Bitcoin - Part 2

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psionl0 said:
So why mention these irrelevant examples if they don't prove anything?

The examples given are all flash in the pan investments that peaked once and never again. Bitcoin has had more peaks than a mountain range - each one higher than the preceding one.
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Not uncommon. It won't go on for ever. Here's dot com bubble period Nasdaq http://news.bbc.co.uk/1/hi/business/8558257.stm
Index of railway shares, 1840s http://www.thebubblebubble.com/wp-content/uploads/2012/06/railroadstocks.jpg
This is the Dow Jones index 1929 https://www.marketwatch.com/story/scary-1929-market-chart-gains-traction-2014-02-11
 
Craig B said:
Not uncommon. It won't go on for ever. Here's dot com bubble period Nasdaq http://news.bbc.co.uk/1/hi/business/8558257.stm
Index of railway shares, 1840s http://www.thebubblebubble.com/wp-content/uploads/2012/06/railroadstocks.jpg
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Those examples compare bitcoin to one shot investments even though bitcoin has been anything but.

Craig B said:
This is the Dow Jones index 1929 https://www.marketwatch.com/story/scary-1929-market-chart-gains-traction-2014-02-11
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That 3yo article compares the DJI then to the DJI as it was in 1929. Needless to say, it was as reliable an indicator of stock prices today as it was an indicator of bitcoin prices today.
 
There will be leaks and troughs, but this looks like a bubble. In fact it looks like the biggest in history. I ask again, are you stating that this will go on forever, and that people buying in at today's prices are making a sound investment? It's not clear what claim you are making, and I note with interest that you have made no response to my question whether you have an ideological commitment to Bitcoin, on libertarian or similar principles.

Here is an interesting passage from J K Galbraith, The Great Crash, 1929
... it is in the nature of a speculative boom that almost anything can collapse it. Any serious shock to confidence can cause sales by those speculators who have always hoped to get out before the final collapse but after all possible gains from rising prices have been reaped. Their pessimism will infect those simpler souls who had thought the market might go up forever but who now will change their minds and sell. Soon there will be margin calls, and still others will be forced to sell. So the bubble breaks.​
Are you one of the simpler souls?
 
Doesn't the value of bitcoin have to constantly increase for the miners to remain profitable? If the value of the bitcoin recieved as payment for maintaining the block chain is less than the cost of electricity to mine it, you will lose miners and thus reduce the utility of the bitcoin as getting transactions registers will take longer and thus hurt the value of bitcoin. This will further decrease the value. But a constantly increasing value is simply not sustainable.

How can the limited number of bitcoins and the nature of mining do anything other than result in a crash?
 
Craig B said:
There will be leaks and troughs, but this looks like a bubble. In fact it looks like the biggest in history.
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So you have told us.
.... and told us.
.... and told us.
.... and told us.
.... and told us.
.... and told us.
.... and told us.
.....
Yet not once have you given us reason to believe that this is the final bubble.

Craig B said:
I note with interest that you have made no response to my question whether you have an ideological commitment to Bitcoin, on libertarian or similar principles.
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No, I have an ideological commitment against BS and you are full of it.

Craig B said:
Here is an interesting passage from J K Galbraith, The Great Crash, 1929 ............
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I see, shift the goal posts towards short term speculators because you might find more losers among that crowd.
 
ponderingturtle said:
If the value of the bitcoin recieved as payment for maintaining the block chain is less than the cost of electricity to mine it, you will lose miners and thus reduce the utility of the bitcoin as getting transactions registers will take longer and thus hurt the value of bitcoin.
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Incorrect. The mining difficulty automatically adjusts so that the block creation rate remains at 1 block every 10 minutes no matter how many miners there are. So if you get fewer miners then the cost of mining decreases and thus the rewards of mining increase for the remaining miners.

One thing you are likely to see is that as block rewards decrease, transactors will have to offer larger fees in order to get their transaction confirmed by a miner. This will further discourage the use of bitcoin as a currency.
 
psionl0 said:
So you have told us.
.... and told us.
.... and told us.
.... and told us.
.... and told us.
.... and told us.
.... and told us.
.....
Yet not once have you given us reason to believe that this is the final bubble.


No, I have an ideological commitment against BS and you are full of it.


I see, shift the goal posts towards short term speculators because you might find more losers among that crowd.
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This invective of yours is ignorable, but you seem confused. I'm saying that Bitcoin is a bubble. Do you agree or not? What may or may not be final is the current peak and trough price cycle. That is invariably unpredictable. It may go up and down again a number of times, but it is unquestionably a bubble. It will not last forever. It will pop sooner or later.

You have not answered the question about your ideological predisposition, but instead have rewarded me with invective. I take it therefore that you do have an ideological commitment to this object of speculation, which you think I have affronted.
 
I'll go on record saying I think not only is it a bubble, I think bitcoin's destination is the dustbin. It is just a matter of time. I think in its wake, some of the technology is here to stay and we'll have crypto currency or currencies but there are a some unfixable flaws with bitcoin.
Maybe I'll have to come back to this thread in a few years and eat crow. Time will tell.
 
Craig B said:
There will be leaks and troughs, but this looks like a bubble. In fact it looks like the biggest in history. I ask again, are you stating that this will go on forever, and that people buying in at today's prices are making a sound investment? It's not clear what claim you are making, and I note with interest that you have made no response to my question whether you have an ideological commitment to Bitcoin, on libertarian or similar principles.
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When are you going to short this biggest bubble in history?
 
I do not see any barrier to entering this game. The analogy to gold is false, since we know the supply is finite in a physical sense. Not so with bitcoin, because a duplicate entity is possible.
Bitcoin is a brand which begs for imitators that are identical. The 20k ceiling is set in concrete.
 
Craig B said:
So, you won't answer.
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I don't know why you consider that a non-answer.

YES. Bitcoin is in a bubble and is probably due for a significant price reversal any day now. However, there is no reason to believe that the price won't recover or that bitcoin will have an extended period of price falls. These usually happen after a bad news event like a bitcoin exchange going kaput (and keeping all the bitcoins) or stories about a government crackdown.

Of course, there must be a lot of nervous nellies buying into bitcoin now so anything can happen.
 
Craig B said:
Never. I'm not a speculator. I take it you don't think this is a bubble.
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I think the parabolic rise resembles a bubble, but I also think the technology is paradigm-changing, and I understand the reason why it was created - the money scam - a whole lot better than you do.
 
Tippit said:
I think the parabolic rise resembles a bubble, but I also think the technology is paradigm-changing, and I understand the reason why it was created -the money scam - a whole lot better than you do.
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Do you? Yes, conspiracy theorists have special understanding not known to the sheeple masses. They know that the world is run by secret committees plotting all the financial developments in their own interests. They know it better than other people do, largely because other people think it's nuts. It's impossible to argue with that kind of conspiracy mania, so I won't try.

But one thing that has been stated repeatedly in this discussion, is that many bubbles, I will say even most bubbles, are based on paradigm changing developments. Tulips, I and others have said, are still there, but were new in 1637 Netherlands. Dot com was a bubble, but the internet is still there. The South Sea Company was a bubble, but joint stock companies are still with us. The Railway mania was a bubble, but in 1845 railways were indeed the transport system of the future. This has all been said in this thread. This bubble may represent the introduction of blockchain as a paradigm changing technology. That is very possible. But that doesn't stop it being a bubble. Please do try and keep up.
 
When one buys a share, one buys a share in the value of the company.

As long as the company keeps producing or has physical assets, it has a value that can be calculated.

Bitcoin has no intrinsic value other than a currency supposedly for trade.

If a dealer sold 100,000 bitcoins a month ago they got paid a certain amount. If all their customers decided to cash in tomorrow do you think they have the money to pay out?

If one holds on, and people find out how cumbersome bitcoin is to trade, what would it's future value be. Junk I think.

I have some rocks in my garden - very special because they are sold with a certificate with my name. Limited supply. Special price limited offer - only $100 a rock. Buy now before the demand pushes up the price. The sky is the limit. Could reach $20,000 in the next six months. (PS - if the scheme crashes you will at least have an asset - a rock.)

(BTW - Why is it that the rich get richer and the poor get poorer. Perhaps fools getting parted with their money?)
 
PartSkeptic said:
When one buys a share, one buys a share in the value of the company.

As long as the company keeps producing or has physical assets, it has a value that can be calculated.

Bitcoin has no intrinsic value other than a currency supposedly for trade.

If a dealer sold 100,000 bitcoins a month ago they got paid a certain amount. If all their customers decided to cash in tomorrow do you think they have the money to pay out?

If one holds on, and people find out how cumbersome bitcoin is to trade, what would it's future value be. Junk I think.
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Instead of comparing bitcoin with a share, why not compare it with a fiat Federal Reserve Note?
 
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