Bitcoin?

[Larry Frank]

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]

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]

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]

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]

Gold and silver are, or were, always referred to as "real money" ,so they are not tokens.

[Malcolm McLeod]

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]

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]

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]

... 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]

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]

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]

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]

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]

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]

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.