Anyone on the Bitcoin train?

[BenedictGomez]

Kind of like banning drugs.  Or prostitution.  Or the trade in human organs.  Human trafficking.  All of those trades are widely occurring with significant government bans.

 

Trying to ban a decentralized, global and virtual commodity is impossible.  You would need the cooperation of every entity on the Internet to achieve that.  It is an impossible task.  There is absolute no way to do it.  You have the same chance of removing all of the porn on the Internet as you do of stopping virtual currencies.

 

I already mentioned banning it wouldn't make it go away.    But there is a fundamental difference between banning a good, versus banning a fiat currency used to transact a good.

 

When you ban a good, as you noted, the price of that good often rises.   This is because the good has some actual value, there is demand for that good, and often the "ban" decreases available supply.

 

Were you to ban a fiat currency, however, that currency will plummet in price.  This is because the fiat currency has no actual value beyond human perception, and the "ban" impedes demand since there are fewer avenues with which to transact is your (no longer) valid fiat currency.   As I said, you just need the "right" countries to ban it.

 

And Bitcoin is much worse than a government-backed fiat currency, because at least with government-backed fiat currency, there is an intellectual way you can go about ascribing value (price increases & price decreases).  Bitcoin, by the definition of what it is, cannot work like that, so Bitcoin is literally more like an adult version of Beanie Babies or Baseball Cards.   

 

I predict this is not going to end well.

Edited December 12, 2017 by BenedictGomez

[Haskell_Hunter]

I already mentioned banning it wouldn't make it go away.    But there is a fundamental difference between banning a good, versus banning a fiat currency used to transact a good.

 

When you ban a good, as you noted, the price of that good often rises.   This is because the good has some actual value, there is demand for that good, and often the "ban" decreases available supply.

 

Were you to ban a fiat currency, however, that currency will plummet in price.  This is because the fiat currency has no actual value beyond human perception, and the "ban" impedes demand since there are fewer avenues with which to transact is your (no longer) valid fiat currency.   As I said, you just need the "right" countries to ban it.

 

And Bitcoin is much worse than a government-backed fiat currency, because at least with government-backed fiat currency, there is an intellectual way you can go about ascribing value (price increases & price decreases).  Bitcoin, by the definition of what it is, cannot work like that, so Bitcoin is literally more like an adult version of Beanie Babies or Baseball Cards.   

 

I predict this is not going to end well.

 

You are misunderstanding one critical aspect of virtual currencies:  They cannot be fiat currency because they are decentralized currency.

 

Fiat means that there is a centralized consolidation of that currency:  Usually a nation state.  Since Bitcoin is not sponsored by a nation state, it cannot be fiat currency.  However, it can be and is currency with a value that works similarly to gold, as I described earlier.  The market is more than likely over-hyped and extremely inflated, but this happens in all markets.

 

Most people in finance cannot describe Bitcoin within the constraints of what they know.  It is something that is very new and does not conform to existing currency models.  It's a hybrid between a currency and a commodity, something that we're taught in finance should never occur.  But it has.  So the value of the virtual currency is affected more so by market forces than by nation state economies.

 

What I do expect to occur is a massive amount of regulation going into place so that nation states can skim value from people participating in virtual currencies.  Regulation always stifles innovation and makes it more difficult for people to interact with a product or service.  While nation states will attempt to do this, the ability to create a new virtual currency functioning outside of the reach of nation states will always exist.  The genie is out of the bottle, and there is no way it's going to get put back in.  Virtual currencies fit into the Internet perfectly:  They are open standards that anyone can freely participate in.  The ability to move information around the globe unimpeded has put many restrictive government regimes at risk.  Platforms like Twitter and Facebook, as well as technologies like VPNs and Tor have allowed the silent few to express themselves globally.

 

Free float currency was the first step toward the decentralization of currency from nation states.  It is now information that moves freely across the globe.  It's a new paradigm in currency that will eventually lead to a global currency that eliminates the demand for highly regulated fiat currency.

[John B]

Bitcoin takes 4000 times more energy per transaction than a credit card. No one cares about it as a currency, only reason anyone heard of it is because of the speculation bubble, hit 19,000 today. Of course will crash, it's a scam from some international crime organization like SPECTRE.

[_X7]

What I want to know is why do people want to sell you gold for your cold hard cash?

 

I've done this before:

[newjerseyhunter]

[1957Buck]

 

Why Shout and take it all Personal have a debate without all the name calling and put downs everyone has an opinion take it all for what it is worth.  whats in your wallet 

[newjerseyhunter]

Why Shout and take it all Personal have a debate without all the name calling and put downs everyone has an opinion take it all for what it is worth.  whats in your wallet 

 

I'm not sure what you are talking about. No one is shouting or name calling. This picture was a joke, relax, have a laugh, and if you still hear shouting try turning your hearing aid down.

[BenedictGomez]

Like Bitcoin, U.S. college tuition is also an unsustainable bubble.

[BowhunterNJ]

Article from today, looks like handling the volume is the big issue right now, along with DDoS attacks for some exchanges.  Hard to trade effectively when it takes hours to days to get your transaction through, no?

 

https://www.reuters.com/article/uk-markets-bitcoin-risks-insight/bitcoin-fever-exposes-crypto-market-frailties-idUSKBN1E724X

[BenedictGomez]

  Hard to trade effectively when it takes hours to days to get your transaction through, no?

 

Big time.

 

   The liquidity of Bitcoin is simply horrendous, which is a systemic threat of nuclear bomb-like proportions.    This will not end well.  

 

Imagine the scene in It's A Wonderful Life when there's a run on the Bailey Bank, and the bank cant pay all those depositors simultaneously. 

 

Now just replace that angry mob at the bank teller window with a bunch of naive people

[BenedictGomez]

Article from today, looks like handling the volume is the big issue

 

 

And this bit from the article you posted, assuming it's true, is positively shocking. 

 

I actually read it 3 times just to make sure I wasn't misinterpreting it, because this should never happen in any remotely efficient market.

 

 

 

During a particularly volatile period of trading on Dec. 7, bitcoin surged from below $16,000 to $19,500 in less than an hour on Coinbase’s exchange GDAX, while it was changing hands at less than $16,000 on another, Bitstamp.

 

That's positively clown shoes right there! LOL   I imagine somewhere in the world there's somebody with a Bitcoin arbitrage algo that must have made millions on that nonsense.

Edited December 14, 2017 by BenedictGomez

[1957Buck]

I'm not sure what you are talking about. No one is shouting or name calling. This picture was a joke, relax, have a laugh, and if you still hear shouting try turning your hearing aid down

Put your Glasses on that is called shouting I am Laughing   

[1957Buck]

Now for the Eye Test   Shouting     Whispering    Get it now 

[newjerseyhunter]

That's positively clown shoes right there! LOL   I imagine somewhere in the world there's somebody with a Bitcoin arbitrage algo that must have made millions on that nonsense.

 

If you were paying attention it could have been you

[Haskell_Hunter]

Now for the Eye Test   Shouting     Whispering    Get it now 

 

It's a picture, he can't change the size of the typeface.