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1  Economy / Economics / Re: Why Bitcoin will collapse in price. on: December 09, 2013, 04:24:14 PM

As for bitcoins actual value. 1) There are a ton of people who assume bitcoin has absolutely no intrinsic value, because it is not "directly backed by anything" - 2) However, most of these people are technologically incompetent people who do not realize the true value of information technology and it's respective system. The platform, the system, the blockchain, is what has value. The very core of bitcoin's structure, and it's ever-increasing infrastructural development, is what contains value. Does not the city of New York hold value? Of course it does. Does not Facebook hold value? Of course it does. They are two widely different "businesses", in that one is purely material and the other is not, however both hold value in their own way.

1) No they formulate it incorrectly. They say: Dollar had value (back in the day) because it was backed by gold. And gold has value because it is pretty to look at. So the dollar bill itself has no value (nothing). It derives its value because it is a claim on gold (back in the day it did).

Now bitcoin is like the dollar bill (actually worse because you cant burn it to create heat). It is nothing. I cant do anything with a bitcoin. Now you say well true, but its backed by the miners. Well that does not add value. I cant redeem the miners and sell them can I? Now some bitcoiners will say: Well you can transfer bitcoin cheaply. Well just because I can transfer nothing cheaply (what a waste I have after all transferred NOTHING) does not mean that nothing thus is something. Its still nothing. If the bitcoin arrives at my place I can still not do anything with it can I?

2) The comparison to facebook is totally flawed. I can do stuff with facebook. What can I do with bitcoin? Nothing.


Now i am 100% confident you are an absolute troll. There is no way someone who has the competence to know what bitcoin is, actually makes those assumptions and claims that you do. You can do stuff with facebook, but you can't do anything with bitcoin? Are you seirous? - I'll let you take a breather and come back on this one, because i genuinely don't believe you are completely incompetent.

Edit: Read this:
2  Economy / Economics / Re: Why Bitcoin will collapse in price. on: December 09, 2013, 03:58:03 PM
Bitcoin is going up in price because people believe it will be used as a medium of exchange and store of value. If they realise this wont happen it will collapse in price. So lets look at these two aspects.

1) Medium of exchange.

Bitcoin is only a medium of exchange when merchants accept it and hold onto it. Right now merchants are dumping bitcoin for dollars, so its not being used as a medium of exchange. This btw. also throws the transaction cost benefit argument right out of the window (spread).

Now will merchants ever accept bitcoin and hold onto them?


a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered.

b) Governments will prohibt merchants from accepting bitcoins. Again: They will never give up their monoply on money.

2) Store of Value

After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely.

Also Bitcoin is a technology, that can be outcompeted by other altcoins. Your wallet can be hacked. The average citizen cant judge if the code can or can not be hacked and thus more bitcoins created. If you want to store wealth over a long period of time investing in a technology is not the best and easiest option. Also Bitcoin is not useful or wanted. If you ask a Bitcoiner what can I do with it they will say: dump it on the next guy it will go up in price! Gold and Silver where always wanted (jewlery and nowadays industry) and thats why they became MONEY in the first place! They have unique properties and everybody love to hold them in their hand. This will always be the case ensuring significant value and acceptance. Nothing like this can be said for bitcoins. Thus I dont believe bitcoin will function as a store of value in any significant way.


I predict bitcoin to collapse in price (as it wont be used either as a medium of exchange nor as a store of value).

EDIT: The price increasing shows bitcoin is used as a speculative vehicle. It does not demonstrate bitcoins viability as a store of value or medium of exchange.

(Additional line of attack for governments: Government could come down hard on miners. They could make it illegal to mine bitcoins. Then bitcoin will lose all of its advantages compared to alternative cryptocurrencies. It will be a code like the rest of them.)

1) Medium of exchange.

A medium of exchange, is simply a platform (currency) used to exchange value. Bitcoin is a unarguably a medium of exchange as it is, however you are right in your conclusion that bitcoin currently is too volatile to be used as both a Medium of Exchange AND as a Store of Value. Traditionally, currencies have been used as both, because it is the norm, and it is a functional system. However, with a system like bitcoin in effect to cover one aspect, and temporarily another system, like the US Dollar, to cover the other aspect, you have a functioning system that operates just as well, if not potentially better.
a) Governments have not effectively made it impossible for people to use bitcoin as a medium of exchange. You are expected to pay taxes on bitcoin gains, as you are expected to with any capital gains. It is the same percentage, and it is the same laws that bind you to your rights through law. This is how the world works.

b) Governments won't prohibit merchants from accepting bitcoin. If you knew the first thing about in-depth politics, you would know that the stake is too high. Effectively, the government is controlled by the people. We are the voters, no matter how corrupt the system inside might be. If bitcoin grows exponentially, it will gain a massive fan-base and world-wide admiration as a new technological wonder. If the USA (example) were to ban the use of bitcoin for merchants, the decision alone would be widely regarded as a direct confrontation of the entire publics belief, and thus politicians will grasp at the opportunity to use pro-use of bitcoin as their marketing plan, and easily win the election come next term. The USA knows better than to put themselves up for risks like this. There simply is not incentive to block bitcoin for merchants, nor will there ever be.

2) Store of Value

This entire point is now made invalid, considering the explanation above.

As for bitcoin as a technology, it can indeed be outcompeted by other altcoins. This is where the open, free and democratic aspect of cryptocurrencies come in to play. It is the foundation of any healthy system. However, i find it extremely unlikely at this point, that any type of altcoin will surpass bitcoin in momentum, unless something comes along with groundbreaking new features that simply out-compete bitcoin by a massive margin.

Your wallet is as absolutely safe as you would like it to be. With the continuation of development on bitcoins infrastructure, which is an ongoing project, we all aim to make the use and adoption of bitcoin less time consuming, easier, safer and less demanding in general. Assuming bitcoin will fail because "your wallted can be hacked" is simply ridiculous.

As for bitcoins actual value. There are a ton of people who assume bitcoin has absolutely no intrinsic value, because it is not "directly backed by anything" - However, most of these people are technologically incompetent people who do not realize the true value of information technology and it's respective system. The platform, the system, the blockchain, is what has value. The very core of bitcoin's structure, and it's ever-increasing infrastructural development, is what contains value. Does not the city of New York hold value? Of course it does. Does not Facebook hold value? Of course it does. They are two widely different "businesses", in that one is purely material and the other is not, however both hold value in their own way. - Just because bitcoin does not hold "traditional intrinsic material value" does not mean it is not backed by something. Another argument some people make is that bitcoin is only worth what people belive it is worth, and thus it is worthless. This argument is flawed beyond reason. The more infrastructure and general development bitcoin gains, the more people believe it is worth, and thus the volatility will even out and stabilize somewhat over time. It is not until we reach the "equilibrium price" that bitcoin can truly 100% stabilize as a modern, global currency, though. Rome was not built in one day.


I predict bitcoin will continue to fluctuate from week to week, however continuously growing in the long-term, both through price as well as infrastructural development and wide-spread adoption. There will be times of growth, and there will be times of decline. However, in the long hold, bitcoin will revolutionize the world of economics, and will either be the precursor to, or the main content of, a completely changed financial system.
3  Bitcoin / Bitcoin Discussion / The Huge Exchange Problem on: December 06, 2013, 10:31:10 AM
A few weeks ago i stumbled upon bitcoin after reading a few articles and news-segments. It didn't take long for me to start reading up, and as i kept reading, i was completely overwhelmed by the sheer brilliance of the bitcoin concept. Needless to say, i have built a very solid understanding of bitcoin in its entirety, and i follow several forums, youtube channels, news-sites and so forth, making sure i catch the latest news and discussions.

About one week ago i decided it was time to invest in bitcoin, and i started looking at the exchanges in order to decide which one was most suitable. What i found out was quite demoralizing and frustrating. As most of you probably know, sites such as Coinbase, Mtgox and Bitstamp require a very tedious and demanding process in order to complete a transaction for bitcoins. I won't go into specifics, but it obviously takes a lot of time and effort in order to get your account verified, your transaction approved, and eventually your exchange completed.

It was not until i found a site based in my home country, Norway, that i was able to easily transfer funds to my newly created account and proceed to exchange my local currency for bitcoins. All in a matter of two days, without any verification requirement or tedious process. I cannot emphasize how thrilled i was when everything came together and i was able to almost effortlessly purchase bitcoins.

The point of this thread is not to discuss my personal transaction history, but rather to bring up a very important issue. As far as i can tell, most exchanges (especially the major ones) all require this type of tedious and demanding process of verification and long waiting times in order to transfer funds to your account. This is a major issue for most people, and it creates a barrier of entry in to bitcoin that is simply too steep for the general public.

Here i Norway we can use, which basically lets us complete all necessary steps as follows:

1. Create account name (e-mail) & password
2. Enter full name, address, telephone number and date of birth
3. Enable two-face authentication through your mobile phone (download Google Authenticator App)
4. Transfer funds from your online bank-site by manually entering Justcoin's information and transferring desired amount.
5. Wait 1-2 bank-days (Monday through Friday)
6. Justcoin verifies the transaction by making sure the name of your account corresponds with the name of the bank-account owner
7. Success, you now have desired amount in your Justcoin balance, ready to be instantly exchanged to bitcoins

Why cannot the major exchange sites such as the previously mentioned ones use this type of system? Why would there be a verification requirement and up to one week wait-time for approvals and confirmations?

I know these sites are all based in different countries that use different rules and laws, however i highly doubt the differences makes for such large gaps in difficulty and waiting times?

Please discuss.
4  Economy / Economics / Re: Banks should embrace bitcoin on: December 06, 2013, 04:58:44 AM
Banks today function with a very basic method for generating profit.

1. The customers profits off of storing their value in the bank, thus generating an interest. For the sake of argument, lets pretend this interest is 5% /year and the inflation of the $ is 3% /year), thus you profit 2% every year off of the amount you've kept in the bank

2. The bank profits off of insurances, where you as a consumer pay a certain amount. For the sake of argument, lets pretend the average customer pays $1000 every year for all insurances. Now, the bank bases their insurance prices off of the calculated statistics of how much an average customer costs the bank through person-based health injury/sickness and material-based injury. So if the average customer pays $1000 /year for insurances, the bank statistically knows they will pay ~$800 (again, for the sake of argument) to cover these insurances for the average Joe.

3. The bank profits off of loans, where you as a customer takes out a loan, and have to pay a certain percentage over your loaned amount. For the sake of argument, lets say this amount if 110% of your loaned amount.

The point here, is that banks follow a very basic formula for how they generate profit. They have to offer the customer advantages to storing their money (other than keeping them safe), otherwise someone else would be offering these services (another bank). - With bitcoin, the banks could not offer loans, as the currency is currently too volatile and unstable. This basically translated to the bank not wanting to hand out loans because of the high risk involved. When you remove the option for the bank to profit off of loans, you have to remove some of the customer profits, otherwise the banks would not make a profit. Very basic 2 -1 = 1 kind of math.

Basically, until bitcoin stabilizes (if ever) there is not safe potential for any bank to deal with bitcoins. The only option i could see for banks to profit off of bitcoin at the moment would be through storage.
5  Economy / Speculation / Re: Borrowed $1,000,000 (1 million dollars) from my dad to invest in BTC (serious) on: December 06, 2013, 12:50:35 AM
Alright so, i'm not sure where i stand on this thread, but my spider-senses tells me you are an obvious troll. Mostly backed by my impression of how you seemingly toss $1 million around like it's salad, yet you say things like this:

I could quit my job and chill in Miami and Ibiza for a year until I need money again.

Serious advice only please, I'm not fucking trolling

However, i'll give you the benefit of doubt and actually answer your questions to the best of my ability, just in case you're the real deal here.

1. Personally, i believe bitcoin could exceed your ambition of $1500/BTC easily next year. However, only time will tell. - There is an ever-pressing concern of political influence and potential bad news that could crush or limit bitcoin in the future. These facts should be of great concern when you're considering investing $1m

2. There are services out there who would take your offer seriously, and thus i propose you look for some more information regarding this. I'm not a specialist on investments of this magnitude, so i'd make sure i do proper research on this subject before even attempting to make contact with any site or third party.

3. Depending on where you want to spend your $million, there will be a long list of sell-orders waiting for you to purchase. If you were to use sites like Coinbase, Bitstamp or Mtgox, you'll have to expect the average price per bitcoin to be up to ~5% higher than the current price for those last few hundred bitcoins of your $1million purchase. An example: A few days ago i saw someone buy out 940BTC from Mtgox. This order ate up every sell-order from $1040 all the way up to $1070, thus driving the price up $30. I would consider buying in portions. Perhaps buy ~100BTC every hour for 10 hours or so?

4. You should make sure the government knows of your investment whenever you plan on cashing out (if ever, of course) - avoiding capital gains tax of this magnitude is serious trouble. - It is also the right thing to do, as with any other legal investment.

A few last notes here. I would strongly recommend reading up on bitcoin some more. You seem like someone with an okay understanding of bitcoin, but i'm sure there is plenty you have let to discover and learn. Make sure you are confident in your investment before you decide to go on with this, and don't hesitate to ask questions on these forums, or other forums for that matter. - Personally, i would have perhaps waited for $1500-1600, as you say you intend, and then cash out for $1.1million (thus satisfying your deal with your father) - and keep the rest in bitcoin, if things still look good with the stance of bitcoin at the respective time.

I sincerely hope you are not some troll wasting our time, but i'll give you the benefit of the doubt and wish you good luck, and make sure you do your research!
6  Economy / Economics / Re: Monthly average USD/bitcoin price & trend on: November 30, 2013, 02:16:10 AM
In my opinion it is a great testimony that we just crossed 100,000,000% value appreciation  Grin

It is truly amazing. What historic assets or companies have risen that much? Are there others?

I would say, no. It is "easy" to have a 1000x value appreciation with startups, perhaps 10,000x is possible. 100,000x hardly.


You pick an arbitrary transaction between private parties to create some irrational hyperbole.

Heck if I note that Dori in a Thirld World country internet cafe gave me free internet access ($0.25 per hour normally) in exchange for my promise to share some of the ownership of Art-O-matic, then does that mean I count the gain after 3 years of the $1.2 million IPO valuation that I was offered in 2001 as a counter-example to your claim.

Have you priced the Tulip mania in comparison? Are you sure you really want to show the "investment" only matches manias and not real investments throughout history?

The gloating is what people who deserve to lose their talents do, because they aren't productive any more, because they've been made too rich to do any real work.

I guess you will delete this post too.

While i respect your opinion as much as anyones, i strongly disagree with your belief of how bitcoin is a malevolent innovation destined to fail and possibly cause major damage.

I have read through several of your posts, and most notably is your constant tendency to reference existent companies, as if bitcoin is even remotely close to a company. You can't estimate or predict the future of bitcoin by "logical economic speculation" using traditional knowledge. This is not a company, this is not a stock. This is bitcoin, a digital cryptocurrency with tendencies we've never seen the likes of.

People need to start realizing that in order to predict the future of bitcoin and evaluate it's risk of failure, you need to think about the psychological nature of the population. You need to estimate when information reaches certain demographics of the population, and how the infrastructure is being developed. The development of the protocol is also important to keep an eye on, as it is being worked on constantly and will most definitely improve on a faster pace given increased interest and market cap. People invest when they see potential growth in the future. Bitcoin will fail when the population loses that faith entirely.

In my personal opinion, i believe there will come a day when stabilization of bitcoin is completely possible. It requires these aforementioned steps to be fulfilled successfully, and i believe they will be. Everyone is entitled to their personal opinion, but i suggest a more open-minded, liberal view, when trying to predict the future of such a revolutionary innovation.
7  Other / Beginners & Help / Re: 1.49 stolen on: November 29, 2013, 12:20:06 AM
Really unfortunate =/ but what kind of two-factor authenticator were you using? If you use something on your phone which generates a random number with 6 digits every ~20 seconds, it takes a lot for a keylogger to monitor your screen all day waiting for you to type in the authenticating code.
8  Other / Beginners & Help / Re: Hello people! on: November 29, 2013, 12:03:29 AM
Non-bot checking in. - Also, bitcoin has been my primary hobby for the last week now. I cannot believe how exhilarating and unbelievably fascinating is.
9  Other / Beginners & Help / Re: Bitcoin Goals on: November 28, 2013, 11:53:18 PM
My goal is to be part of the revolutionary economic innovation that is currently happening, and make sure i'm on the train and not left on the station if bitcoin happens to succeed on a massive scale.
10  Other / Beginners & Help / What's really going on in China? on: November 28, 2013, 10:51:49 PM
I just read through an article i found on reddit recently, and i must say, this looks extremely promising. I will not go off on a speculative rant where bitcoin WILL become the new global currency China has stated they want to pursue, but i definitely feel like we are going to see some growth, especially from China.
11  Other / Beginners & Help / Re: 3 children' Father will execute himself because MTGOX on: November 28, 2013, 10:20:03 PM
I strongly suggest calming down and trying to solve this in a sophisticated manner. Threatening MTGOX will not help you get your money back. MTGOX has a daily/weekly transaction barrier, so you can't withdraw huge amounts at a time. You can however exchange your bitcoins in to EUR (That is your local currency, right?) and slowly send yourself the euro every week until you reach the full amount.

Also, it seems as if you bought 100k worth of bitcoins several months ago, those 100k are surely a lot more by now? Does not this make you happy, rather than sad? You have essentially increased your life savings by a huge amount!
12  Other / Beginners & Help / Re: will the bitcoin reach $1000 one day...? on: November 28, 2013, 09:58:23 PM
I genuinely believe bitcoin has a promising future. Whether bitcoin or another cryptocurrency will be the one to "conquer" the world remains to be seen.
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