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larrywww

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Reply with quote  #31 
Gene:  Blockchain really does involve military grade encryption so that would appear to be useful--and that is why some tech figures think there should be some kind of us for cryptocurrencies (if properly done).

But there is a lack of transparency that raises some issues.

Quite apart from criminals, oligarchs who are stealing from their home countries (think China and Russia) may be fueling the rise of the currency---though, if so, there's no predicting what will happen since these type of actors aren't on anyone's radar---and are actively tryng to remain  below the radar.  The level of theft that is occurring in Russia, in particular---where state industries have been pawned off for pennies on the dollar to oligarchs---means that the dangers posed by bitcoin might pale by comparison.

Some have also argued that hedge fund participation has buoyed it up in the last year---again, we don't have a way of knowing for sure.  Given that the hedge funds have a very bizarre compensation scheme---and they aren't risking their own money---this may make sense.  But I doubt that hedge fund managers are going to publicize that they are playing Russian roulette with their client's money---and don't know how one would predict their intervention.  One original theory was that hedge fund managers who were losing money would turn to cryptocurrencies out of desperation.  

Previously, it was speculated that the Chinese were fueling bitcoin's rise.  But months after the Chinese closed down their exchanges bitcoin rose to almost $11,000----then retreated a couple of grand (I haven't checked today).  Its volatility is one of its main features at this point---and its lack of transparency continues to make it a scary investment.  It's not like a stock or a bond which you can theoretically research---the lack of a central government regulatory body means that your remedies are going to be exclusively private if things don't work out well.  Which is why I consider it a speculation similar to pennystocks, etc.  We will probably not know for years what explains the spikes in bitcoin---if we ever know---although the recent disclosures from the Panamanian law firm clearly shows there are alot of shady actors seeking to hide their transactions in offshore accounts and elsewhere.

Some have argued that the criminal element is overstated because bitcoin IS traceable----and might make alot of criminals nervous---although the recent ransomware payment was sent to a bitcoin acct so maybe not all criminals agree.

In terms of Mt Gox----ending up in a Japanese bankruptcy court isn't my idea of fun.  And the Mt Gox theft occurred in 2011---but they didn't reveal it until 2014.  And there was no real remedy for those who suffered losses in the failure of this exchange.

The real question is whether they are able to invent a cryptocurrency that is more transparent and where your remedies for enforcement aren't quite so limited.  Also, given that bitcoin manufacturing is limited going forward (why there was a fork for bitcoin cash), the # of shares will be limited----and the length of time to make a transaction has also become problematical.

I know that Bruce Norris speculated in pennystocks----made alot of money and then promptly lost everything he gained.  If you are investing a nominal amount I'm not saying you can't speculate----but speculation is pretty much what it is.   The truly odd thing about the increases over the last year is that they occurred despite a succession of really bad press about bitcoin and other cryptocurrencies.  Of course, if you are investing your money---you can invest anywhere you like so long as you live with the consequences----but I wouldn't really recommend it to anyone else unless you can prove this is more than a speculation.
SFL

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Reply with quote  #32 
A few comments:

1. 

Per your 3/16/2013 post, you wrote that "There is a 50% chance it (Bitcoin) will go to 0, but the other 48% chance is for tenfold gains, and maybe a 2% chance of x100 gains. These are odds I have to take with risk money."

Anything involving a 50% chance of losing all your money is a gamble, not an investment.  The odds you set forth - if correct - could have been suitable for a professional gambler dealing with a large set of bets of which this would have been only one, but this risk profile does not describe an investment.  It describes a gamble.  

2.

There is a big difference between talking the talk and walking the walk.  If you had put a reasonable amount of money - say $10K - into this gamble when you say you did, and never sold, then you would now be sitting on BTC which might now be (temporarily) worth $2M - $4M.  

What is your actual track record?  If you hesitate to share actual dollar amounts, then could you let us know what is the ratio of the dollar valuation of your Bitcoin holdings today versus the dollar valuation of your Bitcoin holdings on 3/16/2013?  

3.

Real currencies are tied to geographic areas.   In the US, we all need dollars, on a daily basis, just to deal with life.  Even in inflationary times when we  lose money holding those dollars, we still need them.  The use of even a depreciating currency is a drastically more efficient way of conducting commerce than any alternative (barter, gold coins, etc). 

A real currency is to the economy what blood is to the human body.  The human body needs 5 quarts of blood to survive, there is no substitute.  

Bitcoin, in contrast, is like a beaker full of goop on somebody's lab bench.  Nobody needs it.  Perhaps it will be useful for something someday, but we can live exceedingly well without it.  

4.

To the extent that blockchain technologies are useful, nobody needs to use the specific implementation that is Bitcoin.  If institutions decide to use this technology for their own purposes, they can start fresh with a system of their own design, and allocate the resulting "currency" as agreed upon between the relevant parties.  There is no need for them to pay ridiculous prices to buy into an existing system.

When it comes to house prices, the upper limit of these is set by the cost of duplication.  If you can duplicate a house for $300K, nobody is going to buy the identical one next door for $600K.  Similarly, if you want to compete with any other business, your choice is always between buying an existing business or building a new one from scratch.  It makes sense to do whichever is cheaper. 

So a key question is:  what does it cost to build a new cryptocurrency?  The cost of a computer and a 19-year old programmer?  Last I checked, the cost of a computer and a 19-year old programmer was a tiny, tiny fraction of the the market cap of Bitcoin ($167 billion at $10,028 per bitcoin, as of this writing).  

5.

The old bitcoin thread is quite good, and the comments made in it are just as valid today as they were in 2013.  

6.

Everyone I know who has bitcoin has bought it for only one reason: it goes up, fast. 

That's the same reason why people were buying gold in 1980, dotcom stocks in 1999, highly leveraged real estate in 2006, and so on and so forth.  Same old story, same end result.  I don't expect anything different this time, but timing is, as always, unpredictable.  

In the early 1990's, during the Japanese asset price bubble, it is said that the land under the Imperial Palace in Tokyo was assessed at a value greater than the entire state of California.  When it comes to bubbles, under certain circumstances, the sky really can be the limit.  










Quote:
Originally Posted by davidoosnk
Larry you memory could use some help so here goes.... When you recommend things to people that go up times 200 you too can one day refer to yourself as "the real deal." The classified post was sort of tongue in cheek BTW I'm no more real than you and Bryce, perhaps just better at finding good cryptos lol. I referred to myself as the real deal because there are a lot of people advertising themselves as cryptocurrency experts these days. Well, I don't know how much more real you can get than the post below and the subsequent few on that same thread where I explained in significant detail why I thought the risk reward was incredibly good at that price... $40 roflmao.... for those who could afford to speculate. $40------->$9,000= the real deal. Any questions?

Bryce Re Mt Gox, it was obvious to most close followers in the space that Mt Gox was unsound unfortunately passive investors got caught. Kinda like buying a triplex in a very rough neighborhood and not managing it. 

davidoosnk 

Senior Member 
Registered:12/10/05
Posts: 836 
   #4  
Kevin,

I bought some a year and a half ago, at $20, and have been buying some more in the 40's. But only with money I can afford to lose. 

The way I see it is a 50/50 binary outcome proposition. There is a 50% chance it will go to 0, but the other 48% chance is for tenfold gains, and maybe a 2% chance of x100 gains. These are odds I have to take with risk money.

Because as SFL stated the current notional value of all bitcoin is $400 million .... This means it doesn't really have to become accepted as a strong currency to really go up in value. If it becomes a niche currency and the notional value of all bitcoin outstanding goes to $4 billion, our investment will go up by a factor of ten. 

Although it is risky, the recent developments with coinlab and Silicon Valley Bank seem positive, and I haven't seen anything yet that indicates it's a ponzi scheme. For instance, I've tried to research to find mathematical criticisms of the underlying formula/equation but I can't find any. Most negative criticisms are more along the lines of "it will l get shut down by govt.", "noone wil adopt," etc etc 

Anecdotally, most people I talk to who are ignorant about investments in general think it's a ponzi scheme and most people I find to be good investors agree that it is an interesting proposition if it takes off but very risky.

*This is my personal opinion only and not investment advice. An incredibly dangerous thing to invest in, actually more of a speculative bet than an investment.
davidoosnk

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Posts: 844
Reply with quote  #33 
1. Says who? Plenty of fortunes have been made betting strategically on binary outcomes. Gambling would be betting the farm, not placing a strategic amount of money. 

2. Of course, let me share it all here on SDCIA. Especially since I'm getting all this thanks for the insight I provided via about a dozen informative posts before it went up x 400. And you asked in such a nice manner roflmao.  But since you're volunteering, I'll let you start. What asset have you brought to others' attention that went up x 100+ (birds chirping)... 

3. I'm happy you get to determine what qualifies as a real currency. Now if you have time , read some history on what people have used as currency over the years and you might be surprised to find it doesn't necessarily fit your notion. 

4. Uh way off base again. No, a 19 year old programmer could not create something like bitcoin. It can be copied but not the talent behind it or the critical first mover advantage it has. By your logic I should just open up a Louis Vuitton like label and my own Bank of America.

5. No, I beg to differ. Given that a lot of the comments were negative, a lot of them were not valid unless one enjoys missing out on several hundred fold gains or as you seem inclined to do, disparage the idea of binary outcome investing with odds in one's favor.

6. It may be a bubble now, but it sure wasn't in 2013. And I own plenty of cryptos that have huge potential and are nowhere near bubble territory.

Haters gonna hate... 
SFL

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Reply with quote  #34 
Quote:
Originally Posted by davidoosnk
1. Says who?


Ben Graham.  His seminal 1934 work, Security Analysis, contains a whole chapter entitled "Distinctions between Investment and Speculation".


Quote:
 2. Of course, let me share it all here on SDCIA.


Yes, this would be nice. 

In the classifieds, you are offering your services as a "Cryptocurrency expert consultant" at around $250/hour, in exchange for which you are offering "three current speculative picks that could do incredibly well".

I think it is entirely appropriate to ask about the actual track record of people who are trying to sell investing or gambling advice.  

Please post your track record.  


Quote:
What asset have you brought to others' attention that went up x 100+ (birds chirping)...


I have never attempted to sell investing or gambling advice, nor do I ever intend to.  


Quote:
3. ...read some history on what people have used as currency over the years and you might be surprised to find it doesn't necessarily fit your notion.


I am well aware of what has been used as currencies over the centuries, cowrie shells being an interesting example.  

Tell me - what are cowrie shells worth now?  Do they have any value today aside from aesthetic value?  

Although I haven't personally researched this, I will hypothesize that the only value that cowrie shells have today can be attributed to their aesthetic value.

What is the aesthetic value of a bitcoin?  Would you agree that, being intangible, the aesthetic value of a bitcoin is zero?

Many historic currencies have intrinsic value as consumable goods - cows and cigarettes can be consumed, for example.  Bitcoin, of course, is neither edible nor smokeable.  So no intrinsic value there, either.  
 

Quote:
4. ...a 19 year old programmer could not create something like bitcoin. It can be copied but not the talent behind it or the critical first mover advantage it has. 


I have the highest respect for 19 year old programmers, and especially for the ones who started programming in their pre-teens.  I suspect that most talented programmers, like mathematicians and musicians, find their calling at a very early age.  

If the first mover advantage of Bitcoin is critical, then why are you now desiring to collect your consulting fees in Ethereum rather than Bitcoin?  And are your "three speculative picks that could do incredibly well" related to Bitcoin, or just to some other currency that does not enjoy Bitcoin's "critical" first mover advantage?  Or perhaps that first mover advantage isn't so "critical" after all?


Quote:
5. Given that a lot of the comments were negative, a lot of them were not valid...


Here's the original thread, in my view certainly worth reading for anyone considering a purchase of cryptocurrencies:

http://sdcia.websitetoolbox.com/post/this-investment-i-made-in-january-has-quadrupled-6247033


Quote:
6. It may be a bubble now, but it sure wasn't in 2013.


So is it a bubble or is it not a bubble now?  What is your view?

Here is my view:  I believe Bitcoin is a bubble now.  I believe it also was a bubble in 2013.  I believe that in 100 years, it will have either no value, or almost no value.  I have no idea of what may happen next week, next month, or next year; but within most of our lifetimes (say, 10 years from now) I think it is more likely than not that it will have less purchasing power than it has today.  

Do you have any specific predictions going forward that you are willing to share in public?  


Quote:
And I own plenty of cryptos that have huge potential and are nowhere near bubble territory.


Would you care to share which these would be?  How do you determine which cryptos are in bubble territory, and which ones are nowhere near it?


Further regarding Item 2:   I again repeat that I think it is fair to ask that you share your track record, given your holding yourself out to be an expert consultant.  And I reiterate that this track record need not be shared in dollar terms, but can quite simply be shared in terms of what your Bitcoin position is now as compared to what it was in 2013.  Ten to one?  Fifty to one?  Four hundred to one?  Zero?  

There are lots of perfectly good reasons to sell part of a position in a security, even if one believes it has further to rise.  These good reasons include: a desire not to put too many eggs in one basket, a need for cash, etc.  

By the way, I've always enjoyed your posts.  I find them to be refreshing and thought-provoking.  




rickencin

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Reply with quote  #35 
That was more elaborate and well thought out than most of my high school term papers.  You were polite, too!
__________________
Rick
davidoosnk

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Reply with quote  #36 
Ben Graham is well respected but there are others who have different takes. Also, informed and calculated speculation is very different from gambling.

You have a good point about requesting performance info. I respect it and will provide it in private to serious people. Thankfully I have another occupation. The ad was a test trial. The material in the old thread should suffice for those willing to do the research and see what I was saying back then. Thanks for providing a link to it. Not interested in posting my track record on here because if a cursory examination of the solid analyses I posted in the old thread isn't enough to convince someone to take the time to meet and discuss further then I don't really want to advise them. To each his/her own right? There are also liability issues that come into play with posting performance on public forums. For anyone who is serious and wants to meet in person though, I will be happy to come to the meeting with emails, references, and trade records that can be checked for point in time verification. 

What do you think US dollars will be worth in 10,000 years? 

What's the aesthetic value of AMZN stock which is worth half a trillion dollars on a company that barely posts a profit? 

I think bitcoin could still go up a lot but is not a safe bet at this price but a select few other cryptos are and so my actions reflect my thoughts and I'm holding them. Again, I'm not going to post ideas that I spent hundreds of hours researching. If the analysis I provided in the 2013 thread doesn't suffice to speak to my competence at making informed strategic speculations, and the ad doesn't entice people, well then hey thankfully it's a free country and you don't have to seek my advice. And thankfully for me it was a trial balloon not an attempt at becoming the next guru.

I'll answer one of your questions though with a variant on my original analysis re. bitcoin when I mentioned its $300 million market cap. To analyze whether a crypto currency is a good buy, look at the team behind it, its utility, and the current market capitalization. Then you can also gauge its actual usage and the community behind it. These are all relevant factors, although it's far from an exact science. I will share that one thing I have learned to avoid, and which has been borne out by price action is teams who are too sure of themselves. Generally the teams that are modest and try to put together a community do better than the ones hyping themselves as the next best thing since sliced bread.

STORJ is a crypto that meets a lot of the positive attributes described above though I won't say whether I think it's a good buy right now. You want that info you know where to find me [smile]













christopersteinmetz

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Reply with quote  #37 
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larrywww

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Reply with quote  #38 

To: THE REAL DEAL:

I haven’t gone out of my way to comment on your bizarre claims, but since you have personally baited me (claiming I somehow have a bad memory about your alleged superior accomplishments)—even specifically calling me out by name---I feel compelled to respond.

Once a BS artist---ALWAYS a BS artist---and that is why the board generally stopped listening to you a long time ago.

You criticize the board for being too conservative and discouraging investment---but none of the contributors on this particular thread advised against investing in real estate during the downturn.  Like other investors in this thread, I invested very early in the downturn.  But that doesn’t mean we would encourage rank speculation ungrounded in any kind of method other than guesswork.

For the record, Bruce Norris and all investors (not just Benjamin Graham) distinguish between investments and speculation. 

For the record, bitcoin and other cryptocurrencies could hardly be anything but speculations.   it’s not like a stock you can research----and much closer to pennystocks, which are notoriously volatile and unreliable.  So much of this market lacks transparency---including who is buying bitcoin and why there are doing it. 

Bruce Norris in his early career made a lot of money in pennystocks---and then promptly lost everything.  At least he was honest that this was all more or less a fluke.

The idea of selling your services as an expert “speculator” is absolute nonsense----as if someone needs training to flip coins or make random speculations.

In 2013, apparently you said:

"There is a 50% chance it (Bitcoin) will go to 0, but the other 48% chance is for tenfold gains, and maybe a 2% chance of x100 gains. These are odds I have to take with risk money."

There is no rational way to make any kind of probabilistic assessment of something as volatile as bitcoin and which has so few metrics one can research.  Bitcoin and other cryptocurrencies were relatively unique---although they were basically as unpredictable as pennystocks and other speculative investments.  And yet you claim to have “hundreds of hours” of research??!!  Doing what exactly?  I don't care how much time and how many bitcoin internet forums you haunted, pooling ignorance with the other Young Turks, posing speculations fueled by testerone, greed and too many Red Bulls, this does not qualify as "research" and it doesn't qualify you as a "bitcoin scientist"---as if there was such a thing.

So, even assuming you had good luck with bitcoin----how does this one instance translate into a sufficient basis for making any kind of probabilistic assessment?  And how does success in one instance translate into any kind of probability for the more than 1000 other cryptocurrencies?   Seriously, do you know anything about probabiliity theory?

You also have imposed the following proviso to your claim to being a cryptocurrency “expert”

*This is my personal opinion only and not investment advice. An incredibly dangerous thing to invest in, actually more of a speculative bet than an investment.”

So, while the headline claims you are “The Real Deal”---the fine print concedes you are just a speculator---one who doesn’t (apparently) want to get sued.  Do you claim that I am injecting this into the discussion?  After all, you did say to SFL:

“There are also liability issues that come into play with posting performance on public forums.”

Oh really?  Even though you also claim to be "The Real Deal".

You also claim that:

"the analysis I provided in the 2013 thread speak[s] to my competence at making informed strategic speculations . .”

Actually, No it doesn’t.  There is nothing in the previous thread to raise the discussion above the level of a speculation.  The fact that you read articles on various websites---including bizarre ones like zerohedge----which seems to specialize in bad financial news (something you are very vocal about criticizing)---doesn't mean that the writers aren't engaging in speculation.

Even if you claim to have an advanced degree in group psychology, no one really knows who buys bitcoin----and what exactly is fueling their recent advances.  As a market it lacks transparency in so many ways. 

Keep in mind that Bitcoin is only 1 out of more than a thousand cryptocurrencies, the vast majority of which are completely worthless.  https://en.wikipedia.org/wiki/List_of_cryptocurrencies.

Although you brag that these were wonderful investments in 2013----Mt. Gox was hacked and went bankrupt during this time frame, between 2011 and 2014----and Mt Gox was an exchange  that ultimately controlled 80% of all bitcoin transactions.   Again, the lack of transparency did NOT make this a great investment for many investors.

What is your response to that criticism?

 “Bryce Re Mt Gox, it was obvious to most close followers in the space that Mt Gox was unsound unfortunately passive investors got caught. Kinda like buying a triplex in a very rough neighborhood and not managing it. “

NOW you claim to have predicted the Mt Gox fiasco?  Jeez.  What, total BS.  First, the exchange was so disreputable it was used in 80% of all transactions---which means, I guess, it had a good reputation, after all.  Second ----there is no proof that the Mt Gox exchange was crooked---they were hacked.  Did you travel to Tokyo to participate in their bankruptcy?  Do you personally know the owners of this exchange?

 In any case, the theft appears to have been basically solved----the stolen bitcoin were traded to a crooked exchange, BTC-e, owned by a shadowy Russian, Alexander Vinnik, who has since been indicted for theft and money laundering. 

https://www.theverge.com/2017/7/29/16060344/btce-bitcoin-exchange-takedown-mt-gox-theft-law-enforcement

https://en.wikipedia.org/wiki/BTC-e

Even if the bitcoin enjoys advanced military grade security this doesn’t guarantee that at the level of a wallet you can’t get hacked--- passwords can still be hacked.

 Nor was Mt Gox the first time that an exchange was hacked.  Keep in mind that Bitfloor had to close as an exchange----and this occurred in early 2013 BEFORE you invested (It’s even mentioned in the above referenced thread).  

http://www.zerohedge.com/news/2013-04-18/bitcoin-exchange-bitfloor-shuts-down

This is just one of the dangers of making an investment that lacks transparency and isn’t guaranteed by any government—and that constitutes a speculation.

Another criticism that you have disregarded----is that government action may severely hamper bitcoin and other cryptocurrencies.

How could you possibly discount this as an invalid reason to avoid bitcoin AFTER China banned all their exchanges?  Given that the criminal class may like bitcoin, this is always going to be a possibility, right?

I have also cited the recent episode where over 300 million in ethereum (which you continue to invest in) was accidentally deleted.  https://www.theguardian.com/technology/2017/nov/08/cryptocurrency-300m-dollars-stolen-bug-ether
I don't imagine the owners of this exchange are going to be able to pay back those who had losses.

Then there are the horror stories where hard drives fail, are stolen, etc----that contained bitcoins.
According to a technical study, something like 17% to 23% of all bitcoin have been lost in various ways.
http://www.news.com.au/finance/money/investing/dont-tell-my-wife-melbourne-man-cries-over-lost-bitcoins-as-price-surges-past-us10000/news-story/bd18b6f6aa123dca017f9cc75544fd01

Also, you don't mention the "hard fork"----whereby Bitcoin Cash was born---and which may mean the end of Bitcoin, ultimately.  (The significance of the "hard fork" is subject to debate and it remains to be seen what will happen with it---but it's a potential issue for a would be investor at this point.)

Also, did you notice that the US government has made it a felony to invest in bitcoin to avoid tax or other liabilities? 

I could cite other concerns, but this is enough to NOT make it unreasonable before investing in something like this.

In any case, I am SO GLAD that you are bragging about matters like these----it basically means you are destroying your own credibility since you  are claiming knowledge and expertise you clearly do not have---and couldn’t have.  I always thought you were a BS artist---Thanks for confirming it.

 If you were honest about it, you would admit this is just dumb luck---and move on.  Are you so insecure, unaccomplished and clueless that you need to grab for such a dubious title as World Renowned Expert Cryptocurrency Speculator--The Real Deal.  Yeah, I know you appear to be a realtor from Chula Vista---but why do you feel this need to make such clearly outlandish claims based upon such incredibly thin evidence?   You seem to prefer to speak about “binary outcomes”, whereas in fact what you are really referring to is just dumb luck---isn’t that what results from a lucky speculation?  And this doesn’t really prove anything.

And why should we give you the time of day since you refuse to verify any part of your incredible sales pitch?

BTW, I have no problem with anyone making risky investments if that’s what someone want to do----I told Bryce that I had my reservations, but I don’t see anything necessarily wrong with it if you are doing it with funds you can afford to lose.  But I would be much more supportive if there was some kind of methodology that would justify it.  This is what is notably missing from all of your posts---you don't seem to have any kind of theory about why you think you can predict the price movements---and this was as true in 2013 as it is now.  This isn't like counting cards at blackjack---something that has an objective foundation in reality---this is just someone trying  to predict the group psychology of a speculation.

Primarily, I wish I knew why Bitcoin and other major cryptocurrencies took off like a rocket in late March and early April of 2016.  If you consult the price charts for many of the leading cryptocurrencies you can’t help but be impressed by the coincidence.  And I don't think anyone really knows---though some have speculated---about why this is the case.  And this price trend is the major reason why things have turned out so well for your investment, BTW.  Can you tell me why?

And I think that Bryce and some of the other posters have made some perfectly sensible investments---I don't get your claim to having superior foresight to them (and myself) for that matter.  20/20 hindsight proves nothing---there is such a thing as Dumb Luck.  And given that all of the posters to this thread have likely invested early in the last downturn---it's not like there is a notable lack of moral courage.

I also get the fact that you want to say "I told you so" and all that---but isn't that a little puerile for someone claiming to be an adult?

In any case, I think cryptocurrency may be a legitimate field---I am not attacking the idea of investing in it---and the fact that I have posted on the subject indicates that I have some interest in it.   The question that I had was whether there was a less speculative way of approaching it---or whether its volatile and very unpredictable.  There are alot of hurdles in terms of a new field like this before most investors will feel any comfort level----and given the inflation of bitcoin I am doubtful it makes sense to jump on the bandwagon this late in the game.

In any case, if you want to start your own cryptocurrency thread (or continue the previous one), I will promise not to become involved with  it---or just agree not to have further interactions with me---I really don't see any positives in interacting with anyone who is so self-impressed and inclined to resort to unnecessary and unwarranted braggadocio---all delivered with an insufferable attitude of superiority.

davidoosnk

Senior Member
Registered:
Posts: 844
Reply with quote  #39 
Larry, 

Have you looked into anger management? 

Just because you didn't buy bitcoin and other cryptos that went up x 100+ like me and some other people on that old thread doesn't mean you need to launch vile insults and the like. 

There were people posting all over the internet in bitcoin message boards about Mt. Gox potential insolvency at least six months prior. Also, withdrawals were very slow which confirmed for me the fact I didn't want my BTC on there. I mean is it really that far fetched that I did my research and decided to move my BTC from Mt. Gox? 

This is an email I sent to someone in early 2014. Specifically, I told friends and family around the table at Thanksgiving 2013, the few who had listened and bought bitcoin in the first place, to get out of Mt Gox. Now how you expect me to verify that on the internet, I don't know. I do have withdrawals from Mt. Gox I'm willing to share on an individual basis.  

--------
"If you have any BTC in mt gox get them out NOW!
 
 
I told everyone back in November that it was much better to hold bitcoin in a physical wallet or on block chain using two factor authentication than on mtgox, and that mt god was in trouble.
 
Make a wallet on blockchain.info and send them to yourselves asap
 
They could be having legitimate snafus, but I don't quite buy it. I am very glad I got almost all my mtgox balance out some time ago minus maybe a few cents."
-----------

Anyways, you can have "your" thread [thumb]. Have at it, you rule SDCIA man. It's all about you. Kudos to you and thank you for your valuable insight. I guess I'm just one lucky guy. Thank you for your wisdom. The only advice I can give you is that it clearly doesn't pay to be closed minded and unwilling to try new things. But hey maybe you're right and I'm just lucky. Since I have been investing since 2000 and the returns I've achieved across multiple asset categories, including of course real estate and cryptos nothing to laugh at, it's one hell of a lucky streak. I've also like most people who invest over such a huge time frame made the occasional crappy investment-- like taking time to respond to you on this message board. 0 return and so I'm pulling out of that one right as we speak.  I'm headed right now to buy a lotto ticket though. Thanks again for the insight about my luck. Hopefully this luck will last another 17 years. Have a nice day.   

larrywww

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Well. You CERTAINLY have told me off----from  Chula Vista Realtor to Real Estate Mogul to Cryptocurrency Visionary and Kingpin---The Real Deal!. 

A STAR IS BORN!

I had no right to ask A MAN OF DESTINY to Start His Own thread and/or Stop Personally Baiting Me in this Thread----MEN OF DESTINY Can Do Anything They Like!
It was a Disrespect to the Universe---THE ANGELS CRY!

Huzzah!  Huzzah!

Even if you claim there were warning signs about Mt Gox, it doesn't obscure the basic point that you have no methodology other than sheer guesswork and chutzpah, not to mention infinite self regard.  

davidoosnk

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Reply with quote  #41 
Oh magnificent thread owner and arbiter of who is truly an investor I am but am humble Chula Vistan seeking clarification. That's twice now you mentioned Chula Vista. Are you somehow of the thinking that people from Chula Vista cannot be successful investors? Is that what you're getting at? I'm just curious. I don't see where I spent my Junior High and High School years as particularly pertinent to this conversation, but I am not the wise man that you are, I'm after all just a lucky rogue. Please do clarify though, as there are certainly other people on here from Chula Vista who could also benefit from your wisdom. And about 267,000 other mere Chula Vistans who might be interested to be enlightened, should they be lucky enough to come across the likes of you. 
larrywww

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OK, I'll leave out Chula Vista.

Well. You CERTAINLY have told me off----from  Realtor to Real Estate Mogul to Cryptocurrency Visionary and Kingpin---The Real Deal!. 

A STAR IS BORN!

I had no right to ask A MAN OF DESTINY to Start His Own thread and/or Stop Personally Baiting Me in this Thread----MEN OF DESTINY Can Do Anything They Like!

It was a Disrespect to the Universe---THE ANGELS CRY!

He has no time for us----"the little people"----HE BELONGS TO HISTORY!

Huzzah!  Huzzah!

On the classifieds boards you claim to be an EXPERT on: (1) real estate (2) Stock Portfolio Management (3) Cryptocurrency (4) Real Estate Mentor and Coach---which is what you mean about being successful in "multiple asset categories"-----A UNIVERSAL EXPERT.   Well, EXCUSE ME!  I did NOT realize I was in the presence of Financial Divinity.  And when you describe yourself as a "humble" Chula Vistan----let's be honest----humility is NOT your strong suit.

There are some people who can "strut while sitting down"---but I'm pretty sure you could "strut while lying prostrate and face down on the ground".  You MUST be very proud!

And in terms of your alleged cryptocurrency expertise, even if you had some foreshadowing about Mt. Gox, you still do not have any kind of methodology about why prices would go up, when to invest and when to exit the market---and even you have conceded that bitcoin right now is in a bubble mode.

You also cite your achievements in real estate, as if the members of this board should thank you for being a Real Estate Savior:

"Since I have been investing since 2000 and the returns I've achieved across multiple asset categories, including of course real estate and cryptos . . "

I seem to recall that Bruce Norris and Ward Hannigan played a major role in encouraging investors to invest early in the downturn----and if you did likewise, then guess what?----you were copying them the same way we were doing.  I have never made any secret about which teachers were instrumental in encouraging me---and I WILL give credit where credit is due.
And you are asking credit for THAT!---and keep in mind that most of us did likewise---I was investing in very early 2009 and posting about it.

Most posters on this website will give generous credit to the investors/teachers who showed the way in that regard----like Bruce Norris and Ward Hannigan---who not only gave advice but could back it up with evidence and methodology.  I don't anyone on this website who claims you played such a major role in terms of encouraging others to invest in real estate---or, if you did, you were following Bruce Norris, Ward Hannigan and others.

I think most of the posters on this website like to give credit where credit is due---and I have always been very upfront about not taking credit for the leading role that they played---and continue to play.  And they have encouraged investors not to speculate, but to make principled investments based upon real evidence.  And your belated attempt to push yourself into the limelight and take all the glory just doesn't cut it---and I'm sure isn't going to make you popular on this website.   So, the next time you show up for a victory lap, kindly give credit where credit is due.

Keep in mind the following: If you started following Bruce Norris in December of 1997---bought when he said bought----sold when he said sold----whether or not you attended his classes, even if you just followed him in his free talks-----you would have made serious money in a slow and secure way.   And a similar thing could be said about Ward Hannigan, though he wasn't a market timer per se, he had some very common sense approaches to investment and gave similar advice.  So, therefore you didn't need to rely upon volatile investments like stocks, etc for most markets---although if you wanted to invest in such markets, your real estate profits would make that possible.

Both Bruce and Ward would concede they didn't encourage anyone to invest in bitcoin or other cryptocurrencies.  But even if you wanted to play the Pied Piper role in that, can you honestly say that you had alot of followers on this board, like they did?   I mean you bragged about this situation a long time ago---and now you retun years later, at a time when bitcoin is way too expensive for anyone to seriously invest----asking for credit, etc.  Right?  I don't see any evidence that you helped investors the way that Bruce and Ward did---and these included investors, BTW, who didn't pay Bruce and/or Ward a dime, although the smartest ones did.   And if I am mistaken about, I suppose they can own up to it themselves. right?

According to your revisionist history, your support of real estate in 2009 was a "lone voice crying in the wilderness"---you singlehandedly SAVED real estate in 2009.  Geez, I don't remember it that way, actually.

What about the fact that Norris and Hannigan have many more decades of experience?  How much experience do you want the ideal financial advisor to have?   Zero, according to you----the less experienced the better---and the fact that there are posters on this board with decades more experience is really COMPLETELY IRRELEVANT!

And, even assuming you did, the important thing about Bruce and to some extent Ward is that they could give an investor a methodology and evidence for their point of view----they have invested since the early 1980s.  If all you ever offered was sheer guesswork how can you fault us now for not following you?



David, you and I aren't going to be fans anytime soon.  I have posted alot on this board and I haven't resorted to braggadocio nearly as much as you seem to want to.  In any case, I think it was a mistake for you to bait me and criticize me for holding back investors in terms of cryptocurrency.  I started threads on the subject and it's clear my intent wasn't to disrespect those who invest in this field---but to learn more about it.  Keep in mind that I only started seriously posting about bitcoin in this thread after it had inflated in a major way---and by then not as many were interested in chasing it.   And I never said anyone was stupid to invest in it, the fact that I was investigating meant that I was taking it seriously.  But what I did do was express my reservations, what considerations were giving me pause--and asked for other board members' opinions.  And, for me, I was also just trying to figure out what was powering it forward (and other cryptocurrencies) since early 2016---a very complex issue to which you have contributed no discussion, except at a fee (which I have never asked for, for any of my information).

But I also think it would be wise to move on at this point since I think we are at an impasse---and there is nothing to gained via further discussion.  I hesitated getting involved because I knew what kind of a loose cannon braggart you were----and I thought others on the board were going to fully respond so I wouldn't need to do so.   

But, in any case, I have no desire to interact with you on this board in the future.



mikesd

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Reply with quote  #43 
Move along David. Ain’t Nothing to be gained here.
larrywww

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Reply with quote  #44 

I have asked the question why bitcoin has taken off this year to such a dramatic extent---it fluctuated between a few hundred dollars and a thousand between 2013 and by the end of March 2017 it was still a bit more than a thousand---then it took off on a lunar trajectory.

https://www.coindesk.com/price/

Look up bitcoin and choose "all" to see its entire price history.

What is the explanation? 

In previous articles there has been speculation that hedge funds were partially responsible for the rise in value.

Other market actors include (1) criminals; (2) Russians and Chinese (though the Chinese clamped down), Indians and other emerging economies; (3) other Asian countries; (4) Venezualans and those with unstable currencies; (5) market speculators.

Here is an article from Money magazine----and oddly it hasn't been the hedge funds----it has been more the small investors who given the "bandwagon effect" started jumping on board after the prices rose dramatically.

The option to buy fractional interests of bitcoin has apparently helped to spur its growth.  According to the article, only 3% of investors own a whole bitcoin---97% own only fractional interests of a bitcoin---very small market actors.

Another way to measure its popularity:

"At the beginning of 2017, a single bitcoin cost about $973 and the popular bitcoin “wallet” app Coinbase didn’t even chart among the top iPhone apps. Now one bitcoin costs over $16,000, and Coinbase is the second-most popular free app on iOS."

Coinbase, which launched in 2011 in San Francisco, is now worth over a billion dollars----talk about a rapid rise.


But if and when hedge funds do jump on board it could push it even further.

http://money.cnn.com/2017/12/07/investing/bitcoin-what-is-going-on/index.html
https://news.vice.com/story/wall-street-ruined-bitcoin-but-if-you-want-to-buy-it-heres-how

Among the events that may trigger further growth:

"This month, investors will be able to start trading bitcoin futures via the Chicago Board Options Exchange and Chicago Mercantile Exchange.

New York's Nasdaq plans to launch its own bitcoin futures in 2018.

"The fact the CME, CBOE and Nasdaq will now all offer bitcoin products lends additional legitimacy" to the digital currency, said Chapman."

I'm not arguing that it isn't in a bubble----it clearly is and any investments will be very risky.  But it also seems very unpredictable.  The scary thing that I've heard about bitcoin is the delay in making transactions----the whole issue that bitcoin cash was supposed to resolve.  You could put in a sell order today and given the market frenzy I am not sure what will happen if the bitcoin goes down meanwhile----but my guess is that you would have to pay for that loss.  Though maybe with the rising acceptance of bitcoin the transaction times may be improving---I don't know.

Though, as Bryce has indicated, I wouldn't bet any money you need to keep around since this does appear to be a speculation.

brycewheeler

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Reply with quote  #45 
Larry.   Your posts sound to me like you are SSSSSLLLLLOOOOWWWWWLLLLLYYYYYYYYY CONVINCING YOURSELF to plunk down a few bucks to buy bitcoin or some other crypto currency of your choice.  The ride definitely will add a little excitement to your life.

Bryce
larrywww

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Reply with quote  #46 
No question.   Do you have a plan?  The rise of coinbase may account for the rise in some of these cryptocurrencies.

Since coinbase seems to be pivotal in terms of this price rally, I would think one would want to invest in one or all 3 of the currencies they support: (1) Bitcoin (2) Ethereum and (3) Litecoin.

Since last month bitcoin has gone up something like 120%, since last month has gone up 48%  and since last month litecoin has gone up 143%

Yeah, i guess that qualifies as excitement. 

Was that part of your plan?

It almost  seems like the bitcoin excitement is spilling over into other cryptocurrencies.

I still don't know if coinbase or something else fueled the run since late March / April of these cryptocurrencies.  Maybe no one really knows.

It  seems like the fractional interest may have fueled bitcoin's rise.  Now, they are even speculating about fractional investment in homes.  (Not sure how that would work.) 

 https://www.forbes.com/sites/omribarzilay/2017/08/07/will-blockchain-ignite-fractional-ownership-market-for-homes/2/#146f443d8a44

brycewheeler

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Reply with quote  #47 
Yes Larry.  The bitcoin excitement is part of my plan.  I just pretend they are tulip bulbs!!!

Bryce
larrywww

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Reply with quote  #48 
Normally, such fast moving things dont interest me terribly----I just can't get my mind around it that fast.  I recall Sean OToole commenting that what he really likes about real estate (compared to the stock market and other things) is how slow the market moves.  But the revolutionary thing is how fast the returns have been accelerating on these cryptocurrencies---It's rare that you have a bubble accelerate quite this fast.  The other oddity is how fast so many of them are appreciating.  It's almost like the dot com bubble before it crashed.  The difference is that people were ignoring any kind of financial metrics, but with cryptocurrencies its not like you have alot of metrics as would come into play with stocks bonds or other financial instruments.  All you are doing is trying to figure out how long the animal spirits will push the price---and when it will crash.


And now there is another driver---the Chicago Board of trade is selling Bitcoin futures.

Bitcoin rose 20% overnight.

https://www.cryptocoinsnews.com/bitcoin-price-surges-by-20-overnight-as-volume-of-cboe-futures-skyrockets/

They mentioned that the first day for futures trading was December 10th.
davidoosnk

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Reply with quote  #49 
I’m going to answer an earlier post by issuing a synopsis of the few of the cryptos as I’m holding. That will hopefully meet the intent of this site which is to share investments with others that will be my last post on here in quite some time, then will check back in a year or two or less for posterity sake. This is not Investment advice, cryptos are a very risky asset class If they could even be described as that,and best for people who have experience with these very volatile instruments And speculating in binary outcome propositions, which mean things that have a decent likelihood of going to zero.I’m not going to give you a very thorough analysis, I’m just going to tell you what I have. So I started accumulating Monero at $35, currently holding all of the position Even though it’s right under $300 and my price target is 1000 bucks. Storj I bought for 4 cents with bitcoin profits and I’m looking for minimum two dollars on that one. It is currently trading slightly under a dollar. I bought a boatload of ether between 160 and $400 and I’m looking for at least $1200 on that one. And over the weekend I bought some Tron at .004 which is even more speculative than the others. And for the gentleman who asked about my bitcoin Performance, I bought my first batch in 2011 at 20 bucks, some more in 2013 at 40 bucks, then unfortunately sold 95% of my holdings between 500 and 1000 though I still hold a couple BTC for the ultra long term. Not interested in arguing with Larry or anyone else, He’s actually justified in his skepticism because the overwhelming majority of people posting classified ads on here are a joke. So now I’m answering the question of my holdings and performance and open to checking back in a few months or year or two to see how the three that I let everyone know about today are performing. I do sometimes sell things based on News, I don’t necessarily anticipate posting on here if I do and so again this is not investment advice. Not interested in arguing, sharing why I bought What I did Especially since people are so skeptical about paying for this type of advice LOL . I posted about my methodology hopefully that should suffice. If nothing else I can print this page up in a year or two to show some hedge fun along with other proofs of my track record. Or if everything is selling at 50 to 80% less than what I posted here, then Larry can claim that I was after all just an idiot from Chula Vista. Tongue-in-cheek Larry, not seeking to reignite the argument .Have a nice day.
mlreits

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Reply with quote  #50 
Quote:
Originally Posted by brycewheeler
Yes Larry.  The bitcoin excitement is part of my plan.  I just pretend they are tulip bulbs!!!

Bryce


Bryce,

You're buying excitement with what I consider "Vegas money". I love it.

I'm not a speculator so I'd rather spend my money on a Tesla for excitement than bitcoin. However, bitcoin has been making you money while my Tesla has been costing me money.  The saving grace is that the car puts a smile on my face every time I drive it so it's well worth it to me.

Now, I just need to think of how to pay for the new Roadster in a few years. Maybe take some money and invest it in bitcoin to pay for it? [biggrin]

Cheers!

__________________
Minh

"Be formless, shapeless like water." Bruce Lee
brycewheeler

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Reply with quote  #51 
Minh.  Nice to hear from you.  Ya, have a little excitment riding the tulip bulb roller coaster.
You always seem to cause your own good luck, so a few Las Vegas gambling dollars that you can afford to lose, may bring you a  little fun.

Bryce

larrywww

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Reply with quote  #52 
We sometimes have mentioned the Mt. Gox exchange, and I wanted to leaven the enthusiasm with a little reality.

A bitcoin has a private key and a public key.  But there is nothing necessarily state of the art about the security surrounding the exchanges and the wallets----they can be hacked, like anything else.  And it appears to be an especially attractive target for hackers.

No one who owned bitcoin in Mt. Gox has seen any recovery yet in the Japanese bankruptcy court.   Here is the latest report of proceedings.

https://www.cryptocoinsnews.com/mt-gox-creditors-file-petition-demand-recovery-payments-bitcoin/

Out of more than a million bitcoin in the exchange only 202,000 were recovered---850,000 were never recovered and ended up in a Russian exchange----the end of the line for any recovery.  At the time they went into bankruptcy Mt. Gox processed over 80% of the transactions.   Hackers seem to consider it a target and there have been multiple hacks of bitcoins and other cryptocurrencies.  The beauty of such a theft is that there is no central authority that can cancel the stolen bitcoins----I believe the 850,000 stolen are still out there.  Also, wherever you store your bitcoin you need to back it up since if there is a hard disk crash, your laptop is stolen, etc----there is no way to get your money back---there is no fail safe system if your money is stolen from the exchange, or you lose your hard drive or zip drive.  In fact, horror stories about electrical storms created by sunstorms have been imagined that maybe could wipe out bitcoin on a global basis---I don't know enough to know whether that threat is realistic or not.

But bitcoin seems to have this Lazarus type quality---just when you think it's dead, it returns.  When I heard about Mt. Gox, I assumed they were finished.  Guess again.  At the time the Chinese cracked down many if not most of the buyers were Chinese and there were alot of Chinese exchanges.  But bitcoin rebounded.

Because of all the profit that has been made, it bears investigation, but it's so speculative that I can't really recommend it in the final analysis, except for a small amount.  I have to convince myself that I'm not just throwing darts at the wall.
 
No less than the "Wolf of Wall Street" (you've seen the film, right?)  has come out against it----Wow, I bet he could make serious money on this---and he was selling pennystocks.  (BTW, did they really have 50% commission on pennystocks?  Was that common?   Wow, that is quite a commission).  But even though penny stocks are notoriously risky, there is a considerable amount more information available about them (even if not exactly reliable) than there is about these cryptocurrencies.  

The really weird thing is that bitcoins can subdivided to very small portions---the least is a satoshi, which is:

  One hundred millionth of a single bitcoin (0.00000001 BTC)

https://en.bitcoin.it/wiki/Satoshi_(unit) .

So, although we might consider bitcoin pricey, a single satoshi be had for something like .16 cents (assuming the current---or 10 satoshi for 16 cents---although given that there might be trading expenses, there probably is some way of figuring out the minimum investment.  (I don't know).

The fact that so many investors can buy partial shares----I have seen authority that 97% of the investors only buy partial shares.   Right now, coinbase has more customers than Schwab----if you are willing to go that low in terms of minimum purchases, there aren't really the traditional barriers to entry.

But I am seeking to educate myself about it.  The reason that the bitcoin is so volatile is that there is no easy way to figure out what kind of value it has---some say nothing (ultimately)---some have said a million dollars.

Scarcity alone won't necessarily dictate its value---the total # is limited to 21 million---but there are already 12 million.

But there are over 1000 other cryptocurrencies----and given its recent success, others are proposed----some by governments.

But I can see that the competition that they provide to traditional commerce may be healthy given the fees that exist to transfer funds.

There are regulators threatening to shut it down, but the impact of regulation is uncertain---some say that so far the impact has been to drive it outside the borders of that particular country.  China barred exchanges, but they simply moved to Korea and Japan.  Now Korea is threatening regulation., but bitcoin is like wikkipedia----you can do it practically anywhere.  Even in places like Zimbabwe, Argentina and Venezuela that have very unstable currencies.  Although mining bitcoin isn't cheap---there are substantial rewards, but you are required to have very high end, specialized equipment.  Which is why there are these stories about miners stealing bandwidth because the mining process requires it.

Another issue is that there is no central authority for bitcoin----it's like wikkipedia in that regard.  And getting all of the miners and exchangers to agree hasn't exactly proven easy (hence the fact that bitcoin cash was born as an alternative).

The problem is that even if things slow down in China, this appears to be a worldwide bubble---that would be hard to totally shut down.  Maybe the Chinese go outside China to trade----maybe the Koreans and the Japanese fill in as well.

This thread has spoken about the volatility of bitcoin, but I don't really think outsiders have any idea how volatile it really is.

The 2nd worst day for the S & P since 1945 was 10/15/2008 (if memory serves).  One way of measuring the volatility of bitcoin is that there have (at least) been 65 similar recessions (or market corrections) of a similar magnitude in bitcoin.  (This from 
(This from Nathaniel Popper, a NY Times columnist, who has a 2016 book about bitcoin).  And as strange this increase in value may appear, there was a previous time where in 2013 it did increase ninefold  Alot of those who recommend investing in bitcoin----recommend NOT viewing the daily value fluctuations---you might have a nervous fit.

Tools have been developed to try and make sense of bitcoin's volatile price history like bitcoin wisdom and cryptowatch.  But isn't this just an algorithimic way of trying to predict mob psychology?  Keep in mind that the most recent price fluctuations are really unprecedented in terms of the high prices achieved---and bitcoin has a track record since it's been around since 2008.   Of course, there's no guarantee that bitcoin will follow previous price fluctuations---but if you looked at that I think you would be forced to conclude the present runup is inflated in value.  Most of the years before 2017 were relatively flat.  There was a similar price spike in 2013 when on 12/31/2012 the value was around 13 dollars and the value spiked as high as 945 dollars (an increase of more than 72 times).  But then the price gradually declined until it reached the low 200s in Febuary 2015, at which point the price began to climb again.  There have been a couple of peaks and retreats since then, but since September of 2017 it has climbed at a really steep curve---and it is now something like 16 times its original value in early 2017.  

I don't really know.  But keep in mind that the philosophy behind bitcoin was libertarian----and although computer algorithims are part of the infrastructure, there is nothing agreed about its value.  And the mobs have been increasing.  A year ago coinbase had 4.7 million subscribers---now there are 13.3 million---the # of subscribers tripled in one year---talk about a worldwide bubble.  It's hard to predict crowd psychology when the crowd is worldwide and very diverse.  And there are many exchanges---Coinbase is just the largest.

The total # of bitcoins is limited to 21 million; there are 12 million now.  The # of bitcoins is limited such that for each successive year the # of total bitcoins is cut in half---so by 2040 there will be no further bitcoins.


On the other hand, even some tech companies survived the tech bubble, so it may  be that even if there will be a crash---that some cryptocurrencies may prevail.

The other confounding factor is that governments and central banks and credit cards will probably respond with their own cryptocurrencies---as is the playing field wasn't already confusing enough.  (I hear Russia is coming out with its own cryptocurrency---I think I will pass on that).

But there are advantages to bitcoin, namely:
1) It's a ledger that can't be counterfeited.  (Though if you lose your private key, or someone fools you into sending your money to the wrong account, there's no remedy for that)
2) The transactions can't be reversed.  The transaction cost is low.  (Average for paypal / credit card is 2.7% whereas coinbase costs 1%).
3) Theoretically, you can transfer funds internationally with bitcoin if you have a smart phone and a wallet
4) The transactions aren't subject to control by any kind of central bank or government.
5) A securely held network recognized in every country that hasn't outlawed it.
6) It cuts out the banks, brokers and other middlemen
7) It is anonymous.  (Though part of a public ledger as part of a digitized accounting system).
8) Each time a bitcoin is mined the miner is required to confirm the entire ledger and to make sure that the new buyer is paid with one bitcoin, and only what was paid for.  The rewards for the miners are pre ordained as well.
9) in 2008 Satoshi created an encryption based protocol (which is a military grade encryption---that has never been hacked, even if wallets and exchanges have) utilizing a ledger called the blockchain.  But it's a unique kind ledger since there is no central authority, but more like a cooperative community (hence the wikkipedia analogy).  But that is part of its power---companies like home depot can be hacked because they reside in one central URL.  Bitcoin by contrast resides in thousands of computers worldwide.  And once a bitcoin is recorded on the blockchain, it can't be changed it is part of a permanent ledger.  The identities of the people and the wallets are encrypted, though if someone fools a user into releasing their private password, their bitcoin can be transferred to another user.  Same with the wallets.  But even if a wallet is hacked, it doesn't necessarily endanger the rest of the bitcoin.  And even if an exchange is hacked (Mt. Gox, for example), it doesn't necessarily endanger the remaining bitcoin.
10) Although bitcoin has some attraction to criminals, if law enforcement catches up with the culprits their bitcoin can be confiscated, which was what happened with the silk road, etc.  Each bitcoin has a dual nature---a public part and a private part.  Only if the private identity is revealed, can law enforcement reach the true owner.  But even if unsuccessful in this regard, the public ID may provide some information.  For example, in the ransomware scare about 6 months ago, law enforcement knows which bitcoin were received as ransom---even if they currently don't know the owner's identity.
11) The exchanges are the closest thing to a central authority---but they also are an attractive target for hackers.  The way Mt. Gox became the primary exchange is a real lesson---the original creator of the website sold it to a French guy living in Japan whom he didn't know alot about----seems like a big mistake in retrospect.    Mt Gox got market share simply because it was one of the earliest exchanges in a major city--some thought it had a Japanese owner since it was located in Tokyo---wrong on that.  Bitinstant was a New York exchange that was driven out of business when regulators figured out they were knowingly supplying bitcoins to the Silk Road---one of the managers of the website (who was a 23 year old kid) went to jail for money laundering.  Bottom line: It seems like that alot of the early exchanges weren't necessarily well prepared for the amount of business they ultimately attracted.  The fact that a 23 year old kid was one of the managers of Bitinstant and responsible for the movement of millions of dollars tells you the problems with their due diligence.  Stupidly, he didn't hide the fact that he was supplying bitcoin to the Silk Road---I think he thought it was cool---and he now is in jail. Ultimately, Ross Albrecht, the owner of Silk Road was also found and convicted----when he made a very stupid announcement about looking for programmers.  There is alot of "Wild West" type scenarios involved with the founding of bitcoin, even though the encryption is still secure.

The real issue is that bitcoin and most of the other major cryptocurrencies have already appreciated dramatically----I had another thread where I pointed this out.  So which one to invest in----are are you investing at the top?  

No easy to way to answer that---it's like trying to catch a runaway freight train---although this train also engages in retrograde movements unlike real estate and/or stocks---and is extremely volatile.  Or do you wait for an ICO for a new type of cryptocurrency?  That's the problem---there's no way to reliably predict the top of this market---and when to get in and then get out.

So what is a bitcoin worth?  Some, like John McAfee say it could go up to as much as a million dollars.  Others, like Jamie Dimon says its a worthless fraud that is really worth zero.  In a sense, both are right----its all dependent on what the market does.  Given Satoshi's libertarian philosophy, he wouldn't agree to try and dictate that anyway.  I'm not sure that this isn't the first true world class bubble---and that you unleash an uncontrollable force ---you end up with bitcoin's runaway volatility.  But at least he has the distinction of having created the first decentralized value exchange.

One important issue is whether the SEC will at some point consider these "securities" and regulate them.  Here is an opinion that dao tokens are securities.  I'm not sure if this issue has been resolved or not---but even if the SEC steps in, the likely impact will be to exclude US citizens from ICOs.

http://www.klgates.com/dao-and-the-art-of-securities-regulation-sec-clarifies-that-digital-tokens-may-be-securities-08-01-2017/
brycewheeler

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Reply with quote  #53 
I know bitcoin is like a tulip bulb in the tulip bulb mania in the early 1600,s but it feels more like holding a tiger by the tail to me.  Insane!  

Bryce
larrywww

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Reply with quote  #54 

It's gone up about a thousand $ since  I posted yesterday.

Think about it this way----it started at .05 in 2008 (that was the ICO price)---and was around $18,800 now (But NB the price is always changing).  

That means it has increased 376,000 fold----which is why billions (or maybe hundreds of millions) were made by the early investors.  It has appreciated a dozen and half times (roughly) this year alone, though this was a banner year for it.

That's why there really is no comparison to previous bubbles----the magnitude is simply astonishing.

Here is an article comparing some of the previous bubbles that shows how dramatic it is---by comparison bitcoin looks like a moonshot.

And it is NOT the only cryptocurrency that has appreciated so dramatically.

https://www.marketwatch.com/story/heres-how-bitcoin-is-dwarfing-housing-and-dot-com-bubbles-2017-08-30

It's not really like an IPO, a unicorn startup, biotech or any other kind of investment you might consider.

And alot of these ICOs for other cryptocurrencies start out at 5 cents or a dime, and even spend alot of time around a dollar later on, so the barriers to entry for the market aren't nearly as great.  And this market may permit fractional shares for some kinds of cryptocurrency, most notably including bitcoin.

And alot of these bubbles mentioned above, are primarily a US phenomenon---in housing at some point, the lenders cut back and stop lending on favorable terms, or the hedge funds move on.  With housing the FM limit is 10, though most homeowners don't come close to that #.  But there are no limits on this type of investment other than the limit of your funds.  And the world arguably NEVER runs out of money---and there is SO much worldwide capital looking for investments right now.

Which may be why it is THE state of the art bubble---a Bubble On Steroids.

But that may mean it could crash very dramatically too.




Which is why I should start on my NEW informercial:  FLIPPING BITCOINS!

The slogan for my new company: To Infinity----and Beyond!.  (Sorry, Buzz Lightyear)

On December 1st Bitcoin was just a bit under $11,000.  It is now over $19,000 and getting close to $20,000---and this is just the first half of December.  (It's so volatile that I quote it in thousands, not hundreds---it's too changeable.)

  Which means that it has appreciated 8,000 out of its total value of $19,000 during this time frame---Man, if that's not a bubble, I don't know one at all.

Anyone care to jump on the back of the speeding locomotive??!!

rickencin

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Reply with quote  #55 
Quote:
Originally Posted by larrywww

That's why there really is no comparison to previous bubbles----the magnitude is simply astonishing.



One interesting aspect of bitcoin is the limited number of them.  I believe there are only supposed to be 21 million bit coins, ever.  They have not all been "mined" yet.  I wonder how many bitcoins are being held for investment and not circulated? 

This is distinctly different that US currency where ever increasing amounts are being printed.  If the increase happens to match the increase in goods and services, then the purchasing power seems relatively the same.  If they didn't create more dollars then your dollars would increase in value just by keeping them under your mattress.  If on the other hand, dollars increase faster than the increase of goods and services you have to keep them invested to avoid losing purchasing power. That is a significant stimulant to business.  It also means you pay taxes on the increase in dollars necessary to keep the same purchasing power.

“Money put into business as a lien on its assets is dead money. When industry operates wholly by the permission of "dead" money, its main purpose becomes the production of payments for the owners of that money. The service of the public has to be secondary. If quality of goods jeopardizes these payments, then the quality is cut down. If full service cuts into the payments, then service is cut down. This kind of money does not serve business.” Jerry Brown, Steve Jobs, Henry Ford or Bernie Sanders?


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Rick
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Reply with quote  #56 
I would take the limitation on the # of bitcoins with a serious grain of salt.

The Washington Post had an article of 5 "Myths" about bitcoin---and the limitation to 21 million was one of them.   

Here is what they had to say:

 Yet there is no guarantee that the supply of bitcoin won’t change. The currency’s original design calls for the 21 million units to be slowly created over the next 100 years or so. But the protocol can be amended by community consensus — a majority of participants in the bitcoin network — as has already occurredseveral times, such as an update that helped users specify payment conditions. So far, the bitcoin community has fiercely defended the planned finite supply and is notoriously change-averse. But politics among users, not math, keeps things that way for now.

Those politics may shift if bitcoin’s adherents come to agree with mainstream economists, who say the currency will hit a deflationary spiral as bitcoin are accidentally lost over time and the supply dwindles. Computer scientists also fear that the protocol will become unstable as inflationary rewards for bitcoin “miners” (who secure the system using tremendous computing power) are phased out in favor of transaction fees. For these reasons, some newer cryptocurrencies have eschewed bitcoin’s finite-supply plans. Instead, they follow a digital version of Milton Friedman’s proposal for low but constant inflation.

https://www.washingtonpost.com/outlook/five-myths/five-myths-about-bitcoin/2017/12/15/7a506742-e044-11e7-8679-a9728984779c_story.html?hpid=hp_no-name_opinion-card-d%3Ahomepage%2Fstory&utm_term=.465833096420

Besides, I think it is too early to attribute its runaway price inflation to scarcity.   I tend to think that the low barriers to market entry and worldwide nature of the bubble may have more to do with that---though it is anyone's guess.

The other myth that they mention is the idea that a criminal will want to use bitcoin because of the anonymity.  I think there is some measure of privacy and it's possible ownership may remain private, although there are security firms who sometimes can examine the blockchain ledger to learn the identity of its owners----and this will frequently lead to a bank account, wire transfer, or other transaction that will place the owner within the normal channels of commerce---and those transactions usually ARE traceable.

Now if the bitcoin transfer leads to a bitcoin wallet/exchange owned by a Russian oligarch or the Russian government, or what happened in Mt. Gox (or other less transparent country), that may be a different question.

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