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Author Topic: Too much speculation  (Read 7787 times)
BrightAnarchist
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November 08, 2010, 09:25:35 PM
 #1

The recent hubbub about the Bitcoin rally actually makes me nervous. I don't want Bitcoin to be a beanie-baby style bubble. I want it to make inroads into business and liberate people from the burdens of paypal and the dangers of our instable government-run banking system.

Naturally I'm very happy that my holdings have increased in value, as I'm sure other Bitcoiners are, but I don't want the BTC community to lose focus of the long-term goals here based on the recent rally. It feels like a few months ago bitcoin was a "stable currency", and now it's an "investment". Not a good label IMO, and it worries me. I have friends now that are asking me how to get into bitcoin, not because they want to use the currency in any way, but simply because "it's going up!", and they want to flip it for a USD profit (that is, they think of it as a commodity I guess). These types of people are also going to be the ones that will also panic sell if "it goes down!". Bitcoin has become FOREX now, bah ...

Maybe I just worry for nothing Smiley
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November 08, 2010, 09:29:12 PM
 #2

The recent hubbub about the Bitcoin rally actually makes me nervous. I don't want Bitcoin to be a beanie-baby style bubble. I want it to make inroads into business and liberate people from the burdens of paypal and the dangers of our instable government-run banking system.

Naturally I'm very happy that my holdings have increased in value, as I'm sure other Bitcoiners are, but I don't want the BTC community to lose focus of the long-term goals here based on the recent rally. It feels like a few months ago bitcoin was a "stable currency", and now it's an "investment". Not a good label IMO, and it worries me. I have friends now that are asking me how to get into bitcoin, not because they want to use the currency in any way, but simply because "it's going up!", and they want to flip it for a USD profit (that is, they think of it as a commodity I guess). These types of people are also going to be the ones that will also panic sell if "it goes down!". Bitcoin has become FOREX now, bah ...

Maybe I just worry for nothing Smiley


Crash one time! I've got more I want to spend on cheap coins.

Also, are you sure about this or just speculating? ;-)

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November 08, 2010, 09:30:13 PM
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You are not the only one worried. But there is little that can be done, apart from tyring to spread the word and encouraging business to accept bitcoin.
BrightAnarchist
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November 08, 2010, 09:34:59 PM
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You are not the only one worried. But there is little that can be done, apart from tyring to spread the word and encouraging business to accept bitcoin.

Exactly. My general point is that most of the recent activity has been due to an increase in speculation rather than huge inroads into business. I think that business inroads will increase the stability of Bitcoin.

Don't get me wrong, I love the fact that my coins have increased 6X in value in the past two months, but at the same time doing business with something with that insane level of volatility is difficult to say the least. Maybe Bitcoin businesses should peg to the dollar Smiley
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November 08, 2010, 09:46:42 PM
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You are not the only one worried. But there is little that can be done, apart from tyring to spread the word and encouraging business to accept bitcoin.

Exactly. My general point is that most of the recent activity has been due to an increase in speculation rather than huge inroads into business. I think that business inroads will increase the stability of Bitcoin.

Don't get me wrong, I love the fact that my coins have increased 6X in value in the past two months, but at the same time doing business with something with that insane level of volatility is difficult to say the least. Maybe Bitcoin businesses should peg to the dollar Smiley

Somehow i feel that high value rises will be common thing for bitcoin, as it is a strongly deflationary currency.
We will have to just get used to it.

Also, BTC is not exactly impredictable. If the value of BTC will for long time keep rising fast, then this will be considered normal, and it will possibly be predictable enough to do buisness.

Macho
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November 08, 2010, 10:00:45 PM
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I'm glad that I'm not the only one worried about this. Reading the forums, there are all kinds of speculative uses, gambling, admitted ponzi schemes and similar crap ... but well, that's ok, nobody wants to forbid it, anyone can make crap if they want to ... what worries me is that it is generally accepted by bitcoin community as legitimate use - that is very dangerous thing, I thought people here would be more informed than that. This is the exact same mindset that brought about the economy crisis. The purpose of money is not to make more money! It is supposed to be a medium of exchange for real goods and services ... I'm watching with horror when there is a casino game posted and nobody speaks a word that that kind of use is extremely bad for bitcoin let alone it being immoral ... you make money on others desire to make money! Essentially taking advantage of their greed, it does not produce anything useful except nurturing bad aspects of human nature.

As far as speculation is concerned, that is simply a theft. Again, it does not produce anything ... it just siphons money away from real economy. Buying bitcoins for the hope you get more back than you put in later on is not investment, it's robbing people who make real contribution of their work. Investment would be giving someone bitcoins to make a new useful service which is going to rise the demand for bitcoin therefore up its value - that is real investment and the person investing in it deserves to make profit. Speculators are just thieves, shame on them! Wink

Why nobody else says this? Maybe because our real world economy was turned to crap and people see that crap everywhere so they consider it "normal" ... it is not! Wall Street is a parasite destroying everything it touches, please do not allow the same thing happen to bitcoin. If there are no real goods and services flowing between people who intend to actually use them (not speculate with them), it's a bubble economy and it is going to crash and burn sooner or later.

I'm not going into bitcoin right now exactly for this reason, there are no real things I would actually desire to buy for it so far so it is clear that the current value of bitcoin is a bubble for sure. If there are not real things available for bitcoin soon it is going to collapse just like our real world economy. And these "investors" are going to cry how it could happened, fools.
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November 08, 2010, 10:14:07 PM
 #7

While you were discussing speculation.. Did anyone notice the market crashed?

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ShadowOfHarbringer
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November 08, 2010, 10:15:02 PM
 #8

The market didn't crash...
Mtgox has just introduced trade fees of 0.65%, and that has apparently killed most of the speculation.

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November 08, 2010, 10:18:05 PM
 #9

The market didn't crash...
Mtgox has just introduced trade fees of 0.65%, and that has apparently killed most of the speculation.

I have a problem with that explanation for the drop in price. How do we know it's not simply because mtgox announced anyone can withdraw their money now... And they did?

I'm selling Mt. Gox USD and Bitcoin for cash, check or money order in the mail: http://bitcoinmorpheus.tumblr.com/

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ShadowOfHarbringer
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November 08, 2010, 10:22:09 PM
 #10

The market didn't crash...
Mtgox has just introduced trade fees of 0.65%, and that has apparently killed most of the speculation.

I have a problem with that explanation for the drop in price. How do we know it's not simply because mtgox announced anyone can withdraw their money now... And they did?

Ah, I didn't know about it, perhaps i am mistaken.

kiba
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November 08, 2010, 10:35:07 PM
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As far as speculation is concerned, that is simply a theft. Again, it does not produce anything ... it just siphons money away from real economy. Buying bitcoins for the hope you get more back than you put in later on is not investment, it's robbing people who make real contribution of their work. Investment would be giving someone bitcoins to make a new useful service which is going to rise the demand for bitcoin therefore up its value - that is real investment and the person investing in it deserves to make profit. Speculators are just thieves, shame on them! Wink

This is complete utter nonsense once you consider that speculators are risking their money and their credit rating. They essentially take risks so that farmers and other people don't have to speculate. They serve a very important economic function in ensuring supply meet demands. Who do you think give you the liquidity to convert your dollars into bitcoins and vice versa? Bitcoin speculators.

Who do you think have a vested interest in keeping the bitcoin economy growing? Bitcoin speculators.

Why do you think I post a bounty for a chrome bitcoin extension? Part of it is to make it easier for bitcoins to grow, thus increasing the price of bitcoins. Which in the end, help me make money.

grondilu
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November 08, 2010, 10:36:40 PM
 #12

Bitcoin is a young money.  It"s thus quite turbulent.
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November 08, 2010, 10:38:51 PM
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what worries me is that it is generally accepted by bitcoin community as legitimate use - that is very dangerous thing, I thought people here would be more informed than that. This is the exact same mindset that brought about the economy crisis. The purpose of money is not to make more money! It is supposed to be a medium of exchange for real goods and services ... I'm watching with horror when there is a casino game posted and nobody speaks a word that that kind of use is extremely bad for bitcoin let alone it being immoral ...

What?
Keep thy moral to thyself.

There's nothing "immoral" to gambling, if you take any non-subjective moral (ethics). And it's not bad to bitcoins either!

What worries me is somebody who thinks he can claim what's legitimate for somebody else to do with his own money and his own money only.

you make money on others desire to make money! Essentially taking advantage of their greed, it does not produce anything useful except nurturing bad aspects of human nature.

"Bad aspects" to you! What you call a vice, for others may be amusement. As utility is subjective, what you say ("does not product something useful") makes no sense. If gambling is what Joe wants, that's something useful to him. Stop wanting to impose your personal values on others.

As far as speculation is concerned, that is simply a theft. Again, it does not produce anything ... it just siphons money away from real economy. Buying bitcoins for the hope you get more back than you put in later on is not investment, it's robbing people who make real contribution of their work. Investment would be giving someone bitcoins to make a new useful service which is going to rise the demand for bitcoin therefore up its value - that is real investment and the person investing in it deserves to make profit. Speculators are just thieves, shame on them! Wink

 Shocked  Shocked  Shocked

Understand something, really: nothing can be stolen by consent. This is contradictory in terms. Not understanding the difference between lack of consent and presence of it is like saying sex and rape are the same.

Speculators are not stealing anything. Speculators are just people who try to predict future prices, aiming for profit. And, as always, profit adds wealth to society. Even the profit of a speculator.
A successful speculator is someone that correctly predicts price fluctuations. So, for example, he buys when a certain resource is less scarce, and save it to sell when it's more scarce. The action of the successful speculator helps to flatten price fluctuations, since he buys when the resource is more available (pushes up a downward price) and sells when people are lacking the resource in question (pushing down an upward price).
Interesting to note that the inverse also apply to failures. A speculator that fails will make things worse. As anyone that has losses, he'll be destroying wealth.

Memorize this: The more successful anyone is in pursuing profit through voluntary means, the more this person will help society.

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November 08, 2010, 11:19:51 PM
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Understand something, really: nothing can be stolen by consent. This is contradictory in terms. Not understanding the difference between lack of consent and presence of it is like saying sex and rape are the same.

Speculators are not stealing anything. Speculators are just people who try to predict future prices, aiming for profit. And, as always, profit adds wealth to society. Even the profit of a speculator.
A successful speculator is someone that correctly predicts price fluctuations. So, for example, he buys when a certain resource is less scarce, and save it to sell when it's more scarce. The action of the successful speculator helps to flatten price fluctuations, since he buys when the resource is more available (pushes up a downward price) and sells when people are lacking the resource in question (pushing down an upward price).
Interesting to note that the inverse also apply to failures. A speculator that fails will make things worse. As anyone that has losses, he'll be destroying wealth.

Memorize this: The more successful anyone is in pursuing profit through voluntary means, the more this person will help society.

+1 !
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November 08, 2010, 11:22:03 PM
 #15

Speculation was bound to happen and there is very little we can do about it because the whole point of Bitcoin is that nobody is in control.  

Truely free markets have a lot of benefits but one of their downsides is that they are intrinsically unstable. A bit like the weather. Positive feedback loops are a bitch, but to get rid of them you'd have to change human nature.

If Bitcoin will be anything like other disruptive technologies in history, we should expect a huge bubble as early adopters get overexcited, followed by a crash, followed by a few years of disillusionment and consolidation, followed by mainstream adoption.

Actually, I do think that certain technical modifications to Bitcoin could mitigate the excesses of speculation,  for example damping (Tobin-Tax-style transaction fees) and inflation (more bitcoins awarded for mining).

But those modifications would reduce the usefulness and desirability of Bitcoin, and they probably wouldn't prevent the coming bubble either.

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November 08, 2010, 11:35:04 PM
 #16

Actually, I do think that certain technical modifications to Bitcoin could mitigate the excesses of speculation,  for example damping (Tobin-Tax-style transaction fees) and inflation (more bitcoins awarded for mining).

I very much hope no such thing will be done.  If it is, I might very well sell my bitcoins as I will lose confidence in this money.

Speculation is a zero-sum game.  It is mainly harmless.   Doing something against it would only add useless complexity into the system.


If some people would like to see an non-fixed aggregate cryptocurrency, I suggest they fork bitcoin.  NOW.  Or as soon as possible.  The sooner they fork bitcoin into such a currency, the more sure we will be that bitcoin will never be like that.
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November 08, 2010, 11:56:48 PM
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the coming bubble
If you know there is a bubble coming you can speculate against it, making a nice profit for yourself and at the same time help everyone by smoothing down the bubble.
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November 09, 2010, 12:19:04 AM
 #18

Actually, I do think that certain technical modifications to Bitcoin could mitigate the excesses of speculation,  for example damping (Tobin-Tax-style transaction fees) and inflation (more bitcoins awarded for mining).

I very much hope no such thing will be done.  If it is, I might very well sell my bitcoins as I will lose confidence in this money.

Speculation is a zero-sum game.  It is mainly harmless.   Doing something against it would only add useless complexity into the system.


If some people would like to see an non-fixed aggregate cryptocurrency, I suggest they fork bitcoin.  NOW.  Or as soon as possible.  The sooner they fork bitcoin into such a currency, the more sure we will be that bitcoin will never be like that.


Speculation is not zero sum. Speculating is making an offer. If the offer is accepted it makes the speculator better off. No one will take the offer unless it makes them better off. So by their own values both are made better off.

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November 09, 2010, 12:32:08 AM
 #19

This is what I'm talking about ... the bitcoin community is infested with mindless cheerleaders for profit thinking it s ok to completely divorce economy from human values and physical production. This is the EXACT same nonsense we were bombarded with when deregulation of US economy was pushed bringing rise to such "useful financial instruments" like derivatives, "encouraging 'investment'", "stimulating economy" ... we've heard it all ... in the meantime industry was destroyed, physical production plummeted, millions of people found themselves on the street all the way speculators made wonderful profits, charts were happily jiggling on the way up ... that's how "important role" they play.

If this is the kind of people using bitcoin then it is already dead, it just doesn't know it yet. Exactly as many people knew US economy is done and over with when they saw that 99% of it was in worthless paper traded by speculators robbing regular people blind, who just now are waking up to the fraud when they realize they've lost everything while banks are making record profits.

keep thy moral to thyself? this is the exact mindset of financial sharks who do not give a damn about the consequences of their actions, the only thing that matters is profit. Am I going to make million people starve to death by my food speculations to jack up prices and make profit? Who gives a flying fuck ... these people are scum, lowlifes of human society. What do you provide anybody by speculation? Who does it help? It does nothing ... the fairytales you recite here are excuses for you to not feel guilty robbing people. What good does it make to buy rice at certain price with the intent to sell it for higher price? NOTHING! It just creates artificial demand, a bubble, making rice more expansive that it really should be according to real market making people starve in the process! If you do this kind of thing, you're a leech on human society feeding of off others and I despise you!
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November 09, 2010, 12:37:42 AM
 #20

Rising rice prices help feed and clothe rice farmers.

If the prices rose too far, the same speculators would lower them to reasonable levels at which people could afford to buy and eat rice.

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