Virtual currencies recovering!

[ImpulsE69]

Yea..as long as people are trying to use it as a "get rich quick" scheme based on what they can sell it for actual money, it is no better than playing the stock market.

When I collect dollar bills, it's to get "more dollar bills". I'm not collecting them because I think they'll each be worth $2 tomorrow.

 

[Zenmervolt]

Bitcoin value is fairly smooth and predictable when viewed on a larger timescale as well. And this isn't even a fair comparison, comparing 3 years to 100 years. Check again in 17 years and see if the 20 year chart for bitcoin isn't more volatile than the USD chart.

You have conveniently (for yourself, anyway) missed the entire point and substituted an argument I did not make.

Bitcoin's daily fluctuation is far too large to make it a viable currency. Full stop. A currency cannot fluctuate in value by 30% within a single day and still have any substantive long-term predictability. I wasn't "comparing 3 years to 100 years" I was commenting on the fact that the dollar's value does not suffer severe short-term swings in the manner that the value of bitcoins does.

Slow movements in currency are tolerated by the market because they are largely nondisruptive in the short-term and can be accounted for with sufficient accuracy in the long term. The daily fluctuation in the DXY (the dollar index) is approximately 0.6% (0.006). As I stated before, this is orders of magnitude better than the intraday fluctuation in bitcoin value. There is simply no possible way that bitcoins are a feasible currency at this time.

If you want to claim that time will fix that as more bitcoins are "mined" that's fine. But you'll have to forgive those of us with actual degrees in Finance for waiting until such proof exists and not choosing to invest based on mere speculation.

Yes, and those facts are true despite the inflation of the USD, not because of it.

Show me where I said that was "because of" inflation. Good luck.

ZV

 

[darkewaffle]

I do not think the LHC nor the Smithsonian were built out of people deciding that saving was a waste of time because of inflation. I think you are trying to make a point on a false premise. Inflation discourages savings, that was my point. Do you think honestly think the Smithsonian came about because a few people said "fuck saving, I'm going to spend my money and build a museum"? I can assure you that was not the case, there is no relation between inflation and the existence of the Smithsonian, or LHC, or anything else. You are either poorly informed if you think so, or you know better and you are making a dishonest argument.

Not directly related, no. But it all comes back to lending, which I think moderate inflation is vital to. In a deflationary system, I think lending would be severely bottlenecked by a lack of deposits which would subsequently put a severe bottleneck on such "great works". Without lending the lump sum amounts needed to jumpstart big projects would be far more difficult to achieve. As such, I think inflation is necessary to create an environment where projects like that can exist, yes.

The saying is "hate the game, not the player". The bankers are simply taking advantage of a broken system. Fix the system and you don't need to rely on people being nice. Any economist will tell you that humans do what benefits themselves. Expecting people to disregard years of evolution and work to the common good in a system that can be easily abused for personal gains sounds absurd to me.

What they did was make bad loans. No matter whether your currency inflates or deflates, if you make a loan that someone is unlikely to be able to pay back, it's going to bite you in the ass. However, the bubble was an anomaly. It's not as though that's normal behavior in our economy. It illustrates what can go wrong through abuse, but it's also very irregular.

So what? Inflation causes EVERYTHING to increase in cost over time. In a natural working economy without inflation some things may occasionally increase but most things will decrease in price over long enough timescales.

Yes, change. Not increase, change. Overall, prices will get lower. You can pick a specific example and exclaim that whale meat has increased in cost by 1000% but overall the prices of things all go down.

How do you figure it will decrease? Do you really believe if a company can lower their production costs that they'll lower their retail price to match? I think they'll milk the margin as much as possible; those benefits won't just reach the customer out of the goodness of their heart, prices may go down eventually but it will be market forces that put them there.

Technology and efficiency improving does mean that goods can be produced cheaper, but again that's only one of the factors that go into the supply curve. The fact that goods eventually become more efficiently produced is not enough all on it's own to stake a claim that "all goods would decrease in price without inflation", there's just far too many other variables in play.

The things that increase due to shortage or whatever reason fall behind and don't get purchased and the economically viable products replace it and carry society forward.

So that's what's going to happen to bitcoin?

 

[Doppel]

And that only adds to the volatility and deflationary properties of bitcoin that makes it unsuitable as a currency. This has to do with the disadvantage of a finite amount of bitcoins that require an exponentially increasing amount of work to generate. The physical supply of bitcoins cannot be modified in response to demand like any other fiat or commodity backed currency. Instead, the velocity of the bitcoins needs to increase to keep the value stable but this is not going to happen in a deflationary currency since it is rewarding hoarding.

The sad part is Chiropteran has been told this many times. He absolutely just does not understand why that property makes it untenable. He is functionally incapable of understanding this no matter how many times it is described and no matter how many ways.

 

[Charles Kozierok]

Bitcoin value is fairly smooth and predictable when viewed on a larger timescale as well. And this isn't even a fair comparison, comparing 3 years to 100 years. Check again in 17 years and see if the 20 year chart for bitcoin isn't more volatile than the USD chart.

Posting that log chart and then talking about it as if it were linear does not exactly beef up your analytical credentials.

The sad part is Chiropteran has been told this many times. He absolutely just does not understand why that property makes it untenable. He is functionally incapable of understanding this no matter how many times it is described and no matter how many ways.

Or, he knows it, and he has some sort of personal interest in bitcoin doing well.

 

[SSSnail]

LOL@ non-linear chart. Scale it properly first. Bawahahahaha.....

 

[MaxPayne63]

Or, he knows it, and he has some sort of personal interest in bitcoin doing well.

That's the only explanation that makes sense with the chart he posted as "proof" of bitcoin stability.

 

[etrigan420]

Or, he knows it, and he has some sort of personal interest in bitcoin doing well.

Chiropteran Winklevoss? :hmm:

 

[Doppel]

$115 US now. Pump n' dump in full effect!

 

[Chiropteran]

Posting that log chart and then talking about it as if it were linear does not exactly beef up your analytical credentials.

I never "talked about it as if it was linear", get your facts straight. I said it's value was fairly smooth and predictible, as it showed steady exponential growth over time.

It's growing fairly smoothly, all things considered. A linear chart won't show exponential growth properly. If we could see an accurate chart for USD value in it's earliest years I'd be surprised if it was less volatile.

You guys can't be pleased.

"way nobody will use it it is too volatile"
I show you hundreds of sites that accept bitcoin.
"those don't count!"

I've said it before and it is still true, bitcoin value is going to increase tremendously over the next 10 years. This causes volatility, because speculators will try to push the value up faster and there will be corrections along the way. So what? As long as my bitcoin are up 10X in value per year, I don't really care one bit if the price is volatile in between. If I want to buy something for bitcoin, I will. The volatility doesn't effect my ability to spend, nor does it affect my ability to bitcoin mine and save.

You have 1000 dollars, and I take away 1 dollar every week. This is USD inflation

Or you have 100 bitcoin, and you gain one every day. But once a year I'll take 3 away. This is the volatility of bitcoin.

Take your pick, I'd happily trade a little volatility for a real store of value that doesn't get inflated away to nothing over time.

 

[FelixDeCat]

$115 US now. Pump n' dump in full effect!

$146 baby!

 

[Chiropteran]

Talk about volatile! http://news.slashdot.org/story/13/0...uses-high-freq-traders-to-drop-dow-150-points

The three-minute plunge triggered by the tweet briefly wiped out $136.5 billion of the S&P 500 index's value

I'm glad bitcoins are more stable than that silly fake-money stuff used on the stock market

 

[jaedaliu]

Talk about volatile! http://news.slashdot.org/story/13/0...uses-high-freq-traders-to-drop-dow-150-points



I'm glad bitcoins are more stable than that silly fake-money stuff used on the stock market

right, a 0.93% is something worth worrying about.

 

[Charles Kozierok]

I never "talked about it as if it was linear", get your facts straight. I said it's value was fairly smooth and predictible, as it showed steady exponential growth over time.

It is not customary to show price charts in logarithmic form. Doing so without explicitly pointing out that it is logarithmic is dishonest.

You only used a logarithmic chart because you knew that it demonstrated the exact point your opponents were making, which is that its value has not been stable.

It's growing fairly smoothly, all things considered. A linear chart won't show exponential growth properly. If we could see an accurate chart for USD value in it's earliest years I'd be surprised if it was less volatile.

And I think you're pulling that out of the same dark place as the rest of what you've posted here.

You guys can't be pleased.

I think "we guys" would be pleased if you discussed things honestly rather than being deceptive and endlessly shilling for bitcoin.

"way nobody will use it it is too volatile"
I show you hundreds of sites that accept bitcoin.

What "nobody" means in the context of currency is "very few people", so "hundreds of sites" isn't much of a counter-argument. Kind of a joke, really.

I've said it before and it is still true, bitcoin value is going to increase tremendously over the next 10 years.

And as I and others have said before:
- Maybe it will, and maybe it's a giant bubble and they'll be worthless in six months; and
- Them going up in value doesn't make them a currency any more than Apple stock is a currency.

So what?

So you can't argue that something is a valid currency while deliberately ignoring all of its characteristics that make it not a valid currency. It's irrational and/or dishonest.

As long as my bitcoin are up 10X in value per year, I don't really care one bit if the price is volatile in between.

Which, again, is a sign that you are using this as an investment and not as a currency. That's fine for you, but that volatility makes its value unstable and therefore not of value as a currency, because people use currency to facilitate trade, not as a long-term investment.

Or you have 100 bitcoin, and you gain one every day. But once a year I'll take 3 away. This is the volatility of bitcoin.

Unless, of course, you bought bitcoins on April 10th, and then got to watch them lose 2/3 of their value in two days.

You sound like the hucksters pumping up the NASDAQ bubble in 1999, only at least they never pretended that it was anything but investment. Your attempts to claim that this roller-coaster ride of an "asset" is a currency are becoming rather pathetic.

 

[Charles Kozierok]

Talk about volatile! http://news.slashdot.org/story/13/0...uses-high-freq-traders-to-drop-dow-150-points

I'm glad bitcoins are more stable than that silly fake-money stuff used on the stock market

And still more blatant, transparent dishonesty. 150 points on the Dow is a little over 1%. Bitcoin has had a trading range of 7% just in the last hour.

You're shameless.

 

[Chiropteran]

And still more blatant, transparent dishonesty. 150 points on the Dow is a little over 1%. Bitcoin has had a trading range of 7% just in the last hour.

You're shameless.

Ultra hypocritical.

Your shame me for using a logarithmic graph showing percentage growth, demanding REAL NUMBERS instead of percentage change.

Now you shame me because I showed the REAL NUMBERS lost on the stock market, and now you demand that I show it as a percentage.

Talk about honest arguments, maybe you need to re-think your own.

 

[jaedaliu]

Ultra hypocritical.

Your shame me for using a logarithmic graph showing percentage growth, demanding REAL NUMBERS instead of percentage change.

Now you shame me because I showed the REAL NUMBERS lost on the stock market, and now you demand that I show it as a percentage.

Talk about honest arguments, maybe you need to re-think your own.

hypocricy not detected.

Display your percentage growth on a linear scale and everyone's happy.

You need to talk about percentage change in S&P because of the size of the market.

If real $ is the only thing that matters, nobody cares about bitcoin. It's small potatoes.

 

[Charles Kozierok]

Your shame me for using a logarithmic graph showing percentage growth, demanding REAL NUMBERS instead of percentage change.

Now you shame me because I showed the REAL NUMBERS lost on the stock market, and now you demand that I show it as a percentage.

Talk about honest arguments, maybe you need to re-think your own.

Stock movements are generally reported using linear graphs and either absolute or relative measurements. For example, nearly all stock tracking sites show something like what I just found on Bloomberg:

DJIA 14,713.60 -5.88 -0.04%
S&P 500 1,577.51 -1.27 -0.08%
Nasdaq 3,272.11 2.78 0.08%

Nobody uses logarithmic scales unless they are specifically trying to make a point that there's a huge variability in something's value.

Something's volatility is only important when measured in percentage tersm.

Intel stock is currently $23.34. If it goes down by $10, that would be a crash in value.

Berkshire Hathaway class "A" stock is currently $159,900. If that goes down by $10, it wouldn't even warrant mention.

The fact that I have to explain these things to you strongly suggests that you know very little about finance, economics, investments or even basic arithmetic, which in turn doesn't lend much credence to the idea that your bitcoin "investment" is based on anything rational.

 

[Chiropteran]

A currency (from Middle English curraunt, meaning in circulation) in the most specific use of the word refers to money in any form when in actual use or circulation, as a medium of exchange, especially circulating paper money. This use is synonymous with banknotes, or (sometimes) with banknotes plus coins, meaning the physical tokens used for money by a government.[1][2]
A much more general use of the word currency is anything that is used in any circumstances, as a medium of exchange. In this use, "currency" is a synonym for the concept of money.[3]

Based on that bitcoin is a currency.

Definition of CURRENCY

1
a : circulation as a medium of exchange
b : general use, acceptance, or prevalence <a story gaining currency>
c : the quality or state of being current : currentness
2
a : something (as coins, treasury notes, and banknotes) that is in circulation as a medium of exchange
b : paper money in circulation
c : a common article for bartering
d : a medium of verbal or intellectual expression
See currency defined for English-language learners »
See currency defined for kids »

Based on that, bitcoin is a currency.

Apparently the idea that a currency can't hold a volatile value is simply a lie, that isn't part of the definition of a currency at all.

 

[Chiropteran]

Nobody uses logarithmic scales unless they are specifically trying to make a point that there's a huge variability in something's value.

I've never wavered from the fact that bitcoin is severely undervalued, and has been increasing in value by 10X or more per year every year since it was introduced. At what point did I ever say bitcoin's value was stable? You have been trying to create a straw man through this whole thread with your "volatility" argument.

Nobody cares that bitcoin is volatile. We use it anyway.

 

[xeemzor]

A currency (from Middle English curraunt, meaning in circulation) in the most specific use of the word refers to money in any form when in actual use or circulation, as a medium of exchange, especially circulating paper money. This use is synonymous with banknotes, or (sometimes) with banknotes plus coins, meaning the physical tokens used for money by a government.[1][2]
A much more general use of the word currency is anything that is used in any circumstances, as a medium of exchange. In this use, "currency" is a synonym for the concept of money.[3]

Based on that bitcoin is a currency.

Definition of CURRENCY

1
a : circulation as a medium of exchange
b : general use, acceptance, or prevalence <a story gaining currency>
c : the quality or state of being current : currentness
2
a : something (as coins, treasury notes, and banknotes) that is in circulation as a medium of exchange
b : paper money in circulation
c : a common article for bartering
d : a medium of verbal or intellectual expression
See currency defined for English-language learners »
See currency defined for kids »

Based on that, bitcoin is a currency.

Apparently the idea that a currency can't hold a volatile value is simply a lie, that isn't part of the definition of a currency at all.

How much are you getting paid to promote bitcoin?

 

[Possessed Freak]

Based on that, bitcoin is a currency.

That behaves like a commodity.

Apparently the idea that a currency can't hold a volatile value is simply a lie, that isn't part of the definition of a currency at all.

The more volatile the currency the more likely it is that people will not use it as such. People may day trade it, they may invest in it, but they will not try to use it as a currency. Can you imagine trying to be a company that accepts bitcoins? The risk is too great for a company that lives or dies by tight profit margins.

 

[IronWing]

I have much more respect for those local work barter trade credit systems folks have experimented with. At least the work done to generate the barter credits is productive. Bitcoin mining is wasting resources for the sake of wasting resouces, a perverse incentive sytem. "I get paid to leave the lights on!"

 

[Chiropteran]

Bitcoin mining is wasting resources for the sake of wasting resouces, a perverse incentive sytem. "I get paid to leave the lights on!"

You don't understand it at all if that is what you think. Mining secures the network and handles all of the transactions. It's "wasted" the same way our banking industry is a waste.

How much are you getting paid to promote bitcoin?

$30,000+ so far

Can you imagine trying to be a company that accepts bitcoins? The risk is too great for a company that lives or dies by tight profit margins.

No, it's really not. Try reading the thread, okay? I already listed hundreds of businesses that accept bitcoin, including several car dealerships, reddit, wordpress, namecheap, okcupid, just to name a few of the larger companies.
Here is the most recent post on this- http://forums.anandtech.com/showpost.php?p=34925639&postcount=351

Accepting bitcoin is about as risky as accepting paypal, except you can't be scammed by charge backs, you pay less fees, and you don't need to worry about paypal holding your money for any reason.

 

[Possessed Freak]

No, it's really not. Try reading the thread, okay? I already listed hundreds of businesses that accept bitcoin, including several car dealerships, reddit, wordpress, namecheap, okcupid, just to name a few of the larger companies.

But I am willing to bet that those companies are not hanging on to the bitcoins as... a currency. They are immediately converting it to... a currency... so they minimize risk of holding something so volatile. What currency do you think the car dealership has in the bank for reserves? What currency do you think the car dealership wants to give out in a loan?