The entire thing is absolutely stupid, and isn't going to last forever. People are way too bullish on it. People who have no business investing in it are taking on debt to do so, with no clear exit strategy other than "the moon." A lot of people who don't have any money are going to get absolutely toasted when the pendulum swings the other way. They're in it to get rich. They have no idea what blockchains are. They just think they're buying magic internet money people get rich from.
To put a little perspective on how ridiculous this all is: Last night after Coinbase came back from maintenance, there was the (expected) sell-off, so I figured I'd make a quick buck and bought 300 LTC for about $241 each, then sold it a few minutes later for $251 after the instant rebound and went to bed with a nice $3k profit. I woke up this morning and was astonished to see that LTC was about $380. This was in the course of about 5 hours. Had I not sold it last night, I would have made almost $40k. I'm a little annoyed about that, but again: this is a stupid, irrational bubble that makes absolutely no sense. It's entirely speculative.
I think crypto and blockchain has a future, but it has to solve a few problems first (transaction fees/time and anonymity). None of the big three currencies do that well enough yet. This bubble is going to pop soon and I'm worried that a lot of people are going to get impacted badly.
There's cheap liquidity (ho ho ho said the FED and the ECB), there are institutions (pension funds) that are starting to buy in, and in comparison, the dot-com bubble (which was mainly a US led bubble, not global) went to $5.7tn to $1.7tn. Gold is worth $8tn globally. Why couldn't Bitcoin get to part of that level, e.g. $2tn?
It sure looks like a bubble, and it probably is, but it could literally be the largest bubble in our lives -- unlike one stock in the market, this is a global phenomenon + you only have a few currencies that matter.
To the extent that there is an analogous concept it's their utility as a means of exchange. Which outside of drugs and hard drive ransoms is minuscule at best.
They're different, which is why I used the term arguable--there's no clear reason afaik that bitcoin should be so valued relative to others, but I could be wrong.
- if 1 BTC were $100 trillion, then it's clearly passed the fundamentals of "being a unit of exchange between commercial entities", since it would be way more than what any form of exchange would ever require.
The truth behind the pedantic answer:
- if it's a store of value, then the "fundamental" value is the amount of fiat that's gone into the system so far. If all the exchanges have roughly $100 in USD deposits, the base value of their bitcoin deposits will be at least $100, roughly.
- If it's as a means of transactions, then the fundamentals are linked to how much transaction volume is going on. For example the flow of USD into BTC and vice-versa. BTC <-> BTC exchanges in that universe probably help to define things as well, as it would be used as an alternative to USD.
The dollars don't come from nowhere, so there's at least some base numbers you can think about. Thinking of it as "USD going into the ecosystem" and "USD going out" is a good proxy for now I think. Obviously very fluid, though.
Either way, someone ends up with cash CNY and the other person ends up with electronic USD or EUR or whatever.
The immediate limiting factor is the vulnerability of any in-person transaction to traditional law enforcement mechanisms, and the eventual limiting factor is that the exchange rate is going to be impacted by the demand for cash CNY. Eventually nobody is going to want to sell you USD (or whatever) for your cash-in-a-bag CNY, or will only do it at exorbitant rates.
You don’t have to make it totally safe, just safer compared to other methods of evading control.
Before you can move it out of the country, you have to get it out of the bank, and your bank will refuse to do that with currency control measures in effect.
It's the equivalent of you selling your BTC holdings at market rate and buying the car with USD.
The fact that “experienced” Bitcoin speculators are getting nervous is a sign the bubble is about to pop. Tether volumes are hockey-sticking up as a result. There has been enough technical analysis to show that USDT volume drives BTC price and not the other way around. USDT volume is hockey-sticking over the last few weeks. Feels like a Ponzi scheme and the whales are cashing out.
At some point there will be a correction. This velocity can't be maintained forever. But this is also a technology that heavily relies on going viral to become functional (payments/contracts) - and based on real world interactions I think crypto is heading towards an adoption curve that justifies its price.
Maybe other technologies will, but Bitcoin cannot.
-- said a million articles in 2000
If you buy in, buy in during a consolidation phase, when you see the price is stable. Ethereum had a huge run up, yet then consolidated for around 6+ months around $300. I would say that is healthy. Now it's heading higher. "Fundamentals" aside, of course.
edit: Oh you said "hope it is not" - my mistake.
Also, rich Saudis are scared shitless about losing their wealth when political winds change. They put their money into crypto and it's much, much harder to take it from them, provided they own the private key. This is the best mechanism of wealth storage yet created, provided the value holds, which as more around the globe believe in, it becomes more likely. Bitcoin could be digital gold, but we shall see.
That's not exactly trivial - how do you store a private key in such a way that it's safe, accessible to you and only you, cannot be destroyed by your enemies, and can be passed on to your heirs upon your death?
 yes, there's such a thing: https://www.goodreads.com/book/show/2211931.The_Bin_Ladens
In contrast, if you buy bitcoins, when you flee the country you can bring your wealth with a memorized 24-word code or a slip of hidden paper, and people in other places will accept your Bitcoin.
If you have enough trusted friends, that should work.
His dad runs quite a large traditional investment fund and knows of people in his network working at pension funds that are looking at putting money into Bitcoin / Ethereum and others. The family has done private equity deals together with some of these funds (mostly raising debt financing from them).
I'm not an extreme crypto bull, but I honestly think it's still early. But there will be massive volatility along the way.
Note: not investment advice, obviously. Just my opinion.
The problem with crypto-_currency_ is that it's not a productive asset. A share of a business pays dividends over time and thus has intrinsic value (and _some_ speculative value), while a currency does not. A currency transaction is a zero-sum game, which is good because it minimizes friction.
Buying cryptocurrency with the expectation of increases isn't investment, it's _speculation_.
Pension funds generally allocate up to 5% of their portfolio to alternatives, which could be smaller funds investing in art, watches, music royalty rights, farmland, wine, and the likes. This also includes crypto.
If you're an investment manager, it isn't necessarily crazy to allocate 0.2 or 0.5% of your portfolio to crypto and try to capture some of those gains.
Even without perfect timing of the market, it's a pretty easy decision for a portfolio manager to look at this and say: "While, like any other asset, past performance isn't an indicator of future performance, given the price history and increasing trading volume over time, the risk/reward balance skews heavily in favor of putting at least some tiny bit of money into crypto for all but the most risk-averse."
The analysis presented is a bit disingenuous. If you put money into every thing that could pop 400x, you’d have no money. Pension funds in particular need to be conservative and even if they’re doing “risky” things like venture capital for example, they would want late stage funds — lower returns, lower risk.
Everyone is talking about what if scenarios where huge offshore money or sovereign wealth or whatever comes into Bitcoin YUGE. Well, ok, do you think that money is just parked somewhere or is actually invested somewhere in a productive business?
Most dollars which aren't spent on consumption are converted into equity in productive businesses. In this case, dollars are merely the unit of account. You aren't invested in dollars, you are invested in businesses that produce the things that people need and those investments are measured in dollars.
To draw a parallel to the stock market is not appropriate, but those who bought into MSFT or AMZN even during the peak of the dot com bubble have nothing to regret today.
Sometimes its easier to describe this in terms of words, than numbers and symbols.
In the end, if it goes another 30x from where we're at today, and then has an 80% correction, you'll still be up 6x. It only makes sense to exit if you think such a correction is imminent, or you believe the entire space is going to zero.
Drawing comparisons between gold and a fiat currency (BTC) is completely confusing.
Gold is a tangible commodity. I’ve been in the cryptoasset space for a while and I’m still not exactly sure how to cleanly classify it.
I can relate. If I'd done the exact paired trades i did this month (only between btc, bch, eth, and usd), only at different times than i did, i would have doubled my money yet another time, for a life-changing sum.
Instead I've been sleeping well every night for a month on a healthy exit. Even with hindsight, I don't have any regrets.
I didn't get into the space to get rich and sweat at night, I got in to socialize monetary control. Now crypto doesn't even want to be money. Once this bubble cools off I can start dreaming again.
They are doing it willingly to get rich.
But what about all the non-fiat purposes of crypto currency? It seems that is what’s currently getting lost in the conversation.
For example, I simply want a way to accept electronic payments from people without dealing with middle men.
I want merchants and the general public to become aware of the inherent value in some blockchain by itself as a way for us all to spend “money” and get “paid” in a peer-to-peer manner.
I hope the people who are buying into this bubble come to see this. But I’m afraid if they do get burned, they will have missed the whole point.
Personally, I think many are extremely overbought (BTC, LTC, ETH, etc) but can't help but feel that those with real utility and industry value are (relatively) undervalued.
Buy: 300 LTC @ 241 = $72,300 + 1.49% fee ($1077) = $73,377 cost basis
Sell: 300 LTC @ 251 = $75,300 - 1.49% fee ($1122) = $74,178 gross
$74,178 - $73,377 = $801 net
and that's before accounting for taxes. What am I missing here?
Even if you don’t plan to trade, it might be a good idea to buy/sell through GDAX rather than Coinbase to avoid the fees.
I've just been told that hodl means "hold on for dear life".
Bitcoin Lightning currently works on testnet ... give it a few months and those problems will be solved. The price is exploding in anticipation of events like this.
I was just like wow, this is going to be pulling in a lot of people that have no idea what they are doing. Everything seems irrational. Who knows though.
The exchanges have an export history feature, which I'm planning to put into a spreadsheet to calculate profit. That's gonna be a fun weekend project.
From our perspective yes, Crytpo's use case as currency make absolutely no sense
(yet), we tap our Visa card to pay instantly with no fees and no fraud liability, hard to beat.
As a store of value however there is a very strong use case in the western world. Of the top my head, it is estimated that 10% of our GDP is in off shore havens, think about that infamous 1% moving just half of that 10% into Bitcoin ..
If you venture your mind a little outside the borders of our empire and think about the 'unbanked' parts of our planet, entire populations whom live under poverty for the sole reason that they do not have access to the equity and efficient markets directly.
If you look there, people are DYING for something like Bitcoin and other crypto's.
There is absolutely no reason an African farmer to have to sell his Oranges to Europe in Euro then buy it back from there (Sell Euro to local currency) for local use.
Currency is an abstraction, an expression of a market, just like language is.
Here we tap to pay and need everyone to protect us from fraudsters, pornographers, money laundry , <insert your favorite horse man of the apolocyple here>, in other parts of the world , that far out number the western world in population, they don't care to be protected by the above because quite frankly the price they pay for that 'protection' is insanely oppressive governments that use the above to legitimize the oppression.
It is exactly in those markets where you start to see a VERY stong use case as both store of value and currency for crypto and it is exactly that market that will drive the world's demand for good UI for crypto that will eventually usher in mass adoption.
Of course, there's a reason third world countries want capital controls - a lot of the people seeking to export capital are corrupt non-owning possessors of resources. Just as an example, whatever rank administrators within state oil companies and such who want to take things that actually belong to the nations - because such nations have rather weak administrative classes (not that the US isn't moving closer to "kleptocracy" itself).
So everywhere, bitcoin certainly looks like a device for protecting value - except once all the money that wants to move in has moved, then bitcoin's lack of actual practical use (see $20 fees) will make it not terribly valuable and all that money in it will be at a bit of risk.
Plus, phone-based money systems already are coming/in Africa. They solve the ordinary transaction problem. The problem of "how do you get money out of X currency or resource" isn't a logistics problem, it's a power-struggle. The reason Y person is fighting to get money out of X currency is Z person wants to stop that happening. But overall, remember neither Y nor Z are likely to be less than fully corrupt.
Use as currency for Bitcoin (and other coin networks) is still in it's infancy and cannot scale the way it needs to should it want to replace fiat.
The important distinction I would draw though that stores of value have historically been cumbersome to transport and liquidate, Bitcoin solves that problem in a very good way.
I feel it's important to also address this 20$ bitcoin fee meme that seems to be going around. While based in truth it is not 100% accurate.
You have the capacity to set your own txn fee on the Bitcoin network. If you don't mind waiting a couple of blocks (1-3 hours) to get your transaction confirmed , then the fees fall down to single dollars and even lower.
If you're selling a bulk commodity to a distributor in another market , you don't need ecommerce style confirmation times. Same goes for transferring large sums of wealth.
With that said, things like the lightning network will resolve alot of issues with Bitcoin scaling and in my (humble) opinion this is why LTC is pumping. (Atomic swap + Transfer over LTC )
This is infeasible because of insane volatility that BTC is experiencing. You either pay through the nose for a fast confirmation, or you are overpaying, or underpaying your counterparty.
Not to mention that VISA tends to be able to handle a bit more then 3 transactions a second. For some reason, BCH's market cap has not surpassed BTC's crippled protocol... Perhaps it's because nobody is using Bitcoin to transact.
Someone in a country, who has the equivalent of $800 is life savings, is experiencing hyperinflation (Venezuela let's say). Are you telling me that they're not willing to pay 2.5% (20/800) of their savings to save 97.5% of it? Why do you think someone would be willing to let hyperinflation destroy 100% of their life savings when there's an alternative?
Because the government will forbid it? They can forbid the purchase of BTC, or the exchange of it for goods, too.
Oh, in-person off-the-books transactions will solve the problem? Well, you don't need BTC for that, you can do in-person transactions of bolivars for USD, too.
Anyway, this is a straw man. Who is saying cryptos are useless? People are saying that they are a bubble, that the valuations are irrational.
And as far as I know, it's denominated in Kenyan shillings, not in its own currency (i.e., hype about M-Pesa does not result in something with Bitcoin's to-the-moon valuation relative to the prevailing currency in the land).
I suspect that most Bitcoin detractors, whether those who call it a Ponzi scheme or simply those who oppose proof of work, will be absolutely thrilled with the growth of more centralized electronic money transfer systems that are denominated in existing fiat currency. I know that I've been personally happy to use Square Cash, Apple Pay, EMV cards, etc. in the US. No mining, no or low fees, high security, quick, and suitable for small transfers.
And the fact that this is how M-Pesa works is an extremely strong existence proof that Bitcoin is not needed by the "African farmer".
What he said is that others countries that doesn't have a solid electronic transaction system are actively trying new stuff. In that case, M-Pesa won that race but the fact that it was centralized isn't why it won, it won because it was needed.
Now does Bitcoin is needed for another country? No idea, but I would have said the same for M-Pesa.
For instance, "Bitcoin is a bubble" only makes sense if it's its own unit of currency. "M-Pesa is a bubble," "Square Cash is a bubble," etc. aren't meaningful statements to make; they just support transmission of the underlying currency. ("Kenyan shillings are a bubble" is a meaningful statement, but I've never heard anyone claim that you should use cryptocurrencies to insulate yourself from hyperdeflation of a fiat currency.)
"Bitcoin is environmentally dangerous" only matters if proof-of-work is relevant; in a centralized system, you don't have the problems that lead to you wanting to even consider proof-of-work.
"ICOs are a scam" doesn't make sense in a centralized system. "The transaction rate is too low" isn't a complaint anyone has about a centralized system (the usual complaint about the US markets is that the transaction rate is too high, and HFT should be throttled). And so on and so forth.
"environment": Proof of work systems ensure that the ledger is secure and worthy of trust. Proof of Authority systems require trust, where the ledger is secure "because we say so." Isn't this the major reason why people are fleeing from legal tender? People can't trust the issuers, the processors, or the banks because they're colluding with politicians who provide bailouts using taxpayer dollars?
"ICO scam": absolutely makes sense in a centralized system. Are you actually claiming that people don't create scam companies with centralized currencies? Because why? Even legitimate companies can be slandered for the same reasons that people call ICOs "scams". The Franklin Mint, for example, produces coins which are sold on late-night infomercials that have little-to-no intrinsic value, but people buy for speculative reasons. Are they a scam? The reasoning is identical.
"slow/expensive transactions": One of Bitcoins main value propositions is aiding in international transfers. The centralized systems were too slow and expensive, so a better alternative was developed. Saying that speed and expense aren't complaints that people have made about existing centralized systems is simply wrong.
And so on and so forth.
You are mind-boggled because you have created a strawman; a caricature of what the "bitcoin non-believer" looks like.
Your mind would be less boggled if you accepted that there are valid points on both sides in this case. People who question bitcoin's current valuation or utility often have valid points, but if you immediately interpret their points to be as extreme as possible, of course they're mind boggling.
Similarly, people who are bullish on bitcoin often have good points and sound reasoning, but it's quite easy to also paint them with a brush which makes their positions and points mind boggling as well.
It's good to have some empathy and to actually listen, especially when it's about subjects that are so divisive. The most divisive things are the things that should least be divided further by constantly misrepresenting each side's points.
Not at the one's who are raising very valid red flags on valuation and how hot the market is becoming. In my personal opinion it is absolutely 'bubble' like behavior right now.
And i believe we both echo the same sentiment.
The main point here is that there's absolutely nothing innovative about BTC anymore, if anything it's way behind. Which is why the valuation is so suspect; it's totally disconnected from the utility BTC provides compared to alts. Anything BTC does, alts do better, except for marketing.
That demonstrates a fundamental lack of understanding of what makes bitcoin valuable, and what separates it from all other competitors. Bitcoin node decentralization is what keeps it censorship resistant, and in bitcoin node decentralization, it is ahead of any and all competitors. It likely has more fully validating nodes than all other cryptos combined, and by some margin.
There are a lot of people that want to sell you on a great new thing. Until they can get 150,000+ fully validating nodes to support their technology, they will be nothing more than a mildly distributed inefficient database. What is innovative about bitcoin is that it is the only real cryptocurrency, because it is the only one that isn't controlled directly by its creators, and also maintains its decentralization. The only ones that are even close are ethereum and litecoin, and ethereum is beholden to a single person who dictates changes to the network. Litecoin is simply a clone of bitcoin with minor changes to its implementation, but has a fraction of the fully validating nodes.
160K and counting.
It's why I'm sometimes so short with people who make statements with such confidence and finality. "Bitcoin IS this." without even really understanding the subject matter. I'm not thinking of one month/year timelines for its market penetration. I want to see what it is in another 10 years. I don't subscribe to the view that fiat is going to crash, or that type of apocalyptic talk. But I do think that we are in a 50-year-old debt-bubble, and I'm not sure it is going to be quite as difficult to 'shift', if that is even the correct word, from debt-fueled monetary instruments to credit-fueled monetary instruments. Most people don't even really understand the concept of a market-cap, and how the total value of the cap has no, or very little, relationship to the amount of capital that might be extracted from it. Bitcoin could easily be 10x or even 100x its current 'market-cap' and for it to still not really have any real relationship to monetary supply IMO. Bitcoin definitely has a relationship to gold, but more importantly, I believe bitcoin has a relationship to fixed-asset debt.
I wouldn't want to be entering a career in consumer banking though. Investment banking on the other hand... that is going to freak out over the next decade as the business of supplying debt for fixed assets that are depreciating in value reverses, and people start looking to place their investment dollars in industries that increase productivity.
Just remember bitcoin could lose 85% of its current value, and for it to only have doubled in value this year, and still be the best performing asset class in the market. Because a correction will happen. The only real question is when, and how deep.
Plenty of things that were eventually successful products went into extreme bubble and correct mode before they were successful.
Blockchains may or may not be part of the finance of the future. But that doesn't mean that 99% of the price of a given blockchain product today isn't bubble based bunk to be avoided just as many 1800s railroad stocks and 90s dotcom stocks had value only from bubble-dynamics despite railroads and the Internet being technologies that went on the succeed massively.
And while we were kind of unsure whether it's a pyramid or a Ponzi, actually it _is_ something new: a Nakamoto scheme. https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/
It's nuts to imagine that Africa as a continent compares to the West in terms of fintech. We like to imagine Africa as a monolith; it's a terrible mistake.
I hope you mean realize that merchants eat the fee and are contractually not allowed to offer discounts for cash payments. And many of them are not happy about this situation.
I doubt cypto currency is going to help that setup at all, and most likely it will just offer more avenues to do the same.
Regulation is not easier. I & my merchant can use blockchain today, without any permission or buy-in from a regulatory body.
This is an example of automation taking a job. As an engineer and small(er, more efficient, more effective, more fair, more predictable) government enthusiast, it thrills me to see that we're automating away the jobs of bankers and regulators around the world.
Note that calling cryptocurrencies "crypto" doesn't make much sense either.
e: for making a huge sale of crops or something to another nation, then 1 transaction fee is not bad compared converting at a %, but you'd still need to convert from Bitcoin to a local currency to actually use the money you made.
The IRS would crack down on this as with any other tax avoidance scheme. Offshore havens are probably safer since many rely on loopholes.
If just 0.000000001% of all astroids made of solid platinum land in my back yard I'll be a gazillionaire!
If you're trying to hide assets, the U.S. is the place to be, as none of our treaties actually require us to share information back with the rest of the world.
That's just not true, these fees are baked into the prices, since the seller pays them.
That's one of the reason cryptocurrencies are advantageous in the long run, they can eventually provide the transaction fees close to what they cost in electricity and infrastructure amortization - pretty much sub-penny to transfer any amount.
If you want to get upset, get upset at how if you have poor credit, you're not eligible for these cards, so really this is credit card companies stealing from poor people.
This is a) a good deal on its own and b) a much better deal than Bitcoin, which provides only the first of those things, and only reaches 0.7% if your transaction is over about 3000 USD.
If you think this is a bad deal, I'm curious what you think is a better deal and who's offering it.
With regards to Bitcoin though, I agree you need a much lower fee coin to make it feasible. The lightning network brings the transaction fees on Bitcoin to zero though from what I understand so maybe thats the answer.
I guess it's businesses, who pay high enough fees on your transactions.
Who do I chargeback when an online merchant takes my BTC, and doesn't ship the goods I bought? BitPay will tell me to pound sand. VISA will process a chargeback, no questions asked.
That is cheaper than CC, faster than Venmo, or whatever.
Was this an on-chain transaction or a Lightning transaction?
What does the price of bitcoin have to do with an objective assessment of how well the Bitcoin network is currently functioning?
Supply and demand. People pay more to transact in bitcoin, because it is more secure, because it is more decentralized.
Please remember "that infamous 1%" is actually the 0.001% or much less. The top 1% income actually includes dentists, successful software engineers, etc. Normal successful people. An amount of wealth that can actually be attained regardless where you came from, given luck, talent, luck and in some cases, hard work.
The phrase "the 1%" was originally introduced to draw a line between people with such a ridiculous amount of wealth that it doesn't make sense and is really only attainable by being born in it, or being born with very rich family and learning the shibboleth over your lifetime. Becoming insanely wealthy by an insane stroke of luck is possibly but it only gets you in contact with this elite, not "in", but if you play your cards right your children might.
 don't be mistaken that "hard work" is any kind of predictor for wealth. just look around you. hard work may be considered virtuous, but that's it. it's not like "being a good person" gets you rich, either.
Fees that are absorbed by the merchant, so not an entirely fair comparison. Still, I agree that the fees make the use cases for cryptocurrenies very limited personally. Right now, I can pay a fee to a third-party (CC fees in the form of slightly higher priced goods) BUT that third-party takes on a significant part of the liability (e.g. for goods not provided), and I can transfer money to a trusted (or untrusted providing I am OK with the risk) party in the same country for ZERO fees via my bank. For those use cases, using most cryptocurrenies would be strictly worse (I either give up the fraud protection or I am paying an unnecessary fee).
The only case where it makes sense is for international transfers, which typically do have higher bank fees, but personally they are so rare (I've used it once in the past decade) that they are barely worth considering for my personal use cases.
That would make it something of a niche form of payment compared to say credit cards. You aren't going to use it to pay for a cup of coffee, but there still are trillions of dollars worth of wire transfers per day. That is roughly one thousand times the amount currently transacted per day in bitcoin at the current valuation so even taking over a tiny portion of the wire transfer market would justify bitcoin's current valuation.
Maybe a case could be made for Venezuela where bolivars are useless, but USD is a far better candidate for their currency needs that Bitcoin, given how volatile Bitcoin is.
It'll be an interesting test case for the value cryptocurrencies can provide in third world countries.
Even better, I should sell just a paper (well, an electronic one) stating you own some thin air. Hey, geeks, how cool can this get?
I am sure I could find buyers in the same market as cryptocurrencies.
PS: This is not directed at you, but you expressed the level of pointlessness and... void that reigns in this 'market', so I picked your message to place my joke/rant.
In the performance piece, Zone de Sensibilité Picturale Immatérielle (Zones of Immaterial Pictorial Sensibility) 1959–62, he offered empty spaces in the city in exchange for gold. He wanted his buyers to experience The Void by selling them empty space. In his view this experience could only be paid for in the purest material: gold. In exchange, he gave a certificate of ownership to the buyer. As the second part of the piece, performed on the Seine with an Art critic in attendance, if the buyer agreed to set fire to the certificate, Klein would throw half the gold into the river, in order to restore the "natural order" that he had unbalanced by selling the empty space (that was now not "empty" anymore). 
You just have to make sure not to be one of those idiotic idiots left holding the idiot bag like an idiot.
That reminds me of "Perri-Air" from the movie Spaceballs: https://www.youtube.com/watch?v=gzbIrb7LUJA
Of course, this just shows how bad the air pollution is in China. Then again, water bottle brands like Nestlé's Poland Spring Water are just using "Poland Spring" as a gimmick and a ad-bait. So you definitely can sell thin air at different price based on "where the air was collected."
That idea has been around for hundreds of years: https://en.wikipedia.org/wiki/Indulgence
It'll be able to handle 8x as much air transfer as yours and have a minority following that will always bite at your heels
It's already sold in France. "Air de Montcuq" -> air de mon cul ( air from my ass )
They received a significant sum in offers…
In concept, it's obviously not the joke you're making. In practicality, it's exactly the content of your joke.
That's basically what this is:
Have fun, but don't bet your life on it.
Mabye in the future it can be more than a speculation, but right now it's a game.
You could be right.
But I don't understand everyone's certainty that cryptocurrencies are a fraud-bubble-scam-Ponzi-mania.
The growth curve fits both exponential and logistic (S-curve) functions.
Exponential growth is unsustainable, while logistic growth describes most technology adoption. Halfway through the cycle they're indistinguishable.
When there's 98% agreement this is a bubble about to burst, my instinct is that the conventional wisdom is wrong.
When it blows up, you won't understand why the SEC didn't protect you. By then, you'll realize it was a mirage all along, and you'll want someone to blame for letting it get so out of hand. Every piece of news you interpret will tell you that losing money was not your fault, because that's what you'll want to believe.
On the flip side, the current price action is causing the same sort of confirmation bias--just in the opposite direction.
This is exactly my point.
Why are you so certain?
How can you tell the difference between this and any other technology adoption logistic curve?
People make statements like you do with 100% confidence, and you could very well be right! But where do you get your certainty?
And were you equally certain about the inevitable demise of cryptocurrencies when the market was 1% or 10% of its current size?
By way of an understanding of human nature. From the book Bull! A history of boom and bust:
“...A bubble, Galbraith observed, is always supported by the belief that there is something new in the world. The history of past cycles is dismissed as irrelevant.“
That’s it in a nutshell. It is a time-tested part of who we are, and it’s almost like you’re either born with the ability to see that or you’re not. I don’t know why.
I don’t know how much the price will go up, but it going up, even to a million dollars a coin, means little. It will eventually go down and violently so, and some people will be badly hurt. Just people being people.
Assets need to be productive in order to be true investments. Like farmland or businesses. Otherwise, you’re speculating on price appreciation. Look at gold over the last 100 years and overlay its price graph over the Dow Jones during the same period. They’re not even close.
That’s the difference between speculation and investment.
Counterpoint: Galbraith confidently called the US stock market a "classic bubble" in April, 1999. At that time, the Dow Jones was at 10,494. Today it's at 24,504.
Looking back with 20/20 hindsight, it now looks like Galbraith was wrong.
> Assets need to be productive in order to be true investments
Counterpoint: Maybe assets need to be useful to have value. Land, copper, the balance on a Walmart gift card and my World of Warcraft gold don't produce anything, but they're useful, so they have value.
> Counterpoint: Galbraith confidently called the US stock market a "classic bubble" in April, 1999. At that time, the Dow Jones was at 10,494. Today it's at 24,504.
No! Current day valuation versus 1999 valuation has nothing to do with each other. In 1999 the market was over valued and the bubble soon popped.
> > Assets need to be productive in order to be true investments
> Counterpoint: Maybe assets need to be useful to have value. Land, copper, the balance on a Walmart gift card and my World of Warcraft gold don't produce anything, but they're useful, so they have value.
The key difference between an asset and investment is that investments produce returns.
Right, but an asset can go up in price and stay there if demand increases and/or the currency the price is denominated in is losing value over time. Especially true if supply is limited.
I don't expect BTC to stay at $17000 - it could go down or up, and I wouldn't be the least bit surprised if it's currently in a bubble that pops. It might then go to near-$0, or it might proceed to regain those levels and continue even higher over time, depending on how demand evolves against the ultimately fixed supply. I remember $500 for 1 BTC seemed insanely high at the time. $675 must have seemed crazy for gold in 2006, but I don't expect it to return there again despite the intervening ups and downs.
Here's a chart of the Dow Jones Industrial Average. Please identify this bubble popping that you speak of.
After 18 years we can say that Galbraith was objectively wrong.
When assets appear overvalued, sometimes they are, and sometimes people just don't see their potential at the time.
Because the fundamentals of Bitcoin and The Blockchain are complete garbage. Both are solutions in search of problems. Neither solve any real world problems outside of how to conduct shady, illegal business (murder for hire, crypto-ransomware, mail-order bath-salt delivery) and both do a pretty piss-poor job of even that.
This is why bitcoin will ultimately fail. It is a useless product. Full stop.
Anecdotal: but in the last month I have come across 6-8 people who have taken or know someone who has taken 2nd mortgages, maxed out their lines of credits, and credit cards to "invest" in crypto.
I'm generally a-ok with investment loans (not from credit cards), they are a good resource to reduce portfolio risk - if the loan remain tax deductible. But what is currently transpiring is insanity.
Someone will definitely get bailed out (hint: it will likely be the banks that's unknowingly provided the leverage).
Even in Africa, the possibility of phone-based money allows people to do this.
Bitcoin's risks don't balance its benefits for most users of currency and basically, it's a currency or a "technology", it's simply a unique commodity akin to art or Tulips. I mean, if the bubble was tulips today, I could sell them as "unique biotechnological value-preservation technologies". But that wouldn't change the well known financial/psychological/social dynamics involved.
Litecoin is another animal. I think we'll continue to see a lot of what we're seeing now. People seeing a low price (compared to btc), sad they missed out on cheap BTC and dreaming this one is going to $15k.
I have a high tolerance for risk, so I don't mind going in big (big for me) - if it works out great, if not, it's been a helluva ride.
Of course, that's assuming that don't end 2017 (or 2018) with a massive crypto bubble burst!
I think the part that's hard is that there is a stickiness to hype. Hype starts as baseless hype, but the belief and interest of others is frequently enough to sustain a company or project that has nothing of actual benefit to offer. This makes it hard to dismiss hype-fueled bubbles entirely. There's a circular effect somewhere here that converts the initial baseline hype into value just by the sheer force of will of "true believers".
This applies not only to bitcoin/litecoin, but also companies, software, and all sorts of other things. Generating hype, goodwill, and other mostly-positive forms of human attention is inarguably more valuable to a project or venture's long-term lifecycle than providing actual objective value. Get enough attention or interest on something and any objective value that may potentially exist is liable to materialize, at least in part.
You most likely need to wait until it's close to 3 X the value you bought it because you'll need to pay short-term taxes after you sell it.
And once that happens, why sell half of it, vs all of it? 3 times the current value is a LOT of money and that usually takes at least 8-10 years in the equity market. Now that it happens, you're cashing out just to recoup your costs? Cash out everything, or cash out nothing and let it all ride until it's an even larger amount.
The net cost is 0 - cash in = cash out. And taxation is zero because your profit is (at the time) 0.
It also means you can do something else with your original investment.
If it goes up 100x - cash out whenever.
If it goes down to 0 - you have lost nothing at all apart from some time.
you buy 2 at $5k
it goes up to 10k and sell 1.
profit is current value - cost basis
10k - 5k = 5k profit that will be taxed
Because the 5k in the market is not a realized gain
> And once that happens, why sell half of it, vs all of it? 3 times the current value is a LOT of money and that usually takes at least 8-10 years in the equity market. Now that it happens, you're cashing out just to recoup your costs? Cash out everything, or cash out nothing and let it all ride until it's an even larger amount.
I agree "just recouping your costs" is not really exciting by itself. The idea is that you think it might go much higher, but - crucially - you're not sure. It's just about reducing your exposure to risk at the cost of some upside potential. It all depends on your risk appetite.
This is a little fallacious because it assumes that the value of your money (Dollars or something?) won't continue to lose value against until it becomes worthless paper. This has happened in recent history e.g. Weimar Germany and is happening right now e.g. Venezuela.
At the end of the day, the rationality comes from a comparison of one currency against another. Just converting back from the currency you started with doesn't mean you "can't lose".
Except to inflation ;). But adjust for inflation and selling enough to cover that gets you back the initial investment and also you don't lose money.
I say that without sarcasm. A legitimate request.