Bitcoins/Litecoins/Virtual Currencies

You knew it was coming! I guess China has been cracking down on bitcoin from what I've seen over at bitcointalk.org. Could be a chance to buy in cheap though.

Crypto currency won't disappear anymore now anyway.

Mist_sl said:

I think BTC-E is better? Pretty sure you can use coinbase if you just want to work in bitcoins.

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I couldnt figure out how to get money into BTC-E. They wont accept US bank wires.

Yep

Yeah I've gone on about it enough, obviously a ponzi scheme.
Here's a nice writeup of some data that also points to that conclusion.
These Three Graphs Prove That Bitcoin Is a Speculative Bubble | Ordinary Times
But it's very hard to tell if it doesn't have some life left in it.

Unfortunately, I had orders in just below these lows to close my shorts and then go long.
Here's an updated chart.

The red lines are also support and resistance. So my plan is now, I'm looking for a small bounce to the top red line and then one more down move to the bottom red line. Before a retrace backup to new highs.

So I decided to close my short here at just under 600 and will try and put it on again a little higher, I guess around 750, maybe a little higher. This small gap above 600 is going to fill soon I think.

Do you think it's a speculative bubble or a ponzi scheme? I didn't read the article yet, just asking based on your post and the title of the article.

Eyashusa_sl said:

Yep

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Look at Amazon's stock price from 1998 to 2001.

By no means am I saying Bitcoin is a sure thing, but I think a lot of people blow everything out of proportion when things get super volatile. Its STILL double what it was a month ago. I'm not surprised a lot of people left the market in a rush when they realized it wasn't skyrocketing past 1200, but its important to distinguish that the majority of bitcoin holders are doing it for speculation and will run off easily. I have nothing to back this up, but I imagine day after day more and more people are slowly buying into bitcoin as a store of value with the intent to hold long.

All of the above. But yeah, I suppose it's all semantics really.

I think it's a bubble, like the article argues. People are just going nuts and the coins have no intrinsic value.

But I also think it's a pyramid scheme as well. With the 'pyramid like' get in first and mine your coins while it was easier at the top of the pyramid. Whether or not it officially falls under 'ponzi scheme' I suppose is debatable. I guess it isn't a bonafide ponzi scheme like Bernie Madoff was running. More just a market based bubble ponzi scheme. So yeah, whatever you want to call it. I've never really been big on semantics.

Tuco_sl said:

So anyone have a good guide on how to buy bitcoins? Should I just use mtgox.com and do whatever they say?

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I would try localbitcoins.com -- it gets a lot of positive reviews. Essentially, meet some dood with bitcoins at a bank and do your thing with smartphones. If you don't feel saavy or safe enough, then your next best solution is coinbase.com -- I've done a handful of BTC <--> USD swaps with them and the 5 day wait is annoying but beats any alternatives.

rinthe_sl said:

All of the above. But yeah, I suppose it's all semantics really.

I think it's a bubble, like the article argues. People are just going nuts and the coins have no intrinsic value.

But I also think it's a pyramid scheme as well. With the 'pyramid like' get in first and mine your coins while it was easier at the top of the pyramid. Whether or not it officially falls under 'ponzi scheme' I suppose is debatable. I guess it isn't a bonafide ponzi scheme like Bernie Madoff was running. More just a market based bubble ponzi scheme. So yeah, whatever you want to call it. I've never really been big on semantics.

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I struggle with the "coins have no value" argument. I would argue that the network and its algorithms absolutely have an intrinsic value. You are correct in stating that 1 bitcoin in a vacumn is useless to anyone, but so is an infinite pile of gold. Perhaps I don't understand this intrinsic value argument well enough -- wouldn't ("breathable air, potable water, edible food, OR: tools that the individual can use to obtain the prior three categories") be the only truly intrinsic valuable items to an individual? Then we have to re-define intrinsic value to something more broad when studying a group of individuals; maybe between the whole they have the knowledge they need to use something more complex in perpetutity.

It seems overly shallow to look at the entire BTC network as nothing more than sum in a wallet.

I think the point I'm trying to make is that I don't see any discernable difference between gold and bitcoin -- both have utility to me only so far as I can trade them for something else I actually give a shit about. I recognize that gold has its uses for industrial and commercial purposes, but my undestanding is that the people HOLDING gold as a hedge against fiat give it much more value compared to the dollar... its purely industrial/commercial uses do not justify its trading value. How is this not the same situation that Bitcoin has, except with a much lower market cap (and understandably higher volatility)?

EDIT: I'm reading the comments on the article you linked. One in particular...

"When people buy to hold an asset based solely on its market price, that's a speculative bubble."

I don't understand why this doesn't apply to the millions of people who have a percentage of their portfolio in gold or other commodities? Isn't the purpose of this solely as a hedge against a fiat currency?

It's definitely a speculative bubble. No question on that. It's also certainly not a ponzi scheme in the classic sense. What sets it apart from other speculative bubbles though is the ideology behind it and the evangelism of it's supporters, which creates a bizarre atmosphere that resembles aspects of ponzis and pyramid schemes.

While I'm reasonably certain the end value of bitcoin is essentially $0. I also not convinced we've seen the top of the bubble yet.

Tuco: MtG:OX is a black hole for your money. Money goes in --- can't come out. Coinbase seems the only reliable way to convert bitcoin to real money. You can get money back out of a lot places, but it seems like people have problems getting significant money out of most of them. Like approve a $500 sell. Sell $5k? Suspicious activity. Account suspended.