Bitcoin

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Bitcoin

fschmidt
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This post was updated on .
What can you think of that has zero intrinsic worth?  The US dollar has intrinsic value because it is a government sanctioned means of exchange and is required for paying taxes.  The Zimbabwean dollar has the intrinsic value of the paper that it is printed on and could be used to burn to keep warm or as cat litter.  But finding something that has absolutely zero practical use, zero intrinsic value, is actually quite hard.  One thing that fits is bitcoin.

Bitcoin advocates will claim that its value is its limited supply, like gold.  But this is false because anyone can create another currency just like bitcoin while no one can create a new substance like gold.  The response may be that bitcoin is first.  But again, this really is just a temporary advantage, until other digital currencies gain followings.  In truth, the proper value of bitcoin is zero.

So why has it been the best investment in recent years?  Because members of modern culture are scum who most value what is worth the least and least value what is worth the most.  Members of modern culture hate everything good and love everything that is worthless.  And this is why they love bitcoin.

Bitcoin is just the latest example of modern insanity.  The US dollar is also overvalued as is the US stock market.  Everything that modern culture does is insane and the insanity will not end until modern culture crashes.
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Re: Bitcoin

dawis
As I pointed out here on another thread, another different between gold and bitcoin, is that the later has predicted supply for a given time.

One of the examples to demonstrate the appeared insanity is Dogecoin - a cryptocurrency that stated as a joke.. but now it's market worth hundreds of millions of dollars.

That, of course, won't change the fact the the Bitcoin might still rise, so the question of weather to buy or not to buy is different question than the question of it's real value.
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Re: Bitcoin

andersonnnunes
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Re: Bitcoin

qwerty
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Do you think that it would be worth investing in Bitcoin in the short term? Apparently, its value has increased by a factor of 11 over the past year (http://time.com/money/5042117/bitcoin-usd-price-worth-invest/), so I've been thinking of buying a small amount (about $1,000 worth) and selling in a year, hoping that it continues to rise and doesn't crash before that. Do you think that a Bitcoin crash might be imminent in less than a year, or is there no way to tell?
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Re: Bitcoin

fschmidt
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I think there is no way to tell.
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Re: Bitcoin

fschmidt
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Re: Bitcoin

Johannes
Noobs store their bitcoin on an online exchange. Smart people use a hardware wallet.
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Re: Bitcoin

fschmidt
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Ironically a hardware wallet makes bitcoin physical, with all the problems normally associated with physical assets like gold.  It can be robbed or lost or destroyed.

By the way, I think shorting bitcoin is an opportunity of a lifetime.  I will wait for the price stabilize at a high level and derivative products to mature, and then I will look for a far out of the money long duration put option.
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Re: Bitcoin

Johannes
If you lose your hardware wallet (Trezor) you can restore your wallet from a seed (24 words you have written down or memorized). If someone steals it they need your 5-digit (or longer) PIN to get access to the money. (That does sound like a risk if someone creates a robot that tries every possible PIN.)

(It's not. "Each time you enter a wrong PIN, the wait time increases by a power of 2. After the first few failures, you have to wait several seconds before you’ll be able to try another PIN. Trying the top 15 PINs would take about 18 hours. After this, the device wipes itself.")

What's a far out of the money long duration put option?
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Re: Bitcoin

Allen
In reply to this post by fschmidt
fschmidt wrote
By the way, I think shorting bitcoin is an opportunity of a lifetime.  I will wait for the price stabilize at a high level and derivative products to mature, and then I will look for a far out of the money long duration put option.
That is my plan as well. Arguably bitcoin's only value is the ability to conduct black market transactions in it. As soon as it is regulated it should collapse to a tiny fraction of its current value.
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Re: Bitcoin

Allen
A bad sign about this is that when I type "put options" into a Google search, "put options on bitcoin" is one of the first options that comes up. Following this up, it seems that we are not the only people to have such an idea and so such options are very expensive. Short selling bitcoin is not an option for me due to the unlimited downside risk in that it could easily go up to hundreds of thousands of dollars before it crashes. Therefore, shorting bitcoin may not be as attractive an option as it seemed.