Bitcoins are officially donkdown

[Dan Druff]

Embedded Tweet

https://twitter.com/twt/status/760607145561817088

That's like $60-$70 million, depending upon the value per BTC.

[Sidewinder]

Embedded Tweet

https://twitter.com/twt/status/760607145561817088

That's like $60-$70 million, depending upon the value per BTC.

I wonder if this caused the drop (someone trying to cash out the heist on some other exchange) or no one really knows why the BTC flaps around like a fish from time to time.

[MumblesBadly]

I would try to cancel any cashout right now and wait for stability. It still could be fine in a day or two when it's processed but no way do I want a poker site processing anything right in the middle of this crazy fluctuation trend going on.

For someone cashing out in an ideal world I'd like if the coin dropped to a bit then stabilized down at a rate where you know it's going to probably go up once the public panic settles down from the Bitfinix shenanigans.

I considered that, but I'm guessing the cashout will hit tomorrow, and I am also guessing that the panic-selling will be done by then, and I might make some money back on the rebound

If I don't sense that the crash is over, I'll just quickly sell the BTC.

Hopefully, they cashed you out early this morning. Really early. 'Cause the price is only about $20 lower (about ~3.5%) than it was when you first posted that you thought it would crash ($580). But it is still about $40 (~6.7%) lower than before the panic selling started with Bitfinex's announcement yesterday.



Still, that is an impressive recovery after crashing about 20%.

[GringoStar]

The most important thing to remember about Bitcoin is that, as a long-term investment, it will not be hindered by a hack or even a full collapse of a single platform. The implosion of Mt. Gox, the controversy of Silk Road, the heist of Bitfinix, or even a future problem with a major platform like Coinbase, will not change the core element of BTC, because it is a decentralized protocol.

That being said, these dips can be scary, as the value has dropped more then $100USD in a month, but I imagine it will spike to over $800USD within the next 3 months, especially with the upcoming presidential election.

[MumblesBadly]

The most important thing to remember about Bitcoin is that, as a long-term investment, it will not be hindered by a hack or even a full collapse of a single platform. The implosion of Mt. Gox, the controversy of Silk Road, the heist of Bitfinix, or even a future problem with a major platform like Coinbase, will not change the core element of BTC, because it is a decentralized protocol.

That being said, these dips can be scary, as the value has dropped more then $100USD in a month, but I imagine it will spike to over $800USD within the next 3 months, especially with the upcoming presidential election.

Regarding the long-term risk of bitcoin as a store of wealth: Perhaps a significant long-term risk is whether some hacker(s) develops a malicious and hard-to-detect virus/worm/whatever that surreptiously damages or wipes out the bitcoin on off-exchange wallets/systems/etc, not just on a particular exchange. Then folks' confidence about the durability of the bitcoin their store on their own devices/systems would be in question. Or perhaps when they try to exchange bitcoin, which would escalate fear about the ability to liquidate bitcoin. Those risks, if realistically heightened, would likely have a huge negative affect on the value of bitcoin.

But I guess these risks have already been discussed here.

[sonatine]

Regarding the long-term risk of bitcoin as a store of wealth:

Sincerely,

A truck driver

[DJ_Chaps]

Regarding the long-term risk of bitcoin as a store of wealth:

Sincerely,

A truck driver

Post your credentials.

[Sanlmar]

The most important thing to remember about Bitcoin is that, as a long-term investment

The original premise was that Bitcoin was a currency. I think we are well beyond any discussion of Bitcoin having any common usage.

Currencies can be gamed and speculated but nobody ever bought dollars or yuan as a long term investment.

Bitcoin fluctuates wildly and that has an appeal. Every few minutes the stick man will push the dice your way.

It possesses perfect attributes that allow for illicit activity. There is always a need for that. For that I am grateful.

It does not possess any proprietary attributes that cannot be mimicked by others.

This experiment provides valuable lessons to observe and they will serve you well later.

Most importantly, the free market does not exist anywhere on our planet. People like Druff are the norm. There will always exist the call to regulate.

[Belly Buster]

Embedded Tweet

https://twitter.com/twt/status/760607145561817088

That's like $60-$70 million, depending upon the value per BTC.

[MumblesBadly]

The most important thing to remember about Bitcoin is that, as a long-term investment

The original premise was that Bitcoin was a currency. I think we are well beyond any discussion of Bitcoin having any common usage.

Currencies can be gamed and speculated but nobody ever bought dollars or yuan as a long term investment.

Traditional currencies with reasonable expectations of not having excessive inflation risk are an integral component of a well-diversified portfolio. In countries where people aren't too concerned about the government (or other powerful parties) extralegally or otherwise seizing non-cash wealth, a properly diversified portfolio probably calls for holding somewhere between 2-5% of wealth in CoCE (cash or cash equivalents), depending upon portfolio size, age, etc., and probably somewhat higher the more immediate the personal need for liquidity.

But in countries where the risk of confiscation is high, people are better off holding much more of the wealth in cash or some other readily-exchangable store of wealth they have confidence that they can keep out of the hands of a confiscatory government or other actors. And that is what the Federal Reserve concluded that people overseas, in countries like Russia, where the rule of law regarding property rights is a mirage sustained for the benefit of the kleptocracy, are doing. In fact, the Fed's research to-date on the matter suggests that about 1/3rd of US paper currency being issued is being socked away by individuals and others around the world as a store of wealth. So, yeah. US dollars (mostly C-notes) *are* a long-term store of wealth for *many* people, just not you and most of the folks you know.

Bitcoin fluctuates wildly and that has an appeal. Every few minutes the stick man will push the dice your way.

It possesses perfect attributes that allow for illicit activity. There is always a need for that. For that I am grateful.

It does not possess any proprietary attributes that cannot be mimicked by others.

If so, why don't we see a plethora of viable, and similarly valued, alternatives to bitcoin?

This experiment provides valuable lessons to observe and they will serve you well later.

Most importantly, the free market does not exist anywhere on our planet. People like Druff are the norm. There will always exist the call to regulate.

[Sanlmar]

Investment
Store of wealth

Weaponized self-regard.

Google the definitions

Missed the second part



There are some unique things that propelled both beanies and Bitcoin. Neither had anything to do with currency

[MumblesBadly]

Investment
Store of wealth

Weaponized self-regard.

Google the definitions

Why don't you google Fed research on how US dollars are used as a substantial store of wealth by MANY individuals around the world versus what you simplistically suggest here? Because I trust you are smart enough to comprehend why they conclude what I mentioned if you step away from assuming you already understand this matter without schooling yourself on their findings.

Or are you afraid that you will discover that you are currently a bit underinformed about the matter?

[Dan Druff]

bitfinex is going to spread the losses amongst all their customers.

Lovely.

https://www.rt.com/business/354715-b...sses-currency/

[sonatine]

Anyone looking to understand more about why the Chinese are effectively propping up Bitcoins both as farmers and 'investors', good primer:

http://www.theepochtimes.com/n3/1225...y-the-bankers/

That only covers the internal scamming, it doesnt even touch on the government side of that coin which is just as grim if not grimmer.

[sonatine]

Hey guys great news:

https://www.reddit.com/r/Bitcoin/com...name_a/d6bs505


If you recover the $74,000,000 worth of bitcoins, the owners of the exchange will give you $3.5m bounty.

[Sanlmar]

Hey guys great news:

https://www.reddit.com/r/Bitcoin/com...name_a/d6bs505


If you recover the $74,000,000 worth of bitcoins, the owners of the exchange will give you $3.5m bounty.

Of course all references are made in fiat cause, well, mumbles can explain.

[MumblesBadly]

Comment:

Sanlmar: "Bitcoin is not a common currency. It is not a long term investment. Stay focused or quit"

Just because you say these things doesn't matter to the people who consider them so. That is the nature of markets. The "experts" ultimately don't dictate their value or utility; the market participants collectively do.

Also, like with other non-income generating assets, individual market participants don't have to be expected to hold bitcoin forever for there to be a perpetual *aggregate market* demand for holding them. This notion is well-known in macroeconomics, and serves as a basis for understanding why sophisticated modern central bankers are concerned with determining the best range of outstanding bills and coins of their currency. Which is why the Fed spends on research of the circulation of Federal Reserve Notes (actual physical cash), some of which I mentioned in earlier posts.

About 4 months ago in another thread:
http://pokerfraudalert.com/forum/sho...l=1#post523877

And a week and a half ago in this thread:
http://pokerfraudalert.com/forum/sho...l=1#post572585

But, hey! Don't let ignoring these concepts and facts, willfully or otherwise, get in your way of making your argument!

[Sanlmar]

Just because you say these things doesn't matter to the people who consider them so. That is the nature of markets. The "experts" ultimately don't dictate their value or utility; the market participants collectively do.

But, hey! Don't let ignoring these concepts and facts, willfully or otherwise, get in your way of making your argument!

You neg replied my opinion on some third rate forum because I wasn't properly credentialed.

Now you state my opinion "doesn't matter to the people who consider them so" and instruct me "this is the nature of markets"

I should just let that sit and push send. Where logic meets misfortune... when it starts getting personal and you recognize you've already won. But it's fucking Bitcoin. What nerve have we hit?

Look. Bitcoin is not used as a currency for legal commerce except in a few token instances. It has a niche in illegal commerce. Thank goodness cause it allows me to have some fun.

However, it is not a currency used for legal exchange by anyone as a practical matter.

It does have a value. For now.

You invoke the markets. The market has fought and Bitcoin has a value - not as a currency with utility. It's just a thing. I live the markets every day. In my opinion (can I cease qualifying now? You get how this works yet?) what I see is a collectible not a currency. Yes there is a market. Hummels had a market too. I guess there still is one. Markets are just opinions backed by money.

I shit myself when I saw Sonatine's post regarding the reward. In that Bitcoin is not a measure of value the reward was expressed in fiat dollars. C'mon, that's funny and summarizes anecdotally my point.

I mumbled my "collectible not currency" thought and came up with this remedial lesson from Fortune magazine.

I just have two other thoughts that were stimulated by the article.

It is volatile and lacks security. The only perfect security is physical security. I am not credentialed in IT Security dude. Ask Sonatine if this theory is true in his world. Just my opinion.

It's utility presently relies on exchanges. They can be shut down in an effort to curb illegal activity. The Internet is remarkable but exchanges require trust to work. They need to operate in the open for them to work.

These two ideas make wealth management or long term investing in Bitcoin ludicrous.

Do I hate on Bitcoin? No way. It's fascinating. Cool tech, fraud and fantastic brilliant characters. even the ones that aren't in prison. Yet.

I have seen too much in my time. I know a bubble when I see one. They all have varying lifespans.

From 2013

Bitcoins Are Digital Collectibles, Not Real Money

In case there is any doubt after yesterday’s market action, Bitcoins are not money. They also can never be money, in the sense of providing an alternative to the U.S. dollar for operating the U.S. economy. Rather, they are “digital collectibles,” the cyber equivalent of rare postage stamps.

Money has three basic functions, and Bitcoins don’t do a good job of performing any of them.

First, money provides our fundamental unit of market value, the yardstick against which the market value of everything else in the economy is expressed. For example, a car might be 200 inches long, weigh 4000 pounds, go 120 miles per hour, and cost $50,000. These numbers express data concerning the car, as measured in the American units of length, weight, time, and market value.

The most important thing about any unit of measure is that it has a constant, unchanging magnitude. Since President Nixon abrogated the Bretton Woods gold standard in August 1971, the dollar has not provided a particularly stable unit of market value. However the Bitcoin is far worse in this respect.


On April 9, the market value of the Bitcoin closed at $233. During trading yesterday, the Bitcoin popped up to $266 and plunged to $105 before closing at $130. This left it down by 44.2% on the day in terms of dollars and by 43.3% in terms of gold.

Over the past two months, the value of the Bitcoin in dollars has varied between 15.4% and 204.6% of its April 10 closing value. During the same period, the price of gold in dollars has ranged between 98.4% and 105.7% of its April 10 close.

It would not be possible to base an economy on a currency whose real value was as volatile as the Bitcoin’s. For one thing, money is used to mobilize society’s capital to create real, productive assets, like factories and chemical plants. Obviously, no one could take the risk of buying or selling 10-year bonds denominated in Bitcoins, when the long-term real value of the Bitcoin is so uncertain.


Interestingly enough, as a unit of market value, the Bitcoin suffers from the same basic flaw as our fiat dollar. At any given moment, the supply of the “currency” is fixed, and the market is asked to determine the value of the monetary unit via supply and demand. In contrast, a good monetary control system would fix the value of the currency unit (in terms of gold or something else real) and then adjust the size of the monetary base on a moment-by-moment basis in order to maintain this value in the markets.

The second major use of money is as a medium of exchange. While it is possible today to use Bitcoins to purchase certain items, it would not be possible to substitute Bitcoins for dollars on a large scale. As of the end of March 2013, the U.S. monetary base was $2,961 billion and there were only about 8 million Bitcoins in existence.

To replace our entire dollar base money with Bitcoins would require that each Bitcoin be valued at more than $370,000. Perhaps this fact is what drove speculators to bid up the price of the Bitcoin to $266 yesterday.

Also, by design, there can never be more than 21 million Bitcoins, and that number won’t be reached until 2040. As a practical matter, this means that Bitcoins were never designed to be used as money. Whether this was intentional or not doesn’t matter. It is simply a fact that there will never be enough Bitcoins to use as a substitute for the dollar. No modern economy could survive the constant, grinding deflation that having a fixed monetary base would eventually produce.


The third important function of money is that it provides a way to hold wealth in a completely liquid form. The volatility of the real value of the Bitcoin makes it completely unsuited for this role. However, Bitcoins carry with them an additional risk that is not shared by the dollar. They could all simply vanish into the ether from which they were “mined.”

In the computer world, there is no security without physical security, and it is not possible to protect a computer system from its own administrators. Consider the following account of Bitcoin events in 2010, taken from Wikipedia:

On 6 August, a major vulnerability in the bitcoin protocol was found. Transactions weren’t properly verified before they were included in the transaction log or “blockchain” which allowed for users to bypass bitcoin’s economic restrictions and create an indefinite amount of bitcoins.[27][28]

On 15 August, the major vulnerability was exploited. Over 184 billion bitcoins were generated in a transaction, and sent to two addresses on the network. Within hours, the transaction was spotted and erased from the transaction log after the bug was fixed and the network forked to an updated version of the bitcoin protocol.

Obviously, the same people who erased the 184 billion phony Bitcoins could erase the 8 million “real” ones. Money always involves trust, and in the case of Bitcoins, you don’t even know whom you are trusting.


Given all of the hair on the Bitcoin dog, what accounts for all of the interest in Bitcoins? Actually, we have seen this phenomenon before.

During the 1970s, as inflation rose and public anxiety rose with it, ads advocating “investment” in “collectibles” started to appear. Financial advisors began recommending that people keep 10% of their net worth in “alternative investments,” including not only precious metals like gold, but “luxury valuables and collectibles.”

An unstable dollar is deeply frightening to people. Fear of inflation (and the societal breakdown that it can bring) motivates citizens to do things that, from the standpoint of the economy as a whole, are really dumb. One such dumb thing is to devote real resources to producing and squirreling away “collectibles.”

One company that was prominent in the collectibles business during the 1970s was the Franklin Mint. Near the peak of the inflation bubble in 1980, Warner Communications (now part of Time Warner) bought the Franklin Mint for about $225 million. Six years later, after Ronald Reagan and Paul Volcker had crushed the inflation, Warner sold the company for $167.5 million. “Collectibles” turned out to be not such a hot investment after all.

Bitcoins are nothing more than digital collectibles. They are bought by speculators to hedge against inflation. Stabilize the U.S. dollar and all interest in Bitcoins will vanish

[Sanlmar]

Mumbles I know exactly which nerve I hit. I was being rhetorical. You know what? I don't care. You shouldn't either. Lace on some apathy like a big boy.

You want to chat about Bitcoin or got something interesting, I am in.

You got other problems? Go ahead and kill the thread. Chill. I am not your problem here.

[Sanlmar]

I feel like lol wow with the three-peat. It's the mark of a champion.

Bitcoin is the pornography of currency.
Largely illegal.
Filthy & fun.
Nobody will admit to using it.
Both drive tech innovation
Initially both were lucrative.
You know it when you see it