
Why I'm Putting All My Savings into Bitcoin (2011) - bemmu
https://falkvinge.net/2011/05/29/why-im-putting-all-my-savings-into-bitcoin/
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justaaron
Whenever i see articles with titles like this I'm reminded that a common
practice in the financial world is to encourage the general investing public
to buy something we wish to have hyped, to create the next level of buyers to
buy us OUT of a product we wish to divest from, as we see a peak and trough in
the near future...

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qbrass
Here's the 2011 HN posting if you want to see what people thought then.
[https://news.ycombinator.com/item?id=2596475](https://news.ycombinator.com/item?id=2596475)

~~~
tbabb
> Asset bubbles run on the bigger fool principle, and they end when you run
> out of bigger fools to sell to. If folks have really started cleaning out
> their bank accounts and borrowing money to buy bitcoins [...] then it seems
> to me that the world is about to run out of bigger fools.

The fatal mistake is underestimating how many fools the world is capable of
providing.

~~~
eip
There is literally quadrillions in wealth measured in the various currencies
of the world. So far crypto isn't even 0.1% of that.

The true fool is the one who believes crypto has any more or less intrinsic
value than fiat.

~~~
wz1000
Fiat _has_ an intrinsic value, in that it can extinguish your tax liabilities.
Come April 15th, it doesn't matter whether your income is in bitcoins or
onions or beanie babies, you will have to acquire USD somehow to pay the IRS
their share.

[https://en.wikipedia.org/wiki/Chartalism](https://en.wikipedia.org/wiki/Chartalism)

~~~
whiskers08xmt
Could it be argued that crypto has intrinsic value in it's ability to hide
from these tax liabilities? I've seen Bitcoin, and other crypto-currencies,
compared to the off-shore tax evasion market, as it seems to be able to fulfil
much the same purpose.

Of course, Bitcoin as a vehicle for tax evasion isn't a good brand, unless
you're very libertarian.

~~~
wz1000
Everyone _needs_ to pay taxes if they don't want to have the police kick in
their door and drag them off to prison. Most people don't have an unavoidable
_need_ to evade taxes.

Using bitcoin to move around assets and evade taxes presuposes that it has a
value. It cannot be an explanation for the value of bitcoin. As we've seen
from all the altcoins and bitcoin forks, crypto-"currency" tokens are not
exactly a scarce resource. You can create an infinite variants of them, or an
infinite copies(forks) of the same blockchain. There is no fundamental
reason(i.e. you can't tell just by looking at the properties of the token) why
Coin A exchanges for more USD than Coin B.

Some of these tokens can have some intrinsic value, when the coin is set up in
such a way that you can "redeem" them for computation time, data storage,
content etc. Then it functions in a way similar to an accounting or point
system. But beyond this, the price of cryptocurrency tokens is propped up by
nothing more than speculation.

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smdz
Back in 2011, there were much lesser threats to Bitcoin than what we have now.
Most people did not take Bitcoin seriously until now. Most people did not want
to buy it because they were scared/skeptical about it (a perfect time to
invest). Recently many novices who don't understand cryptocurrencies have
invested in it - And very likely that fueled the recent rally upto 10k and
well beyond that. Its not a good time to invest or buy bitcoins now. Plus the
transaction costs have become significant large to ignore.

As of now (near 2018), comparing these bureaucratic threats to that of just a
p2p networks is just not correct and may be naive. (It was different in 2011
when this was not well recognized).

What if governments disallow converting Bitcoin to real currency? Why would a
govt not use points like - Taxes, Money laundering and terrorism - to prevent
bitcoin? Or may be they allow it with some kind of significant bitcoin-
conversion-tax?

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cbstory
I am in India and am surprised how big btc here. Ex: I know 50 year old people
have no connection to the tech scene who have 1000 dollars in btc, yet have no
idea how it works. They think it's digital gold that will give them free
money.

It makes me kind if sad. If/when btc crashes it's people like this who are
going to get hurt.

~~~
yread
Don't feel sad for them, if they made millions they also woudn't share it with
you

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chinathrow
> Short version of what bitcoin is: it is a currency, but an entirely new kind
> of currency that can’t be seized or frozen by governments, one which is
> integrated with its transaction system where transaction fees are optional,
> and where you can transfer any amount anywhere instantly without any
> authority knowing or interfering.

Ha, of course a government can seize any assets these days. We've seen this a
couple of times already.

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ProxCoques
In 2015, I got him to reply to a mention about this on this tweet:
[https://twitter.com/KimDotcom/status/800388921255280642](https://twitter.com/KimDotcom/status/800388921255280642)

Seemed to imply that he was happy with his decision, but wouldn't do the same
thing now.

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waterside81
Isn't this inaccurate in today's climate?

> Use case: the key advantage for bitcoin is that it does away with all
> bureaucracy, all transaction fees, and perhaps foremost, all transaction
> delays and gatekeepers in the financial system.

Maybe in 2011 that was the case?

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AlexCoventry
FWIW, you could get a similar return today by buying the ETH presale in 2014.

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baxtr
Well, what a clever man

~~~
gscott
The problem is it was probably all stolen by now.

~~~
jameslevy
Why do you think it would be stolen? Is this because many wallets were
generated with weak security in 2011?

I've heard many anecdotes about weak Bitcoin wallet security in the earlier
years but haven't really seen many definitive information about just how much
Bitcoin was hacked from brainwallets, etc.

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drewm1980
Did he cash out yet?

~~~
qbrass
[https://falkvinge.net/2017/06/11/right-money-bitcoin-
hits-30...](https://falkvinge.net/2017/06/11/right-money-bitcoin-
hits-3000-1000x-entry-point-six-years-ago/)

[https://falkvinge.net/2017/11/17/new-google-management-
decid...](https://falkvinge.net/2017/11/17/new-google-management-decided-
search-cost-20-take-eight-hours-deliberately-unreliable-bitcoin/)

Guessing that he moved it to Bitcoin Cash.

