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Old 2013-10-09, 20:35   Link #21
Ithekro
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- could go for a little deflation.
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Old 2013-10-09, 20:50   Link #22
kuroishinigami
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The problem in bitcoin or any non-regulated currencies is the volatility of its value leads to its undesirability.
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Old 2013-10-09, 20:56   Link #23
4Tran
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Quote:
Originally Posted by kuroishinigami View Post
The problem in bitcoin or any non-regulated currencies is the volatility of its value leads to its undesirability.
Bingo. The value of money is based entirely on the confidence of consumers in how it's backed. Without backing from a solid institution like a country or major corporation, the value of any currency, electronic or otherwise, will fluctuate wildly and eventually fall to nothing. Bitcoins don't have any kind of backing, so their fate is pretty much preordained. If you want a superior virtual currency, go with QQ coins.
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Old 2013-10-09, 21:47   Link #24
speedyexpress48
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All right, as an experienced local bitcoin trader and someone who has been in the bitcoin scene since its infancy, lemme tell you my story.

I first got into the whole idea of bitcoin back when "Satoshi Nakamoto" mined the first block of bitcoin, which numbered 50 bitcoin in total...of course, back then the bitcoin wasn't worth much (I remember the value in the 0.003-0.005 USD range...yes, kids, this is what bitcoin was worth before "teh Road"...), but I asked a certain friend of mine (let's just call him "Danny Boy") to send me a few (5-6 bitcoin). Obviously, as a completely new system, it was filled with vulnerabilities, and to be honest it was so hilariously buggy in the first few months of its initial popularity that I just forgot about the coins for a long time.

It wasn't until late 2010 when bitcoin values raised to $0.50. However from then on out, it rose quickly, and the value of bitcoins rose to $1 each in about 3-4 months (it was either March or April of 2011...probably March, though don't trust me on that). Sometime in the summer, the value of BTC raised to $10/coin, however because I was desperate for cash and kinda stupid back then, I sold all but one of my BTC back to the friend who gave me the coins. Huge mistake, since the value of BTC just rose faster and faster...I think it reached $60 something at the end of the year.

Anyways, I decided to pour some cash into BTC and give trading BTC a go. All I could see was the value going up...and up...and up...

I held off selling my current bitcoin and bought a few during the crash too. Why? Because I kinda expected that the value will rise back up. I decided to become a localbitcoins trader, and I profited a hefty amount after waiting it out for a few months.

Sure enough, after the crash of April 2013, $60 bitcoins went up $100 in value over just a few hours. I had quite a few customers, and since I also charged a bit of a processing fee, a dozen trades in a three-month period netted me $500-600 in profit.

Bought a lot with that money...fixed up my car to the point where it was enjoyable to drive again, started to plan out a Anime Expo trip, and bought some fine, legalized weed from the locals

Now? Silk Road is dead, which was most likely the reason why I lost most of my customers. I heard of plenty of people locally who stored BTC on SR and lost their cash during the seizure, and some of my friends who were also traders complained a lot...some of them had 4-5 trades a day and now, nothing. Can't really feel too sorry for them though...they should have known it was coming.

But who knows, there will probably be a nice ol boom period again, or maybe Litecoin is the next big thing. I had my fun...maybe I'll be back, maybe I won't. But a thing to always remember is...Bitcoin is a game of currency, not an investment. Don't depend on it, don't put too much into it, whatever...

And the game of currency part ensures that BTC will never be an mainstream currency for anything (not even drugs...LOL) Can virtual cash become mainstream in the future? Maybe. But BTC isn't it. I love bitcoins and the whole idea of BTC, but for now it's just too much of a gamble. Can you profit from it? Sure, I already did...but it's not gonna be very useful for the next century or so.
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Old 2013-10-10, 08:01   Link #25
SaintessHeart
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I agree with Speedy.

Think of bitcoin as gold in real life, and you would probably understand what it is about.
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Old 2013-10-10, 08:19   Link #26
kuroishinigami
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Difference is, gold is actually useful for something. Also, having it used as reserves even by central bank, it's definitely more "safe". Still, there's a reason people no longer use gold as currencies(voatilities)
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Old 2013-10-10, 19:27   Link #27
speedyexpress48
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Quote:
Originally Posted by SaintessHeart View Post
I agree with Speedy.

Think of bitcoin as gold in real life, and you would probably understand what it is about.
Not to mention the fact that LiteCoin is quickly catching up with BitCoin on value. I'm mining Litecoins, I should know.
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Old 2013-10-10, 19:49   Link #28
erneiz_hyde
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Quote:
Originally Posted by kuroishinigami View Post
Difference is, gold is actually useful for something. Also, having it used as reserves even by central bank, it's definitely more "safe". Still, there's a reason people no longer use gold as currencies(voatilities)
Really? I'm under an impression that gold is at least a stable investment, and the reason they fell out of favor as a currency is more practicality issues rather than values.
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Old 2013-10-10, 20:33   Link #29
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Slightly off topic (or not), but on the topic of bitcoins and "teh Road"...listen to the interview and connect the dots to BTC/SR...

https://www.youtube.com/watch?v=Xfgu...ature=youtu.be
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Old 2013-10-10, 23:35   Link #30
SaintessHeart
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Quote:
Originally Posted by kuroishinigami View Post
Difference is, gold is actually useful for something. Also, having it used as reserves even by central bank, it's definitely more "safe". Still, there's a reason people no longer use gold as currencies(voatilities)
It is a safe haven for funds, like bitcoins. Not much difference when it comes to alternative investments other than it has legacy value than its virtual counterpart.
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When three puppygirls named after pastries are on top of each other, it is called Eclair a'la menthe et Biscotti aux fraises avec beaucoup de Ricotta sur le dessus.
Most of all, you have to be disciplined and you have to save, even if you hate our current financial system. Because if you don't save, then you're guaranteed to end up with nothing.
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Old 2013-10-10, 23:57   Link #31
kuroishinigami
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Quote:
Originally Posted by SaintessHeart View Post
It is a safe haven for funds, like bitcoins. Not much difference when it comes to alternative investments other than it has legacy value than its virtual counterpart.
Uh, you do realize that gold is used as EM radiation coating among many other use right(mainly coating, and as jewelry)? That alone make gold has some kind of intrinsic value(although not as high as its current price) unlike bitcoins, which just data. What I meant to say is, unlike bitcoin, which can become trash when no one is putting their money in it, there will still be some value on gold even if it no longer become the de facto standard of alternative investment.


Quote:
Originally Posted by erneiz_hyde View Post
Really? I'm under an impression that gold is at least a stable investment, and the reason they fell out of favor as a currency is more practicality issues rather than values.

You can't have a stable currency unless an institution(like governent) can completely regulate the outflow of said item. Sure, it's a relatively stable investment currently, but if someone/group of people, let's say... Top 100. Richest person, decide to hoard those golds for quite sometimes to remove it from circulation, the price can go up rapidly. The same can actually be said for currencies, but since it's controlled by government, if a person tried to hoard USD for exampe and remove it from circulation, the US overnent can print more money to steady the money circulation itself. Of course, this is a simplified explanation, but I hope you get my point.
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Last edited by kuroishinigami; 2013-10-11 at 00:14.
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Old 2013-10-11, 00:16   Link #32
SaintessHeart
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Quote:
Originally Posted by kuroishinigami View Post
Uh, you do realize that gold is used as EM radiation coating among many other use right(mainly coating, and as jewelry)? That alone make gold has some kind of intrinsic value(although not as high as its current price) unlike bitcoins, which just data. What I meant to say is, unlike bitcoin, which can become trash when no one is putting their money in it, there will still be some value on gold even if it no longer become the de facto standard of alternative investment.
But how much of that is needed to let gold have a significant value?

The value of a metal is dictated usually by its value in industry, like copper, steel, platinum, etc. Gold use as EM absorber is usually exotic, there are many other applications which could have been used if not for weight and mission-terms.
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When three puppygirls named after pastries are on top of each other, it is called Eclair a'la menthe et Biscotti aux fraises avec beaucoup de Ricotta sur le dessus.
Most of all, you have to be disciplined and you have to save, even if you hate our current financial system. Because if you don't save, then you're guaranteed to end up with nothing.
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Old 2013-10-11, 00:37   Link #33
kuroishinigami
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You forget that demand always adjust to te price. Right now, it is still used as exotic alternatives, but once gold lose some value from stop being used as investment, it might end up being used more as coating(it's also a very good coating for oxidation and corrosion BTW) so at the very least it won't be much cheaper than zinc or other EM absorber(it's actually EM refractor BTW not aborbant, and also infrared refractor which make it a good coating for satelite) due to its rarer nature.

Like I said, if gold stops being used as investment tools, its price might drop a lot, but it surely won't become trash like itcoin
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Old 2013-10-11, 10:17   Link #34
SaintessHeart
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Quote:
Originally Posted by kuroishinigami View Post
You forget that demand always adjust to te price. Right now, it is still used as exotic alternatives, but once gold lose some value from stop being used as investment, it might end up being used more as coating(it's also a very good coating for oxidation and corrosion BTW) so at the very least it won't be much cheaper than zinc or other EM absorber(it's actually EM refractor BTW not aborbant, and also infrared refractor which make it a good coating for satelite) due to its rarer nature.

Like I said, if gold stops being used as investment tools, its price might drop a lot, but it surely won't become trash like itcoin
That is what the textbook says. Try playing gold stock for a year or two using that strategy.

You forget one VERY fundamental thing - what gives something a value? Go beyond the textbook terms of supply and demand for a moment, looking only at price; the answer is less complex than what you expect.
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When three puppygirls named after pastries are on top of each other, it is called Eclair a'la menthe et Biscotti aux fraises avec beaucoup de Ricotta sur le dessus.
Most of all, you have to be disciplined and you have to save, even if you hate our current financial system. Because if you don't save, then you're guaranteed to end up with nothing.

Last edited by SaintessHeart; 2013-10-11 at 10:27.
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Old 2013-10-11, 15:12   Link #35
AnimeFan188
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As regulators circle Bitcoin, virtual money men ante up for the digital currency:

"After dismissing Bitcoin as a joke for years, many Silicon Valley investors now see
digital currencies as the next revolution to hit the Web after social media. In May,
Founders Fund, set up by PayPal founders including Peter Thiel, led a $2 million
investment in Atlanta-based BitPay, which allows merchants to accept Bitcoin
payments and is processing transactions totaling about $7 million a month.

Also in May, after two years of wait-and-see, New York-based Union Square Ventures,
an early investor in Twitter, put $2.5 million in Coinbase. Coinbase was processing $20
million worth of Bitcoins a month as of September, up from $1 million in February.
Then Google Ventures jumped into digital currency with an investments in OpenCoin,
which started Ripple, a payment system using Bitcoin and other currencies."

See:

http://www.washingtonpost.com/busine...523_story.html


====================================


What An ATM Could Mean For The Bitcoin Community:

"The Lamassu Bitcoin ATM claims to convert currency into Bitcoin in seconds.

Lamassu, Inc.ís video demo shows CEO Zach Harvey turning cash into Bitcoin by
scanning his Bitcoin wallet QR code and then feeding bills into the machine. The
machine transfers the money digitally. Since the machine doesnít have a way to spit
bills out, the process is not reversible."

See:

http://readwrite.com/2013/10/11/what...ojZNWQsH8uGpJd
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Old 2013-10-12, 18:19   Link #36
willx
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Old 2013-10-12, 19:13   Link #37
Roger Rambo
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Quote:
Originally Posted by SaintessHeart View Post
I agree with Speedy.

Think of bitcoin as gold in real life, and you would probably understand what it is about.
A scam where the people who own the *valuable* substance try to trick everyone else into thinking it's highly valuable/stable, and then reap the benefits of being atop the pyramid scheme?
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Old 2013-10-12, 21:32   Link #38
Jan-Poo
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Originally Posted by speedyexpress48 View Post
All right, as an experienced local bitcoin trader and someone who has been in the bitcoin scene since its infancy, lemme tell you my story.

*snip*
That's way too volatile to work as a currency. How could a retailer even set a price for his products when that price's value could double in the span of an hour?

I think that the sudden success of "bitcoin" was mainly due to speculators like you and not serious buyers and traders.
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Old 2013-10-12, 22:10   Link #39
speedyexpress48
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Quote:
Originally Posted by Jan-Poo View Post
That's way too volatile to work as a currency. How could a retailer even set a price for his products when that price's value could double in the span of an hour?

I think that the sudden success of "bitcoin" was mainly due to speculators like you and not serious buyers and traders.
Actually, most of my buyers were probably buying some fine...erm...products on the Silk Road, judging by the huge dropoff after SR shut down. Just my guess though

But yeah, true...I do kinda agree with you, it was probably speculation. Still though, those sudden peaks were not really constant at all and were pretty much one-time occurrences; BTC is very volatile, but not that volatile most of the time. (Also, since BTC is mostly online, prices rose/fell according to value rate calculators.)
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Old 2013-10-14, 02:01   Link #40
kuroishinigami
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Originally Posted by SaintessHeart View Post
That is what the textbook says. Try playing gold stock for a year or two using that strategy.

You forget one VERY fundamental thing - what gives something a value? Go beyond the textbook terms of supply and demand for a moment, looking only at price; the answer is less complex than what you expect.
Well, I know about human greed and inclinement to avoid cognitive dissonance(hence trends and speculation born from it), but I think we were talking about whether if gold is no longer used as investment tool, will it turn to trash like bitcoin(and real life money actually) or will it still retain some value(no matter the value) so the price is irrelevant?

I argue that yes, no matter what the value is, it will still have some value(with the lower limit being the price of item it can substitute such as zinc IMO, but pricing by human can be fickle).

And although I never played gold stock, having a private fund manager for a small circle of friends for 4 years already, I know a bit about how fickle a price solely decided by market can be, but in the long term, from what I observed, it usually always adjust to its intrinsic value(in the term of stock market, the projected profit of the company), which is why I argue that as long as gold has intrinsic value(as a substitute for other element), it will never lose its value completely like bitcoin(which IMO has zero intrinsic value, like real money).
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