And also easy losses of money. — Agustino

It's OK, I won't do that.

It's OK, I won't do that. — Michael

I have yet to meet a man who says he will do that.

Gonna try again with CodeBase tonight. Had an issue yesterday where the photos of my ID weren't high enough quality so they were rejected, and that placed a 24 hour block before I could try again. Hopefully I'll have more luck this time. — Michael

That's the crazy thing. How is the price going up if nobody can actually manage to buy it? It's possible that there's a lot of price manipulation by the insiders at the exchanges. Nobody knows. It's a mystery though. Every exchange is collapsing under the weight of the transaction volume, yet the price keeps going up.

An acquaintance of mine was trying to explain to me why he thought bitcoin will exceed 40k-50k per unit by this time next year.

"It's about trust" he said. "No other currency can be trusted like Bitcoin can, America can just print as many American dollars as it pleases. Everyone can just use bitcoin, we have no need for other currencies. Fractional lending. Visa! They're all bad!".

I tried to explain the hurtles facing bitcoin (authentication times, power consumption, possible unforeseen digital vulnerabilities) and the realities of currency (especially what makes the American dollar so secure/the global reserve currency) but nothing would land and he just kept coming back to the idea that every other form of currency is a bull-shit lie put on by corrupt governments and banks.

With this kind of widespread radical distrust of government and radical faith in bitcoin, ironically, it might actually be able to get that high one day. (that would mean all 21 million bitcoins once they're mined, would be worth around 1 trillion dollars altogether).

This is on my watchlist for tonight https://www.netflix.com/au/title/80154500

The only case where it makes sense really is for illegal activities. Drugs, arms trading, etc. — Agustino

This is actually not true. Bitcoin is not as anonymous as people think Every transaction is tracked forever. For example that NiceHash $62M theft, those bitcoin are sitting in a wallet whose ID everyone knows. If the thief tried to convert it to cash, they'd be found out. You need to give your real-world identification to the exchanges in order to open an account.

It turns out that there are cryptos that are completely anonymous. The biggest one is called Monero. It's built on a version of the blockchain that's designed for true anonymity. They mix up each transaction with others so that you can't trace the coins back to any particular account. As I understand it, discerning criminals use Monero now, not bitcoin.

Disregard

I tried to explain the hurtles facing bitcoin (authentication times, power consumption, possible unforeseen digital vulnerabilities) and the realities of currency (especially what makes the American dollar so secure/the global reserve currency) but nothing would land and he just kept coming back to the idea that every other form of currency is a bull-shit lie put on by corrupt governments and banks. — VagabondSpectre

Market crazes (& speculative bubbles) are always marked by people dogmatically sticking to one idea, and greedily chasing it, thinking that they too can earn. They are generally unable to provide even one single rational idea behind their actions.

Funnily enough, in this thread, some reputable atheists are doing exactly this, backed by absolutely no rationale or reason, except that the price is going up, and they want in. They are behaving much like the crazed cultists who strap bombs to their chest and blow themselves up thinking that it's the will of God.

Generally, market crazes are created. Those with money can buy strategically placed media assets to inseminate such ideas in people. They can also create the necessary fluctuations in price. And people bite the bait because of their greed (or fear). However, once created and on the way, like now, they're entirely irrational and uncontrollable. So one has to be careful when they cash out.

With this kind of widespread radical distrust of government and radical faith in bitcoin, ironically, it might actually be able to get that high one day. (that would mean all 21 million bitcoins once they're mined, would be worth around 1 trillion dollars altogether). — VagabondSpectre

It will never reach that high. By New Years' Eve or Christmas, it will have tanked, that's my prediction. Until then, it may reach 20-30K. Or it may tank sooner. The reason I'm saying that is that most people want to cash out for the holidays ;) - they don't want to be playing stocks on Christmas Eve.

You need to give your real-world identification to the exchanges in order to open an account. — fishfry

So large criminal organisations sifting through millions upon millions of dollars cannot get fake identification, or steal other people's identification, etc.? They cannot make the money lost by transferring it through a network of different accounts, before re-directing all of it to one main account?

I mean really, as much as the entire US? — Posty McPostface

There was a story in the last few days that if Bitcoin's growth were to continue at this exponential rate, it would be using ALL the world's energy resources by 2022. So who would have thought that a completely imaginary digital invention, that has no physical counterpart aside from digital code, would have an enormous carbon footprint?

https://www.wired.com/story/bitcoin-mining-guzzles-energyand-its-carbon-footprint-just-keeps-growing/

I have yet to meet a man who says he will do that. — Agustino

Yeah, but I have a bulletproof plan. I'll only buy into the currencies that increase in value.

Yeah, I was referring to that report, but I edited my post because I couldn't find it.

Yeah, but I have a bulletproof plan. I'll only buy into the currencies that increase in value. — Michael

They all do >:O

So this could actually transform from an interesting speculative bubble, and 'gee I wish I had bought some of them in 2010', to an actual economic AND environmental crisis.

Today, each bitcoin transaction requires the same amount of energy used to power nine homes in the US for one day. And miners are constantly installing more and faster computers. Already, the aggregate computing power of the bitcoin network is nearly 100,000 times larger than the world’s 500 fastest supercomputers combined.

And it's all growing exponentially. Now there's a Black Swan event that nobody would have thought of a year ago.

And how can we profit from it? What should we be shorting?

Don't know, I've always been totally crap with investments. I'm just one of the punters who missed out and is now watching the news with incredulity. But this 'energy resource hit' is, I think, a 'Black Swan event' - a chaotic unintended consequence of an ingenious scheme.

I guess their big consumption is of electricity, so if anything fails it will be the electricity providers not being capable to keep up with demand, therefore raising prices to lower demand. And if they raise prices... what will happen? Bitcoin miners will have to depend on higher bitcoin prices to maintain the economics of their operations. If the market tanks, they'd be screwed. Are there any publically traded bitcoin miners? Anyone know?

If Bitcoin prices don't fall, I don't think electricity providers will be allowed by the governments of the world not to provide to consumers because they have to provide to Bitcoin miners instead who are more profitable. So then the question is will electricity providers be able to keep up with the demand?

For those unable to buy Bitcoins, this looks like a good alternative. Less risky too (no risk of your bitcoins getting stolen).

https://www.marketwatch.com/investing/stock/gbtc

In the past month, Bitcoin rose 130% and GBTC 100%. So quite close. If I were to risk investing in either, it would certainly be through an investment fund.

"It's about trust" he said. "No other currency can be trusted like Bitcoin can, America can just print as many American dollars as it pleases. — VagabondSpectre

This is such an accurate perspective on those investing in Cryptocurrency. Which is why I asked what the USA dollar was backed by because it USED to be backed by Gold bullion but that is no longer the case and as you suggest, we can keep printing it as we need it but eventually it will become worthless on the world stage.

This is such an accurate perspective on those investing in Cryptocurrency. Which is why I asked what the USA dollar was backed by because it USED to be backed by Gold bullion but that is no longer the case and as you suggest, we can keep printing it as we need it but eventually it will become worthless on the world stage. — ArguingWAristotleTiff

It's backed by the might of the US government ;) - the dollar that is.

This is such an accurate perspective on those investing in Cryptocurrency. Which is why I asked what the USA dollar was backed by because it USED to be backed by Gold bullion but that is no longer the case and as you suggest, we can keep printing it as we need it but eventually it will become worthless on the world stage — ArguingWAristotleTiff

The Federal Reserve is like a fiduciary decision maker when it comes to printing money; they're only supposed to print dollars as the wealth of the economy grows. The whole reason the FED doesn't take direct orders from the federal government is precisely because nobody trusts a king who manages their own finances (if "the king" is backed by a bank who has their own reserves then everyone feels confident when lending and dealing with said king because the they act like a guiding force against bad financial decision making and will/can actually pony-up should things go sour). If the American government really was allowed to print their own fiat they would never have any budget deficits, and the American dollar would have long since hyper-inflated.

What Aug says is also true. The American government (it's ability to sanction and otherwise fuck up it's opponents) and military is like an on-going threat of reprisal for any entity that could damage or destroy the value of the American dollar and the strength of the American economy. The American dollar may be fiat, but it is physically and speculatively held in place with brick, mortar, and mortars. The fact that it's the global reserve currency means every other nation of note lives or dies by the success of the dollar along with the American economy, even nations like China, Russia, and North Korea. We're too interdependent on the dollar for it to fail unless we're prepared to deal with global recession and decades of setback regarding technological (and therefore medicinal, environmental, and economic) progress.

@Agustino @VagabondSpectre Thank you for sharing your knowledge with me. It gives me a sense of comfort knowing I am around people smarter than I. (Y)

Invest in Moroccan solar energy projects instead! (not sure if this kind of thing is even viable)

http://www.invest.gov.ma/?Id=24&lang=en&RefCat=2&Ref=145

So we're on what, delusion? Or new paradigm?

So we're on what, delusion? Or new paradigm? — Baden

We're at about the right time to short-sell gbtc I think >:)

Down 7% on the hour. Fun to watch.

So this could actually transform from an interesting speculative bubble, and 'gee I wish I had bought some of them in 2010' — Wayfarer

This whole thread is a clear sign of a very large bubble. Because this is a Philosophy Forum.

When you have ads about apps Trading bitcoin coming up if you play some silly smartphone game, you know that loonie time is here. This is the time "when taxidrivers are giving stock tips"-moment. Classical moment when it very likely bursts.

Enjoy the moment with popcorn.

And anyway, this bubble bursting isn't so serious as the housing market: people need a home to live, but they don't have to use cryptocurrencies.

At least yet. Perhaps when money as something physical is taken out of circulation.

From the Wired article:

By July 2019, the bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the entire world does today.

So, something plainly has to give.

So, something plainly has to give. — Wayfarer

Bitcoin's already dead IMO. It may go to a million US first, but it's going to zero. It has unsolvable scaling problem, electricity usage being one of them. The centralization of miners is another. Their network's already congested and inefficient. Transaction costs are rising and settlement times are lengthening. Their protocol is designed to get worse the more people use it.

To put bitcoin's performance in perspective, the bitcoin network can handle up to 7 transactions per second. By comparison, Visa handles a constant stream of several thousand transactions per second and up to 50K/sec at peak, using orders of magnitude less electricity per transaction. Many delusional bitcoin enthusiasts think bitcoin's going to replace the world's financial system. This is not going to happen.

Some other crypto might. And there is a technical revolution based on blockchain and other distributed ledger technologies that may end up being bigger than the Internet. But bitcoin itself is already over. If someone gets in at $15k and out at $20k more power to them. But someone's gong to be that last fool.