Too late to become a bitcoin millionaire?

[fishbrando]

12 hours ago, seancbk said:

If I hand over 1000 baht for a meal tonight, I can be pretty sure that aside from a bit of inflation in 12 months the 1000 baht I paid for the meal, will still be worth 1000 baht.

However, if you were to hand over 1000 baht worth of bitcoin this evening there is a very real chance that this time next year you would look back and realise you paid 10,000 baht for a meal you ate a year ago. 

Sure, or the opposite could happen.  You hand over 1000 baht worth of bitcoin and later that same amount of bitcoin is only worth 100 baht.

 

I know of someone who (back when btc was still quite cheap) bought a new TV with Bitcoin.   At the time the TV and the BTC he used to buy it were worth about $1000, a few months later the BTC were worth $35,000 (and now would be worth considerably more).   The TV on the other hand hadn't suddenly become worth $35,000, it was still only a $1000 TV.

So, I reiterate, you'd be an idiot if you bough BTC and then used it like cash.

I also know people who spent tens of thousands of Bitcoin, which is tens of millions of dollars worth at today's prices.  The important thing is that, through their usage of Bitcoin, they saw the potential of Bitcoin and this prompted them to keep some of their savings in Bitcoin.  They are quite well-off now.

 

As someone else mentioned, no one can predict the future.  If you're very sure that Bitcoin will go up in price, then yes, it would be foolish not to invest every single spare penny you have into Bitcoin.

 

You can still use Bitcoin to purchase things.  If you're worried about losing Bitcoin, just buy more every time you purchase something.

 

Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n^2).  The Bitcoin network is no exception.  The more you use Bitcoin, the more valuable the network becomes.  If you're interested in increasing the value of your investment, it would make sense to grow the network by using your Bitcoin for frequent transactions.

[Skeptic7]

Not too late if one wants to buy at an inexplicable, ridiculous top and then lose it all when the bubble bursts, as it inevitably will. Did Bernie Madoff create Bitcoin??? 

[Jingthing]

1 hour ago, Skeptic7 said:

Not too late if one wants to buy at an inexplicable, ridiculous top and then lose it all when the bubble bursts, as it inevitably will. Did Bernie Madoff create Bitcoin??? 

Sure, but more like maybe this is the ridiculous top and maybe the actual ridiculous top will be reached much later ... 

 

On the other hand, it probably is a kind of evidence that someone like me, previously not the slightest bit interested in bitcoin, is looking at it now. OK, not very seriously but still. Like the old saying that when your taxi driver starts touting the stock market time to go SHORT. 

[lkn]

15 hours ago, onthesoi said:

465 Banks or branches?.... As the distinction is night and day in difference.

 

[…] How can a governement offer unlimited guarantees?.... Its nonsense, what exactly would they be paying out with?.... A failed currency?.... They might print more money, quantitve easing, but the payout would be worthless when offset against rocketing inflation.

It is of course banks and a simple Google search would have lead you to the full list published by FDIC: https://www.fdic.gov/bank/individual/failed/banklist.html

 

As for how an unlimited government guarantee works, for my own country, the total deposits when this guarantee was issued was just below €1bn, so while it was unlimited for the individual depositor, the government knew that even if every single bank in the country had to write down all their assets to zero, the government would not have to pay out more than €1bn.

 

As for how to pay it out, my government cannot print money, so worst-case they would have to issue government bonds.

 

As for your comment about the money being worthless, I think you are conflating bank failures with hyperinflation.

 

BTC is of course not immune to inflation, as we saw from 2014-2016, where the currency fell tremendously in value, despite being based on a finite supply.

[onthesoi]

7 minutes ago, lkn said:

It is of course banks and a simple Google search would have lead you to the full list published by FDIC: https://www.fdic.gov/bank/individual/failed/banklist.html

 

As for how an unlimited government guarantee works, for my own country, the total deposits when this guarantee was issued was just below €1bn, so while it was unlimited for the individual depositor, the government knew that even if every single bank in the country had to write down all their assets to zero, the government would not have to pay out more than €1bn.

 

As for how to pay it out, my government cannot print money, so worst-case they would have to issue government bonds.

 

As for your comment about the money being worthless, I think you are conflating bank failures with hyperinflation.

 

BTC is of course not immune to inflation, as we saw from 2014-2016, where the currency fell tremendously in value, despite being based on a finite supply.

I can only explain it you, I cant comprehend it for you.

[impulse]

18 hours ago, onthesoi said:

If too many banks fail at the same time, for eg over extending on bad investments, then insurance will fail also and the whole house of cards comes tumbling down...while bitcoin is not exposed to those risks as it doesnt invest in anything.

 

But if the banks fail, what are people going to buy your Bitcoins with?  And what are you going to spend your Bitcoins on?

 

If cash has no value, how are they going to quote Bitcoins?  And how are the 99% of factories and farms that produce the goods you would need going to operate?

 

Unless you can figure out how to eat or burn Bitcoins...

[impulse]

6 hours ago, fishbrando said:

Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n^2).  The Bitcoin network is no exception.  The more you use Bitcoin, the more valuable the network becomes.  If you're interested in increasing the value of your investment, it would make sense to grow the network by using your Bitcoin for frequent transactions.

 

The problem being that, unlike USD, RMB, Euro's, etc, there is no legal barrier to entry and Bitcoin is vulnerable to having 1,000 competing currencies in a few years, each of them diluting the market to the point that Bitcoin transactions may be cut by a factor of 100 (and still be doing 10x as well as the other 999)

 

Remember when AOL and Compuserve were the only games in town?

 

 

[onthesoi]

23 minutes ago, impulse said:

 

But if the banks fail, what are people going to buy your Bitcoins with?  And what are you going to spend your Bitcoins on?

 

If cash has no value, how are they going to quote Bitcoins?  And how are the 99% of factories and farms that produce the goods you would need going to operate?

 

Unless you can figure out how to eat or burn Bitcoins...

Where did I say cash would have no value?

 

See Zimbabwe, if you need a real world example to help you understand how it would play out.

[honu]

It's odd that no one mentioned that bitcoin value is about to crash again.  Notice any repeating trends in this value graph?:

 

http://www.coindesk.com/price/

[chingching]

6 hours ago, fishbrando said:

•  Also, if you have a dispute with the government over your taxes (or other financial/criminal matter), they can easily freeze/seize your funds.

In the U.S.A. the police now have a gadget that scans your debit cards and empties them.  The company that makes these gadgets get 10%.  They use them at traffic stops.  http://www.news9.com/story/32168555/ohp-uses-new-device-to-seize-money-used-during-the-commission-of-a-crimehttp://www.news9.com/story/32168555/ohp-uses-new-device-to-seize-money-used-during-the-commission-of-a-crime   And there are many documented cases of the police using "civil forfeiture" to seize property and money.  One man was going to buy a car for cash.  The police stopped him and seized the money.  The man cannot go to court, because the case is not against him , it is something like "The State of California vs $3500 dollars" 

[onthesoi]

3 minutes ago, honu said:

It's odd that no one mentioned that bitcoin value is about to crash again.  Notice any repeating trends in this value graph?:

 

http://www.coindesk.com/price/

Is up, up and up the repeating trend?

 

Sounds like now is the perfect time to buy?

[speedtripler]

5 minutes ago, honu said:

It's odd that no one mentioned that bitcoin value is about to crash again.  Notice any repeating trends in this value graph?:

 

http://www.coindesk.com/price/

 

 

Looks like a standard S curve of mass adoption to me .........

 

[impulse]

19 minutes ago, speedtripler said:

Looks like a standard S curve of mass adoption to me .........

 

My first cell phone (bag phone) cost me $1,200, my first monitor cost me $800 (I splurged for the 14" model instead of the 13"), my first LaserJet printer cost me $3,000 and I got my first inkjet printer (HP BxW) when the price dropped by half to $500.  That's the other side of the S curve of mass adoption.

 

Had I bought any of those as an investment, I'd have been sorely disappointed.  But I bought them as business tools and the only one that didn't pay out (many times over) was the cell phone.  That was a bad decision based on "want" rather than ROI.

 

[speedtripler]

8 minutes ago, impulse said:

 

My first cell phone (bag phone) cost me $1,200, my first monitor cost me $800 (I splurged for the 14" model instead of the 13"), my first LaserJet printer cost me $3,000 and I got my first inkjet printer (HP BxW) when the price dropped by half to $500.  That's the other side of the S curve of mass adoption.

 

Had I bought any of those as an investment, I'd have been sorely disappointed.  But I bought them as business tools and the only one that didn't pay out (many times over) was the cell phone.  That was a bad decision based on "want" rather than ROI.

 

 

I didnt buy my own airplane either ,but that doesnt mean air travel didnt become insanely popular ......

I still buy a ticket when i want to fly somewhere 

I think of bitcoin network in the same way ,if i want to transfer money to my family i can send any unlimited amount 24/7 

from my phone and nobody can stop me  ,there is no government controls, bank manager , westernunion or paypal in the middle and i think

thats part of the value of bitcoin ..... especially in those "less free "  nations around the world where governements might try and control  or restrict your money 

[impulse]

19 minutes ago, speedtripler said:

 

I didnt buy my own airplane either ,but that doesnt mean air travel didnt become insanely popular ......

I still buy a ticket when i want to fly somewhere 

I think of bitcoin network in the same way ,if i want to transfer money to my family i can send any unlimited amount 24/7 

from my phone and nobody can stop me  ,there is no government controls, bank manager , westernunion or paypal in the middle and i think

thats part of the value of bitcoin ..... especially in those "less free "  nations around the world where governements might try and control  or restrict your money 

 

There's a lot of value to the Bitcoin concept.  So much that I think we'll see a repeat of the PayPal concept where there will be dozens, if not hundreds of lookalikes all competing for the same customers.  I was at a 7/11 here in China and they have a choice of about 20 "Pay" cards I could add funds to.  Then another couple at the bank itself, and another few hundred online.  Hell, I even have a "Pay" card tied to the BTS in my Rabbit card.  All based on the pre-paid account concept.

 

Then the question becomes which one is growing faster, the money or the selection of crypto=currencies to put it in.  The money is growing at a finite rate (maybe high, but definitely finite) and the number of crypto-currencies could grow at an unlimited rate- virtually infinite.

 

They haven't suspended the concept of supply and demand...  

 

My objection isn't to crypt- currencies.  My objection is to their speculative nature that has seen the value drop several times virtually overnight.  Great concept, hijacked by quick buck hucksters...  It could stabilize, it could go up for years, or it may crash tomorrow.  And that's not a good attribute for a currency.

 

[Skeptic7]

1 hour ago, honu said:

It's odd that no one mentioned that bitcoin value is about to crash again.  Notice any repeating trends in this value graph?:

 

http://www.coindesk.com/price/

Alluded to that in Post #62 above. 

[fishbrando]

8 hours ago, impulse said:

 

But if the banks fail, what are people going to buy your Bitcoins with?  And what are you going to spend your Bitcoins on?

 

If cash has no value, how are they going to quote Bitcoins?  And how are the 99% of factories and farms that produce the goods you would need going to operate?

 

Unless you can figure out how to eat or burn Bitcoins...

You can replace the word "Bitcoin" with the word "gold" in your sentence:

 

But if the banks fail, what are people going to buy your gold with?  And what are you going to spend your gold on?

 

Answer?  Goods, labor, services. 

 

[fishbrando]

8 hours ago, impulse said:

 

The problem being that, unlike USD, RMB, Euro's, etc, there is no legal barrier to entry and Bitcoin is vulnerable to having 1,000 competing currencies in a few years, each of them diluting the market to the point that Bitcoin transactions may be cut by a factor of 100 (and still be doing 10x as well as the other 999)

 

Remember when AOL and Compuserve were the only games in town?

 

 

Certainly true, and it is great to see the innovation in other cryptocurrencies.  We'll see who comes out the winner. 

[fishbrando]

8 hours ago, chingching said:

In the U.S.A. the police now have a gadget that scans your debit cards and empties them.  The company that makes these gadgets get 10%.  They use them at traffic stops.  http://www.news9.com/story/32168555/ohp-uses-new-device-to-seize-money-used-during-the-commission-of-a-crimehttp://www.news9.com/story/32168555/ohp-uses-new-device-to-seize-money-used-during-the-commission-of-a-crime   And there are many documented cases of the police using "civil forfeiture" to seize property and money.  One man was going to buy a car for cash.  The police stopped him and seized the money.  The man cannot go to court, because the case is not against him , it is something like "The State of California vs $3500 dollars" 

It's maddening that they are allowed to do it.

 

One thing I mentioned is that, often, the bank is the one that keeps you from accessing your own money.  Anyone who has had their account frozen by PayPal (or normal bank) can relate.

[ThailandLOS]

19 hours ago, chingching said:

In the U.S.A. the police now have a gadget that scans your debit cards and empties them.  The company that makes these gadgets get 10%.  They use them at traffic stops.  http://www.news9.com/story/32168555/ohp-uses-new-device-to-seize-money-used-during-the-commission-of-a-crimehttp://www.news9.com/story/32168555/ohp-uses-new-device-to-seize-money-used-during-the-commission-of-a-crime   And there are many documented cases of the police using "civil forfeiture" to seize property and money.  One man was going to buy a car for cash.  The police stopped him and seized the money.  The man cannot go to court, because the case is not against him , it is something like "The State of California vs $3500 dollars" 

Increadible - there seems to be no limits to the US police state nowadays. What really set me off is the following sentence in the linked article:

 

"If you can prove can prove that you have a legitimate reason to have that money it will be given back to you"

 

What happened to innocent until found guilty?

 

Similar things are going on in Europe with banks asking for proof of source of funds when depositing cash over the counter. It all boils down to that they don't want us to access any cash - the cashless society totally controlled by gov.

 

When the gov sanctioned block chains come along - don't buy into it folks.

[janclaes47]

On 5/29/2017 at 9:24 AM, spidermike007 said:

I remember hearing about bitcoin almost 20 years ago.

 

Bitcoin was created 9 years ago.

[spidermike007]

1 minute ago, janclaes47 said:

 

Bitcoin was created 9 years ago.

 

Read the thread please. I stood corrected a long time ago.

[lkn]

15 hours ago, fishbrando said:

But if the banks fail, what are people going to buy your gold with?  And what are you going to spend your gold on?

 

Answer?  Goods, labor, services. 

We probably need to define what is meant by “banks failing” to answer the question, because we have seen a 6 month bank strike in Scotland, hundreds of failing banks in the U.S., forced shutdown of banks in Cyprus, temporary currency control introduced in Greece, nationalization of banks in Iceland, etc.

 

I am not aware of gold playing any significant role in the above scenarios.

 

What I think is meant by some posters here is “currency failing”, such as hyperinflation, most recently seen in Zimbabwe, but in modern times we have also seen it in several South American countries, and thus have good data to study.

 

I was in Zimbabwe in 2008, and they had basically switched to using USD and South African rand, although currency was not their main problem, and many of the locals were happier receiving food and clothes than foreign currency.

 

I don’t see how bitcoin could have played any role whatsoever in Zimbabwe.

 

Where it can play a role is when governments want to introduce currency control. This is actually an interesting topic to follow to the end, because the currency control we saw in Greece was to avoid a nationwide bank run, because the banks presumably did not have enough cash to handle this (because of losses due to bad debt).

 

Had all the citizens of Greece instead had their money in bitcoin, the government could not stop them from transferring money out of the country, however, in such scenario there was no reason to stop bitcoin from flowing out of the country, because this would not have any effect on the banks, because in such situation, the people of Greece would not have deposited their money with the banks in the first place, to give the banks the necessary cash to issue loans (for which it later turned out there wasn’t enough security).

 

This raises an interesting question: In a bitcoin world, how do we handle loans?

 

Debt seems to be a necessary ingredient in the modern economy, so how would that work in a bitcoin world? If I want a mortgage, would I need to rely on P2P lending? I sincerely doubt anyone will borrow me money via Bitcoin without some sort of guarantee.

 

So a likely development will be vetting institutions that check the credit of the potential debtor, and effectively, that is what the banks do, and if these institutions are a bit lax with their credit checks, as they were up to the U.S. subprime crisis, everybody who have contributed to these subprime lenders stand to lose money, sounds familiar?

 

[speedtripler]

1 hour ago, lkn said:

We probably need to define what is meant by “banks failing” to answer the question, because we have seen a 6 month bank strike in Scotland, hundreds of failing banks in the U.S., forced shutdown of banks in Cyprus, temporary currency control introduced in Greece, nationalization of banks in Iceland, etc.

 

I am not aware of gold playing any significant role in the above scenarios.

 

What I think is meant by some posters here is “currency failing”, such as hyperinflation, most recently seen in Zimbabwe, but in modern times we have also seen it in several South American countries, and thus have good data to study.

 

I was in Zimbabwe in 2008, and they had basically switched to using USD and South African rand, although currency was not their main problem, and many of the locals were happier receiving food and clothes than foreign currency.

 

I don’t see how bitcoin could have played any role whatsoever in Zimbabwe.

 

Where it can play a role is when governments want to introduce currency control. This is actually an interesting topic to follow to the end, because the currency control we saw in Greece was to avoid a nationwide bank run, because the banks presumably did not have enough cash to handle this (because of losses due to bad debt).

 

Had all the citizens of Greece instead had their money in bitcoin, the government could not stop them from transferring money out of the country, however, in such scenario there was no reason to stop bitcoin from flowing out of the country, because this would not have any effect on the banks, because in such situation, the people of Greece would not have deposited their money with the banks in the first place, to give the banks the necessary cash to issue loans (for which it later turned out there wasn’t enough security).

 

This raises an interesting question: In a bitcoin world, how do we handle loans?

 

Debt seems to be a necessary ingredient in the modern economy, so how would that work in a bitcoin world? If I want a mortgage, would I need to rely on P2P lending? I sincerely doubt anyone will borrow me money via Bitcoin without some sort of guarantee.

 

So a likely development will be vetting institutions that check the credit of the potential debtor, and effectively, that is what the banks do, and if these institutions are a bit lax with their credit checks, as they were up to the U.S. subprime crisis, everybody who have contributed to these subprime lenders stand to lose money, sounds familiar?

 

That problem has already found some solutuons and there are many websites to margin trade with loans or loan your bitcoins  to someone who will and there are currently more advanced ones in the making... 

I. Don't suggest btc will ever totally replace fiat  currencys  but  bitcoin or something like it will have a place in several global markets, remittance and over seas transfers are two of many that will benefit hugely from the savings of blockchain technology 

[lkn]

1 hour ago, speedtripler said:

That problem has already found some solutuons and there are many websites to margin trade with loans or loan your bitcoins  to someone who will and there are currently more advanced ones in the making... 

I think it’s fair to say that there is a long way to go from the current offerings and a system that Joe Shmoe can turn to for his mortgage.

 

1 hour ago, speedtripler said:

I. Don't suggest btc will ever totally replace fiat  currencys  but  bitcoin or something like it will have a place in several global markets, remittance and over seas transfers are two of many that will benefit hugely from the savings of blockchain technology 

The reason why overseas transfers are slow or expensive are not due to limits of pre-blockchain technology.

 

I can transfer money to anyone else in my country instantly and free of charge (using my phone). Within the EU monetary zone I can transfer up to 50,000 EUR free of charge (via the internet) and it arrives next day.

 

As you probably know, transaction fees for bitcoin will most likely be introduced by the minors as the mining reward reaches zero, and there is also a current block size limit of 1MB, so there is a limit to daily transactions (as it takes time to complete a block, and each time a block has been appended to the blockchain, every minor has to restart their computation for the next block).

 

So while blockchain is a technology that allows us to have alternatives to the centralized financial institutions, I think the deal offered by the current financial institutions will be more appealing to many people, as I mentioned, I can already do instant free transfers via my phone without bitcoin, the bitcoin transfer is not instant, and it will not remain free of charge.

 

[speedtripler]

2 minutes ago, lkn said:

I think it’s fair to say that there is a long way to go from the current offerings and a system that Joe Shmoe can turn to for his mortgage.

 

The reason why overseas transfers are slow or expensive are not due to limits of pre-blockchain technology.

 

I can transfer money to anyone else in my country instantly and free of charge (using my phone). Within the EU monetary zone I can transfer up to 50,000 EUR free of charge (via the internet) and it arrives next day.

 

As you probably know, transaction fees for bitcoin will most likely be introduced by the minors as the mining reward reaches zero, and there is also a current block size limit of 1MB, so there is a limit to daily transactions (as it takes time to complete a block, and each time a block has been appended to the blockchain, every minor has to restart their computation for the next block).

 

So while blockchain is a technology that allows us to have alternatives to the centralized financial institutions, I think the deal offered by the current financial institutions will be more appealing to many people, as I mentioned, I can already do instant free transfers via my phone without bitcoin, the bitcoin transfer is not instant, and it will not remain free of charge.

 

Sepa-zone is not the whole world, is it? 

 

Also, your txs are monitored, recorded and maybe delayed, blocked, frozen or confiscated at any point 

 

Bitcoin will scale up to accommodate the influx  of new users or another blockchain  will take its marketshare and accommodate them

 

Don't compare chalk with cheese, plz

[lkn]

1 hour ago, speedtripler said:

Sepa-zone is not the whole world, is it? 

I mentioned this to illustrate that the problem is not with lack of technology, as you said “[overseas transfers] will benefit hugely from the savings of blockchain technology”. Maybe you meant the bitcoin technology can provide an alternative to financial monopolies and thereby pressure them to lower the prices, that I sort of agree with, although pick the right bank, and overseas transfers are already close to free.

 

1 hour ago, speedtripler said:

Bitcoin will scale up to accommodate the influx  of new users or another blockchain  will take its marketshare and accommodate them

The scaling up is of course a bit of a challenge, because there must be a cost associated with appending a block to the chain.

 

1 hour ago, speedtripler said:

Don't compare chalk with cheese, plz

What do you mean? I think my posts should make it clear that I do understand the difference between the blockchain concept, the bitcoin implementation, the current monetary system, etc. — but all of these things are related when discussing bitcoin.

 

[lkn]

1 hour ago, speedtripler said:

Also, your txs are monitored, recorded and maybe delayed, blocked, frozen or confiscated at any point 

Worth mentioning though with bitcoin, your entire transaction history is public.

 

If someone is able to identify the physical person behind one transaction, they have the entire current and future history for that wallet.

[speedtripler]

32 minutes ago, lkn said:

Worth mentioning though with bitcoin, your entire transaction history is public.

 

If someone is able to identify the physical person behind one transaction, they have the entire current and future history for that wallet.

Also worth mentioning though, that Bitcoin address are more  disposable than throwaway  email addresses.... Unlimited  supply and zero cost 1 click creation without identification  so if privacy is an important aspect of your dealings, create a new one for every tx (address reuse is widely discouraged btw)

 

Both systems have their pros and cons so there are tradeoffs on both sides and no perfect solution... I still shop with my credit cards day to day but I don't want to store value in it like Bitcoin or gold

[diwata]

On 5/29/2017 at 1:10 PM, maisodni said:

Your comment is interesting, given that the original Whitepaper that outlined the Bitcoin concept was only published in November 2008, and the Genesis block of the Bitcoin blockchain was mined in January 2009.

 

The Whitepaper is only 9 pages long:   https://bitcoin.org/bitcoin.pdf

 

No one should be bad-mouthing Bitcoin unless they have read this document, because otherwise, you simply have no idea what you are talking about.

 

 Agree with you Maisodni. According to Thomas Frey, dramatic predictions for 2030 is that over 10% of all global financial transactions will be conducted through Bitcoin or Bitcoin-like crypto-currencies. Google it. Lately, Japan announced that Bitcoins are to be accepted in more than 260,000 stores in the country. See http://bxcoins.com/bitcoins-are-to-be-accepted-in-more-than-260000-stores-in-japan/