Topic: Gold collapsing. Bitcoin UP. - page 1422. (Read 2032272 times)

I see technical analysis on gold and silver as mostly self-fulfilling prophecies (with some interested "prophets" behind the scene painting the ticker), possibly useful only in the very short term -and not the most useful thing anyway.

A worthwhile article by Martin Armstrong, dated yesterday:
''We are on the Verge of a Very Profound Systemic Global Meltdown''
http://armstrongeconomics.com/693-2/2012-2/we-are-on-the-verge-of-a-very-profound-systemic-global-meltdown/

Related:
Economist Richard Duncan: Civilization May Not Survive 'Death Spiral'
http://webabuser.blogspot.com/2012/08/economist-richard-duncan-civilization.html

http://www.safehaven.com/article/26417/two-disturbing-gold-charts

Thoughts?

I was almost yelling to my screen: "BITCOIN, you idiots".

thanks for that.  it was interesting.  the solution they're talking about is Bitcoin but just don't realize it.

All the bulls that have stuck it through the hardest times.

I thank you.

To all the bears still "taking a look"?

You're clocks running out .

This was an interesting hour of video.

Congressman Ron Paul's Final Domestic Monetary Policy Subcommittee Hearing

Congressman Paul's subcommittee met on August 2nd, 2012 to examine sound money and parallel currencies.

Bitcoin is discussed briefly, in the context of being a barter currency, at around 48:38.

A part I found interesting was the comments by guest Nathan Lewis on his belief that only large institutions such as Citibank would be the ones to offer an asset-backed (likely gold-backed) private money system.  This started at 58:45 and runs to then end.

I now realize they just don't get decentralization and the power of cryptography.  Nearly every sticking point could have been answered with "except with bitcoin ....".

 - http://www.youtube.com/watch?v=oPCFKHCCKF0&feature=player_detailpage#t=2918s

let me say a few more things about Bitcoinica.  one of the indicators to follow when looking at financial stress of a bank is if the interest rates offered on CD's start to rise.  this indicates that a bank is low on reserves and is looking to add to deposits to strengthen its balance sheet.

soon after i signed off on debating Zhou i noticed he started offering interest payments for anyone willing to deposit new funds. if you recall, his business model before this did not include outside deposits or a money market acct which he constantly complained about.  instead his private "reserves" were in fact getting entirely lent out to speculators wishing to place leveraged bets.  which meant in fact he oftentimes had no reserves uncommitted as indicated by the starfish.  that is not a safe situation and basically meant he was an infinitely leveraged business.  by offering healthy interest rates he was able to lure in more BTC and USD the way i understand it.  ppl like Memory Dealers got sucked in.  did he in fact lend out those new monies as well?

bottom line as i see it, there was never a sustained period of time where his business model was stable and running smoothly.  another way of saying it was that it was an unstable business model that he kept tinkering with to show profits.  i wouldn't have touched it with a ten foot pole in terms of buying it until perhaps he showed a sustained level of profit for at least a year with a stable model.

i stopped following the minutia surrounding Bitcoinica sometime in January i think.  i had seen enough problems to make me sign off.  yes, what u say is possible altho a pessimist might argue the ponzi nature of the scheme coming to a boil could have logically led to staged hacks with a subsequent sale. 

Your memory is wrong. The unholy trio was hired by Tihan, not by ZT.
I played a little bit on bitcoinica, and there was no need for anybody to explain anything - everything was intuitive. I recently looked at BitcoinOPX - I have no clue how this should work, and I am by far not the only one. And that despite this user giving page long examples.
And if ZT really wanted to steal the funds, he could have easily started some sort of fractional reserve system, but apparently he did not.

You seem to forget what happened to bitcoinica.
It's wasn't a problem with hedging (although according to the leaked mails they were not profitable in the last months), nor was it a vulnerability in the code.
No, just third parties (linode) and bad/suspicious work from security "experts" (hacked mail account, release of the code with identification inside).

You've been lucky to have been right because of the wrong reasons (even if i admit time would perhaps have proved you right, but i don't think it has to be).
Anyway, nice story about how your burned some bears

how so?  just b/c some early adopters might own more Bitcoin than later adopters doesn't mean they could or would use their newfound wealth to exploit others.  many of us early adopters have a libertarian bent and would reject those type of behaviors i would hope.  but the most important reason i have against early adopter exploitation of others is that they cannot print more Bitcoin.  in that sense Bitcoin is very much democratic and fair than any other currency the world has ever seen including gold.  gold coins can be shaved, physically diluted with other metals, and weights can be obscured during tx's.  and from a more practical viewpoint of a gold standard, paper representations of gold would be absolutely required for everyone to participate in the system. and once that happens fraud is inevitable.

Just what the manipulator would say!!

the reason Bitcoinica was so successful was that Zhou was so accessible.  he was everywhere on the Forums talking up the site, answering questions, and explaining what he was doing (superficially by my estimation).  his young age was intriguing and captivated the younger kid newbie traders here who defended him with a passion.  perhaps they saw themselves via his personna.  even the older devs were captivated by his charisma; look at Amir, Donald, and Patrick who bought the ponzi from him right at the wrong time.  personally, i think Zhou knew it was going to blow up and used his excuse for going to school as an out.  why give up a highly profitable business unless those profits were based on a ponzi?  no proof, just my intuition based on my interactions with him and the vulnerabilities in the site that i saw.

no, i only manipulated the market that one time.  i never deposited a cent onto Bitcoinica b/c i distrusted the site immensely.  i am not The Manipulator everyone talks about.  

he's a lawyer, not a mathematician.  just watch his billable hours if you hire him. 

There is one thing that ZT did right, and that was to design the site in a way, so that everybody could quickly understand how it works - or at least believe to do this. Compare the success (number of active users) of Bitcoinica with the few others that have some similar direction. No one is using BitcoinOPX. icbit has probably not that much more traders. ZT clearly showed that there is some demand for such a site. And one could argue, that it is only fair, that those that don't know how to play lose the game.
Just curious, did you do this only on a upward ramp?

The first mistake:
400 000 000 * 25 = 10 000 000 000 (not 10 000 000 000 000, but 1000 times lower)

The second mistake:
10 000 000 000 000 / 15 000 000 = 666 666.667 (not 663 000 000, but about 1000 times lower again)

So you somehow got a result 1 million times higher than it should be. What's wrong with you?

So 400M americans, $25 per person in bitcoins would give us around 660 USD/BTC considering there are 15M bitcoins in total.

Am I missing a point?

On the contrary, I think my attitude about Bitcoin has been surprisingly uniform throughout.

Back when you and I seemed to be among the dwindling count of the more vocal proponents, I never said it was going to go anywhere...only that there existed a decent possibility and what I was hoping for was simply that fewer people would be left out if so.

As for the 'potential' for a positive impact on society, I have to admit that I consider it, along with the $1000's/BTC 'jackpot' possibility, to remain much less than likely.  Bitcoin has as much potential as anything to be exploited as a sharp tool by the few against the interests of the many.  I retain my very early hope that were this to happen, there exists a possibility that the 'many' could, by consensus, destroy Bitcoin (relative to other vehicles.)  A fundamental reason I 'like' Bitcoin more than I do PM's is that such an exercise of democratic power is somewhat more tenable with a crypto-currency than a physical element.

I must have missed the question; perhaps you did not have my attention. But I see several reasonable arguments for analysis when it comes to Bitcoin.

From a monetary science analysis I see gold and bitcoin as opposite sides of the same coin, both are after all decentralized peer-to-peer currencies, and like most monetary systems through the ages; cattle and salt, gold and silver, etc. Thus, gold is good for transferring wealth over time and Bitcoin for transferring wealth over distance. Both are sterile assets although bitcoin is more sterile than gold because gold has alternative uses such as industry. As sterile assets their increase in relative price is merely a transfer of wealth that has already been produced and is currently stored in some asset to the holders of the sterile assets.

From a venture capital analysis I see an argument for Bitcoin as an open-sourced startup, think about if Facebook or Skype had publicly traded stock from their inception, as it is both the blood (gold, FRN, Euros, Yen, etc.) and the veins (banks, credit cards, Paypal, etc.). As such it would move from being a mere sterile asset to a productive asset with 100% retained earnings and constant but predictable dilution (mining reward).

One thing just about everyone with any sense of what is going on in the current financial and monetary systems agrees on is that the system is FUBARed. What is used as currency is not going to be used as currency much longer. The time horizon could be a decade or two though but that is a tiny amount of time considering the current system is a five hundred year old relic. Will it be replaced by a new gold or silver system or standard? Will it be replaced by Bitcoin or something similar? Will modern civilization and society collapse due to the inability to continue the specialization of labor? I do not know those answers and doubt anyone does because the human action has not been decided yet.

But using either or both analysis Bitcoin offers a tremendous ability for the economy to be more efficient and generate wealth by, as tvbcof pointed out, reducing or eliminating counter-party risk and allowing the specialization of labor to continue even more efficiently because of its ability to transfer value over distance and is resistent to violent censorship. This is a HUGE problem in our current economy, financial and monetary systems. A symptom are the huge international trade imbalances. Solving this issue and the double-spend issue, which is the tremendous innovation Bitcoin does, can result in a ton of wealth saving and generating results. Tied along with this, but beyond the scope of this response, would be the advancement of triple entry bookkeeping that is made possible, the capital formation that will result and renders the current system obsolete much like double entry bookkeeping rendered single entry bookkeeping obsolete.

But unlike gold which is a tangible element and can never become worthless the Bitcoin network is censorship resistant, but not impervious, and could be compromised and all addresses become worthless, instantly. Some actor, like a government not necessarily acting out of profit motive, could use excess computer capacity and decimate the current blockchain. So, I do think there is reason to be cautious and not move or keep too much wealth stored in it. But that depends on each individual's risk horizon. When I first waded into Bitcoin is was around $0.05. Thus, an allocation of .5% of my net worth would result in it more than doubling.

Sure, there is a very speculative bullish argument to be made for just about any figure you could pull out of your agama tail (glad to see you have a sense of humor ). A million dollars isn't cool. Not even a billion dollars is cool anymore. You know what's cool, a trillion dollars.

For example, Skype sold for $8.5B 9 years after inception. In 2016 a similar valuation would put bitcoins at about $540 each. June 2012 seasonally adjusted M2 was 9,944.5B. That is about $25/person in cash balances. Assuming the valuation of bitcoins in 2016 is equal to the average american (400m) has $25 of value in bitcoins then that would be 400,000,000*25=$10,000,000,000,000/15,000,000 or about $663,000,000 per bitcoin.

So, how does one value a bitcoin? Good luck. Credit Suisse estimates global wealth at $231 Trillion and if there is a massive transfer of wealth as a result of Bitcoin adoption then you will no longer be an agama but a Godzilla! Much like an iceberg flipping so likewise I could see Bitcoin resulting in the rise of a new super-class and world order. This would not be unlike what happened during the transition from the Agricultural Age to Industrial Age; the time would just be compressed from hundreds of years to a few decades due to the rapid adoption of technology.

But one thing is for sure, the world is transitioning from the Industrial Age to the Information Age and for those on the cutting edge of this evolution: This is our time.

glad to see your attitude towards Bitcoin has improved.  the change has been palpable.

given the negative impact of financial markets today on the common citizen, a small glimmer of hope provided by Bitcoin could easily turn into a Bright Shining Beacon.

To clarify, because the suggestion above is basically 180 degrees off of what I meant to say:

Firstly, I find PM's and Bitcoin to be very similar in one very important respect.  Counter-party risk (or I should say, lack thereof) and relatively few reasonably available modern vehicles have such a property.

Secondly, just about anything can have different purposes to different people.  In my case, I use PM's, and especially Gold, as a very basic wealth preservation tool to perform even the most trying of possible scenerios...up to and including complete anarchy.  If I 'make money' on PM's, fine, but that's not my fundamental goal with this particular asset.

I consider bitcoin is very much akin to playing the startup game in terms of risk/reward.  The big difference is that Bitcoin is far less work and a fairly dinky monetary investment besides.  I don't consider it a success unless I make a fair amount of money in the end and the potential for a monster jackpot is in the mix.

Similar to a startup, I consider the most likely outcome for my investment in Bitcoin is near full loss, but expect to learn interesting things along the way.

Similar to some (but not many) startups, I do see Bitcoin as having a potential to have a positive impact on some aspects of our societies.