Heaven help us if Bitcoin becomes the world reserve currency without some central authority like the Fed controlling the money supply. Bad things would happen without counter cyclical fiscal policy.
Thoughts on Bitcoin
121–130 of 213 posts
Re: Thoughts on Bitcoin
#122I've been watching bitcoin since $30, bought at $80, and sold last night. I think that Stefan Molyneux (or however you spell it) is right on when he says that bitcoin is "a revolutionary protocol for information synchronization." However, it is by no means unique, and as we've seen, anyone can start their own bitcoin-type cryptocurrency. Apparently, the Canadian government is working on their own, and I don't think i…
gold = bitcoin parity is a major resistance point.
if you look at charts. huge volume but downward moving from 1240 level. traded as low as 840. that level 1 fibonacci retracement. there's a huge chance this thing will revert below 600 quickly.
also from game theory perspective, lots of people take profits year-end. they don't want q1 of next year to start with down 50% on a trade.
Re: Thoughts on Bitcoin
#123Earlier quoted context omitted.
I actually think the decentralized nature of bitcoin is what gives it all it's value. The fact that no bank can control it, inherently holds value. Currency manipulation is a really big problem right now, and knowing that you can buy a currency that won't be artificially controlled by it's issuer is an asset in itself. Having the currency centrally controlled again isn't special and it doesn't deviate enough from a c…
A central authority needs to control money supply. This is crucial in all advanced economies. It has to be capped somehow (currently, it's obviously exploited), but a decentralised currency will never work.
Under what definition of won't work. Won't be adopted? Would cause economic calamity? I think this is a crucial distinction.
Re: Thoughts on Bitcoin
#124Earlier quoted context omitted.
I hope those 11k aren't all your savings. I have coins, am bullish long term, but buying bitcoin is speculation, and bitcoin can fall back to $0.01, even if I don't think it's likely.
It is indeed all my savings. But I was saving it anyway, so I won't be out in a doghouse if it vanishes. I guess I'm dumb, but at this stage in my life I'd rather have 9.89BTC than $11k. My theory is, everyone's expecting it to crash. So therefore it's more likely to do the opposite. Not much of a theory, but it seems to have been historically true.
>My theory is, everyone's expecting it to crash. //
That's how a crash happens isn't it? It's not driven by any wider economic reality beyond the conviction of "investors". If the investors can be convinced that it's crashing then it crashes. That certainly appears to be how manipulative exploitation of short positions occurs.
Re: Thoughts on Bitcoin
#125My biggest issue with bitcoin is that it should be redeemable for something tangible other than $USD. The first virtual currency that addresses this and is directly convertible to watts or calories will be the currency to beat.
you just defined 'currency'. basically, your issue with bitcoin is that it can't be exchanged for goods and services.
this is quite the chicken and egg problem. but basically when people 'believe' it's a currency, they will accept it as one - thereby justifying that belief since it will be true due to all the other people accepting it.
dollars are only a worldwide currency because people and institutions think it's one - and if it were to stop being treated as currency it would stop being accepted as one. totally tautological - but there's currency for you.
Re: Thoughts on Bitcoin
#126Earlier quoted context omitted.
I agree with the majority of your post, but I'm not convinced that inflation should be included in your list of bad things ("do you want inflation, meddling, and regulation?"). A moderate amount of inflation is a very good thing, and this isn't really even open to debate among economists. Its importance has been empirically and theoretically proven many times. Inflation is important because economics is all about cre…
Inflation is not essential. If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods. Inputs for other ventures are cheaper. If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead. Resources are not infinite. When someone accepts a piece of paper and just holds on to it ins…
> If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods.
That is called "deflation." They tried it in Japan, it didn't work.
> If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead.
Inflation and cheap money/asset bubbles are completely orthogonal. If anything, inflation should increase interest rates, not lower them.
> Resources are not infinite. When someone accepts a piece of paper and just holds on to it instead of immediately consuming what he could buy, the resources are available for other things.
Resources are also for the most part either perishable or they depreciate. At the very least, resources must be expended (warehousing) while unused resources are stored for later use. Ideally, resources are used closed to when they are produced. Otherwise, value is lost in some manner.
> And when there are more people deferring their consumption, its cheaper to borrow money/resources and cheaper to grow new industries.
Why grow your industry when the consumers have deferred their consumption? Once more people have deferred consumption, the economy and industry will shrink, not grow.
> Countries don't become rich and powerful by consuming everything as soon as they get it. They do it by growing their industries.
They do it by doing both. I live in a country with high industrial output (aimed at export) but little consumption in comparison (people save too much + high income disparity), its a trap that the Chinese government is desperately trying to get out of. If Chinese don't consume, the gov has little choice but to buy treasuries (as upposed to investing in more unused infrastructure/ghost cities/industrial output), and they are losing money on those t-bills.
Re: Thoughts on Bitcoin
#127Sam - 你忘记了中国的影响。 The price is bitcoin is proportional to the "hot money" flowing out of China. Doesn't matter if that's an illicit market, it's still the most significant factor. Whether or not one believes that hot money is going to stop/slow should strongly influence your estimate of the price of bitcoin. That said, it's top heavy at $900-$1100, and reasonable people should be selling a portion of their holdings.
Why is it reasonable to sell a portion of their holdings? What does that actually achieve for the holder?
Re: Thoughts on Bitcoin
#128From the article: low transaction costs for worldwide commerce would still be great. I'm late to the whole bitcoin phenomenon, but here is what I really like about crypto-currencies. My US credit union (not even a commercial bank) charges me 40 dollars for an international wire transfer to Canada, and the bank on the other end will charge me 15 dollars. If this were done in bitcoin or a similar currency? Nothing, as…
I just looked at transaction costs on 2 exchanges and they were both at 0.2% for Kraken and BTC-E resp.
Re: Thoughts on Bitcoin
#129Earlier quoted context omitted.
By your definition of a "mistake", the biggest mistake you probably made in your life was not buying all the Medifast Inc stock you could get your hands on in 1999. It went up 16,210% in ten years. But wait, it gets worse. Even just going back a year, if you had bought and sold the right stocks at the right times, you'd be the richest person on earth by far, even if you only started with a few bucks. But don't worry,…
Really? Is there something a stock or anything accessible by mere mortals that goes up 20+ times it's value every year? :-) I bought and sold my bitcoins when prices where bellow 100$. Well, given the fact that I doubled the money I should be happy and brag about it, but I'm not. I could be holding 10k now and it hits in the stomach when I'm thinking about it. On the other hand, I would never invest more than I can a…
Well if you knew stock movements like the poster suggested, you could achieve huge returns by playing with options. Like the options on Nokia that went from a few pennies to a dollar or so when MS announced the purchase. Options jump around by a huge lot each week. So it seems that starting from $100, if you knew were things were going each week, you'd make a ton of money. (There's a limit as you get more money - it's uh, hard, to double a billion dollars on a limited set of options in a week, versus only $100.)
Re: Thoughts on Bitcoin
#130Earlier quoted context omitted.
Oops, yeah, I meant the other way around.
There's no obvious reason why BTC velocity should go lower than USD velocity. If anything, its electronic nature and potential for fast settlement times should indicate a much higher velocity than USD M2.
>Note that sam's point about merchants immediately converting BTC back to USD serves to increase the money velocity (perhaps by >10x).
If this changed, it could at least get closer to the velocity of usd.