Bitcoin - Part 2

[Craig B]

Nothing to see here, move along:

http://fortune.com/2017/12/21/bitcoin-price-drops-infighting/

Now at $12,500 and, according to Business Insider

Chris Weston, head of research at IG Markets in Sydney, said the move appeared based on no particular news and looked “herd driven”.

“If people feared missing out on the way up, the idea you can actually lose money is also a new emotion and people are getting out of all cyrptos at the same time,” Weston said. “Wealth preservation time,” he added​

The "no particular news" is absolute classic bubble; that's what makes the pop unpredictable even in principle. It's caused by internal chaotic movements because the bubble was inflated by similar movements, not by any intrinsic merit, even if the traded commodity or underlying technology does, like railways in 1845, have a real and significant value.

When the fall bottoms out (Where? I don't know; nobody does) we may see what the real value of Bitcoin as a medium of monetary transfer and store of wealth really is. It'll be some dollars or cents, perhaps, like the amount people are willing to pay over the face value to buy a postal order. Or it may be more than that if it's used by crooks to stash profits from narcotics sales; or it may be nothing at all. I have no idea.

 

[Craig B]

Here's an instance of a piggybacking "Bubble Company" of which there were many examples on the fringes of the South Sea Co in 1720.

But even evidence of that change in direction has raised troubling questions about the market's sustainability after an unprofitable drinkmakers, Long Island Ice Tea Corp, rose nearly 300% in a matter of hours after it changed its name to Long Island Blockchain Corp.​

What remains to be investigated is the degree of corruption and racketeering going on around cryptocurrency promotion.

That, and mutual predation, was a feature of economic life back in 1720. Even the King was up to his neck in financial naughtiness, and politicians were being bought and sold like second hand garments. If that turns out to be the case today, though public morality is much better now than it was in those far off days, then every feature of earlier bubbles will have been exactly replicated this time.

 

[psionl0]

When the fall bottoms out (Where? I don't know; nobody does) we may see what the real value of Bitcoin as a medium of monetary transfer and store of wealth really is. It'll be some dollars or cents, perhaps, like the amount people are willing to pay over the face value to buy a postal order. Or it may be more than that if it's used by crooks to stash profits from narcotics sales; or it may be nothing at all. I have no idea.

IOW You have absolutely nothing to say about bitcoin at all. You are full of hot air.

What remains to be investigated is the degree of corruption and racketeering going on around cryptocurrency promotion.

I knew that sooner or later you would get to the "scam" angle. Charges that bitcoin is being run as a scam were thoroughly rebutted long ago.

 

[Craig B]

IOW You have absolutely nothing to say about bitcoin at all. You are full of hot air.


I knew sooner or later you would get to the "scam" angle. Charges that bitcoin is being run as a scam were thoroughly rebutted long ago.

You'll notice I've not claimed Bitcoin was a scam, but that it may well have created the opportunity for scams to accumulate round it. Galbraith notes the phenomenon of large scale embezzlement during the 1929 boom. It was very pervasive, as people often stole from the companies they were employed by in order to play the market.

They intended to pay the cash back of course, because the market would go up and they would repay what Galbraith calls the "bezzle" when they made a killing. When the market prices stopped rising, this class of miscreants was inevitably doomed.

The South Sea Company wasn't conceived as a swindle, though it became quite unscrupulous in marketing its shares. But what of this, from Business Outsider?

... naïve regular people flocked to the irrationally exuberant market, as did other stock trading operations. One of the most unscrupulous of these was called ... A Company for Carrying on an Undertaking of Great Advantage, but Nobody to Know What It Is.​

The promoters of that scheme collected subscriptions till close of business that day, and then departed on a boat bound for France, I imagine.

But what I expect from certain commentators is the explanation, if this downturn is indeed the "big pop", that the crash is all a plot by the Rothschilds and the Federal Reserve selling Bitcoin short, to deprive free born people of the services of Bitcoin so that they'll have to use the scam fiat FR dollar instead.

 

[Craig B]

IOW You have absolutely nothing to say about bitcoin at all. You are full of hot air.

Because I admit I have no idea where the downturn will bottom out?

If that makes me full of hot air, what about this ignoramus?

What is "real value"? I am not aware that some thing needs to have an industrial or domestic use (like gold) in order to be desirable. The only "useful" thing about bitcoin is that there is no equal when it comes to rapidly transferring large sums of wealth around the globe without interference.

Bitcoin is so novel that nobody can predict what will happen. I was once foolish enough to predict that the price of bitcoin would double from $1,000 to $2,000 within 6 months. Needless to say, I ended up with egg on my face. I would never have anticipated the current spike ...

I knew that sooner or later you would get to the "scam" angle. Charges that bitcoin is being run as a scam were thoroughly rebutted long ago.

The ignoramus pushes the "scam angle" too"

Maybe, if enough big name investors get involved (like central banks), bitcoin will become subject to price manipulations similar to what you get with gold and silver.

 

[psionl0]

You'll notice I've not claimed Bitcoin was a scam, ........

The South Sea Company wasn't conceived as a swindle, though it became quite unscrupulous in marketing its shares. ........

One of the more common tricks with posters in this thread is to conflate bitcoin with bitcoin exchanges. That way, any bitcoin exchange scam becomes a bitcoin scam. The thing is that most of the posters who do this are unable to tell the difference between bitcoin and a bitcoin exchange.

You may have more ability in this regard but you have done exactly the same thing. You have compared bitcoin with shares in a company. Those shares were "unscrupulously" marketed with false information. Nobody is putting out false information about bitcoin (except you).

If that makes me full of hot air, what about this ignoramus?The ignoramus pushes the "scam angle" too"

This "ignormamus" examines the facts about bitcoin and explores some of the possible future developments (good and bad).

That is a whole lot different to the poster who makes unqualified predictions about bitcoin then retreats into weasel words when challenged:

It may not die, as I have stated many times. Railways didn't die in 1846. But the bubble will burst and people who bought at bubble inflated prices will suffer irretrievable loss. That is very much the most probable outcome.

 

[Craig B]

One of the more common tricks with posters in this thread is to conflate bitcoin with bitcoin exchanges. That way, any bitcoin exchange scam becomes a bitcoin scam. The thing is that most of the posters who do this are unable to tell the difference between bitcoin and a bitcoin exchange.

You may have more ability in this regard but you have done exactly the same thing. You have compared bitcoin with shares in a company. Those shares were "unscrupulously" marketed with false information. Nobody is putting out false information about bitcoin (except you).


This "ignormamus" examines the facts about bitcoin and explores some of the possible future developments (good and bad).

That is a whole lot different to the poster who makes unqualified predictions about bitcoin then retreats into weasel words when challenged:

None of this is what I have said. You're being disingenuous, to speak politely; and it's pointless for me to refute your posts yet again. As at this writing, BTC is hovering around $11,000. I think it has further to fall, so God help you if you're holding it at any elevated price, or if you have borrowed to buy into it. https://www.etoro.com/markets/btc/chart

 

[Thabiguy]

As at this writing, BTC is hovering around $11,000...

But that was half an hour ago; now it's over $13,000. That's a growth of nearly 1% a minute; this means that your investment is bound to double in less than three hours. Obviously, now is a great time to buy.

 

[Fudbucker]

Extreme volatility is the hallmark of a successful currency (or whatever Bitcoin proponents claim it is).

 

[psionl0]

As at this writing, BTC is hovering around $11,000.

This has all happened before. You are not refuting a thing.

 

[Craig B]

This has all happened before. You are not refuting a thing.

So it will happen again? It will again go up above 20,000? I'm not sure about that. And I'm certain this is a bubble and will go pop, exposing holders to irretrievable loss. You are saying it never will? That no matter at what price I buy it, BTC is a good investment over a reasonable timescale?

 

[psionl0]

So it will happen again? It will again go up above 20,000?

In the past, everybody who has said "bitcoin's price will never be this high again" has made a jackass out of themselves. I don't see any reason why nobody will be pinning the tail on you this time.

 

[Craig B]

In the past, everybody who has said "bitcoin's price will never be this high again" has made a jackass out of themselves. I don't see any reason why nobody will be pinning the tail on you this time.

Well, I don't know if this is indeed the final crash, but I'm happy to assume it is, for the sake of this enterprise; if you will accept jackasshood, in the contrary case.

From the telegraph 2 hours ago

Coinbase - one of the largest cryptocurrency exchange websites - has temporarily disabled buying amid a massive sell-off following Bitcoin's price plunge. "Due to today's high traffic, buys and sells may be temporarily offline. We're working on restoring full availability as soon as possible," Coinbase wrote on its website at 4.35pm (local time).

Bitcoin tumbled more than 30 percent after passing the all-time record $20,000 mark on Sunday. It dropped to $12,560 on Friday morning, following a week of warnings from global investors and high profile hacks on currency exchanges.​

 

[applecorped]

Sucky currency, too volatile

 

[psionl0]

From the telegraph 2 hours ago

GOTO 1190

 

[applecorped]

Enjoy the ride.

 

[Travis]

I've been telling people for months now that I think the Bitcoin bubble imploding will start the next economic disaster that nearly tears the modern world apart.

 

[Craig B]

I've been telling people for months now that I think the Bitcoin bubble imploding will start the next economic disaster that nearly tears the modern world apart.

Have its excesses infected public finance to that extent? The Tulip bubble didn't ruin the Dutch economy, because important institutions like the Bank of Amsterdam and the United East Indies Company weren't affected by it.

The 1719 Mississippi scheme, on the other hand, bankrupted France and postponed the acceptance of paper money in that country for decades. The 1929 crash inaugurated, though not immediately, the Depression.

I think Bitcoin is pretty crazy, and nearer the Tulip end of the scale. It's sort of laughable.

Do you think it's more grave and ominous?

 

[commandlinegamer]

I've been telling people for months now that I think the Bitcoin bubble imploding will start the next economic disaster that nearly tears the modern world apart.

Nah. A Chinese depression on the other hand...

 

[psionl0]

The cost of using bitcoin

The last time I examined the blockchain, the total collected in transaction fees was around 1 BTC per block.

An examination of blocks 500613 to 500622 (https://blockchain.info/blocks/1513994444769) shows that this has risen to between 7 BTC and 12 BTC per block. When the block reward halves in 2020, transaction fees will be the primary motivation for mining.

The average cost of a transaction is around 0.004 BTC ($50 at current prices) and a little less than 1% of the value of the transaction.

What all this means is that the days of buying a pizza with bitcoin are long gone. Unless you are buying or selling bitcoin, the only reason you would use it in a transaction is if you were dealing in large sums of money.