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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

#151

Post by bhickey »

javert wrote: post #139
hugh3 wrote: post #107

Earlier quoted context omitted.

True, but if you break down the value of gold then it's maybe a dollar an ounce from practical uses and 1500 dollars an ounce from the fact that it's a seven-thouand-year-old asset bubble. Or, to put it another way, suppose tomorrow I figure out a way to replace gold with some much cheaper tin-copper alloy in all its industrial applications. That's not gonna decrease the value of gold all that much. (Note that I don'…

gold is used in jewellery because it's valuable, not because it looks any prettier than other metals I'm not so sure about that. Gold is used in jewelry because (a) it looks cooler than silver/tin/copper/etc.; and (b) because it is really rare. So I'm proposing the chain is: Looks good & rare -> Valuable I think if you were missing either "looks good for jewelry" OR "rare", it wouldn't be valuable and it wouldn't wor…

Gold is used in jewelry because: * It is malleable * It is resistant to corrosion/tarnish

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

#152

Post by mcantelon »

hugh3 wrote: post #65
Tichy wrote: post #42

Earlier quoted context omitted.

BitCoin doesn't promise any returns, and doesn't distribute anything to new people who sign up. It is only a Ponzi scheme if the real world's economy is a Ponzi scheme. I don't know if it is.

You're right. While bitcoin has certain similarities to Ponzi schemes (i.e. the fact that the people who start the scheme get rich while the folks who come later lose their money) I think it's really more accurately described simply as an asset bubble. Except, y'know, without any actual underlying asset. I don't think I've ever seen an asset bubble in something that was literally worthless before. Even the tulip bulb…

The worth is in the design, adoption, and utility. Anonymous currency has MUCH utility. And this currency, unlike the paper issues by states, is backed by math.

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

#153

Post by richardw »

cma wrote: post #145
richardw wrote: post #52

Earlier quoted context omitted.

The basket many people are holding all their eggs in, is the USD. That has depreciated significantly in the last few years, with a very good chance that it'll continue to do so. My home currency isn't the dollar but my app is priced in dollars and that sucks. I'd far prefer to have Euro earnings and earn a few bitcoins a month as a speculative investment.

"with a very good chance that it'll continue to do so." That's not what extraordinarily low interest rates in the bond market say.

China's been buying a lot of dollars to hold their own currency down. I assume that won't continue forever. When it does stop, the USD will drop & Yuan will rise. Also, Pimco, biggest bond trader in the world, has dumped all their treasuries. I'm with them :)

My guess is that the USD is seen as a safe haven during these risky times, but not a long-term store of wealth. That's why treasuries are (temporarily) high.

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

#154

Post by [deleted] »

zitterbewegung wrote: post #59
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.

Due to the volatility of the bitcoin market I'm betting we are going to see a next blog post by the author "How I lost all my savings using bitcoin"

[deleted]

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

#155

Post by Wilduck »

zitterbewegung wrote: post #59
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.

Due to the volatility of the bitcoin market I'm betting we are going to see a next blog post by the author "How I lost all my savings using bitcoin"

Or alternatively, "How I convinced more people to invest in bitcoin and then made bank when I pulled out my savings right before the crash."

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

#156

Post by vrotaru »

javert wrote: post #96
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…

I don't know much about economics, but... Gold isn't really a non-consumption commodity. It's used in things like jewelry and compter circuits. In other words, it doesn't just work because everybody agreed that it's a good mechanism for trade. It works because it actually has underlying value. Or, at least, I can't rule out that possibility, because it DOES have underlying value.

Gold isn't really a non-consumption commodity. It's used in things like jewelry and compter circuits.

Yes, but... (you know the drill) World gold reserves are 60 times its annual production, which means that gold is mostly a non-consumption commodity.

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

#157

Post by troels »

hugh3 wrote: post #79
knowtheory wrote: post #43

Earlier quoted context omitted.

Actually Luigi, you're missing the best and most fundamental rule: 3. Past performance is no guarantee of future returns

Personally, my most fundamental rule is this: 4. Invest in stuff that has value.

Doesn't financial services have value?

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

#158

Post by vrotaru »

woodall wrote: post #33
scotty79 wrote: post #12

Earlier quoted context omitted.

If such silly thing as gold became money and paper printed by governments became money then a tool possessing qualities that bitcoin possess is bound to become money eventually. Only two real risks. Crypto weakness or Bitcoin 2.0 Gold is intrinsically similarly useless as bitcoin. We used it as money only because it was durable and rare. We used paper as money because strong, trustworthy entity declared that its supp…

>Gold is intrinsically similarly useless as bitcoin. That is incorrect on many levels. Gold has applications in MANY things. I bet the device you used to type out that comment has a bit of gold in it. The comparison to BitCoin and paper money makes more sense, but it doesn't. This is because BitCoin has no one backing it. If the dollar drops, well the US is backing it; and they will be forced to deal with the consequ…

> That is incorrect on many levels. Gold has applications in MANY things.

We still have a more gold that it is put productive uses. Gold reserves/production ratio is 60. No other commodity comes even close. So most of the world's gold is similarly useless as bitcoin, and more will be if some day gold will be re-monetized.

But, maybe, a better analogy would have been, dollar (outside of USA) is similarly useless as bitcoin.

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

#159

Post by dualogy »

hugh3 wrote: post #124
dualogy wrote: post #121

Earlier quoted context omitted.

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 fil…

But then, so was 15 years ago that whole Internet thing "too geeky", very insular with no connection to the non-geek world out there. So I suppose the BTC crowd sees that as a promising beginning.

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

#160

Post by DennisP »

Someone wrote: post #2

Take away the interesting technical aspects, and BitCoin, to me, looks like a pyramid scheme. The BitCoin economy is like a small country with a novel monetary system. Now, a big country, say the USA, wants to join because it sees benefits in that system. Normally, such a transition would have the USA print new money. In this case, the answer to "OK, sounds useful, how do we introduce this kind of money into our econ…

> nobody can check where money flows

The government actually provides a system with exactly that property.

> Indirect government control over inflation and interet rates? Forget it.

A lot of people see that as a benefit.

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