"PwC said it has begun accepting Bitcoin as payment for its advisory services"
Well... given that BTC is mostly useful for crooks, that figures...
(yeah, by the time I hit post I'm sure I'm not the only one to make that bad joke)
The price of Bitcoin (BTC) continued to soar on Thursday, creating chaos among those trying to buy and sell the cryptocurrency currency due to service trouble at several exchanges. In the past 24 hours, Bitcoin surged from around $12,700 up beyond $16,500, a new high, before retreating to around $15,500 by mid-morning Pacific …
@sjsmoto: I am already into Bitcoin since 2009, but only invested in 2013. As I already pulled my investment out 4-fold 2 months ago (halving my wallets), I now see the remains climbing another 15-fold after 2 months and strongly consider to give notice on my invoices that these may be discounted 20% if paid in Bitcoin. Most customers probably won't choose to do so, but doubling the money in a few weeks on the rest may well be worth it...
If I had a spare couple of quid (some hope at this time of year) I would definitely short BitCoin.
The key, as ever, is timing - or knowing quite when the whole shebang will come crashing down. End of 2018 is my best guess, there's still a few irrational expectations to be piled onto this Christmas turkey.
Here's my first and final instalment. (All future instalments can be derived by keeping my payment in Bitcoin currency).
This charade will continue until there are some well-publicised instances of people unable to convert to traditional currency, and everyone tries to head for the exit in desperate panic. Due to the time overhead involved in interfacing with the underlying blockchain, meltdown is not far away.
Good ideal. But Douglas Adams beat you to it...
All you have to do is deposit one penny in a savings account in your own era, and when you arrive at the End of Time the operation of compund interest means that the fabulous cost of your meal has been paid for.
This, many claim, is not merely impossible but clearly insane, which is why the advertising executives of the star system of Bastablon came up with this slogan: "If you've done six impossible things this morning, why not round it off with breakfast at Milliways, the Restaurant at the End of the Universe?"
Yes! In fact, the rise in bitcoin has made me wealthy enough to buy several million tulip bulbs, should I so desire! And if you'd got in early enough, rather than pointing and laughing and saying 'lol it's a bubble!' as the price passed $2 then $10 then $100 then $500 then $1000 then $5000 then $10000 you could too!
Famous, but not at all the first:
We learnt about the South Sea Bubble at school:
…peaking in 1720 before collapsing to little above its original flotation price; the economic bubble became known as the South Sea Bubble. The Bubble Act 1720, which forbade the creation of joint-stock companies without royal charter, was promoted by the South Sea company itself before its collapse.
Little Dorrit (1855 - 1857) identifies such schemes.
The Way We Live Now (1875) identifies such schemes.
So obviously much older. It wouldn't surprise me if the Ancient Romans did it 2000 years ago.
Gold coins from about 500BC (or earlier) became Electrum. The proportion of silver (and sometimes copper) was gradually increased. Pure gold is too soft for a coin anyway. The idea of gold as a standard survived in west till 20th C. Modern Fiat Currency using paper money was established in the 11th C. in China. It's really only a problem if the Government gets corrupt and stupid, because printing too much is self defeating (Hungary & Germany in the past, South America and Zimbabwe today).
Bitcoin seems designed to aid money laundering and pyramid selling. The mechanism to create coins is in the private control of rich people that can afford the mining computers and have cheap electricity.
Little Dorrit is a novel by Charles Dickens, originally published in serial form between 1855 and 1857. It satirises the shortcomings of both government and society, including the institution of debtors' prisons, where debtors were imprisoned, unable to work, until they repaid their debts. The prison in this case is the Marshalsea, where Dickens's own father had been imprisoned. Dickens is also critical of the lack of a social safety net, the treatment and safety of industrial workers, as well the bureaucracy of the British Treasury, in the form of his fictional "Circumlocution Office".
The Way We Live Now is a satirical novel by Anthony Trollope, published in London in 1875 after first appearing in serialised form. It is one of the last significant Victorian novels to have been published in monthly parts.
Comprising 100 chapters, The Way We Live Now was Trollope's longest novel, and is particularly rich in sub-plot. It was inspired by the financial scandals of the early 1870s; Trollope had just returned to England from abroad, and was appalled by the greed and dishonesty those scandals exposed. This novel was his rebuke. It dramatised how such greed and dishonesty pervaded the commercial, political, moral, and intellectual life of that era.
"money for nothing always requires an idiot on the other side of the transaction."
Same with buying Oranges on the stock market. You just need someone who likes Oranges.
Hope the world dont suddenly decide to hate Oranges. Maybe they will prefer the green ones.
Probably the best thing you can do.
It is highly unlikely there will ever be another tulip bubble but at least tulip bulbs have some intrinsic value (you can plant them and grow tulips to make your garden look pretty) whereas bitcoin do not (if the bitcoin bubble bursts you'll delete your wallet to reclaim disc space).
Tulip bulbs also have another useful property. One bulb is enough to kill you.* So after you lose a fortune in a tulip bubble you can eat a couple of bulbs to end your despair.
*There are conflicting reports about this. One claims that only the centre of the bulb is really dangerous. Which is why I recommend eating a couple of bulbs to be sure.**
**Severe abdominal pain may occur beforehand.
Who wouldn't invest if they knew for certain it would rise 15x in 2018 and not burst till 2019? I just don't understand these things well enough to know when the crash will come. But I've said that for several years. If I understood people's appetites better, I could have made a killing.
"Neither does anybody else."
I think I could have better understood the psychology of the
fools investors and geeks. The continual hype should have given me a clue. Instead of smirking knowingly at the swelling, pus-filled zit, I could have taken some of their cash.
However if it carries on at 10x per annum then in three years people who'd've cashed out with millions today will be cashing out with billions. In six, they'll be trillionaires. Does that sound sustainable? Based on what Steam were saying, it's no longer usable as currency either. So on practical grounds, it would seem to be close to apex. But it could easily have another year of high-rate growth.
Although the questions I'm really interested in, are, "If Bitcoin crashes, will investors run away from all cryptocurrencies and everybody suffer or will they move to the one that 'fixes' the problems?" And of course, "How much can I afford to lose?"
Its the banks buying up bitcoin - hence the price increase over the past year or two. Eventually they will crash bitcoin by selling it off by the wheelbarrow load. Once bit coin has bitten the dust they can carry on business as usual safe in the knowledge that they have destroyed this threat to their business model.
Cryptocurrencies are definitely a disruptive technology in finance circles. Best to destroy it rather than try and compete and lose out on major fees.
That's why all successful (for the early adopters) Ponzi schemes work. Anglo Irish Bank. Quinn was a sucker! Though he had been a serial speculator making bad choices after getting money from the Gravel pit and later for a while from the Insurance.
Usually a secret cartel of early adopters trigger the crash as they get out.
"Who wouldn't invest if they knew for certain it would rise 15x in 2018 and not burst till 2019? I just don't understand these things well enough to know when the crash will come. But I've said that for several years. If I understood people's appetites better, I could have made a killing."
Exactly - hindsight is a bitch!
If I'd known how much it would grow (bubble or not) back when I first heard about them (2010 I think) I could have sunk a few hundred in and paid off my mortgage a few times over by now...
As with all gambling, knowing when to get out and stay ahead is key!
Crumbs, someone has made a killing.
About 4 years ago a buddy and I lamented that fact we had missed the bitcoin boat. Oops!
I am wondering who is buying these up at current prices because they must feel there is still some further price increase to be had. Who knows, the sky is the limit I suppose.
I'll focus on paying down the mortgage for now and when its done I can blow the extra cash on risky ventures.
I am wondering who is buying these up at current prices because they must feel there is still some further price increase to be had.
Like all currency manipulation and stock exchange transactions, it's a bet placed with incomplete knowledge. And, like all bets, gambling fever can take hold (the stock market pretty much runs on it). Like all the people who bet on the favourite in a horse race. they reason that it's the favourite because people know something. In actual fact it's the favourite because random disparities in betting shortened the relative odds enough that people who have no idea how to evaluate form decided to bet on it because other people already had.
It's also subject to that form of manipulation known as "pumping." Economists have learned a tiny amount about negative feedback and labelled it the "invisible hand." If they'd learned a little more about negative feedback they'd have encountered Routh's Stability Criterion and realized just one of the reasons that a free market economy doesn't scale well. God knows if they'll ever learn about Z-transforms and figure out why microtrading is inherently dangerous if you don't understand control theory. Anyway, Routh's Stability Criterion explains why oscillations occur and why pumping can happen.*
*Greatly simplified explanation. I've forgotten 99.9% of the control theory I studied, and still know more about it than any economist.
My current plan with bitcoin is every time my fraction of a BTC is worth enough to buy a new graphics card, I'll cash out, but make sure I leave a tiny fraction.
Then a few years later, my 0.00001BTC is worth £500 again and I can cash out leaving 0.00000001BTC.
Considering I bought 1BTC for ~£70, and I've so far bought about £700 worth of stuff with it, I'm feeling smug. This is how investment works right?
"My current plan with bitcoin is every time my fraction of a BTC is worth enough to buy a new graphics card, I'll cash out, but make sure I leave a tiny fraction.
Then a few years later, my 0.00001BTC is worth £500 again and I can cash out leaving 0.00000001BTC.
Considering I bought 1BTC for ~£70, and I've so far bought about £700 worth of stuff with it, I'm feeling smug. This is how investment works right?"
Same here, though on a smaller scale than you. I bought 0.1BTC for ~£40 in 2014. So far I've bought almost £400 of kit in the last 2 months, and I've still got around 6x my original stake left.
Bitcoin Math: £40 - £370 = £300
It's a ponzi scheme using virtual tulips, which unlike real ones are designed to have a fixed final number.
I'm not sure when the early birds are cashing out and burning all those that bought in much later. Eventual value could be zero to $100.
A speculation vehicle that also has a transaction time that scales badly as more people do transactions is not a useful currency for ordinary people and honest retailers.
I'm not sure when the early birds are cashing out and burning all those that bought in much later..."
That supposed lump sum of 14,400 BTC that was cashed out yesterday at $15400. That equals over $200 million. How? What exchange could provide that much cash? This is where I think things might go wrong. Once the value has inflated beyond the fiscal capacity of any one organisation to trade, what happens then? Actually while writing that I realised what they'd do - continue dealing in fractions of BTC, but have a slowly-lowering ceiling of the highest amount they'll trade in.
Someone traded 14,400 bitcoin for... something. No one knows why, for what, for how much, or with whom. There's no way to know what they got in return, but the transactions were immediately "mixed" (laundered) so that might explain a few things. Someone was willing to pay the ludicrously high BTC transaction fees thousands of times to make that money untraceable.
Much of this is going into what are called ICOs AIUI. The big transactions are not cash, the small ones are. Thus most volume is for inter-crypto currency conversions. This is why the transaction goes through even when fiat exchanges are down.
I think money laundering also plays a huge role. I do think this is a bubble but then I also think fiat currency and QE are bubbles too so I don't know enough to draw the line.
If it ever becomes a real economic currency it will absolutely skyrocket but then regulators will stop it and it will die. I can't see how crypto currency can help society anyway.
It's easy to say it's a bubble when you don't know anything but the predictions earlier this year of it hitting $20k by next year are starting to look prescient. The thing is, if it were a bubble then you'd see the price going up without any serious support behind it ... but look at the hash rate on some of the larger mining pools - it's going through the roof. The hash rate is based on people investing in the hardware that supports bitcoin ...
According to the Wikipedia article linked to earlier, Tulip Mania was disrupted by bubonic plague in a trading exchange. The traded good suddenly became illiquid because of this.
Name any run on a bank. How did it effectively kick-off? When people tried to withdraw funds they had in their account and were told "not today". The currency had effectively become illiquid by that action.
Ponzi schemes end when there are not enough people coming on-board, putting money into the kitty to repay earlier investors.
If Bitcoin conversion into traditional currency were to take a long time to effect, or situations like a Denial of Service were to occur, then people would start to wonder whether their money were safe. With no government willing to act to repay investors/ speculators if Bitcoin defaulted, this is the scenario I envisage:-
So let's say a Bitcoin transaction takes longer than you anticipate to complete. Would you complain on Twitter? With Twitter and fake news fuelling the fire, a slight delay could turn into a positive feedback frenzy, and everyone will want out.
"It's easy to say it's a bubble when you don't know anything"
It's also easy to point out that it's a bubble when you do know. The ONLY thing not known is when it will burst.
There is no production or earnings or real changes in other currencies to support the current price.
The transaction time is non-linear and high. It's not scaleable to be used for regular frequent transactions by a reasonable number of people.
The only "problem" Bitcoin and other Cryptocurrencies solve is anonymity.
It's purely a speculation vehicle. The massive change in price actually proves this.
I'd not argue that it can't reach $20K, that would make it clearer to idiots that it's a bubble.
People buying now KNOW it can't last but are gambling that they can get out with a profit. That is characteristic of a bubble.
Also when it's too expensive to "mine" or there are no more to mine?
"The thing is, if it were a bubble then you'd see the price going up without any serious support behind it ... but look at the hash rate on some of the larger mining pools - it's going through the roof. The hash rate is based on people investing in the hardware that supports bitcoin .."
The hardware used to mine crypto currencies has no bearing on the actual "value" of the coin.
The "value" of the coin dictates the hardware people are willing to use to mine the coin, low price - low hashrate equipment due to the power costs.
Value of the coin is dictated on the exchanges based on the same principle of stock markets - what someone is willing to pay.
Funny thing is, all these exchanges are great at taking your money ( with an inner circle of miners) selling your their precious comidity (or have you believe it is) but once you have them, you can’t find another sucker to take them from you... had my wallet full of coins, only successfully bought a couple of smaller things online and that is it... to me it’s a scam, I mined my coins but never been able to cash out like everyone talks about, and it’s the recurring theme in the main forums an tweeter feeds... it’s a scam, prices can only go up, hope that new blood comes in with their hard earned cash and subdue the IDIOTS that did before with the homie of making it big! Whatcha the news lately, where is the headline on new era millionaires from BTC? Righ, why is that... don’t be blind!
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