Anybody familiar with BitCoin

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internationalaw

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#1
I recently invested and I have a cousin that's made $1500 on just over a week. Just wanted to see if anyone else is familiar with it.

It's an online currency that is completely decentralized
 

kulanapan

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Nov 27, 2012
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#11
Pretty sure BitCoin is not going to end well.
BitCoin is the future of currency. The market abhors an elastic currency, which is exactly what our dollar becomes as the money supply continues to be inflated and deflated on whim. BitCoin's money supply is relatively fixed and limited, not regulated by a bunch of old white men sitting in a secret office. As such, it's value may fluctuate, as the value of any money or commodity fluctuates naturally based on demand, but it will not suffer from the devastating effects of inflation that fiat currency suffers from.

The only way it can't end well is if government gets its hands on it and started regulating it. They are already taking notice of it, and government hates competition, so it's probably just a matter of time before they ruin it. But if they take it down, another digital currency will pop up. The beauty of the internet.
 

kulanapan

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#13
Sounds like tulips to me...
Tulips are not money. We've been over this before. Money, by definition, has several characteristics that tulips do not have. Money is: durable, divisible, limited, consistent, convenient, has a history of acceptance, and has value in itself. The only virtue that you could argue BitCoin lacks is that it has value in itself. It can't be consistently redeemed at a fixed price for any physical commodity like gold or silver. But it does have durability, it is divisible, it is quite limited, it is consistent, it is supremely convenient, and it is building a history of acceptance.

The big deal is that BitCoins more closely approach the true definition of money over our current fiat paper system. Paper dollars are no longer limited (the Fed keeps printing billions more every week), they are not durable, and they are becoming more and more inconvenient. They are still divisible and consistent, but so is rice and aluminum. About the only thing fiat paper has going for it is a history of acceptance. But that foundation was built during a time when paper notes could still be redeemed for gold.
 

internationalaw

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#14
In essence, BitCoins are online Cash...

Here's a little write up that some may enjoy:

"First off Bitcoin is not a bubble or a ponzi scheme. I think it's hard for most people to see the value in something like Bitcoin, because it's virtual, so that is knee-jerk reaction.

A Ponzi scheme is where someone offers an investment with a huge return rate, and pays off previous investors with new investors money. There really is no "investment". A Ponzi scheme only lasts as long as there are more new investors than old ones. As soon as the flow of new investors stops there is no money to pay off old investors and the Ponzi scheme crashes. Most recently a guy named Bernie Madoff (who used to run NASDAQ, the biggest stock exchange) was able to steal over $65 billion from investors in a Ponzi scheme.


Bitcoin is not a Ponzi scheme because it actually has value (quick transactions, low fees, no inflation, no regulations). There has been many times that the price of Bitcoin has leveled out and there really wasn't any new investors and Bitcoin did not collapse. Even if Bitcoin does not raise in value it is still valuable to people for many reasons.


An economic bubble is when something is speculated to a higher price then what its "intrinsic" value is. Intrinsic value is the actual value of the product, not the value created by investment. During the recent housing bubble people were buying houses specifically to sell them at a higher price, but not to live in usually. This created a surplus of homes, with many people owning homes that they could never afford, but bought because they could sell for higher. Obviously this could not last forever and as soon as people started to miss payments the whole thing collapsed. The Tulip Mania from back in the day was a bubble, because obviously tulips aren't worth that much. The secret to a bubble is that it works as long as Demand is increasing faster than the Supply. For a while people really wanted tulips, but eventually enough people started growing tulips and then the Supply was bigger than the Demand and the Tulip market collapsed. For a while people really wanted to buy more houses, but eventually enough contractors built more houses than were demanded and the housing market collapsed.

Is Bitcoin a bubble? Hardly. First, what is Bitcoin's "intrinsic" value? Hard to say, it could potentially be very high. It is a better system than PayPal, WesternUnion, easier to use than Gold, and a better asset than paper money. Could the Supply ever overwhelm the Demand? Hell no, that's the whole point. Unlike houses and tulips there is no way to make a bunch of Bitcoins if the value increases. The supply increases less and less over time, no matter how valuable Bitcoin is.

The biggest reason I think Bitcoin is going to do really well is the "network" effect. Basically the higher the value of Bitcoin the more stable the value is. The more people using Bitcoin means more businesses accepting Bitcoin. The higher the value the easier it is for people to switch their assets to it without the risk. Think about Facebook. Super popular, but pretty pointless if you're the only person using it. Remember when people started to switch from MySpace to Facebook? At first it was just a trickle, but then it started to increase, until it was just a massive switchover. The more people that started using Facebook made it a better idea for the people that hadn't switched yet. The same thing with Bitcoin. A lot of people won't want to use Bitcoin because they won't know what to do with it. Yet the more they hear about it, the more people they know using it, and the more businesses accepting it, the easier the switch.

Most people will not think Bitcoin is a good idea until it becomes so big it is accepted by everyone. Bitcoin is a "black swan" (https://en.wikipedia.org/wiki/Black_swan_theory) which means it is something that has never happened before so we have no past experiences to use to predict what it will do. Remember when the internet first came out? Almost no one thought it was a big deal. But now its ****ing huge. If Bitcoin is what I think it is, it will change history as we know it."
 

Reed

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#17
I'm so mad at myself. I considered buying a fair amount several months ago right after a little crash in their value. They got down around $5. I decided against it. Now they're up to about $140. In the past the value has always fluctuated like crazy, but then again it's never gotten anywhere near this high before. At this point I think anyone who claims to know what will happen next is full of it.
 

internationalaw

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#18
I'm so mad at myself. I considered buying a fair amount several months ago right after a little crash in their value. They got down around $5. I decided against it. Now they're up to about $140. In the past the value has always fluctuated like crazy, but then again it's never gotten anywhere near this high before. At this point I think anyone who claims to know what will happen next is full of it.
agreed, but It's taking off like there is no tomorrow. Online merchants, physical stores, and now VC's are using BTC because of its ease of use, low cost transactions and anonymity
 

internationalaw

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#19
There's 1.5 billion already in Market Cap and it could climb fast. Many believe it could be between $1,000 to $10,000 per BTC within 1-2 years and even potentially in 6 digits after grandparent adoption (6-12years)
 

internationalaw

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#20
My cousin got in at $85, he's made about 2500 and I'm in at 104 right now, but I'm gonna continue to invest a decent portion of my discretionary income until it reaches the $1k mark.