BITCOIN GETTING MURDERED Tonight

OMG! I've just realized I have an incredibly rare Multiple Bit-Flip Bitcoin Error! And here I was thinking it was just a random string of ones and zeros.

 

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Well, the idea is that the supply is fundamentally constrained, and so as long as we keep making more stuff that you can buy with it, its value will continue to go up.

And that's fine, except that there's no constraint on the supply of alternative currencies. So it may hold its value just fine until all the kids get tired of it and go play in another sandbox.

And anyone with a computer and an AWS instance can make a new sandbox.

 

Where "criminals" are defined as "people who don't want their purchases tracked by authorities". I'm not sure that definition is fully accurate -- although I do have the impression that the IRS (and other agencies) would like to make it so.

 

Tax criminals are criminals. The Internal Revenue Code is fine and fully valid law.

 

I've heard from more than one source that some people want their transactions private for reasons other than tax evasion or trade in illegal goods.

Yes, yes, I'll wait for the laughter to die down before we continue.

 

Yes well, those days are numbered in western economies generally. The only defense against seeing a cashless economy is advanced age.

 

What do you suppose your Amish neighbors will do? I picture them operating with cash (and maybe checks), but I have to admit that I don't know what they're doing even today. Traditional mechanical credit card imprinters?

Edit: Google is my friend, even when I don't give it the attention it deserves:

http://www.creditcards.com/credit-card-news/amish-and-credit-cards-1278.php

Short answer: the Amish use the same payment methods we do -- they're just less likely to abuse them (running up a revolving balance).

 

The Bitcoin investors on my other gold and silver group are going nuts. I knew this was a scam when it was introduced. IMO.

 

Don't get too self-congratulatory. 90% of the gold and silver market hype is a scam too.

 

For reasons I do not understand, my more conservative Amish neighbors have no electricity, and no landline phones, but can have a cellphone in a lockbox on a pole outside their house which has a solar panel on it to charge the phone. Again, I don't get it or have to. I'm not an elder.

 

Well, then they are probably horrible "investors" in other mediums as well. If they were doing proper research, they should have been able to at least understand what was going on, hedge their bets, and not be freaking out - you know, what you're supposed to do as a real investor. This cycle was predictable and it's a repeat of what happened last year to a degree, and other times in its (short) history.

Last year there was uncertainty about the "halving", where the rate of coins (reward) produced by mining was cut in half, as is part of the programmed schedule within the code. In addition there was the whole uproar about "the scaling", and the introduction of a competing set of code called Bitcoin-XT.

No one knew exactly what would happen with the halving, as this was only the second one since the introduction, so price was all over the map. The majority counted on the halving raising the price by double, but there were plenty who screamed doom because the price would stay the same, miners wouldn't be profitable, and everybody would give up - i.e. the death of Bitcoin. Needless to say, halving happened, price rose as expected, no death, and you could have made a killing if you understood the mechanics of why it was probable to happen.

Then Bitcoin-XT, where a competing codebase was launched to try to tackle an inherent design "flaw" (if you believe it's a flaw) with the amount of transactions that can be processed in one block. Everyone freaked out, big war going on with the two development camps, price dipped. XT didn't gain traction, Core kept running, price stabilized and continued to climb once the threat was diffused. Again, could have made a killing if you did your research and watched it closed like you should with any investment.

Fast forward to now, and you had the Bitcoin ETF, and now "Bitcoin Unlimited" (or "BU").

The majority rise in price from the "stable" $600-800 range was in lead up to the ETF decision, which everyone knew was coming this past week. Same as the lead up to the halving. ETF denied, and price dropped. Anyone with an investment at a lower level would have been wise to sell part stake and reap the benefits, and stay in at a partial investment in case the ETF was approved, and price skyrocketed.

This drop right now is the effect of BU, which is another code alternative to the Core, trying again to address this scaling dilemma. You now have worry that there could be a "hard fork" (same situation as XT) situation, and if BU were adopted it could fork to that blockchain instead. The worry there is not the fork - that's how the software is designed to work and overcome technical hurdles - but that the split won't see majority acceptance and you could have competing chains and coins, which would indeed cause quite an issue with the ecosystem.

Again, with the right research and understanding of everything, these events should not be of any real surprise to anyone who is willing to put money into this. If you are a blind investor, you will lose. And, rightfully so.

As for the scam part, I don't think it really is. If it was taken for what it is and what it's supposed to represent, it's actually a very ground breaking piece of technology. Regardless of the name of the coin - Bitcoin, Ethereum, whatever Alt - the technology that runs it all, the Blockchain concept, has found quite a wide array of uses in the current Financial systems and other government use (just Google about the blockchain and real world use cases). I can give plenty of counter opinions as to why I think it has its uses, and will be here to stay for a very long time to come, if you'd like to debate them.

 

You have the "traditional" Amish, and then the Menanites (think I spelled that correctly).

A traditional Amish will not have any electricity to use within their dwellings, and does things the way they were done 200 years ago. However, even the Amish understand that in order to survive, they had to adapt to the times and allow for things to change.

The Menanites are Amish who are able to use electricity and forms of current technology for the purpose of doing business. They can have lights, TV's, and computers and credit card machines, Internet, etc. It's those that are the method of funding for the communities.

The cellphone outside the house on the pole is not in their residence, but is able to be used in case of emergency (call for help), since they don't have land lines and normal telephones. Or, for those who have children that have left the Amish culture and assimilated into "normal" communities, although I believe they are supposed to be shunned, it could be a way for them to communicate with them on the outside.

 

I'm not sure if you are saying, "no contraint on the supply," in regards to bitcoin individually or cryptocurrencies as a whole; however, I believe the idea is bitcoins will not be created indefinitely. The amount of bitcoin available to be mined will continuously dwindle until it ceases in approximately est. 2140. Only 21 million bitcoin will be created total. As that happens it is possible the bitcoin supporters move on to the next thing; however, there have already been handfuls of other cryptocurrencies that have been attempted, most of which have failed.

 

The latter. Anyone can create a new cryptocurrency. As you say, the first-mover advantage is hard to overcome -- but if Bitcoin starts to be seen as too troubled, that advantage may decrease.

Of course, "real" currencies can fall out of favor and decline, too.

 

Of course it is.

 

And as always, Gresham's Law applies.
Bad money drives out the good.

 

I HATE "Gresham's Law". It is just a stupid thought that doesn't deserve anyone's name. It's merely a specific case of a generalized common sense matter of preferences.

 

Good to see that the Securities and Exchange Commission rejected the bitcoin ETF. Every penny stock boiler room in the country had been asking "why didn't we think of this?"

 

and they rejected a 2nd Bitcoin ETF request
==> http://www.marketwatch.com/story/us-regulators-reject-another-bitcoin-etf-proposal-2017-03-28

 

To my understanding, Bitcoin is similar to any finite resource. It's only worth something if people are willing to a) accept it and b) use it to buy things.
Gold is a finite resource, which long ago was "accepted", and continues to be accepted to this day.
However, fossilized conch shells are also finite, but I don't see them being accepted for currency anywhere.
With any currency system, it all depends on whether or not people accept it. Although US dollars are backed by the full faith and credit, if tomorrow nobody in the US accepted US dollars as a money then it would be worthless.