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Posted on 03/21/2014 5:17:50 PM PDT by TsonicTsunami08
The stuff that makes people worry about bitcoin—its volatility, the notion that it's a nationless currency, the bizarreness of being able to "mine" money on a computer—are all part of a brilliant ploy designed to spread the crypto-currency around the world. And it's working.
(Excerpt) Read more at mag.newsweek.com ...
Love the headline:
“I BELIEVE IN HONEST MONEY: GOLD SILVER, AND BITCOIN”
As if they had anything whatsoever in common.
I see markets. I see metals through the roof and metals MINING artificially low.
Why would I buy, for ten grand, some geek’s notion of a global “you say I have ten grand” currency, when I can buy ten grand worth of metals or mining stock - or even a promising currency? With the former I am trading cash for “gift certificates.” No thanks, geeks. I’m not paying for your house in Seattle.
Quote me.
You don’t understand, There are forces at work that cannot be stopped. Metcalfe’s law of the network effect has Bitcoin rolling along to viral mass adoption. Bitcoin will be ubiquitous in 6 months.
It is basically impossible to speculate in bitcoin and not be greedy and stupid. There is no underlying logic to result in any particular price or any way to use some sort of technical charting. My point about greed is important. The best way to get burned is to put money into an exchange like Mt Gox to have them hold your private keys. First, you will own nothing since there is no regulation like at a brokerage. Second, their centralized server is a central point of failure and attack. It *will* ultimately fail since protection it has to be public facing and protection is alway more difficult than attack.
The "proper" and very safe way to hold bitcoins is with your own private key, thus they can't be traded in and out of currency (speculation) but must be held or transacted on digital services. They can also be spent on physical products but that generally involves a physical product company using an exchange like Mt Gox which doesn't make sense. In that case (my case with 0.1% of my portfolio so far) it is simply digital gold in a mattress. Buy, hold, diversify and wait for the dollar to crumble.
All that said, the best way to exchange value in the information age is something like bitcoin. There is no doubt whatsoever that the distributed transaction chain has long lasting value contained within it. It was designed that way. If I had to speculate in something like value in a chain, I would pick some scrypt coins and diversify. The newest coins are 99% doomed since they have no new qualities making them any better than the old ones. But there will be new coins that will jump in value because they add new value. As an engineer I would like to create one of those. But for now I will learn about what new value can be added to a coin to make it appeal to a wide variety of people.
Excellent observations. Thank you.
the problem with bitcoin is that
there are no barriers to competitor ‘coins’
such as litecoin or dogecoin
I generally agree with your assessment with one caveat. I beleive the true value lies in the decentralized network not the “ currency “ per se. As the article stated “ the light bulb to the grid “.
After reading the White Paper I realized that this was a network. After watching with fascination over the years the adoptions of new technologies and doing a vast amount of reading on the subject, I determined that this was a killer app.
Every movement of Bitcoin from its inception to present day has been exponential and gaining speed. You can look at network hash rates, price, number of users, all of it. The other very important thing is that it is global, worldwide. I know, redundant but this can’t be overstated.
Mankind has never seen the adoption of a technology this rapid. I am grateful for this opportunity and the ability to see it coming. This is the natural evolution of the information age, THE NEXT BIG THING!
You may be right, it does have a ton of potential uses. The only catch is that the strength of the mining network currently depends on the incentive for spending, so it could end up being dual use: a currency for some and distributed storage or some other distributed functionality. Lots of innovation is comig.
Competition is a good thing, it tests the strength of the leader. You have a valid point but the displacement of Bitcoin as the market leader becomes more unlikely with each passing minute for a number of reasons.
Bitcoin enjoys the advantage of first mover. It also has the advantage of a vast decentralized network infrastructure that has taken on a life of its own and is growing at never before seen speed.
It has wide name recognition( branding) everyone who talks about cryptocurrencies talks about Bitcoin generally.
It is being accepted by merchants now and that class of users is growing exponentially as well.
I wouldn’t say Bitcoin could never be displaced but as time passes the idea appears highly remote.
Dude, do not doubt MySpaceCoin. This time is different[tm].
In both cases you are trading one medium of exchange for another, hoping in both cases that they maintain, or if you're fortunate increase, in purchasing power. When you ask the question, why would I have bitcoin instead of gold, you raise the utility argument. Bitcoin is gaining traction as a medium of exchange because it can be transferred peer to peer, like cash, but without having to physically meet. Thusly it facilitates cash exchanges over great distances (e.g. migrant laborers transmitting purchasing power back home without giving Wells Fargo their multi-billion dollar cut, or someone making a purchase from Overstock.com on the web).
Other utilitarian feature of bitcoin is the ease of making change. $10,000 in gold no doubt is nice to hold, but if you need to make a $20 purchase, how readily can you do so from your bullion?
Bitcoin also completely avoids some of the transportation draw backs that large values of even high unit value commodities like gold pose. If you are flying out of Argentina with $10,000 in gold you're at much greater risk of personal loss than if you have the codes you need to access a bitcoin wallet from anywhere in the world.
Bitcoin, like gold, cannot be counterfeited, and that is why it is gaining traction among tech crowd. That is to say, by its nature, a cohort with higher than average intellect, and an ability to spot the Federal Reserve con for what it is, and furthermore, to act in their own interest accordingly.
I encourage anyone to diversify their savings because so much of the real economy remains susceptible to the whims of politicians, bankers, and technocrats like Yellen. With the gap in Federal outlays and receipts being reported at a trillion dollar last year, I see no 'tapering' to Federal inflation on the horizon.
Heres an interesting read if you haven’t seen it already. It takes up the topic we were discussing here.
Barry Sibert Founder and CEO of Second Market and The Bitcoin Trust tweeted
“Requests from 38 institutional investors representing +$250 billion to meet with me re bitcoin at Barclays Emerging Payments Forum tomorrow.”
May you live in interesting times Gentleman.And Mr.Palmer, you may want to bump that 1% up to 1.5% in your portfolio.
That’s Silbert with an
‘L’. Also the meeting is taking place this morning.
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