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Title: The Great Bitcoin Scam
Source:
Forbes
URL Source: https://www.forbes.com/sites/jayadk ... eat-bitcoin-scam/#edcd6f95c1e7
Published: Feb 3, 2018
Author: Jay Adkisson
Post Date: 2018-02-03 23:44:42 by A K A Stone
Keywords: None
Views: 2782
Comments: 35
At the outset, let me clarify that Bitcoin itself is not a scam, but how Bitcoin is being sold is a scam. More about that below. To start out, it is important to understand what Bitcoin really is. It would be easy to bore you with a discussion of the technology, about peer-to-peer servers and sophisticated algorithms, but that is not what you need to know. What you need to know about Bitcoin is that distilled to its technological essence, each Bitcoin is simply a number. That's it: A number. It is simply a series of digits, with each number being assigned to each Bitcoin. To illustrate, I'll randomly pull a $1 bill from my wallet, which bears No. L88793293J. Assuming some minimal level of competency by the U.S. Treasury, no other bill bears that number. The face value of a $1 bill is, of course, just $1 dollar. It is simply a unit of exchange, printed on what many folks would consider to be ugly paper. But two people could privately agree that No. L88793293J is actually worth $5,000. To illustrate Fred wants to buy Joe's golf clubs, but Fred doesn't want his wife to know -- at least just yet -- that he spent $5,000 for golf clubs. So, Fred and Joe agree that No. L88793293J is worth $5,000 and Fred gives No. L88793293J to Joe. Fred then tells his wife that he bought the clubs for the $1 bill. At some later time, when Fred's wife doesn't care so much, Fred pays $5,000 to Joe for No. L88793293J, and gets the $1 bill back. The only difference between Bitcoin No. ABC123 and $1 Bill No. L88793293J is that at the end of the day, the $1 bill physically exists and has a face value that is worth something, i.e., Fred could take the $1 bill and buy something off the $1 menu at McDonalds. By contrast, Bitcoin has no intrinsic value -- it is just a number. The number may have an agreed value between two parties, but the number itself has no value. Consider a bank account number, such as Wells Fargo Account No. 456789. The depositor and Wells Fargo essentially agree that the account designated by No. 456789 has the value of what the depositor puts into it, less what the depositor takes out. But the number itself, No. 456789 has no value. The same situation occurs with credit card transactions, whereby the credit card processing company assigns are unique value to each transaction, but the number itself has no value. Here, the technological difference with cybercurrencies, or crypocurrencies if you prefer, is that they don't require a middleman such a clearing bank. Value, whatever it is, goes directly from A to B, with nobody in the middle. That has some value, but how much? The value, it would seem, would be the difference in the cost of the wire-transfer fees less transaction cost of the cybercurrency unit, which isn't that much -- and in some cases, the wire-transfer could actually be less expensive, although more cumbersome. So, if you find the idea of thinking of Bitcoin as simply a number is too simplistic, then just think of it as a money bag with a lock, the internet version of this. Money goes from transmittor to transmittee, and the transmittee gets a unique code to unlock the bag. What's that really worth? Let's now talk about uniqueness. Bitcoin does have some value because there are only a finite number of Bitcoins available, because the algorithm that is used limits Bitcoin to a particular number of units, of which there should only be somewhere in the neighborhood of 21 million that fit the algorithm. Uniqueness certainly has value. Because there is only one Hope Diamond, it is estimated to have a value in the neighborhood of $350 million. Because there are only 100 of that 24¢ stamp with the upside down airplane printed in 1918, they are estimated to be worth about $1 million each. Ditto for rare coins, original Picasso paintings, etc. But here is where the fundamental flaw in Bitcoin's value lies: It is simply a number, and numbers are infinite -- there will never be a shortage of numbers. Even if you are the world's greatest mathematician and think that you found the largest number ever, there is always that number plus one, plus two, etc. So, Bitcoin may be limited to 21 million numbers, but that doesn't mean that somebody else can't come up with a similar algorithm and thereby create their own unique set of numbers, i.e., their own cybercurrency. In the larger scheme of things, Bitcoin isn't unique. Quite the opposite, as anybody who comes up with their own currency can begin to compete with Bitcoin and any other such currency. It's very much like competing with technical cheeseburgers -- anybody with the necessary mathematical skills can cook one up. For example, let's say that somebody creates a cybercurrency that is based on known prime numbers. There are about 50 million of those, so another 50 million cybercurrency numbers could be created. Indeed, the recent boom in Bitcoin has triggered numerous companies offering their own cybercurrencies, and the amount of such numbers that they can generate is limited only by the ability of their mathematicians to create the necessary algorithms, which of course is similarly infinite. According to that tome of all knowledge known as Wikipedia, as of November 27, 2017, there were 1,324 cybercurrencies in use. Just multiple each cybercurrency by the number of units they each support, and you get a pretty big number. And that is just the presently existing cybercurrencies, recalling that all it really takes is a sharp mathematician to come up for an algorithm for a new one. And that brings us back to the main point: Cybercurrency units are simply numbers, and there is not a finite supply of numbers. Rather, the numbers available are infinite. This further means that the supply of cybercurrency units is likewise infinite. This has profound implications for pricing. The true value of any widget is determined by the aggregate street price of the item, i.e., the sum total of what all units could be purchased for today, divided by the number of additional units which are available for sale. This is where uniqueness comes into play. There is only one Hope Diamond, which means that you take its estimated value of $350 million and divide by one, yielding $350 million. Collectively, those 24¢ stamps with the upside-down airplane are worth $100 million, but there are 100 of them, so they are worth about $1 million each. Or think of it simply in common-sense terms: The more there are of something, the less valuable each one is; if the market is flooded with something, they each have little value. Consumers see this every day at the gas pump, as the price of fuel varies primarily based upon available oil supplies. Herein lies the problem with cybercurrency, which is that there are an infinite number of cybercurrency units available. Divide anything by infinity, and you get a number that is almost zero -- not quite zero -- but as close as you can get to it as possible. This is true even if we assign a current aggregate value of all the existing cybercurrency units at $500 billion. Because it is not quite zero, we can assign it a value of 1¢, not because it is necessarily worth 1¢, but simply because that is the smallest unit by which we can designate value in our currency. Actually, it is some number larger than zero, and thus 1¢, mainly because the Bitcoin folks have put in a lot of effort to keep each number unique and assignable to a given owner, and there are some merchants who will accept Bitcoin as if it were a government-issued currency. This is known as acceptability. Bitcoin has value in excess of 1¢ because it has some (albeit, pretty limited) acceptability. But how much does that really add, and how unique are those features as other cybercurrencies take hold? Suffice it to say that the answer is much closer to 1¢ than $15,000 per unit. This now brings us to the economic law of supply and demand, by which value is determined by what a willing seller will let a unit go for, and what a willing buyer will pay for that unit, at a particular moment in time. Take the 24¢ stamp with the upside-down airplane as an example. Presumably, the U.S. Postal Service would honor the stamp only for 24¢, which is its face value. Otherwise, the stamp creates no other value. But collectors of stamps and other valuables would offer $1 million or more for such a stamp, due to its rarity, and their belief that the value of the stamp will increase over time. And now for something completely different: Tulip bulbs. Tulip bulbs have no intrinsic value, other than that they can produce a pretty tulip flower. Yet, beginning in 1636, the price of tulip bulbs in Holland began to skyrocket, as buyers started believing that -- with demand driven by exports to the apparently then tulip bulb hungry French -- the price of tulip bulbs would keep appreciating. They were right. Eventually, the price of a single tulip bulb hit many multiples of the average Dutchman's average wages, and reportedly 12 valuable acres of land were traded for one particular tulip bulb. Individual tulip bulbs were traded for many times each day, with the price increasing with each trade. Then, one day in February of the following year, 1637, the price of tulip bulbs quit going up, and by May 1, the price for tulip bulbs had fallen back to their original value. Thus, was tulip mania the first recorded bubble. Many centuries later, more specifically in November, 2013, the President of the Dutch Central Bank, Nout Wellink, reflected on the tulip bulb bubble with the following: "At least then you got a tulip, now you get nothing." He was referring to Bitcoin. But Wellink wasn't exactly right, since with Bitcoin you get a unique number. What that unique number is worth, as discussed above, is something pretty close to zero, which makes Wellink's statement much closer to the truth. Poster Comment: This is only half of the article. More at Forbes.
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#1. To: A K A Stone (#0)
BITCOIN Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich
The FED is the biggest pyramid/ponzi scheme. It's not federal, and there's no reserve. Wells Fargo, huh? In August 2016 the Consumer Financial Protection Bureau announced that Wells Fargo would pay a penalty of $3.6 million plus $410,000 in restitution to customers to resolve allegations that it engaged in illegal student loan servicing practices. In September 2016 the CFPB imposed a fine of $100 million against Wells Fargo in connection with the revelation that for years bank employees were creating more than two million new accounts not requested by customers, in order to generate illicit fees. The company also paid $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. The case generated a major scandal, and the bank's CEO John Stumpf was denounced in a Senate hearing and then one in the House. He was forced to return about $41 million in compensation, but this did not diminish the controversy. The California Treasurer announced that the state would suspend many of its business dealings with the bank; Chicago later did the same. Stumpf subsequently gave in to the pressure and resigned. The bank later clawed back an additional $75 million from Stumpf and another former executive. In a separate case, Wells Fargo agreed to pay $50 million to settle a class action lawsuit alleging that the bank overcharged hundreds of thousands of homeowners for appraisals ordered after they defaulted on mortgage loans. In April 2017 Wells Fargo was ordered to provide $5.4 million in back pay, damages and legal fees to a bank manager who had been terminated in 2010 after reporting suspected fraudulent behavior to superiors and a bank ethics hotline. In July 2017 it was revealed that more than 800,000 customers who had taken out car loans with Wells Fargo were charged for auto insurance they did not need. Several weeks later, the bank disclosed that the number of bogus accounts that had been created was actually 3.5 million, a nearly 70 percent increase over the bank's initial estimate. *** And that's not even half of their corruption. Wells Fargo, huh? And....oh, yea....not only Wells Fargo, but also Forbes along with others. And now let’s add what Financial times is saying: By BLOOMBERG - February 3, 2018 For Bitcoin investors, these are the times that try one’s soul. After surging to almost $20,000 in December following the introduction of regulated futures contracts in the U.S., the world’s largest cryptocurrency has lost more than half its value, plummeting to as low as $7,614 on Friday. It regained some ground on Saturday, rising 7.5 percent to $9,290.15 as of 2:58 p.m. in New York, according to coinmarketcap.com. Particularly hard hit have been those who got swept up in the mania just before what skeptics ranging from Jamie Dimon to Nouriel Roubini have labeled as one of the biggest asset bubbles in history began showing signs of deflating. Selling by “weak hands,” as latecomers are sometimes called across the investing world, contrasts with the view of early advocates pledging to HODL — one frenzied trader’s misspelled entreaty to hold onto the tokens during an earlier rout that’s become the mantra of Bitcoin purists. Bitcoin’s rise in mainstream consciousness was brought on in part by retail investors’ fear of missing out after viewing the approval of futures as an endorsement by the establishment. As more novice investors jumped in, Bitcoin shot above $10,000, then $15,000, then as high as $20,000 on some exchanges, in a span of only a few weeks. Some of Bitcoin’s biggest backers even warned the euphoria had gotten out of hand. Billionaire Mike Novogratz, who shelved his plans to open a $500 million cryptocurrency hedge fund and instead wants to build a crypto merchant bank, warned that Bitcoin would fall to as low as $8,000. Thomas Lee of Fundstrat said the cryptocurrency would slide to as low as $9,000 before shooting back up. Recent hacks and tightening regulation have “weighed on confidence,” Lee said in a telephone interview Friday. “Investors are staying on the sidelines until there’s some visibility, but nothing fundamental has changed. It’s healthy; you need drawbacks sometimes as nothing goes up in a straight line.” Those highs helped increase the scrutiny regulators as the total market capitalization climbed to more than $800 billion at one point in January. A steady steam of headlines since about officials cracking down on the market sparked jitters and caused those same retail traders who got in at the highs, to panic sell, hoping to avoid even greater losses. But the hordes of people wanting to trade crypto, which repeatedly crashed San Francisco-based exchange Coinbase Inc. when the market was rallying, are still there. More than one million people have signed up for “early access” to the brokerage app Robinhood Financial’s cryptocurrency section since it said it would offer no-cost trading in digital coins last week. Up 800% Charles Hayter of research website CryptoCompare sees good news on the horizon, as Bitcoin developers are making breakthroughs in technology that will help the network process transactions faster. Also, Hayter said an emerging regulatory framework and investor protections will be positive for cryptocurrencies in the long term. Meanwhile, many investors who got in earlier aren’t budging. Bitcoin was worth about $1,000 at the beginning of last year and about $450 at the start of 2016, so those who bought then are shrugging off these losses — they’re still up more than 800 percent. “It’s just early-year market blues,” said David Mondrus, a long-time crypto enthusiast and chief executive of Trive, a blockchain-based research platform. “In 12 months, we won’t even remember it.” For more Bitcoin coverage: Bitcoin Whipsaws Investors as Bubble Shows Signs of Bursting Roubini Says Bitcoin Is the ‘Biggest Bubble in Human History’ Long Blockchain Backs Off Bitcoin Mining as Cryptocurrency Falls Big Investors Circle Telegram Offering as Crypto Insiders Pass To the World, They’re Crypto Bros. To Each Other, a Brotherhood Since you want to attack the messenger instead of the message, do you have anything in your copy and paste trash file on these messengers: Forbes and Bloomberg?
Wells Fargo, huh? By Merryn Somerset Webb The cryptocurrency boom is as obvious a speculative mania as markets have ever seen There goes bitcoin. The world’s most popular cryptocurrency has spent much of the past week in the grip of an old-fashioned crash. Its value peaked just before Christmas at $19,434 per virtual coin. By this week, it had plunged to more like $9,000. Down more than 50 per cent in a month and many, many billions along the way. Bitcoin isn’t the only one to have flipped. Other well-known cryptocurrencies, Ripple, Ethereum and Litecoin, are having a torrid time too. This will have come as absolutely no surprise to anyone with more than a decade of experience in any market. We have pointed out that the cryptocurrency boom has been about as obvious a speculative mania as markets have ever seen. We have noted over and over that a private crypto can’t ever be money for the simple reason that governments won’t allow it to be — this crash may have been triggered by talk of banning bitcoin trading in South Korea. We have refused to accept the idea that cryptos are somehow like gold — money that isn’t government-sponsored, but is still universally accepted as a global store of value. Gold has many thousands of years of history as money. It is approved by central banks (they all hold vast hoards of it). It has a genuinely limited supply (algorithms can be changed, a couple of billion years of geology cannot). And it has an intrinsic value (you can make stuff with it). Cryptocurrencies have none of these things. But here’s the thing. None of this means you shouldn’t be interested in the crypto boom bubble and bust. Perhaps the world of money is changing and perhaps buying cryptos is a long-term way to build your wealth. Maybe this seeming crash is a mere stumble on the road to total monetary domination. I doubt it. But those regular readers who keep lists of my mistakes might add this one in pencil just in case. The point is that if you want to increase your long-term wealth faster than most other people, it is worth keeping a constant eye out for the next big thing. An interesting reminder of this comes from a new paper from Hendrik Bessembinder of the WP Carey School of Business at Arizona State University. His conclusion is that most of the things we invest in aren’t worth the candle. By his calculations, 58 per cent of stocks return less than one-month Treasury bills over their lifetimes and “the entire gain in the US stock market since 1926 is attributable to the best-performing 4 per cent of listed stocks”. Outperforming the market as a whole is only possible if you hold those stocks. For investors that can mean one of two things. You can recognise that separating brilliant from overhyped is really hard — something bitcoin investors may be grasping this week as, until recently, making money in cryptos had looked pretty easy. In which case, you would probably go for the full diversification strategy of just buying a tracker fund. That way, you will get the overall performance without much stress or expense of fussing about finding the favoured 4 per cent. It seems a good idea to do this with a good part of your cash. The other possibility is to forget diversification completely and devote your life to finding the few investments that will be the world’s big winners — or hire someone else to be relentlessly investigative on your behalf. You will say that most fund managers purport to do exactly that, using their special stockpicking skills to seek out the best individual companies to hold for the very long term. But that isn’t really so. Look at the average investment presentation (there are plenty in my office I can send you if you have none to hand). You will see a barrage of charts, yield curve discussions, sector comparisons and relative valuation metrics. You won’t find much in the way of blue sky thinking, or discussion about what makes any particular company more innovative than others. Corporate longevity is also ignored (company lives are much shorter than they used to be — there is a lot of disruption out there). Since you always find it necessary to attack the messenger instead of addressing the message, do you have anything in your copy and paste trash file on Merryn Somerset Webb?
Bitcoin and cryptocurrencies 'will come to bad end', says Warren Buffett Do you have anything bad on Warren Buffett in your copy and paste file?
Wells Fargo, huh? Hey, sport....do you think maybe since Forbes, Bloomberg, Financial Times and Warren Buffett are all in agreement with what former Wells Fargo CEO Dick Kovacevich is saying ....that Kovacevich is right? Or does your agenda bias prevent you from seeing this and the name “Wells Fargo” only presented you an opportunity to use your copy and paste trash file?
The man known as the "Wolf of Wall Street" has said once again that Bitcoin will collapse in value, saying it is highly prone to market manipulation. By Miguel Gomez , 02 February Jordan Belfort, the former stockbroker known as the “Wolf of Wall Street,” sees Bitcoin’s future as bright in the short term, but does not believe the cryptocurrency stands a chance against market forces over the long term. He went on to elaborate that Bitcoin has no inherent value, relying only on its scarcity to command its current price. This is in some way similar to blind pools, according to Belfort. These financial instruments were often based on trust from investors that the money they dipped into the pools would be put to good use. During the 1980s and 1990s, blind pools acquired a toxic reputation due to the ease with which investors could be scammed. Belfort believes that people are moving into “Bitcash” (presumably Bitcoin Cash) to participate in a pump-and-dump scheme. This wouldn’t be the first time the Wolf of Wall Street has taken a stance on Bitcoin. Late last month, he said the phenomenon was dangerous and “a bubble for sure.” In an interview for The Street, he pulled no punches, calling the cryptocurrency a fraud. In each of these statements, he used different reasoning for his assertions. In the December presentation, he dubbed Bitcoin dangerous because it is both unregulated and seen as a “get rich quick” scheme. In his interview, he cited the cryptocurrency’s volatility as the reason he thought it was a fraud.
I must go for now. As I do, I will leave you with this:
Quoting a major bank CEO about bitcoin being a ponzi scheme is much like a democrat quoting CNN about Trump colluding with Russia.
We should use world of Warcraft artifacts for currency. They are rare and people buy and sell them.
Did you read the whole thing? There are some positive notes for bitcoin too. But Forbes caters to and is attuned to the established finance sector so they like to tell big corps what they want to hear. And I was looking at Bloomberg headlines last night, and they mentioned "bubble" in a headline about bitcoin as though it was common knowledge and not a controversial claim, and it was not an editorial either.
Quoting a major bank CEO about bitcoin being a ponzi scheme is much like a democrat quoting CNN about Trump colluding with Russia. Since you don’t like hearing it from the former CEO of a major bank....then hear it from Paul Krugman,he is major bank CEO: The bitcoin craze is emotion driven and is very well on the verge of a bitcoin bubble. Furthermore, when investing geniuses David and Tom Gardner have a stock tip, it can pay to listen....they have tripled the market for over a decade now....and investing in bitcoin is listed nowhere by them.
Quoting a major bank CEO about bitcoin being a ponzi scheme is much like a democrat quoting CNN about Trump colluding with Russia.
No bank CEO here:
All your quoted sources are established financial people who have earned their positions is the present, conventional financial world by approaching finances in the standard conventional "old school" way. So of course they will be predisposed to having ill regard for cryptocurrency, as it does not fit into the financial world they have completely ingrained in their head and which has paid them all so much in dividends, putting food on their table, buying them boats, fancy cars, big mansions and so much more. They have no reason to see cryptocurrency to exist because for them, there is no financial problem to solve. The world is already on a silver platter. But a $20 trillion national debt, not to mention the unfunded mandates that run 5-10 times that, says otherwise. The ability to create US dollars, a privilege exclusively belonging to banks and government has resulted in enormous fiscal irresponsibility, and the market understands that. And it's not these well off elite that are expected to be the catalyzing force upon which crypto currency needs to prevail. It's instead the common people, yes probably even the millennials that now have smart phones as a permanent part of their attire that will be able to acquire and use cryptos as a very "natural" part of life. I'm tired of having my defenses and points made in favor of cryptocurrency go completely unchallenged, with the only responses being article postings and quotes by supposed gurus whose only credibility rests in standard financial conventions, as though simply posting such things constitutes critical thought on the subject. If you want to stay away from cryptos, fine. Stay away. Maybe I'm wrong and cryptos will crash. Or maybe bitcoin will breach $20k again. We'll see.
Cryto-currency does not have the under pinnings of being "safe" for most investors. It is speculative just as in the past month it has lost over 50% in value; I don't know anything about your financial circumstances but losing about 10,000 bucks in a month's time is significant.
Honestly it has lead to great American wealth and power. We can do it because of our economy. Protected by military might. Making it a safe currency. They aren't really crypto either since they are entirely traceable unlike paper dollars. Sure people can make some money short term. The suckers will be left holding some antiquated Atari 2600 cartridge like thing.
I don't see it as so much as an investment as much as a technological revolution. Arguing against bitcoin is possibly much like arguing against the Wright Brothers airplane. I mean, what practical purpose could that first contraption have? None, as it could only carry one person lying down, required a railway track to take off, and only flew less than 1000 feet. And someone was actually killed flying a replica of it on the 100th anniversary. What a joke it was, right? Of course people could have invested, as speculators, in the airplane industry in the early 1900's and made or lost a lot of money on it. But even though people lost money, the industry as a whole took off, so to speak. The fact that it's volatile speaks nothing to the potential that cryptocurrency has. You don't need to buy bitcoin in whole amounts. You can convert any amount of US dollars into bitcoin you want. Only have a penny to invest? No problem: At current exchange rates, that will buy you 0.000001 bitcoin. The bitcoin system can handle that amount just fine. Bitcoin is far more divisible than US dollars are. If you only have $1000 portfolio to invest in various enterprises, fine. Just put maybe $50 into bitcoin. Even if you did that at it's $20k peak your portfolio value would be down to about $970, a 3% drop. That ain't so bad.
Airplanes are real things. Bitcoin is a scam and it is nothing but basically a number. One of those pokemon things are worth more. At least they have some artistic value. People need to quite pretending stuff like that has any value and get back to making real things. Like roads, cars, hammers, candles, light bulbs etc.
That is an outlandish claim. Akin to saying Hitler loved the Jews.
Oh please. The value of the airplane was quickly realized. It was a useful means of transportation. Bitcoin is nothing more than an entry in a database. The day will absolutely come when having a bitcoin is like having confederate money.
I hardly see how my analogy could be compared to a holocaust reference, and it's peculiar you would suggest one. I suppose if I had to guess, it's because you are taking a religious angle on this subject, and knowing you, perhaps you consider it possible that a crypto currency could be the mark of the beast. If so, then while that wouldn't fit into my view of things but I won't knock anyone who does see it that way.
No I was trying to make an outlandish statement because I thought yours was outlandish. No I don't think bitcoin is the mark of the beast. You might have picked up on my view when I said it would crash and burn, collapse or however I put it. If it crashes and burns it couldn't be the mark of the beast. I think technology will play a role in the mark of the beast. But that is progressing and nothing we can do about it. I don't know how I or anyone else could possibly stop the mark of the beast if it is supposed to happen. Isn't there stuff in the Bible about it being time for the harvest or something like that. I put it in crude words without looking it up.
The bitcoin industry is the nearest thing to a fifth dimension anyone will ever witness....everybody who is involved is just…well, they’re just possessed. it’s always a new “fad” with some zealots. It was about 3 years ago that all we could read about from multiple sources daily were the doomsday preppers, the survivalists. Not that they are associated in any way with these current day true believers, but now all we read about are the bitcoin fanatics with a new currency that will revolutionize both customer loyalty and modern money. The bitcoin bubble will burst and this latest craze shall also pass....only heavens knows what will come next?
Okay, fair enough.
At least I can do more than post articles, copy quotes, and insult people. Applying critical analysis and thoughtful discussion to the forum is obviously beyond you. It's why I usually just put you on bozo.
And if you feel insulted, then “that’s your problem.” If bozo is the only way you can handle your problem....then you know the drill, have at it. Furthermore, I don’t GAS what you usually do....or don’t do, for that matter. There ...
And when I give a point by point response to those articles, you have no rebuttal. Just more article citations that don't actually do anything more than say bitcoin is in a bubble, but it's supposed to be compelling because it was said by [fill in the blank]. Stone has begun responding with arguments. You should follow his example.
As a recommendation, stick with your tater peelin' and you will be OK to provide limp-wristed scallywags an alternate perspective.
I will continue to do things as I choose to do and not as you try to lecture me to do. Getting back on topic....it was no surprise to see investors continue to exit bitcoin and other risky assets across the board this morning while watching markets in Asia and Europe. Bitcoin is in no way living up to the comparisons with gold as a store of value which was promoted by some staunch supporters during recent months. While bitcoin is leading cryptocurrencies lower for fifth straight day as global equities have deepened and investors migrate to havens, bullion has edged even higher with spot gold up to $1 337 an ounce. I see that that bitcoin, the biggest of the digital currencies sank to $7,722 making it tumble by 22 percent since the beginning of this month. This means bitcoin has erased more than half its value for the record high of $19,511 in December. I believe that the general public still looks on cryptocurrency as something negative and fraud prone, as evidenced by bitcoin’s recent price tanking. I find no reason this overall sentiment will improve qnd confidence in the cryptocurrency markets will continue to take a major hit. The bitcoin party is over, someone please turn off the lights....after venting out the smoke and removing the mirrors.
The latest news is that China has announced an effort to prevent Chinese citizens from accessing foreign crypto exchanges. So it's more gov effort to fight cryto currency. But okay, great. You made a firm prediction. We'll see if bitcoin ever gets back above 20k, 15k or even 10k. Gold's all time high, in dollar terms, is about $1920 per ounce set it 2011, and it bottomed since then at about $1040 in 2015, a drop of some 45% or so. Gold is good to own, but still now some 35% off that 1920 high set 7 years ago, Bitcoin, on the other hand, while it is off some 70% from it's high, it was a high set only some 7 weeks ago, and compared to it's price in 2011, even at today's price, is up an extraordinary amount. And even the current price was considered remarkably high just 4 months ago. The talk up until Nov 1 last year was if bitcoin would actually reach the incredible 10k benchmark before the end of the year. So if you are going to compare bitcoin to gold, be fair about it. And yes, I'm telling you what to do. I personally think 20k was too high a price for bitcoin to reach in the time frame it did. It's certainly easy to say that in hindsight, but the rise from 5k to 20k was far faster than I expected. It surprised even me. I would say it was unfortunate that it did as it does attract inexperienced investors and people without an understanding of it, and the current pullback is probably a demonstration of that. A more steady growth is healthier growth. But still, the market is what the market is. But whatever. There's no point in arguing what it will do. You've made your prediction, and I've made mine. Time will be the judge. Enough said.
I’ll tell you a different pipe dream that ran its course, as will bitcoin ... Some folks don’t know about or refuse to correlate with bitcoin today, an event known as “Silver Thursday.” It occurred on Thursday, March 27, 1980, in the U.S. commodity markets following the Hunt brothers' unsuccessful attempt at cornering the silver market. This led to a subsequent steep fall in silver prices and pandemonium on commodity and futures exchanges. Speculators and investors saw the price of silver jump from $6.08 per troy ounce on January 1, 1979 to a record high of $49.45 per troy ounce on January 18, 1980, representing an increase of 713%....before going “POOF” and disappear. As it was with silver and as it will be with bitcoin, the truth Geoffrey Chaucer said in his famous idiom: “All Good Things Must Come to An End”....it does. And the good thing with the rising price of silver ended on January 7, 1980, when in response to the Hunts' accumulation....the exchange rules regarding leverage were changed, when COMEX adopted "Silver Rule 7." This new rule placed extremely heavy restrictions on the purchase of commodities on margin. Since the brothers had leveraged heavily on borrowing to finance their pruchases, they were un able to meet the new margin obligations, thus causing the panic as the price of sliver began dropping by 50% in just four day. No parallel with the silver fiasco and the bitcoin? Sure there is....both ran up and both came down, or is still coming down. So, by applying some “critical analysis and thoughtful insight” one should see the parallel in the silver fiasco and the bitcoin coming fiasco....which may already be underway. During the fall of the silver price, there were diehards still predicting a $200 per Troy ounce rise in silver price. Today I read that a diehard bitcoin fanatic is still predicting the bitcoin to rise to $100,000 this year. Unbelievable! Some people never learn ...
Good gravy! The reason why price spiked is precisely because of the attempt to corner the market. And yes, when a regulatory change was made, they couldn't hold on and of course the price crashed. Both the rise and fall were due to decisions made by 2 different parties, one buying party and a second regulatory party, the exchange. If you believe bitcoin rose in price because of a single investor trying to corner the market, then, well, okay. More power to you. And unlike in the Hunt brother's case, there is no single exchange that has the power to change the rules for trading it. And what's more, unlike with this incident, bitcoin CANNOT be bought with any built in leverage. If you want $10,000 worth of bit coin, you have to come up with $10,000. Bitcoin has never been a levereaged product until it was made available on futures market which just happened in December (and that market is settled in cash only, meaning no one trading futures would ever be obligated to acutally buy real bitcoin to provide to the opposing party, so it's just an independent betting house that could just as easily and legitimately be betting on the daily high temps of Miami). So you can take this little tidbit to any bank you trust: The run up of bitcoin to about the 8k-10k level happened with NO leverage being available to buyers, while the run up of silver to $50 was possible PRECISELY because leverage was available. I don't think you know as much about trading as I do, Gatlin.
I don’t believe that. I do however believe that you latched onto the wrong culprit in the parallel analogy, just like you latched onto the wrong thing believing in bitcoin. The point in the silver parallel never was that someone was tying to corner the market in bitcoin, the point was that that a governmental regulation change caused the wipe out. A cursory glance at today’s CoinMarketCap price chart will show two things. It will show that the bitcoin meltdown continued today with an 11.85% drop to $7,262.81 USD. But more importantly, it will show that bitcoin has been falling for weeks and this latest crash has been blamed on the mounting confusion surrounding the Indian Government’s stance on cryptocurrencies. It was four days ago that India’s Finance Minister, Arun Jaitley, threw a monkey wrench into the flywheel and spooked investors with his announcement of plans to “eliminate” the use of digital currencies for payment purposes....when he said: “The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto- assets in financing illegitimate activities or as part of the payment system.” This action by Jaitley was the straw that broke the camel’s back. It must now be realized that bitcoin is no longer a domain reserved exclusively for use by geeks, It gains publically with each passing day now and this has prompted control of bitcoin by governments....some controls beginning to be severe. Even before India, there were five other countries tightening their controls on bitcoin with governmental regulations. So, you looked for the wrong culprit in my silver analogy. You were slapping at a mosquito buzzing around your head while an alligator was biting at your ass. The parallel to the silver fiasco was not that an entity is trying to corner the bitcoin market....the culprit in the bitcoin market is the same one in “Silver Thursday.” It is governmental control with the adding and changing of severely controlling regulations. That very well may be. I started serious equity trading back in 1965 while still in the Air Force when a group of officers pulling duty in the alert facility 24/7 every third week had time on our hands and formed an investment group. It was so pleasurable and financially rewarding that I decided to retire full time in 1975 and move to Scottsdale to continue. Be that as it may and getting back to your statement....even after all these years I am by no means an expert. I continue to learn something new every day. And the most recent lesson I learned was to stay the fuck away from bitcoin. People like you have been excellent teachers in this regard....I thank you for that.
#2. To: Gatlin, Federal Reserve Bank, pyramid, ponzi (#1)
DACA Shithole Dreamers - Make America Great Again?
#3. To: Gatlin, A K A Stone, hondo68 (#1)
BITCOIN Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich
“Truth is treason in the empire of lies.” - Ron Paul
Those who most loudly denounce Fake News are typically those most aggressively disseminating it.
#4. To: Deckard (#3)
(Edited)
BITCOIN Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich
No, “It’s the Bitcoin, stupid.” Bitcoin Newbies Are Getting Crushed And that's not even half of the bad Bitcoin news.
#5. To: Deckard (#3)
BITCOIN Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich
Not only Wells Fargo, Forbes, Bloomberg....but let’s also add what Financial Times is saying: I told you investing in bitcoin was a bad idea
PERSONAL FINANCE & INVESTMENT COLUMNIST
February 1, 2018 And that's not even half of the bad Bitcoin news....but we are slowly presenting more and getting there.
#6. To: Deckard (#5)
#7. To: Deckard (#3)
BITCOIN Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich
#8. To: Deckard (#7)
Jordan Belfort Predicts “Really Bad” End for Bitcoin “What’s going to happen with Bitcoin is going to be a black swan event in the next six months, by the way just so you know, I’m not saying Bitcoin is going down, it might go to $50,000. I wouldn’t short Bitcoin for a second right now. I don’t know where it’s going over the short term, I know where it’s going over the long term. Nothing is guaranteed in life, I’ve never been surer of something that this ends really bad for people,” he said.
Belfort, a man with experience in manipulating stock markets, said the Bitcoin technology has a severe flaw that “opens itself up to be manipulated.”
#9. To: Deckard (#8)
#10. To: Gatlin (#1)
BITCOIN Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich
#11. To: Gatlin (#8)
He went on to elaborate that Bitcoin has no inherent value, relying only on its scarcity to command its current price.
#12. To: Gatlin (#4)
And that's not even half of the bad Bitcoin news.
"Bitcoin Whipsaws Investors as Bubble Shows Signs of Bursting"
https://www.bloomberg.com/news/articles/2018-02-02/bitcoin-drops-below-8-500-as-cryptocurrency-misery-continues
#13. To: Pinguinitem A K A Stone (#10)
Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich.
It is not only one former CEO of a major bank, there are well-respected finance moguls who feel the same way. While numerous bitcoin enthusiasts and pundits see great success in bitcoin, there are respected finance moguls who have taken an exceptionally bearish view on bitcoin. In fact, a few are unsure if it holds any value at all. I will compile a list for you. Paul Krugman, Nobel Prize-winning economist, professor, and New York Times columnist Paul Krugman has had serious doubts about the long-term survival of bitcoin for years. Back in 2013, Krugman penned an op-ed for The New York Times in which he said: So far almost all of the bitcoin discussion has been positive economic – can this actually work? And I have to say that I'm still deeply unconvinced. To be successful, money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why bitcoin should be a stable store of value.
Although some have chosed bitcoin as the asset choice, it is not a true finite resource like gold. There is nothing to stop bitcoin’s protocols from being changed so that more than 21 millions coins can eventually be mined. Also, as Stone pointed out....without government backing there is no floor underneath the value of bitcoin.
#14. To: Pinguinite, A K A Stone (#10)
Bitcoin is a 'pyramid scheme,' warns former Wells Fargo CEO Dick Kovacevich.
Since you don’t like quoting a former CEO of a major bank, I will quote the “Oracle of Omaha.” Warren Buffett, yep, the most highly revered stock invetor in the world believes that bitcoin is a sham. Durning an interview with CNBC, here’s what he had to say: Stay away from it. It's a mirage basically. It's a method of transmitting money. It's a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money? I hope bitcoin becomes a better way to do it. But you can replicate it a bunch of different ways. The idea that it has some huge intrinsic value is just a joke in my view.
Stone’s idea of using “the world of Warcraft artifacts for currency since they are rare and people buy and sell them” will be proven to make more sense than investing in bitcoin....after the bubble bursts.
#15. To: Pinguinite (#10)
Peter Boockvar, chief investment officer at Bleakley Advisory Group, predicted Bitcoin could drop to as low as $1,000 per coin this year, CNBC reported. According to Boockvar, bitcoin is a "classic bubble," one that might burst as soon as central banks worldwide start increasing interest rates.
#16. To: Gatlin, A K A Stone (#15)
#17. To: Pinguinite (#16)
I'm tired of having my defenses and points made in favor of cryptocurrency go completely unchallenged, with the only responses being article postings and quotes by supposed gurus whose only credibility rests in standard financial conventions, as though simply posting such things constitutes critical thought on the subject
#18. To: Pinguinite (#16)
But a $20 trillion national debt, not to mention the unfunded mandates that run 5-10 times that, says otherwise. The ability to create US dollars, a privilege exclusively belonging to banks and government has resulted in enormous fiscal irresponsibility, and the market understands that.
#19. To: buckeroo (#17)
Cryto-currency does not have the under pinnings of being "safe" for most investors.
It is speculative just as in the past month it has lost over 50% in value; I don't know anything about your financial circumstances but losing about 10,000 bucks in a month's time is significant.
#20. To: Pinguinite (#19)
Of course people could have invested, as speculators, in the airplane industry in the early 1900's and made or lost a lot of money on it. But even though people lost money, the industry as a whole took off, so to speak. The fact that it's volatile speaks nothing to the potential that cryptocurrency has.
#21. To: Pinguinite (#19)
Arguing against bitcoin is possibly much like arguing against the Wright Brothers airplane.
#22. To: Pinguinite (#19)
I don't see it as so much as an investment as much as a technological revolution. Arguing against bitcoin is possibly much like arguing against the Wright Brothers airplane.
#23. To: A K A Stone (#21)
That is an outlandish claim. Akin to saying Hitler loved the Jews.
#24. To: Pinguinite (#23)
I hardly see how my analogy could be compared to a holocaust reference, and it's peculiar you would suggest one. I suppose if I had to guess, it's because you are taking a religious angle on this subject, and knowing you, perhaps you consider it possible that a crypto currency could be the mark of the beast.
#25. To: Pinguinite, A K A Stone (#16)
All your quoted sources are established financial people ...
And all you can do is join the more than a few folks who are completely, utterly, batshit-crazy obsessed with cryptocurrency....who will stop in their tracks and stare deeply into blank space with their eyes doing cartwheels at the mere mention of the trigger word....bitcoin.
#26. To: A K A Stone (#24)
No I don't think bitcoin is the mark of the beast.
#27. To: Gatlin (#25)
And all you can do is join the more than a few folks who are completely, utterly, batshit-crazy obsessed with cryptocurrency....
#28. To: Pinguinite (#27)
At least I can do more than post articles, copy quotes, and insult people. Applying critical analysis and thoughtful discussion to the forum is obviously beyond you. It's why I usually just put you on bozo.
The articles and quotes in many cases express a point much better than I can. So, I will continue to use them. If you don’t like it, you should know how to use “Thread Ignore” since after all, you designed it into the forum for a purpose.
#29. To: Gatlin (#28)
The articles and quotes in many cases express a point much better than I can.
#30. To: Gatlin (#28)
The articles and quotes in many cases express a point much better than I can.
#31. To: Pinguinite, A K A Stone (#29)
(Edited)
Stone has begun responding with arguments. You should follow his example.
Stone can do what Stone wants to do. You should not tell me what to do.
#32. To: Gatlin (#31)
The bitcoin party is over, someone please turn off the lights....after venting out the smoke and removing the mirrors.
While bitcoin is leading cryptocurrencies lower for fifth straight day as global equities have deepened and investors migrate to havens, bullion has edged even higher with spot gold up to $1337 an ounce
#33. To: Pinguinite, A K A Stone (#32)
And yes, I'm telling you what to do.
I think not....no, I know not. You may be trying to , but try is as far as you get because I don’t listen to someone telling me to believe an illusory pipe dream based only on hope and so unrealistic that you would have to be smoking a crack pipe to believe it could come true.
#34. To: Gatlin (#33)
following the Hunt brothers' unsuccessful attempt at cornering the silver market.
#35. To: Pinguinite, A K A Stone (#34)
(Edited)
If you believe bitcoin rose in price because of a single investor trying to corner the market ...
I don't think you know as much about trading as I do, Gatlin.
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