Bitcoin's and the future of online banking - Page 14

As it is pretty hard to buy a "bottom" entry point a reasonnable strategy can be to buy at any price then buy again if it goes lower.

Thats actually what I did, buying first almost at the 30$ bubble then several times after the crash

On November 19 2013 12:31 Emi wrote: Show nested quote + On November 19 2013 11:53 cariadon wrote: Even EMI, the ambassador of bitcoins and his site, is clueless. And he is supposedly a bitcoin expert, us mere mortals don't stand a chance. lol sure I am clueless. Thats probably why I bought bitcoins back in 2010 and you did not. And just FYI, I plan to keep them still at current prices. There is tons of reasons why bitcoins is a superior form of money so do your homework. I foresaw this coming a long time ago. You even talk about "short squeeze" that tell a lot about how uninformed you are about bitcoins. There is almost no shorting in bitcoins, due to many reasons but mainly the lack of good leveraged exchanges.

You used the word clueless a couple of posts back. "Now where it is going... I am completly clueless." Just because you bought bitcoins doesn't mean i didn't. I don't give a shit what you do with yours, enjoy the ride. There is a reason 99.999999999999999999999% of purchases are paid for with cash or credit.

There is shorting in bitcoin, it is possible to make money when the value of bitcoin drops. Your vague bulshit needs to stop.

On November 19 2013 12:49 Emi wrote: Show nested quote + On November 19 2013 11:53 cariadon wrote: Watching the price of a very volatile instrument trade is very lucrative. If you pick the highest and lowest point in a chart and multiply the price difference by your bankroll you can get very interesting numbers. It isn't so easy in reality. Hindsight is 20/20 and the real question should be if it was possible to predict such movement with the materials available at that time. There is no absolute truth and it is impossible to predict things very accurately. However, there is a lot to be said about doing your homework, having a very good understanding of what it is you are doing and discipline. . To make a step in your direction however, I 100% agree that trying to make winnings trade on short time frame is really hard and that the price is impredictible especially short term. I never thought that bitcoins would have been so popular so fast, I could not imagine what is happening now before a few years. Also, as you said, the bitcoin markets (especially those who own bitcoins) is full of newbie traders : people that bought bitcoins early and have no clue on how to trade and just dump coins or dump buy orders without spreading them, thus creating many "spikes" and prices fluctuation in very tiny amount of time. In classical markets, all the big players use broker firm who will orders their traders to do VWAP (volume weighted average price) trading ensuring the price move smoothly

No, i didn't say the bitcoin markets are full of newbie traders. I was arguing a point. There is a difference. Your comprehensive reading is terrible. English can be challenging.
I'm not saying i know more about bitcoins, i despise your way of reasoning.

Maybe you'd be so awesome and tell us an educational story. How bitcoins started for you and how it has progressed. Hopefully we'll all learn something.

@cariadon then tell me how you short bitcoins, please. The only option I know is bitfinex and it is quite limited and I dont think many people are shorting bitcoins, and if it is its pretty insignifiant.

I won't respond to all your personnal attacks, it is pointless.

Bitcoin started for me by reading the whitepaper, using it, and seing the insane potential it had even thought the default client was crap and all the services were crap.

I usually tends to believe great thinkers and great idea are simple and easy to understand (A variation on Occam's Razzor), and I got the same feeling reading satoshi nakamoto himself that I had reading Darwin or others great thinker : This guys gets it and make it simple to understand. Same goes for economy (in my humble opinion), most of the economic litterature is crap because economy is a pseudo science (In karl popper's meaning) as well as sociology and some psychology forms like psychanalysis.

petty fights ITT


what companies do we think would really grow because of increased usage of digital currency? things like generic payment processors will die away, maybe credit card usage goes down, etc, so it would be nice if we can short those, but i dont know what will really explode cause of this

Well I don't think those will necessary die. Payment processors should incorporate bitcoins, actually, since they already offer a host of services and network that bitcoin does not have

But most of big payment processor like paypal have not incorporated bitcoins because of legal issues, they dont want to take any risks. But the funny thing is most of the paypals investors did invest in bitcoins and bitcoins start up, since thats the cheapest way for them to get invested while not exposing their already working business to legal risks

ok so just playing devils advocate here and trying to reason through everything i can and think of any problems. really want to digest everything i can and have done quite a bit of reading, but im sure you guys (emi/others) who have lived through it have better ideas of whats happening and whats going to happen.

possible problems i see with bitcoins:
-theft: Are the companies that hold the bitcoin ewallets secure? i know there have been some cases of bitcoin theft and it seems like a lot of the companies were aiming to pay back its customers, but are they all insured? and is this something thats tightening up?

-volatility. not in that the value of your bitcoins go up and down and make you uneasy, but exchanging bitcoins for goods when their price is in constant flux feels a little weird. i.e. if i wanted to buy a monitor on amazon for .25 bitcoins, well right now .25 bitcoins is $172.5. maybe in 20 minutes it will be $165. you know where im going. think this volatility will shrink as time goes on? and is that much of an issue currently or are the bitcoins being held more for hoarding and speculating at the moment?

any other issues people see?


also still interested in what companies will really explode because of digital currency. it always helps for money transfers to be faster and cheaper, but people already do a shitload of online shopping without it. i dunno, what you guys think?

theft is in my opinion THE problem of bitcoins. You need to have an insane amount of trust in your employees and hack (or insider theft) are sooooo easy. A single mistake and the whole company bitcoin balance can be wiped.
They are not at all insured and there is a long history of fuck up and depressed investors in the bitcoin world (hello genjix !)

volatility is supposedly only a short term issue, ie if ever bitcoins get used much much more the price would be more stable.

For merchants this is a non issue as if they want they can use services like bitpay which ensure they get paid in $ and that automatically adapt the price.

On November 19 2013 14:25 Daut wrote: also still interested in what companies will really explode because of digital currency. it always helps for money transfers to be faster and cheaper, but people already do a shitload of online shopping without it. i dunno, what you guys think?

Yeah basically the dollar is already a digital currency. The main disadvantages the dollar has (inflation, transaction costs) is hidden from the consumer. Card companies go as far as to make the merchants pay all the transaction fees while they give the consumer rewards points.

So when buying stuff online is already so quick and easy its just going to be really hard to convince your average joe that a completely new system is superior.

On November 19 2013 12:31 Emi wrote: Show nested quote + On November 19 2013 11:53 cariadon wrote: Even EMI, the ambassador of bitcoins and his site, is clueless. And he is supposedly a bitcoin expert, us mere mortals don't stand a chance. lol sure I am clueless. Thats probably why I bought bitcoins back in 2010 and you did not. And just FYI, I plan to keep them still at current prices. There is tons of reasons why bitcoins is a superior form of money so do your homework. I foresaw this coming a long time ago. You even talk about "short squeeze" that tell a lot about how uninformed you are about bitcoins. There is almost no shorting in bitcoins, due to many reasons but mainly the lack of good leveraged exchanges.

congratulations.. this might make you the richest poster on lp :D and i thought poker was the way to go for easy money in 2010....

On November 19 2013 15:54 Ket wrote: Show nested quote + On November 19 2013 12:31 Emi wrote:   On November 19 2013 11:53 cariadon wrote: Even EMI, the ambassador of bitcoins and his site, is clueless. And he is supposedly a bitcoin expert, us mere mortals don't stand a chance. lol sure I am clueless. Thats probably why I bought bitcoins back in 2010 and you did not. And just FYI, I plan to keep them still at current prices. There is tons of reasons why bitcoins is a superior form of money so do your homework. I foresaw this coming a long time ago. You even talk about "short squeeze" that tell a lot about how uninformed you are about bitcoins. There is almost no shorting in bitcoins, due to many reasons but mainly the lack of good leveraged exchanges. congratulations.. this might make you the richest poster on lp :D and i thought poker was the way to go for easy money in 2010....

Genjix took care of those BTCs bought back in 2010, as his company got hacked. But nonetheless he still could be the richest. ^^

I am clearly not the richest poster around here. I got very few BTC left since most got stolen... A couple hundreds $ worth of BTC, still cool but nowhere near what some of you guys have been making playing poker :D

On November 19 2013 14:29 Emi wrote:For merchants this is a non issue as if they want they can use services like bitpay which ensure they get paid in $ and that automatically adapt the price.

Yeah, but it may be an issue for bitpay.

Well normally their business is to be plugged on exchange and automatically trade all the time to hedge themselves. If each time they make a conversion for a merchant they immediatly do it on a exchange they make a profit

I agree with you Emi when you say a great idea is simple and easy to understand. If you understood the potential then why didn't you bet house on it? Just because you happened to buy when it was dogshit cheap and got to be on the ride doesn't alone make you an expert on the matter. I rest my case.

If bitcoins are so simple then why doesn't anyone please tell me how bitcoins should be valued. And i don't mean dropping random ideas into a hat. Let's see some math and solid theory that can be applied to understand past events and used to predict future ones. What is fueling bitcoin and how much is left in the tank. E.g. P/E for stocks. It was clear Netflix was in a bubble trading at astronomical P/E when even the CEO stepped in to calm the markets. netflix

You are all getting carried away with the impact of bitcoins. The global economy is over 70 trillion. 12mil bitcoins valued at 1000 a piece is 12 billion. Apple has 147bil of cash at hand. Calm the fuck down, this isn't as revolutionary as you make it out to be. Bitcoins won't have as grand and immediate of an effect to serve the purpose of a quick buck most are looking to make. Get real.

And to answer a question the bitcoin sites are probably making money. Where there is turnover, brokers make money. If not by fees then some other way.
I would like to think i can keep an open mind but at these valuations bitcoin is not the way to go if you want to make some money on the side. I am not hating on bitcoin, just taking the opposing side of the idea of buying into the fad.

There are some open questions in this thread that are worth discussing. Hopefully in a peaceful and constructive manner that adds value.

On November 19 2013 17:02 cariadon wrote: I agree with you Emi when you say a great idea is simple and easy to understand. If you understood the potential then why didn't you bet house on it?.

I did. Took all the money I made from my salary for 2 years into bitcoin. Then I had the bad idea to trust Amir and his pals with my bitcoins...

After that I was so fucking depressed by bitcoins that I just did not want to hear about it for some time. Emotions dont help to make rationnal decisions

On November 19 2013 17:02 cariadon wrote: If bitcoins are so simple then why doesn't anyone please tell me how bitcoins should be valued. And i don't mean dropping random ideas into a hat. Let's see some math and solid theory that can be applied to understand past events and used to predict future ones. What is fueling bitcoin and how much is left in the tank. E.g. P/E for stocks. It was clear Netflix was in a bubble trading at astronomical P/E when even the CEO stepped in to calm the markets. netflix

As in poker. Of course you cant use company valuation models to give it value.

Also, its value is tighly correlated to the number of people using it so its rate of growth should look like technological rates of adoption of new products (meaning, quite fast)

You make scenarios with probabilties attached, for example :

25% - All bitcoins website are hacked, nobody use bitcoins anymore : bitcoin value = 0$
50% - Bitcoin stay in a niche market for geek as a toy : 200$
24% - Bitcoin takes over most of online payments : ~15k
1% - Bitcoin takes over as world currency and become the standard way of storing value : insane$

Any set of scenarios I can think of make investing in bitcoins EV+. But it is a bit like set mining, you should not go all in into it because it might fail for unpredictable reasons.

Of course most of its current value is speculative

On November 19 2013 13:08 Daut wrote: Show nested quote + On November 19 2013 11:53 cariadon wrote: Watching the price of a very volatile instrument trade is very lucrative. If you pick the highest and lowest point in a chart and multiply the price difference by your bankroll you can get very interesting numbers. It isn't so easy in reality. Hindsight is 20/20 and the real question should be if it was possible to predict such movement with the materials available at that time. There is no absolute truth and it is impossible to predict things very accurately. However, there is a lot to be said about doing your homework, having a very good understanding of what it is you are doing and discipline. Daut you have a strong strategic mind, surely picking up trading will come naturally for you. However i encourage you to look past what is readily available. If the main idea behind buying bitcoins is how it has been skyrocketing then it is burning money. The decision can be described as unintelligent speculation. If there is no sound reasoning i suggest staying away, doing nothing isn't all that bad considering how unpredictable bitcoins are. Even EMI, the ambassador of bitcoins and his site, is clueless. And he is supposedly a bitcoin expert, us mere mortals don't stand a chance. NMcNasty, how to profit from fish trading? If you believe fish are driving the price and in fact it is something completely different then problems arise. Bitcoins aren't that new. There are people and i'd even guess investment bank type of offices that have been following the developments of bt for a long time already. Who has the edge and where does it come from? At a glance it seems major stakeholders of bitcoin have the most influence or atleast trigger frenzies. Who owns what % of the bitcoins, does anyone know? The term short squeeze comes to mind. Maybe this is one of them. Whoever is operating the levers is printing $€. im not looking to trade on the current volatility of the market. im just looking for the best entry point. i would much rather buy in at $300/btc than at $700. im on the same page as emi now with regards to this being the future of banking, and i dont think in the coming weeks bitcoin clones are a problem. thats an issue at the earliest a few months down the road and possibly longer. i want to invest in bitcoins, its clones and companies that will do well because of their existence.

Then we have a common interest. If there is a way to value bitcoins risk can be calculated and minimized.
What is the ultimate goal? To make money? To be involved in bitcoins regardless of the outcome? I don't know what it is for you but here are some things to consider.

Spend a couple of thousand and start mining bitcoins yourself. This is the best option to limit risk right not doing anything at all. Bitcoins are mined with your graphics card and a dedicated machine can be built that is of little use outside mining bitcoins.
If it drops to 300$ will you really be buying? How much of a loss will you tolerate? Why should the value of bitcoins go up from there? Where will you take profits? Have a plan.
Be careful with buying into companies you perceive to thrive on bitcoins as there are other factors that affect the stock price. Big companies won't budge much and smaller ones involve more risk. Shooting from the hip approaching this as news trading seems to have its merits. Being first to react matters.
Another suggestion is to bet on different companies that pass the criteria for your idea. If the idea is strong enough it will move the valuation of the companies with the advantage of having diversified risk. However fees are a concern and if you haven't traded securities before it can be tricky at first.

On November 19 2013 13:19 Emi wrote: As it is pretty hard to buy a "bottom" entry point a reasonnable strategy can be to buy at any price then buy again if it goes lower. Thats actually what I did, buying first almost at the 30$ bubble then several times after the crash

This is just bad advice. Hello evil cousin of Martingale. Just because it worked for you doesn't validify the theory. What you are advocating is swing trading or momentum trading. If the goal is to get in on the action, this is really good advice: buy NOW ! If you want to buy and keep for a longer period of time (months if i am reading between the lines) then i'm afraid swing trading is not the way to go. Pulling numbers out of thin air can get you cut. Technical analysis is not the way to go, the price is unpredictable. Past price is no indication of the future. Think about this, it makes sense.

It is true you are very unlikely to catch the very bottom and need to sit on a loss for an amount of time.

https://www.documentcloud.org/documents/835843-virtual-currency-hearings.html

On November 19 2013 17:20 Emi wrote: Show nested quote + On November 19 2013 17:02 cariadon wrote: If bitcoins are so simple then why doesn't anyone please tell me how bitcoins should be valued. And i don't mean dropping random ideas into a hat. Let's see some math and solid theory that can be applied to understand past events and used to predict future ones. What is fueling bitcoin and how much is left in the tank. E.g. P/E for stocks. It was clear Netflix was in a bubble trading at astronomical P/E when even the CEO stepped in to calm the markets. netflix As in poker. Of course you cant use company valuation models to give it value. Also, its value is tighly correlated to the number of people using it so its rate of growth should look like technological rates of adoption of new products (meaning, quite fast) You make scenarios with probabilties attached, for example : 25% - All bitcoins website are hacked, nobody use bitcoins anymore : bitcoin value = 0$ 50% - Bitcoin stay in a niche market for geek as a toy : 200$ 24% - Bitcoin takes over most of online payments : ~15k 1% - Bitcoin takes over as world currency and become the standard way of storing value : insane$ Any set of scenarios I can think of make investing in bitcoins EV+. But it is a bit like set mining, you should not go all in into it because it might fail for unpredictable reasons. Of course most of its current value is speculative

Agreed. I don't have a problem with the value being speculative if there is huge upside potential. Having risk limited would be the cherry on top.
Let's add time to the equation.
Timeframe for bitcoins website to be hacked: any given time.
Bitcoin stay in a niche market trading around 200 with spikes both ways: the near future (there needs to be a catalyst to move the price up and i am not seeing many big ones on the horizon, can be wrong)
Bitcoin takes over most of online payments: hard to tell but i'm guessing years (what is wrong with the current system?)
Bitcoin takes over as world currency and becomes the standard way of storing value: > 10 years (this is too big of a chance to be implemented straight away)

Is there a difference in buying bitcoins for a quick gains and buying with the intention of weathering the storm and having slightly better than a snowballs chance in hell?

On November 19 2013 17:39 ugly wrote: https://www.documentcloud.org/documents/835843-virtual-currency-hearings.html

Care to post the TL;DR ?