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comment by nowaypablo
nowaypablo  ·  3774 days ago  ·  link  ·    ·  parent  ·  post: 1 BTC traded over 1000 USD

Too bad bitcoins weren't created by the global bureaucracy and they will be fought against forever by most major financial institutions out of pure fear -.-





mk  ·  3774 days ago  ·  link  ·  

I don't know if that will be the case. The Senate hearing last week seemed to suggest otherwise. Read page 10, which begins the Federal reserve's opinion to the Senate.

user-inactivated  ·  3774 days ago  ·  link  ·  

Very interesting read. It seems to me that the anti-virtual currency crowd makes a pretty good point here, unfortunately -- money laundering and removal of currency from the US becomes infinitely easier, right? What's the counter-argument?

The bit where they outlined all the law enforcement measures they had taken against virtual currencies recently wasn't convincing to me.

b_b  ·  3774 days ago  ·  link  ·  

To me bitcoin is just a libertarian wet dream that will collapse in disaster. Even if it is generally accepted eventually, the current price will collapse dramatically. There is no case in history that I'm aware of in which a commodity can sustain a 1,000,000 fold price increase in the space of a couple years and not come back to reality. People are deluded by the old "But this time it's different!" mantra.

wasoxygen  ·  3774 days ago  ·  link  ·  

    the current price will collapse dramatically
Would you be willing to promise to sell me 100 BTC (or a bag of peanuts, if bitcoin ceases to exist) in five years for a total price of ten dollars? Seriously, with signatures and escrow and whatever we need to make a deal.

If not, what price would you ask?

    There is no case in history that I'm aware of in which a commodity can sustain a 1,000,000 fold price increase in the space of a couple years and not come back to reality.
I agree, for commodities I am aware of. But there is also an annoying statistical anomoly that I see frequently. Country X has the fastest-growing GDP in Region Y. It's true, but Country X is really tiny compared to the others in that region. It's easy to grow fast when you are young and small. I once doubled my body weight in a week, back in my zygote days.

Bitcoin has been around for a while, but if it has a future of wide global usage, it is clearly still in its infancy.

"This time it's different!" is a sucker's mantra. But still ... this time it's different. Was there ever another commodity in which the total supply was permanently capped? I have compared bitcoin to genuine Picasso paintings. The total supply can only decrease over time. Fashions influence their value, but they can't lose value because of decreasing scarcity.

b_b  ·  3774 days ago  ·  link  ·  

    Would you be willing to promise to sell me 100 BTC (or a bag of peanuts, if bitcoin ceases to exist) in five years for a total price of ten dollars? Seriously, with signatures and escrow and whatever we need to make a deal.

Obviously not. There's no upside for me in that case. I'm not going to make a hard price prediction. There is a chance BTC will be worth a decent amount years from now, but if so, it will be through gradual adoption, which will make the price increase steadily. As it stands now, this is a bubble. Bubbles all burst eventually.

wasoxygen  ·  3774 days ago  ·  link  ·  

I don't mean to suggest that you don't make a good point. There is no way I would accept less than, say, $10,000 for the promise to sell 100 BTC in five years. It's too risky. But on the buying side, I get uncomfortable at only $100. There is a huge amount of uncertainty.

    Bubbles all burst eventually.
If your time horizon extends to the heat death of the universe, then this is undeniable. And it has been true of all traditional commodities I know of. (Tulipomania was a great read.) All investments come to naught on a long enough time scale.

But what about Google stock? It was a positive frenzy at the IPO in 2004, when the first stocks went on sale for $85 per share. Was there ever a more obvious bubble? Yet GOOG trades today at about 1 BTC per share.

wasoxygen  ·  3774 days ago  ·  link  ·  

    There's no upside for me in that case.
There's ten bucks (less the cost of peanuts) in it for you. If that's not enough, you can name your price. (For the record, I am in at ten. I would consider it for $100.)

The point is, if you are bullish on bitcoin, you can buy them and hope to gain. If you are skeptical, you can still put money (and therefore credibility) behind your position and hope to gain by shorting bitcoin.

The current graph does make the word bubble come to mind. But this is exactly how it looked running up to $100. I was too skeptical then to buy in, so my money has been earning a safe 0.1% at Wachovia instead of gaining 20x.

People still make money selling tulips.

mk  ·  3774 days ago  ·  link  ·  

It sure is a brutal way to disperse a world currency if that is what it is to become.

It's funny that it's so enthusiastically compared to the value of fiat currency, when it is supposed to be a genuine replacement for it. Real BTC value would mean an economy dependent upon it.

wasoxygen  ·  3774 days ago  ·  link  ·  

    the anti-virtual currency crowd makes a pretty good point here, unfortunately -- money laundering and removal of currency from the US becomes infinitely easier, right? What's the counter-argument?
That telephones do the same thing.
iammyownrushmore  ·  3774 days ago  ·  link  ·  

How do you think they could effectively go after BTC holders? They list forfeiture/seizure as a strategy, but this kind of reeks of all the legal action against torrenting all over again, but I can imagine since this time it's about currency, it's going to be A LOT more vicious.

mk  ·  3774 days ago  ·  link  ·  

I imagine that they could only start at the exchanges. A heavy hand there might be enough to kill general acceptance, or at least slow it by a lot.