Stephen Reed's Million Dollar Logistic Model

[SlipperySlope]

BTW I trade options so I know about how options price works and I know quite a bit about technical analysis.

One thing I can say is that most bubble charts have the same shape.    If you look at AAPL in 2012 compare it to FB,  TSLA,  AMZN today.      You'll find an uncanny similarity in there shapes.   With only a variance of 2-4 weeks.   Ive looked at past bubbles like MSFT,  YHOO,  NOK, CSCO too.   They have some resemblance to curent bubbles but slightly different.

Anyways by studying shapes of bubbles I predicted the top of TSLA,  FB,  NFLX they all crashed this week.   I believe AZMN is showing signs of bubble but not the top yet.   Same as GOOG

My theory is that bubbles are more technical than fundamental but the similarity is they disconnect from fundamentals and then eventually fundamentals pull them back into alignment.

I don't trade bitcoin so I don't know its chart.   But a sign of bubbles is when speculators invest on future market domination.   I believe they do this to justify their investment as well as recruiting greater fools so they can exit.  To me bitcoin smells exactly like a pump and dump.  

I agree with your viewpoint with regard to bubbles. Bitcoin prices get ahead of the fundamentals. I admit selling at the April 2013 peak and buying back during the ensuing collapse. There is an element of pump and dump going on - but I think that is not because Bitcoin is a scam but rather because when an asset goes from zero to potentially millions USD per unit, bubbles are going to be inevitable and is it not reasonable to expect that speculators will try to time them?

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[twiifm]

From my comments on various MarketWatch.com articles, I believe that only a minority of ordinary stock market investors have purchased bitcoins, and even fewer are true believers. And the ponzi scheme, pump and dump notions have been applied to bitcoin for four years by skeptics.

A true believer is one who believes that the Bitcoin economy will achieve future market domination.

I became a true believer in the 30 minutes that it took me to read Satoshi Nakamoto's paper back in 2010. I am a computer scientist with a degree in applied mathematics, who also has a great interest in business. I have lived long enough to witness full adoption of many disruptive technologies, e.g. TCP/IP, bank credit cards, ACH (US Automated Clearing House), bank check truncation, Automatic Teller Machines, emailed financial statements, hard disk drives, open source software, microcomputers, electronic word processing, digital spreadsheets, relational databases, algorithmic credit scoring, Virtual Private Networks, High Frequency Trading, etc. Back in 2010 I had recently worked with X.509 certificate trust chains and knew how digital signatures worked. I also understood how distributed peer-to-peer networks and clients worked at the developer level. Thus it was easy for me to understand how Satoshi's platform operated. I fully understood the problems with the current financial infrastructure, having programmed for a wide variety of bank software applications, and also as an ordinary banking customer.

Whether a particular Bitcoin company can build a moat around its core business to fend off competition, whether a particular Bitcoin company can endure and achieve market domination - is not my concern. Whether Bitcoin achieves future market domination as a payment mechanism, as a technology platform, and as a deflationary store of value - is my concern.

One of the reasons I came to this board is because my old retired father got a tip somewhere to invest in bitcoins because "its the future of curency", "its like digital gold", "designed deflationary - always go up in price", etc..

I got so sick of hearing this drivel and thinking how all these unsophisticated folks will get suckered into it and lose their money.   It happens on Wall Street all the time w tech stock pumping.   Before that it was mortgages.   And before that it was internet stocks.  The worst are penny stocks and small & micro cap.   But at least w stocks we have fundamentals to use as price indicator.

I also have some background in economics and finance.   So I understand the finance/ banking system

The simple economic reason bitcoin will fail as replacing fiat.   It is not centrally controlled.   The power to adjust the supply of money is extremely crucial in order to maintain liquidity in money markets.  This didn't happen overnight it evolved to this stage through painful lessons of history.  Without this aspect bitcoin is inefficient as money.  

As a technology I think cryptocurrency has potential.   The public ledger aspect of it is extremely intriguing.  Bitcoins potential is in money transfer not as currency.   This is what GS and Buffett said and I agree.    I predict that in the future the banks will create some digital cash using public ledger idea.   But its not a separate currency but based on dollars in your bank account.   Thats what consumers want.   Something like M Pesa or Ripple

Anyways,  you seem like a smart guy.   Smarter than most of the bitbugs I've encountered or "believers" if using your semantics

I suggest you look into a coursera.org course called "economics of banking" taught by prof Merhling of Columbia U.  Theres no politics in this course.   Just banking,  how it functions,  its history.   I think you will understand money much more and how banking infrastructures weakness is not because Central Banking or fractional reserve banking.   It has more to do w regulations surrounding derivatives, prop trading,  shadow banking, etc.    Things that can't be solved by inventing a new currency

https://class.coursera.org/money-001
https://class.coursera.org/money2-001

If more crypto developers understood how money works then maybe the next iteration won't be so held back by immature politics or designed to be abused by speculators.  

If you want to design something useful,  then design it to work on top of what we have not replace it.   Why do you want millions of indiviual networked bankers?   Can they provide financial services like loans or credit?  Deal liquidity? Make markets?  Or are they there just to support the network for blockchain?  Why do you need a new curency when it has to be converted back to dollars?   I just don't get what problems bitcoin is supposed to solve

[SlipperySlope]

The simple economic reason bitcoin will fail as replacing fiat.   It is not centrally controlled.   The power to adjust the supply of money is extremely crucial in order to maintain liquidity in money markets.  This didn't happen overnight it evolved to this stage through painful lessons of history.  Without this aspect bitcoin is inefficient as money.  

You challenge one of the main features of Bitcoin. History shows that governments cannot resist printing money for themselves, or causing inflation to reduce the impact of government debt. The US Federal Reserve props up the banking system by creating money to loan at low rates to banks, and creates money to purchase toxic assets from them. Central control of Bitcoin, I believe, will be limited to prudent government regulations necessary to protect consumers, while encouraging innovation.

Because business cycles are currently related to credit expansion and contraction, a Bitcoin dominated economy may not need central banks to create money to prop up collapsed equity markets. A bitcoin economy is one in which credit as we know it will be replaced by something else. Loans cannot be easily made when denominated in a deflationary currency because the loan interest rate must be greater than the rate of deflation, which is currently about 10x annually. I think that future homeowners will rent-to-own rather than obtain 30 year Bitcoin mortgages. The monthly payments would be indexed to the rate of deflation.

As a technology I think cryptocurrency has potential.   The public ledger aspect of it is extremely intriguing.  Bitcoins potential is in money transfer not as currency.   This is what GS and Buffett said and I agree.    I predict that in the future the banks will create some digital cash using public ledger idea.   But its not a separate currency but based on dollars in your bank account.   Thats what consumers want.   Something like M Pesa or Ripple

According the economic principal popularized in Crossing the Chasm, it will be difficult for entrenched financial institutions to create new financial products that cannibalize their existing revenue streams. The US Federal Reserve has been pushing for immediate settlement of transactions but that is simply not good enough. Bitcoin's no-recourse feature makes settlement immediate. Bank card operators charge high fees to pay for the fraud that the current system allows and which Bitcoin prevents.

I suggest you look into a coursera.org course called "economics of banking" taught by prof Merhling of Columbia U.  Theres no politics in this course.   Just banking,  how it functions,  its history.   I think you will understand money much more and how banking infrastructures weakness is not because Central Banking or fractional reserve banking.   It has more to do w regulations surrounding derivatives, prop trading,  shadow banking, etc.    Things that can't be solved by inventing a new currency

https://class.coursera.org/money-001
https://class.coursera.org/money2-001

Good tip. I have used coursera before.

If you want to design something useful,  then design it to work on top of what we have not replace it.   Why do you want millions of indiviual networked bankers?   Can they provide financial services like loans or credit?  Deal liquidity? Make markets?  Or are they there just to support the network for blockchain?  Why do you need a new curency when it has to be converted back to dollars?   I just don't get what problems bitcoin is supposed to solve

I am familiar with the stack model of software development, e.g. building RDF on XML, building HTTP over TCP/IP, etc. But Bitcoin startups are discarding the upper layers of the financial services stack and plugging in at the lowest possible level for a re-engineering of the system. For example, consider a Bitcoin ATM compared to a bank ATM. The Bitcoin ATM uses the internet to operate same as a bank ATM - but the Bitcoin ATM does not involve the vast overhead of the banking infrastructure. A bitcoin point of sale device likewise plugs into the cashier station in a manner similar to a bank card POS device. A Bitcoin wallet on a smartphone fits in a pocket in a manner similar to a conventional leather wallet holding bank cards.

Billions of individual Bitcoin users will be their own bankers but will not themselves be providing banking services to others. Bitcoin is programmable money that permits new financial services to be operated by third parties that add value to the system.

If indeed Bitcoin becomes the dominant financial instrument, then converting back to fiat would not be needed. For example, it is difficult for taxing authorities and public utilities to accept bank card payments from taxpayers and ratepayers because of the high merchant fees that cannot reasonably be passed on to the public. But Bitcoin is free for the receiver so when taxing authorities accept Bitcoin then the last reason to convert to fiat is gone.

Bitcoin is supposed to solve all the problems caused by the legacy financial infrastructure - the most severe of which I believe is the horrific misallocation of scarce resources given inflation, and the boom and bust business cycles caused by fiat-created credit.

[BitDreams]

re:

Slippery Slope: For example, consider a Bitcoin ATM compared to a bank ATM. The Bitcoin ATM uses the internet to operate same as a bank ATM - but the Bitcoin ATM does not involve the vast overhead of the banking infrastructure...  

And the bitcoin ATM certainly doesn't use WindowsXP where an estimated 95% of traditional ATM are still using XP!

http://money.cnn.com/2014/03/04/technology/security/atm-windows-xp/

re:

 twiifm: If more crypto developers understood how money works then maybe the next iteration won't be so held back by immature politics or designed to be abused by speculators.  

I believe there is enough evidence to prove that the existing system is fragile from the ground up. If not so, there would have been no need for QE in all its flavors since, what, 2008? If not so, the average lifespan of the dominant currency might be longer than 27 years.

http://georgewashington2.blogspot.com/2011/08/average-life-expectancy-for-fiat.html  

Even today, after all the bailouts, Citibank failed a 'stress test' - what's that supposed to mean anyway? How do we measure it when the most important ledgers were kept of the balance sheets.

I worked at a bank. I would read internal guidance on a regular basis. I learned that it was 'in the best interest of our customers' to get them on Libor, 'because it is more stable' - yeah... http://en.wikipedia.org/wiki/Libor_scandal - they left out the part where it was more stable for collusion and profit through theft.

I would regularly read guidance internally in the banks that was later echoed by Federal Reserve publications. Not only are banks ahead of the game but they rig it and plan its course, yet they still can't survive without extortionary tactics.

This was not fair to all the credit unions and small independent banks who were wise with their assets and leverage and still suffer the consequences through higher insurance costs and regulation - not to mention the damages to everyone else who's not a big bank.

I remember Greenspan saying in 2004 that adjustable rate mortgages 'might be the better deal' - http://usatoday30.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm - yeah... how'd that work out.

Start with an anti-fragile base and build on top of it. Just like Microsoft has chosen to stop supporting WindowsXP on April 8th, Bitcoin developers can dump the old code and build from the ground up with the goal of lasting more than 27 years.

[twiifm]

re:

Slippery Slope: For example, consider a Bitcoin ATM compared to a bank ATM. The Bitcoin ATM uses the internet to operate same as a bank ATM - but the Bitcoin ATM does not involve the vast overhead of the banking infrastructure...  

And the bitcoin ATM certainly doesn't use WindowsXP where an estimated 95% of traditional ATM are still using XP!

http://money.cnn.com/2014/03/04/technology/security/atm-windows-xp/

re:

 twiifm: If more crypto developers understood how money works then maybe the next iteration won't be so held back by immature politics or designed to be abused by speculators.  

I believe there is enough evidence to prove that the existing system is fragile from the ground up. If not so, there would have been no need for QE in all its flavors since, what, 2008? If not so, the average lifespan of the dominant currency might be longer than 27 years.

http://georgewashington2.blogspot.com/2011/08/average-life-expectancy-for-fiat.html  

Even today, after all the bailouts, Citibank failed a 'stress test' - what's that supposed to mean anyway? How do we measure it when the most important ledgers were kept of the balance sheets.

I worked at a bank. I would read internal guidance on a regular basis. I learned that it was 'in the best interest of our customers' to get them on Libor, 'because it is more stable' - yeah... http://en.wikipedia.org/wiki/Libor_scandal - they left out the part where it was more stable for collusion and profit through theft.

I would regularly read guidance internally in the banks that was later echoed by Federal Reserve publications. Not only are banks ahead of the game but they rig it and plan its course, yet they still can't survive without extortionary tactics.

This was not fair to all the credit unions and small independent banks who were wise with their assets and leverage and still suffer the consequences through higher insurance costs and regulation - not to mention the damages to everyone else who's not a big bank.

I remember Greenspan saying in 2004 that adjustable rate mortgages 'might be the better deal' - http://usatoday30.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm - yeah... how'd that work out.

Start with an anti-fragile base and build on top of it. Just like Microsoft has chosen to stop supporting WindowsXP on April 8th, Bitcoin developers can dump the old code and build from the ground up with the goal of lasting more than 27 years.

I don't disagree that there are numerous problems in banking.  But it has more to do with regulations than what currency we use or how its made.

You say the current system is fragile.  That may be true but it isn't because of the Federal Reserve System.  The dollar is/was pretty stable.  The 2008 crisis has more to do w liquidity.  Banks like Bear Stearns & Lehman got too leveraged on mortgage derivatives.  But these derivatives were back w toxic assets.  Investors heard the rumors and worried their investments would go bust so they pulled out.  It's like a bank run but not because they feared collapse of dollars.  They feared the collapse of their investments.  As these MBS collapsed, the banks couldn't unwind them fast enough.  Other banks wouldn't lend them money so Bear & Lehman went insolvent.  Over at Goldman, their MBS was insured by AIG.  So that means AIG would implode if they had to payout all the insurance on Goldman's MBS.  It was a big mess. 

In terms of regulation there is a lot of controversy surrounding repeal of Glass Steagal.  And some people believe the repeal in 1999 was a major contributor to 2008 crisis 9 years later.  I happen to agree.

Dodd-Frank tries to address some of these issues but unsuccessful in reinstating Glass-Steagal itself.   Things like Volker Rule & ring fencing would help minimize damage if something like 2008 were to occur again

I'm for MORE regulations when it comes to banking not LESS.  It is my observation that many bitcoin activist are politically libertarian and in general prefer less to NO regulations.  Um, I just don't see it.  Money makes people greedy and I see more greed and corruption in bitcoin world than in mainstream banking.  The only difference is scale.  The Mt Gox saga didn't crash bitcoin only because bitcoin is fringe.  Imagine if that was NYSE or Nasdaq.  That would severely damage our economy

[BitDreams]

re:

Slippery Slope: For example, consider a Bitcoin ATM compared to a bank ATM. The Bitcoin ATM uses the internet to operate same as a bank ATM - but the Bitcoin ATM does not involve the vast overhead of the banking infrastructure...  

And the bitcoin ATM certainly doesn't use WindowsXP where an estimated 95% of traditional ATM are still using XP!

http://money.cnn.com/2014/03/04/technology/security/atm-windows-xp/

re:

 twiifm: If more crypto developers understood how money works then maybe the next iteration won't be so held back by immature politics or designed to be abused by speculators.  

I believe there is enough evidence to prove that the existing system is fragile from the ground up. If not so, there would have been no need for QE in all its flavors since, what, 2008? If not so, the average lifespan of the dominant currency might be longer than 27 years.

http://georgewashington2.blogspot.com/2011/08/average-life-expectancy-for-fiat.html  

Even today, after all the bailouts, Citibank failed a 'stress test' - what's that supposed to mean anyway? How do we measure it when the most important ledgers were kept of the balance sheets.

I worked at a bank. I would read internal guidance on a regular basis. I learned that it was 'in the best interest of our customers' to get them on Libor, 'because it is more stable' - yeah... http://en.wikipedia.org/wiki/Libor_scandal - they left out the part where it was more stable for collusion and profit through theft.

I would regularly read guidance internally in the banks that was later echoed by Federal Reserve publications. Not only are banks ahead of the game but they rig it and plan its course, yet they still can't survive without extortionary tactics.

This was not fair to all the credit unions and small independent banks who were wise with their assets and leverage and still suffer the consequences through higher insurance costs and regulation - not to mention the damages to everyone else who's not a big bank.

I remember Greenspan saying in 2004 that adjustable rate mortgages 'might be the better deal' - http://usatoday30.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm - yeah... how'd that work out.

Start with an anti-fragile base and build on top of it. Just like Microsoft has chosen to stop supporting WindowsXP on April 8th, Bitcoin developers can dump the old code and build from the ground up with the goal of lasting more than 27 years.

I don't disagree that there are numerous problems in banking.  But it has more to do with regulations than what currency we use or how its made.

In terms of regulation there is a lot of controversy surrounding repeal of Glass Steagal.  And some people believe the repeal in 1999 was a major contributor to 2008 crisis 9 years later.  I happen to agree.

Dodd-Frank tries to address some of these issues but unsuccessful in reinstating Glass-Steagal itself.   Things like Volker Rule & ring fencing would help minimize damage if something like 2008 were to occur again

I'm for MORE regulations when it comes to banking not LESS.  It is my observation that many bitcoin activist are politically libertarian and in general prefer less to NO regulations.  Um, I just don't see it.  Money makes people greedy and I see more greed and corruption in bitcoin world than in mainstream banking.  The only difference is scale.  The Mt Gox saga didn't crash bitcoin only because bitcoin is fringe.  Imagine if that was NYSE or Nasdaq.  That would severely damage our economy

I am for regulation that is enforced. If it is not enforced, it should be totally removed as regulation. Programmable money solves many barriers to enforcement. There will still be corruption but it won't be like rotting from the inside out.

Accepting that the IRS has ruled Bitcoin is a property, I'm for a wallet that calculates my income taxes on a real time basis. Reduce fraud everywhere and anywhere it can be rooted out and all of a sudden the garden is a lot greener for everyone.

[twiifm]

re:

Slippery Slope: For example, consider a Bitcoin ATM compared to a bank ATM. The Bitcoin ATM uses the internet to operate same as a bank ATM - but the Bitcoin ATM does not involve the vast overhead of the banking infrastructure...  

And the bitcoin ATM certainly doesn't use WindowsXP where an estimated 95% of traditional ATM are still using XP!

http://money.cnn.com/2014/03/04/technology/security/atm-windows-xp/

re:

 twiifm: If more crypto developers understood how money works then maybe the next iteration won't be so held back by immature politics or designed to be abused by speculators.  

I believe there is enough evidence to prove that the existing system is fragile from the ground up. If not so, there would have been no need for QE in all its flavors since, what, 2008? If not so, the average lifespan of the dominant currency might be longer than 27 years.

http://georgewashington2.blogspot.com/2011/08/average-life-expectancy-for-fiat.html  

Even today, after all the bailouts, Citibank failed a 'stress test' - what's that supposed to mean anyway? How do we measure it when the most important ledgers were kept of the balance sheets.

I worked at a bank. I would read internal guidance on a regular basis. I learned that it was 'in the best interest of our customers' to get them on Libor, 'because it is more stable' - yeah... http://en.wikipedia.org/wiki/Libor_scandal - they left out the part where it was more stable for collusion and profit through theft.

I would regularly read guidance internally in the banks that was later echoed by Federal Reserve publications. Not only are banks ahead of the game but they rig it and plan its course, yet they still can't survive without extortionary tactics.

This was not fair to all the credit unions and small independent banks who were wise with their assets and leverage and still suffer the consequences through higher insurance costs and regulation - not to mention the damages to everyone else who's not a big bank.

I remember Greenspan saying in 2004 that adjustable rate mortgages 'might be the better deal' - http://usatoday30.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm - yeah... how'd that work out.

Start with an anti-fragile base and build on top of it. Just like Microsoft has chosen to stop supporting WindowsXP on April 8th, Bitcoin developers can dump the old code and build from the ground up with the goal of lasting more than 27 years.

I don't disagree that there are numerous problems in banking.  But it has more to do with regulations than what currency we use or how its made.

In terms of regulation there is a lot of controversy surrounding repeal of Glass Steagal.  And some people believe the repeal in 1999 was a major contributor to 2008 crisis 9 years later.  I happen to agree.

Dodd-Frank tries to address some of these issues but unsuccessful in reinstating Glass-Steagal itself.   Things like Volker Rule & ring fencing would help minimize damage if something like 2008 were to occur again

I'm for MORE regulations when it comes to banking not LESS.  It is my observation that many bitcoin activist are politically libertarian and in general prefer less to NO regulations.  Um, I just don't see it.  Money makes people greedy and I see more greed and corruption in bitcoin world than in mainstream banking.  The only difference is scale.  The Mt Gox saga didn't crash bitcoin only because bitcoin is fringe.  Imagine if that was NYSE or Nasdaq.  That would severely damage our economy

I am for regulation that is enforced. If it is not enforced, it should be totally removed as regulation. Programmable money solves many barriers to enforcement. There will still be corruption but it won't be like rotting from the inside out.

Banking is a cat & mouse game between bankers & regulators.  These bankers did nothing illegal.  Just they outsmarted the regulations.

How does programable money solve barriers to enforcement?  Lets say I created derivatives on bitcoin.  How is that regulated?  Mt Gox isn't regulated by SEC.  That's why they can lose the customers money and just declare bankruptcy

[BitDreams]

[qoute] Banking is a cat & mouse game between bankers & regulators.  These bankers did nothing illegal.  [/quote]

Bitcoin is the mousetrap.

 LoL... now you're just trying to place some smoke and mirrors in front of me. After you posted that one liner right there I had to stand up and dance the boogaloo, twist and shout and I went over next door and high fived the neighbor!

I probably won't be able to respond to many more of your posts because I'm laughing too hard but here's just a smattering of a reply to your one-liner.

http://www.washingtonsblog.com/2013/03/stunning-crimes-of-the-big-banks-updated-list.html

http://www.nakedcapitalism.com/2012/10/why-it-is-essential-that-criminal-bankers-are-prosecuted.html

http://www.libertygoldandsilver.com/GoldandSilverBlog/?p=385

http://finance.fortune.cnn.com/2011/03/15/inside-job-director-on-geithner-goldman-and-criminal-bankers/

http://www.ritholtz.com/blog/2013/09/5-years-after-financial-crisis-big-banks-are-still-committing-crimes/

libor, robo-signing mortgages, inflated valuations so they could print more money, improper accounting of deeds/double spending, illegal repossessions... which is a trail of fraud from the top to the bottom!

http://www.appraiserspetition.com/ <- 11,000 appraisers tried to tell Congress of bank fraud OVER A DECADE AGO!

You want to build upon what we got now?

How does programable <sic> money solve barriers to enforcement?  Lets say I created derivatives on bitcoin.  How is that regulated?  

Instantly auditable 24/7 through the block chain. You're talking about the edges, I'm talking about the core.

I can show you evidence where banks are collecting and foreclosing on property they don't actually hold the deed for. What's that worth to eliminate the MERS pilfering organization who stole document fees from every state in the nation?

Bitcoin works at the core so enforcers can concentrate on the edges.

I believe the more the law understands bitcoin the more they will work to support it. Bitcoin benefits everyone but the sharks.

[twiifm]

I dont support criminals.  I said Lehman & Bear didnt do anything illegal to cause their collapse.  I already said problems in banking is due to weak regulations.  We need MORE regulations not LESS

The problem w your bitcoin is these problems dont arise from arise from currency creation itself but from people outsmarting the system so they can profit.  People are corrupt not the currency.

You are naive if you think bitcoin offers anything other than an innovation in money transfer

[SlipperySlope]

@SlipperySlope do you believe we are near the bottom based on your charts??

Yes, I share the feeling that we are near the bottom. I believe the resolution of the November 2013 bubble is remarkably similar to the resolution of the April 2013 bubble. Others have observed that twice prices dipped down briefly to around $400.

However I would not be surprised if prices fell briefly to an even lower level as $400 is about 34% of the peak at $1163. Back in the collapse of the April 2013 bubble, prices fell from a peak of $259 to $63 which was about 24% of the corresponding peak.

Sorry I cannot be more precise. The logistic model offers little in the way of short term price prediction aside from the price direction bias towards the trendline.

In the last week, bitcoin prices have dropped from $600 to under $500.

An hour ago I purchased some fractional coin from the Robocoin ATM close to my house. Looks like I will make another purchase tomorrow given the bargain prices available. There are two more Bitcoin ATMs in town made by Lamassu, I believe - and I want to try them out. It is so much fun to operate the machines that I like to spread out the purchases.

Here is a video about this particular ATM. Note that I am not a gun enthusiast, but welcome them to our community. I expect that eventually Bitcoin ATMs will become as numerus as bank ATMs. Hope you enjoy them as much as I do.

http://www.usatoday.com/media/cinematic/video/6304515/looking-to-purchase-a-bitcoin-head-to-the-gun-store/



Texas, USA observers may note that in this particular case the orange bitcoin logo color has been darkened a bit to exactly match the local University of Texas school color - burnt orange. Ha.

[SlipperySlope]

I am for regulation that is enforced. If it is not enforced, it should be totally removed as regulation. Programmable money solves many barriers to enforcement. There will still be corruption but it won't be like rotting from the inside out.

Accepting that the IRS has ruled Bitcoin is a property, I'm for a wallet that calculates my income taxes on a real time basis. Reduce fraud everywhere and anywhere it can be rooted out and all of a sudden the garden is a lot greener for everyone.

This.

[SlipperySlope]

Bitcoin works at the core so enforcers can concentrate on the edges.

This too.

[marcus_of_augustus]

From my comments on various MarketWatch.com articles, I believe that only a minority of ordinary stock market investors have purchased bitcoins, and even fewer are true believers. And the ponzi scheme, pump and dump notions have been applied to bitcoin for four years by skeptics.

A true believer is one who believes that the Bitcoin economy will achieve future market domination.

I became a true believer in the 30 minutes that it took me to read Satoshi Nakamoto's paper back in 2010. I am a computer scientist with a degree in applied mathematics, who also has a great interest in business. I have lived long enough to witness full adoption of many disruptive technologies, e.g. TCP/IP, bank credit cards, ACH (US Automated Clearing House), bank check truncation, Automatic Teller Machines, emailed financial statements, hard disk drives, open source software, microcomputers, electronic word processing, digital spreadsheets, relational databases, algorithmic credit scoring, Virtual Private Networks, High Frequency Trading, etc. Back in 2010 I had recently worked with X.509 certificate trust chains and knew how digital signatures worked. I also understood how distributed peer-to-peer networks and clients worked at the developer level. Thus it was easy for me to understand how Satoshi's platform operated. I fully understood the problems with the current financial infrastructure, having programmed for a wide variety of bank software applications, and also as an ordinary banking customer.

Whether a particular Bitcoin company can build a moat around its core business to fend off competition, whether a particular Bitcoin company can endure and achieve market domination - is not my concern. Whether Bitcoin achieves future market domination as a payment mechanism, as a technology platform, and as a deflationary store of value - is my concern.

One of the reasons I came to this board is because my old retired father got a tip somewhere to invest in bitcoins because "its the future of curency", "its like digital gold", "designed deflationary - always go up in price", etc..

I got so sick of hearing this drivel and thinking how all these unsophisticated folks will get suckered into it and lose their money.   It happens on Wall Street all the time w tech stock pumping.   Before that it was mortgages.   And before that it was internet stocks.  The worst are penny stocks and small & micro cap.   But at least w stocks we have fundamentals to use as price indicator.

I also have some background in economics and finance.   So I understand the finance/ banking system

The simple economic reason bitcoin will fail as replacing fiat.   It is not centrally controlled.   The power to adjust the supply of money is extremely crucial in order to maintain liquidity in money markets.  This didn't happen overnight it evolved to this stage through painful lessons of history.  Without this aspect bitcoin is inefficient as money.  

As a technology I think cryptocurrency has potential.   The public ledger aspect of it is extremely intriguing.  Bitcoins potential is in money transfer not as currency.   This is what GS and Buffett said and I agree.    I predict that in the future the banks will create some digital cash using public ledger idea.   But its not a separate currency but based on dollars in your bank account.   Thats what consumers want.   Something like M Pesa or Ripple

Anyways,  you seem like a smart guy.   Smarter than most of the bitbugs I've encountered or "believers" if using your semantics

I suggest you look into a coursera.org course called "economics of banking" taught by prof Merhling of Columbia U.  Theres no politics in this course.   Just banking,  how it functions,  its history.   I think you will understand money much more and how banking infrastructures weakness is not because Central Banking or fractional reserve banking.   It has more to do w regulations surrounding derivatives, prop trading,  shadow banking, etc.    Things that can't be solved by inventing a new currency

https://class.coursera.org/money-001
https://class.coursera.org/money2-001

If more crypto developers understood how money works then maybe the next iteration won't be so held back by immature politics or designed to be abused by speculators.  

If you want to design something useful,  then design it to work on top of what we have not replace it.   Why do you want millions of indiviual networked bankers?   Can they provide financial services like loans or credit?  Deal liquidity? Make markets?  Or are they there just to support the network for blockchain?  Why do you need a new curency when it has to be converted back to dollars?   I just don't get what problems bitcoin is supposed to solve

Probably when you are so late to the party you should try to figure out what the heck happened to make it such a blast before your shining intelligence showed up to elucidate all and sundry.

[marcus_of_augustus]

You say the current system is fragile.  That may be true but it isn't because of the Federal Reserve System.  The dollar is/was pretty stable.  The 2008 crisis has more to do w liquidity.  Banks like Bear Stearns & Lehman got too leveraged on mortgage derivatives.  But these derivatives were back w toxic assets.  Investors heard the rumors and worried their investments would go bust so they pulled out.  It's like a bank run but not because they feared collapse of dollars.  They feared the collapse of their investments.  As these MBS collapsed, the banks couldn't unwind them fast enough.  Other banks wouldn't lend them money so Bear & Lehman went insolvent.  Over at Goldman, their MBS was insured by AIG.  So that means AIG would implode if they had to payout all the insurance on Goldman's MBS.  It was a big mess.  

This is completely delusional or wantonly revisionist ... the entire system was insolvent and the taxpayer bailed them out. If you really are involved in banking how could you have missed that detail?

Goldman Sachs bonuses in 2008, (~ $20 billion worth) were paid directly out of the check that the taxpayer wrote to bail-out AIG. It was a pirate@40 pass-thru scandal only a truly evil cadre could abide by and profit from ....

They were criminal because a criminally compliant congress bailed out broke institutions to the tune of trillions of dollars stolen from the wealth of nations themselves to make bankers whole on bad bets that made the entire system insolvent. Just because they were not prosecuted does not absolve them of their criminality.

[twiifm]

You say the current system is fragile.  That may be true but it isn't because of the Federal Reserve System.  The dollar is/was pretty stable.  The 2008 crisis has more to do w liquidity.  Banks like Bear Stearns & Lehman got too leveraged on mortgage derivatives.  But these derivatives were back w toxic assets.  Investors heard the rumors and worried their investments would go bust so they pulled out.  It's like a bank run but not because they feared collapse of dollars.  They feared the collapse of their investments.  As these MBS collapsed, the banks couldn't unwind them fast enough.  Other banks wouldn't lend them money so Bear & Lehman went insolvent.  Over at Goldman, their MBS was insured by AIG.  So that means AIG would implode if they had to payout all the insurance on Goldman's MBS.  It was a big mess. 

This is completely delusional or wantonly revisionist ... the entire system was insolvent and the taxpayer bailed them out. If you really are involved in banking how could you have missed that detail?

Goldman Sachs bonuses in 2008, (~ $20 billion worth) were paid directly out of the check that the taxpayer wrote to bail-out AIG. It was a pirate@40 pass-thru scandal only a truly evil cadre could abide by and profit from ....

They were criminal because a criminally compliant congress bailed out broke institutions to the tune of trillions of dollars stolen from the wealth of nations themselves to make bankers whole on bad baets that made the entire system insolvent. Just because they were not prosecuted does not absolve them of their criminality.

Wait you know what a bailout is don't you?   Its a loan and its already been paid back.  Did you pay bailout? Cause I didn't and I pay tons of taxes.  I got mortgage relief through an FHA loan though. So you pissed I got bailout thru via FHA? 

You know what would happen if AIG didn't get bailed out?  Goldman would have gone under.   Do you realize the size of Goldman compared to Lehman and Bear?   Do you understand the concept of liquidity at all?

Criminals are people who commit crime.   Please cite the crime Bear or Lehman committed.    If there was crime then we already have a justice system to deal with that.  Im so sick of the moral superiority in here.  Bankers are just bankers.   Its there job to make money.   You don't like that some people make 100x your salary then that's your problem for choosing that profession.

I don't like that 2008 happened either.   And Im scared as hell that it happens again.   But I think issues are regulatory.   Heck thats the only thing you can do is change the laws.  You can't remove greed from human nature.   Bitcoin world is of equal if not more greed and corruption than banking specifically due to lack to zero REGULATIONS.   The idea that bitcoin will solve banking is a joke to anyone w a rudimentary knowledge of undergrad macro and  finance

You think Goldman Sachs will go away if bitcoin replace dollars?   If anything they'll monopolize it and ess rape you even more without regulations.   If Goldman truly believed that bitcoin replaces dollar they'll use so much money to short it, collapse the price and buy it all.   It would be too easy at the current market cap.  Fortunately for you,  they're not kiddies.   They don't care about your libertarian utopian fantasy

[marcus_of_augustus]

Without derailing the thread any further into anti-Libertarian rants from Newbies ... (strange how none of them have anti-Mao anti-Marxists rants, USA after all was founded and made great by Libertarians)

... you're wrong, they suspended GAAP and changed the mark-to-market rules to mark-to-model for the very reason that the entire mega-banking complex was operating outside the law under colour of criminality. They were insolvent and to continue trading knowingly an insolvent institution is criminal. They were not only bailed out financially by the taxpayer (the economic repercussions are all around you so have no idea how you can say "it was paid back" like some petulant child) ... they deserve not one cent of the 100x salaries because they owe society every penny and more, not just for the ridiculously misallocated bonuses, but for the massive and widespread economic destruction they have caused. Must be nice to have a bribed congress who can change the laws when you are caught involved in a massive criminal enterprise that is raping society for trillions eh?

They should have all be let go bust and begin again. As it now stands, you should be very afraid because by bailing out the incompetent and corrupt all Congress has done is double down and make a bigger bet, such that the next bust will be worse than 2007. There are no free lunches my ranting banker friend, nature always bats last and human nature owes you one.

[wachtwoord]

You say the current system is fragile.  That may be true but it isn't because of the Federal Reserve System.  The dollar is/was pretty stable.  The 2008 crisis has more to do w liquidity.  Banks like Bear Stearns & Lehman got too leveraged on mortgage derivatives.  But these derivatives were back w toxic assets.  Investors heard the rumors and worried their investments would go bust so they pulled out.  It's like a bank run but not because they feared collapse of dollars.  They feared the collapse of their investments.  As these MBS collapsed, the banks couldn't unwind them fast enough.  Other banks wouldn't lend them money so Bear & Lehman went insolvent.  Over at Goldman, their MBS was insured by AIG.  So that means AIG would implode if they had to payout all the insurance on Goldman's MBS.  It was a big mess. 

This is completely delusional or wantonly revisionist ... the entire system was insolvent and the taxpayer bailed them out. If you really are involved in banking how could you have missed that detail?

Goldman Sachs bonuses in 2008, (~ $20 billion worth) were paid directly out of the check that the taxpayer wrote to bail-out AIG. It was a pirate@40 pass-thru scandal only a truly evil cadre could abide by and profit from ....

They were criminal because a criminally compliant congress bailed out broke institutions to the tune of trillions of dollars stolen from the wealth of nations themselves to make bankers whole on bad baets that made the entire system insolvent. Just because they were not prosecuted does not absolve them of their criminality.

Wait you know what a bailout is don't you?   Its a loan and its already been paid back.  Did you pay bailout? Cause I didn't and I pay tons of taxes.  I got mortgage relief through an FHA loan though. So you pissed I got bailout thru via FHA? 

Please give me a similar loan under the same conditions and I'll have more money than I'll ever need AND pay the loan back. Will I get the loan? Nope. Did blatant criminals get the loan? Yes.

With the system such as it exists today the loan to these companies were gifts. Just not gifts of the entire amount but huge gifts none the less.

And to conclude: what you regard as the biggest shortcoming in Bitcoin is its greatest strength. So, either figure out why it is so, or leave and wait for Bitcoin to collapse. Newsflash: it won't

[twiifm]

Yes the TARP was paid back in full except for Citi of which the Treasury hold common stock of C and will make $12B profit on the TARP program on selling the Citi stock.  This is a fact.  

Nobody is stopping you for applying for loan at a bank.  If your business is so big that banks can't service you, then you go to the govt to get the loan.  The role of gov in economics is to be buyer or lender of last resort.  If they didn't provide this function there is nothing to stop a downward spiral.  

[marcus_of_augustus]

Yes the TARP was paid back in full except for Citi of which the Treasury hold common stock of C and will make $12B profit on the TARP program on selling the Citi stock.  This is a fact.  

Nobody is stopping you for applying for loan at a bank.  If your business is so big that banks can't service you, then you go to the govt to get the loan.  The role of gov in economics is to be buyer or lender of last resort.  If they didn't provide this function there is nothing to stop a downward spiral.  

You haven't just been drinking the Kool-Aid you've been swimming in the punch bowl .... we're on a wild downward spiral of the banks and govt. making.

Recall the "too big to jail"? ... this is why justice has been denied, prosecuting individual criminal bankers, like Blankfein and Dimon would collapse the whole rotten system. MF Global? Corzine walked away uncharged after demonstrably misappropriating customer funds and physical assets worth $1 billion ... do I need to go on?

Paid back? Point to me one criminal banker who has handed back their bonuses that was known to have come directly from government bail-out checks. The rest of the money was taken from society in one form or another as the mega-banks provide zero utility, only serving to bleed the real economy to line their own pockets, It's become a mega-racket and it serves only to enrich those at the top, as can be seen very clearly when you look at long term graphs of wealth inequality and the soaring inequality since 2007-08.

Final comment. Apologies to Slippery Slope and his excellent model and discussion thread

[twiifm]

Off w their heads!   Hey I don't have any political opinions only economics.   Just stating what happened.   Why shoot the messenger?

Why would anyone give back their bonus when those were contractual obligations?   Bailouts were repaid.   Treasury received Citi stock or warrants (I forgot)  and they made 2B in profit.

There were no criminal proceedings cause no crime was committed.   You want argue ethics then I won't disagree w you.   But cite me the law that was broken

To repeat I AM FOR MORE REGULATIONS in matters of banking.   I AM FOR RULE OF LAW.   I am NOT for circumventing law,  mob rule, anarchy,  unregulated currency,  lassiez faire capitalism. 

The koolaid I drink is empiricism. I am interested in academics and how things work.   Not soapbox rhetoric

Im finished w this topic cause I don't want hijack this thread anymore