That's called gambling, not investing. It's just speculation. You're buying an asset and hoping it will go up without any real indication that it will. "Buy low sell high" is generic, worthless advice. It's like going to a gambling casino and saying "the key to profiting at blackjack is drawing a 21." It's worthless, self-evident advice. Knowing what you have to do to profit is not the same as having the ability to do it. In either case, your ability to "win" is completely outside of your control. That's why it's not investing.

Judging by the 30% drop bitcoin has experienced in the last 10 days, do you think bitcoin is more stable? Or perhaps more resistant to manipulation? The truth is that neither gold nor bitcoin is suitable as an investment for people looking for stability. Both are volatile and swing wildly, but bitcoin is amped to that end. Gold is volatile, but tends to be more muted in its swings. I think we'll continue to see bitcoin pare back now. This is not the bottom of the fall.

Setting aside that your 2016 predictions weren't that accurate (50% accuracy is a coin flip), you provide nothing to back up your predictions, and currently aren't doing so well one week into 2017. Are you just shooting in the dark or do you have anything to base your predictions on other than whim? Because it seems more likely that we're in another deflating bubble period, as opposed to an environment that can sustain the momentum that ended 2016. This is a repeat of 2013.

I wouldn't expect volatility to be impacted much by the falling origination rewards. It's volatile because of speculative traders, not miners. Further, by the time the rewards fall low enough, mining fees will increase substantially to offset the lost income for miners, and that will make transactions too costly for many people. At that point, Bitcoin will have other problems.

Is it really so different for Bitcoin? There's nothing fundamentally different about what gives Bitcoin value than an altcoin except the number of people involved in propping up the value. The motive to buy is exactly the same: volatility provides profit opportunity. But no one is buying and hoping it just retains value, which would make it useful as a currency, people buy and hope for the moon.

Gold's "intrinsic" value is based on historical longevity. There's nothing special about it other than superstition. It can suffer a loss of confidence the same as any other asset. All fiat also is only based on confidence. Hyperinflation is a direct result of a lack of trust in the currency, often because governments print it into obsolescence.

By "sequester," I thought you meant repossess. If that's not the case, that point isn't relevant.

The same two conditions do exist for subprime car loans, that's the point in drawing the analogy. Nothing has changed with the process, it's just a new risky security at the heart of it: subprime auto loans. The auto loans still have levered derivatives built on top of them, and the loans and the derivatives are both rolled into convoluted investment vehicles that are layered and complex to the point of reducing liquidity. When the investments are that layered, you can't dispose of the toxic parts easily, which was the problem with the housing crisis. Loans were defaulting, but it was impossible to know who owned them or how they impacted the overall vehicles they were rolled into, so everyone stopped all transactions involving them. Same thing with the auto loans now, the point is that it doesn't take a very large portion of the original loans to default to cause large problems because the effects are amplified by the leverage and the low liquidity.

But you also may be on to something in that there is a level of hype due to how bad it was last time. There's really no way to know which until something goes horribly wrong or doesn't.

Taking control of the underlying asset wasn't the problem, it was all the leveraged derivatives placed on top the underlying initial asset that were rolled into complex and illiquid investment vehicles so that when defaults happened, the losses were 1) amplified by the leverage and 2) frozen because they were illiquid. Those two factors caused the entire financial sector to seize up, and without access to capital, large firms started failing in what would have been a domino effect without government intervention. So the fact that cars are easier to repossess than houses doesn't alleviate the problem if those two conditions are not addressed.

More people are using it to gamble by speculating on it, or using it as a medium to gamble to get around country controls, but that isn't using it as a currency. It dropped 20% in a day after it reached $1100 again, and anything that drops that far that fast suggests we were in bubble territory. And we probably still are. Large traders are just milking the bounces right now for all they can, but I would not be surprised if it continues a clunky decline over the next month. Disappointed, but it surprised.

If Bitcoin could solve the volatility issue, it might gain more traction as a currency. People just use it to speculate (gamble) right now because it's so volatile. It's not useful as a currency when it swings wildly in value because the essential function of a currency is to maintain value. Bitcoin has never done this for any meaningful stretch in its short life.

The thing preventing Bitcoin from being an international currency isn't recognition, but volatility. It can't maintain a stable value, which is absolutely critical of any currency. Look what happened when it hit $1100 most recently: it dropped 20% in a day and then has been extremely wild since. People aren't using it as a currency right now so much as a speculation vehicle. For as long as that continues, it will never be a "currency."

They already have. All digital transactions are based in digital fiat. Any bill you pay online, any transfer between bank accounts, any time you use a credit or debit card, all these transactions are digital fiat. The government doesn't have to do anything "new" to create it, it already exists and t is already the bulk of transactions in western economies. Bitcoin is not going to replace that.

It is quite likely that digital currency replaces physical fiat, but his does not necessarily mean Bitcoin. It is more likely to be digital fiat. Western economies already deal more with digital fiat than physical fiat; it's a trend that has been increasing for 20 years already. Physical fiat probably doesn't go away, it will always have a place, but will be very small in comparison to digital transactions using fiat.

A Chinese digital currency wouldn't cause a btc price crash because people in China don't buy Bitcoin to use as a digital currency. They use it to get around capital controls imposed by the state and transfer money out of the country. Since a Chinese digital currency wouldn't address either of these uses, there's no reason to expect it to have a direct impact on the price of btc.

Stock ownership provides passive income if the stock pays a dividend. Savings accounts are also passive income, though inflation is likely to outpace the rate of return there, so you would see a nominal gain and a purchase power loss.

Hey wetsuit, any update or news on the touted announcement from awhile back? It's been a couple weeks since I asked last time. Figured I'd ask again since I haven't heard anything since then. No judgement, just excited for what it might be.

That's all anecdotal evidence. You don't have near enough data to conclude it's rigged. You would need to show uncharacteristic losses over thousands of bets, not a handful. Variance is far too high with small data sets to conclude anything.

Gold is at from stable. There is plenty of volatility in gold prices. Compared to Bitcoin it may look more stable, but any gold chart of sufficient length will give you enough data to see that gold suffers from volatility in the short run.

I'm wondering if you notice any impact on site play when there are wild swings in bitcoin's price? It's been steadily appreciating since early 2016 up to over $1100 yesterday, then suffered a 20ish percent drop in a few hours before swinging wildly in the 900s. Is the gambling seem pretty steady through all this, or do you see less (or maybe more) when there are wild swings in price?

I've hit some decent doge winnings. The only problem with it is that I don't cash out very often. I just let it accumulate so that it feels like something meaningful by the time I withdraw. In the amount of time that it takes to reach that point, doge depreciates a fair amount so that what I withdraw is always much smaller (btc- and USD-wise) than what it was when I won it. But converting doge to btc every week is overly tiresome. First world problems and all...