hominin (OP)
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April 12, 2013, 03:42:46 PM |
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i am, as the title suggests, a newbie so I'm not sure if these forums are always this bleak but the topics suggest it might be heavily caused by the price drops caused by whatever. however, I've finally analyzed my own bleakness on the issue and here it is in case it resonates with others. I've been into Bitcoin for a little over a year now, not giving it much thought other than initially learning just enough to have a little trust in using it for relatively small transactions. Then, as I enjoyed the extra freedoms, I developed a sweet spot for what it represents and the technology behind it. However, the thought of hoarding Bitcoins was never a concept; buy Bitcoins to buy stuff with Bitcoins was about it. But then I got stuck with some when a particular transaction I bought Bitcoins for didn't end up happening.... Then the boom came and all of a sudden, I found myself checking the price of Bitcoins even when I had no plans to use any ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) And once the drop in prices got into full swing, I found myself with a sense of loss.... WTF?! I bought what I have at $20, the thought of selling them for a profit was still an option, but I somehow felt that more than doubling my money was still a loss?!... Examining the absurdity of this feeling, I also came to the realization that I have been avoiding buying things I would like to buy so I could hold onto these damn coins! That was the provebial light bulb; the problem wasn't the crash, it was the boom! Having developed a bunch of wealth without doing anything, I had made myself a slave of it, with the coins controlling my [purchasing] behavior instead of serving it! Obviously, once you become mindful of the psychology, you are freed from it ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) Bitcoin is a very useful tool for facilitating exchange. For it to be more useful, more people need to be encouraged to use it, not hoard it! I believe this crash is going to serve a lot of useful purposes; with the large publicity it generated, it will discourage hoarding behavior somewhat (panic sellers would have loved the liquidity!) and if Bitcoin holds public interest long enough or recovers quick enough, it will prove its resilience to more people, hopefully causing more circulation ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) As for me, I've now gone and spent my coins in exchange for things I like and I am happy! I no longer feel the need to check on prices, it can wait till the next time I need to use Bitcoins.. And if you send me more, I will spend that too ![Grin](https://bitcointalk.org/Smileys/default/grin.gif) Alternatively you can spend it yourself for stuff you like, just don't hoard it, keep it circulating; its better for Bitcoin and it will make you happier ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) Disclaimer: I make no claim to knowing the secret of happiness or mastering the concepts of Bitcoin or market forces or human psychology, simply extrapolating from analysis of my own head, however I can attempt to provide those services in exchange for Bitcoin to spend ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif)
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markymark
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April 12, 2013, 04:18:42 PM |
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Hang onto them. This is still a new frontier and over time BTC is here to stay. You'll be glad you held your ground. Keep acquiring BTCs and don't worry about the price. You'll wake up some day and be plesantly surprised.
Mark
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Mogwai
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April 12, 2013, 04:34:28 PM |
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It's hard to stop thinking in $ at this time. You have something other people want and it immediately switches your mindset.
But the Bitcoin did not crash. Every Change in value ends up in a correction in the opposite direction. It's still worth a lot more than 2012.
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odolvlobo
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April 12, 2013, 04:51:52 PM |
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I think you are almost there.
The real value in Bitcoin is not the value of the bitcoins. It is the value of the industry and business built up around it. Sure you can buy some bitcoins and sit on them and hope for the price to rise and make you a millionaire, but the real profit is in building a business that grows into something that makes you a million dollars every year.
Bitcoin is wide open. The bitcoin businesses that have sprung up weren't started by rich people with lots of money to burn. They were started by people like you and me. These people had an idea and they built something, and they are being rewarded even as the price of BTC plummets.
Take casascius, for example. He doesn't do anything special. He makes physical bitcoins and he has done very well. He's a smart guy and I have no doubt that his next project will be just as successful.
Take johnniewalker, for example. I have a lot of respect for him. He isn't the smartest guy here and he hasn't been that successful yet, but he keeps trying. Eventually, he is going to come up with something great and he will be amply rewarded for all his efforts.
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hominin (OP)
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April 13, 2013, 01:59:31 AM |
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It's hard to stop thinking in $ at this time. You have something other people want and it immediately switches your mindset.
But the Bitcoin did not crash. Every Change in value ends up in a correction in the opposite direction. It's still worth a lot more than 2012.
yes, mindfulness is as hard as it is easy but does wonders for correcting those mindsets and keeping us happy ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) I'm just using the term 'crash' as shorthand for the 'big price drops recently', I have no doubt that BTC will bounce back as it is very useful and people like buying useful things ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) Hang onto them. This is still a new frontier and over time BTC is here to stay. You'll be glad you held your ground. Keep acquiring BTCs and don't worry about the price. You'll wake up some day and be plesantly surprised.
Mark
some mornings would be pleasant surprises, others quiet unpleasant. the harmful thing there is that hoarding BTC basically drags competitiveness (if you're making a profit from the boom/bust/boom/bust, it is at the expense of others) into a refreshing cooperative system. Competition, even if you're winning, is stressful. I'd rather not be a winner or a loser but just help out people who help me out ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) it is true that hoarding speculators that enjoy the competition are needed by the system as well so it can grow, but would be inclined to think that obtaining an unhealthy ratio of competitors (buying and selling bitcoins) to cooperators (buying and selling commodities and services with bitcoins as well as mining and software development) is what causes the crashes. hopefully it is resolved by more people switching to the cooperators team rather than just leaving BTC but we'll have to wait and see how it plays out. I think you are almost there.
The real value in Bitcoin is not the value of the bitcoins. It is the value of the industry and business built up around it. Sure you can buy some bitcoins and sit on them and hope for the price to rise and make you a millionaire, but the real profit is in building a business that grows into something that makes you a million dollars every year.
Bitcoin is wide open. The bitcoin businesses that have sprung up weren't started by rich people with lots of money to burn. They were started by people like you and me. These people had an idea and they built something, and they are being rewarded even as the price of BTC plummets.
Take casascius, for example. He doesn't do anything special. He makes physical bitcoins and he has done very well. He's a smart guy and I have no doubt that his next project will be just as successful.
Take johnniewalker, for example. I have a lot of respect for him. He isn't the smartest guy here and he hasn't been that successful yet, but he keeps trying. Eventually, he is going to come up with something great and he will be amply rewarded for all his efforts.
cheers, that is exactly the kind of healthier thinking i've returned to - thanks to the crash ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) i am very thankful to Bitcoin for re-awakening the part of me that had given up on finding something that can make a difference! i don't necessarily agree with all of the political positions behind it, but the power of alternative markets and currencies to make a difference has already proven itself to a degree.. and that is something to be excited about ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) i am currently trying to learn as much as i can, as quickly as i can regarding those concepts, and welcome any mature discussion as i type away my interpretations based on knowledge obtained so far. as for starting a business, i find myself plagued by the same problems as in the mainstream economy; have the skills to make things happen (software, hardware, design, architecture, development, admin etc) but they're spread out - jack of all trades (involving tech) but master of none (fairly decent at each but not as good as someone focusing in a single field) and definitely lacking business (money side) and marketing skills - i don't really mind but it does get in the way whenever i take the entrepreneurial path... except in cases where i can collaborate with people that have the opposite skill sets; business minded people who need someone with an overall, mature view of technology to coordinate it. maybe there are some here? ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif)
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WSwatch
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April 13, 2013, 02:10:23 AM |
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This is an interesting discussion. However, realistically speaking, bitcoins seem to be more useful as a store of value rather than as a medium of exchange. Perhaps bitcoin's utility in the future will be like that of gold--good for storing value or backing other currencies, but not so good for buying things.
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odolvlobo
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April 13, 2013, 03:47:53 AM |
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This is an interesting discussion. However, realistically speaking, bitcoins seem to be more useful as a store of value rather than as a medium of exchange. Perhaps bitcoin's utility in the future will be like that of gold--good for storing value or backing other currencies, but not so good for buying things.
That scenario will mean the death of bitcoin because its only intrinsic value is its utility as a medium of exchange. In order for the currency to have any value at all, the Bitcoin system must be viable. Speculative bubbles like this one are the direct result of bitcoin being overvalued as a store of value.
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WSwatch
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April 13, 2013, 03:52:16 AM |
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I think there are differing degrees to which an asset can be used for exchange. Something like gold can be exchanged between individuals and institutions, but it's not that convenient for small, day-to-day transactions. Clearly bitcoin needs to be exchangeable to have value, but it doesn't need to be the end-all solution for every split-second nanopayment to have value.
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transcendco
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April 13, 2013, 03:53:39 AM |
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I would hold on as well.
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fgjfgh63
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April 13, 2013, 04:01:21 AM |
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right
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rbgrish
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April 13, 2013, 04:13:51 AM |
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I've been reading and studying about bitcoins for the last eight or nine months. But the crash was what I actually got me the most excited about opening an account and learning to transact with bitcoins. I believe the crash in the recent start of a comeback will do more to validate bitcoins than any thing so far. The crash is proving that bitcoins can come back on their own, nobody stepped in to bail them out no government or corporation had to back stop them, they have just proven they are a real store of value. On their own merit they have survived a "market cycle" for lack of a better comparison. And though not maintaining the 250 value which was not real "yet". They have still stabilized at a higher value than they were at before.
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mdahl
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April 13, 2013, 04:20:19 AM |
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The crash was caused primarily by a huge flood of newbies into the market, who end up using mtgox. When the server lags due to the flood of new traffic, the newbies panic-sell because they aren't yet well-informed on how the system works, economics, etc. With the huge pile of volatility already present (from overspeculation; that is the currency value was artificially boosted by speculation and not backed by actual spending/movement of goods and services) all the traders manage to panic and we fall into a liquidity trap. Gox serves to exacerbate the people's fears by shutting down for a bit (so it can sell off its bitcoins and make a hefty profit) essentially destroying confidence in the name of greed. Thus I agree; we really need actual spending power to back up artificially high bitcoin prices.
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hominin (OP)
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April 13, 2013, 05:03:45 AM |
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This is an interesting discussion. However, realistically speaking, bitcoins seem to be more useful as a store of value rather than as a medium of exchange. Perhaps bitcoin's utility in the future will be like that of gold--good for storing value or backing other currencies, but not so good for buying things.
I would be interested in learning why you feel that is the most logical conclusion. Personally, lack of liquidity, nicely demonstrated now, would lead me to conclude that it is quiet bad at storing value. I would not want to store my savings in a commodity where trying to get them out is likely to cause a reduction in its value regardless of how small they are ![Shocked](https://bitcointalk.org/Smileys/default/shocked.gif) Currently, I seem to be watching a whole lot of panic sellers stuck in a bottleneck, not a good look for savings or investments. Whereas when it comes to spending, I can send payments immediately and without a middle man to take some of it. Works equally clean when i receive it. That to me is a brilliant medium of exchange (or at least a good iteration towards one) and with all the recent publicity, one that has the potential to be widely accepted ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) On their own merit they have survived a "market cycle" for lack of a better comparison.
You don't need a better comparison, "market cycle" is exactly what happened because people are trying to trade bitcoins the same way they would trade any other commodity in the markets. That is probably also why the new investors were attracted to Mt. Gox, the place looks and works like any other market they have been trading in. One of the reasons why I think this crash has been a blessing; it has the potential to make people understand bitcoin and its possibilities rather than taking the simplistic approach of simply treating it like any other commodity. But, there is also the possibility that the cooperators will move on if the currency stays unsuitable for exchange due to excessive volatility created by the competitors. If that were to occur, It would be interesting to see how the competitors would prop up the value of a currency you can't buy anything with ![Roll Eyes](https://bitcointalk.org/Smileys/default/rolleyes.gif)
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shibaji
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April 13, 2013, 05:10:16 AM |
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Very well written. I concur with your feelings. Thank you.
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mdahl
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April 13, 2013, 05:51:39 AM |
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This is an interesting discussion. However, realistically speaking, bitcoins seem to be more useful as a store of value rather than as a medium of exchange. Perhaps bitcoin's utility in the future will be like that of gold--good for storing value or backing other currencies, but not so good for buying things.
Without actual products and services backing bitcoin up, it's going to be incredibly volatile due to the value being backed only by the confidence of speculators. Thus your assertion would render itself rather invalid. Bitcoin's only going to become stable if people start to attach the value of bitcoin to the value of things. That of course happens when people buy and sell stuff with BTC...
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Mouser
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April 13, 2013, 07:31:23 AM |
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This is an interesting discussion. However, realistically speaking, bitcoins seem to be more useful as a store of value rather than as a medium of exchange. Perhaps bitcoin's utility in the future will be like that of gold--good for storing value or backing other currencies, but not so good for buying things.
That scenario will mean the death of bitcoin because its only intrinsic value is its utility as a medium of exchange. In order for the currency to have any value at all, the Bitcoin system must be viable. Speculative bubbles like this one are the direct result of bitcoin being overvalued as a store of value. Exactly. BTC is not fractional. BTC is usury free. That is why I believe in it. That is why I bought it. Hundredth or centiBTC (cBTC) and thousandth or milliBTC (mBTC) and millionth or microBTC (uBTC) need to be introduced as needed so BTC can continue to be used as currency which is where its value lies at a level which is confortable to people everywhere. $266 BTC are unwieldly for most people to use as currency. When BTC reaches $200+ again it should be reset to $2+ (cBTC) so it can continue to easily be used as currency. BTC value is as a currency. There are a fixed amount of units. To accomodate new users and fluid trade a currency reset or splitting at successive points is required. No wealth or value is ever lost and BTC stays at a currency comfort level for trade.
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TMAN
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Exchange Bitcoin quickly-https://blockchain.com.do
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April 13, 2013, 07:41:21 AM |
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why all the focus on Value & hoarding?
why not just buy more coins with fiat to spend online, keep some - everyone needs to save, but the only way to get this mainstream is to get the coins changing hands - get more vendors to accept it. pure speculation is bad for adoption!
That's my 2c anyway!
T
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magical
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April 13, 2013, 07:49:08 AM |
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Ripples are the future!
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shibaji
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April 13, 2013, 08:06:12 AM |
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Ripples are the future!
Why ?
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schmokel
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April 13, 2013, 08:10:21 AM |
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This has been my first foray into investments over which I have active control. I don't know about you guys, but it is both terrifying and exciting to think that with the right trades, your pile of bitcoins can either explode or vanish. Or you can just stash them away in a cold storage wallet which can never be taken from you. That's pretty cool when you think about it. It is also disturbing to see the volatility resulting from widespread panic and criminal attacks on the bitcoin infrastructure. I'm also disturbed by the lack of pricing information available when Gox is down. Seriously .. the market is absolutely paralyzed without it. Thankfully, there isn't nearly the kind of panic we saw before. It seems like people are adjusting to life with DDOS. Anyway, the current volatility makes its use as a bona-fide currency impractical since manufacturers generally don't buy capital, labor, materials, etc. in bitcoins. What's clear is that this is definitely a work-in-progress and the bitcoin you see 5 years from now will look very different than the bitcoin you see today. Probably much like the internet itself as it morphed from pure html to what we have now. After all the speculation, hand waving, and so on you see over in the big boy forums, I think what is evident is nobody really has a solid pulse on what will happen in the next hour, day, month or year. You read what the speculators have to say, and it reminds me of a broken clock being right twice a day. Every bull has his day and every bear has his day. Predicting where BTC/$ will be tomorrow is like predicting the weather. In fact, I'd say its considerably harder to predict than the weather. Tomorrow NK could launch nukes @ Japan. What happens to BTC? There could be a DDOS against all the exchanges that never lets up and basically cannot be mitigated. What happens to BTC? A security flaw, another hacked exchange, gov't regulation, another panic caused by some unforeseen factor, and so on are all distinct possibilities. Hell, the people running each exchange could be threatened by hired guns. If this really takes off, a lot of very powerful dynasties will be extremely agitated. I think this will either be an unbelievable success story or a dismal failure .. lots of money will change hands in the next few months & years on these exchanges. Grab your popcorn ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif)
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