
This finance expert thinks Bitcoin will fall 99 percent by June - xmpir
http://www.washingtonpost.com/blogs/the-switch/wp/2013/12/10/this-finance-expert-thinks-bitcoin-will-fall-99-percent-by-june/
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pyalot2
How to spot people who are talking out of their armpit? They're engaging in
prophecy about the future, that's how.

Nobody has any clue what the future holds, let alone the one of bitcoin.
Everybody has a guess of course, but that's it, a guess.

Now some guesses are more educated, and others are less so, but that doesn't
make them any less or more likely to come to pass.

But somebody will incidentially be right. Now it could be this guy, or it
could be not. Nobody really knows.

As to when it comes to guesses about bitcoin, it'd be particularly important
not to play the blind & elephant game (it's a commodity! No, it's a currency!
No, it's a payment system! No it's a store of value! No it's an accounting
ledger! No, it's a p2p network! No, it's a protocol! etc.). That is, you can't
comment on an aspect of bitcoin and derive your entire guess from that, while
ignoring all other aspects of bitcoin. You're free to base your guess upon
that basis, but it's quite likely that in this case, your guess does indeed
have a lower likelyhood to hit the mark.

~~~
kolinko
Well, sure, you can't predict future with 100% certainity. But sometimes you
have to make an educated guess. If you have a million dollars to invest, you
have to speculate - put that into dollars, into some "safe stock", into
properties, or at least a small part into Bitcoin?

At least this guy sets himself up to be accountable, compared to a bunch of
experts who give vague statements like "Bitcoins are tulips, they will
crash!", and then, once Bitcoins fall from $20k to $5k apiece 5 years later,
they'll say: "see? I told you!"

~~~
pyalot2
I actually suspect that the accountable game doesn't work.

Have you ever heard of that guy? Nope. Will you ever hear of him again? Well
only if he was right...

The game works essentially like this. Create N identities for a topic, at each
junction of the topic (substantial news, price developments, what have you)
you'll have one of the identities make up a prediction that's exactly opposite
of another identity.

If an identity is now straying into the clearly "wrong" territory, discard it,
continue with the identities which have turned out to incidentially make a
right prediction.

You continue this until you've weeded out all identities but one, which is now
endowed with a streak of having made the right predictions. That's when you
strike, now it's time to monetize on that belief that you're an expert in some
or another fashion.

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ekianjo
Quote: _Optionality [Bitcoin could drop to zero]. I view that there 's always
a chance that a Bitcoin could be adopted. Could be used potentially as a basis
for virtual currency. And so that would have some upside. An option premium of
$5, $7, $10 seems reasonable._

This guy is a quack. There's no way he could define where is the "reasonable"
point for Bitcoin to be in terms of value vs the Dollar. If he were indeed an
expert in Finance, he should know that the value is driven by demand and
supply, and not by what one guy thinks it's reasonable.

There's many ways Bitcoin may fall and drop in value, but just saying that _it
's because it's backed by nothing but confidence_ is really a wrong argument.
Confidence is everything, and this is valid for both Bitcoin and fiat
currencies alike. The key difference is that the supply of Bitcoin is limited,
and that, inherently, ensures a better long lasting value vs fiat currencies
on the long term as long as the utility/confidence remains there.

~~~
arethuza
I'm not saying you are wrong, but to me the tone of your comment reminds me a
lot of the comments people used to make back in 2000 when some "finance
experts" pointed out that a lot of .com companies were going to implode fairly
soon....

[NB I have no stake in Bitcoin financially but I do think it is technically
very neat and potentially game changing but having a few scars on my back from
the .com crash I do tend to worry when I hear arguments that amount to "you
don't understand, this time it's different!"....]

~~~
ekianjo
I'm not saying _this time it 's different_. Did you read my comment properly?
I'm saying Bitcoin _can_ crash. But not for the reason that it inherently has
no value. This guy's argument is really shallow, because tons of things start
by having no value and simply gain it because people use them.

~~~
arethuza
I was noting the familiarity of the _tone_ of your response - nothing else.

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stingrae
Everything is speculation. I am not sure why "finance experts" bother stating
their opinion on bitcoin. It is still too early to tell whether it will
succeed or fail. If it ever stabliizes it opens huge possibilities to
dramatically change banking as we know it.

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userulluipeste
"Initially Bitcoin was supposed to be a very democratic process. We could just
open our laptop and start mining Bitcoins. Now to mine Bitcoins after 11
million have been mined, you have to have super computing power."

For the record, it's not the quantity of the already mined Bitcoins that
determines the further mining requirements, it's the mining competition. If
back then there would have been so much mining activity as there is today, a
laptop would have been as useless as it is today.

~~~
kolinko
This. What kind of an expert is he, if he doesn't understand how Bitcoin
works?

