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Bitcoin just crossed $7.00.

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Re: Bitcoin just crossed $7.00.

#81

Post by jimrandomh »

csomar wrote: post #6

The reason for that is the death of Bitcoinica. Bitcoinica offered shorting, which stabilized prices at around $5. When Bitcoinica went out of business, the only way to make money on Bitcoin is to speculate its' price increase which will drive demand; which will drive its' price even more. That being said, it might be the right time to buy Bitcoins, and sell before the bubble bursts. However, for a more stable Bitcoi…

On the other hand, Bitcoinica also offered leveraged trading, which had a large destabilizing effect. There were big traders deliberately moving the price around, to force smaller traders into margin calls. That problem went away when Bitcoinica did.

Leveraged trading is trading with partially borrowed money. If you buy something with leverage and the price falls, you're forced to sell. A wealthy trader can temporarily lower the market price by dumping a bunch of coins on the market at once, knowing that the price will recover when he buys them back; this costs him money, because he gets a lower price for his coins and buys them back at a higher price. But it also forces margin traders to sell out their leveraged positions, at the lower price, which those same traders can capitalize on.

These sorts of shenanigans depend on there being unsophisticated traders using leverage (a bad idea for any non-expert trader!), and they get harder as the number of traders in the market increases. Many of the rapid price oscillations we saw were a side effect of this strategy. (Not all of them, of course; the initial rise was caused by the wave of publicity, the fall by loss of confidence when some people lost their coins by storing them on insecure computers or giving them to scammers pretending to be "online wallet services".)

Re: Bitcoin just crossed $7.00.

#82

Post by TazeTSchnitzel »

kiba wrote: post #73
rbn wrote: post #60

Earlier quoted context omitted.

The problem is that CCs and PayPal is much easier to use and it is much safer than Bitcoins. So I for one see no reason to use bitcoin to purchase anything other than products that can only be purchased via bitcoins

The problem is that CCs and PayPal is much easier to use and it is much safer than Bitcoins. If you never use bitcoin, you wouldn't realize how convenient it is in some situation. For example, when I brought an album, I just sent some coins to the address and then it was a done deal. I don't have to enter my credit card information or enter my username/password. If you aren't convinced about bitcoin but you have time…

Also, I'd argue that BitCoin is very simple to use. Put in an address, type in the amount of money, and wait. Sure, transactions can take a while, but it's not very complex.

Re: Bitcoin just crossed $7.00.

#83

Post by javert »

vannevar wrote: post #52
javert wrote: post #43

Earlier quoted context omitted.

Does anyone not think the Bitcoin game is rigged? There are significant reasons why having a deflationary, digital currency (or commodity) would be quite useful, at least for certain people and use cases. If there were no use case for Bitcoin, calling it a scam without presenting evidence would be much more reasonable. Given that there are use cases, calling Bitcoin a scam without presenting evidence is completely ar…

I didn't say Bitcoin itself is a scam, only that the market is so tiny that a single player could easily manipulate it. And if someone can, someone will. And while I see Bitcoin's legitimate use cases, few ( very few ) people are using it for actual trade. The market seems purely speculative, with no underlying Bitcoin economy to stabilize it (save possibly the money-laundering business).

I agree that the market is largely speculative. But I think the speculation is mainly very long-term speculation - so people predominantly want to get more bitcoins, or they want to hold them. This will tend to drive the price up.

Re: Bitcoin just crossed $7.00.

#84

Post by javert »

ChrisNorstrom wrote: post #59

I lost a lot of money in bitcoin. I learned a valuable lesson that's better than anything I learned in collage. 1) Easy to make, easy to lose. 2) Whatever you are thinking of doing, so is everyone else. If you're planning on outsmarting thousands of other people, just remember, they are planning to outsmart you. 3) Any market with a high volume of flippers (buys to resell and make money) vs users (actually use a prod…

Each new generation brings the same humanistic flaws of the last generation. Doomed to repeat itself forever and ever. Humans will be humans the same way sharks will be sharks. We are cursed with a primitive instinct

My comment has nothing to do with Bitcoin. Just want to point out that I am very tired of this old bromide. People do make mistakes, misjudgements, etc. However, humans do not have instincts (which are automatic pre-programmed behaviors). Moreover, humans individually and, particularly, as a society, can learn from past mistakes. Thus, there is just no valid comparison to, for example, a shark.

You're basically just repeating a secular version of "Original Sin" and it's no more valid than the religious version.

Re: Bitcoin just crossed $7.00.

#85

Post by javert »

damian2000 wrote: post #68
morsch wrote: post #46

For further amusing reading, look at https://bitcointalk.org/index.php?topic=91661.20 User pirateat40 is running a BTC investment scheme with super-high returns (BS&T: Bitcoin Savings & Trust, a name suggested by investors). So high, that the community is split between the believers who can't resist the ROI and the non-believers who are convinced that Pirate is running a Ponzi scheme. But that's not the fun part. The…

Both those users are probably the same guy, and its an attempt to gain credibility, when he wins... ;-)

That's a funny idea, but as someone who pays attention to bitcointalk.org, it's extremely unlikely.

Re: Bitcoin just crossed $7.00.

#86

Post by javert »

morsch wrote: post #46

For further amusing reading, look at https://bitcointalk.org/index.php?topic=91661.20 User pirateat40 is running a BTC investment scheme with super-high returns (BS&T: Bitcoin Savings & Trust, a name suggested by investors). So high, that the community is split between the believers who can't resist the ROI and the non-believers who are convinced that Pirate is running a Ponzi scheme. But that's not the fun part. The…

I really wish I had been the guy betting against pirate, because then I'd invest 5,000 BTC in pirate pass-through accounts. Perfect hedge.

Re: Bitcoin just crossed $7.00.

#87

Post by javert »

cs702 wrote: post #75

I’m persuaded that in the long run -- that is, over many years -- Bitcoin is likely to appreciate far above current levels as it gains further adoption worldwide. Here's why: https://cs702.wordpress.com/2011/05/29/on-the-potential-adop... -- I wrote this more than a year ago, and still think it's correct. However, I would not bet on the direction of Bitcoin prices in the short run, because I have no advantage over th…

I haven't read your post, but I agree with your projection. I'm happy to put a significant but disposable amount of my money in bitcoin while I can still afford to get a significant percent of all bitcoins ever (which I still can).

(EDIT: And by that I mean, say, something like .01%.)

Re: Bitcoin just crossed $7.00.

#88

Post by irishcoffee »

Paul_S wrote: post #72
tatsuke95 wrote: post #63

Earlier quoted context omitted.

> "Taking money from speculators and giving money to geeks... " Classic fallacy. "Those rules don't apply to me!" Guess what? You are a speculator, no better or worse than any other speculator out there, be it in gold, houses or mortgages. Sorry.

I don't think I'm a speculator. I just started mining back in the day when CPU mining was still viable. Early in the day when we got a 50 bitcoin batch every other week. I didn't buy a single bitcoin. I just sold the ones I mined. Is this really speculation?

You speculated that the electricity you used to mine the bitcoins would be worth the cost of mining them. I'd say it was as safe a speculation as one could make. =pp

Re: Bitcoin just crossed $7.00.

#89

Post by Paul_S »

irishcoffee wrote: post #88
Paul_S wrote: post #72

Earlier quoted context omitted.

I don't think I'm a speculator. I just started mining back in the day when CPU mining was still viable. Early in the day when we got a 50 bitcoin batch every other week. I didn't buy a single bitcoin. I just sold the ones I mined. Is this really speculation?

You speculated that the electricity you used to mine the bitcoins would be worth the cost of mining them. I'd say it was as safe a speculation as one could make. =pp

By that definition any and all investment is speculation. Does this word mean anything on its own then? Though the fervour with which I deny being one proves it must.

Re: Bitcoin just crossed $7.00.

#90

Post by cs702 »

javert wrote: post #87
cs702 wrote: post #75

I’m persuaded that in the long run -- that is, over many years -- Bitcoin is likely to appreciate far above current levels as it gains further adoption worldwide. Here's why: https://cs702.wordpress.com/2011/05/29/on-the-potential-adop... -- I wrote this more than a year ago, and still think it's correct. However, I would not bet on the direction of Bitcoin prices in the short run, because I have no advantage over th…

I haven't read your post, but I agree with your projection. I'm happy to put a significant but disposable amount of my money in bitcoin while I can still afford to get a significant percent of all bitcoins ever (which I still can). (EDIT: And by that I mean, say, something like .01%.)

Thank you. FWIW, my post both outlines the reasons why Bitcoin would appreciate and makes an effort to quantify potential appreciation under different worldwide usage assumptions.
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