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Bitcoin Surges Past $7,000 to Extend Record Rally

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Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#391

Post by davidmanescu »

feriancek wrote: post #137
davidmanescu wrote: post #88

To me an asset that moves 15% in a day, and which no-one knows what it's truly worth, isn't great as a store of value. I'm not going to speculate about where bitcoin will be trading when it becomes a stable, useful asset, but in order to justify a market cap anywhere near this high it will eventually need to generate actual utility for its users. Can someone explain where that will come from? Cheap currency conversio…

Check out this chart: http://charts.woobull.com/bitcoin-nvt-ratio/ "NVT Ratio (Network Value to Transactions Ratio) is similar to the PE Ratio used in equity markets." The NVT is currently high, but not out of control like it was in 2014. This is the best dataset I've seen for working out if the network is actually being used in a way that matches the valuation, and I think will become invaluable when the CME Bitcoin…

PE ratios correlate highly to dividends for shareholders. Does holding bitcoin have a way of compensating you when the transaction count increases?

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#392

Post by coryfklein »

petercooper wrote: post #79
Andrenid wrote: post #2

I consider myself pretty tech-savvy, but I'm still completely lost as to whether Bitcoin is basically a pyramid scheme set to crash massively, or something huge that will continue climbing. I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. (Queue heated comments from both sides. Discussing bitcoin is like bringing up religion AND politics at the…

I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. The thing I keep telling myself is if I'd mined even 1000 bitcoins (which was viable at the time I first learnt about it) I'd have totally sold out at $10.. there is zero chance I would have made it to $1000 :-D

It doesn't have to be all or nothing. The proper strategy would be to sell a percentage at $10.

In fact, if you started in 2011 with 1000 BTC and every year you sold 50% then today you'd have (by my rough calculations):

8 BTC (worth about $50k)

$160k USD

Of course it's not the millions you'd have if you just held each time, but for many that is a life changing amount of money and you would have obtained it in a responsible manner that doesn't just rely on the value of Bitcoin shooting to the moon.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#393

Post by mywittyname »

coryfklein wrote: post #387
mywittyname wrote: post #349

Earlier quoted context omitted.

Well, there are two components to a pyramid scheme: 1. returns to early investors are generated by contributions from new investors. 2. Each new investor attempts to recruit two or more new investors. The "profits" for existing investors are paid with money from new investors. So it checks the first requirement to be a pyramid scheme. Now, this isn't explicit , but people still understand that the more BTC investors,…

Point 1 applies to Apple stock as well Point 2 has nothing to do with Bitcoin. Yes, there are bitcoin holders that evangelize the currency, but there are plenty that don't. You are not analogizing correctly - just because you can find a similarity or two between two things doesn't mean one is a metaphor for the other. See Hume's response to the Watchmaker Analogy[1] for more. [1] https://en.wikipedia.org/wiki/Watchma…

No. Apple stock returns profits to investors. While it's possible to also profit on speculation of future profits, that's not the sole, or even primary reason for investing in it. The primary reason for buying Apple stock is for a share of profits.

> but there are plenty that don't.

Bull. The BTC community as a whole, are evangelists and will point out the multitude of reasons why the price of BTC will trend toward infinity. It's no surprise that, as the financial institutions get more invested into BTC, Bloomberg, et. al. report more on how the price keeps going up! Because the only way to make money on BTC is to find someone willing to pay more than you did for one.

Apple could literally pay a $50/share dividend. BTC could never do that.

I'm not saying a pyramid scheme is a metaphor for BTC, I'm saying it is an instance of pyramid scheme in action. It's just a more modern evolution. The creators were smarter and covered their asses: making it a brand, not a company, hiding their identities, making it pseudo-anonymous.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#394

Post by coryfklein »

oldboyFX wrote: post #212
Andrenid wrote: post #2

I consider myself pretty tech-savvy, but I'm still completely lost as to whether Bitcoin is basically a pyramid scheme set to crash massively, or something huge that will continue climbing. I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. (Queue heated comments from both sides. Discussing bitcoin is like bringing up religion AND politics at the…

It's a pyramid scheme in a sense that you depend on others to keep buying the bitcoin. If everyone suddenly lost trust in bitcoin you would lose everything, because technically, it has zero real value. That's why all the "bitcoin enthusiasts" keep hyping it up. They know that once the mania stops, people who didn't cash out will be left holding the bag. Currently, it's nothing more than a speculative asset. You might…

It does not have "zero real value" - it definitely competes well against established money transfer services like Western Union. You can send $1000 to your mom in Japan for a $5. That is a good enough value for money transfers that Bitcoin won't ever go completely to $0 value while Western Union can charge $20 for the same service.

And that is at current bitcoin price. Since the fee is paid in bitcoin, if the price drops down to $100/bitcoin then you can send $1000 for pennies.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#395

Post by coryfklein »

mywittyname wrote: post #393
coryfklein wrote: post #387

Earlier quoted context omitted.

Point 1 applies to Apple stock as well Point 2 has nothing to do with Bitcoin. Yes, there are bitcoin holders that evangelize the currency, but there are plenty that don't. You are not analogizing correctly - just because you can find a similarity or two between two things doesn't mean one is a metaphor for the other. See Hume's response to the Watchmaker Analogy[1] for more. [1] https://en.wikipedia.org/wiki/Watchma…

No. Apple stock returns profits to investors. While it's possible to also profit on speculation of future profits, that's not the sole, or even primary reason for investing in it. The primary reason for buying Apple stock is for a share of profits. > but there are plenty that don't. Bull. The BTC community as a whole, are evangelists and will point out the multitude of reasons why the price of BTC will trend toward i…

> returns to early investors are generated by contributions from new investors.

This is literally true about Apple stock. If I bought $10 of Apple stock 10 years ago I sell it for $84 today, my $74 return is generated by the contributions of new investors.

Yes, I would also have $104 of dividends paid out, but literally 40% of my "profit" comes from contributions of new investors. So does that make Apple stock a pyramid scheme? NO!

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#396

Post by mywittyname »

SippinLean wrote: post #385
mywittyname wrote: post #383

Earlier quoted context omitted.

Actually, I looked up the literal definition of a pyramid scheme before posting, to ensure I hit all the points. > Returns (and losses) to all investors, new or old, are equally distributed. No, old investors can profit while new investors lose money. Or, the new investors paid the old ones. Original BTC investors got them for free, the next generation paid pennies for them, the next paid dollars, then hundreds, and…

Why were you throwing the term around before you knew what it was? Again, you left out MANY aspects of pyramid schemes--the ones hardest to twist into fitting bitcoin. And you glossed right over this: the necessity of a purposefully fraudulent bad actor to redistribute the new investors' "investments" to old investors. >So should the price collapse, the old generation still stands to make massive profits, at the expe…

I knew what it was, but looking it up helped ensure my argument was complete. I know what a Volvo P1800 is, but if I saw one on the street, I'd still compare it to a picture on my phone to be certain.

> And you glossed right over this: the necessity of a purposefully fraudulent bad actor to redistribute the new investors' "investments" to old investors.

I did not, but here:

Any person who currently own BTC, and publicly state that it will continue to rise in price indefinitely are bad actors intent on defrauding the public. This applies doubly to individuals with technical or financial backgrounds that claim their are an authority on the subject.

There. You may not agree, but you can't continue to argue that I'm ignoring this point.

> in a pyramid scheme new members are promised a share of the money taken from every additional member that they recruit. "Evangelizing" by itself is not proof of a pyramid scheme.

When evangelizing crosses into market manipulation, then it is.

I feel that people are making claims about the price of BTC can rise, for the purpose of attracting more investors and increasing the price. Thus, attempting to profit from each member they recruit. The margin can be small per recruit, as the audience is literally worldwide.

I do feel that there are evangelists that are primarily motivated by political principals. But I also think nearly every investor is motivated, in some part, by greed.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#397

Post by wolco »

Scea91 wrote: post #293
wolco wrote: post #215

Earlier quoted context omitted.

In some ways we all are but I think we are forgetting the most important aspect. Using it for payments. That utility use case is more important because at some point the price will go down

That is the problem with deflation. People expect that their money will be worth more tomorrow so they are more reluctant to spend it.

But if you use it as a currency you exchange money for bitcoin as soon as possible and use it when required. Money is always increasing so you try to earn more.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#398

Post by coryfklein »

pinchharmonic wrote: post #206

Do these people that hold bitcoin or say that they've "made amazing returns" actual cash out at any point? Or are they holding a few bitcoins like everyone else? Isn't that how a bubble forms? If I got into it, I would get a return I thought was nice (100-200%) and then cash out.

I didn't buy long enough ago to be rich from my investment, but I just choose a percentage of my portfolio that I'm comfortable holding in Bitcoin. If that's 10% and Bitcoin increases in value, then I sell until I'm down to 10% again.

This means that over time I've sold a lot of my bitcoin and moved it to lower risk investments, but the dollar value of my bitcoin holdings has increased over time as well.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#399

Post by fermienrico »

joefourier wrote: post #31

Notice how almost all news of Bitcoin now are about its price. Bitcoin used to be exciting in both technical and economical aspects, but has now become just a store of value entirely driven by speculation. Other technically superior cryptocurrencies (e.g. Monero, Ethereum) have replaced most of its usecases, boasting much faster and cheaper transactions and real anonymity in the case of Monero. Bitcoin takes more tha…

Bitcoin is a currency. Why shouldn't a currency not have more articles about its price? I don't understand where you're going with this argument.

There is plenty of technical information about bitcoin. Bitcoin has spawned an overwhelming amount of technical discussion with regards to blockchain.

> It may or may not continue to increase in value long-term, but it has little uses outside of being worth a lot of money.

It is a form of currency. What uses are you thinking? Bitcoin popularized blockchain technology. I really don't understand your criticism of Bitcoin.

Re: Bitcoin Surges Past $7,000 to Extend Record Rally

#400

Post by coryfklein »

tqi wrote: post #263

Is this good or bad for BTC as a currency? On one hand, I can see how being more valuable makes it more likely to be supported by retailers / banks / etc, but on the other hand I can't imagine spending BTC on anything when prices keep skyrocketing... at which point I feel like it ceases to be a currency (BTC in particular, not crypto in general).

If BTC ever reaches a period of stability in price, I say that getting there the faster the better. Then people can actually start using it as a currency. So I vote this is good for BTC.
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