If it makes anyone feel better. When the Bitcoin whitepaper came out, I read it and thought it was neat. Then came the first mining program and I installed it on my computer and it ran the CPU up. I said, "This is dumb." and uninstalled it.
I bought in at $3 USD / $4 CAD after trying to find someone to sell it to me while I watched it go from $1 to $4. I was broke at the time so I borrowed money off my credit card.
Sold almost all of it at $200 to $400. Felt like a complete baller. Who else has made 50x to 100x their money in a couple years? Who else takes a credit card cash advance and is right about it?
Sold some more at $6k CAD, overall I've cashed 250x my investment and still have some, but right now it's worth 2000x my original buy price and it's a bit batty to look at the current price. Could have bought a really, really nice house in Toronto if I'd just held on until today.
But you know, 2000x is, on a log graph, not that far from 250x. So unless bitcoin goes to $50k or $500k a coin I'm not going to be a touch sour.
Edit:
Also, this reminds me. I should go through my comment history and find people like tptacek that were very confident that bitcoin couldn't be securable:
It was a pain in the butt, but I secured bitcoin just fine. Bitcoin is one of those thing where you can go through what you said 10 years later and say "What did I say there? Yep that was right, nope that bit was a bit off, yep it wasn't banned by x, nope that person was wrong that it'd get shutdown within the year."
So much of what we arguable is unknowable, like generics in Go or whether mutable state is a good thing for certain programming applications. But the nice thing about investing is you get to find out how right you were.
And you're only really, truly right after the gains are realized.
Lol, well I did the exact same thing, mined 100 BTC on my CPU, turned it off, and forgot about it. That computer had been formatted at least twice before 1 BTC even hit $1. I comfort myself with the fact that I would have sold when it hovered around $8.
Similarly, I was living in dorms (free electricity) at the time bitcoin made its debut (well not really, but it was still very early). I started mining using my fairly beefy desktop. After months I decided it wasn't worth the small amount of 'money' I had made and just deleted everything. That PC is long gone, wonder how much money I would have now if I still had that wallet. Damn.
I do not mind having Bitcoin keep going up. But as a business owner that relies heavily on cryptocurrencies, I would really love it if things were more stable. We are building a business on privacy, anonymity, and cryptocurrency as a backbone. We're extrajurisdictional, so banking to USD or other fiat is very tricky. Tether is a great idea, but the current company looks very unstable. If there's a crash, they seem unlikely to be solvent.
Our company would pay a premium to get into a solid, pegged-to-USD coin. At least 5% if not more. Or even a coin that's pegged to an ETF. Of course we cannot satisfy KYC laws so it'd need to be a freely traded token, really.
I really hate the "hodlrs" and the complete lack of focus on how this is supposed to work for real businesses that use it as a means to an end, and not an end by itself.
I see this a lot talking about the 2x chain. People sometimes discuss it in terms of what's better for the BTC price. Why is that a goal at all? Other than the obvious reason of making current users richer?
If you want to transact in USD shouldn’t you use USD rather than a different currency (BTC)? And if you want to use a block chain to transact in USD shouldn’t you use something designed for that like Ripple?
I believe this is because we are still very low on the adoption curve. Once it gains mass adoption and it is used more as a form of payment, the price will stabilize.
2x was made by businesses for businesses. It is supposed to solve the high fees and long confirmation times (at least on the short term) which are crippling businesses.
What's the volume / liquidity of Bitcoin these days?
Say you're Tim Draper and you're sitting on 30K (bought at $600 from the US Gov in 2014 [1]). Would it be possible to offload them for $180M or is the order book too thin?
I've asked it before but: how is this a desirable characteristic for a currency?
This level of deflation is as bad as too much inflation, though the problems it creates are different. Why would anyone actually use Bitcoin if simply sitting on it will yield a greater return than investing it in anything? So far it seems more deflationary than gold. If this keeps happening won't this actually crowd out the currency application and lead to Bitcoin becoming nothing more than a speculative bubble?
It's hard to determine but I'd love to see some data on Bitcoin use vs. its price in USD/EUR.
Central banks have (without evidence) claimed that deflation is a universally “bad thing” in order to justify inflating the currency every single year (AKA stealing from savers, and transferring wealth to the people who are the earliest recipients of the inflated currency).
Gold would have become the standard around the world if governments had not used coercion to prevent it from becoming so, and instead replacing it with fiat currency (which they can control and benefit from).
If Bitcoin, or another cryptocurrency, replaces fiat, it’s value will be worth several orders of magnitude of what it’s worth today, which is why many people are holding it instead of spending it at the moment.
However, people will not simply “horde” Bitcoin forever in anticipation of its price going up any more than people currently spend every single fiat dollar/euro/yen they have for fear of it going down in value due to inflation.
You may ask, “but why WOULDN’T they hold it instead of spend it if they anticipate the value increasing each year?” The answer is because people HAVE to live in the here and now, they have to pay for things like food, rent, entertainment, cars, fuel, etc. So they can’t get around having to spend some amount of money to live.
But sound money (money with low to no inflation) does cause people to spend LESS money than fiat currency because there’s a much larger opportunity cost.
> If this keeps happening won't this actually crowd out the currency application and lead to Bitcoin becoming nothing more than a speculative bubble?
I think it'd be reasonable to say that this has largely already happened. Beyond the volatility, it's terribly impractical to use as an actual currency due to the transaction fees these days.
You’re thinking about this wrong; bitcoin is meant to be used more as a store of value rather than as a currency for transactions. You should think about it more as hold than dollars.
Also, new assets and specially new asset classes are predictably going to have high volatility at first, until the market knows what to make out of it and finds the right value for it. In relative terms, bitcoin is still a pretty new asset, specially since new people are coming into the market every month.
I love bitcoin, this rise comes just 3 days after it had its biggest one day drop in a month. At this point it must be a CTA's dream instrument, all it does is seem to trade on momentum:)
So if China shutting down exchanges, the CFTC coming out and claiming tokens used in ICO's fall under its jurisdiction, confusing regulations everywhere, and huge recent gains can't stop it, I'm not sure what will.
As a side note, if there are any Bloomberg engineers around, come on VCCY<GO> is really awful.
Put some time into it, its not like virtual currencies are going away any time soon.
This made me realize I think I just recycled the hard drive with my old bitcoin wallet on it. I had half a bitcoin that I mined in a few nights on my old Geforce 4 GPU. Fuck me!
Wishing I had not transferred one Bitcoin to someone back in 2011 just to show them how it works. And then erased that old MacBook that was loaded with 10 BTC in its wallet.
I remember those times - does anyone know how many bitcoins one could make per computing time, every year since the beginning to see what opportunity is missed.
Say what you will, but this irrational exuberance is precisely that; irrational. I knew about Bitcoin 6+ years ago, when I read a blog about someone buying a sandwich with this newfangled currency. But I didn't rush to mine it. I didn't rush to buy it either. I was simply indifferent to the prospect of it, and I don't regret it.
Here's why. Bitcoin's thesis is that it possesses inherent value because it will become a medium of exchange i.e. people will trade in bitcoin, thereby using it as a store of value, and making it valuable. And yet, that hasn't happened yet. While it's hard to estimate the velocity of money for something like Bitcoin, and the "Bitcoin days destroyed" metric isn't accurate either, it is quite clear that as Bitcoin as a store of wealth rises rapidly in value, its utility as a currency correspondingly drops in value; thereby invalidating the central thesis on which the question of its value rests.
Here are rough estimations for the velocity of money for BTC;
Even if these are filled with inaccuracies, the general trend seems to be quite clear. People use BTC as an asset not a currency. And as such, the idea that it's a savvy investment belies the fact that it's value as an asset is entirely psychological in nature and completely ungrounded from actual metrics like fiat currency (though again fiat currency does run on trust, but the difference is that it's a marker of exchange thereby measuring the economy and its productivity gives an estimate of its value).
Further, even if it was a valid currency, then what we're witnessing over here is hyperdeflation in action, and it is fundamentally irrational to expect it to continue.
The reasoning for the above points is quite straightforward and simple. The magic of money and capitalism isn't that you can hoard gold and get rich. No, it's that you can make money. It's the idea that value can be created and destroyed through the economic actions of human beings, and that money as a concept serves as a measure of wealth as opposed to wealth. It's why we moved away from the gold standard - it was fundamentally irrational and in the long run, would have caused the exact phenomena we're seeing with BTC.
If you really think that somehow as a store of value BTC is going to become some significant fraction of human wealth, then go ahead buy this. But if you give it any rational thought whatsoever, then you'll see clearly that this is the tulip mania in action and that timing your actions to beat the market is even more irrational.
So no I don't regret passing up on buying BTC, precisely because it was and is a lottery ticket and I'm not in the business of buying lottery tickets no matter how well conceived they may be.
Right now, the most rational thing to do is to bet for it to fail. And then figure out how to time that bet. Because the farther it rises, the harder it will fall.
> So no I don't regret passing up on buying BTC, precisely because it was and is a lottery ticket and I'm not in the business of buying lottery tickets no matter how well conceived they may be.
Dude, this is nonsense. Everyone regrets passing up on buying BTC because it's currently worth $6k because you can sell it right now for that money. Anything else is complex rationalization to make yourself feel better.
Your chart shows that velocity of BTC is the same as velocity of USD M2. Is USD not a medium of exchange by this logic?
Bitcoin is a replacement precisely for M2 (base money + deposits), because with a fractional reserve deposits are as much usable as a medium of exchange, as the base.
The entire crypto market is worth $160bn at the moment (Bitcoin: $100bn). That is less than the market cap of Visa, or equals about the market cap of Mastercard. Global gold is valued at around $8.2tn (or $8,200bn).
This is not investment advice, but _IF_ (and that's a big if) some of these coins (mainly Bitcoin and Ethereum) successfully achieve some of their goals, today's price will be extremely cheap. If not, it will probably be expensive. Do your own research and then decide whether you think they can.
Basically I don't see any target value for bitcoins and there's no bubble since this is a once upon a life time opportunity. Basically since number of bitcoins will be limited - total value of all bitcoins must be a fraction to total human wealth. Tech leaders and SV have strongly stood behind bitcoin and blockchain with convincing arguments, and put their credibility behind it and each day by increasing valuation of Bitcoin they prove why tech matters on this planet.
Edit: /S
If a bubble forms and people's finances get hurt, that'll have very negative effect on the credibility of SV and tech sadly.
> "Basically I don't see any target value for bitcoins except that there's no bubble since this is a once upon a life time opportunity"
Why? I can start my own blockchain tomorrow, and so can anyone else. If people perceive bitcoin distribution as being fundamentally unfair, they can just stop using it and switch to the some other crypto currency.
The value of bitcoin, as with other currencies, is the value people believe it holds. More concretely, this would be the value of goods or services you can exchange it for today, and/or the future value you believe the currency will hold.
Your argument reminds me of a classic eBay seller problem: you can price your rare collectables however you want, but if no one is buying, they are worthless
I think this is just the tip of the iceberg for Bitcoin. Time will tell if I am right or wrong. If we think of it as simply a currency, or a store of value we can place limits on its value based on what we know about gold, fiat currency, etc. We can extrapolate and come up with a valuation that we think is appropriate. However, its not just any of those things. It's a paradigm shift in digital ownership of value, and could potentially be a record of and a secure digital token for a huge variety of physical goods, virtual services, etc. Whether this happens is largely dependent on scale, but we will leave that argument for another thread since the troll army will show up. Bitcoin is something entirely new in the history of value transfer and ownership, stop trying to compare it directly with the systems that will be eclipsed by it.
[+] [-] electic|8 years ago|reply
Huge mistake.
[+] [-] 3pt14159|8 years ago|reply
Sold almost all of it at $200 to $400. Felt like a complete baller. Who else has made 50x to 100x their money in a couple years? Who else takes a credit card cash advance and is right about it?
Sold some more at $6k CAD, overall I've cashed 250x my investment and still have some, but right now it's worth 2000x my original buy price and it's a bit batty to look at the current price. Could have bought a really, really nice house in Toronto if I'd just held on until today.
But you know, 2000x is, on a log graph, not that far from 250x. So unless bitcoin goes to $50k or $500k a coin I'm not going to be a touch sour.
Edit:
Also, this reminds me. I should go through my comment history and find people like tptacek that were very confident that bitcoin couldn't be securable:
https://news.ycombinator.com/item?id=2607706
It was a pain in the butt, but I secured bitcoin just fine. Bitcoin is one of those thing where you can go through what you said 10 years later and say "What did I say there? Yep that was right, nope that bit was a bit off, yep it wasn't banned by x, nope that person was wrong that it'd get shutdown within the year."
So much of what we arguable is unknowable, like generics in Go or whether mutable state is a good thing for certain programming applications. But the nice thing about investing is you get to find out how right you were.
And you're only really, truly right after the gains are realized.
[+] [-] joshstrange|8 years ago|reply
[+] [-] sp00ls|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] aw3c2|8 years ago|reply
[+] [-] chrisabrams|8 years ago|reply
[+] [-] the_stc|8 years ago|reply
Our company would pay a premium to get into a solid, pegged-to-USD coin. At least 5% if not more. Or even a coin that's pegged to an ETF. Of course we cannot satisfy KYC laws so it'd need to be a freely traded token, really.
I really hate the "hodlrs" and the complete lack of focus on how this is supposed to work for real businesses that use it as a means to an end, and not an end by itself.
I see this a lot talking about the 2x chain. People sometimes discuss it in terms of what's better for the BTC price. Why is that a goal at all? Other than the obvious reason of making current users richer?
[+] [-] erentz|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] ikazaki|8 years ago|reply
2x was made by businesses for businesses. It is supposed to solve the high fees and long confirmation times (at least on the short term) which are crippling businesses.
[+] [-] deweller|8 years ago|reply
A peggable USD coin with a decentralized exchange for BTC would be most valuable.
[+] [-] koolba|8 years ago|reply
Say you're Tim Draper and you're sitting on 30K (bought at $600 from the US Gov in 2014 [1]). Would it be possible to offload them for $180M or is the order book too thin?
[1]: https://en.wikipedia.org/wiki/Tim_Draper#Bitcoin_auction
[+] [-] dharma1|8 years ago|reply
https://coinmarketcap.com/currencies/volume/24-hour/
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] api|8 years ago|reply
This level of deflation is as bad as too much inflation, though the problems it creates are different. Why would anyone actually use Bitcoin if simply sitting on it will yield a greater return than investing it in anything? So far it seems more deflationary than gold. If this keeps happening won't this actually crowd out the currency application and lead to Bitcoin becoming nothing more than a speculative bubble?
It's hard to determine but I'd love to see some data on Bitcoin use vs. its price in USD/EUR.
[+] [-] sbenitoj|8 years ago|reply
Gold would have become the standard around the world if governments had not used coercion to prevent it from becoming so, and instead replacing it with fiat currency (which they can control and benefit from).
If Bitcoin, or another cryptocurrency, replaces fiat, it’s value will be worth several orders of magnitude of what it’s worth today, which is why many people are holding it instead of spending it at the moment.
However, people will not simply “horde” Bitcoin forever in anticipation of its price going up any more than people currently spend every single fiat dollar/euro/yen they have for fear of it going down in value due to inflation.
You may ask, “but why WOULDN’T they hold it instead of spend it if they anticipate the value increasing each year?” The answer is because people HAVE to live in the here and now, they have to pay for things like food, rent, entertainment, cars, fuel, etc. So they can’t get around having to spend some amount of money to live.
But sound money (money with low to no inflation) does cause people to spend LESS money than fiat currency because there’s a much larger opportunity cost.
[+] [-] rsynnott|8 years ago|reply
I think it'd be reasonable to say that this has largely already happened. Beyond the volatility, it's terribly impractical to use as an actual currency due to the transaction fees these days.
[+] [-] heelhook|8 years ago|reply
Also, new assets and specially new asset classes are predictably going to have high volatility at first, until the market knows what to make out of it and finds the right value for it. In relative terms, bitcoin is still a pretty new asset, specially since new people are coming into the market every month.
[+] [-] baddox|8 years ago|reply
[+] [-] Geee|8 years ago|reply
[+] [-] zby|8 years ago|reply
[+] [-] chollida1|8 years ago|reply
So if China shutting down exchanges, the CFTC coming out and claiming tokens used in ICO's fall under its jurisdiction, confusing regulations everywhere, and huge recent gains can't stop it, I'm not sure what will.
As a side note, if there are any Bloomberg engineers around, come on VCCY<GO> is really awful.
Put some time into it, its not like virtual currencies are going away any time soon.
[+] [-] soVeryTired|8 years ago|reply
[+] [-] albertgoeswoof|8 years ago|reply
It's interesting that despite bitcoin being deflationary by design, you can just fork the chain and do quantitative easing that way.
Pretty much all the cited benefits of cryptocurrencies are disappearing in implementation, unfortunately.
[+] [-] bdcravens|8 years ago|reply
I did find a few references to it, only on searching, and most seem to think it's a scam.
https://www.reddit.com/r/btc/comments/734i6s/as_it_turns_out...
[+] [-] aboodman|8 years ago|reply
[+] [-] virtuexru|8 years ago|reply
[+] [-] holtalanm|8 years ago|reply
[+] [-] shmageggy|8 years ago|reply
[+] [-] zby|8 years ago|reply
[+] [-] ttul|8 years ago|reply
[+] [-] diminish|8 years ago|reply
[+] [-] lawlessone|8 years ago|reply
[+] [-] Sir_Cmpwn|8 years ago|reply
[+] [-] todayiamme|8 years ago|reply
Here's why. Bitcoin's thesis is that it possesses inherent value because it will become a medium of exchange i.e. people will trade in bitcoin, thereby using it as a store of value, and making it valuable. And yet, that hasn't happened yet. While it's hard to estimate the velocity of money for something like Bitcoin, and the "Bitcoin days destroyed" metric isn't accurate either, it is quite clear that as Bitcoin as a store of wealth rises rapidly in value, its utility as a currency correspondingly drops in value; thereby invalidating the central thesis on which the question of its value rests.
Here are rough estimations for the velocity of money for BTC;
http://charts.woobull.com/bitcoin-velocity/
https://charts.bitcoin.com/chart/velocity
Even if these are filled with inaccuracies, the general trend seems to be quite clear. People use BTC as an asset not a currency. And as such, the idea that it's a savvy investment belies the fact that it's value as an asset is entirely psychological in nature and completely ungrounded from actual metrics like fiat currency (though again fiat currency does run on trust, but the difference is that it's a marker of exchange thereby measuring the economy and its productivity gives an estimate of its value).
Further, even if it was a valid currency, then what we're witnessing over here is hyperdeflation in action, and it is fundamentally irrational to expect it to continue.
The reasoning for the above points is quite straightforward and simple. The magic of money and capitalism isn't that you can hoard gold and get rich. No, it's that you can make money. It's the idea that value can be created and destroyed through the economic actions of human beings, and that money as a concept serves as a measure of wealth as opposed to wealth. It's why we moved away from the gold standard - it was fundamentally irrational and in the long run, would have caused the exact phenomena we're seeing with BTC.
If you really think that somehow as a store of value BTC is going to become some significant fraction of human wealth, then go ahead buy this. But if you give it any rational thought whatsoever, then you'll see clearly that this is the tulip mania in action and that timing your actions to beat the market is even more irrational.
So no I don't regret passing up on buying BTC, precisely because it was and is a lottery ticket and I'm not in the business of buying lottery tickets no matter how well conceived they may be.
Right now, the most rational thing to do is to bet for it to fail. And then figure out how to time that bet. Because the farther it rises, the harder it will fall.
Good luck.
[+] [-] fragsworth|8 years ago|reply
Dude, this is nonsense. Everyone regrets passing up on buying BTC because it's currently worth $6k because you can sell it right now for that money. Anything else is complex rationalization to make yourself feel better.
[+] [-] monort|8 years ago|reply
Bitcoin is a replacement precisely for M2 (base money + deposits), because with a fractional reserve deposits are as much usable as a medium of exchange, as the base.
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] leoharsha2|8 years ago|reply
[+] [-] underyx|8 years ago|reply
[+] [-] charlesdm|8 years ago|reply
This is not investment advice, but _IF_ (and that's a big if) some of these coins (mainly Bitcoin and Ethereum) successfully achieve some of their goals, today's price will be extremely cheap. If not, it will probably be expensive. Do your own research and then decide whether you think they can.
[+] [-] aqme28|8 years ago|reply
There's still a good chance you'll be wrong. Don't gamble what you cannot lose.
[+] [-] conn01|8 years ago|reply
[+] [-] diminish|8 years ago|reply
Edit: /S If a bubble forms and people's finances get hurt, that'll have very negative effect on the credibility of SV and tech sadly.
[+] [-] empath75|8 years ago|reply
Why? I can start my own blockchain tomorrow, and so can anyone else. If people perceive bitcoin distribution as being fundamentally unfair, they can just stop using it and switch to the some other crypto currency.
[+] [-] jonknee|8 years ago|reply
Or they could be worth nothing?
[+] [-] lord_jim|8 years ago|reply
Your argument reminds me of a classic eBay seller problem: you can price your rare collectables however you want, but if no one is buying, they are worthless
[+] [-] albertgoeswoof|8 years ago|reply
well, not really
Don't get me wrong, blockchain tech is really amazing. But whether it has an actual use in the real world is very much TBD.
[+] [-] buttershakes|8 years ago|reply