The Bitcoin Saga

I’m with Kraken as well and cashing out (after jumping through all the setup hoops) is usually within a day and done with a few clicks. It’s just too bad their trading engine sucks so hard.

I understand exactly how bitcoins are mined. I understand their design. I understand the concepts of scarcity introduced, and the block chain, and fractional payment.

But clearly this whole thing is an elaborate scam, right? Every currency in the world was once backed by physical goods (gold or silver being the most common). The US eventually went off the gold standard, but that was after it had proved to the world that it was a stable, healthy country with little chance of it’s currency tanking. Same with the British pound. Same with every other currency.

But Bitcoin? It’s just made up shit. You can’t create a currency out of nothing, backed by nothing, out of nowhere.

I’m glad people are making money speculating in the long term, but this is crazy and doomed to fail.

Anyone have a counterargument? I’d love to hear it.

I mean, you absolutely can, as long as people are willing to accept it. There are many, many examples throughout history, though none as prominent as bitcoin. The problem with bitcoin, as a currency, is that the more people use it, and the higher its value, the less useful it is as a currency. In its current form, it’s basically useless as such. Its only realistic purpose is as a speculative asset.

That’s exactly my take, it’s pure speculation. At least you could plant tulips.

The fact that you have to “cash out” through some convoluted process is a dead giveaway.

Bitcoin is backed by tons of criminal money as it’s great for money laundering. Not something that will ever make it a legitimate currency alternative, but a real source of value nonetheless.

That said, the recent craze is going to bomb hard. I cashed out most of my coins atm, waiting for the inevitable crash. If there is a future for cryptocoins it’s not going to be found in bitcoin.

There is something to the idea that Bitcoin is backed not by gold or silver, but heroin and AK-47’s.

The future of cryptocurrency may lie in Ripple. Ripple was developed specifically to eliminate most of what makes Bitcoin and other cryptocurrencies unstable, the mining of the blockchain and all the processing headaches and price fluctuations that come with it. Ripple is meant to be stable, holding value so it can be used as “real” cryptocurrency for exchanges between banks and online retailers like Amazon.

Right now Ripple is around $0.25 per coin. The idea was to eventually get it to an even transaction value, so around $1 per coin. While Ripple will likely never see a value spike like Bitcoin, Litecoin and Etherium, many pundits do think it could benefit a little from the crypto craze and reach as high as $5 sometime next year. That could turn a $100 investment today into a $2000 windfall this time next year. It’s not Bitcoin levels of crazy, but it’s not terrible either.

The bottom line is, Ripple is trying to do what Crytocurrency should be doing, setting itself up as a stable and tradeable alternative to localized currency instead of a speculative investment bubble.

Bitcoin is backed by speculators wanting in on the action before it all falls down.
That’s my feeling regarding it all.

Use your casino money to invest if you want but please don’t use your life savings.

I don’t see this changing until the day comes that you’re paying for your morning coffee on the spot, via bitcoins. This means a couple of things, probably top being that the transaction is confirmed within a couple of seconds and not the current 45+ minutes (bitcoin confirmation time * number of confirmations to ensure payment).
This means speeding up the network somehow, etc, etc, etc

This will never happen unless its with another cryptocurrency. Bitcoin has too much issues(both technical and social).

I changed your comment to include my Spidey Sense about the whole damned thing.


It’s a spoof.

So BTC lost 4% immediately upon opening up on some exchange today.

Yeah but it’s still at 18 thousand goddamn dollars. For a “currency”.

Glad all the pederasts, drug dealers, human traffickers and other criminals are making so much money. Yay technology!

Did you guys ever read Cryptonomicron by Neal Stephenson? In it the protagonist opens a secure data vault that is not covered by international jurisdiction on a remote island nation. The people who show up to use it are . . . all scumbags.

Sure, but its absurd instability kind of betrays the fact that it’s not a “currency” at all. Because the entire fucking point of currency is to provide a stable measurement of value.

It’s tulip bulbs. It’s just an abstract commodity (purely abstract) that people are gambling on.

Essentially, investing in BTC is choosing to join into a game of chicken with other “investors”… only the loser is the last guy to flinch.

I was telling a buddy of mine who got a bitcoin at like $500 that he was nuts for not selling it last week. I’m like, “Dude, it’s $20k. At least sell PART of it and lock in your gains.”

I did the same thing with my SIRI stock two weeks ago… sold off half of it at like $5.65… because even if it goes up, I don’t want to lose the huge chunk of money I already made.

But it’s the same kind of thing that traps every gambler… “What if I get off, and it goes up, and I lose money!”

If you sell a commodity for a massive gain, YOU ARE NOT LOSING MONEY. That’s the only way to ever make money. You can’t make money at a craps table unless you quit while you’re up.

I’m a Democrat and I really want a bigger safety net for Americans, but I would be all for a law that says anyone who loses money on Bitcoin doesn’t get saved by the government.

I love that law. It’s gambling.

But yeah, it’s clearly a speculative commodity. Curious to see the CME and CBOE options put and call balances, and how much they are going for.

And are they really options, like you can excercise them and get the underlying commodity?

They are not listing options, they are listing futures. A.k.a. at a specific date in the future the buyer and seller will make the transaction. They are cash settling, however. Participants do not exchange the underlying commodity, they cash settle based on an index settlement cost. The CME and CBOE have different settlement price. The CME is based on an aggregate index:
http://www.cmegroup.com/trading/cf-bitcoin-reference-rate.html

Long story short, though, is that since they cash settle in dollars the participants do not need to hold or exchange actual BTC.

They’re real derivatives, but they’re cash settled, by reference to either an auction, or a proprietary spot rate based on trade data from various exchanges.