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This one feels real, but as others have said correction not crash. I'm gonna pluck $164 out of my ass.
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there is always an xkcd for everything, I think we could be in an xkcd bubble...  |
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Because it's absurd. And with this run-up you would be silly to expect anything but a sharp, substantial and enduring drop.
Does anyone care to (re)post the historic trend graph for Berkshire Hathaway shares?   i dont get it. please enlighten me? |
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What is the difference between being worth $1m and deciding to invest it all in BTC, and having a $1m of BTC and no other assets. Would you tell somebody worth $1m to invest it all in BTC? If so "I have business proposition for you ..."  |
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The mood here has remained collected and cool up to just this week or so, even through such dramatic increases. That was very bullish. Now it just might be changing. I'm not saying it is for sure, but watch sentiment closely.
I think the crazy train pulled in days ago! |
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When it reaches a $1million per coin, I will have lost 100's of millions in potential profits. suicide worthy?
Well, I think the tens of millions worth of BTC that I will still have will soothe the pain, as well as the millions that I took out on the way there...
What if it goes to $999,999 then fails catastrophically? What's your exit strategy? At that point I'll be millions richer.
Do you even know what risk is?
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Approaching my next sell order at $240, part of me wants to pull it because it might go higher.
THEN I PUNCH MYSELF IN THE FACE FOR BEING STUPID
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bitter. lol. I am already no lose. If it goes to the moon I still have some, if it crashes to zero I am already thousands of dollars up.
Understanding risk is key to financial health. Right now you seem to think "ALL IN !!!1111one" is viable strategy. Good luck.
Bitter. lol.
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It's never obvious exponential stuff, until afterwards.
Everything seems fine until a point where it's way too late to do anything. Take consumption for example, if some resource consumed at a rate that doubles every year. Then everything might tick along fine for hundreds of years, then bam in two years you go from oy having ever used 25% of the total supply ever over all that time to using it all.
Humans aren't geared to intuitively grasp exponential growth. This article is a cracking good read! Exactly what I have been looking for to understand what I felt but could rationalise why!
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Do you guys think it will be possible for central banks to generate new cryptocurrencys in the future?
What are the implycations if it's possible?
I'd say sure it's possible! However, getting a strong following like Bitcoin is another matter. And we mustn't let facts get in the way of a good story either. The Satoshi fork seems to have unstoppable momentum... despite Litecoin, PPCoin, Novacoin and all the rest. There's also the question of how Bitcoin could be controlled if it can't be printed at will. Well, printing is just one brute-force technique for controlling inflation. Fractional reserve and setting interest rates for banks is another technique. However, just because those particular techniques are not well suited for Bitcoin, me mustn't assume there is no available technique! Bitcoin's monetary velocity could, in theory, be controlled by miners (and operators of so-called "full nodes") by setting transaction fees. It's bloody simple once it clicks in your mind. E.g.: - Bitcoin's short-term price is getting too high and bubbly --> Miners start rejecting "low bids" --> Less trade can be done and network performance suffers and becomes more laggy --> THE EXCHANGE RATE GOES DOWN.
- Bitcoin's short-term price is too low and it's falling or heading lower --> Miners accept more "low bids" --> More trade can be done, "micro-transaction" opportunities pop up, network performance gets faster --> THE EXCHANGE RATE GOES UP.
But of course nobody wants to engage in discussion on this topic. YES. You totally nailed it. Central Banks don't need to discredit or destroy bitcoin, they just needs to control it, and right now they have infinite money to make that happen. Again, this is only a problem if people don't figure out what's happening. If they do, then miners looking for money making opportunities will buy new machines so that when the "conspiracy" network turns off, they turn on - When the conspiracy network is accepting all transactions, they turn off because it's not profitable. Seems a simple matter to see when normally accepted transactions start being rejected, or normally sub-acceptance transactions are accepted - Wouldn't be hard to automate the balancing process based on that information. That's why I keep coming back to discredit - You can't force people to quit something better once they understand why it's better and what it does for them, Bitcoin is like Napster, squishing it just makes a bunch of small ones that eventually grow larger than the original you wanted to get rid of. But if you scare them early into thinking it's not safe and they'll get hurt, then they have to weigh that "fact" against the potential gains, and many risk-averse individuals will simply walk away to play it safe. There's a book called the Starfish and the Spider, very worth your time if you're confused on these issues of decentralized vs. centralized organizations, they're very hard to control and even harder to stop. Do you believe that once the manipulation is realized (slowdowns that drop the price, acceptance that brings it up) it would not be countered by other miners not in on the game? Or are you just saying "MINERS" as one giant group implying they're all operating under the same motivational/organizational structures? Clearly it doesn't suit your agenda, as a writer, to consider anyone else's point of view other than your own. You are convinced that BTC will save you. You refuse to consider it could enslave you. Look at blahblahblah's post above this, thats another great point of view, again it exposes the concept that the BTC network can in fact be controlled (though this example is not so nefarious as mine!), this is a fundamental property of the world. Starfish and the spider works when no one person is a power hungry psychopath. Show me a world where we don't have any of those, and I will submit to your thesis that decentralised power cannot be controlled. You are campaigning against human nature! |
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In reality the underlying asset is not traded, instead the math is done and the money is transferred from one party to the other.
Effectively the profit and loss is derived form what would have happened if the two parties had bought/sold the equity. Hence the name derivative.
If the underlying asset is not traded, then the real price cannot be known, especially in a small market like bitcoin. If the "option" (to buy/sell BTC) is no longer an option and can be replaced with a settlement in fiat at the discretion of the "losing" party, then it is no longer an option, but only a side bet. Designed for gamblers. What did you think options were !? Stuff designed to stabilize the price for those who need it - and are ready to pay for it Like corn options for corn farmers/pop corn producers. Oil options for oil companies/refineries/fuel retailers ... Am I realy dreaming ? For sure if you own the underlying asset, or perhaps your livelihood depends on say a minimum corn price, then options can be useful took to hedge. I'm not sure wall st plays it like that though  |
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I'f I've got millions riding on a given strike price, and it only costs me thousands to move the price where I want it ....
I think the bank that would issue such options - or anybody who would buy it "against" you - would be fools to accept it for any amount exceeding the hourly volume of MtGox. Your counterparty is unlikely to be one person. It's the aggregate of everyone that took the opposite position. Either a punter who went naked on leverage, or if there were no sellers for your buys, then the broker would (should) have hedged the position. What people ought to do, and what people do... two different things! People do stupid stuff all the time, I'm certainly not exempt from that! |
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BurtW is right. Most people that trade options just do it for the currency the options are valued in and not the asset.
And that's the faulty assumption - You're looking at bitcoin like an asset rather than a currency that's actually better at being money with lower costs at the very least. That's why bitcoin is different when it comes to buying options. Obviously if the market does not go in your favor, you will not exercise your option - but if the market DOES go in your favor, under what circumstance would it make sense to incur EXTRA COSTS to accept USD instead of just taking delivery of the BTC to whatever account you want at no cost to you (sender pays transaction fee)? Whether you like it or not, options behave like options! The option contract has a value in whatever currency (typically dollars) and you can go long or short. The price of the contract depends on the strike price (typically in dolars) of the underlying asset (in this case BTC) that the contract is for. I used the word asset because you can get options on anything commodities, equities or other currencies, like bitcoin. Its just terminology, the concept is identical. You keep talking about fees? What fees? You go to your broker, you buy your option with dollars, you win or lose a certain amount of dollars. If you want to take delivery then you tick a box and your option will excercised and you'll get bitcoin (provided you have the funds to excercise your option). The broker makes its money on the spread, good look trying to avoid that... the house *always* wins. |
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In reality the underlying asset is not traded, instead the math is done and the money is transferred from one party to the other.
Effectively the profit and loss is derived form what would have happened if the two parties had bought/sold the equity. Hence the name derivative.
If the underlying asset is not traded, then the real price cannot be known, especially in a small market like bitcoin. If the "option" (to buy/sell BTC) is no longer an option and can be replaced with a settlement in fiat at the discretion of the "losing" party, then it is no longer an option, but only a side bet. Designed for gamblers. What did you think options were !? |
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I'f I've got millions riding on a given strike price, and it only costs me thousands to move the price where I want it ....
For a while, once this manipulation is discoved then I suspect the market for these hightly manipulated options would collapse. Still waiting for that in the gold market |
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I haven't said you can't take BTC. On the contrary I explained several posts back how you can, because delivery is optional, and if you do all that happens is the broker pays your 'profit' from when the options is assigned in BTC instead of USD.
BurtW is right. Most people that trade options just do it for the currency the options are valued in and not the asset.
He is also right that you can use options to acquire an asset at a fixed price, by *OPTIONALLY* taking delivery of the good when the option is assigned.
I think you are confused because you don't seem to see how options work.
This is the theory behind what happens when an option is assigned (assuming they are both naked, which is usually the case):
When an option is assigned then the losing person must buy the asset at market price. The winning person buys the asset from the loser at the option strike price. The winning person then sells the asset back to the market at market price. Thus the loser has lost a dollar amount equivalent to the difference between the strike price and the market price multiplies by the number of options. Vice versa the winner has gained that same dollar amount.
In reality the underlying asset is not traded, instead the math is done and the money is transferred from one party to the other.
Effectively the profit and loss is derived form what would have happened if the two parties had bought/sold the equity. Hence the name derivative.
So now you can see how naked options are not only possible, but likely commonplace. In an earlier post you said something about how options can only be used to control the BTC price if the options market dwarfs the real market. I hope now you see how that can in fact be the case. I'f I've got millions riding on a given strike price, and it only costs me thousands to move the price where I want it ....
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Do you guys think it will be possible for central banks to generate new cryptocurrencys in the future?
What are the implycations if it's possible?
I'd say sure it's possible! However, getting a strong following like Bitcoin is another matter. And we mustn't let facts get in the way of a good story either. The Satoshi fork seems to have unstoppable momentum... despite Litecoin, PPCoin, Novacoin and all the rest. There's also the question of how Bitcoin could be controlled if it can't be printed at will. Well, printing is just one brute-force technique for controlling inflation. Fractional reserve and setting interest rates for banks is another technique. However, just because those particular techniques are not well suited for Bitcoin, me mustn't assume there is no available technique! Bitcoin's monetary velocity could, in theory, be controlled by miners (and operators of so-called "full nodes") by setting transaction fees. It's bloody simple once it clicks in your mind. E.g.: - Bitcoin's short-term price is getting too high and bubbly --> Miners start rejecting "low bids" --> Less trade can be done and network performance suffers and becomes more laggy --> THE EXCHANGE RATE GOES DOWN.
- Bitcoin's short-term price is too low and it's falling or heading lower --> Miners accept more "low bids" --> More trade can be done, "micro-transaction" opportunities pop up, network performance gets faster --> THE EXCHANGE RATE GOES UP.
But of course nobody wants to engage in discussion on this topic. YES. You totally nailed it. Central Banks don't need to discredit or destroy bitcoin, they just needs to control it, and right now they have infinite money to make that happen. |
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I think we all know how options work. Here is how I would use them (once they exist):
Buy a call. Assuming the price of BTC goes up before the option expires then I will exercise my option and take deliver of my BTC.
If the seller of the call actually had the BTC no problem, they ship me the BTC.
If the call was naked then the seller of the call will be forced to go the maket and buy BTC in order to cover the call.
Wala - a new way to buy BTC!
Exactly - Literally the most convenient way to accept payment if you wind up wanting to exercise your option, is to simply have them send you the bitcoins. If the price is volatile, what kind of idiot would sell an option naked for any length of time when the price could swing wildly against them, investors who don't want to go broke will buy the bitcoins at what they think is a cheap price, option the bitcoins when they feel the price is overbought and likely to fall to lock in their gains, with the worst case scenario being they sold their bitcoins at what seemed like a high price, but in fact wasn't. Your upside is big, but your downside is capped. So the market will stay small because going naked and getting it wrong could be so dramatically expensive. I think we all know how options work.
Thats what I thought too.. at first... Right? Why would someone choose to take settle in cash rather than take delivery when at the very least there are less fees for the transaction. Just to be clear here, are you asking why people would trade options to make money? |
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Buying up or mining a significant amount the coins would not necessarily cripple the Bitcoin economy.
People would simply use what is left in circulation.
We sort of already have that situation now with lots of the coins from the original miners being forgotten or lost.
I doubt the central banks *want* a crippled economy, what they want is not to lose their position as your lord and master! What do you think the point of this game is? It isn't to make everybody love bitcoin You seem to be prescribing motives to players that don't really match their actions - Do you not think the Gold and Silver markets are manipulated to keep the price from running away and causing a panic into the "safe haven"? I think the gold/silver markets are likely manipulated, for no less a nefarious reason than the money being made on derivatives based on the market far outweighs the cost of moving the price. However, this does not necessarily lead to that, bitcoin is not metal. It is not subject to the same laws that govern its control. I am not aware of any actions that have been taken by the central banks with regard to bitcoin. The only motives I assign to the bank is the betterment of its own position in the game. As for the point of the game - I think we have different games in mind. I have the broader goal of how the central banks might serve their own best interests through the mechanism of bitcoin, whereas you seem to be specifically focused on how best to discredit bitcoin, based on the assumption that this *is* the optimum strategy. I don't agree with the premise that discrediting BTC is the best action for the banks to take. I think we even agreed that you can't *kill* it you can only mess with it. If it can't be killed, then maybe it can be controlled. The more I think on the more the 'own the network' plan seems to make sense for the banks. I'd be glad to hear counter arguments to that, as it has me a little worried. I'm really hoping they are stubborn/stupid enough not to. Central banks can't serve their purpose through Bitcoin because Bitcoin cannot be created at will to accomplish policy goals. If CBs were going to support Bitcoin, they'd already be supporting gold as it provides many of the same balances. The problem with gold is it's opaque - you have to store it, and it's very valuable so you don't want to let everybody see it. This provides a way to, even on a gold standard, produce currency in excess to what your "backing" would allow, because nobody checks how much you actually have and lacking that information it's pretty much impossible to determine how much currency should be out there. Bitcoin doesn't allow that - If a currency were to be backed by it, the reserve address would probably be printed on the money so that anyone who wanted to check what their dollar was backed by could just look up the bitcoin address and see how many BTC there are relative to the amount of the paper currency in circulation. So again, please re-examine what purpose central banks actually serve - If you think it's to "keep inflation low" I suggest you re-examine your analysis. It is to finance government. The way you finance government when you don't want to tax as much as you want to spend is by devaluing the currency. Bitcoin would make that impossible, and in being such good money demonstrate to the world what bad money all alternatives are. Wow, neither have I said that I think think that, nor do I think it. I made it quite clear that my view on central banks, and to be clear I mean the IMF, ECB, Federal Reserve etc is to retain and/or increase the power they have over their subjects using money as the proxy. It's all about power. What you are explaining to me is economic theory. A theory that it suits the central banks for you to believe. They want you to believe the choice is "Buy and Spend vs Austerity" because it suits them for you to believe that. It is a form of divide and conquer. You need to stop thinking that the way things are is the only way things can be. If you keep arguing based on those assumptions then your whole argument collapses the moment your assumption is proven invalid. When you say "Central Banks can't serve their purpose because..." and then define their purpose as that which they would have you believe it is, then of course you will only draw the conclusions that can inevitably come from a basic flawed assumption. When you say "If CB's were going to support bitcoin they would be supporting gold..." you have i) misunderstood what I have been saying. They dont want to 'support' bitcoin, they want to control it. The key difference is that you saying support bitcoin implies some benefit to you (and the other serfs) just as supporting gold implies some benefit to you (and other serfs). Think carefully about the implications of them 'owning' the network - in particular the endgame scenario, once the block reward dries up. They ream the transaction fees, they have better control over the transactions (remember miners choose what goes in what block - hello censorship). Right now, who is to say they arent the ones pushing the price up, buying all the loose coin. This not only gets the necessary mindshare by making it appealing, but it also lets them offload all those soon to be worthless dollars. But what about all the millionaires they are creating?? I refer you to the 'worthless dollars' clause... So think bigger dont think about bitcoin in the context of everything that went before, think about how it is different and how those differences can be (ab)used to the ends of those nefarious enough to want to controll all of the money in the world. In some ways its easier. There is a fixed amount, so they always know exactly how much they have, they have a significant control over the block chain (who is to say they couldn't effect a meta-minimum fee, or your transaction nver gets included in 'their' blocks, voila taxation!) You are underestimating the ways in which the ideas of good man can be twisted by those with evil motives. |
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