Bitcoin - Part 2

[psionl0]

The Guardian - Sun 30 Sep 2007: Why Ninja mortgages could wreak havoc

I stand corrected. Somebody did warn of the dangers of NINJA loans before the 2008 crisis (just not Nouriel What's-his-name apparently). I won't say that Heather Connon predicted the GFC but more people should have taken heed of her article (although GWB would probably not have understood it).

I can't find any opinion from Heather Connon regarding bitcoin. Maybe she is one of those people who sticks to writing on things she knows something about.

 

[Craig B]

I stand corrected. Somebody did warn of the dangers of NINJA loans before the 2008 crisis (just not Nouriel What's-his-name apparently). I won't say that Heather Connon predicted the GFC but more people should have taken heed of her article (although GWB would probably not have understood it).

I can't find any opinion from Heather Connon regarding bitcoin. Maybe she is one of those people who sticks to writing on things she knows something about.

That's right. So you should be reading the predictions of other commentators who know something about Bitcoin. What they know is that bitcoin's value is derived entirely from speculation.

That means it'll crash once all the money that people are willing to bet on it is consumed. When will that happen? We can't know, even in principle. Because even if we had a formula that told us, speculators would alter their behaviour in accordance with the result of the formula, and invalidate its predictions.

 

[psionl0]

So you should be reading the predictions of other commentators who know something about Bitcoin.

I eagerly await the day that "commentators who know something about Bitcoin" will come along.

In the mean time I will have to put up with people who think that bitcoin was invented yesterday and that they are first to ever predict bitcoin's demise.

 

[GlennB]

I eagerly await the day that "commentators who know something about Bitcoin" will come along.

What are your criteria for judging a person's qualifications to comment on Bitcoin?

 

[psionl0]

What are your criteria for judging a person's qualifications to comment on Bitcoin?

It would help if somebody understood the technology as well as the economic laws of supply and demand.

Honestly, the amount of superstition that gets sprouted as fact here makes me ashamed to call this a "skeptics" forum. Maybe we should move this entire thread to the paranormal section.

 

[PartSkeptic]

It would help if somebody understood the technology as well as the economic laws of supply and demand.

Honestly, the amount of superstition that gets sprouted as fact here makes me ashamed to call this a "skeptics" forum. Maybe we should move this entire thread to the paranormal section.

I meet your requirements. I understand the technology all too well. I explained how it worked a while ago on this thread. And I have been right about the weaknesses and the flaws.

I understand supply and demand in both the housing and the stock market. I predicted the 1987 crash about 6 months before it happened, and the 2008 crash about 3 months before it happened. Both times, my wife at the time took my advice and benefited.

On Bitcoin I advised my son-in-law in December to sell and get out. He benefited although he is gambling with the profit at the moment.

Funny, this time round it is you that has the irrational belief rather than me.

Of course, just because my beliefs are irrational by standards of skeptics on this site does not mean I am wrong.

 

[GlennB]

What are your criteria for judging a person's qualifications to comment on Bitcoin?

It would help if somebody understood the technology as well as the economic laws of supply and demand.

Understanding the technology is a requirement for judging whether Bitcoin's progress constitutes a bubble? Why? I don't expect a doctor to understand the science behind CT scans, just be able to analyse the output.

 

[Myriad]

I fired my financial advisor when it turned out he knew nothing at all about engraving or die-making techniques.

 

[psionl0]

I meet your requirements. I understand the technology all too well. <...snip...>

A belief that there is a mystical voodoo force that will magic all the bitcoin nodes away and hypnotize everybody to stop buying bitcoins does not count for knowledge.

 

[psionl0]

Understanding the technology is a requirement for judging whether Bitcoin's progress constitutes a bubble?

Yes. Too many people think that bitcoin isn't even real. How could anybody that stupid even begin to understand why anybody would trade in it?

 

[Craig B]

Yes. Too many people think that bitcoin isn't even real. How could anybody that stupid even begin to understand why anybody would trade in it?

I think the point being made is that it doesn't have a physical form, not that it doesn't exist at all.

 

[PartSkeptic]

Understanding the technology is a requirement for judging whether Bitcoin's progress constitutes a bubble? Why? I don't expect a doctor to understand the science behind CT scans, just be able to analyse the output.

You have to have understand why the hype is false.

Bitcoin is touted as a paradigm shift in digital technology. You have to understand what is involved in finding the hash number for the ledger, how the ledger is constructed and distributed, what the constraints are in power and speed, what the capital costs are to mine and maintain, how ongoing costs per transaction are calculated, how secure the keys and the exchanges are. And so on.

But you are quite right that one can analyze Bitcoin from an asset, price, valuation, demand and trading point of view. One then finds that money is transferred to the exchanges, the miners, and the people who got in first. As many have pointed out, when the new buyers stop buying the exchanges will stop paying out and run.

Once stories of people losing their shirts and their houses and jumping out of high buildings then the panic will set in on cryptos.

There initially was a use for transferring money, and laundering money, but the governments are already acting to stop that.

With no functional value to society and no underlying asset value, cryptos will go down in history as a phenomenon.

 

[Samson]

New low for the correction 7900.
Who would have predicted.

 

[GlennB]

There initially was a use for transferring money, and laundering money, but the governments are already acting to stop that.

With no functional value to society and no underlying asset value, cryptos will go down in history as a phenomenon.

Ah, but we will always have 'the nodes'

 

[Samson]

"Most major U.S. credit card issuers have now banned the use of their cards to buy Bitcoin or other digital currencies, in a move intended to decrease both financial and legal risk.

Bank of America began blocking cryptocurrency purchases on Friday, according to Bloomberg. JPMorgan did the same on Saturday.

Citigroup also says it is halting cryptocurrency purchases on credit, and Capital One and Discover had already enacted their own bans. That means all of the top five credit card issuers have announced or implemented bans.

The moves are above all in the banks’ self-interest. As Fortune previously reported, the mania surrounding cryptocurrency late last year appears to have motivated many retail investors to use credit cards as leveraging tools, buying more cryptocurrency than they could afford. With Bitcoin down roughly 50% from December highs, many of those investors are likely underwater right now, and may not be able to pay off their initial Bitcoin purchases soon, if ever."

http://fortune.com/2018/02/04/banks-ban-buying-bitcoin-credit-card/

The fat lady is singing up a storm.

 

[xjx388]

I’ve been following the bitcoin saga from pretty close to the beginning. I bought 10 bitcoin in 2013 when it was about $15, IIRC. I sold about 7 bitcoin in late December when it was about $15000.

I initially bought it because I think there is utility in the underlying idea: A completely anonymous way to make purchases. No credit card trails, no bank statements, virtually nothing that can tie you to individual transactions. Plus, if it became widely used, it would make transferring money between people quick, cheap and simple. I could envision a time when online purchases were mainly done with bitcoin and it would become mainstream, even useable at B&M stores.

Largely, that vision has yet to come to pass. I used it here and there for about a year, noted the volatility and just kinda forgot about it. Until I saw a news report in late December, dug out my wallet (that’s a story in itself) and sold it all. That was an amazing day.

I still think there can be utility in cryptocurrency but not right now. There is way too many “coins” out there and way too much speculation. Not to mention scams.

I don’t think Bitcoin is going anywhere, but it won’t become a mainstream payment method until the market stabilizes.

 

[phiwum]

New low for the correction 7900.
Who would have predicted.

Well, not you. You said $500 by the end of January, not $7900 In early February.

So, who would have predicted it? One down, some billions to go.

 

[Samson]

Well, not you. You said $500 by the end of January, not $7900 In early February.

So, who would have predicted it? One down, some billions to go.

Such a negative approach.
How about, despite yesterday calling a sell at 8902 that immediately made a low of 7809, a 12.2% decline, your prediction of $500 bitcoin looks premature.

 

[phiwum]

Such a negative approach.
How about, despite yesterday calling a sell at 8902 that immediately made a low of 7809, a 12.2% decline, your prediction of $500 bitcoin looks premature.

Sorry, my prediction? I've made no prediction and have no opinion on the long term viability of bitcoin (but I'm sure not investing in it).

It was your failed prediction we were discussing.

 

[xjx388]

Such a negative approach.

How about, despite yesterday calling a sell at 8902 that immediately made a low of 7809, a 12.2% decline, your prediction of $500 bitcoin looks premature.

If your algorithm calls “sell” on a 12% decline, I’m not sure how it can possibly work long term on such a volatile item. You might sell at 8902 and then miss a crazy climb to 12000+. If you are buying and selling all over the place, you will be eaten alive by the fees.