For those who were interested in the post "OT, Bitcoin, for rent?

Nov 7, 2017 5:18 PM"

We've had quite a roller coaster 2 months! From Nov 7 when we first started discussing (price approx $7,100), it maxed out at north of $19,000 on Dec 16, and now fallen to today (price approx $9,400....dropped $100 from aboutt 20 minutes from when I first checked it).

Wow! The bloom may have fallen from this rose. Or not! Who knows! It could be $20,000 next week, or $2000....the point was, is, and always has been....not a stable store of value, which is a primary factor of any currency.

This isn't a "told ya so" post, quite the opposite! I'm sure LLs who accepted rent in bit coin up until Nov 30th (value around $9,300) are still feeling okay about it...maybe pretty good if they cashed out at the high point. The ones who accepted afterwards and/or held on too long...meh, not so much.

The original past was "Bitcoin for rent?" The question was "Would you accept it?" My response was and remains, "Heck, no!" Based on the evidence, it's not a stable investment or method of holding.

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Not for me.

I don't understand the bitcoin market at all, so I am OUT.

From my limited POV, it seems like a 21 Cent. version of a Ponzi scheme.

Isn't this a "fiat" currency" as it is worth whatever the players "say" its worth.

the secret to success here may have been in getting in early and pulling the rip-cord when you have made enough.

Surely time will tell.

Frank, bitcoins are traded on an open market, thus it is supply and demand that determines its value.

Frank, bitcoins are traded on an open market, thus it is supply and demand that determines its value.

To be clear, I'm fine with whoever wants to "play" with it. Gamble only what you cannot afford to lose.

Homer, I get what you're saying, but the stock market is considerably more stable and has 100+ years of history to show how it typically behaves. Bit coin and other crytpos have no history to speak of. Most are younger than 5 years old...the minimum time anyone should consider a viable time-period for evaluating an investment based on historic average.

Missed out on this. My SO, who's a computer scientist said "buy, buy, buy," back when it was like $30. I said, "Have you lost your mind."

And here we sit a couple million dollars poorer than if I'd listened to her. Kick me, harder...

Barbara, your approach mimics what most folks whom I know personally are doing. Small amounts like $500 or less. A buddy of mine bought in when it was around $5200, so he's still doubled his money. But it's not like he's going to retire tomorrow off that.

Unless someone is willing to bet big even if it quadruples, it's still just fun money.... The time to get in was Jan 2017 or earlier. I don't personally know anyone who has wagered less than $10,000 and made $1 million or more. It's like most "next big things"....by the time 99% of us hear of it AND jump in, the really exciting levels of return have already been made.

What I DO understand is that bitcoins have NO INTRINSIC VALUE. Thus, they have no real market value. And therefore, they have no valuation that would determine what their price SHOULD be.

Such an investment will go up or down according to the whims of investors. If some columnist says to "buy", then there will be a lot of sales driving the price up. If the next days, this columnist says "sell", there will be a lot of sales driving the price down. These swings will be large, maybe very large, and I think that that explains the current market for bitcoins. They have no actual valuation.

Bitcoins are not a Ponzi scheme. Think of what a Ponzi scheme is. Time won't tell anything, except that some investor will get money from some other investors, and no one except the sharpies will be happy.

Bitcoins are simply market objects. They don't (and won't) have any special history and if it had a long history, it wouldn't be of any help.

Anyone who buys (sells) because someone else says buy, buy, buy, deserves whatever they get. Even a simple coder needs some logic behind their actions.

Markets are no place for those who do not understand them.

Moshe, well said.

I will note there is some intrinsic value in the concepts of block chain as a methodology for tracking transaction history (and it has various other cool uses, such as Identification), and also the use of crypto currencies a more efficient, less costly method to transfer money than many current options (SWIFT / bank wire). But the price is far higher than the actual value this provides. Certainly, there isn't any one crypto today that has proved it is superior to all others. Others are actually faster than bit coin for validating transactions, and hence from a value standpoint should be "better" and priced accordingly higher.

Well, it's back to $11,190 right now. If anyone bought when we first started discussing it at $7,100, then you're probably doing fine even after the drop. :)

I'm actually not a fan of Bitcoin. I own some, but not a big fan because I don't think it has real potential to be USED. Fees to transfer are way too high and they don't have a good solution to that still.

I think some other coins have some actual potential for daily usage -- such as Ethereum (for Smart Contracts) or Litecoin (for use as currency in countries where their actual economy has tanked and fiat money has become fairly pointless).

Most of my holdings are in Ethereum. (Mainly because I made a decent amount trading virtual cats for a few days!)

- John...

And, yes, David, video cards are certainly in short supply. Sold out everywhere can going for well above MSRP on EBay.

I picked up a few more this week (3 RX580s and 2 1070s). I haven't decided if I'm going to mine with them or just resell them on EBay. Depends on what happens over the next few days.

- John...

Also, note that even with the huge "crash" from the last few days -- where everything dropped 30-40% -- Ethereum is still UP 27% from just a month ago! :)

- John...

Market value is what someone will pay for a thing.

Intrinsic value is what the thing is actually worth to someone who wants to buy it. For example, If you need to dig a hole, and a hole-digger wants $100, then a shovel may have an intrinsic value of $50 - $75 or so. Similarly, the value of a share of stock has an intrinsic value calculated as the value of real estate owned by the company, its cash deposits, inventory, equipment etc plus some increment representing anticipated profit in the coming year(s). Thats an actual value, and the market will determine that value (rather than speculation producing an imaginary market value). No one would pay too much for a share of General Dynamics stock, because the intrinsic value is pretty well determined. Bitcoins lack that ability to have an actual valuation. A dollar HAS intrinsic value more than the cost of paper and ink, because it is valued by what it will buy and, as Pmh points out, that value may be depended on, short of minor market fluctuations.

As of today Chris Larsen , co-founder of Ripple XRP has lost $44 billion since Jan 4. That roughly $2.7 B/day.

This. An hour from my home and a customer back when I had a job:

HANCOCK COUNTY, Ind. -- The computer system at a hospital in Indiana was hacked and held for ransom, CBS affiliate WTTV-TV reports. Hancock Regional Hospital confirmed Friday that the system was compromised by "an unknown party" in an effort to halt operations, the station reported.

Rob Matt, the hospital's chief strategy officer, told The Indianapolis Star that those behind the attack requested an unspecified amount of bitcoin and that the hospital has not paid the ransom. Matt said the hack affected the hospital's email system, electronic health records and internal operating systems, but did not affect patient information.

"Hancock Regional Hospital has been the victim of a criminal act by an unknown party that attempted to shut down our operations via our information systems by locking our computer network and demanding payment for a digital key to unlock it," the hospital said in a statement. "Unfortunately this sort of behavior is widespread in the world today, and we had the misfortune to be next on the list."

"Our doors are open at Hancock Regional Hospital," it said.

A follow up article states they paid 4 bitcoins with an estimated value of $55,000. The hackers were most likely eastern European and gained access via a vendor's password. They were clever to keep the amount low enough to be "palatable" and payable.

Within 2 hours of paying with Bitcoin the computers records were restored.

Hospital viewed this are cheaper than rebuilding the records.

The Bitcoin transaction was untraceable.

Better get use to the idea of cryptocurrency... we are one financial crisis away from having it go main stream. The best analogy I have heard is this: internet pre-2000. Before that, internet was a wild west with a high $$ valuation but not much use. Then it crashed. Then Google figured search/ads. Then "good business uses" came about. It wasn't just about dirty websites anymore...

Bitcoin will crash further yet. One of the currencies will raise to be the front runner and be the next Google, Amazon, Facebook, or Apple....

Tim...I'm with you that bit coin will probably crash more, but I'm not understanding where you say the Internet was the wild west and "it" (the Internet?) crashed. I think what you mean is there were a bunch of goofy Internet companies with zero revenues that crashed.

John, I know you like cryptos and are having fun playing with them and mining them. More power to ya, literally, for all the juice needed for those mining rigs.

Agreed -- they are like trading "penny stocks" on they are worth a lot more than pennies. But, since you can trade tiny pieces of them, it is again like penny stocks. Very volatile and crazy.

But, for fun money, it's kinda fun to throw some in. I've currently got only around $200 invested directly in cryptocurrency. (I was up to about $1000 total in, but sold some off a while back so that I only had a small stake in it.) So, I've got $200 out of pocket in it -- since around August or so -- and, as of this minute, it is worth just under $7000. Sure, it could be $5000 tomorrow. Or it could be $9000 tomorrow. With only $200 in, I'm not that worried. :)

For my mining, that's a different thing. Less risk in that. I've bought hardware to mine, but it is easily resellable -- it still has most of the value that I bought it at (since I bought it used and video cards have actually gone UP since then). For mining, I've been doing it for around 4-5 months, have about $2500 worth of equipment invested, and I'm just past break-even on the mining profits. So, everything from this point on is gravy -- and I still have the equipment itself to sell later too, of course.

It's been a fun learning experience. I do think some coins have potential for real-world usage down the road (although Bitcoin is not really one of them, IMO). We'll have to see what shakes out.

- John...

I think until it becomes widely accepted, the volatility should continue. I also understand that there will only be a finite amount of bitcoins mined. Once that threshold has been reached and mining stops and no new coins will be produced. At that point, the value should really go up. I bought in at $200 and $3000. Wishing I had put more into it at $200 but oh well.

Sid- correct, internet stocks crashed in 2000 with no revenue or good business model. Pre crash, FAAG stocks were small fish in the pond. Apple was getting crushed by microsoft. Internet was about chat rooms, yahoo/AOL, and dirty sites. That was about it.

Post crash, we do our shopping, pay bills, research products/business, buy our next property, etc...

So in my book, bitcoin is like Yahoo or AOL pre-2000. If you want to be wealthy, find which currency is going to like FAAG. I have been doing some reading that says keep on eye on Europe. When it starts to crash, watch out. Europe will start crumbling and it will lead to Japan hurting. That wave of hurt keeps up and lands on the US. But it will take 1.5-2 yrs before hitting the US. In that time frame, US stock market will soar to Dow 45,000 . Then crash hard.... US govt will do everything it can to get it going again. If deflation is happening, people will turn to cryptocurrency...

FYI:

Facebook

Apple

Amazon

Google or FAAG

PMH: Japan is struggling, only being supported by their exports to Europe. So when Europe starts to tank, export go down for Japan. China hurts too, but they have a large enough economy that consumes themselves now and reserves, they can insulate them for a Europe down turn. What you pointed in the lack of younger people is correct. This is one BIG reason Europe is going to tank. There isn't enough tax revenue to support all the entitlements to the old people....

The reason US Stock go higher, is you got a flight of money. The rich in Europe will pull their money and buy Blue Chip stocks in the US. You saw this in 2010 I believe when Greece, Spain, Portugal was all doing austerity. Their was a flight of money to safe havens aka US Treasury and stocks. We were hurting, but looked better than everyone else at the time.