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Why I’m Putting All My Savings Into Bitcoin

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

#81

Post by hugh3 »

hasenj wrote: post #73
Tichy wrote: post #42

Earlier quoted context omitted.

BitCoin doesn't promise any returns, and doesn't distribute anything to new people who sign up. It is only a Ponzi scheme if the real world's economy is a Ponzi scheme. I don't know if it is.

Real world economy is a kind of a ponzi scheme, in my opinion. With the central bank being at the top, and other banks below it, followed by the financial sector, and all the people who become rich by "speculating" on money instead of actually producing something useful EDIT: Please read this in context before you downvote. We're talking about bitcoin. If bitcoin is a kind of a Ponzi scheme, then it's no different fr…

That's not really how the real world economy works. The real world economy is all about people producing and consuming things. Banks, even central banks, are just a thin layer of icing on top of the cake.

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

#82

Post by amalcon »

carbocation wrote: post #16
rheide wrote: post #13

This person lost all credibility to me when he said that he borrowed money to invest. I'm a huge admirer of Bitcoin's technical aspects, but I would never even think of borrowing money to invest in anything, let alone bitcoins.

Leveraged positions are common, but leveraging yourself to the maximum possible and not leaving yourself a safety net, as is implied by the article, is crazy. I assume the author is speaking hyperbolically.

Leveraged positions are common, yes. They are also behind nearly every market bubble (and subsequent crash) in history.

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

#83

Post by j123 »

tectonic wrote: post #67
richardw wrote: post #52

Earlier quoted context omitted.

The basket many people are holding all their eggs in, is the USD. That has depreciated significantly in the last few years, with a very good chance that it'll continue to do so. My home currency isn't the dollar but my app is priced in dollars and that sucks. I'd far prefer to have Euro earnings and earn a few bitcoins a month as a speculative investment.

Does investing in foreign stocks hedge against this?

Holding stocks can definitely hedge against a devaluation of currency. Even domestic stocks or others prices in the currency you're seeking to get out of can work, but are significantly worse at doing so than one priced in a "safer" currency. There are investment firms that specialize in investing in the stock of foreign companies.

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

#84

Post by j123 »

sorbus wrote: post #66
scotty79 wrote: post #12

Earlier quoted context omitted.

If such silly thing as gold became money and paper printed by governments became money then a tool possessing qualities that bitcoin possess is bound to become money eventually. Only two real risks. Crypto weakness or Bitcoin 2.0 Gold is intrinsically similarly useless as bitcoin. We used it as money only because it was durable and rare. We used paper as money because strong, trustworthy entity declared that its supp…

There's another risk, actually: government legislation/intervention.

This insight, I think, is key. Imagine the power conferred by controlling a nation's currency. People don't just let that sort of power go. The first 1000-fold increase in value has pushed Bitcoin into the spotlight. The next 1000-fold increase will be far more noticed and hence far likelier to attract some counteractions by governments.

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

#85

Post by rdtsc »

richardw wrote: post #52
luigi wrote: post #3

This violates two simple, and obvious, tenets of investing: 1. Don't put all your eggs in one basket. 2. If it sounds too good to be true, it probably is.

The basket many people are holding all their eggs in, is the USD. That has depreciated significantly in the last few years, with a very good chance that it'll continue to do so. My home currency isn't the dollar but my app is priced in dollars and that sucks. I'd far prefer to have Euro earnings and earn a few bitcoins a month as a speculative investment.

Would you have preferred your app to be priced in bitcoin instead?

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

#86

Post by hugh3 »

knowtheory wrote: post #40
BCM43 wrote: post #36

Earlier quoted context omitted.

> If someone pulls the rug out on BitCoin- might never happen, but who knows- then no one is responsible. How might someone go about doing this?

Actually quite easily. If your nation bans the trading of bitcoins for the official state currency, then you have a problem. Regardless of the fact that bitcoins can be transferred w/o outside observation is irrelevant if you can't purchase or trade for goods and services. And at that point, you're either black market, or you're fucked.

Well, as long as not all nations ban trading bitcoins for official state currency it doesn't completely screw things over. I simply trade my bitcoins for Vietnamese dongs or whatever and then exchange my dongs for dollars.

No, the collapse is more likely to happen on its own. At some point the massive increase in value must draw to a close. What happens then? Big bitcoin holders no longer have an incentive to hold onto their millions of dollars' worth of bitcoins "Hmm, time to sell some of these bitcoins". Millions of bitcoins hit the market and find no buyers at the quoted price. All of a sudden the price is a lot lower, folks panic, drives prices even lower.

In an asset where the only incentive to hold the asset is the massive increase in value, panic selling happens as soon as it looks like the massive increase has gone flat. The steeper the increase, the steeper the decrease. That makes bitcoin unlike gold.

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

#87

Post by Canada »

hugh3 wrote: post #70
richardw wrote: post #52

Earlier quoted context omitted.

The basket many people are holding all their eggs in, is the USD. That has depreciated significantly in the last few years, with a very good chance that it'll continue to do so. My home currency isn't the dollar but my app is priced in dollars and that sucks. I'd far prefer to have Euro earnings and earn a few bitcoins a month as a speculative investment.

The basket many people are holding all their eggs in, is the USD Not many people, or at least not many people with nontrivial amounts of money, have all their assets in US dollars. Most folks own shares and/or property. As you say, US-dollar cash assets are a poor investment right now since interest rates are lower than inflation. Still, keeping all your money in US dollars (in a big brown bag inside a zoo, perhaps)…

The US dollar hasn't existed nearly that long in its current form. The current currency regime began in 1971 when Nixon ended the policy of buying back each dollar with 1/35 of an ounce of gold.

Major changes to the nature or definition of the US Dollar occurred over the past 200 years:

- In 1945 the Bretton Woods agreement made the US Dollar the world's reserve currency

- In 1933 private ownership of gold in the US was outlawed. Gold was forcibly confiscated for $20 per ounce. The price was then raised to $35 per ounce.

- In 1913 the Federal Reserve System was created

- In 1861 fiat "Greenbacks" were issued

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

#88

Post by nazgulnarsil »

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 commodities.

2. Fiat currencies ARE backed. They are just usually backed by a service and not a commodity. The USD for example is backed by several things: the fact that it is the reserve currency for buying oil (all oil is sold in US dollars), the fact that dollars are avoid-prison coupons for tax burdens (how most fiat currencies have been backed), confidence that the US will inflate less than other regimes and meet its obligations, confidence that the US will enforce debt obligations denominated in USD with their military if necessary.

I'm getting pretty tired of ALL CAPS hyperbole about gold and fiat currency.

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

#89

Post by limmeau »

cletus wrote: post #76

> In the past three months, the value has hundredfolded If this trend continues, my $8 invested for 1 bitcoin will be worth $800 million in a year! Seriously?

$800 millions should be enough to live comfortably by for a lifetime; no need to go all-in on bitcoins.

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

#90

Post by tpatke »

Bitcoin is a market which has buyers and sellers. Just because one more idiot is willing to buy $10, or $1000 for a coin does not mean there is a market to SELL $50M worth.

This market sounds easy to get into and hard to get out of - especially in a hurry.

...saying that. I think the value of a bitcoin is probably going to go up. Everyone loves a bubble.

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