I've posted this before but ill post it here.
Ponzi scheme - A central actor (person or 'company') receives money with a promise of quick and significant returns. All people that buy into the scheme interact directly with the central actor who pays out money he has received from 'investors' as returns in order to drum up more investment in a fictitious investment opportunity. It is by design centralized, non-transparent and has a hierarchy of 2 levels - CEO of ponzi and everyone else. The investors do not realize they are being payed out with their own and others principle investments.
O O O
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O - (CEO of ponzi) - O
/ | \
O O O
Pyramid scheme - A central actor encourages a number of other actors to invest in something in return for something of little to no real world value in a fixed hierarchy on a promise of a) high profit margins on a cheap product and b) getting more new actors into the hierarchy directly underneath you feeding your personal revenue stream (and by design, those directly above you). This structure allows large profits to flow up the streams towards the tip of the hierarchy. A pyramid scheme by design is centralized and non-transparent in nature. People lower down are often not allowed to know exactly how far down they are in the pyramid, only seeing those they directly interact with.
(CEO of MLM)
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O O O
/ | \ / | \ / | \
O O OO O O O O O
Bitcoin - Every bitcoin is worth the same so every actor benefits proportionally with the growth of the network. Note that with a pyramid scheme the goods you purchase either have little utility like a poor quality 'how to' guide or a good whose market value is vastly lower than what you just paid to purchase it ($600 for 24 energy drinks). With bitcoin wealth is being traded 1:1. If you buy a bitcoin at a market price of $600, that is what it is worth at that moment and neither party can be said to have 'lost any wealth'. There is nothing stopping you from turning around and selling it right back to the market for market price, just like gold or an antique vase. Bitcoin has a flat hierarchy with no central authority and is transparent.
O - O O
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O-O O - O
\ / \
O O - O
The scam Bitcoin is closest to in nature is a pump and dump, but what separates it from a penny stock P&D is transparency. Because the bitcoin landscape is transparent (open source software, the blockchain etc), it's utility is transparent. The pump of a penny stock is dependent on misinformation and opacity.
What confuses people is the exponential growth and the religious zeal of some bitcoiners giving the impression it is a get rich quick scheme.
This is good stuff. I have to disagree with the point about transparency. Yes the blockchain is transparent but so are the 10-Ks of penny stocks. The reason why BTC looks like a penny stock pump & dump because the early buyers are pumping the stock so they can unload their shares. The similarity to a penny stock pump & dump is that the marketing doesn't show risk/reward analysis only reward. Penny stock pumpers usually say things like "no way this goes lower", "it's only 25c per share, will go to $10", "to da moon", etc... |
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The MML report actually said it was worth $1300 if these things were to happen:
"Our fair value analysis suggests that to justify the current Bitcoin valuation, it will need to (1) account for at least 10% of all global e-commerce B2C transactions, (2) become one of the top three players in the money transfer industry, and (3) acquire a store of value reputation close to silver."
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If you read between the lines, you'd have realized that the PBOC really does NOT like BTC at all. It has to do with the Central Communist Government's desire to centrally control their currency within their country. So, YES, the ban is REAL and will be coming down HARD.
I'm amazed at the denial. The PBOC has been issuing explicit anti-Bitcoin guidance for months now. They gradually restricted what Bitcoin exchanges could do, allowing an orderly shutdown. Bitcoin fanboys kept trying to interpret the orderly shutdown as "Bitcoin will not be stopped in China!". They were wrong. Now we're coming up on the shutdown deadline, and, unsurprisingly, people in China are selling Bitcoins.
As for it not being "apparent overnight", Bitcoin just dropped from $450 to $390 overnight. I have actually been surprised by this. I thought that they would be smart enough to realize that they should buy as many coins as the can while they still can, not sell at a loss because the government doesn't like it. It's not like that government can confiscate the coins or prevent people from cashing out outside the country. Why surprised? If suddenly no stores/ banks/ govts accept USD are you going to stock up on USD or are you going to dump it? |
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I can't think of much really. I suppose you can use it when you want to buy illegal goods online?
Travelling internationally doesn't really matter much to me. When I go to other countries, I can pay easily with my debit card. When I shop online, I use paypal.
I think Bitcoin's selling point is the fact that it's decentralized and "anonymous." Though when it comes down to it, how many people actually care about those features? At this point, I think more people are in it for the speculation and making quick profits rather than belief in the protocol.
I agree. I think 99% of people who hold BTCs are speculators. They just try to convince themselves that its not gonna be worthless someday by repeating the propaganda ad nauseum I crypto has a place in the future of financial transactions b/c theres a way to send cash digitally. The banks like this cause they don't need to clear the transactions. However banking is not going away just because of this. And probably no bank wants to integrate BTC into their infrastructure. Most likely it'll be Ripple or something that's more business friendly w/o all the politics and bad press |
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capital gains is favorable to short term gains. If anything they would wait then sell it. Unless its a loss then they want to take losses short term
If you need money to pay the IRS, it doesn't really matter -- late penalties are worse than what you'll be facing in short/long term capital gains tax. If you made money in 2013 on capital gains, it needs to be paid to the IRS now. Yeah that's true. I didn't think about that |
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No surprises here.
US income and capital gains tax is due on Tuesday for individuals.
Anyone buying or selling in 2013 has to pay it -- which means that there's tens or hundreds of millions of dollars in tax money the IRS is waiting for. Those USD have to come from somewhere, so everyone is liquidating while they still can if they have suspected tax bills coming up.
capital gains is favorable to short term gains. If anything they would wait then sell it. Unless its a loss then they want to take losses short term |
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Selling now is such good advice tabnk, wow. You are really helping the noobs, like this poor lady who lost so badly. Selling will lock in the loss: Didn't you say the same at a much higher "lows"? If you think the price will further drop selling is a good advice. At this hours it is just gamling. Not more or less. It is like poker or roulette. permabulls say "buy" at any price cause they're freaking out watch their position lose value. If he just bought it today, then he should sell it before it drops more |
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black friday was named because it was the first day most retailers went into the black (positive net income). i don't think most btc holders are going into the black today...
Nah its reference to "Black Monday" big crash in 1987 |
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Oversold can stay oversold in a down trending market. Yep that true. Don't get steamrolled by momentum |
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Warren Buffet is so heavily invested in paper money. His big plays in paper currency have been well documented in the past so it comes to no suprise he would take issue with Bitcoin.
you're thinking of Soros. Buffett is a value investor. |
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If you want people to use it as a currency then it should be spent not hoarded
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Insert Quote
Simple answer: It's a bubble More detail? Its a technology in the same way like the world-wide-web, its not air that’s being sold here; As a tech its more comparable to torrents than the WWW. Anyways WWW is not a priced commodity so don't make the fallacy of comparison. Just look at the price since thats what you are trading. Its a bubble. I can show you charts of lots of bubbles and they all have a resemblance |
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Chart is breaking down. No resistance til 200 area
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From the book I am reading now about automate trading systems ... maybe can be applied to bitcoin market too ...but was made from forex, stocks, futures perspective ...
"The leverage in the market yields a locally unstable system because individuals have finite capital and are playing the game so as to survive
the next round.This instability is increased by the asymmetry between game-theoretic behaviors of accumulation and divestment of risky positions. When you accumulate a position you have all the incentive in the world to tell all your friends, and it is a self-fulfilling virtuous circle
as people push prices in “your” direction, thus increasing your profit. This is the epitome of a cooperative game. On the other hand, when you
divest, you have no incentive to tell anyone as they may exit before you, pushing prices away from you. This is a classic Prisoner’s Dilemma game
where it is rational to defect, as it is not seen as a repeated game. This is why we observe a great deal of asymmetry between up and down
moves in prices of most assets, as well as price breakouts and violent trend reversals."
This is what a lot of TA traders believe in. In TA language; the price of BTC today is signal of descending triangle breakdown. Bearish pattern http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:descending_triangle_ |
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Simple answer: It's a bubble
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It more closely resembles a pyramid scheme (but so does every other commodity ever traded).
Government currencies are ponzi schemes because when they collapse the central banks come out rich.
So wrong. Commodities are priced on supply & demand. Soybeans, oil, coal..all these commodities are priced on supply demand. Not pyramid at all Government currencies are not Ponzi. Ponzi is taking in new investment money to pay earlier investors. Giving them the impression the investment is profitable so they invest more money. In fairness BTC is not a Ponzi either. Its a pump & dump. Early investors try to draw in new investors to drive up price so they can dump their holdings Is Bitcoin priced on a principle other than supply and demand? The pyramid scheme isn't imbued into the commodity being traded. The distribution of availability creates a pyramidal distribution. Each traded commodity has groups and organizations that drive the markets; look at gold, silver, and oil as examples. The government ponzi doesn't ask for a voluntary investment; they do however take money to pay the earlier investors (treasury bonds). It is a Ponzi scheme, just one with the ability to force investment of wealth with higher taxes, inflation of the money supply, etc... Its based on supply demand. But my reply was to correct the guy who said "all commodities are pyramids". They are not. A pyramid is you invest $100 and when you bring in 5 other investors you get $500 in return. What I said was BTC is a pump & dump I'll have to agree to disagree that's not what Ponzi scheme means so you can't apply that to govt currency. In a Ponzi scheme is investors are paid on supposed profit but the money actually coming in from new investors |
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It more closely resembles a pyramid scheme (but so does every other commodity ever traded).
Government currencies are ponzi schemes because when they collapse the central banks come out rich.
So wrong. Commodities are priced on supply & demand. Soybeans, oil, coal..all these commodities are priced on supply demand. Not pyramid at all Government currencies are not Ponzi. Ponzi is taking in new investment money to pay earlier investors. Giving them the impression the investment is profitable so they invest more money. In fairness BTC is not a Ponzi either. Its a pump & dump. Early investors try to draw in new investors to drive up price so they can dump their holdings |
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The potential of crypto is for replacing wire transfers which currently requires ACH (automatic clearing house). Because it's treated like cash you don't need a middle man to clear the transaction.
But BTC is not even the best choice for this function. I think Ripple has the most potential for this type of transaction. The reason is XRP is supposed to work as a token so the system can function. It similar to going to a casino and buying poker chips. You don't store those chips you just buy them when you need to use them.
It's kind of annoying how people always say BTC vs fiat. BTC is also a fiat currency.
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My theory is that conspiracy theorists don't have jobs or girlfriends/ wives
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Great Thread. Nothing is Random, randomization is of course impossible as every action has a predetermined consequence. Whether the human mind or tools which the human mind has created have the processing ability to discover the results of all actions before they occur is of course unlikely at our current technological stage.
But having said that the Financial Markets are not as complex as say human life, therefor we are likely to be able to determine fairly accurate predictions of financial markets with the right input data, what of course makes these predictions less stable are variables which we do not have access to, such as other peoples influence. But again this is not random, we just don't have all the data we need.
It is by no means certain that actions have predetermined consequences, in fact it seems it's just not the case. If your right though, we had better stop wasting our time trying to build quantum computers. Find me a theory that explains how a random activity works. For something to be random it has to happen for no reason, with nothing preceeding it. We cannot as humans beings necessarily predict the consequences of actions, but how can something happen without cause or reason? Did I randomly come across this post and decide to start writing a response.... well if I was telling someone else about it I would probably say I came across the post randomly - however I didn't, all the events from my birth onwards led me to that point (and of course my mother and fathers actions would of also had an affect, and theirs and so on). So it wasn't random, several trillion variables which all had a set value due to other trillions of variables and so on created the unique event of me replying to this post. But hey, its just theory of mine - I may be wrong . :p Random as in unpredictable. |
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