Is anyone else just killing it trading bitcoins?

[Jordan]

Oh, you must be one of those elites who are gonna be at the front of all the breadlines then.

Well, my plan is to productive within whatever semblance of a real economy might be left.

Fear mongering...

[jclay2]

I've been around long enough to know that hopes and dreams are often crushed, that the government doesn't like the idea of an anonymous currency, and that investment interest typically peaks at the same time a market reaches a top. I hate to be the bitcoin bear, but I just don't look at it through rose colored glasses. Do you not find similarities between the number of bitcoins threads here and the number of silver threads when it bubbled to $50/ounce? Once people think that "this time is it" they start plowing every dime they have into a market, only to see that markets can go down just as easily as they can go up.

+ rep Jordan. Wow, I can't believe I just did that.

[muh_roads]

I've been around long enough to know that hopes and dreams are often crushed, that the government doesn't like the idea of an anonymous currency, and that investment interest typically peaks at the same time a market reaches a top. I hate to be the bitcoin bear, but I just don't look at it through rose colored glasses. Do you not find similarities between the number of bitcoins threads here and the number of silver threads when it bubbled to $50/ounce? Once people think that "this time is it" they start plowing every dime they have into a market, only to see that markets can go down just as easily as they can go up.

I recognize that I could be wrong, but so far, placing your money AGAINST the status quo has made far more many people broke than it has ever made rich.

People aren't sick of bailouts. Households love participating in the stock market rallies. We're all Keynesians now!

You are right in one aspect there at the end. Our culture of debt that can't save loves cheap currency. I believe Americans will be the last to embrace BTC.

I am excited for BTC for countries that are more oppressive like China. It is very exciting right now especially because the EU is threatening to do to more countries like what they did to Cyprus.

Government $#@!ed with $50/silver easily. We gave them the freedom to start naked paper shorting decades ago. This is where BTC differs from metals IMO.

What they might try to do to the exchanges are what I would look out for. But just like file transferring never went away...I don't see how BTC can go away either. The individual will set their own prices. Druggies need their drugs. Oppressed people will always need an escape.

[muh_roads]

+ rep Jordan. Wow, I can't believe I just did that.

YAY +rep to someone who sides with my uneducated view about a topic...and hiding the fact that I just have sour grapes from not buying earlier.

Sorry...lol, that was mean. I can see why hazek became defensive over BTC on this board.

Did you ever have a difficult time trying to explain why gold/silver is better than US dollars to anyone in your family? It is starting to feel like that to me with BTC when you naysayers clearly haven't done your research.

[jclay2]

YAY +rep to someone who sides with my uneducated view about a topic...and hiding the fact that I just have sour grapes from not buying earlier.

Sorry...lol, that was mean. I can see why hazek became defensive over BTC on this board.

Did you ever have a difficult time trying to explain why gold/silver is better than US dollars to anyone in your family? It is starting to feel like that to me with BTC when you naysayers clearly haven't done your research.

That is true that there are some on this board that are not educated about it. I actually think bitcoin is a great idea that needs to be talked about and thought upon more. However, the problem for me and many others is that isn't tied to something physical. If you took away the bitcoin currency system and gave me 1 bitcoin. I wouldn't value it for any utility whatsoever. The utility comes from a currency and currency alone. That is where my beef and many others lie. Yes bitcoin has some really good characteristics, but those are secondary when the only value comes from others accepting it.

I don't think it is theoretically possible, but we need to figure out a way to mix hard currencies or even $'s to bitcoin. The medium of exchange characteristics of bitcoin are very good. If there was a way to connect it to something more real than "the power of math" and energy it takes to mine bitcoins, it would be gameover.

[enter`name`here]

I am so mad at my self right now. About a year ago a canadian exchange opened up and I had planned to throw a spare $10 at these things every week as a novelty because I liked the idea of them. It went well for a few weeks but then the exchange decided to go "legit" and required paperwork to continue making deposits. I sent them my paperwork but my scanner cut some of it off and they rejected it. I got lazy and said $#@! it and just took what coins i had bought and forgot all about bitcoins untill i came on here the other day and noticed holy $#@! they sky rocketed! If i had gotten off my ass and filled out the work again and stuck to my original plan i'd be able to pay off half my student loans!

I'm still sitting on an unexpected chunk of change, up 1000%+, but man i am wracked with a bad case of the "should of's"

I think I am going to fill out that paperwork and cash out most of my holdings. I am a believer in the project but this is insane, the 2 year chart is unnatural. If this was the dow this forum would be alight with cries of manipulation.

[cheapseats]

Bitcoin Mythology: Red-herrings and Bull$#@!
By Gareth, on March 28th, 2013

http://dont-tread-on.me/?p=28991

[gwax23]

While Im not Anti Bitcoin by any means there is still a real threat that the government will shut it all down if it becomes too much of a threat or too big. None of the bitcoin supporters can deny that and thus there is substantial risk in bitcoins.

[Petar]

While Im not Anti Bitcoin by any means there is still a real threat that the government will shut it all down if it becomes too much of a threat or too big. None of the bitcoin supporters can deny that and thus there is substantial risk in bitcoins.

Seems to me that the government in question would have to be about as tyrannical as the one in China. I just don't see it being something that the U.S. government can readily accomplish. If they had the power to shut down bitcoin, they already would have locked down the internent the same way that the Chinese already have. Further, mass adoption threatens to become something that will severely erode the tyrannical control that they currently do exercise.

[cheapseats]

Nine months ago, "as bitcoin climbs back to $12..."

The Bernie Madoffs of Bitcoin? As market heats back up, virtual hedge funds claim fantastical profits
By Adrianne Jeffries on August 15, 2012


The market for Bitcoin — the digital currency of choice for the tech-savvy libertarian set — is hot again. The price of the popular online currency has steadily risen over the last six months, and the number of Bitcoin transactions per day has increased roughly 400 percent since May. The resurgence has several causes: the debut of a popular Bitcoin betting game, increased interest from Europe, and the growing success of the underground illegal drug bazaar, Silk Road. But the currency’s rebound has coincided with a relatively new phenomenon in the Bitcoin financial sector: investment funds that promise sky-high returns based on secret strategies.

So-called "High Yield Investment Programs" are suddenly being heavily advertised, promising to use investors' Bitcoins to trade large volumes, engage in complex arbitrage, and otherwise bet on the market in lucrative ways. The creators of these programs promise to pay out as much as 12 to 18 percent a month or 6.75 percent a week in returns to investors. The number of HYIPs posted in the "Lending" section of the Bitcoin Forum offering north of six percent is increasing. But suspicion is growing that these HYIPs may be nothing more than good old pyramid schemes, in which the money from new recruits is used to pay the earlier investors.

"THIS IS GOING TO BE THE NEXT BLACK EYE STORY FOR BITCOIN."


"This is clear cut. This is Ponzi 101," said Bryan Micon, who has publicly taken up the issue. Micon is a professional poker player who became interested in Bitcoin about 18 months ago and now works on the Bitcoin poker site Seals With Clubs. He noticed the abundance of HYIPs as soon as he discovered the Lending forum. "I realized Lending was literally filled with scams. It really pissed me off too... this is going to be the next black eye story for Bitcoin."

BITCOINER BEWARE
Micon posted a list of HYIPs he had identified as scams, igniting a debate that became a 40-page long thread on bitcointalk.org, the Bitcoin forum that serves as the community’s hub. (Earlier this week, forum moderators moved the HYIPs out of the main Lending forum due to lobbying by Micon and others. The HYIPs now appear under the rather neutral-sounding subforum "Long-term offers.")

Last month, when one user posited that HYIPs could be the "Bitcoin Killer app," Gavin Andresen, the lead developer on the Bitcoin project, replied without mincing words:

Good advice that I expect will be widely ignored: only invest in what you know.
So-called high yield investments are (almost?) always dressed-up Ponzi schemes. If you "invest" in them then please lick your wounds quietly when they implode. And if you're one of the lucky few who make money on them, don't expect me to admire your investing wisdom, any more than I'd admire the number-picking brilliance of a lottery winner.

"I think any 'investment' that promises low-risk high-interest returns is almost certainly a scam. My general advice would be to avoid investing in anything that you don't understand," Mr. Andresen told The Verge in an email. "That includes Bitcoin!"

The idea of a Bitcoin "Ponzi scheme" isn't new, nor is it necessarily considered bad. The first generation of pyramid schemes were more transparent. The Bitcoin Randomizer was a blatant pyramid scheme that paid out earnings according to who got in first. The Randomizer was like a lottery or a gambling game, with low stakes and potentially high returns. Other schemes including Bitcoin Matrix and Bitcoin Pyramid operated similarly with payouts according to referrals.

By contrast, the new HYIPs sound more like Bernie Madoff's hedge fund, claiming to earn huge returns through a secret investing formula. In May, Bitcoin Magazine ran a cautionary story about the phenomenon. "Over the past five months, the Bitcoin community has seen the emergence of savings funds offering interest rates far higher than any seen in the traditional economy," the story read. "More recently, however, the interest rates seem to have lost all sanity."

One "high risk fund" at the exchange MyBitcoinTrade teased a 20 percent return every month for six months. A fund called "Joker's Dragon BTC Investment Fund" promises a 300 percent profit. Bitcoin Savings & Trust, an invite-only operation run by the psuedonymous pirateat40, advertises a seven percent weekly return on deposits of more than 25,000 BTC, a sum worth more than $275,000 at the time of writing. How does BS&T achieve these returns? "If I told you then I couldn't do what I do," pirateat40 says.

BS&T in particular has become a target of suspicion. Many of the other HYIPs are "pass-through" funds, which simply turn around and invest in BS&T. There's no evidence that BS&T is a scam, however. The Verge talked to a member of the BTC Police, a group that monitors and investigates Bitcoin theft. No one has complained of losing money to BS&T, he said. Still, BS&T and other HYIPs are promising returns that strike many as too good to be true.

TWO SIDES OF BITCOIN
One could argue that there are two main groups using Bitcoin, a virtual currency released in 2009. Bitcoin was designed to be self-regulating, without the need for a central authority to back it or control it. The code provides for a steadily increasing money supply, user-powered verifications of transactions, and a greater degree of anonymity than can be found with mainstream forms of payments.

There are those who use Bitcoin as a currency; that is, for commerce. It’s now possible to buy everything from books to legal services. Bitcoin Jobs, ForBitcoin, and Bitgigs provide listings mostly for coding work, but there’s also the occasional ad for translation, artwork, and various other things ("I will Send 20 nude photos of my girlfriend for 1.00 BTC," reads one offer).

Then there are those who simply trade Bitcoin, taking advantage of the currency's volatility to make bets the way professional traders swap euros and yen. These two groups overlap considerably, but the currency's popularity as an investment vehicle has at times distracted from its adoption as a unit of money. The Bitcoin economy is still so small that large trades can swing the market, making it difficult for vendors to price their goods.

"The Bitcoin adoption rate is rock steady, and more and more people are investing in Bitcoin for its many virtues," Mark Karpeles and Gonzaque Gay-Bouchery of Mt. Gox, by far the biggest Bitcoin currency exchange, told The Verge in an email. "But we do not believe that we have reached the climax of the Bitcoin just yet... there will be many more years before Bitcoin reaches the minimum level of adoption for it to transition from an 'Investment Tool' to a 'Serious Tool' to compete with other means of payment."

Theft and security breaches have undermined Bitcoin's viability as a currency from the beginning. Speculation, which can lead to bubbles and busts, is also destablizing the currency — especially as investment schemes get more complicated, grandiose, and high-risk.

As the Bitcoin investment sector matures, it is starting to mirror the US investment banking industry’s trademark complexity. The Bitcoin Global Stock Exchange allows Bitcoin startups and entrepreneurs to issue shares, bonds, futures, and other financial instruments. As one Bitcoin trader told this reporter last year when the Bitcoin derivatives market was just getting off the ground, "Bitcoin is like Wall Street was 15 to 20 years ago when I entered. Fragmented markets, wide spreads, manipulation, the trading stone ages." And in the absence of a Bitcoin credit rating agency, it's impossible to tell which operations are legitimate and which are being held together by string.

IS THERE A BITCOIN BUBBLE?
Although Bitcoin seems to be rebounding, these trends have elicited skepticism along with bullishness. There's reason to be cautious. Bitcoin is a relatively new currency. In lieu of a government or central authority, Bitcoin is essentially backed by a sophisticated technology of unknown origins; a small development team; and the faith of its users. Intense speculation and recurring cyberattacks by the equivalent of information superhighway robbers have made some people rich and others poor.

Last summer, the price of a single Bitcoin hit an all-time high of $31.91. The currency’s value rose incredibly quickly, and the peak was reached after a surge of media interest in the e-currency experiment. Then a sudden crash sent the market into a tailspin, the mainstream attention dwindled, and in November, the price hit $1.99. The dramatic volatility suggested the market for Bitcoins had been fueled by hype.

One could argue that any time or money invested in Bitcoin is high-risk. But as the technical core of the new economy and the supporting infrastructure evolve, the basic bet looks less risky. " The ultimate goal is to form a 'closed loop' economy where people both earn and spend bitcoins," Mr. Andresen said in an email. "I still call Bitcoin ‘experimental,' and still tell people to only invest time or money that they can afford to lose... but every month that goes by both the core system and the supporting infrastructure (exchanges, e-wallets,merchant solutions, storage solutions, etc.) become less experimental and more reliable.

The Bitcoin Project will be making a major announcement in September that should contribute some stability, he said. Still, he predicted things will continue to be exciting in the world of Bitcoin with "continued controversy and chaos."

The number of HYIPs promising champagne profits certainly adds to a bubbly atmosphere. Optimism is returning, but as Bitcoin climbs back up to $12, some are beginning to wonder: Is there a Bitcoin bubble? The well-respected startup investor Fred Wilson recently solicited opinions about the state of Bitcoin on his blog. "Bitcoin is still very much a fringe thing and is tiny as these things go. Compared the the volume of transactions Square will do with Starbucks, Bitcoin looks like a joke," Mr. Wilson wrote. "But I like to pay attention to the jokes, the laughing stocks, because occasionally they get the last laugh."

http://www.theverge.com/2012/8/15/32...ings-and-trust

[Petar]

Fear mongering...

It's called "reality mongering".

You may find it inconvenient to think that your precious federal reserve system may be unable to eat its own tail forever, but those of us who can make out the obvious have an idea of what is coming.

[PaulConventionWV]

That is infinitely better than a bunch of 1's and 0's. What utility comes from having 1 bitcoin in of itself seperate from the bitcoin currency system?

Aesthetics is nothing. We're talking about gold being hundreds of times what it would be because it is shiny. There's nothing wrong with that. What people fail to see is that bitcoin is totally different from any other form of currency. Information on a computer has no intrinsic value, and yet the CIA will attest to its value, as will just about anyone.

We've always been accustomed to thinking money has to be something tangible because that's the way it's been for millenia, but nobody ever considered the value of a uniquely self-contained digital entity. In an age where the internet has taken the world by storm, it's safe to say that something that relies on the internet can still be valuable even though there is nothing that bases it in tangible matter reality. It has value like the concept of logic has value. It doesn't exist, but people know what it means and they all know it can be used. The world is shrugging off the idea that money has to be based in material wealth, and of course people are going to dump on it.

Record labels turned down the beatles because they said "groups with guitars" are "on the way out."

People said the television was a fad.

People are saying the same thing about bitcoin because they simply can't understand the world outside of the paradigms they have been taught with, and that is the idea that money has to be materialistic, just like wealth is materialistic. The world is changing and leaving these people behind. Bitcoin is not like paper money because paper really does exist as a material, but it just so happens that that material is almost completely useless when used as money. The real problem with money is that it IS tied to material wealth, even though it is worthless. Bitcoin is completely separate from all material wealth because it does not depend on how much paper you shuffle around, and its value does not depend on the ratio of real to imaginary paper that is being circulated.

[PaulConventionWV]

That is true that there are some on this board that are not educated about it. I actually think bitcoin is a great idea that needs to be talked about and thought upon more. However, the problem for me and many others is that isn't tied to something physical. If you took away the bitcoin currency system and gave me 1 bitcoin. I wouldn't value it for any utility whatsoever. The utility comes from a currency and currency alone. That is where my beef and many others lie. Yes bitcoin has some really good characteristics, but those are secondary when the only value comes from others accepting it.

I don't think it is theoretically possible, but we need to figure out a way to mix hard currencies or even $'s to bitcoin. The medium of exchange characteristics of bitcoin are very good. If there was a way to connect it to something more real than "the power of math" and energy it takes to mine bitcoins, it would be gameover.

I happen to think it's the fact that bitcion is NOT physical that gives it its value. Why do we all have this idea that money has to be something physical? The value of bitcoin is that it's not chained to material wealth. For millenia, we've had to settle with material wealth as a store of value, but there's no reason we couldn't have a currency that serves better as a currency specifically because it's NOT tied to the speculation about a certain material's value as a physical object.

We all live with this idea that wealth MUST be tied to something physical because that's how it's always been, but that doesn't mean that's how it has to be.

[PaulConventionWV]

I am so mad at my self right now. About a year ago a canadian exchange opened up and I had planned to throw a spare $10 at these things every week as a novelty because I liked the idea of them. It went well for a few weeks but then the exchange decided to go "legit" and required paperwork to continue making deposits. I sent them my paperwork but my scanner cut some of it off and they rejected it. I got lazy and said $#@! it and just took what coins i had bought and forgot all about bitcoins untill i came on here the other day and noticed holy $#@! they sky rocketed! If i had gotten off my ass and filled out the work again and stuck to my original plan i'd be able to pay off half my student loans!

I'm still sitting on an unexpected chunk of change, up 1000%+, but man i am wracked with a bad case of the "should of's"

I think I am going to fill out that paperwork and cash out most of my holdings. I am a believer in the project but this is insane, the 2 year chart is unnatural. If this was the dow this forum would be alight with cries of manipulation.

If Max Keiser is right, you may not have to kick yourself in a few years, considering the prospects of where bitcoin may end up going.