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$10k bet that bitcoin will outperform gold/silver/stock by 100x over two years (longbets.org)
42 points by eof 1752 days ago | hide | past | web | 28 comments | favorite

Just buy a hundred dollars worth of bitcoins, and short ten thousand dollars worth of gold, and there you have your bet, at whatever multiple you like. No need for someone to take you up on a "wager" as the market allows it already. And good luck with that.

You're right, of course, but you presuppose that the purpose of the "bet" is financial. It's actually a donation to the Long Now Foundation. Plus, it gets your name on their website, which is kind of cool.

I was really surprised by "it gets your name on their website." Why is that cool? I think longnow is a neat organization so its not that I have something against my name on their website.

"With bitcoins, a person in California can send $20,000 USD worth of value to a person in Russia in a matter of seconds, for FREE."

No. It would take about 15 minutes for the block chain to verify and even that would be with a commission. Maybe 4 days delay if you didn't do a commission.

Moreover, unless Bitcoin becomes so pervasive that it becomes the dominant currency, you still have to convert USD to BTC and BTC to whatever. This involves transactions that have some fees to exchanges associated, either explicitly or implicitly via spreads.

So you should just invest $1k in BTC. If it outperforms by 100x, you lose 10k but very likely gain much more, otherwise you get $9k.

That would be awesome! Sadly Long Bets makes you donate the winnings to charity to avoid prosecution as an illegal gambling site. Now if you happened to own a charity...

Haha, I wonder if they could use Bitcoin as their prevailing currency and avoid that problem altogether.

Actually, I think the bet may have been worded so that if gold gains 2% and bitcoin gains 200%, the bet is won. This makes it substantially harder to arbitrage.

Better you invest $100 or $5k.

All these arguments are because Bitcoin is the only cryptographic currency thats widely used. What happens when another cryptographic currency replaces it?

This bet is a self serving purpose - it brings attention to Bitcoins with outlandish claims which will get media coverage. This brings more people to the table to drive the value up as they purchase BTC on speculation only.

Is that website reliable as an intermediate? Do they intermediate at all? I tried to find out how to bet, and it required me to sign up. And signing up requires entering a credit card? O.o

Is it really a bet if there's no clearly-defined winning or losing conditions? What dates would you use to calculate the prices of the things mentioned? What "stock market", DJI? NASDAQ? FTSE? Something more exotic? Do bitcoins have to outperform "the stock market" and those commodities individually, or some kind of average?

Seems like more of a publicity stunt by someone who knows that nobody with $10k to throw around is foolish enough to agree to such ill-defined terms.

The site still calls it a prediction:


Exactly Bitcoin is the equivalent of a pyramid scheme. It rewards the early adopters and needs new users for the whole scheme to succeed.

This 'bet' is nothing more than a publicity stunt to convince people that Bitcoin is a no-brainer investment.

It's not a pyramid scheme. Although it does reward early adopters for taking a risk, eventually price should stabilize at a real world value (as opposed to a dollar value. As long as we keep printing dollars, the real world value of a dollar will decrease. The value of a bitcoin should always increase relative to the dollar).

As long as we keep printing dollars, the real world value of a dollar will decrease.

Assuming no corresponding productivity gains occur.

From the article:

> Once Bitcoin use is wide spread, the people in favor of the wars will no longer be able to force the people against the wars to pay for them.

Yes they can. First of all, nobody keeps all of their assets in fiat currency. Most people have houses, cars, and other valuable property that could be physically seized to pay taxes due.

Second, the government can use "rubber-hose cryptanalysis" [1] -- if you refuse to pay, threaten to prosecute and jail you (or for more oppressive governments, torture and kill you). Nonpayment of taxes is certainly something that can send people to jail in the US. (In practice, if you're delinquent, AFAIK usually they just let you get away with paying back taxes, interest and penalties, and have a procedure where you can set up a payment plan if you can't afford to pay when they're due; prosecution is reserved for more outrageous cases like deliberate fraud.)

Third, even if you have no non-Bitcoin assets and you're willing to go to jail for your anti-tax stance, you still presumably economically interact with others, who might not be willing to go to those extremes. In the US, for example, I believe "backup withholding" is a procedure the tax authorities can use to make an employer send a portion of a tax delinquent's paycheck directly to the government for unpaid taxes. (By default, in the US most people's paychecks have regular withholding, which I believe is voluntary, but if you reduce it or turn it off then you're supposed to make payments manually during the year. Most people go with the automatic system as the path of least resistance.)

[1] https://en.wikipedia.org/wiki/Rubber-hose_cryptanalysis

While the author's stance is idealistic, I don't think this response addresses the author's basic point.

To address this statement: "First of all, nobody keeps all of their assets in fiat currency"

1) Bitcoin is not a fiat currency, which is the point.

2) The dollar is a fiat currency, and plenty of people (and countries) keep all their assets in the form of dollars

Of course property is not fiat currency, but lots of property these days is not owned but instead is either leased or bought using debt.

The point about torture is well taken, but torture can't be used on you if the government can't identify who you are.

I don't believe Bitcoin is a "fiat" currency. Gold has value as a currency because of its properties as a metal. Bitcoin has value because of its properties as a P2P network: anonymity, guaranteed not to hyperinflate, free transactions, and the other things the author mentioned.

So, I think as these properties become more and more valueable, so will Bitcoin.

> The dollar is a fiat currency, and plenty of people (and countries) keep all their assets in the form of dollars

The point I was trying to make is that most people's assets include some physical items like food, shelter, clothing, appliances, vehicles, computers...regardless of what currency you hold, these physical items can all be physically seized.

Just note that cash can also be anonymous, guaranteed not to hyper inflate, free to transact etc.

By what mechanism is it guaranteed not to hyper inflate?

Impossible. Bitcoin cannot outperform gold stock by 100x without having a lot more publicity.

Oh wait-

So this is just someone who wants to bet, and nobody has taken it?

Or he didn't accept them. Apparently LongBets lets you decline a challenger: http://news.ycombinator.com/item?id=3263807

Yes. It is a two year bet that is one year over today which is how I heard about it here: http://youtu.be/TxC0dIBPzZg

You can't take money out of the website after you win it. You have to donate it.

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