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Bitcoin Price Pressure

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Re: Bitcoin Price Pressure

#81

Post by tethis »

gnaritas wrote: post #79
tethis wrote: post #46

But if the currency is deflationary with a coin limit, over the long term the only way more people can enter the market / make use the currency is for, as an example, $1 USD to be represented by smaller and smaller subdivisions of BTC. This necessarily increases the value of 1 BTC. Why is there ever any incentive to do anything with BTC besides hoarding?

Hoarding creates the value necessary per unit to make large funds transfers possible. Hoarding is good.

But to succeed as a currency, it needs to encourage people to spend.

Re: Bitcoin Price Pressure

#82

Post by atom-morgan »

dublinben wrote: post #60
jnbiche wrote: post #44

Earlier quoted context omitted.

For many of us, Bitcoin represents far more than an opportunity to gain or lose money. For us, the freedom from financial and fiscal paternalism is worth the risk.

How does Bitcoin provide you any "freedom from financial and fiscal paternalism"?

By providing you an alternative store of value that isn't controlled by a handful of people in government.

Look at Zimbabwe Dollars or the Weimar Republic. There's no reason that can't happen in any other country and Bitcoin provides an alternative to government issued currencies or any other currency.

Edit: downvote for ...?

Re: Bitcoin Price Pressure

#83

Post by michaelt »

boyaka wrote: post #37
sillysaurus3 wrote: post #33

In a moment of some depression, reflecting back on sinking so much money into Bitcoin at close to the peak of its price history, I made this: http://i.imgur.com/f3tIJwK.png It's important to understand that Bitcoin is dangerous to you, and you need to respect its danger if you decide to buy some. You need to be using a secure cold storage wallet. You need to not trust services like Coinbase to hold onto your coins fo…

Can you provide reasons/evidence for why I should not trust Coinbase?

Two words: Mt Gox.

In April 2013, Mt Gox handled 70% of bitcoin trading [1] - they were a widely trusted, well known brand, operating in a stable legislative environment.

Coinbase today has what Mt Gox had a year ago.

Admittedly, coinbase also has some VC investors. If you believe, should they be hacked or robbed by an insider, that the VCs are going to throw good money after bad to compensate customers, you are much more optimistic than I am.

[1] http://www.wired.com/2013/11/mtgox/all/

Re: Bitcoin Price Pressure

#84

Post by miros »

IvyMike wrote: post #35

> Anecdotally, I hear from merchants who start taking bitcoin that after an initial spike they see almost no volume. To me, this is one of the biggest problems with adoption--bitcoin doesn't offer much benefit to the typical consumer for mundane transactions. I'm about to buy a coffee machine on Overstock.com. There's no practical reason that bitcoins are better than what I'm going to do which is put it on my masterc…

It's also worth pointing out that you are probably incurring significant fees when converting from your native currency into bitcoin.

In addition, if you are holding bitcoins with the expectation that they will actually appreciate (i.e. the currency will deflate rather than inflate) you are effectively losing money by spending it, further discouraging you from engaging in the transaction.

Krugman has enjoyed making this point a few times:

http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/

http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfett...

Re: Bitcoin Price Pressure

#85

Post by ISL »

sillysaurus3 wrote: post #33

In a moment of some depression, reflecting back on sinking so much money into Bitcoin at close to the peak of its price history, I made this: http://i.imgur.com/f3tIJwK.png It's important to understand that Bitcoin is dangerous to you, and you need to respect its danger if you decide to buy some. You need to be using a secure cold storage wallet. You need to not trust services like Coinbase to hold onto your coins fo…

There's risk associated with every investment, and there are plenty of other arenas in which you can lose all of your money in an eyeblink (for example: a single-drug pharmaceutical company with a drug undergoing FDA approval; the outcome is almost binary).

I've been thankful to have experienced the highs and lows of bitcoin -- it's been a tumultuous introduction to the internal psychology of investing. The key to my bitcoin-related happiness was to never play with more than I could afford to lose. If the price goes to zero today, I'll still be thankful for the many lessons I've learned.

Re: Bitcoin Price Pressure

#86

Post by gnaritas »

Ologn wrote: post #71

> The other way to get enough buy pressure would be if many people started deciding they want to hold bitcoin as a hedge or a speculation. This spurs occasional bubbles, but we haven’t yet seen it work long term. Bitcoin is doomed because it has no value. Commodities have value. Modern trade began by people trading commodities for each other. Some commodities had attributes which made them good currencies - they were…

You have no idea what you're talking about. Bitcoin has value as a remittance network, especially internationally, your argument is trivially invalid.

Re: Bitcoin Price Pressure

#87

Post by acomjean »

IvyMike wrote: post #35

> Anecdotally, I hear from merchants who start taking bitcoin that after an initial spike they see almost no volume. To me, this is one of the biggest problems with adoption--bitcoin doesn't offer much benefit to the typical consumer for mundane transactions. I'm about to buy a coffee machine on Overstock.com. There's no practical reason that bitcoins are better than what I'm going to do which is put it on my masterc…

Odd because one of the benefits of Bit Coin is lower transaction fees that what credit card companies charge.

One would think businesses would really like this and promote it.

Re: Bitcoin Price Pressure

#88

Post by anigbrowl »

It’s important to understand that the default price pressure of the bitcoin ecosystem is down.

Only if you assume demand is static. With a mathematically-fixed supply, expanding global population, and the supposed inherently inflationary nature of fiat currencies, the default price pressure should arguably be upward. Let's face it, a great number of the early adopters are digital goldbugs with a jaundiced view of central banking. Like many quasi-political demographics, I think they overestimated the popularity of their viewpoint.

I do agree about the significance of the blockchain as a technical innovation...up to a point. Last time I looked at the dogecoin blockchain it was some multi-gigabyte monsters that I need to move off my boot drive sooner rather than later.

Re: Bitcoin Price Pressure

#89

Post by gnaritas »

miros wrote: post #67
gnaritas wrote: post #56

Earlier quoted context omitted.

Keeping your credit card number out of their database where it can't be hacked is a practical reason to use bitcoin. It reduces your risk of merchant's getting hacked, which happens all the time.

Yeah but my credit card company protects me from that sort of fraud so it really isn't a practical concern.

Only if you notice and report it, people get skimmed all the time and never notice.

Re: Bitcoin Price Pressure

#90

Post by gnaritas »

Goronmon wrote: post #75
gnaritas wrote: post #56

Earlier quoted context omitted.

Keeping your credit card number out of their database where it can't be hacked is a practical reason to use bitcoin. It reduces your risk of merchant's getting hacked, which happens all the time.

So, a merchant gets hacked and your credit card info is stolen. You notice fraudulent charges, call your credit card company and they reverse the charges and send you a new card. If someone gets access to your bitcoin wallet or whatever storage mechanism you are using fails, then that money is gone forever with no way to recover it. If you are a regular user with no need to make a political statement with the use of…

Only if you notice and report are you protected, many don't.

You're arguing against cash, cash doesn't need defending.

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