471–480 of 505 posts
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It will never fall to zero, I'll personally buy every last one of them at $0.0001 each.
It would not make sense to buy EVERY one of them, as then you're guaranteeing they won't have value to anyone else.
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I am constantly amazed how little Bitcoin fans value large, stable, global financial and legal institutions like the US or EU. Without them, Bitcoin, the Internet, and most of the other aspects of their comfortable lives would exist.
- the legal system is a huge disappointment (CISPA, SOPA, etc.) - the financial system is a huge disappointment (worldwide financial crisis) It's not that we love Bitcoin (sure, it is an interesting piece of technology, but it's money , and money is a dirty word), we just dislike the alternatives.
Democracy isn't promised to be perfect, just to be better than its predecessors.
Something can be the best-ever-made and still be disappointing.
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I am constantly amazed how little Bitcoin fans value large, stable, global financial and legal institutions like the US or EU. Without them, Bitcoin, the Internet, and most of the other aspects of their comfortable lives would exist.
There are a lot of reasons why people are skeptical of those systems. How could you not be at least a little? And I doubt the internet and life as we know it wouldn't exist if things were different, but it depends a lot what that means.
If you invest in bitcoin because you don't trust governments, but bitcoin relies upon the internet, and the internet requires governments to stay up; then there's a sad potential future where a government-skeptic bitcoin investor is exactly right but because of the prerequisites for bitcoin to maintain value ends up with nothing.
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As a long-time (since 2010) miner, I can tell you first-hand that there are massive DDoS attacks taking place against not only MtGox (who has already described DDoS against their infrastructure) but the pools as well. In fact, Reddit's pool (MtRed.com) is completely DOWN at the moment because of a larger DDoS than we've ever seen. You can keep drinking the "everything's fine" koolaid, or get with the reality that cur…
You were wrong.
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>And regardless, there's absolutely no conceptual reason cost of production would represent any kind of floor. Well no sane/rational entity would want to sell for less than cost of production because that would entail a loss (let's keep this simple and say there aren't any ulterior reasons one would receive gains/benefits from selling at below cost). Since competition drives the price towards the cost of production i…
A rational entity would absolutely sell at a loss. They would not acquire with the goal of selling at a loss, but once they already have the thing what they paid to get it is a sunk cost, which a sane or rational agent ignores in making future decisions. If bitcoins were overproduced, say during a bubble, they could well remain low long-term - there is no particular pressure driving them up.
Well if the cost to produce them was higher than the price, people would simply stop mining. Perhaps my understanding of bitcoins isn't correct, but I thought that if there were no miners then transactions would stop being processed and the currency would basically stop working and die.
I know right now bitcoins are still being created/produced by miners, but at some point in the future that will stop happening and miners will be compensated through transaction fees as a percentage of each transaction. At that point if price of bitcoins falls below the cost to mine we likely will see people stop mining and transactions ceasing until the price rises enough for it to be worthwhile.
Of course bitcoin is a bit special in that there are a lot of fans of it that will likely be completely willing to accept a loss to keep the currency going. As we all know humans don't act as perfect economic-minded rationalists. But I still think the cost of production is a good bottom metric to keep an eye on. If the price falls below that we will know that the currency is in rather dire straits and being artificially propped up by those with an interest in keeping it going.
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> "However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world." This is a flaw, not a benefit. I want to know what the value of my BTC are. Not what they are here, vs China, vs Canada, vs Australia... > "Buying and selling an Indian Rupee for example is quite heavily restricted. " What do you mean, "quite heavily restricted"? It's far harder fo…
The Indian rupee is not a free float currency. That means that the reserve bank of India tries to make sure it doesn't fluctuate too much in value. While India is trying to move the currency towards free float, it isn't done yet. Basically, if anyone tries to speculate large amounts in rupees, the reserve bank will try to prevent fluctuations by speculating as well, or placing some sort of controls. This happened las…
My point is simply that it's pretty easy buy international currencies on the forex. IMHO easier than buying bit coins.
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> "However, BTC China is still trading at above $275! That's the beauty of bitcoin, it isn't restricted to just one region in the world." This is a flaw, not a benefit. I want to know what the value of my BTC are. Not what they are here, vs China, vs Canada, vs Australia... > "Buying and selling an Indian Rupee for example is quite heavily restricted. " What do you mean, "quite heavily restricted"? It's far harder fo…
The Indian rupee is not a free float currency. That means that the reserve bank of India tries to make sure it doesn't fluctuate too much in value. While India is trying to move the currency towards free float, it isn't done yet. Basically, if anyone tries to speculate large amounts in rupees, the reserve bank will try to prevent fluctuations by speculating as well, or placing some sort of controls. This happened las…
My point is simply that it's pretty easy buy international currencies on the forex. IMHO easier than buying bit coins.
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> the efficient market is dead and always has been. This is what people mean when they say "efficient market" in this context: > In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient". In consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the inv…
There are generally arbitration opertunity's that offer short term rewards well beyond the standard risk reward curve. Which is how many algorithmic traders consistently return high double digit returns with ought leverage. The simplest being having a mix of buy and sell orders that straddle the average.
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There are generally arbitration opertunity's that offer short term rewards well beyond the standard risk reward curve. Which is how many algorithmic traders consistently return high double digit returns with ought leverage. The simplest being having a mix of buy and sell orders that straddle the average.
Which is exactly what the hypothesis says. Assume that others are using arbitrage to reduce your opportunities, leaving you with an efficient market.
Also: Empirical analyses have consistently found problems with the efficient-market hypothesis, the most consistent being that stocks with low price to earnings (and similarly, low price to cash-flow or book value) outperform other stocks. Which is presumably due to cognitive bias. http://en.wikipedia.org/wiki/Efficient-market_hypothesis
PS: It's a reasonable simplification that's useful for the average investor, but not policy makers for example.
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And who guarantees that an ounce of gold will buy me some amount of wheat? Or that a bushel of wheat will give me some amount of energy when eaten? Only a very powerful entity can make such guarantees. On that basis I would say that the word of the United States is far more intrinsically valuable than any physical object.
Gold has generally had stable value throughout history, but you are right that it isn't guaranteed. Other commodities like wheat are a little harder to use to back a currency, but from year to year they are fairly stable and pretty much guaranteed to have some value whatever happens. But US dollars aren't guaranteed to do anything for you either in such a situation. The currency could hyper-inflate tomorrow for all a…
Nothing, neither gold nor grain, is backed by anything but power. Fiat currency is just the government accepting that responsibility de jure.
