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Why I’m Putting All My Savings Into Bitcoin

falkvinge.net

171–180 of 201 posts

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

#171
post #113

Earlier quoted context omitted.

You're right, Bitcoin is actually more like a penny stock pump-and-dump scheme.

Except there doesn't appear to be a whole lot of dumping going on. I suspect the majority of Bitcoin investors are more interested in seeing how far Bitcoin can go rather than dumping all their coins the moment they've made a reasonable profit.

Yes, that is the interesting bit. A lot of people are not in Bitcoin for the money primary. They are hoarders or altruists.

Once some person tries to cash a $50,000 BTC account it will go down. The market depth is simply not there it seems. The money supply is not regulated vs. the trade volume, right?

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

#172

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…

Thank you, sir, for the coinage 'avoid-prison coupons'. (Your comment is currently the only source Google finds for that particular phrase.)

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

#173
post #136

Earlier quoted context omitted.

>Gold has applications in MANY things. Yes, but that's not what makes it so valuable. This was discussed elsewhere but copper, for example, has many more industrial uses than gold but because it's not this one special metal it isn't worth as much. Essentially, there are real applications for gold but those alone do not account for its high value.

Take Macs for example. The hardware does not warrant the price tag; same for the OS. Most of it is marketing and perceived/symbolic value(I'll use these terms interchangeable). Gold gets its value from many sources. Gold is expensive not only because of its applicational value(medical, space, electronics) but also its perceive value(jewelry, shiny, ect). BitCoins are perceived value. Also, gold is used in different c…

Your analysis makes sense without the tortured analogy to PC fanboyism. Macs are not in asset bubble, they are a product people enjoy, and pay a premium or aesthetics or peace of mind or lack of competition from an equivalent product, not because they hope to trade the Mac for something else later.

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

#174

Earlier quoted context omitted.

Right, but then you are operating on a black market basis, because you're laundering money. If the problem gets bad enough the US starts banning dongs, or applying pressure on their government or what not. Worse yet, laundering money on this basis will almost certainly come with an increased cost to trade through another currency, especially if there is legal risk to the parties doing the laundering. It's not like la…

I've read that it's actually illegal for them to use your tax return as evidence against you in a criminal case, due to the Fourth Amendment.

Even if so, it is not going to excuse someone from increased scrutiny that leads to further evidence.

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

#175
post #97

Earlier quoted context omitted.

Srsly. One of the many, many problems with government debt is that there is no collateral.

The government doesn't need collateral, they use yours. Seriously, government debt is backed by the fact that the government has the legal right and the practical ability to confiscate as much of its population's wealth as it feels like. I don't like US government debt at all, but it's nowhere near the point at which the don't have the ability to pay it back.

Are you sure? He government can try to tax everything and use my PlayStation and house in Ohio to settle a debt to a Chinese citizen, but if it ends up destroying the US economy, there won't be any new wealth creation to tax, and that is where most government revenue comes from.

It is far more likely that US government will do what it and every other government always has done: either inflate the currency or default or declare war or some mixture thereof.

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

#176
post #167
post #163

Earlier quoted context omitted.

Money is just a tool, and BitCoin is a particular variant of that tool. It has unique properties that can be used for lots of things. Therefore I wouldn't say that they are worthless.

It has unique properties that can be used for lots of things Well, no, it doesn't have any unique properties. For instance, as I've said before, I'm running an alternative currency called "bitcoin prime" which has these two properties: 1. Every string of bits that is a bitcoin is also a bitcoin prime, and 2. Every bitcoin prime extant as of April 1, 2011 belongs to me (all subsequently mined bitcoins prime belong to…

Hrrrm. This redefinition, while trivially possible, seems irrelevant. Possession of assets is first and foremost a practical matter. (I think you understand this, but for the benefit of the discussion…)

In the case of primary real-world goods, possession comes from being able to physically access the state of various matter and energy: I physically own a house to the extent that I can reliably live in it and make modifications to it and so forth. I physically own food to the extent that I can make use of it by eating it. Other people can alter the game by acting as environmental forces to change the set of available interactions.

In the case of fiat currency and economic goods, practical ownership (including but not strictly identical to theoretical legal ownership) is similarly determined, but with more of a focus on laws of people rather than the laws of physics; the former are backed by the latter, but usefully form a separate conceptual layer.

The case of Bitcoin is also analogous, but there is now a focus on the laws of mathematics as they apply to the state space in which the Bitcoin system operates, and in particular to the practicalities of computing—a strong cryptographic attack could still destroy the system.

So the reason that owning all the early Bitcoins prime is not useful is the same reason owning all the virtual dollars in a parallel system to the US banks is not useful despite being able to invent whatever such system you want. Because no one will recognize this, the amount this changes your set of available physical interactions with regard to primary goods is very small. (I haven't taken weird social goods into account in the above, but I think a similar argument applies since they also require external recognition.)

That said, I think the GP poster would do well to clarify what ey meant by “unique properties”, and perhaps whether (as I interpret it) “unique” is meant to be “of the set of currently active systems, for some fuzzy activity threshold”, thus excluding Bitcoin prime and the infinite variations thereof.

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

#177

Earlier quoted context omitted.

Take Macs for example. The hardware does not warrant the price tag; same for the OS. Most of it is marketing and perceived/symbolic value(I'll use these terms interchangeable). Gold gets its value from many sources. Gold is expensive not only because of its applicational value(medical, space, electronics) but also its perceive value(jewelry, shiny, ect). BitCoins are perceived value. Also, gold is used in different c…

Your analysis makes sense without the tortured analogy to PC fanboyism. Macs are not in asset bubble, they are a product people enjoy, and pay a premium or aesthetics or peace of mind or lack of competition from an equivalent product, not because they hope to trade the Mac for something else later.

Just like gold :)

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

#178
post #149
post #139

Earlier quoted context omitted.

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…

Look at Platinum. More expensive than gold, largely commercial use (jewelry is about 25%).

Also comparatively harder to work than gold.

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

#179

Earlier quoted context omitted.

The paper used to print dollars also has intrinsic value, but you wouldn't want to argue that it's a good choice as currency just because you can burn it.

Okay, now i'm veering into positions where i don't have a sound enough background in economics to be totally confident in the statements i am going to make. I'm sure there's economic research on this, and i'd further hazard a guess that there's probably not agreement on the subject: Sorry, let me be more clear. The criteria for a sound investment as an asset is different from the criteria determining soundness in a c…

I think you're trying to distinguish between properties that make something a good way of transporting value over time and properties that make it good as a medium of exchange. You're right that these things aren't necessarily the same because they are overlapping, but not congruent, sets of properties.

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

#180
post #58

Its hard to accept the author dismissing the threat of bitcoin being banned and then admitting it is difficult to buy bitcoins. If it is difficult to buy bitcoins, its most likely hard to get useable currency from bitcoins. Until you can buy groceries or other real life things in bitcoins, I'd say it is a a very real threat.

You can buy groceries with Bitcoin: http://bitmunchies.com/
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