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Author Topic: For those who have no idea what to do  (Read 4236 times)
bitsalame
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October 05, 2014, 05:13:18 AM
 #21

Your father could have been a millionaire if he just invested 10% of it in 2010
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October 05, 2014, 05:14:58 AM
 #22

Your father could have been a millionaire if he just invested 10% of it in 2010

He can be one right now. Just if he had a time machine.
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October 05, 2014, 05:20:00 AM
 #23

Your father could have been a millionaire if he just invested 10% of it in 2010

Hindsight is 20/20.  The price never had anything to do w the investment thesis.

Its all speculation.  Only early adopters can make money by pumping and dumping to newbs

Dont fall for it.  

But do what you want, I dont care.  Im only here to help people understand economics and finance

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October 05, 2014, 05:20:25 AM
 #24


Bitcoin price is purely speculative.  There are no fundamentals.  The only time we got near a bitcoin economy was silk road.  That is when goods are priced in bitcoin.  When goods are priced in bitcoin then you can estimate price by comparing the same basket of goods relative to other currencies.

No, SR never had their prices in bitcoin, as any other business selling goods purchased or produced with fiat never did. There's no such things as "bitcoin economy", if anything it's 10 years down the road *at least*. Everybody with a tiny bit of clue understands that, this is a protocol building stage, not world domination stage.

i am satoshi
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October 05, 2014, 05:21:25 AM
 #25

http://en.wikipedia.org/wiki/Systems_theory
http://en.wikipedia.org/wiki/Homeostasis

When things start getting messy and emotions run high, I often find it's useful to remind myself of the basics.  Accordingly, this is a post aimed at those who, over the past few weeks, have become increasingly emotional and panicky about BTC price.

What should you do?  Should you sell?  Should you buy?  Should you HODL?  Should you diversify?  Ultimately, these are unknowns, and the more you focus on the unknown, the less you focus on what is knowable.

So, what is knowable?  Systems Theory is an *extremely* broad, overarching theory of systems in general.  Depending on what discipline Systems Theory is applied to, it will look slightly different and certain systemic aspects will be highlighted over others.  But, the core ideas behind Systems Theory are applicable to virtually everything.  Absolutely everything and anything is a system -- I'm a system, you're a system, and this community is a system.  Most relevant to this post is that the Bitcoin market is a small, economic system nested within much larger economic systems.

Why is this basic knowledge useful?  All systems have some basic properties that, at the very least, can help us to understand the context in which the Bitcoin market exists in relation to other economic markets.

Let's first address some characteristics of all systems:

1) Entropy -- All systems are prone to entropy or decay over time, and will continue to do so without outside influence.

2) Homeostasis -- Homeostasis is a state of balance within a system, and is often achieved when systemic input is delicately balanced by systemic output.   A system in a state of total or near-total homeostasis can be described as stable.  A system not in a state of homeostasis can be described as volatile.

3) Input -- energy flowing into a system from external systems.

4) Output -- energy flowing out of a system into other, external systems.

Example:
Imagine a human being.  From the moment you are born, you are subject to entropy.  You will decay and die without some additional source of energy in the form of received input from some external system (e.g. food, oxygen, etc).  But, simply receiving this input will not guarantee your continued existence.   This systemic input needs to be counterbalanced by systemic output (e.g. excretion, etc.).  The absence of one or the other will lead to a quick death, and extreme imbalances between systemic input and output will cause systemic volatility that can threaten systemic collapse.

Applying Systems Theory to Bitcoin:
This post isn't intended to give you a formula for determining the cause of every tiny movement, but rather to provide some general considerations so that you can place the current state of Bitcoin in a more reasonable context.  Accordingly, here are a few of those considerations, though this is by no means an exhaustive or even comprehensive list:

1) Bitcoin is still a tiny economic system nested among larger ones.  This implies that smaller amounts of systemic input/output will have a larger impact on Bitcoin than they would on some larger economic system.  This is obvious -- simply imagine how, for example, the influx of $1 billion in new money might affect the Bitcoin market vs. how it might affect Google stock.

2) Bitcoin has experienced several phases of enormous systemic input that was not counterbalanced by systemic output.  The rise to the $32 in June 2011 was the first example, the rise to $266 was a second example, and the rise to >$1000 was the third.   These are all examples of periods in which systemic input was grossly mismatched with systemic output.  The inevitable result of these scenarios is systemic imbalance or a lack of homeostasis, thereby increasing the chances of systemic collapse.

3) Bitcoin is not self-correcting.  It is inherently linked to external systems from and to which energy is transferred.  This dependence upon other systems is specifically what removes any guarantee whatsoever of recovery.  

For the dense, let me repeat and highlight that last sentence:  This dependence upon other systems is specifically what removes any guarantee whatsoever of recovery.

4) Volatility doesn't care which direction you're moving or whether you're making or losing money, it is simply a reflection of instability within a system.  Although I'm certainly generalizing a bit with this next example, it's equally 'bad' in terms of instability whether the price goes up $100 in a day or falls $100.  Accordingly, you shouldn't be looking to your trading success or lack thereof as an indicator of market health.

Again, this list is extremely short and by no means comprehensive, but I thought I'd get the ball rolling with some general advice (Note:  I am NOT a licensed professional).  I like people, which means that I generally like all of you, and I don't enjoy reading stories of people making investment decisions that end up ruining their lives.  So, here goes:

1)  To HODLers, there is absolutely 0% guarantee of a price recovery, and it is absolutely possible for this system to die.

2)  Systemic death can begin at any price.  Volatility and a lack of homeostasis lead to systemic death, not a low price.

3)  However, as Bitcoin grows, its resistance to systemic death increases.  Furthermore, as systemic output grows to match systemic input, the chances of re-establishing a homeostatic state increase.  Consequently, even this precipitous price drop from the ATH over the course of nearly a year is not conclusive evidence of a dying Bitcoin market, but possibly of one that is mending and healing itself.  This is directed towards the doomsday prophets on this forum.

4)  Avoid extreme positions.  Don't commit yourself to sinking with the ship, but also don't pretend icebergs can't or don't exist.

**Note: For the record, I released the majority of my holdings between $600-$850 but still have some stake in this market.

very insightful.  Thank you.
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October 05, 2014, 05:26:24 AM
 #26

Your father could have been a millionaire if he just invested 10% of it in 2010

Hindsight is 20/20.  The price never had anything to do w the investment thesis.

Its all speculation.  Only early adopters can make money by pumping and dumping to newbs

Dont fall for it.  

But do what you want, I dont care.  Im only here to help people understand economics and finance

I had the foresight about bitcoins in 2010.
And I am having it for MaidSafe now.
Cheers.
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Let's talk governance, lipstick, and pigs.


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October 05, 2014, 05:28:47 AM
 #27

I will make it simpler:
Just invest in MaidSafeCoins.
And hold your position in Bitcoins.
Thats it.

If bitcoins fails, all Cryptos are gonna fail.
MaidSafe is another story, a completely different animal.
I'm not putting that company down, but they are just a business. If it shows any promise it will either be bought or copied. If it's bought its model may be changed. If it is copied and marketed by a big brand, then your investment will be lost. Bitcoin has thousands of failed competitors. Can Maidsafe resist such competition? That's a rhetorical question.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 05, 2014, 05:31:53 AM
 #28


Bitcoin price is purely speculative.  There are no fundamentals.  The only time we got near a bitcoin economy was silk road.  That is when goods are priced in bitcoin.  When goods are priced in bitcoin then you can estimate price by comparing the same basket of goods relative to other currencies.

No, SR never had their prices in bitcoin, as any other business selling goods purchased or produced with fiat never did. There's no such things as "bitcoin economy", if anything it's 10 years down the road *at least*. Everybody with a tiny bit of clue understands that, this is a protocol building stage, not world domination stage.

Then there is no price discovery because money ultimately has to be used for exchange.  Without an economy its 1 btc = 1 btc

I never used SR cause I dont buy drugs.  But looks to me like this ecstasy was priced in bitcoins

http://blogs.telegraph.co.uk/technology/files/2013/05/Silk-Road-009.jpg

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October 05, 2014, 05:33:37 AM
 #29


Bitcoin price is purely speculative.  There are no fundamentals.  The only time we got near a bitcoin economy was silk road.  That is when goods are priced in bitcoin.  When goods are priced in bitcoin then you can estimate price by comparing the same basket of goods relative to other currencies.

No, SR never had their prices in bitcoin, as any other business selling goods purchased or produced with fiat never did. There's no such things as "bitcoin economy", if anything it's 10 years down the road *at least*. Everybody with a tiny bit of clue understands that, this is a protocol building stage, not world domination stage.

Then there is no price discovery because money ultimately has to be used for exchange.  Without an economy its 1 btc = 1 btc

I never used SR cause I dont buy drugs.  But looks to me like this ecstasy was priced in bitcoins




No, it wasn't. It was dollar pricetags translated to btc in real-time. You can't really have btc pricetags on anything but digital goods which have zero cost to start with.

i am satoshi
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October 05, 2014, 05:37:46 AM
 #30


Bitcoin price is purely speculative.  There are no fundamentals.  The only time we got near a bitcoin economy was silk road.  That is when goods are priced in bitcoin.  When goods are priced in bitcoin then you can estimate price by comparing the same basket of goods relative to other currencies.

No, SR never had their prices in bitcoin, as any other business selling goods purchased or produced with fiat never did. There's no such things as "bitcoin economy", if anything it's 10 years down the road *at least*. Everybody with a tiny bit of clue understands that, this is a protocol building stage, not world domination stage.

Then there is no price discovery because money ultimately has to be used for exchange.  Without an economy its 1 btc = 1 btc

I never used SR cause I dont buy drugs.  But looks to me like this ecstasy was priced in bitcoins




No, it wasn't. It was dollar pricetags translated to btc in real-time. You can't really have btc pricetags on anything but digital goods which have zero cost to start with.

So you are agreeing w me thats its a useless currency

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October 05, 2014, 05:45:29 AM
 #31


Bitcoin price is purely speculative.  There are no fundamentals.  The only time we got near a bitcoin economy was silk road.  That is when goods are priced in bitcoin.  When goods are priced in bitcoin then you can estimate price by comparing the same basket of goods relative to other currencies.

No, SR never had their prices in bitcoin, as any other business selling goods purchased or produced with fiat never did. There's no such things as "bitcoin economy", if anything it's 10 years down the road *at least*. Everybody with a tiny bit of clue understands that, this is a protocol building stage, not world domination stage.

Then there is no price discovery because money ultimately has to be used for exchange.  Without an economy its 1 btc = 1 btc

I never used SR cause I dont buy drugs.  But looks to me like this ecstasy was priced in bitcoins




No, it wasn't. It was dollar pricetags translated to btc in real-time. You can't really have btc pricetags on anything but digital goods which have zero cost to start with.

So you are agreeing w me thats its a useless currency

it is a convenient digital value transfer tool and amazing technology that will change the way we do finance in the future. it is an ok currency for digital goods. selling TVs for bitcoin is an artificial thing, it's like introducing youtube in 1990 - fun but not practical.

i am satoshi
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October 05, 2014, 05:59:28 AM
 #32

**Note: For the record, I released the majority of my holdings between $600-$850 but still have some stake in this market.

this is the real message, the rest is blah blah blah
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October 05, 2014, 06:04:20 AM
 #33


Bitcoin price is purely speculative.  There are no fundamentals.  The only time we got near a bitcoin economy was silk road.  That is when goods are priced in bitcoin.  When goods are priced in bitcoin then you can estimate price by comparing the same basket of goods relative to other currencies.

No, SR never had their prices in bitcoin, as any other business selling goods purchased or produced with fiat never did. There's no such things as "bitcoin economy", if anything it's 10 years down the road *at least*. Everybody with a tiny bit of clue understands that, this is a protocol building stage, not world domination stage.

Then there is no price discovery because money ultimately has to be used for exchange.  Without an economy its 1 btc = 1 btc

I never used SR cause I dont buy drugs.  But looks to me like this ecstasy was priced in bitcoins




No, it wasn't. It was dollar pricetags translated to btc in real-time. You can't really have btc pricetags on anything but digital goods which have zero cost to start with.

So you are agreeing w me thats its a useless currency

it is a convenient digital value transfer tool and amazing technology that will change the way we do finance in the future. it is an ok currency for digital goods. selling TVs for bitcoin is an artificial thing, it's like introducing youtube in 1990 - fun but not practical.

Say what???  That made no sense and my head is hurting for trying to comprehend.

You are reinforcing my point.  Bitcoiners dont understand finance or economics.  

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October 05, 2014, 06:06:55 AM
 #34

I will make it simpler:
Just invest in MaidSafeCoins.
And hold your position in Bitcoins.
Thats it.

If bitcoins fails, all Cryptos are gonna fail.
MaidSafe is another story, a completely different animal.
I'm not putting that company down, but they are just a business. If it shows any promise it will either be bought or copied. If it's bought its model may be changed. If it is copied and marketed by a big brand, then your investment will be lost. Bitcoin has thousands of failed competitors. Can Maidsafe resist such competition? That's a rhetorical question.

MaidSafe has NO competition.
Research about it, and then come back.
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October 05, 2014, 06:17:05 AM
 #35

That is an interesting proposal but it doesn't explain why a currency called Bitcoin should exist and why it should have any price.  A worthless token can achieve the same utility since its all outside money anyways
I agree that an arbitrary number of units in a blockchain system have no inherent value, but neither does fiat money. Bitcoin is the first blockchain currency experiment and will only have a value based upon the size of the network, and the "store of value" interest it attracts. The number of units and the future rate of their creation is known, as is the current value of the particular block chain. This gives a meaningful current value to the price of a bitcoin. What will the future fair value of the currency be? That is harder to determine, but it's a better bet than the people of the Weimar Republic had. I am personally motivated by the incredibly irresponsible monetary policy of most major economies at the moment, all previous experiments with excessive money printing have ended badly, and I have no reason to assume things will be different this time.

But do yourself a favor and do some due diligence on your investments.  
Have done, that's why I made over 2000% on my initial bitcoin investment. I have also lost a lot of paper worth as a result of this downtrend, but I'm OK with that because owning bitcoin was always a long term project for me, voting with my wallet for an open source transparent global economy, rather that the unstable corrupt oligarchy we currently have. I made the investment because I took the trouble to learn about the global banking system after the 2008 crisis and came to the conclusion cryptos were going to replace government fiat currencies eventually. Bitcoin is an early experiment in this regard, but a better option than faith based government currencies in my opinion.

I just hate bitcoin because someone tried to get my retired father to invest in bitcoin.  He was about to throw $50K at it til I stopped him.  
If your father was going to invest money he couldn't afford to lose then you did the right thing, speculating on the price of bitcoin is high risk/volatility and people need to understand that. I agree there have been a lot of irresponsible pumpers on this forum, just like there are a lot of greedy trolls now, but if you have $50k to invest then no responsible adult should make investment decisions based upon what some faceless person on a forum is saying.

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October 05, 2014, 06:26:23 AM
 #36


Say what???  That made no sense and my head is hurting for trying to comprehend.

You are reinforcing my point.  Bitcoiners dont understand finance or economics.  

Or maybe you are reinforcing my point that people of average intellectual ability can not grasp bitcoin - yet. Don't worry, we'll make it easy for you later on. For now, you don't have to hurt your brain thinking, it is not for you yet.

i am satoshi
zulover
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October 05, 2014, 06:40:07 AM
 #37

Nice post.i have some idea but at the moment things are hurting looking losses and severe problem.not sure if to sell or to hold.
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October 05, 2014, 06:45:35 AM
 #38

Nice post.i have some idea but at the moment things are hurting looking losses and severe problem.not sure if to sell or to hold.

of course sell, always sell low buy back high, that is the recipe for success. or was it the other way around? can't ever remember.

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October 05, 2014, 07:13:27 AM
 #39

**Note: For the record, I released the majority of my holdings between $600-$850 but still have some stake in this market.


When did you get in?


Good post, glad I read it

I got into Bitcoin June 2011.

Thank you Smiley

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October 05, 2014, 07:14:27 AM
 #40

Buy high, sell low. Repeat until homeless.

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