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Author Topic: The End of Bitcoin as a speculative Investment  (Read 4577 times)
anu
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February 21, 2014, 10:14:08 AM
 #21


Now look at all the bag holders of gold who lost 50% of their holdings in the past 2 years

Gold peaked at 1900. It is now at 1300. Are you implying that the Dollar lost 20% in the last 2 years?


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February 21, 2014, 03:59:21 PM
 #22

people would be crazy to use bitcoin for day to day purchases given that it offers zero consumer protections.


people would be crazy to use CASH for day to day purchases given that it offers zero consumer protections.

Customer protection is helping chargeback fraudsters not honest customers. This kind of customer protection is paid for by honest customers, because shops need to add the 3-6% of chargeback fraud and costs associated with it on the price.

This kind of customer protection also disadvantages small shops - Amazon can deal with chargebacks in an automated fashion. As always, when big corporations or govt is "doing something for your protection", it is just to enable them to control you and rip you off.

So true, also the thing about charge backs is that even if someone stole an identity and the merchant does everything correct/follows all the rules according the CC processing company to verify a transaction to credit card and there is a charge back the returned funds get taken from the business who did the transaction. 

When my company was processing with merchant accounts there was a thick manual that had all sorts of procedures to follow before accepting a CC although that takes so long that just about NO ONE does it.  Even when you call to do a "manual auth/verification" they charge you extra money!  IMHO those higher CC processing fees should cover those manual auth calls since that is suppose to help stop fraud.  Of course most of the time identity thefts are already ready to handle that and would have all the correct information and sometimes people don't realize that their credit card has been stolen until a nice large bill has been racked up.

Also, more fees when the transaction is not done with "card present" like if the customer's card doesn't read in your machine for some reason and you just enter their CC number.  They consider this "high risk" since many phone orders/internet orders are done this way but even if you can prove that your customer is standing in front of you they don't differentiate.

Even if you integrate CC processing into your website and turn on ALL of the verification settings so that the buyer has to have exact matches on all their information and more (which is a PIA for the customers when they type "PO box" or "P.O. Box" it may reject unless it is exactly the same as the billing address) etc... they still charge a higher rate than face to face transactions because again, it's a "high risk" category.  When it is such a PIA just for a customer to pay then they usually move on and may just go and get something similar from Amazon so you just lost a sale.

Giant merchants like Amazon can be more lax on some of the CC verification since they make so much that a few hits from a stolen card is nothing to them and they have already factored that into the budget as cost of operations.  Same thing like brick and mortar stores factoring shoplifting and I'm sure stolen CCs too.

The people that these CC companies and banks affect the most are small to medium businesses as most of the time since they can't all afford to have to take the hit for multiple charge backs due to fraud, even though the merchant had done everything correctly.  Sometimes it can just be a couple purchases that can wipe out a company, as sometimes these thieves get a hold of corporate cards that have high limits and don't get flagged because large purchases are already common.  Then the company that it was stolen from does not notice that the charges until months later and it is already too late as you have already shipped your product to their drop address.  Those cards will even pass through a phone verification and manual auth, so lets say they buy some miners, that could easily come up to 100k or more just using 2-3 CCs and different names.

So everyone is talking about "consumer protection" well what about merchant protection?!  Merchant are the consumers for the CC processing companies too right?  That extra 1-2% for online merchant accounts, gateway fees, monthly fees, minimum sales, etc just go straight into their pocket because in the end the merchant pays for ALL charge backs, fraud or not, even if you show them that all the correct procedures which they require you to do were done.  Where is our (the merchants who are consumers to the CC companies) consumer protections?  Why are extra fees paid when all the liability is still on the merchant?  Especially when the CC reps say that the higher rates are to cover loses but it's not their loss... even the merchant gets charged a flat FEE when a charge back is done, fraud or dispute and even if they find the dispute in your favor they still charge you that fee.

How is that fair?  These policies would wipe out a small business like Bees Brothers (the kids that sell honey for BTC) if someone used a fraudulent CC and made a huge 100k order.  The only choice you have is to try and dispute with your merchant account provider but that doesn't really make a difference, they will even try to automatically take money from your bank account without permission to cover the charge back.

At the same time the cost to set up a merchant account is not cheap (well cheaper now than it use to be) but still is a barrier for smaller start up businesses.

With BTC none of that happens and if the transaction is so large that there is a concern then escrow could easily be used and for a lot less than dealing with fees from a charge back.  There is still consumer protection, people just need to be taught how to use BTC properly.  Along with that there is also Merchant protection so it's a two way street.

People have gotten so use to the debt based consumerism and all the BS the CC companies push like "100% fraud protection" that everyone files a charge back for anything and more often than not abuse the system.  The CC companies don't care because they are not actually losing the money since they just take it from the merchant and if they don't pay then the bank will just close their CC processing account.

How does this help our society as a whole?  It only leads to people being more dishonest since it is piratically encouraged by all the big money processors.
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February 21, 2014, 04:03:05 PM
 #23

I love the smell of capitulation in the morning.

If only it was real... I still sense way too much hope around here.

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February 21, 2014, 06:05:33 PM
 #24

I love the smell of capitulation in the morning.

If only it was real... I still sense way too much hope around here.

there is no hope and no despair either, this is exactly what happens when a commodity peaks it's max value.

Bitcoin as a speculation vehicle is no more.
gentlemand
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February 21, 2014, 06:12:35 PM
 #25

Now it's been confirmed this sub forum needs to be deleted ASAP.

If it's still here the next time I check then I'm finding whatever centralised authority I can and raising hell.

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February 21, 2014, 06:56:42 PM
 #26

I love the smell of capitulation in the morning.

If only it was real... I still sense way too much hope around here.

there is no hope and no despair either, this is exactly what happens when a commodity peaks it's max value.

Bitcoin as a speculation vehicle is no more.

ha ha ha...i said exactly the same thing back in april 2013 after the crash..but i have learnt from my misjudgement....there will be a lot of traders making a tonne of profit at the moment...so why on earth would they consider stopping speculating on bitcoin?!
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February 21, 2014, 07:06:10 PM
 #27

I'm sure OP has never heard of this (dat ignorance, it's cute) :

http://www.sec.gov/Archives/edgar/data/1579346/000119312514058712/d562329ds1a.htm
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February 22, 2014, 01:15:44 AM
 #28

Well I guess we know the who has at least BTC200,000....

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February 22, 2014, 01:33:30 AM
 #29

Well I guess we know the who has at least BTC200,000....
The winklevoss have less than 200.000 coins, actually 120.000
gentlemand
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February 22, 2014, 01:37:07 AM
 #30

The ETF with 100,000 bitcoins?

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February 22, 2014, 06:36:56 AM
 #31

Exponentially increasing fiat money supply will ensure bitcoin's value rise forever


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February 22, 2014, 06:43:34 AM
 #32

Exponentially increasing fiat money supply will ensure bitcoin's value rise forever



Yeah but there is no reason for ppl to keep pumping fiat into bitcoin forever.
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February 24, 2014, 03:38:25 AM
 #33

Exponentially increasing fiat money supply will ensure bitcoin's value rise forever



Yeah but there is no reason for ppl to keep pumping fiat into bitcoin forever.

The most simple reason is that their fiat money is losing value day by day, year by year

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February 24, 2014, 11:06:27 AM
 #34

Bitcoin current situation reminds me of the demise of gold and silver.

I was around when Gold peaked at almost $2000 per ounce, there were this huge number of newcomers buying at those prices and the situation was the exact same thing. As the prices started to crash all the early adopter who bought gold at $200-$800 were saying we went through this before, it will go up again bla bla ignoring the signs of peak. I remember in kitco forums some dude went like ALL IN at $1900 per ounce with like $1million of his life savings.

Now look at all the bag holders of gold who lost 50% of their holdings in the past 2 years and might take another 5 years for them to break even. The only ones making money is pro day traders who trade gold and silver on the minor swings.

The same thing with bitcoin will happen, I am seeing the exact same environment play out here.


I agree, a lot of similarities.
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February 24, 2014, 04:00:18 PM
 #35

Exponentially increasing fiat money supply will ensure bitcoin's value rise forever


Bullshit chart, especially because what is shown here isn't at all related to the Money in circulation. Not even close, even the monetary base excluding excess reserves doesn't fit that description.




source: http://www.slate.com/blogs/moneybox/2012/08/03/the_monetary_base_is_irrelevant.html
see also: http://www.newyorkfed.org/research/current_issues/ci15-8.pdf
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February 24, 2014, 04:04:54 PM
 #36

Money in circulation =/= monetary base.

It would be like someone saying apples are red and you saying "bullshit" and posting a photo of an orange as proof.

The "money supply" has lots of definitions.  If we look at broad money supply (M2) it has expanded almost 10x in the last 35 years.
http://research.stlouisfed.org/fredgraph.png?g=sqb

We haven't seen hyperinflation because the velocity of money has collapsed
http://research.stlouisfed.org/fredgraph.png?g=sqc

Of course the fed would argue when the economy picks up they will just soak up all that excess reserves to prevent "excessive" inflation.   So nothing to worry about, history has shown the Fed has already been quick, precise, and aggressive when needing to tightening the money supply (1970s oil shock, dotcom bust, housing market bubble, etc).
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February 24, 2014, 04:10:31 PM
 #37

Money in circulation =/= monetary base.

It would be like someone saying apples are red and you saying "bullshit" and posting a photo of an orange as proof.

johnyj's chart uses the same data as the st.louis fed monetary base chart including excess reserves and for all practical purposes it is bullshit.
To match your analogy, it shows an apple and writes "This is a banana" on top of it.
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February 24, 2014, 04:14:19 PM
 #38

The "money supply" has lots of definitions.  If we look at broad money supply (M2) it has expanded almost 10x in the last 35 years.
http://research.stlouisfed.org/fredgraph.png?g=sqb

Big whoop, in a world where many people don't even live longer than 70. Oh and nevermind the population growth and economic growth during that period.
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February 24, 2014, 04:14:29 PM
 #39

Money in circulation =/= monetary base.

It would be like someone saying apples are red and you saying "bullshit" and posting a photo of an orange as proof.

johnyj's chart uses the same data as the st.louis fed monetary base chart including excess reserves and for all practical purposes it is bullshit.
To match your analogy, it shows an apple and writes "This is a banana" on top of it.

Well seeing as the charts don't even peak at the same value or point .... that seems unlikely.  Maybe you assumed the chart was for the monetary base when in fact it could be for M0, or M1.
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February 24, 2014, 04:15:44 PM
 #40

The "money supply" has lots of definitions.  If we look at broad money supply (M2) it has expanded almost 10x in the last 35 years.
http://research.stlouisfed.org/fredgraph.png?g=sqb

Big whoop, in a world where many people don't even live longer than 70.

But most do live long than 35.  This is rather unprecidented so to pass it off as routine is disingenuous.  Please point to a period of time prior to 1980 where then money supply expanded 10x in any 35 year period.
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