(Topic ID: 200502)

Somebody explain Bitcoin to me

By Pinballlew

6 years ago


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  • Latest reply 2 years ago by toyotaboy
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    #14 6 years ago
    Quoted from ExtremePinball:

    It is unlikely that the entire world eventually wants a USD conversion.

    USD is still the preferred reserve currency of the world so any meaningful conversion amount eventually involves dollars.

    Bitcoin at best is highly speculative at worst a ponzi scheme.

    Some global currency/ crypto currency will likely evolve over time as we all get more connected. But to bet any real money on bitcoin today is silly.

    #43 6 years ago
    Quoted from pezpunk:

    i don't know the future (and i don't have any money in bitcoin) but comparing it to the tulip mania fad is not accurate. there's certainly interesting underlying theories behind it.

    Sorry, his comparison is a good one. The dramatic value increase in tulips and bitcoin value is/was driven more by speculation than the actual change in rarity or the demand for the underlying asset.

    Heck, with all the people here complaining about pinball prices and machines as investments, I'm surprised it hasn't been linked to our crazy mania.

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    #45 6 years ago

    The rapid increase in valuation is being driven by speculation, not the for the intrinsic value it has or in actual change in rarity.

    That in and of itself defines it as a bubble (or mania), and is undeniable in this instance.

    #49 6 years ago

    Pez, speculation in bitcoin is undeniable, except by you.

    There are approximately 1 billion bitcoin transactions per day, or about $5 trillion in value at today's rate. This is equal to all other global currency transactions.

    Global GDP is $110 Trillion (as of 2015).

    At this rate, total bitcoin transaction values exceed the value of Global GDP in about a month.

    So, if all Global GDP was transacted with bitcoin at these rates, less than 10% of all bitcoin transactions would be for goods and services.

    Bitcoin used for real transactions is still a rounding error in global ecommerce, several decimal places deep.

    The inference is that well over 99.999% of all bitcoin transactions are investment related. So I'd say the speculation is likely more widespread in the market than you want to admit.

    #56 6 years ago
    Quoted from Luckydogg420:

    You might not like the idea of Bitcoin, but the technology used to create and control them will change the future

    Agreed. Blockchain has applications in many industries, where tracking history, sharing complex information, and security is important.

    If someone could figure out how to use it to secure credit history and identity it would truly be a breakthrough.

    Unfortunately, use as a common currency in its current form is unlikely for a variety of reasons:

    scale - mining gets exponentially more involved as the items age. Do you really want to track a coins entire history to buy a piece of gum or other end-user purchase?

    backing - I don't trust the government, do you think I'm going to trust a corporate entity to back my money?

    the nature of purchases - the volume, rate, and size of most purchases & currency transactions don't need the properties that make blockchain unique: tracking history, sharing complex information, and security

    Blockchain is at the peak of the hype cycle right now. If you want to invest, look at companies that are developing real world solutions based on blockchain.

    Buying Bitcoin today is equivalent to investing in Pets.com in 1999.

    #61 6 years ago

    Which part, that a company might manipulate its product to make a buck at my expense, or that the government manipulates its levers, like interest rates, the printing press, or deficits that impact the value of my assets and earnings?

    The government plays lots of games that I don't like, but it is always visible to the public. There is no guarantee of transparency or stability from any of these cryptocurrencies or the promises they make to ensure its value.

    Quoted from Astropin:

    (somewhat like gold on that front)

    It's not like gold in anyway. Gold has intrinsic value. It is used in tech manufacturing, jewelry and other items that need gold. Nothing needs Bitcoin, it has virtual value only.

    #95 6 years ago
    Quoted from ThatOneDude:

    Money, in whatever form, is a placeholder for a defined unit of power.

    Interesting perspective but a little off. You are not compelling someone with your dollar your are convincing them. You can't make anyone do anything because you have money. They are agreeing to do it because it is a fair exchange.

    #96 6 years ago
    Quoted from ExtremePinball:

    Again, Bitcoin, and all crypto currencies are a global game. And the U.S. market is but a tick on an elephant's ass.

    The US represents 20% of the world GDP and approximately 50% of the electronic payments value.

    Not exactly a tick, but a big challenge.

    #99 6 years ago
    Quoted from ThatOneDude:

    Perhaps a compromise would be to say that it can be either one.

    I understand what you are trying to say, but it's not both.

    No one can compel you because they have money in their hand. You may feel compelled due to external circumstances, other obligations, or something as simple as hunger, but no one is compelling you to work for less than you think it's worth. You are making that decision.

    No one is compelling you to sell a pinball machine for less than you think it is worth, just because they threw money on the glass. Same principle.

    If we can agree on something, it's that your definition of compel is different than mine.

    #172 6 years ago
    Quoted from Astropin:

    Bitcoin has no relation to your precious "tulip bulb" analogy. Other than it might be a bubble. In that sense it would be more analogous to the famous "dot com" bubble.

    Why are you fighting the tulip analogy here? Don't you like flowers?

    Tulips, dotcom market, 2000's housing bubble, bitcoin, and dozens of other examples are similar in one regard - the extraordinary price growth is greatly, if not completely, driven by speculation and investment, not from the underlying commerce generated.

    What about bitcoin has generated the $105,000,000,000 in virtual value? The belief, hope, speculation that it will survive as a currency, and people don't want to miss out on it.

    If it is truly worth that and is sustainable, then it is unique in all of history as the biggest, fastest economic engine ever invented.

    1 month later
    #375 6 years ago

    Not sure what point you are trying to make. You hype up Bitcoin, then admit it could crash any time, just like the guys you are complaining about.

    What's a hypothetical Tulip guy? The tulip mania isn't hypothetical and the many other examples listed here are real too. Tulips have value today, so there is hope for Bitcoin long term.

    If you haven't yet, look up the Greater Fool Theory, it helps explain today's Bitcoin market.

    I bought $500 worth some time ago because I know there would be greater fools out there and I am ready to get out (and go on a nice vacation.)

    #382 6 years ago

    Pez, you've been hyping Bitcoin as the future this whole thread and ignoring the Greater Fool Theory as an explanation for its dramatic increase in value. You are right, TGFT is not new to this thread, as there hasn't been any new information for 6 pages or so.

    Astro, since you coined Tulip Yellers, I'm trademarking the phrase Tulp Deniers. Tulip Deniers believe that Bitcoin is the one mania in all of history that will avoid collapse.

    #386 6 years ago
    Quoted from pezpunk:

    repeatedly saying "i have no idea if it will go up or down" and "i have no bitcoin" is hyping bitcoin?

    No, but this is ...

    Quoted from pezpunk:

    I built a mining rig with five Radeon Vega 56's.

    You've actually been pretty fair in your comments, except for your denial that this is in a mania cycle.

    #394 6 years ago
    Quoted from ExtremePinball:

    Based on your posting in this thread, it appears that you're just a megalomaniac who believes that he has the superhuman ability to not only identify a mania cycle, but can actually predict the future.

    Dude, I was being funny, but it doesn't take superhuman powers to identify an economic mania.

    #396 6 years ago

    Oh, you live in Vegas, helps explain why gambling is part of your retirement plan.

    #400 6 years ago

    Pintucky- if you are buying it at 10k you are not getting rich, so there is no rush. :$

    #419 6 years ago

    Extreme, you really need to chill out a bit and play some pinball.

    #447 6 years ago
    Quoted from rotordave:

    Anything else is gambling.

    Dave,

    Can't believe you are spewing these rational thoughts in this thread. The pitchforks came out quick when I did it.

    #455 6 years ago
    Quoted from Astropin:

    Dave has a "better/nicer" way of presenting his thoughts on things (IMHO).

    Well I've never known that to be an issue on Pinside.

    Except for one poke at Pez on page two, not sure where I've not been nice, and the vitriolic responses from others was way out of line.

    #470 6 years ago

    Can we please call it a mania now?

    image (resized).jpgimage (resized).jpg

    -1
    #496 6 years ago
    Quoted from solarvalue:

    Isn't that graph a bit misleading? They have 2017 as "year 1" for Bitcoin.

    Arguing with the WSJ? You tulip deniers are killing me.

    The graph represents the lifecycles of market fervor, and compares the timelines of the Bitcoin bubble with other recent events. Year one is when each episode started, not when a market was created. The article talks about Bitcoin's nine year history, so I think they got it right.

    The headline said Mania, so it is officially one. Please change the thread title accordingly.

    #501 6 years ago

    Astro, you need to check with your accountant on that. Once you convert it back to usd you have a gain, not when you withdraw.

    Think of it like bank interest or mutual fund gains. You are taxed when the event happens not when u take money out of the account.

    #503 6 years ago

    Oh, i missed that detail earlier.

    #534 6 years ago

    Astro, you are funny. I mentioned value manipulation on page 2 and you wanted to argue about it. Glad you saw the light!

    Just remember, the CBOE doesn't buy or sell the futures themselves, they are just creating a place for them to be bought and sold. They make their money on the transaction itself.

    It will be interesting to see how active this market is.

    #538 6 years ago

    The government should stay out of it. As soon as it is regulated it becomes real and I’d rather the market determine its reality and durability than the US government.

    Two trends Ive been watching-

    Futures - will this cause the crash or a short squeeze? Either way it becomes more susceptible to value manipulation.

    Distribution and security - As china’s investment in Bc infrastructure grows they could break the security inherent in the distributed ledger concept. If you control 51% of the processing power, you can create and verify bogus transactions. Don’t underestimate China’s ability to get there to disrupt financial markets and tech in the US.

    These are examples of companies manipulating values that I referred too long ago. No one has to own it to manipulate it. The dollar is the largest reserve currency in the world because it is the most stable and least likely to be manipulated. Even though I disagree with much of our monetary policy which impacts its long term value.

    1 week later
    #774 6 years ago

    Block chain technology has many advantages where you need to share security with other parties or track transaction histories. But I haven’t seen any advantages as a currency or method of payment for regular transactions.

    What is in this ton of advantages that is not already available widely and inexpensively?

    #796 6 years ago

    You also forgot

    3+ Tulip Deniers in this thread

    and

    0 reasons why cryptocurrency is better than the current state

    investors (resized).pnginvestors (resized).png

    #799 6 years ago

    Spyder -

    Gold has intrinsic value. Some don't think it is as important as others, but it exists. Besides, if you had to cut up your gold for bread, it means the internet and bitcoin are already gone.

    BTC is theoretically decentralized, but China is aiming at 51% of the processing power, which could give them control over transactions. Also, 40% of all bitcoins are held by 1,000 accounts, and another source claimed that 20% were held by 17 accounts. None of these stats are good for the decentralization assumption and it would crash if the Winklevosses sold out today. And although government policy influences currency values, it is highly unlikely the US dollar, the Euro, or Pound are way less likely to devalue than bitcoin.

    Not sure how bitcoin would be immune to inflation: if the price of bread increases, you'll still need more bitcoin.

    I am a big supporter of Blockchain and work with many clients to develop and use it in their businesses. You are right, it is another discussion. Unfortunately most people are conflating excitement over blockchain technology and Bitcoin euphoria.

    Being better is needed for wide-spread adoption and is a factor of its acceptability as a currency and its survival. So yes it should be considered when making an investment or storing money there.

    #802 6 years ago
    Quoted from Astropin:

    The "theory" / assumption is that Bitcoins value will always outpace (USD) inflation (if it becomes a usable currency). Therefore you would need less bitcoin for the rising cost of bread...etc...

    So now we have invented something with infinitely positive returns? Getting more far-fetched every day.

    1 week later
    #910 6 years ago

    Extreme, you seriously need to relax man.

    Take a day off from watching the coinbase indexes and let your blood pressure get back to normal.

    #973 6 years ago

    Hard to take this seriously anymore when you guys are arguing gold has no intrinsic value.

    Look up the definition of the word.

    It may not be that valuable to you personally but it has value value in industry, medical, jewelry, art, and other uses.

    I think it qualifies.

    #976 6 years ago

    I’m not arguing the market price = intrinsic value.

    Have you ever been to India or the Middle East? People there love gold and they buy lots of jewelry and art to acquire it. You couldn’t own gold in India except for jewelry at one time so the industry is huge.

    1 week later
    #1183 6 years ago

    And it only took 24 pages to come around to reality.

    #1186 6 years ago

    My position has always been that this is speculation not an investment. I never said there wasn't money to be made.

    It's just funny that you have picked a winner in Bitcoin, and see the other coins for what they are - gambling.

    It's like my buddy who said the same thing about Pets.com. It was the one internet stock that was going to make it. He was also up 300% before it went to 0.

    Bitcoin is no different than the other coins, it has grown only because a lot of people have thrown a lot of money at it.

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