[kmarei]

Originally Posted by MediaArtist

Umm, so BitCoin is only down 40% from 2 days ago. Is that a victory for you?

Where in this trajectory do you see BitCoin ever spiking past its high again?
Seriously, look closely at this graph, does that evoke confidence?



kmarei, I hope you're not taking out a loan for the $14,000 to buy those mining machines. You will never see that money again.

If you look over the last 6 months
what is out of the ordinary is the price increase that happened from around November 25th till December 7th
we are back to the same price levels as November 20th
and the trend is definitely going up

don't forget if you want safe investment, you get low returns
if you are willing to take a risk, you potentially can make a lot

[MediaArtist]

Originally Posted by kmarei

If you look over the last 6 months
what is out of the ordinary is the price increase that happened from around November 25th till December 7th
we are back to the same price levels as November 20th
and the trend is definitely going up

don't forget if you want safe investment, you get low returns
if you are willing to take a risk, you potentially can make a lot

Yes, risk vs reward, classic conundrum when it comes to investing hard earned dollars into an investment vehicle.

What about the BitCoin investment vehicle excites you?

[kmarei]

Originally Posted by MediaArtist

Yes, risk vs reward, classic conundrum when it comes to investing hard earned dollars into an investment vehicle.

What about the BitCoin investment vehicle excites you?

Several things
First the whole unregulated aspect of it, is refreshing
Unlike stocks and bonds etc, anything could happen
The price could go up to 10,000, or sink to $20

Second the fact that you can mine with the hardware and usually sell it at a profit
With most hardware is usually sold as pre orders, so it's sold cheap
And the minute it starts shipping, the price sky rockets
The knc jupiter was sold as a pre order for roughly $5000
It's now selling on eBay for 20-25,000!
So you buy it for 5K, mine roughly 15-20 bitcoins with it
Then sell it 4-5 times your initial investment
The fact that I am not paying for electricity also sweetens the deal
Plus I work in IT, so this is down my alley

The best thing is, if this takes off, it could revolutionize the entire banking sector.
I'll give you an example
I was trying to buy bitcoins to buy the hardware. I had to do a bank transfer which took 4 days!
If I have bitcoins and I want to send you some
I can do the transfer from my iphone and its instant
And no fees or restrictions like banks

I think it's worth a shot
Yeah it's risky, but its got a little bit of the "gold rush" feel to it

[Templar]

such crypto

wow

much currency

[tuj]

Ok, so here's the problems with Bitcoin:

1. Volatility. Its WAY too high.

2. Divisibility. If bitcoin is to become a viable currency, it has to break down to enough fractions that would support the economy. As far as I know, with the current software for Bitcoin, there are not enough subdivisions to support an economy the size of the USA.

3. Hyper-deflation. Because the total number of bitcoins is fixed, there is potential for 1 bitcoin to skyrocket in value. This would make the fractionalized bitcoins too large for practical transactions (ie. imagine if the smallest USD bill you could use was a $20...hard to buy McDonald's without losing value).

4. Competitors. Nothing makes Bitcoin unique; other cryptocurrencies could undercut or become more popular than Bitcoin.

Bitcoin is a lot like gold, and gold is JUST A COMMODITY. If you look at the volatility of gold, its way higher than the exchange rate volatility between currencies. Finally, I can't buy a meal at McD with gold, nor can I use bitcoin, so until it is accepted without conversion, you will always be exposed to a highly fluctuating exchange rate.

Sorry but I don't consider that kind of volatility an 'investment'.

[MediaArtist]

Originally Posted by tuj

Bitcoin is a lot like gold, and gold is JUST A COMMODITY. If you look at the volatility of gold, its way higher than the exchange rate volatility between currencies. Finally, I can't buy a meal at McD with gold, nor can I use bitcoin, so until it is accepted without conversion, you will always be exposed to a highly fluctuating exchange rate.

Sorry but I don't consider that kind of volatility an 'investment'.

It's actually much worse than Gold. Gold actually has an intrinsic value or "utility". Yes you can't go to WalMart and exchange Gold for goods (yet), but you also can't go and exchange your house for goods, or your car, both of which have great intrinsic value and utility. Gold is a metal that isn't tarnished by air/water exposure, it's an excellent conductor, and of course is popularly used in jewelry and art.

BitCoin has none of that. It's only intrinsic value is that they claim that it cannot be replicated. While that is technically true, the proliferation of other Cryptos like LiteCoin, DogeCoin, etc etc makes that intrinsic value all but moot.

[MediaArtist]

Originally Posted by kmarei

Several things
First the whole unregulated aspect of it, is refreshing
Unlike stocks and bonds etc, anything could happen
The price could go up to 10,000, or sink to $20

That's great, but that rational isn't about investing, that's speculating. It has more in common with gambling at the roulette table than it does building a viable investment portfolio.

[gatorfast]

Originally Posted by kmarei

The best thing is, if this takes off, it could revolutionize the entire banking sector.
I'll give you an example
I was trying to buy bitcoins to buy the hardware. I had to do a bank transfer which took 4 days!
If I have bitcoins and I want to send you some
I can do the transfer from my iphone and its instant
And no fees or restrictions like banks
)

I've seen this argument a lot and it's pretty weak IMO. Bank transfers are generally much quicker than 4 days and there are vehicles such a paypal which transfer funds instantly and free of charge as well.

The reason I would never invest in bitcoin is that no matter how many times and by how many people explain it to me, it still makes absolutely no sense and no one can give me a valid reason why a bitcoin is better than a dollar. Only aspect of utility I see in it is that it's ananymous and untraceable. So basically it's good for illegal payments if that's your thing...

[kmarei]

Originally Posted by gatorfast

I've seen this argument a lot and it's pretty weak IMO. Bank transfers are generally much quicker than 4 days and there are vehicles such a paypal which transfer funds instantly and free of charge as well.

The reason I would never invest in bitcoin is that no matter how many times and by how many people explain it to me, it still makes absolutely no sense and no one can give me a valid reason why a bitcoin is better than a dollar. Only aspect of utility I see in it is that it's ananymous and untraceable. So basically it's good for illegal payments if that's your thing...

You're not really going to make a return in holding on to dollars
If you buy $100 today, it will still be worth $100 in 6 months
If you buy 100 bitcoins today, who knows how much it will be worth in 6 months
Looks at the way the price has gone up in the last year


You don't have to understand it
I don't understand why some people pay an arm and a leg for hello kitty crap
But they do

[gatorfast]

Originally Posted by kmarei

You're not really going to make a return in holding on to dollars
If you buy $100 today, it will still be worth $100 in 6 months
If you buy 100 bitcoins today, who knows how much it will be worth in 6 months
Looks at the way the price has gone up in the last year


You don't have to understand it
I don't understand why some people pay an arm and a leg for hello kitty crap
But they do

You should never invest in something you don't understand.

I would rather keep my dollars and invest in things I understand like stocks. Sounds like you have been lucky so far but when you gamble you eventually lose.

[kmarei]

Originally Posted by gatorfast

You should never invest in something you don't understand.

I would rather keep my dollars and invest in things I understand like stocks. Sounds like you have been lucky so far but when you gamble you eventually lose.

My point is as long as people are buying bitcoins
I don't need to know why they are interested in them
If I can procure/produce something that people are willing to pay for
And I can make a profit on it
Why not?

[gatorfast]

I hope it works out for you.

Fwiw I have a friend who has been pounding the tables on bitcoin since it was trading around $1 so I am well aware that there is money to be made and of course it worked out very, very, well for him.

[tuj]

If you buy $100 today, it will still be worth $100 in 6 months

Technically this isn't true given the time-value of money. As a hyper-extension, $100 dollars you had in 1930, had you just put it in a drawer, would have much less purchasing power today than in 1930 because of inflation.

Therefore when you value an alternative investment, you should consider the "risk-free" rate-of-return on depositing your money or investing it in a T-bill or CD.

Your statement is true today especially because interest rates are so low, but that isn't always the case. Just an FYI.

[MediaArtist]

As of today BitCoin can be bought for $647.12, or about $50 below the price when this thread was first posted.

If you had invested $5,000 into BitCoin, you would be down almost $400.

If you had invested $5,000 into Google, you would be up over $400.

Guess which one I was invested in (in September admittedly, not November 18th, but since price fluctuation between September and Nov.18 was very low, I think my point still stands).

[kmarei]

Originally Posted by MediaArtist

As of today BitCoin can be bought for $647.12, or about $50 below the price when this thread was first posted.

If you had invested $5,000 into BitCoin, you would be down almost $400.

If you had invested $5,000 into Google, you would be up over $400.

Guess which one I was invested in (in September admittedly, not November 18th, but since price fluctuation between September and Nov.18 was very low, I think my point still stands).

And had you invested $5000 into bitcoin mining hardware on November the 18th (first post of this thread) you would have made roughly $3500 in bitcoins (at today's rate, was higher earlier in the month)
And your hardware would still be worth about $3-4K


So +$400 @ google
Or $2000 in bitcoin mining

Originally Posted by kmarei

And had you invested $5000 into bitcoin mining hardware on November the 18th (first post of this thread) you would have made roughly $3500 in bitcoins (at today's rate, was higher earlier in the month)
And your hardware would still be worth about $3-4K


So +$400 @ google
Or $2000 in bitcoin mining

+1

[whyrms]

Besides some really good points that have been posted before by other people why bitcoin is not a good currency, I would like to point out two other points.

The first is that, it is not backed by any form of government or authority with the power to track down and bring justice to people who has committed fraud using loopholes on the currency. Just last month there was a guy that swindled 100 million dollars worth of bitcoin and it is up to the people he stole it from to track him down and bring street justice to him (no government is going to bother with it).

The second is that it is based on an encryption method seemed infallible right now...but how can you trust an entire economy on an encryption method? what happened when someone finally find a way to crack it? I know...very unlikely...but there is a chance...I wouldn't bet on that chance especially the way technology is developing...

Originally Posted by whyrms

Besides some really good points that have been posted before by other people why bitcoin is not a good currency, I would like to point out two other points.

The first is that, it is not backed by any form of government or authority with the power to track down and bring justice to people who has committed fraud using loopholes on the currency. Just last month there was a guy that swindled 100 million dollars worth of bitcoin and it is up to the people he stole it from to track him down and bring street justice to him (no government is going to bother with it).

The second is that it is based on an encryption method seemed infallible right now...but how can you trust an entire economy on an encryption method? what happened when someone finally find a way to crack it? I know...very unlikely...but there is a chance...I wouldn't bet on that chance especially the way technology is developing...

You can't "crack" the encryption. Once you crack it then it rewards you with a block of coins. If someone were to crack the same key it would not reward you. It would be already used up

[MediaArtist]

Another log into the fire.

On November 18th when the OP posted this thread, BitCoin transactions were spiking at 90,583 transactions per day.

As of this morning that number is down to 27,791. It hasn't been this low since last year December when BitCoin was trading at $14 a coin (yes, $14).

If this isn't a death spiral, I don't know what is. China has literally begun BitCoin's death with one fell swoop.

[MediaArtist]

Originally Posted by kmarei

And had you invested $5000 into bitcoin mining hardware on November the 18th (first post of this thread) you would have made roughly $3500 in bitcoins (at today's rate, was higher earlier in the month)
And your hardware would still be worth about $3-4K


So +$400 @ google
Or $2000 in bitcoin mining

Why are you being dishonest? Mining isn't guaranteed. It's all a game of chance. My $5,000 actually buys me $5,000 worth of Google as a company. Your $5,000 buys you a glorified high powered PC that you could have probably built yourself for half the price for the CHANCE of possibly solving the BitCoin problems which MAY give you a coin, or you could get 75% of your potential mining yield, or maybe 50%, maybe less. Mining is still based on chance and percentages.

Also another thing you failed to bring up.

How much will that hardware be worth when BitCoin transactions drop another 70% like they have since November? What happens when transactions go below 10,000, or go to 5,000?

What is the likelihood of that vs the likelihood that Google will suddenly implode as a business?

I would rather carry $5,000 of a company that is literally approaching a monopoly in the information world than some over priced hardware that has a "chance" of mining a BitCoin which has rapidly depreciating value.

[PINeely]

Because when people think of an ideal digital currency they want to choose the one whose entire history is steeped in online drug and child porn markets.

[ES_TRADER]

yea, im long btc at 1100. will double position size at 400