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Why I’m Putting All My Savings Into Bitcoin

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Re: Why I’m Putting All My Savings Into Bitcoin

#121

Post by dualogy »

hugh3 wrote: post #75

This article is crazy, and actually fills me with a little bit of schadenfreude. Asset bubbles run on the bigger fool principle, and they end when you run out of bigger fools to sell to. If folks have really started cleaning out their bank accounts and borrowing money to buy bitcoins (an amount of bitcoins which, incidentally, you probably could have picked up for twenty bucks just six months ago) then it seems to me…

Far from it because right now this is only being discussed in Hacker News... not in USA Today or FarmVille. However one defines "fools", I don't see a shortage. That said, I'm not invested, only observing here.

Re: Why I’m Putting All My Savings Into Bitcoin

#122

Post by njs12345 »

FooBarWidget wrote: post #93
bcl wrote: post #7

bitcoin is somewhat interesting, I've been experimenting with it recently. One thing to note is that transfers aren't instant until your client catches up with the network -- when you first connect you currently have about 127k blocks to download before you are current. At first I had some trouble understanding why you couldn't just had a client and create easier coins. The thing is, you can, but the network won't re…

> The key to the system's security is that as long as 50% of the bitcoin nodes agree on that the current difficulty level is you can't inject 'fake' money into the system. Isn't it quite easy to spawn a few million malicious nodes?

You have to have the computing power to beat 50% of the network - given the current size of the bitcoin network that's certainly not trivial.

Re: Why I’m Putting All My Savings Into Bitcoin

#124

Post by hugh3 »

dualogy wrote: post #121
hugh3 wrote: post #75

This article is crazy, and actually fills me with a little bit of schadenfreude. Asset bubbles run on the bigger fool principle, and they end when you run out of bigger fools to sell to. If folks have really started cleaning out their bank accounts and borrowing money to buy bitcoins (an amount of bitcoins which, incidentally, you probably could have picked up for twenty bucks just six months ago) then it seems to me…

Far from it because right now this is only being discussed in Hacker News... not in USA Today or FarmVille. However one defines "fools", I don't see a shortage. That said, I'm not invested, only observing here.

However one defines "fools", I don't see a shortage.

In this particular case, foolishness is denoted merely by their willingness to pay high prices for bitcoins. While there may be out there in the general population plenty of people objectively more foolish than this guy, they're less likely to fall for this.

This is the other big problem I have with bitcoin: it seems to exist in a very insular, very geeky world filled with people who don't really understand the non-geek world out there. Bitcoin will never really jump from the geek world to the real world, because the general population won't even understand its supposed benefits, much less give a damn about them. A few geeks may be able to talk their poor grandmas into buying some, but that's about it for general market penetration.

Re: Why I’m Putting All My Savings Into Bitcoin

#125

Post by hnsmurf »

stevenj wrote: post #62
luigi wrote: post #3

This violates two simple, and obvious, tenets of investing: 1. Don't put all your eggs in one basket. 2. If it sounds too good to be true, it probably is.

Re: 1 Perhaps. But if you know what you're doing, wide diversification may not be wise. "How many insights do you need? Well, I'd argue: that you don't need many in a lifetime. If you look at Berkshire Hathaway and all of its accumulated billions, the top ten insights account for most of it. And that's with a very brilliant man—Warren's a lot more able than I am and very disciplined—devoting his lifetime to it. I don…

The Berkshire Hathaway quote illustrates the diversity point here. Berkshire made a lot more than 10 investments, just those 10 returned most of the money. If they knew in advance what those 10 would be they would have only made those 10 investments, but they didn't so they diversified.

Re: Why I’m Putting All My Savings Into Bitcoin

#126

Post by evan_ »

njs12345 wrote: post #122
FooBarWidget wrote: post #93

Earlier quoted context omitted.

> The key to the system's security is that as long as 50% of the bitcoin nodes agree on that the current difficulty level is you can't inject 'fake' money into the system. Isn't it quite easy to spawn a few million malicious nodes?

You have to have the computing power to beat 50% of the network - given the current size of the bitcoin network that's certainly not trivial.

Unless you're a malicious entity who doesn't mind using a botnet.

Re: Why I’m Putting All My Savings Into Bitcoin

#128

Post by hugh3 »

ecaradec wrote: post #110
hugh3 wrote: post #98

Earlier quoted context omitted.

Yes they do. They're the ones who go around saying "Don't put all your eggs in one basket".

Don't put all your eggs in a basket you know nothing about.

Actually, don't put any eggs in a basket you know nothing about.

Don't put all your eggs in any basket even if you think you have perfect knowledge of it.

Re: Why I’m Putting All My Savings Into Bitcoin

#129

Post by hnsmurf »

nazgulnarsil wrote: post #88

Bitcoin has aggravated the "layman talks out his ass about economics" problem again. 1. Gold is a proof of work system just like bitcoin. When someone accepts gold as payment for some other commodity or service they are doing so under the assumption that the value will be stable because it takes at least X amount of time/labor/ingenuity/money to "create" more gold by mining it. This is what backs non-consumption comm…

That flares up every few months. It's pseudo-intellectual herpes.

Re: Why I’m Putting All My Savings Into Bitcoin

#130

Post by tzs »

mdonahoe wrote: post #22
tobias3 wrote: post #14

"[Bitcoin is] an entirely new kind of currency that can’t be seized or frozen by governments" Simply not true. At the end of the day you need to change Bitcoins back to real money. The money that actually has some value because it (is supposed to) represents goods. The stuff you need in order to survive and live (food, clothes, ...). Goverments can declare these "banks" that change bitcoins back to real money illegal…

People accept bitcoin as direct payment for things already, removing the need to switch back to dollars. Granted it's not a big selection

You still need to switch some back to dollars, to pay sales taxes or VAT on the sales, and eventually to pay income taxes.
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