Bitcoin - ###Mod Note in 1st Post - Please Read###

Seaneh

Mint Aero wrote: »

What d'ya find worrying about it?

It will fall, drastically, but the question is, when?

I wouldn't buy now, but I wish I'd spend €100 on some a year ago (or even a few weeks ago).

AtomicHorror

Seaneh wrote: »

It will fall, drastically, but the question is, when?

You get that from a graph?

View it on a shorter timescale and it looks less scary. View it on a 100 year time scale and the whole thing is scary. Tells us squat.

KyussBishop

alb wrote: »

People are speculating that Bitcoin will be used for this in future. It's still young and this growth and adoption takes time.

If that were true, people would not be cashing out now while Bitcoin is peaking, they would be holding onto it long-term.

People are cashing out now, because they know the price rise is only temporary (if they believed otherwise, then there is no logical reason for them to cash out, as it's only going up, right?) - they are using it for speculation, in a bubble that amounts to a Ponzi scheme, where a lot of people at the bottom will be losing what they put in.

For the 'true believers' who think this is a permanent transformation of Bitcoin and not just a bubble, and are holding onto their coins, I don't judge them as they're putting their money where their beliefs are, but the people who know this is a Ponzi-like bubble, and use it to extract wealth from those at the bottom, are scumbags in my view.

There's no excuse for knowingly participating in a Ponzi-like bubble, to exploit those below - particularly one as hyped as this.

Seaneh

AtomicHorror wrote: »

You get that from a graph?

View it on a shorter timescale and it looks less scary. View it on a 100 year time scale and the whole thing is scary. Tells us squat.

All currency has falls, no currency has rises THAT sharp in THAT short a time without it later collapsing to a more "normal" level.

KyussBishop

AtomicHorror wrote: »

You get that from a graph?

View it on a shorter timescale and it looks less scary. View it on a 100 year time scale and the whole thing is scary. Tells us squat.

It's pretty much the archetype of a bubble:
https://lh3.ggpht.com/-6EWdbjTr_PU/TwSvWAYGlmI/AAAAAAAABE8/qRA5uI2S8lE/s1600/nasdaq+bubble.png
http://dshort.com/charts/bears/bubbles/shanghai-index.gif

Take this:
https://upload.wikimedia.org/wikipedia/commons/4/4b/Stages_of_a_bubble.png

And compare it to this - you can see each stage play out:
https://blockchain.info/charts/market-price

Kikin

Seaneh wrote: »

All currency has falls, no currency has rises THAT sharp in THAT short a time without it later collapsing to a more "normal" level.

Patterns like this have been repeated countless times throughout history. Is really just a matter of when enough of the guys who have made the most gains from this steep rise decide to cash out their "winnings".

AtomicHorror

Seaneh wrote: »

All currency has falls, no currency has rises THAT sharp in THAT short a time without it later collapsing to a more "normal" level.

At some point, BTC went from $0 to something. Graph that in the right way and it'll look far scarier than the graph we're looking at now and would be just as meaningless because we have no proper context yet. "Normal" is very hard to define when something has yet to have ever been normal. It might mean 0, 100, 1000 or any number you like to infinity.

I'm not saying BTC won't drop, I think it will. But calling "bubble" based on aesthetics or comparison to other graphs is pure pseudoscience.

forgotten password

currency flexibility, we could see it eh , changed for currency stability

geetar

everyone investing in it isnt using it for a currency, they're placing a bet that its going to go up in value, and dramatically so.

if nobody is willing to use it because it will be worth 10% more tomorrow, how does that make it anything other than a speculative investment?

it's far from stable because it is currently not being used as a currency, which is its entire purpose. its an entirely speculative over inflation that does not represent its true value at all in any way shape or form. it will certainly drop in value, its a matter of when, not if.

the hockey stick graph is almost cliché bubble territory at this stage. my guess is that it will drop significantly, before stablising around the mid hundreds range. i only say that because i do see bitcoins having significant value in the future, just not at the artificially inflated levels we see now.

i would also be worried about th significant amounts of bitcoins that people with large buying power currently own. its only a matter of time before they decide to bail and flood the market causing a crash and leaving small time investors with the spare change in their pockets.

Frank Garrett

I just read the first 10 pages of this thread and they were calling it a bubble in late-2010.

Tigger

KyussBishop wrote: »

If that were true, people would not be cashing out now while Bitcoin is peaking, they would be holding onto it long-term.

People are cashing out now, because they know the price rise is only temporary (if they believed otherwise, then there is no logical reason for them to cash out, as it's only going up, right?) - they are using it for speculation, in a bubble that amounts to a Ponzi scheme, where a lot of people at the bottom will be losing what they put in.

For the 'true believers' who think this is a permanent transformation of Bitcoin and not just a bubble, and are holding onto their coins, I don't judge them as they're putting their money where their beliefs are, but the people who know this is a Ponzi-like bubble, and use it to extract wealth from those at the bottom, are scumbags in my view.

There's no excuse for knowingly participating in a Ponzi-like bubble, to exploit those below - particularly one as hyped as this.

capitalist as scumbag is a very uninformed view

forgotten password

buy it, move it

Mint Aero

Frank Garrett wrote: »

I just read the first 10 pages of this thread and they were calling it a bubble in late-2010.

and they were so sure of it too.

KyussBishop

Tigger wrote: »

capitalist as scumbag is a very uninformed view

If someone promotes and participates in a Ponzi-like bubble, that they are fully aware will rebound to a much lower value, with the intention of making a profit by exploiting all of the people at the bottom who will be left with less than they put in, then they are a scumbag.

Ponzi schemes are illegal for a reason, and this being a Ponzi-like bubble, is like a legalized version of a Ponzi scheme, with the same ethical problems.

seamus

In principle I'd subscribe to the bubble theory, except that bitcoin isn't a typical currency which can be inflated and deflated by a central bank or by large economic problems in the issuing country. The total no. of bitcoins is finite and as such they can be likened more to gold. They can be traded, stored and lost but they cannot be created.
Discovering a way to "game" the system and create more bitcoins would obviously collapse their value but my understanding is that this would be mathematical alchemy (i.e. Simply not possible)

And now that people have put money in the game, they've no reason to withdraw it. So I don't see where the collapse can come from.

You could argue that because they're intangible they've inherently less worth, but in reality gold too is effectively just a totem against which we value goods and services. If the worldwide economy collapsed tomorrow, a vault full of gold will be no good at putting food on the table any more than a hard drive full of bitcoins.

One thing which makes curious is whether a competing bitcoin currency can be created. Start a new bitcoin from a new seed. Now you have competing bitcoin currencies, effectively equal. And suddenly bitcoin 1 sees its value collapse.
Perhaps the maths make this impossible.

johnr1

seamus wrote: »

In principle I'd subscribe to the bubble theory, except that bitcoin isn't a typical currency which can be inflated and deflated by a central bank or by large economic problems in the issuing country. The total no. of bitcoins is finite and as such they can be likened more to gold. They can be traded, stored and lost but they cannot be created.
Discovering a way to "game" the system and create more bitcoins would obviously collapse their value but my understanding is that this would be mathematical alchemy (i.e. Simply not possible)

And now that people have put money in the game, they've no reason to withdraw it. So I don't see where the collapse can come from.

You could argue that because they're intangible they've inherently less worth, but in reality gold too is effectively just a totem against which we value goods and services. If the worldwide economy collapsed tomorrow, a vault full of gold will be no good at putting food on the table any more than a hard drive full of bitcoins.

One thing which makes curious is whether a competing bitcoin currency can be created. Start a new bitcoin from a new seed. Now you have competing bitcoin currencies, effectively equal. And suddenly bitcoin 1 sees its value collapse.
Perhaps the maths make this impossible.

Interesting idea, - fake bitcoin, basically, which some merchants would theoretically accept in ignorance........and people would buy if it cost slightly less..........my brain is too small to see the hole in this, but im sure there must be one or else it would have been done by now.

Capt'n Midnight

http://www.irishtimes.com/news/technology/it-worker-s-bitcoin-fortune-ends-up-buried-in-landfill-1.1610454

An IT worker is frantic after losing a £4 million-plus digital fortune he inadvertently threw out with the rubbish.

James Howells (28), would be a bitcoin multimillionaire - if he could lay his hands on the computer hard drive containing his fortune.

But the digital cash is lost in a mountainous landfill site in Newport, south Wales where bin men took it after it was thrown out by mistake.

geetar

Frank Garrett wrote: »

I just read the first 10 pages of this thread and they were calling it a bubble in late-2010.

Mint Aero wrote: »

and they were so sure of it too.

well it was hardly considered a bubble back in 2010 when it was worth pittance.

its only taken off above the $20 at the start of this year. last week it was worth $400, and now its over $1000.

that is exponential growth, all of which is based on speculation. say what you will, but ive seen the most keen bitcoin investors calling this rise in prices a bubble. everyone can see it, and if you dont, you may want to reconsider how strong your investing brain is before you get foolish.

the bubble will be temporary, but it will pop. bitcoins wont dissapear, but a lot of peoples money will. unless you cash before its too late, like any investor worth his salt will do, you may fall victim to it along with many others.

srsly78

johnr1 wrote: »

Interesting idea, - fake bitcoin, basically, which some merchants would theoretically accept in ignorance........and people would buy if it cost slightly less..........my brain is too small to see the hole in this, but im sure there must be one or else it would have been done by now.

If it's fake it would not pass validation. Noone should accept an unvalidated transaction...

"Computer says no"

Mint Aero

geetar wrote: »

well it was hardly considered a bubble back in 2010 when it was worth pittance.

its only taken off above the $20 at the start of this year. last week it was worth $400, and now its over $1000.

that is exponential growth, all of which is based on speculation. say what you will, but ive seen the most keen bitcoin investors calling this rise in prices a bubble. everyone can see it, and if you dont, you may want to reconsider how strong your investing brain is before you get foolish.

the bubble will be temporary, but it will pop. bitcoins wont dissapear, but a lot of peoples money will. unless you cash before its too late, like any investor worth his salt will do, you may fall victim to it along with many others.

Ok sound advice thanks

alb

seamus wrote: »

One thing which makes curious is whether a competing bitcoin currency can be created. Start a new bitcoin from a new seed. Now you have competing bitcoin currencies, effectively equal. And suddenly bitcoin 1 sees its value collapse.
Perhaps the maths make this impossible.

Agree with all other parts of your post, as for the final bit I quoted, there are already loads of other crypto currencies. You can see a list of the most valued, ordered by market cap here: http://coinmarketcap.com/

In order to be trustworthy Bitcoin had to be open source, any closed source or centralised currency will now be a step backwards. One consequence of being open source is that anyone can take the code, change it a bit and launch it as their own coin.

Lets be clear here, these alt-coins as they're called, cannot be spent as Bitcoins in the Bitcoin network, they are completely separate networks, with separate client software and separate mining networks.

some have some interesting changes, but by and large most are copycats with no innovation and offer no real advantage over bitcoin.

Whether a better coin than bitcoin will be introduced and overtake it is one of the main risks to bitcoin, however any such coin would have to be open source, and therefore Bitcoin could adapt by copying any useful changes anyway. I think there's room for many to co-exist.

There is a whole ecosystem already about crypto currencies btw, sites such as cryptsy.com have day traders trading between the alt-coins all day long. It's a niche hobby within itself already for people that enjoy trading. There's also a bitcoin based stock market at cryptostocks.com where you can invest in companies directly and receive dividends in bitcoin - no brokers, no quarterly fees, no barrier to entry.

Kikin

seamus wrote: »

In principle I'd subscribe to the bubble theory, except that bitcoin isn't a typical currency which can be inflated and deflated by a central bank or by large economic problems in the issuing country. The total no. of bitcoins is finite and as such they can be likened more to gold. They can be traded, stored and lost but they cannot be created.
Discovering a way to "game" the system and create more bitcoins would obviously collapse their value but my understanding is that this would be mathematical alchemy (i.e. Simply not possible)

And now that people have put money in the game, they've no reason to withdraw it. So I don't see where the collapse can come from.

Don't have the figures to hand but I was reading that something like 90%-95% of bitcoin transactions at the moment are for investments. Eventually people want to liquidate their investments. The collapse will come from people cashing in their investments after seeing colossal returns. This sparks panic among other holders who also want to sell before the price falls too much. Then a new price base is set, the graph returns to the mean. I believe like the last bitcoin crash, around 60%-70% will be wiped off the value, still leaving them at a high enough value ($400~)

This exact aspect of human and social psychology was written about in the, 1840s by Charles mackay in the madness of crowds publication. It's nothing new

SusieBlue

I thought this thread was about those stupid cartoon things on facebook.

/leaves thread

hatrickpatrick

Just to clarify, faking a bitcoin would be practically impossible. Every bitcoin that can possibly exist is already hardcoded into the bitcoin network - when people talk of "mining", what they're actually doing is decrypting. In other words, the coins already exist, they simply can't be used until the block they are in has been decrypted. The reason mining becomes more difficult over time is because one has to decrypt more data in order to get the same amount of bitcoins.

Bearing this in mind, the only way to change the hardcoded limit in the bitcoin network would if if you could convince everyone running Bitcoin software to upgrade to a new version you have created, with new rules. Otherwise, if you attempted to introduce new bitcoins yourself by adding lines of code to the already hardcoded bitcoins, it wouldn't work because other bitcoin clients wouldn't have this new code you'd have introduced and would reject it.

Think of it like an organ transplant - just as the body recognizes a foreign body which wasn't part of the original design and attempts to attack it, so other bitcoin clients will recognize new code which wasn't part of the original chain, and unless you've convinced everyone to switch to a new version of the software which has room for these new lines, they will never be validated by the rest of the network.
Incidentally, this is why bitcoin transactions take so long - a transaction is only complete when enough bitcoin miners have validated it in this way to be absolutely sure it's not a fraudulent transaction. I suppose one good side effect of the increase in mining difficulty and therefore the increase in computing power people are putting into the mining process is that increased computing power in the network = faster processing of these transaction validations.

So tl;dr version, unless someone discovers some kind of absolutely gaping and fundamental mathematical exploit in the bitcoin software, it's simply not possible to create fake bitcoins and actually use them.

KyussBishop

KyussBishop wrote: »

If someone promotes and participates in a Ponzi-like bubble, that they are fully aware will rebound to a much lower value, with the intention of making a profit by exploiting all of the people at the bottom who will be left with less than they put in, then they are a scumbag.

Ponzi schemes are illegal for a reason, and this being a Ponzi-like bubble, is like a legalized version of a Ponzi scheme, with the same ethical problems.

Do you know what a Ponzi scheme even is?

Hope you have a mortgage you scumbag. By your definition, they're "ponzi".

KyussBishop

Deleted User wrote: »

Do you know what a Ponzi scheme even is?

Hope you have a mortgage you scumbag. By your definition, they're "ponzi".

Did you even bother your arse Googling 'Ponzi scheme', clicking the first result, and seeing if, just maybe, it bears some resemblance to economic bubbles? (go on, do it now...)

If someone buys a house to live in, grand, they are not any different to someone buying bitcoins and holding onto them long term, for use as a currency not as a vehicle for speculation.

If someone buys a house, watches a housing bubble grow, and sells on the house for the express purpose of profiting at the peak of the bubble before it bursts (in full knowledge that they are profiting off of a bubble, where a lot of people must lose and go into enormous debt in order for the financiers to turn a profit), then yes - they are an absolute scumbag.

As you have seen, the damage caused by the speculators in the housing bubble, was worldwide and crippled entire countries - there's a reason Ponzi schemes are illegal, and a reason why economic bubbles should be strictly regulated against (arguably there was rampant fraud in the case of the housing bubble too - banks pumping out mortgages/debt beyond sustainability, to inflate their own wages/bonuses, and to give their partners in finance a massive bubble to speculate/profit over).

The kind of scumbags who profit off of these unethical (yet legal) acts, at the expense of other people (and in the case of the housing bubble, the expense of the rest of society), are far more damaging to society than your average criminal, because their actions affect a much greater number of people, and do far more wide ranging and long lasting damage, and are far easier to get away with without repercussion (which is why, where they are made illegal, they should be extremely harshly dealt with).

Jonny7

geetar wrote: »

well it was hardly considered a bubble back in 2010 when it was worth pittance.

its only taken off above the $20 at the start of this year. last week it was worth $400, and now its over $1000.

that is exponential growth, all of which is based on speculation. say what you will, but ive seen the most keen bitcoin investors calling this rise in prices a bubble. everyone can see it, and if you dont, you may want to reconsider how strong your investing brain is before you get foolish.

the bubble will be temporary, but it will pop. bitcoins wont dissapear, but a lot of peoples money will. unless you cash before its too late, like any investor worth his salt will do, you may fall victim to it along with many others.

Yes, and to every investor or adviser - all alarm bells are currently going off

However, the last bubble spiked at approx 240ish then dropped down to 50ish.. but crucially didn't fade back to 20

Now that it has gone to 1K.. yes there will be a sharp drop, however the public interest is so massive in this (from a pure money making point of view, and thanks to get rich quick stories) that any sharpish drop will lead to a huge hunger for bitcoins at that lower price - because, crucially, we have the knowledge it can rebound (and it will)

So when the fall comes.. it's going to have difficulty dropping to even 400 which was considered an insanely high point literally 2 weeks ago

Mint Aero

Did Alex Jones say Bitcoin is gonna crash soon?

Buy Buy Buy

thunderdog

srsly78 wrote: »

Because I am a dumbass obviously.

I actually sold the coins a few months ago (DOH), and have had the euros sitting in mtgox until recently. Takes several months to actually withdraw euros for mt gox.

I never got into this for speculation, I bought a few coins last year to buy stuff online. Now I'm just cashing in the "loose change".

Several months???!really. I withdraw half of my bitcoins from bitstamp during the last crash and it hit my account 2 days later

srsly78

Selling the coins is instant. Withdrawing the euros is the problem. MtGox blame the heavy regulation, and AML rules that make it difficult for them to transfer money from japan to poland (which is where their euro transactions happen).

In fairness, I haven't read about anyone not being able to take their euros out - just that it can take a while.