How To Use Bitcoin – The Most Important Creation In The History Of Man

[Tippit]

I think your friend would find, once he started selling his Bitcoin stake and supply and demand started kicking in, his $30 million would be significantly reduced.

Bitcoin is approaching about $500 million in daily volume, so I'm pretty sure he could liquidate $30m in short order if he wanted to without budging the price. The market cap is north of $11b.

 

[Sceptic-PK]

That's a whole lot of drugs and child porn.

 

[pantsorama]

Another "let's ignore all the real data and make up stuff instead" joker. Comparing bitcoin to a game of craps is almost as stupid as comparing it to the martingdale system.

If bitcoin really was a game of craps then there would be equal chances of winning or losing. The price would be volatile but in the long run, you would not win or lose much. The real data shows the exact opposite but "shhhh - don't discuss any facts" . You guys ought to be ashamed of yourselves for treating the intelligence of fellow JREF members with such contempt.

You don't understand what I was saying at all. I guess I'm not surprised.

Suffice to say that a rapidly gaining asset means nothing until you realize a profit on it. What this guy has is in effect $30m in inventory. I do not find that impressive at all. Hell - even if he had $30m in cash I would not find it impressive, and cash is ton more liquid than bitcoins.

 

[psionl0]

You don't understand what I was saying at all. I guess I'm not surprised.

I understand exactly what you are saying. Your statement that "He lost it all that same trip, because he didn't cash out" wasn't intended to mean that his casino chips suddenly lost all of their value. It means just what anybody would think it means - that he continued playing the even money game of craps.

 

[pantsorama]

I understand exactly what you are saying. Your statement that "He lost it all that same trip, because he didn't cash out" wasn't intended to mean that his casino chips suddenly lost all of their value. It means just what anybody would think it means - that he continued playing the even money game of craps.

So the situation would have been better if he had never cashed out, and had 25k of casino chips on his desk as some sort of boast? It still means nothing if it is not in a usable form. Can't and won't mean the same thing in this case.

 

[llwyd]

It hasn't worked satisfactorily. Half the world is living in abject poverty, the other half is subject to routine political, economic and social crises, and wealth condensation (the gap between rich and poor) is the greatest its ever been. It's not a matter of "if" but "how much" and "when" the power to create money will be used to steal vast sums of wealth from the gullible public.
.

Well, and how were things when we last time had the gold standard? We had abject poverty (within the Westen world and not only without), we had awful, gigantic international crisis, we had bubbles and slumps. The difference to modern era seems rather to be that there is now way more wealth and it is way more equally spread, now spreading to China and India among other places. The era of the active central bank has been quite succesful economically.

About the "worthlessness" of bitcoin I meant that there is no value there except the value it's given by the market - essentially this means that bitcoin is based on investor trust. It was created out of thin air and has no other practical uses (whereas gold actually does). It is way too early to tell how it will function as a currency - at the moment it's essentially an object of commodity speculation which, btw, is not a good place for a currency for which a basic stability is an absolute requirement.

I don't mean to say that this is impossible to change in the future - a less speculative and much wider userbase would be absolutely needed. And of course some benefit for using it compared with regular central bank managed currencies. And what exactly is this benefit? It sounds so far an awfully lot like an ideological benefit. A libertarian can say to himself that well, this currency is untouched by the evil and unholy hand of the Fed, hurray, But about 99.5% of people are not libertarian, thank thee Lord, and are quite fine with regular currencies and don't bother themselves with the intricacies of the huge, gigantic outrage that is fiat money. If it works, they are fine.

So, what would they get out of bitcoin?

 

[psionl0]

So the situation would have been better if he had never cashed out, and had 25k of casino chips on his desk as some sort of boast? It still means nothing if it is not in a usable form. Can't and won't mean the same thing in this case.

Still trying to say it had nothing to do with continuing to play craps?

 

[Tippit]

You don't understand what I was saying at all. I guess I'm not surprised.

Suffice to say that a rapidly gaining asset means nothing until you realize a profit on it. What this guy has is in effect $30m in inventory. I do not find that impressive at all. Hell - even if he had $30m in cash I would not find it impressive, and cash is ton more liquid than bitcoins.

A few posts up I mentioned how there is nearly $500 million in daily volume, so realizing $30m in bitcoin gains isn't very difficult, if he wanted to, which he doesn't. Who cares whether you're impressed or not?

Breach of rule 12 removed. Do not insult other posters.

Replying to this modbox in thread will be off topic  Posted By: Cuddles

 

[Tippit]

Well, and how were things when we last time had the gold standard? We had abject poverty (within the Westen world and not only without), we had awful, gigantic international crisis, we had bubbles and slumps. The difference to modern era seems rather to be that there is now way more wealth and it is way more equally spread, now spreading to China and India among other places. The era of the active central bank has been quite succesful economically.

Wrong again. The late 19th century was marked by dramatic economic growth in the US. You suffer from the same shortsightedness that a lot of people do, namely that gold was to blame for past economic problems. Wealth condensation has never been worse than it is now, and how do you know that gains in standard of living haven't been made in spite of, not because of central banking? You seem to be dramatically understating the benefits of technological progress in favor of central banking. Central banking is clearly a disaster - except for the power elite who benefit from it.

So, what would they get out of bitcoin?

Well, right now, early investors have gained a lot of wealth from bitcoin. If and when it stabilizes and functions more like a medium of exchange, savers will gain a method of saving which doesn't cause them to be perpetually robbed, and vendors will gain a method of payment which cuts out VISA/MC and their 3% tribute, with no chargebacks.

 

[pantsorama]

Still trying to say it had nothing to do with continuing to play craps?

Still trying to avoid answering an inconvenient question?

 

[ponderingturtle]

A few posts up I mentioned how there is nearly $500 million in daily volume, so realizing $30m in bitcoin gains isn't very difficult, if he wanted to, which he doesn't. Who cares whether you're impressed or not?

Breach of rule 12 removed. Do not insult other posters.

Replying to this modbox in thread will be off topic  Posted By: Cuddles

Depends on how much of that money is just going around in day trading bit coins. As this is a speculation tool there can be a lot of transactions with little total money behind them.

 

[remirol]

A few posts up I mentioned how there is nearly $500 million in daily volume, so realizing $30m in bitcoin gains isn't very difficult, if he wanted to, which he doesn't.

Why has your "friend" not cashed $2mil of that $30 out to USD and parked it into any of a number of low-risk USD investments, successfully hedging his bets against a Bitcoin crash _and_ a USD crash in one swell foop while still retaining the vast majority of his BTC?

Ratholing is forbidden at the casinos for a reason, after all.

 

[psionl0]

Still trying to avoid answering an inconvenient question?

What inconvenient question? It was never about when he cashed in his chips. It was about when he stopped playing craps.

If he had quit when he was ahead then it wouldn't have mattered if he cashed in his chips immediately or waited until he was ready to leave the casino. There was never any possibility that he would leave the casino without cashing in his chips.

I can't even call this attempt to shift the goal posts a nice try. It was totally lame.

 

[Tippit]

Why has your "friend" not cashed $2mil of that $30 out to USD and parked it into any of a number of low-risk USD investments, successfully hedging his bets against a Bitcoin crash _and_ a USD crash in one swell foop while still retaining the vast majority of his BTC?

Ratholing is forbidden at the casinos for a reason, after all.

Because he thinks bitcoin is going to be very big, and because he already has gold. If it were me, I would take a lot off the table and put it into gold, which is barely trading above the cost of production including capex. Diversification is a hedge against ignorance.

 

[mhaze]

Because he thinks bitcoin is going to be very big, and because he already has gold. If it were me, I would take a lot off the table and put it into gold, which is barely trading above the cost of production including capex. Diversification is a hedge against ignorance.

Yeah, but you answered your own question. His problem would be one of periodic readjustment of his portfolio.

Anyone that has done the due diligence to study the fundamentals of bitcoin would likely think it has a long way to go in the upwards direction. But that's fundamentals, and that has nothing to do with day to day or month to month swings.

 

[Anders Lindman]

"The Magic Number: Bitcoin Prices Top $1000

The value of a bitcoin has topped $1000, a mere 11 months after the fledgling digital currency was worth little more than a $10 bill.

As of 7:25am Pacific time this morning, bitcoins were trading at $1,041 on Mt. Gox, the world’s most prominent bitcoin exchange, a place where you can swap federal monies, such as dollars and yen, for the digital currency.

The price of a bitcoin has surged in recent weeks, likely driven by heavy demand in China and by public statements from US financial authorities that seemed to endorse the digital currency — at least in part." -- Full story: http://www.wired.com/business/2013/11/bitcoin-one-thousand/

 

[Anders Lindman]

Bitcoin is a really clever invention, but I don't like the potential pyramid scheme effect of the currency. And even if bitcoin remains increasing in value I think it's too unfair for people who enter the market late.

Plus the legal status of bitcoin is shaky. I would like to have a similar currency that is specified and approved by international standard organizations. And a currency that is made stable in terms of inflation and deflation. Bitcoin is super deflationary if it becomes a major currency.

 

[wrs]

"The Magic Number: Bitcoin Prices Top $1000

The value of a bitcoin has topped $1000, a mere 11 months after the fledgling digital currency was worth little more than a $10 bill.

As of 7:25am Pacific time this morning, bitcoins were trading at $1,041 on Mt. Gox, the world’s most prominent bitcoin exchange, a place where you can swap federal monies, such as dollars and yen, for the digital currency.

The price of a bitcoin has surged in recent weeks, likely driven by heavy demand in China and by public statements from US financial authorities that seemed to endorse the digital currency — at least in part." -- Full story: http://www.wired.com/business/2013/11/bitcoin-one-thousand/

Bitcoin now dropping like a rock, headed back to $150. It has dropped $140 in the last hour on heavy volume at MTGOX.

 

[mhaze]

Bitcoin is a really clever invention, but I don't like the potential pyramid scheme effect of the currency. And even if bitcoin remains increasing in value I think it's too unfair for people who enter the market late.

Plus the legal status of bitcoin is shaky. I would like to have a similar currency that is specified and approved by international standard organizations. And a currency that is made stable in terms of inflation and deflation. Bitcoin is super deflationary if it becomes a major currency.

you use the 'pyramid scheme' concept incorrectly, there is NO pyramid scheme effect in bitcoin and cannot be any layering of value on value as occurs with fiat money. It is fiat money that has intrinsic pyramid schemes.

Nobody cares if you think it's unfair. Or anything else you think (or that I think). The markets and consumer behavior move in organic fashion according to the net of interests and desires and speculation, and it is what it is.

And it's likely good to have consumers have a choice in currencies, some that are superinflationary like the USD, and some that are deflationary like the btc.

 

[Belz...]

http://preev.com/

Well it's still at 937$ right now.