EVERYONE CALM DOWN

[legolouman]

Panick, sell your bitcoins and all your mining hardware now, before there worth pennies.

Spelling and grammar errors.

I was thinking that, but decided not to be a grammar nazi, just because I didn't want to start a flame war.

You can sneeze the wrong way and start a war around here.

How true, it's a really bad melting pot full of people, I guess once money is involved, the "community" turns into "my money"

[HappyFunnyFoo]

FEAR PHASE BEGINNING.

LOL

[YoYa]

Blood on the streets!

[BC-Trader]

as a stock investor I remember many .com stocks that went up during during the tech bubble era with an almost identical chart to bitcoin. I remember all the "hopes and future earnings" that never came most people that bought and hold sold out at 0..



Now I sit here and look at bitcoin and really let's be honest it's worth no one near these levels fundamentally, it is poorly(at best) accepted in the online world, it's connected to drug trade(silkroad) and when that went down so did much of the interest in bitcoin.



Sorry to say  I think  the actual value of bitcoin is worth less then a buck and that's being generous since if it reaches under a buck it will likely fall much lower.

I love trading penny stocks in the real stock market where a stock goes from $40 to $0.04 and people on the message boards are screaming about "Massive rally to $0.08" incoming, ignoring the fact a year ago it was at $40!!"


Also what does not help is MTGOX is a bunch of amateurs and anyone with large money should not and apparently no longer trusts that place, the other exchanges have such pathetic volume they should just say "mercy" and shut down

[johnj]

as a stock investor I remember

...

most people that bought and hold sold out at 0..

Something seems fishy here.

[Cluster2k]

as a stock investor I remember many .com stocks that went up during during the tech bubble era with an almost identical chart to bitcoin. I remember all the "hopes and future earnings" that never came most people that bought and hold sold out at 0..

Now I sit here and look at bitcoin and really let's be honest it's worth no one near these levels fundamentally, it is poorly(at best) accepted in the online world, it's connected to drug trade(silkroad) and when that went down so did much of the interest in bitcoin.

Your views are dangerously logical and rational, and have no place in the Speculation forum 

[fivebells]

it's connected to drug trade(silkroad) and when that went down so did much of the interest in bitcoin.

  I largely agree with your comment, but I'm curious as to what you mean when you say silk road went down.  Is the server no longer working?

[Nagle]

as a stock investor I remember many .com stocks that went up during during the tech bubble era with an almost identical chart to bitcoin. I remember all the "hopes and future earnings" that never came most people that bought and hold sold out at 0..

Me too; I'm the guy who did "downside.com" and automatically tracked the cash flow of public dot-coms as they went to 0.

With Bitcoin, there are no potential future earnings.  Yes, if Bitcoin was mostly used for transactions with some speculation, it might at least hold its value. But the reality is the other way round. As a zero-sum speculative vehicle, it's a pyramid scheme.

[N12]

Nagle, how do you feel about Gold? It doesn’t pay any dividend either, and its industrial and economic use is very limited.

Is this a pyramid scheme as well?

[Lolcust]

Regardless of Nagle's wisdom...

Bitcoin can not be thought of in the same way you think of a stock. It is a non-correlated asset class all its own. And as such, there is value for purposes of risk diversification in the fact that is it non-correlated.

A sentiment I find myself in agreement with.

[2112]

Regardless of Nagle's wisdom...

Bitcoin can not be thought of in the same way you think of a stock. It is a non-correlated asset class all its own. And as such, there is value for purposes of risk diversification in the fact that is it non-correlated.

A sentiment I find myself in agreement with.

And I'm with John Nagle. The security itself is provably quite uncorrelated. But the promotional activities that sorround it are highly correlated with the "caveat emptor" section of pink sheets.

http://www.otcmarkets.com/otc-101/otc-market-tiers
http://www.otcmarkets.com/otc-101/caveat-emptor

I particularly like that they have a special logo for that tier of securities:

has been labeled Caveat Emptor for one of the following reasons:

■Questionable Promotion — The security is being promoted to the public, but adequate current information about the issuer has not been made available to the public.
■Spam — The security is the subject of spam promotion having the effect of encouraging trading of the issuer's securities.
■Investigation of Fraud — There is a known investigation of fraudulent activity involving the company, its securities or insiders.
■Suspension/Halt — A Regulatory Authority has halted or suspended trading for public interest concerns (i.e. not a news or earning halt).
■Disruptive Corporate Actions — The security or issuer is the subject of corporate actions, such as reverse mergers or serial stocks splits and name changes, without adequate current information being publicly available.
■Unsolicited Quotes — The security has only been quoted on an unsolicited basis since it entered the public markets and the issuer has not made adequate current information available to the public.
■Other Public Interest Concern — There is, in OTC Markets' view, a public interest concern.

I edited to correct the links.

[2112]

I would like to point out that your proposition conflates the mathematical and the rhetorical sense of 'correlation'. And that you seem to be drawing several false equivalences.

No, actually I'm speaking mathematically.

What you call "rhetorical correlation", I'll call correlation to the events that are assigned "tail" probability in your models (2% 5%). In other words, your model is 98% or 95% of the time correct. When it isn't correct it will create loses on the same order of magnitude like the profits you are creating.

Price of BTC in USD simply doesn't obey the assumptions of "law of large numbers". This is the common fallacy of using linear statistics in finance.

[sukiho]

its correlated. but not as we know it

[Lolcust]

2112, which of those, in your view, are typical of bitcoin ?

I am yet to start receiving bitcoin spam...

[2112]

Oh yeah... Probability mechanics it is, but linear statistics it ain't. You won't find what I am doing in any textbook. But you are free to profit from it just the same...

Weird. The whole first page of Google search about "probability mechanics" is related to Star Trek and some conspiracy theory blog Above Top Secret.

Chodpaba, have you warped or wormholed to our universe from some other one?

Or is the "probability mechanics" a title of some discontinued elementary statistics textbook?

[2112]

2112, which of those, in your view, are typical of bitcoin ?
I am yet to start receiving bitcoin spam...

It is probably a little bit of each. Please bear in mind that my personal slant is European Union and non-English languages, not the USA and other English-speaking countries. As far as fraud the cases I know were settled under civil law, not criminal, and as such are under seal.

I mean, I fully agree with Chodpaba that bitcoin isn't a "blue chip stock" nor it is "noble metal commodity". It is some sort of synthetic security that could be tradable (and probably will be traded) using the OTC BB rules (or their equivalent). But I don't see this happening under the stewardship of the current "core development group".

[molecular]

Nagle, how do you feel about Gold? It doesn’t pay any dividend either, and its industrial and economic use is very limited.

Is this a pyramid scheme as well?

I like your answer. It's funny how Chodpabas answer is very similar to yours, yet yours doesn't get disputet at all, while the thread unwinds to discuss Chodpabas answer at length.

It's because, well, who would dispute the value of gold? It's had value for thousands of years, yet is suffers some of the same "problems" bitcoin "suffers" from.

I've been pointing out that bitcoin is more like gold than like a currency (or, god beware, bank notes) since I first got in touch with bitcoin in early 2011. That sentiment doesn't resonate much for some reason and people just go on to discuss money, investement, economics,... probably a good thing.

[mizike29]

It is similar to gold, even the mining part, you mine for gold, you mine for bitcoins, and I think that is the reason the word was used.  There are similarities, but its a virtual currency not tangible, not backed by anything and uses cryptography so there is some economics, mathmatics, stock type values inside bitcoin, but if you want to compare it to anything it would be like World of warcraft money with a touch of gold lol

[Lolcust]

Personally, I think that "gold price" could be seen as a disease, not of individual people, but of market itself

[critmass]

Nagle, how do you feel about Gold? It doesn’t pay any dividend either, and its industrial and economic use is very limited.

Is this a pyramid scheme as well?

I like your answer. It's funny how Chodpabas answer is very similar to yours, yet yours doesn't get disputet at all, while the thread unwinds to discuss Chodpabas answer at length.

It's because, well, who would dispute the value of gold? It's had value for thousands of years, yet is suffers some of the same "problems" bitcoin "suffers" from.

I've been pointing out that bitcoin is more like gold than like a currency (or, god beware, bank notes) since I first got in touch with bitcoin in early 2011. That sentiment doesn't resonate much for some reason and people just go on to discuss money, investement, economics,... probably a good thing.

If I can buy a ring of bitcoin, and propose to my girlfriend with it, then bitcoin is like gold.  If I can't, then your argument fails.