers, gun dealers, kidnappers, slavers and other criminals to operate internationally totally transparent to any government knowledge or ability to track.

Those enterprises don't accept cash? They didn't exist prior to bitcoin? Huh.

There sure are a lot of very strong opinions in this thread from people who appear to lack even a cursory understanding of what they're having an opinion about...

Michael Weber
12-11-2017, 10:43 AM
Those enterprises don't accept cash? They didn't exist prior to bitcoin? Huh.

There sure are a lot of very strong opinions in this thread from people who appear to lack even a cursory understanding of what they're having an opinion about... Of course they did Dan. I didn't imply otherwise. It's just another level of protection for criminal elements. Everything I have read seems to indicate it is a useful tool for criminal activity in that it allows instantaneous, anonymous conversion to legitimate currencies. Agreed, I'm not an expert on cyber currencies.

Pat Barry
12-11-2017, 10:50 AM
Some recent legitimacy in that Chicago Options Exchange now trading Bitcoin

Stephen Tashiro
12-11-2017, 11:00 AM
The website of the computer hardware seller NewEgg says that NewEgg accepts bitcoins.

Is there anyone on the forum that deals with international trade? How expensive or risky is it to do business involving currencies from several nations? Bitcoins would by-pass the process of currency exchange.

Edwin Santos
12-11-2017, 12:28 PM
Some recent legitimacy in that Chicago Options Exchange now trading Bitcoin

The CBOE is not trading Bitcoin, they're trading futures contracts on Bitcoin which is very different.

But your point is valid that in doing so, they are recognizing Bitcoin as a legitimate commodity against which you can trade futures contracts.

Michael Weber
12-11-2017, 12:35 PM
I believe they are not trading Bitcoins but FUTURES in bit coin much like pork bellys. I suppose that is for folks for whom trading in bit coin directly simply isn't speculative enough :eek:

Michael Weber
12-11-2017, 1:31 PM
The website of the computer hardware seller NewEgg says that NewEgg accepts bitcoins.

Is there anyone on the forum that deals with international trade? How expensive or risky is it to do business involving currencies from several nations? Bitcoins would by-pass the process of currency exchange. NewEgg and others accept bitcoin but they don't hold it for speculation. The bitcoin trades of both buyer and seller occurs almost simultaneously. IMHO bitcoin is far more speculative than international currency trading which has some basis of judgement for value,ie perceived government stability and monetary policies, I don't see how it would bypass international currency exchange rates. If you buy $100 worth of Euros, you've now introduced two flucuating variables rather than one. You might win or you might lose. From what I've observed bitcoin varies a LOT more than currencies which do fluctuate constantly but usually by small percentages over short time intervals. Perhaps I'm over simplifying your question or misunderstood. I've speculated on a few things over the years. Some successfully and some not. None were done using actual knowledge or much research or cost more than I could afford to lose. My financial investment advice is worth exactly what Ive been paid for it ;).

dennis thompson
12-11-2017, 2:23 PM
I just heard that since bitcoin was introduced it has had declines of 80% five times, :eek:a little too much for this index investor

John Terefenko
12-11-2017, 2:44 PM
Funny, a lot of cryptocurrency fans believe it is the cold hard cash in your wallet that is the ponzi scheme.
Gold bugs tend to be in the same camp.
I guess time will tell who's right.

One thing I'm quite sure about - the world your kids or grandkids will grow up in will look radically different than the one you grew up in.
Your world and the world of your parents will look quite similar to each other in comparison.

Take long to think of this statement??? Of course the world will look different if there will be a world. North Korea may have a say in this along with other radicals. Modern man is expanding much faster because there are so many more as opposed to yesteryear. New technology leads to newer technology and so on.

I do not know anything about Bitcoin and nor do I want to. I hate using credit cards. Give me all your green cash and I will dispose of it for you.

Edwin Santos
12-11-2017, 4:15 PM
Take long to think of this statement??? Of course the world will look different if there will be a world. North Korea may have a say in this along with other radicals. Modern man is expanding much faster because there are so many more as opposed to yesteryear. New technology leads to newer technology and so on.

I do not know anything about Bitcoin and nor do I want to. I hate using credit cards. Give me all your green cash and I will dispose of it for you.

John, It actually did take me quite a while thinking about things to arrive at that statement, but then again I won't deny being slower than some.

In case it wasn't well communicated the first time, basically what I was trying to say is that over a long period of time, change to me seemed to be somewhat constant. My observation over the past decade or so is that the curve of change has moved to a more exponential and less logarithmic rate than in the past. In other words, the speed of change is accelerating, and the extent of change is broadening in a non-linear fashion. It's like taking the principle of compounding returns and applying it to basically everything.

So while every generation will look different than the one preceding, I'm saying the degree of resemblance between two adjacent generations is diminishing.

If this is/was obvious to you and everyone else, then I am slow to the party indeed. And/or I wonder if others would agree on the observation at all.

I'm not endorsing nor trashing Bitcoin or any blockchain cryptocurrency, but I think it's an exciting time in general and I very much look forward to the future.

Stan Calow
12-11-2017, 4:33 PM
Edwin your observation actually was the subject of a series of books back in the '70s - Future Shock by Alvin Toffler, which were widely popular bestsellers at the time. What I think causes the acceleration is demographics. The population of the US has more than doubled since I was born, and the world population has almost tripled. I've heard it said that half the people who have ever been alive on earth, are alive today. Don't know if thats true, but the sheer number of people drives things forward - whether better or worse, I dont know. I'm staying away from bitcoin.

Wade Lippman
12-11-2017, 4:52 PM
Oh, and what is the intrinsic value of dollars? Or GBP? Or yen? Or gold?

Bitcoins are valuable because people mutually agree they have value. Just like dollars, pounds, yen, or gold.

Either you already know better than this, or you are incapable of understanding. Either way, there is no point to answering.

Mel Fulks
12-11-2017, 5:09 PM
I'm making this my last comment on this thread. And that promise is to ME. Look up "fiat money" and "legal tender "laws.
Bit coin is succeeding on the high ground of choice.

John Terefenko
12-11-2017, 10:21 PM
Edwin your observation actually was the subject of a series of books back in the '70s - Future Shock by Alvin Toffler, which were widely popular bestsellers at the time. What I think causes the acceleration is demographics. The population of the US has more than doubled since I was born, and the world population has almost tripled. I've heard it said that half the people who have ever been alive on earth, are alive today. Don't know if thats true, but the sheer number of people drives things forward - whether better or worse, I dont know. I'm staying away from bitcoin.


This was my point also. The amount of people contributing to change has increased over years and that is why it is accelerating so fast. You are also improving on things that were not available years ago. This is a natural progression. It is always fun to look back to what things use to be but live in the present and hope the future will hold good things.

Rich Engelhardt
12-12-2017, 6:36 AM
Anyone own bitcoin? Anyone understand what it is? I don't
-no
- sort of...it's a currency invented by some guy that appears not to have ever existed.
- no problem, what you don't know (in this case) will save you money.

Yeah, like I'm about to wake my wife up and tell her I want to invest about $17 thousand in something invented by some guy that no one has ever met and is some kind of currency that's only accepted at a few places....

If I did that, she would hurt me. She would hurt me bad. We're talking major beat down. Blood/stitches/sub-whatcha-ma-call-it, hemo - whats-it....ride to the ER ---type of beating...

Pat Barry
12-12-2017, 7:45 AM
Who knows how Bitcoin will turn out. Maybe it will be a lasting thing that everyone adopts or maybe another, newer, better technology will come to the fore. Regardless, it is foolish to think that all things monetary will remain the same forever. Many of the folks that claim they will never buy in to this new technology are the same that said they would never use credit cards, or debit cards, or Paypal, etc or invest in the stock market, or T bills, or futures of any kind. Sooner or later you will adopt the new technology or fall by the wayside. I agree that it is relatively foolish to invest in Bitcoins - that isn't for me - but it might be a great speculative investment for some with high risk tolerance (in which case those risk takers may become wealthy). I for one have never understood how the US Govt can claim its money is backed by gold hidden in Fort Knox, yet just print more money any time they need it. They didn't add gold to Fort Knox to print more money - they just did it - so what value in gold does it really have? The price of gold fluctuates fairly radically, does the value of your currency fluctuate along with it? Mine doesn't seem to. Those dollars I stashed away in a mason jar under my porch are still worth just a dollar - same as they did 50 years ago.

Wade Lippman
12-12-2017, 9:16 AM
I for one have never understood how the US Govt can claim its money is backed by gold hidden in Fort Knox, yet just print more money any time they need it.

US Dollars are not backed by anything, except the full faith of the US Government. You can use them to pay your taxes; that is about all that is for sure. If the government acts irresponsibly, they will have little value. That is why many people like gold; it has always had value, regardless of what the government does. I don't think it is a good argument, but it is an argument.

Bitcoins are not backed by anything at all. If, as will inevitably happen, the price starts to fall; then everyone will want to sell them and no one will want to buy them. Then they will go to zero. That will happen, probably in the next year or two; the US government is unlikely to collapse in that time period. But if the US government does collapse, do you think anyone will trade food or fuel for your bitcoins, even if it were possible to do so (which it probably wouldn't be...)?

You know the old joke; the US Dollar might be the most speculative investment, except for all the others.

Oh, the government CAN'T print new money. The Fed can print new money which it can invest in Treasuries. It sounds like double talk, but isn't quite, as there is the means to unprint the money as is happening now. They essentially sell the bonds and retire the money.

I have never understood why we don't sell all the gold in Fort Knox. England sold most of their gold 50 years ago, only to see the price spike, and that would be really unpleasant, but it could just as easily have dropped.

Edwin Santos
12-12-2017, 9:29 AM
Who knows how Bitcoin will turn out. Maybe it will be a lasting thing that everyone adopts or maybe another, newer, better technology will come to the fore. Regardless, it is foolish to think that all things monetary will remain the same forever. Many of the folks that claim they will never buy in to this new technology are the same that said they would never use credit cards, or debit cards, or Paypal, etc or invest in the stock market, or T bills, or futures of any kind. Sooner or later you will adopt the new technology or fall by the wayside. I agree that it is relatively foolish to invest in Bitcoins - that isn't for me - but it might be a great speculative investment for some with high risk tolerance (in which case those risk takers may become wealthy). I for one have never understood how the US Govt can claim its money is backed by gold hidden in Fort Knox, yet just print more money any time they need it. They didn't add gold to Fort Knox to print more money - they just did it - so what value in gold does it really have? The price of gold fluctuates fairly radically, does the value of your currency fluctuate along with it? Mine doesn't seem to. Those dollars I stashed away in a mason jar under my porch are still worth just a dollar - same as they did 50 years ago.

Are you aware the United States abandoned the gold standard in 1971 under President Nixon? Since that time there has been no relationship between US dollars and gold.

The subject you raise about the US Govt (Fed) "printing" more money has been the subject of a great deal of debate and speculation, and is one factor influencing many Bitcoin fans.

Simon MacGowen
12-12-2017, 9:39 AM
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

John Llewellyn
12-12-2017, 9:48 AM
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

Rich Engelhardt
12-12-2017, 3:23 PM
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.

Myk Rian
12-12-2017, 4:19 PM
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.

Frank Drew
12-19-2017, 12:19 PM
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).

Wade Lippman
12-19-2017, 5:33 PM
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.

Art Mann
12-19-2017, 8:43 PM
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.


Either you already know better than this, or you are incapable of understanding. Either way, there is no point to answering.

Wade Lippman
12-20-2017, 10:34 AM
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.

Edwin Santos
12-20-2017, 11:31 AM
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

Pat Barry
12-20-2017, 1:57 PM
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?

Wade Lippman
12-20-2017, 4:48 PM
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.

Wade Lippman
12-20-2017, 4:57 PM
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.

Pat Barry
12-20-2017, 5:03 PM
....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.

Edwin Santos
12-20-2017, 5:18 PM
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

Pat Barry
12-20-2017, 6:18 PM
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.

Edwin Santos
12-20-2017, 6:42 PM
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.

Pat,
Apparently I need to sincerely apologize. In fact I found no fault with your post at all and I thought I was vindicating it in my own metaphorical way. I'm really sorry about that. I thought your reasoning was absolutely sound, especially distinguishing between Bitcoin as a form of currency for exchange of goods and services, and Bitcoin as a speculative investment. This is why I said I don't think you need more research.

There are other comments through the thread that I think are completely ignorant of basic economic theory and fiat currency, but your recent post was not one of them, and my opinions are only my own which more often I should probably keep to myself.
Sorry, Edwin

Wade Lippman
12-20-2017, 6:49 PM
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.

The whole point of it is that it is totally anonymous. When you pay a ransom in bitcoins, you have no idea who is getting the payoff; it is totally untraceable. If you don't know who you paid, you obviously can't prove you paid them.
I suppose it is not that different than paying in cash, but who would do a significant transaction in cash with someone they don't trust?

I am so sad Edwin considers me ignorant of economics.:(

Pat Barry
12-21-2017, 7:47 AM
Pat,
Apparently I need to sincerely apologize. In fact I found no fault with your post at all and I thought I was vindicating it in my own metaphorical way. I'm really sorry about that. I thought your reasoning was absolutely sound, especially distinguishing between Bitcoin as a form of currency for exchange of goods and services, and Bitcoin as a speculative investment. This is why I said I don't think you need more research.

There are other comments through the thread that I think are completely ignorant of basic economic theory and fiat currency, but your recent post was not one of them, and my opinions are only my own which more often I should probably keep to myself.
Sorry, Edwin
Edwin, I too am sorry to have misinterpreted your posting. I should have attempted to clarify the situation. I'm sure that had it been a simple conversation the misunderstanding would have been immediately apparent and corrected. Such is the problem with conversations of this nature. Please accept my apology.

Pat Barry
12-21-2017, 7:49 AM
The whole point of it is that it is totally anonymous. When you pay a ransom in bitcoins, you have no idea who is getting the payoff; it is totally untraceable. If you don't know who you paid, you obviously can't prove you paid them.
I suppose it is not that different than paying in cash, but who would do a significant transaction in cash with someone they don't trust?
Yes, I think it is exactly like cash. All the transactions are tracked and recorded. The peer to peer transaction is processed and verified by the system. I still see no reason for me to use Bitcoin however as long as the dollar still works.

Frederick Skelly
12-21-2017, 9:45 AM
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.

Yup. My Dad always says "Bears make money. Bulls make money. Pigs go broke."

I don't mind if folks invest in bitcoin or in pork bellies or in beanie babies - as long as if/when the bottom drops out, they don't ask the rest of us taxpayers to bail them out in some way or another. (I believe very strongly in the idea that "If I gamble and win, I get to keep it. If I gamble and lose, I've got to 'man up' and get a second job." )

Edit: When I got hit with the Cryptolocker virus a couple years ago, they wanted payment in bitcoin. Was the first I'd heard of it myself.

Roger Feeley
12-24-2017, 4:33 PM
One of Warren Buffet's cardinal rules is that he never invests in a business he can't understand. I would bet that the Oracle of Omaha owns no Bitcoin.

Wade Lippman
12-24-2017, 5:27 PM
One of Warren Buffet's cardinal rules is that he never invests in a business he can't understand. I would bet that the Oracle of Omaha owns no Bitcoin.
https://www.forbes.com/sites/johnwasik/2017/11/06/why-buffett-sees-bitcoin-bubble/#2ba2c44662a8

Apparently his understanding of economics is as poor as mine!

Curt Harms
12-25-2017, 8:05 AM
Yes, I think it is exactly like cash. All the transactions are tracked and recorded. The peer to peer transaction is processed and verified by the system. I still see no reason for me to use Bitcoin however as long as the dollar still works.

You might if you didn't want "the powers that be" to be able to reconstruct your actions and associations through access to your financial records. Remember that "the powers that be" also get to decide who are criminals and who are good citizens.

Wade Lippman
12-25-2017, 9:36 AM
You might if you didn't want "the powers that be" to be able to reconstruct your actions and associations through access to your financial records. Remember that "the powers that be" also get to decide who are criminals and who are good citizens.

And something that serves no purpose except to conceal criminal activity is good because it facilitates crime. Extraordinary.

John Llewellyn
12-25-2017, 9:47 AM
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

Pat I do understand your economics cross reference concerning Bit Coin and you are correct. My son has been involved in Bit Coin and Alternative coins shortly after it became a "geeks thing". He is 35 and the biggest issue he finds is peoples misunderstanding or ignorance of the concept or even why it was started. I have watched it's growth and with my son's insight helping me understand it. May I suggest everyone take time and research the history and "understand it". I am not for or against it but the concept is very interesting and as a 69 year old I had to want to be open minded to even accept the content. As my Mother always said. "ignorance is bliss". Just my opinion as I see our financial institutes failing us and becoming very rich off us just using our own make believe cash system.

Something to remember our world continuously evolves, we older or not informed have a harder time catching up.

Have a great day and better tomorrow.
John

John Llewellyn
12-25-2017, 9:54 AM
And something that serves no purpose except to conceal criminal activity is good because it facilitates crime. Extraordinary.

So does "cash", do you think criminals use a bank account for an illegal transaction.

Wade Lippman
12-25-2017, 10:12 AM
So does "cash", do you think criminals use a bank account for an illegal transaction.

Well, it is pointless to argue with that!

Curt Harms
12-26-2017, 7:05 AM
And something that serves no purpose except to conceal criminal activity is good because it facilitates crime. Extraordinary.

It depends on how you define criminality. Remember that George Washington, Thomas Jefferson, Benjamin Franklin et. al. were considered criminals by the government in place at the time. The same is likely true in places like Russia or Mainland China today.

Art Mann
12-26-2017, 5:37 PM
Bitcoin is already used as a medium of exchange, without any of it being converted to dollars. It works just like money for some groups and individuals. There is nothing to prevent it from becoming more popular as a medium of exchange, not just a bogus investment. It would behave just like dollar bills except a computer keeps up with how much you own. That is what Dan may have been trying to get Wade to understand.

As it is now, we are rapidly becoming a cashless society. That is to say you can't buy or sell anything without the government being able to know all about both sides of the transaction. That bothers me as much as the government keeping records of my phone calls. I could see that Bitcoin could be used to circumvent this potentially serious violation of privacy.

John Terefenko
12-26-2017, 11:39 PM
Still a ponzi scheme in my eyes. Continue on though.

Larry Frank
12-27-2017, 7:41 AM
At my age and being retired, bitcoin makes no sense for me. It is very speculative and does not fit my portfolio. My financial advisor would disown me if I wanted to invest in it.

Wade Lippman
01-16-2018, 12:31 PM
11,400 and falling fast. Anyone buy at 20,000?
Of course... it could be back to 17,000 by the time I finish writing this. How could this be anyone's idea of currency?

Rich Riddle
01-16-2018, 3:48 PM
Psychologist frequently set up reward programs called token economies. In reality, every method people utilize to pay for something is nothing more than a token economy. The reason cash works is that people put value in cash (token). At one time the economy was based on gold/silver (tokens). If you ponder it, why on earth would someone want a rock, mineral or gem? Bitcoin is nothing more than a token economy.

Malcolm McLeod
01-16-2018, 4:24 PM
11,400 and falling fast. Anyone buy at 20,000?
Of course... it could be back to 17,000 by the time I finish writing this. ...

History is full of similar cases involving nearly every currency on the planet. All it takes is a general loss of faith in that particular currency.


... How could this be anyone's idea of currency?

... The reason cash works is that people put value in cash (token). ...

Rich is correct in the world I live in. Currency, cash, or bitcoins are all just tokens. Tokens (by any name) have value to me, only because they have value to you. ...I can give you a token worth of my labor or goods, because I have faith that someone else will give me a token worth of their labor or goods (that I want). It is just a medium of exchange that simplifies the flow of goods and services.

Mel Fulks
01-16-2018, 4:25 PM
Gold and silver are, or were, always referred to as "real money" ,so they are not tokens.

Malcolm McLeod
01-16-2018, 4:37 PM
Gold and silver are, or were, always referred to as "real money" ,so they are not tokens.

So why not brass, aluminum, iron, tin, or titanium? They are all real. We can make disks and engrave George's head on them. They'd be 'real money' too.

What if Mt. Saint Helens starts oozing gold? Say at 1000 tons a minute (estimated to continue for the next 1000 yrs). Will gold still be real money, or can we just use beach sand?

Wade Lippman
01-16-2018, 5:17 PM
Rich is correct in the world I live in. Currency, cash, or bitcoins are all just tokens. Tokens (by any name) have value to me, only because they have value to you. ...I can give you a token worth of my labor or goods, because I have faith that someone else will give me a token worth of their labor or goods (that I want). It is just a medium of exchange that simplifies the flow of goods and services.

You are missing the whole point. How can something that goes up or down 20% in a hour be a currency. It is absurd. Yes, you can point to "currencies" that suffered from extreme inflation, but they are associated with economic collapses. That suggests they are something to be avoided.

Down another 10% since I posted earlier this afternoon.

Mel Fulks
01-16-2018, 6:19 PM
Malcolm, the government HAS done that,we no longer have gold and silver in circulation. The ancients used gold and silver. They have always been desired without need of decree. The down side, is that when stolen they can be melted to make art just blobs or bars . Some of Cellini's work is gone because of that. When gold and silver circulate along with base metals they are always pulled out leaving the less desired metals in circulation. Failing to change human nature governments ...take out the desired,and therefore valuable metals leaving the base metals as "money"

Malcolm McLeod
01-16-2018, 7:45 PM
... That suggests they are something to be avoided...


... take out the desired,and therefore valuable metals leaving the base metals as "money"

I didn't mean to imply bitcoin (or any other token) was desirable or a good investment, merely that it IS a currency - for the simple reason that 2 or more people (...tho' count is apparently dropping fast today) accept it as a medium of exchange.

My example of a gold volcano, is merely to point out the upset that would occur in supply vs. demand. If gold were to suddenly flow like water, gold would eventually be as valuable as ....sand.

Aluminum was once considered a (desired) rare noble metal! Now, not so much. Why? It's still 'noble' (i.e. doesn't corrode like iron). Did we lose our desire? Or, did aluminum lose it's rarity?

We use gold as a token because it's rare/desired/valuable ...and fits in our pocket. So we don't have to drag a dump truck full of monetary sand around with us to buy a pack of smokes.

If Golden Delicious Apples, suddenly genetically morphed into an eternal life elixur, equal in value to a mid-priced automobile - - sliced apples might very well be the next currency. All that has to happen is that 2 or more people recognize it as such. Enjoy!:)

Mel Fulks
01-16-2018, 11:58 PM
The only real example I can compare the "gushing gold" to is the American gold rush. The miners needed supply's and were finding a lot of gold. Supply and demand. Prices got extremely high ,but supply and demand worked ,mining went on
with the required goods. I believe all involved thought the situation was unusual but accepted the negotiated balance as neccesary and fair.

Pat Barry
01-17-2018, 7:53 AM
Might be a good buying opportunity for Bitcoins now. The markets always overreact to bad news. I predict the valuations will recover and this will be a blip on the radar.

Wade Lippman
01-17-2018, 9:58 AM
Might be a good buying opportunity for Bitcoins now. The markets always overreact to bad news. I predict the valuations will recover and this will be a blip on the radar.

You would have lost 10% already.
Is this the bubble bursting? No way to tell, but you can be sure it will burst eventually.

julian abram
01-17-2018, 10:03 AM
11,400 and falling fast. Anyone buy at 20,000?
Of course... it could be back to 17,000 by the time I finish writing this. How could this be anyone's idea of currency?

Agreed. If you want to gamble, there are better things out there to gamble on.

Pat Barry
01-17-2018, 7:52 PM
You would have lost 10% already.
Is this the bubble bursting? No way to tell, but you can be sure it will burst eventually.
I'm not buying, but be careful not to confuse a short term blip in value with who knows what the longer term will be. Lets check back in 6 months

Steve Demuth
01-17-2018, 9:02 PM
I wouldn't even venture a prediction of whether the price of Bitcoin is going back up or down, and how dramatically, tomorrow, or over the next 6 months. There are no "fundamentals" to analyze, other than Bitcoin's ability to continue to attract optimists and "greater fools." Thus I won't be buying. I may be a fool for many purposes, but I'm nobody's "greater fool" in the investment space.

What I would predict with a lot of confidence is that we will not be using Bitcoin (at least as it is currently constituted) as a currency in any significant degree a decade from now. We may have a fully digital currency. We may have blockchain based exchange services all over the place. Some of them may even be based on distributed trust mechanisms. But we won't be buying most stuff or receiving our salaries, wages or pensions in Bitcoin, unless something new and different assumes the name Bitcoin. Thus I would also predict that Bitcoin won't be worth a lot in a decade, although I'll allow that Bitcoin might be replaced by something with the same name and all existing Bitcoin converted to that new currency, so I'm less confident of the "no value" prediction.

The reason for this is simple: without major reconstruction Bitcoin cannot scale to anything like an economy-wide exchange mechanism, and without similarly major reconstruction, it can't escape the fact that the number of Bitcoins is strictly capped, and there is no mechanism for the creation of new Bitcoin outside of the existing capped mechanism. The former limits Bitcoin's grown, but the latter means no government is going to allow Bitcoin to be "coin of the realm," because they would totally lose their ability manage money supply - all the policy levers that governments and central banks use to avoid inflation, deflation, and liquidity crises are inherently absent in Bitcoin as currently constituted would go away (this is actually one of the goals of the people who push Bitcoin). The moment Bitcoin looks to actually function like a currency and take over a significant fraction of exchange within a national economy, governments and banks will kill it as a legal exchange mechanism. So, either it stagnates, or it it gets itself killed.

Stewie Simpson
01-18-2018, 5:42 AM
You would have lost 10% already.
Is this the bubble bursting? No way to tell, but you can be sure it will burst eventually.

https://www.investopedia.com/articles/investing/090215/3-reasons-why-countries-devalue-their-currency.asp

Ever since world currencies abandoned the gold standard (https://www.investopedia.com/terms/g/goldstandard.asp) and allowed their exchange rates (https://www.investopedia.com/terms/e/exchangerate.asp) to float (https://www.investopedia.com/terms/f/float.asp) freely against each other, there have been many currency devaluation events that have hurt not only the citizens of the country involved, but have also rippled across the globe. If the fallout can be so widespread, why do countries devalue (https://www.investopedia.com/terms/d/devaluation.asp) their currency?

To Boost ExportsOn a world market, goods from one country must compete with those from all other countries. Car makers in America must compete with car makers in Europe and Japan. If the value of the euro (https://www.investopedia.com/terms/e/euro.asp) decreases against the dollar, the price of the cars sold by European manufacturers in America, in dollars, will be effectively less expensive than they were before. On the other hand, a more valuable currency make exports (https://www.investopedia.com/terms/e/export.asp) relatively more expensive for purchase in foreign markets. (See also: Interesting Facts About Imports and Exports (https://www.investopedia.com/articles/investing/100813/interesting-facts-about-imports-and-exports.asp).)
In other words, exporters become more competitive in a global market. Exports are encouraged while imports are discouraged. There should be some caution, however, for two reasons. First, as the demand for a country's exported goods increases worldwide, the price will begin to rise, normalizing the initial effect of the devaluation. The second is that as other countries see this effect at work, they will be incentivized to devalue their own currencies in kind in a so-called "race to the bottom." This can lead to tit for tat currency wars (https://www.investopedia.com/terms/c/competitive-devaluation.asp) and lead to unchecked inflation (https://www.investopedia.com/terms/i/inflation.asp).
To Shrink Trade DeficitsExports will increase and imports will decrease due to exports becoming cheaper and imports more expensive. This favors an improved balance of payments (https://www.investopedia.com/terms/b/bop.asp) as exports increase and imports decrease, shrinking trade deficits (https://www.investopedia.com/terms/t/trade_deficit.asp). Persistent deficits (https://www.investopedia.com/terms/d/deficit.asp) are not uncommon today, with the United States and many other nations running persistent imbalances year after year. Economic theory, however, states that ongoing deficits are unsustainable in the long run and can lead to dangerous levels of debt which can cripple an economy. Devaluing the home currency can help correct balance of payments and reduce these deficits. (See also: Current Account Deficits: Government Investment Or Irresponsibility? (https://www.investopedia.com/articles/04/012804.asp))
There is a potential downside to this rationale, however. Devaluation also increases the debt burden of foreign-denominated loans when priced in the home currency. This is a big problem for a developing country like India or Argentina which hold lots of dollar- and euro-denominated debt. These foreign debts (https://www.investopedia.com/terms/f/foreign-debt.asp) become more difficult to service, reducing confidence among the people in their domestic currency.
To Reduce Sovereign Debt BurdensA government may be incentivized to encourage a weak currency (https://www.investopedia.com/terms/s/weak-currency.asp) policy if it has a lot of government issued sovereign debt (https://www.investopedia.com/terms/s/sovereign-debt.asp) to service on a regular basis. If debt payments are fixed (https://www.investopedia.com/terms/f/fixed-interest-security.asp), a weaker currency makes these payments effectively less expensive over time.
Take for example a government who has to pay $1 million each month in interest payments on its outstanding debts. But if that same $1 million of notional payments becomes less valuable, it will be easier to cover that interest. In our example, if the domestic currency is devalued to half of its initial value, the $1 million debt payment will only be worth $500,000 now.
Again, this tactic should be used with caution. As most countries around the globe have some debt outstanding in one form or another, a race to the bottom currency war could be initiated. This tactic will also fail if the country in question holds a large amount of foreign bonds (https://www.investopedia.com/terms/f/foreignbonds.asp) since it will make those interest payments relatively more costly. (See also: Why Your Pension Plan Has Sovereign Debt in it (https://www.investopedia.com/articles/investing/050813/why-your-pension-plan-has-sovereign-debt-it.asp).)
The Bottom LineCurrency devaluations can be used by countries to achieve economic policy. Having a weaker currency relative to the rest of the world can help boost exports, shrink trade deficits and reduce the cost of interest payments on its outstanding government debts. There are, however, some negative effects of devaluations. They create uncertainty in global markets that can cause asset markets to fall or spur recessions (https://www.investopedia.com/terms/r/recession.asp). Countries might be tempted to enter a tit for tat currency war, devaluing their own currency back and forth in a race to the bottom. This can be a very dangerous and vicious cycle leading to much more harm than good.

andrew whicker
01-19-2018, 4:46 AM
I am seeing a lot of people with strong opinions, but no desire to learn about digital currency. A quick youtube search will give you 5 to 10 minute videos explaining the technology.

It's actually very brilliant. Bitcoin is only one example. It won't end up being THE digital currency for various reasons, but it was still a home run. Here are a few things I want to clear up:

- Digital currency isn't totally anonymous, in fact in most cases the total opposite
- You pay income taxes on any digital coin that you transfer to USD
- Inflation / deflation (Amt of digital currency created) is set by a computer program

Digital currency is really really exciting and has the potential to solve many issues. Just from a currency stand point: there are people who are NOT starving in Venezuela right now because of Bitcoin. Think about that. Regardless of how irresponsible your government is, you can still feed and shelter yourself because you have a currency that is NOT tied to where you are geopolitically located. Why does currency have to be tied to where you are anyway?

Secondly, and this takes some understanding of how digital currency works, this space is extremely good at keeping records. Even in America, we have to pay a company to find out if the person selling the house really owns the house. Imagine a world where you create a part with serial number XYZ and every buyer of that serial number is known from cradle to grave. How powerful would that be? No receipts necessary. It's too complicated to describe in a forum, but if you are interested check out filecoin or ethereum to get an idea of what can go on in the background. In other words, I could pay in USD to Germany. They would get paid in Euro. But if we both were using a digital currency in the background, then the purchase would be recorded on 1000's of computers.

A lot of ignorant anger comes from people in wealthy countries who already have a stable currency. These digital currencies have the potential to help millions of people that aren't as fortunate as those living in first world countries. Property ownership records being a huge example.

Obviously the currencies aren't ready yet, but they will be. They are the future. The technology makes sense. Inflation by mathematical equation or inflation by an old gov't employee that bends to the will of big banks and presidents? You can have your government BS, I'll take the decentralized currency.


Also, if you want anonymous, use cash. Hell, I wanted to take back a tool I bought with a debit card and the store wouldn't let me because I didn't have a receipt. Not sure why people get bent out of shape about that aspect anyway. Everyone buys and sells cars in their lifetime and doesn't tell the gov't.

Wade Lippman
01-19-2018, 9:17 PM
- Digital currency isn't totally anonymous, in fact in most cases the total opposite


How so?
The whole point of it is that it is untraceable; so how isn't it anonymous?

Jim Koepke
01-20-2018, 1:17 AM
Everyone buys and sells cars in their lifetime and doesn't tell the gov't.

All it takes is getting a bunch of parking tickets for a car sold 6 months earlier to cure a person of not making sure the government knows when a particular car has changed owners.

Besides, to legally drive it on the streets it needs proper tags & plates.

jtk

Wade Lippman
02-05-2018, 1:34 PM
If anyone is interested, it is now 6,900. It was 15,000 when this thread started.

Ignoring bitcoins promise as a wildly speculative investment, fluctuations like this are not what you look for in a currency.

Pat Barry
02-05-2018, 1:58 PM
If anyone is interested, it is now 6,900. It was 15,000 when this thread started.

Ignoring bitcoins promise as a wildly speculative investment, fluctuations like this are not what you look for in a currency.
Thanks for the update. Maybe post again when it drops another 50%

Wade Lippman
11-17-2018, 2:32 PM
It was $19,000 in December when the OP was made.
It fell sharply and fluctuated between 10,000 and 6,000 for most of the year.
In the fall it was oddly stable at $6,500 for a few months.
A week ago it well to $5,500 and has been stable for a week.

Van Huskey
11-18-2018, 3:56 AM
It was $19,000 in December when the OP was made.
It fell sharply and fluctuated between 10,000 and 6,000 for most of the year.
In the fall it was oddly stable at $6,500 for a few months.
A week ago it well to $5,500 and has been stable for a week.

I am on a college football forum with a very healthy money sub forum. There were some VERY early very vocal proponents of Bitcoin, for years the mantra of the vocal minority was IDIOT, IDIOT, IDIOT which last year changed to FREAKIN GENIUS MILLIONAIRES, now it is back to IDIOT, IDIOT, IDIOT. I felt bad for the many I saw finally cave and buy-in (some in a big way) at the $16k+ price point. One was a reasonably close friend and while I am sure it isn't the only reason he is being divorced, now he only has half his stuff and half his overpriced ones and zeros.

BTC is a great and scary idea all at the same time and though I didn't read all the thread and thus may be echoing as long as cryptos are used primarily as speculative investments they will never gain traction as a viable currency. The ridiculously high volatility will never fly as a currency.

Bill Dufour
11-18-2018, 11:06 AM
I read that one bitcoin "bank" got scammed by counterfeit bitcoin and about 15% percent of their clients lost their money. instead of leaving it at that the "Bank" stole the bitcoin equally from all the accounts to even out the loss. Kinda of like if they break into the vault and only open some of the safe deposit boxes. Yours is untouched but they make you open it up and have to give 15% of the valuables to the bank to share with those who got robbed.
AFAIK Bitcoin is not a legal currency and therefore their is no penalty for counterfeiting it in any country.

Bil lD.
http://fortune.com/2017/08/22/bitcoin-coinbase-hack/

Wade Lippman
11-26-2018, 10:19 AM
Now it is $3,800.

If I seem a bit obsessed over this... the only real use for a bitcoin is illegal transactions; buying drugs or getting ransom payments. It ought to be illegal and everyone who "invests" in it ought to lose their money. I am delighted that it seems to be going that way.

Mel Fulks
11-26-2018, 11:03 AM
Well, I'm guessing the people scared of bit coin are really glad the Beanie Baby thing is over. Some of them had really scary faces!

Art Mann
11-26-2018, 11:18 AM
Absolutely! I would prefer a cashless society in which the government has access to every financial transaction I make. That appears to be the direction in which we are headed.

Now it is $3,800.

If I seem a bit obsessed over this... the only real use for a bitcoin is illegal transactions; buying drugs or getting ransom payments. It ought to be illegal and everyone who "invests" in it ought to lose their money. I am delighted that it seems to be going that way.

Bill Dufour
11-26-2018, 3:36 PM
Bitcoin is just one well known brand of fake currency. No reason it will not be replaced by something that people feel is easier to use and more secure. When the lemmings run over the cliff to the new improved bitcoin rival the old bitcoins will fall in value. They have no intrinsic value so once the lose precieved value there is no reason for it to come back.
Want to buy some Nigerian currency. it can only go up in value.
Bil lD.

Wade Lippman
11-26-2018, 5:54 PM
Absolutely! I would prefer a cashless society in which the government has access to every financial transaction I make. That appears to be the direction in which we are headed.

Do you have financial transactions you wouldn't want the government to know about?! Unless you are into something illegal, I can't imagine what they would be. And yes, tax fraud is both illegal and immoral.

Pat Barry
11-26-2018, 7:07 PM
Interesting that the state of Ohio will now accept Bitcoin as payment on taxes. Now that doesnt mesh with only being useful for criminal endeavors, or does it?

Edwin Santos
11-26-2018, 7:30 PM
Absolutely! I would prefer a cashless society in which the government has access to every financial transaction I make. That appears to be the direction in which we are headed.

If you sincerely mean that, I'd say you would be happier living in China!

Wade Lippman
11-26-2018, 8:20 PM
Interesting that the state of Ohio will now accept Bitcoin as payment on taxes. Now that doesnt mesh with only being useful for criminal endeavors, or does it?

Great for those looking for unnecessarily high transaction fees, but otherwise what is wrong with a check? Afraid the government will find out you paid your taxes?

Just because it can be used doesn't make it useful. Black and Decker sanders can be used, but that doesn't mean they are useful. (ever tried?)

Besides:
"Mandel also told the publication that he is “confident that this cryptocurrency initiative will continue” after his term ends this January. As an elected state official, Mandel told journalists that he is able to decide that his office will accept the digital currency “without approval from the legislature or governor,” the WSJ reports."

He was just playing a prank; his successor will certain reverse it, and no taxes will ever be paid in bitcoins.

Pat Barry
11-26-2018, 8:44 PM
...He was just playing a prank; his successor will certain reverse it, and no taxes will ever be paid in bitcoins.
I think the facts in this case speak otherwise. None the less, it seems inevitable that Bitcoin or an alternative crypto currency will take hold whether you care to participate or not. In many ways, the modern dollar is nothing more than a well accepted crypto currency. For example, your paycheck gets electronically deposited in your bank, you auto pay bills or charge things on Visa, PayPal, etc. No one really has to see a real dollar much at all. We are becoming a cashless society and we will all be better for it when it happens.

Edwin Santos
11-26-2018, 11:02 PM
Now it is $3,800.

If I seem a bit obsessed over this... the only real use for a bitcoin is illegal transactions; buying drugs or getting ransom payments. It ought to be illegal and everyone who "invests" in it ought to lose their money. I am delighted that it seems to be going that way.


Great for those looking for unnecessarily high transaction fees, but otherwise what is wrong with a check?




I think the facts in this case speak otherwise. None the less, it seems inevitable that Bitcoin or an alternative crypto currency will take hold whether you care to participate or not. In many ways, the modern dollar is nothing more than a well accepted crypto currency. For example, your paycheck gets electronically deposited in your bank, you auto pay bills or charge things on Visa, PayPal, etc. No one really has to see a real dollar much at all. We are becoming a cashless society and we will all be better for it when it happens.

Indeed Bitcoin itself, as one brand of cryptocurrency may not stand the test of time, but it seems fairly accepted by lots of smart people that the blockchain technology behind it is here to stay. It might be worth Wade's time to read the Wikipedia entry for Blockchain. Specifically:

A blockchain is a decentralized (https://en.wikipedia.org/wiki/Decentralized_computing), distributed (https://en.wikipedia.org/wiki/Distributed_computing) and public digital ledger that is used to record transactions across many computers so that any involved record (https://en.wikipedia.org/wiki/Storage_record) cannot be altered retroactively, without the alteration of all subsequent blocks.[1] (https://en.wikipedia.org/wiki/Blockchain#cite_note-te20151031-1)[19] (https://en.wikipedia.org/wiki/Blockchain#cite_note-wired20161107-19) This allows the participants to verify and audit transactions independently and relatively inexpensively.[20] (https://en.wikipedia.org/wiki/Blockchain#cite_note-:1-20) A blockchain database is managed autonomously using a peer-to-peer (https://en.wikipedia.org/wiki/Peer-to-peer) network and a distributed timestamping server. They are authenticated (https://en.wikipedia.org/wiki/Authentication) by mass collaboration (https://en.wikipedia.org/wiki/Mass_collaboration) powered by collective (https://en.wikipedia.org/wiki/Collective)self-interests (https://en.wikipedia.org/wiki/Self-interest).[21] (https://en.wikipedia.org/wiki/Blockchain#cite_note-hwb-21) Such a design facilitates robust (https://en.wikipedia.org/wiki/Robustness_(computer_science))workflow (https://en.wikipedia.org/wiki/Workflow) where participants' uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility (https://en.wikipedia.org/wiki/Reproduction_(economics)) from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending (https://en.wikipedia.org/wiki/Double_spending). A blockchain has been described as a value-exchange protocol.[14] (https://en.wikipedia.org/wiki/Blockchain#cite_note-bc2.0-14) This blockchain-based exchange of value can be completed quicker, safer and cheaper than with traditional systems.[22] (https://en.wikipedia.org/wiki/Blockchain#cite_note-cbh-22) A blockchain can maintain title rights (https://en.wikipedia.org/wiki/Title_(property)) because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance (https://en.wikipedia.org/wiki/Offer_and_acceptance).

Just the immediacy of the back office settlement and the authentication properties are major assets. No possibility of double spending or bounced checks. For these reasons it is my understanding that the likes of Bank of America, J.P. Morgan Chase, Goldman Sachs have made big investments in the area so as not to be left behind if and when digital currency exchange of this nature becomes mainstream.

There are quite a few people holding on to the bias that blockchain is expressly reserved for criminals and illicit transactions, but in fact, all of us would benefit from the logistical advantages that blockchain offers. It just may be that some future incarnation other than Bitcoin may be the form it needs to take.
Perhaps governments and/or central banks will collaborate on a format.

Unfortunately, there seems to be more bad information than good information in the mainstream regarding these technologies. Furthermore, until it becomes common, new media of currency is a difficult concept to grasp for those of us old enough to be accustomed to the traditional ways for decades. I happen to think the term "cryptocurrency" doesn't help matters because it connotes something dark and illicit as a first reaction for many people.

Also, it's important to separate the idea of currency as a medium of exchange from currency as a speculative investment (let alone a volatile speculative investment). The successful model of digital currency will need to be adopted more for the former reasons than the latter in order for it to be a durable solution.

Either way it won't be long before writing a check to pay your taxes or anything else will not be acceptable simply because it takes too long for the transaction to clear and costs too much to process it. That's my prediction at least.

If someone disagrees with this reasoning and believes the status quo is here to stay, please make your case as to why.

Edwin

Wade Lippman
11-27-2018, 2:22 PM
It might be worth Wade's time to read the Wikipedia entry for Blockchain.


I don't need to read a puff piece on blockchain. A few years ago there was much investigation into it as perhaps then next great thing in data management, but it has largely been abandoned because the overhead is punitive.




A blockchain can maintain title rights (https://en.wikipedia.org/wiki/Title_(property)) because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance (https://en.wikipedia.org/wiki/Offer_and_acceptance).



Sure, you can structure a blockchain in many different ways. Bitcoin went for complete anonymity. Again, traditional methods are better in every instance that isn't illegal.

There might be a good use for blockchains in the future, but Bitcoins will never be good for anything that is legal. (I am making the assumption that you wouldn't need to hide anything legal from the government; I know I wouldn't)

Pat Barry
11-27-2018, 8:14 PM
I don't need to read a puff piece on blockchain. A few years ago there was much investigation into it as perhaps then next great thing in data management, but it has largely been abandoned because the overhead is punitive.




Sure, you can structure a blockchain in many different ways. Bitcoin went for complete anonymity. Again, traditional methods are better in every instance that isn't illegal.

There might be a good use for blockchains in the future, but Bitcoins will never be good for anything that is legal. (I am making the assumption that you wouldn't need to hide anything legal from the government; I know I wouldn't)
IBM is hugely invested in blockchain. I suspect they know what they are doing.

Art Mann
11-27-2018, 10:56 PM
On the other hand, if you thought I was being sarcastic, you would be correct.


If you sincerely mean that, I'd say you would be happier living in China!

Art Mann
11-27-2018, 11:04 PM
When we are a cashless society, then the government will have the ability to track every financial decision we make. Whatever political party is in power will almost certainly do so if it fits their needs. I would prefer to keep my political contributions and benevolence private.


We are becoming a cashless society and we will all be better for it when it happens.

Wade Lippman
11-28-2018, 1:24 PM
IBM is hugely invested in blockchain. I suspect they know what they are doing.

All I can find is 30years of data, but IBM's revenue is 10% lower than it was in 1988; adjusted for inflation it is 65% lower. What makes you suspect they know what they are doing?