This Is the Week Wall Street Went Nuts Over Cryptocurrencies (bloomberg.com)

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This Is the Week Wall Street Went Nuts Over Cryptocurrencies (bloomberg.com)

Posted by msmash on Friday October 13, 2017 @06:00AM from the growing-trend dept.

Wall Street banks that weren't already on the bitcoin bandwagon appear to be piling on, or least eyeing seats, after the cryptocurrency surged to all-time highs this week on the way to $6,000. From a report: Analysts are working to keep up with demand from clients for information. UBS and Citigroup published extensive explainers on blockchain technology, while senior executives at JPMorgan Chase warmed to the cryptocurrency during the bank's third-quarter earnings call. The digital currency has risen more than fivefold after trading at less than $1,000 as recently as December, breaking the $5,000 mark this week and already targeting the next thousand-dollar level. Throughout its rise, the cryptocurrency shrugged off tighter regulations, feuding factions and warnings from the likes of JPMorgan's Jamie Dimon of fraud and an eventual price collapse.

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Bubble! by XXongo · 2017-10-13 06:02 · Score: 4, Insightful

http://www.investopedia.com/te...
What is a 'Bubble'
A bubble is an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset M and driven by exuberant market behavior.
1. Re:Bubble! by Anonymous Coward · 2017-10-13 06:05 · Score: 1
  
  If you shout "bubble" a million times, there's a good chance you might be right, once.
2. Re:Bubble! by Anonymous Coward · 2017-10-13 06:13 · Score: 1
  
  If there is a commodity whose trading value increases five-fold in under a year, and you shout “bubble” (just once), there is a good chance you might be right once.
  Any questions?
3. Re:Bubble! by Anonymous Coward · 2017-10-13 06:15 · Score: 1
  
  People are buying Bitcoin mainly because they think it's a way to make money fast. That is obviously not sustainable.
4. Re:Bubble! by Anonymous Coward · 2017-10-13 06:22 · Score: 1
  
  Indeed.
  A bitcoin is not a lump of gold. You can't actually do anything with it. Much like fiat money; its value is entirely a matter of agreement.
  There is no good reason to believe that the value will continue to increase or hold steady over time. It, of course, might, but we are speculating entirely about human agreement, and not about a natural process of resource consumption.
5. Re:Bubble! by JesseMcDonald · 2017-10-13 06:30 · Score: 4, Interesting
  
  You can't categorically declare that Bitcoin's price is "unwarranted by the fundamentals of the asset". It's a new asset type and its fundamentals are yet to be determined. We're still feeling out Bitcoin's ultimate utility and long-term viability. Surges like this are inevitable.
  We've gone through this process several times already. Each time people have declared it a "bubble", and yet... while each surge has been followed by a "crash", the average price after each crash has been significantly higher than the average price before the preceding surge. This was true at $2, $30, $200, $1200, and $4000. The long-term trend has been toward gradually increasing prices and less volatility.
  
  --
  "The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
6. Re: Bubble! by sl6551 · 2017-10-13 06:33 · Score: 1
  
  Don't call it a bubble until it meets it's terms, i.e. bitcoin needs to collapse in value then can be classified as a bubble. Surge in price alone isn't enough nor saying the fundamentals aren't there, since clearly many would argue quite the opposite.
7. Re:Bubble! by JeffSh · 2017-10-13 06:39 · Score: 1
  
  the post all-time-high "crash" isnt a "crash" because it's a profit taking exercise that gets the currency in the hands of new adopters.
  The people who held the currency before the spike realize gains and cash them out. This causes a retraction as new adopters buy in, and then before long its time for a new series of gains, and then profit taking occurrs again.
  this will happen multiple times as bitcoin has the potential to become a world wide relevant and daily traded store of value.
8. Re:Bubble! by rickb928 · 2017-10-13 06:41 · Score: 1
  
  If there is an IPO whose trading value increases five-fold in under a year, and you shout “bubble” (just once), there is a good chance you might be right once. Just once.
  Any questions?
  
  --
  deleting the extra space after periods so i can stay relevant, yeah.
9. Re: Bubble! by Anonymous Coward · 2017-10-13 06:41 · Score: 1
  
  It's a good way to grow money off the naive though. Buy, wait a short time and resell. Don't invest too much because I agree it will collapse but might as well ride the bubble for a bit. #capitalism
10. Re:Bubble! by Chris+Mattern · 2017-10-13 06:44 · Score: 1
  
  A bitcoin is not a lump of gold. You can't actually do anything with it.
  And what, exactly, were you planning to do with a lump of gold that would make it worth what you paid for it? Or do I want to know?
11. Re:Bubble! by Lisandro · 2017-10-13 06:45 · Score: 1
  
  There is no good reason to believe that the value will continue to increase or hold steady over time.
  There actually is: Bitcoin is a fixed amount currency, with only about 21 million BTC available. If it popularity increases prices will go nowhere but up.
12. Re:Bubble! by Jzanu · 2017-10-13 06:48 · Score: 1
  
  Company IPO only happens once, so if he is right just once then you just bought a useless thing more overvalued than Enron.
13. Re:Bubble! by Lisandro · 2017-10-13 06:51 · Score: 5, Insightful
  
  Gold is not valuable because it is tangible; it is valuable because it is scarce. So is Bitcoin, BTW. Much like gold, as a currency it is inherently deflationary.
14. Re:Bubble! by Lisandro · 2017-10-13 07:00 · Score: 1
  
  "Controlled"? What the fuck are you talking about?
  https://en.wikipedia.org/wiki/...
15. Re:Bubble! by Chris+Mattern · 2017-10-13 07:03 · Score: 1
  
  Neither use of which comes close to making it worth $1300 an ounce. You can make breathtaking jewelry out of base metals--it's only "priceless" because of its gold content. Its use in microchips is severely limited because it's so hard to justify the cost of using it there.
16. Re:Bubble! by Jzanu · 2017-10-13 07:07 · Score: 1
  
  Bitcoin and all the virtual currencies have no utility except as units for value exchange, primarily from the anonymitiy enabling money laundering and extortion amongst other financial crimes. Those are problems for governments and police until you become one of the victims. Before that, the problem for any investors is that that value isn't backed by anything, not even a promise from an authority with tax powers and an army. Bitcoin is an algorithmically generated string of bits, which may be unique temporarily but is subject to rapid depreciation with quantum computing or even heavy parallel computing.
17. Re:Bubble! by Lisandro · 2017-10-13 07:17 · Score: 2
  
  Well, no, not really. Disclaimer: i'm not yet quite sold on the concept of crytpocurrencies, but i've been studying them for a while.
  Bitcoin and other digital currencies do have utility and their value (specially in the case of Bitcoin) is derived from scarcity and the effort required to "mine" new currency. The main problem with BTC is that right now its market is minuscule and limited almost exclusively, as you explain, to value exchange. Relatively small operations can make its USD value change dramatically overnight; BTC is volatile because it is not widely used, and it is not widely used because of its volatility. I don't know if it will ever overcome this issue.
  Other than that, the design behind Bitcoin is technically very sound - not only in terms of crypto but also economics. Whoever came up with it did its homework.
18. Re:Bubble! by DontBeAMoran · 2017-10-13 07:19 · Score: 1
  
  Priceless jewelry
  There is no such thing. Find any jewel on the planet, it has a price value attached to it.
  
  --
  #DeleteFacebook
19. Re:Bubble! by Jzanu · 2017-10-13 07:24 · Score: 1
  
  What happens when the cost of the computing resources required to generate more falls below the marginal selling price of a bitcoin? Its value starts a strictly decreasing spiral downward, along with all the other ones and none will ever recover value. Then any remaining holders are left holding empty virtual paper bags. This outcome isn't far off in practice certainly less than a decade, and likely just a few years if that.
  Then there are other systemic issues due to the origin of its value in illegal activities making it target for not just every imaginable regulation but making the holding itself illegal and subject to sentencing and fine/prison. This does happen and is targeted at stopping those illegal activities. For instance, try crossing an international border with a million in undeclared USD and see what happens.
20. Re:Bubble! by Lisandro · 2017-10-13 07:37 · Score: 2
  
  What happens when the cost of the computing resources required to generate more falls below the marginal selling price of a bitcoin?
  Nothing more than someone gaining money easily, but we'll likely never hit that point. The amount of BTC available for mining is fixed; by next year over 80% of it will already be mined. A conservative estimate is that the last block will be mined in 2140 (by virtue of the block reward halving frequency every four years), but it is posed to happen way before. Right now a new block is mined every 9% in average, which is already 10% faster than the estimate.
  
  Then there are other systemic issues due to the origin of its value in illegal activities making it target for not just every imaginable regulation but making the holding itself illegal and subject to sentencing and fine/prison. This does happen and is targeted at stopping those illegal activities. For instance, try crossing an international border with a million in undeclared USD and see what happens.
  You can cross an international border with a million USD in undeclared bank assets and no one will ever know. BTC is the exact same in that regard.
  Now, i agree that the legality of cryptocurrencies is a big question mark and i have no idea how this will evolve in the future. In general governments don't like what they can't control nor tax.
21. Re:Bubble! by liquid_schwartz · 2017-10-13 07:38 · Score: 2
  
  Bitcoin is a fixed amount currency, with only about 21 million BTC available. If it popularity increases prices will go nowhere but up.
  And that _if_ is the rub. If it becomes more popular you are indeed correct. If it doesn't then it's useless. As others have noted bitcoin is just a different flavor of Fiat currency - it has no intrinsic value. I
22. Re:Bubble! by Archangel+Michael · 2017-10-13 07:45 · Score: 1
  
  Gold is valuable because unlike most other versions of matter, is very difficult to corrupt and fairly rare.
  Gold will remain after fires, earthquakes, floods .... It is slow to corrode (unlike silver)
  It basically just outlasts people and is difficult to create or destroy which makes it very nice "fiat" currency. The down side is it is very heavy and difficult to move in quantities. Italian Job Physics not withstanding.
  
  --
  Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
23. Re:Bubble! by Gilgaron · 2017-10-13 07:46 · Score: 1
  
  Its fundamental worth is less than a Groupon. And unlike something like gold that you can make things out of even if a pure gold meteor crashed down and increased supply by some crazy amount, the stuff is all worthless once somebody builds a better calculator.
24. Re:Bubble! by Lisandro · 2017-10-13 07:49 · Score: 2
  
  In all fairness, nothing has intrinsic value. Not even gold.
25. Re: Bubble! by Lisandro · 2017-10-13 07:51 · Score: 1
  
  Bitcoin is artificially scarce.
  Yes, it is designed that way. Its artificial scarcity is intrinsic - you cannot just switch it off.
26. Re:Bubble! by Archangel+Michael · 2017-10-13 07:56 · Score: 2
  
  Bitcoin has intrinsic value above nominal fiat currencies, in that it is not influenced by central banking authorities or government programs that devalue currency. This makes it ... deflationary in nature, and hence the pricing spike.
  The primary value in our current Fiat currency is that it is credit based value because it is inflationary. It is better to spend a dollar today, than save it for a marginal return that might not match the inflationary pressure on that currency. It is why most wealth is not maintained in currency form, but rather assets that increase in value faster than inflation.
  It is my opinion, that the combination of inflationary pressure on nominal fiat currency, and the deflationary pressure on cryptocurrencies like BitCoin, are both being reflected in the nominal currency to Bitcoin exchange rate. I am also sure that some of that is indeed "bubble" valuation. The question is, two fold, when is the bubble going to burst, and what is the proper current valuation of Bitcoin, relative to nominal currencies.
  
  --
  Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
27. Re:Bubble! by Geoffrey.landis · 2017-10-13 08:02 · Score: 1
  
  Priceless jewelry
  There is no such thing. Find any jewel on the planet, it has a price value attached to it.
  What is the price of the crown jewels of England?
  For that matter, what is the price of the Hope Diamond?
  Things do not have a price unless they are available to be sold.
  
  --
  http://www.geoffreylandis.com
28. Re:Bubble! by mysidia · 2017-10-13 08:03 · Score: 2
  
  What happens when the cost of the computing resources required to generate more falls below the marginal selling price of a bitcoin?
  Chances are the people who bought those resources Already made their profit, because they did the calculations.
  The marginal cost of continuing to operate that hardware is very small though, particularly in certain parts of China where they get free electricity.
  At the point it becomes non-profitable to CONTINUE to operate bought and paid for miners, they either RAISE THE BAR FOR TRANSACTION FEES, so users pay a little more, or shut off, and the hashrate goes down ---- and eventually profitability of the miners increases, so it's self-correcting.
29. Re:Bubble! by mysidia · 2017-10-13 08:05 · Score: 1
  
  A conservative estimate is that the last block will be mined in 2140
  Not the last block.... the last block that pays out a direct reward. After that last block, mining is subsidized by the transaction fees alone.
30. Re:Bubble! by Chris+Mattern · 2017-10-13 08:05 · Score: 1
  
  Cryptocurrency also has all these advantages--it too is very difficult to corrupt, is fairly rare, and will remain after natural disasters. It even avoids the downside of being heavy.
31. Re:Bubble! by Jzanu · 2017-10-13 08:06 · Score: 1
  
  Only by assuming that demand is constant, which it isn't. Demand is price sensitive, and everything has a life cycle with dead end.
32. Re:Bubble! by Anonymous Coward · 2017-10-13 08:10 · Score: 2, Insightful
  
  My personal fingernail clippings are very scarce. But they are worthless since no one desires them.
  The moment people realize the Bitcoin is simply a shared delusion then we will see who the greatest fool of investing lore is, exactly.
33. Re:Bubble! by mysidia · 2017-10-13 08:11 · Score: 3, Interesting
  
  It is why most wealth is not maintained in currency form, but rather assets that increase in value faster than inflation.
  Perhaps.... but imagine a world with a deflationary currency. In order for businesses to persuade you to invest in their business or their debts, the bar for investing will be a much greater return --- because the business will have to increase in value faster or pay in interest a rate of interest you expect to be greater than the rate at which the deflationary currency increases in value, thus the cost of capital will be high, and businesses will be more responsible and careful with $$$ they spend not to waste it, Whereas with an inflationary currency it is almost a "Given", that tangible commodities and businesses will become worth more currency over time.
34. Re:Bubble! by DontBeAMoran · 2017-10-13 08:18 · Score: 2, Insightful
  
  Somebody, somewhere, has a price listed for those items. Are they insured? Check their value there.
  
  --
  #DeleteFacebook
35. Re:Bubble! by Anonymous Coward · 2017-10-13 08:29 · Score: 1
  
  Perhaps.... but imagine a world with a deflationary currency.
  No need, just read a book. Until the mid-thirties the US had one with the gold standard.
36. Re:Bubble! by MangoCats · 2017-10-13 08:46 · Score: 3, Insightful
  
  Gold is very valuable because people have, throughout the past many hundreds of years, considered it very valuable. The fact that it is hard to mine, relatively easy to refine and store, etc. does help, but in the end the value of gold comes down to people's willingness to pay for it - and that willingness to pay for it has much more to do with its historical value than its current and future intrinsic worth, it's just a financial investment.
  Bitcoins have negative intrinsic worth, but they've managed to hang on as the "cybercurrency of choice" even while they are hardly differentiable from dozens, maybe hundreds of alternate blockchain based cybercurrencies. The only thing propping up bitcoin is people's willingness to continue paying for it and mining it. It's worse than betting on Coke or Pepsi. But, then again, plenty of people got stinking filthy rich by investing in Coke, or Pepsi.
37. Re:Bubble! by painandgreed · 2017-10-13 08:59 · Score: 1
  
  Gold is not valuable because it is tangible; it is valuable because it is scarce. So is Bitcoin, BTW. Much like gold, as a currency it is inherently deflationary.
  A bit simplistic. Gold is not only scarce but also doesn't rust. If you start with an amount of gold, you can pretty assume you will still have that amount of gold even if buried in the ground and otherwise exposed to elements for decades so long as it isn't stolen. It also happens to be considered pretty, hard to fake, capable of being used for gilding, easy to work, and these days has some industrial advantages over other more commonly used metals that it would be used for if not for the cost but sometimes still is.
38. Re:Bubble! by mikael · 2017-10-13 09:47 · Score: 1
  
  The ability to "mine" bitcoins is controlled. Originally people were using old low-end desktop PC's, then moved to high-end gaming PC's. The difficulty was increased. More people switched to GPU's which were 100x faster. The "difficulty" to mine bitcoins was then adjusted again. They moved to motherboards with 19 PCI slots. The difficulty was increased again. Some developers came out with bitcoin mining ASIC's (currently selling for $1900). Some users have struck gold simply by mining bitcoin hashcodes at random and finding a blockchain.
  It's a shame they couldn't apply this innovation to something like protein folding.
  
  --
  Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
39. Re:Bubble! by Archangel+Michael · 2017-10-13 09:56 · Score: 1
  
  With Deflationary currency, those people producing goods and services that others actually value will be rewarded. And the earning power of the youth will benefit them when they are elderly. Hence the saying ... "a penny saved is a penny earned", which unlike current fiat inflationary currency is meaningless.
  Further, everyone knows what rampant inflation looks like, and why it leads to war and revolution. Nobody cared when it was runaway deflation, because holding a coin for two days doubled your wealth.
  I'm pretty sure that we have no real idea what business looks like with deflationary currency. We can make educated assumptions. One thing is for sure, savings would be more beneficial than spending, and credit would largely be rare, rather than common.
  
  --
  Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
40. Re:Bubble! by DanielRavenNest · 2017-10-13 10:02 · Score: 1
  
  Bitcoin's purpose is to transfer value, either in space or in time. It is not useful in itself, just like US dollars (the paper kind) are only useful in themselves for snorting white powder. Their usefulness comes in being able to trade for other things. Bitcoin is especially useful when the trade is over long distances with barriers in the way. Paper dollars are most useful in immediate local trade. They each have their niche.
  Since the supply of bitcoins for immediate purchase is limited, their market value is mostly determined by current supply vs demand. The rise in price causes some bitcoins which were in long-term storage to get unlocked, eventually balancing demand.
41. Re:Bubble! by Bruce+Perens · 2017-10-13 10:04 · Score: 2, Insightful
  
  Cryptocurrency is inflationary, because anyone can create a new cryptocurrency.
  
  --
  Bruce Perens.
42. Re:Bubble! by SethJohnson · 2017-10-13 10:17 · Score: 1
  
  Tin isn't an element, however.
  
  --
  $5 / month hosted VPS on linux = awesome!
43. Re:Bubble! by desdinova+216 · 2017-10-13 11:09 · Score: 1
  
  is that similar to shouting Apps?
44. Re:Bubble! by Jzanu · 2017-10-13 11:20 · Score: 1
  
  Try again.
  See: "A US jury indicted Alexander Vinnik on Wednesday after his arrest in a small beachside village in northern Greece on Tuesday, following an investigation led by the US justice department along with several other federal agencies and task forces.
  Vinnik was described by the justice department as the operator of BTC-e, an exchange used to trade the digital currency bitcoin since 2011, which was allegedly used to launder more than $4bn for people involved in crimes ranging from computer hacking to drug trafficking." The fellow was involved since 2011 and is an absolute criminal pandering to criminals."
45. Re:Bubble! by Khyber · 2017-10-13 11:46 · Score: 2
  
  3.5 billion pounds for the British Crown Jewels.
  Hope Diamond? About 220 million at current market price per carat.
  I am a certified GIA appraiser.
  
  --
  Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
46. Re:Bubble! by codebonobo · 2017-10-13 12:05 · Score: 1
  
  How many appreciating bubbles does bitcoin have to go through before bitcoin stops being a just a "bubble"
47. Re:Bubble! by bitbybitbybitcoin · 2017-10-13 12:23 · Score: 1
  
  Gold isn't inherently deflationary. We'll keep discovering new gold, which makes it kind of unpredictably inflationary. For examples of what that can do to the world, just picture what happened to the Old World after the New World's gold was discovered. When we start mining asteroids, things will change again. That's why Bitcoin's set deflationary-ness is so novel and valuable - even if we haven't solved the problem of transmitting between nodes at interstellar distances... yet.
48. Re:Bubble! by oakgrove · 2017-10-13 12:56 · Score: 1
  
  There will only ever be 21 million bitcoins. No matter how many copycats spring into existence that number will never change.
  
  --
  The soylentnews experiment has been a dismal failure.
49. Re:Bubble! by Powercntrl · 2017-10-13 14:55 · Score: 2
  
  Cryptocurrency also has all these advantages--it too is very difficult to corrupt, is fairly rare, and will remain after natural disasters. It even avoids the downside of being heavy.
  Crypto's rarity is simply an agreed upon constraint by its userbase. There's absolutely no reason it couldn't be forked to spew out more "coins", if most of the miners decided more is better than less, and updated to the new fork. To look at it another way, Bitcoin's rarity hinges on the same aspect of the human psyche which enabled Donald Trump to become president (as long as enough people agree to support something insane, it can happen).
  Unless there's some crazy breakthrough in the cost of nuclear transmutation, gold is going to stay rare.
  
  --
  
  ---
  DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
50. Re:Bubble! by Comrade+Ogilvy · 2017-10-13 15:05 · Score: 1
  
  Further, everyone knows what rampant inflation looks like, and why it leads to war and revolution. Nobody cared when it was runaway deflation, because holding a coin for two days doubled your wealth.
  I'm pretty sure that we have no real idea what business looks like with deflationary currency. We can make educated assumptions. One thing is for sure, savings would be more beneficial than spending, and credit would largely be rare, rather than common.
  Your "pretty sure" is simply wrong. In roughly the same historical period we saw an advanced economy get smacked by hyperinflation and fall into chaos then war, the USA itself was getting hammered by deflation. It was a wonderful time when American shoe factories laid off workers to starve in the streets while barefoot farmers were kicked off their farms, all to serve the idolatry of gold.
  Gold fetishists have brainwashed certain people into believing that inflation is super scary while deflationary contractions are purely a theoretical problem. That is because they lie and some sheep are always eager to believe them.
51. Re: Bubble! by Powercntrl · 2017-10-13 15:17 · Score: 1
  
  Yes, it is designed that way. Its artificial scarcity is intrinsic - you cannot just switch it off.
  Actually, you can. Bitcoin is open source - feel free to modify it any way you like.
  The difficulty is getting a majority of miners and end users to switch to your fork. It's already happened with "Bitcoin Cash".
  
  --
  
  ---
  DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
52. Re:Bubble! by VeryFluffyBunny · 2017-10-13 15:26 · Score: 1
  
  Yep, Wall St. + Bitcoin is a match made in hell. Wall St. will gamble away everything they have, bankers will get their huge bonuses, executives will get stinking rich, and when they music stops, guess who's going to pay the bill?
  
  --
  Debate is a form of harassment. Do not question my truth.
53. Re:Bubble! by Powercntrl · 2017-10-13 15:29 · Score: 1
  
  There will only ever be 21 million bitcoins.
  Actually, if everyone simply agreed to stop running the Bitcoin software and delete the blockchain from their computers, there'd be no Bitcoins. People could wake up tomorrow and decide gold is worth less than polystyrene, but the gold would still continue to exist. That's decentralization for you.
  
  --
  
  ---
  DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
54. Re:Bubble! by oakgrove · 2017-10-13 16:12 · Score: 1
  
  Actually, if everyone simply agreed to stop running the Bitcoin software and delete the blockchain from their computers
  Why would they do that?
  
  --
  The soylentnews experiment has been a dismal failure.
55. Re:Bubble! by Jzanu · 2017-10-13 16:21 · Score: 1
  
  God damn you lot are all fucking idiots, you need to at least try to read coherently! I am talking about the entire bitcoin, the faggot before you obsessed with miners as claim on the only ones involved in 2011. Now go fuck off!
56. Re: Bubble! by Bruce+Perens · 2017-10-13 18:31 · Score: 1
  
  It doesn't matter how many bitcoins there will be, because they are a member of the set of cryptocurrencies, and there is no intrinsic limit on the size of that set.
  
  --
  Bruce Perens.
57. Re: Bubble! by oakgrove · 2017-10-13 18:54 · Score: 1
  
  Bitcoin being in the set of all cryptocurrencies is akin to Facebook being in the set of all social networks. Bitcoin has the network effect and the economic incentive of the participants to keep building on it. Bitcoin ran away with the crown the same way the longest chain runs away with the consensus every 10 minutes. Every day more miners invest in hardware strengthening the BTC blockchain, more owners take a stake, more businesses associate themselves accepting BTC as payment. True, there are many ersatz challengers and they can all be dubbed "cryptocurrencies" endeavoring to soak up some BTC shine but in the end, there is only one BTC blockchain and whether people realize it or not, that's what they are invested in. If the BTC blockchain isn't verifying your transactions then, no, you have no claim to the "set" of all cryptocurrencies. The set of pretenders maybe.
  
  --
  The soylentnews experiment has been a dismal failure.
58. Re: Bubble! by Bruce+Perens · 2017-10-13 19:15 · Score: 1
  
  Facebook will lose dominance just like other big companies. Network effects can't support bitcoin perpetually, because it can't rise forever, and younger cryptocurrencies that are easier to mine and have not approached their economic limits will be seen as a better investment.
  
  --
  Bruce Perens.
59. Re: Bubble! by datavirtue · 2017-10-13 21:06 · Score: 1
  
  I am turned off by the fact that everyone is measuring bitcoin value in dollars.
  
  --
  I object to power without constructive purpose. --Spock
60. Re: Bubble! by datavirtue · 2017-10-13 21:11 · Score: 1
  
  It is supposed to be a currency. It should not have a price. I think the point was to substitute bitcoin for dollars. No one is doing that. Is this how we establish the value of bitcoin against a basket of goods?
  
  --
  I object to power without constructive purpose. --Spock
61. Re:Bubble! by mysidia · 2017-10-19 02:11 · Score: 1
  
  the USA itself was getting hammered by deflation. It was a wonderful time when American shoe factories laid off workers to starve in the streets while barefoot farmers were kicked off their farms
  All that tells you is that economic downturns (Booms and Busts) happen.
  And reminds that SUDDEN massive changes in price inflation / deflation are Bad, which
  are different from having deflationary or inflationary exchange currencies.
  That doesn't tell you anything in general about deflationary currencies or economics, however.
  Economics is mostly about forecasting "on average" / "eventually" / "when equilibrium is reached" results;
  the economy under ALL/ANY kind of monetary system and EITHER inflation OR deflation is subject to the
  possibility of temporary shocks / spikes in growth or sudden major losses, all of which are observed to
  smooth out only in time
  All long-term inflationary currency is is essentially a TAX, most of the value of which is taken from people and distributed to the bankers.
  People who want to save money for future use would likely prefer to hold their savings in Deflationary currency given a choice,
  and people who want to spend most money as soon as they get it would likely prefer Inflationary, so they earn more and more quantity of units over time
  to help replace what they didn't save.
Oh for fucks sakes by rsilvergun · 2017-10-13 06:12 · Score: 2, Insightful

it's only valuable because it's backended by a ton of illegal activity (money laundering, gambling, drugs, ransomware). Nobody's buying much of anything legitimate with this stuff because it's not backed by governments, no will it be. Sooner or later the government will crack down and it'll all collapse.

Wall Street has always been a combination shell game and method for the ruling class to skim 50-60% off the economy without doing any real work, but this is just ridiculous. Come to think of it that's the only way I could see Crypto currency get a kind of legitimacy. I could see the ruling class forcing us to use it to buy stuff so they can skim even more off us working stiff's wages. Like credit cards but without the convenience and buyer protections.

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1. Re:Oh for fucks sakes by Jzanu · 2017-10-13 06:46 · Score: 1
  
  How often do you lie to others? You might be a psychopath.
2. Re:Oh for fucks sakes by Jzanu · 2017-10-13 07:03 · Score: 1
  
  If you have personally invested money in bitcoin then you are a biased interested party by definition. Then anything in your self-interest of boosting prices on any temporary basis so that you can cash out, that provides your justification. This is why investing advice shouldn't come from the internet or anonymous sources, and anyone who offers it that way is suspect by default.
3. Re:Oh for fucks sakes by Jzanu · 2017-10-13 07:33 · Score: 1
  
  I am talking about practical investing and awareness. Your belief that you are somehow the smartest one around just makes you an easy target for real criminals. The first one to find you will manipulate you even more than steal anything you do have for themselves. Hopefully that is just a bit of money.
4. Re: Oh for fucks sakes by Jzanu · 2017-10-13 07:44 · Score: 2
  
  I am cautioning everyone now from being stupid because there is only one direction for bitcoin and all the crop of virtual currencies to go - and that is to $0. Then they will be screwed financially, and given the typical age here that means they will have lost their retirement incomes. Don't be so stupid, and stop lying to others for your own temporary benefits.
5. Re:Oh for fucks sakes by Jzanu · 2017-10-13 07:51 · Score: 1
  
  I won't take advice from someone financially biased to encourage my investment for purposes of their own personal gain and against any consideration of my interests. Anonymous advice and internet advice is suspect because it has no legal framework for liability. That is fundamental for practical investment. I hope you grow up a lot more before you get money or someone will take it all from you very quickly. Faster than you can even realize they've scammed you, they will be gone.
6. Re: Oh for fucks sakes by Anonymous Coward · 2017-10-13 09:19 · Score: 1
  
  Its ok. Point to me where Bitcoin touched you.
7. Re:Oh for fucks sakes by GuB-42 · 2017-10-13 11:40 · Score: 1
  
  Literally made 20 grand on 500 dollars. Stay salty.
  Did you sell your ETH? If not, you made nothing.
  This is a fallacy even banks fall for, and that's one of the cause of the subprime crisis.
  If you did sell enough ETH and really made money, well played, and don't it lose back.
8. Re:Oh for fucks sakes by codebonobo · 2017-10-13 12:02 · Score: 2
  
  Yes, Bitcoin is primarily purpose is for regulatory arbitrage and thus exists as a hedge against anarchism where states indirectly subsidize its value. The most effective way for states to attack bitcoin is to legalize everything and eliminate all taxes which I don't think is very realistic to ever occur thus feeding into the value proposition of bitcoin. There is a circular economy of the under-served who need bitcoin to survive and these users create an inelastic demand on a disinflationary supply of bitcoin driving up the price. States can no more stop copyright infringement or drug use than they can stop bitcoin.
9. Re:Oh for fucks sakes by Jzanu · 2017-10-13 13:24 · Score: 1
  
  A ponzi scheme whose advocates dress up their rants with imitations of the language of finance, but who have no understanding of how to calculate risk, and who don't care about mathematically expected returns. Bit coin and all the others have unregulated markets subject to wild manipulation, are most often used for illegal trade and money laundering. Advocates range from naive but useful idiots (in the political sense), to stupid over-entitled sheltered fools, to serious hard-ass criminals. Have fun, don't stay so long you're the last sucker holding an empty bag, and don't try to trick anybody else into joining your hell!
So where can I go short on bitcoin? by Wrath0fb0b · 2017-10-13 06:28 · Score: 3, Insightful

So in a functioning market, investors should be able to go long or short on an asset -- that is, it should be possible to assert that it will rise and to assert that it will fall (or if you're clever, buying options that assert the price will remain right where it is).
As far as I can see, a hypothetical person that wanted to bet that bitcoin would fall doesn't really have a vehicle by which to take that position.
1. Re:So where can I go short on bitcoin? by JeffSh · 2017-10-13 06:40 · Score: 1
  
  http://www.investopedia.com/ne...
2. Re:So where can I go short on bitcoin? by Ryanrule · 2017-10-13 06:50 · Score: 1
  
  There are exchanges that offer such services.
3. Re:So where can I go short on bitcoin? by aaarrrgggh · 2017-10-13 07:00 · Score: 1
  
  That is partially why the banks want to play.
  This will end well...
4. Re:So where can I go short on bitcoin? by JasonVergo · 2017-10-13 07:16 · Score: 2
  
  There are a number of exchanges where you can short it. https://www.bitmex.com/ is one of them.
5. Re:So where can I go short on bitcoin? by bradley13 · 2017-10-13 07:59 · Score: 1
  
  "investors should be able to go long or short on an asset"
  Um...why? Those are derivatives. If you invest in a small company, i.e., not publicly traded, derivatives don't exist. You invest because you believe the company will increase in value. If you believe the opposite, you sell your investment.
  Options, and indeed all derivatives, are mostly tools for the big investment houses and banks. In the best case, this is to hedge their bets, to limit potential losses. In the worst case, they use these tools to manipulate the market. For the ordinary investory, it's more like gambling: the fluctuations on derivatives are mostly driven by the games the big boys are playing, and have very little to do with the fundamentals of the investment.
  
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6. Re:So where can I go short on bitcoin? by mysidia · 2017-10-13 08:51 · Score: 1
  
  So where can I go short on bitcoin?
  Greetings to you. I am Mohammed Abacha,the son of the late Nigerian Head of State who died on the 8th of June 1998.
  It is my great pleasure to write to you and present my business proposal for your consideration and possible acceptance which you will find mutually beneficial to both parties. In order to enable you to short the bitcoins... I will make the following proposition for you:
  If you agree to wire $6500 to an agreed upon 3rd party in collateral at my Bank of new Nigeria and pay me 10% APR daily on the maximum daily value of a Bitcoin plus 1% in administrative fees for the shorting escrow; then i'll loan you 1.0000 of my BTC for shorting, that you can sell to buyer of your choice and return to me later.
  If the value of BTC decreases or stays below $6000, thence you can give me my BTC back at your convenience: any time in exchange for a return of your collateral (but not interest).
  On the other hand, if the value of BTC increases, you shall within 12 hours deposit additional collateral to maintain 160% of the value of my 1 BTC you are borrowing at all times, and if you fail: you agree that ownership of the collateral transfers to me, and you will repay me for the maximum value my 1 BTC had that occurred on or after the date you defaulted; before we begin the transaction, you shall provide a signed and notarized promissory note to that affect with additional collateral or a surety bond towards your performance.
  What could possibly go wrong, though?
7. Re:So where can I go short on bitcoin? by thelandp · 2017-10-13 08:57 · Score: 1
  
  Wow you really didn't look very hard. The first google result for "how to short bitcoin" seems pretty informative
  http://www.investopedia.com/ne...
  Seems there are plenty of methods, no more difficult than shorting pretty much anything else.
  That got 5 insightful? Slashdot, your standards are dropping
  
  --
  
  -- the only thing we have to fear is really scary things
8. Re:So where can I go short on bitcoin? by codebonobo · 2017-10-13 11:53 · Score: 1
  
  You have been able to short bitcoin for the last 5 years. Many exchanges allow you to open up shorts. Here is a regulated exchange in the US that allows you to short Bitcoin - https://support.kraken.com/hc/...
9. Re:So where can I go short on bitcoin? by george14215 · 2017-10-16 11:02 · Score: 1
  
  LedgerX https://ledgerx.com/
Master, you are flesh! by TheZeitgeist · 2017-10-13 06:38 · Score: 1

...ITS WORKING!!!
-Lo Pan
Re:Yeah 'cuz the stock market bubble means no debt by peragrin · 2017-10-13 06:40 · Score: 1

The stock market has nothing to do with government finances.
That's like saying since you got a raise this year I can buy a bigger house. It makes no sense and isn't related.
Then again that is common currently idiots looking unrelated topics together and basing decisions off of that. Like autism and vaccines 100% false yet still.beloeved

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i thought once I was found, but it was only a dream.
Re:Yeah 'cuz the stock market bubble means no debt by Lisandro · 2017-10-13 06:49 · Score: 1

And he's supposed to be a Wharton-educated businessman. Jesus effin Christ.
Wall street... by gatfirls · 2017-10-13 06:57 · Score: 1

Never a speculative bubble it didn't like.
Re:Good to see... by Jzanu · 2017-10-13 07:17 · Score: 1

It is still not an investment because its value depends on technology and especially computing power somehow not advancing, which is one of the only guarantees in life (along with death and taxes).
Thank you slashdot by JasonVergo · 2017-10-13 07:19 · Score: 3, Funny

Back in 2011, Slashdot had a post about bitcoin. I thought it sounded interesting. So, I mined some and sent some money via dwolla to tradehill to mt.gox or something crazy like that and bought some. That $300 is now worth over $250k. I don't remember there being that many hater on the thread back then. If there were, I'm glad I didn't listen to them.
1. Re:Thank you slashdot by JasonVergo · 2017-10-13 07:40 · Score: 1
  
  Are you calling me a scammer? I've been on slashdot a lot longer than you have.
2. Re:Thank you slashdot by Jzanu · 2017-10-13 07:45 · Score: 1
  
  By account number? I hate accounts and only have one to post over the anonymous limit per day. That you attach meaning to it and attempt to discard thought on that basis shows that you are just an idiot though.
3. Re:Thank you slashdot by JasonVergo · 2017-10-13 07:53 · Score: 1
  
  Joining slashdot 18+ years ago was all part of my master plan to scam people today. I'm impressed how you unraveled my plan. You know what, I know that I'm not a scammer. I don't understand why you are labeling people as scammers without any proof. My point was that I'm super grateful that I read that article about bitcoin on slashdot back in the day. It's kind of insane that wasting time on slashdot has paid off for me.
  Now imagine if I had a beowolf cluster of gpu miners back in 2011.
4. Re:Thank you slashdot by Anonymous Coward · 2017-10-13 08:06 · Score: 1
  
  Obviously Jzanu is a shill for the US Federal Reserve, possibly Janet Yellen herself. I'm confident in this assessment as I have exactly the same overwhelming amount of evidence he utilized in labeling everyone here who disagrees with him a scammer.
5. Re:Thank you slashdot by Jzanu · 2017-10-13 08:15 · Score: 4, Insightful
  
  I'm German, I just hate the direction of the US led economics and American idiots advocating the stupidity that is killing off everyone who isn't as greedy as possible. If I can help one person realize analysis requires more thought than that then I am happy. There are greater interests exist in the world, and greater purposes for existence. Family, community, peace, humanity itself.
6. Re:Thank you slashdot by JasonVergo · 2017-10-13 08:23 · Score: 1
  
  There is no problem selling $250k of bitcoin these days. In the last 24 hours, $150 million dollars worth of bitcoin was traded on gdax. That's just one exchange. I could sell $250k of bitcoin right now on gdax and the price of bitcoin would go down less than a dollar. There is a lot of liquidity in the bitcoin market.
7. Re:Thank you slashdot by DNS-and-BIND · 2017-10-13 10:23 · Score: 1
  
  You're German, you own Europe, why aren't you creating your own reality with family and community? No, you're doing what you do best - get onto an American website and bitch and moan - in English - that the Americans are ruining everything. Everyone's sick of your shit. Fuck off, European.
  The US fought the Cold War and risked nuclear annihilation on its own soil to keep the Russians out of Western Europe, and mitigated ethnic tensions in the region, and all we got in return was European complaining about how stupid and greedy the US is from the very guys who fucked the world up in the first place. It's a total farce and it's high time it came to a screeching halt.
  
  --
  Shutting down free speech with violence isn't fighting fascism. It IS fascism!
8. Re:Thank you slashdot by Jzanu · 2017-10-13 11:05 · Score: 1
  
  You are a bad troll, go back to your bridge and stay there.
9. Re:Thank you slashdot by JasonVergo · 2017-10-13 11:25 · Score: 1
  
  How so?
10. Re:Thank you slashdot by JasonVergo · 2017-10-13 13:44 · Score: 1
  
  That's an excellent point. Though, you do realize the US dollar is the petrodollar?
11. Re:Thank you slashdot by Powercntrl · 2017-10-13 16:01 · Score: 1
  
  All the hate comes from the people who saw that same post, and -didn't- chuck in a few hundred bucks like you did.
  As the saying goes: hindsight is 20/20. The technology landscape is littered with revolutionary ideas which totally flopped. DigiScents, the :CueCat, Divx, every early 2000s "Internet Appliance", disposable digital cameras/camcorders, self-destructing DVDs, etc. If I had thought any of those things was worth investing in, I'd have lost money, every time. It was entirely reasonable to view the concept of peer-to-peer currency, released by an anonymous developer, with a healthy dose of skepticism.
  This was just one of those rare cases where betting on a long shot paid off big.
  
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  ---
  DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
12. Re:Thank you slashdot by DNS-and-BIND · 2017-10-13 21:26 · Score: 1
  
  Stung, didn't it? Why is a wealthy continent of 500 million totally unable to defend itself and has to rely on a distant country of 300 million for its defense? Losers.
  
  --
  Shutting down free speech with violence isn't fighting fascism. It IS fascism!
Am I the only one that thinks by rsilvergun · 2017-10-13 08:44 · Score: 1

shorting should be outlawed? I get the concept but it's pretty much gambling of the worst sort. Plus if you're a big investor with lots of power you've suddenly got incentive to make a company fail. Heck, in a crypto currency market you could probably do all sorts of stuff to tank the price after you shorted it.

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