Topic: put on your tinfoil hats. I think I've gone over the edge. (Read 3981 times)

I've pretty familiar with the forex market. its how i learned about technical/ fundamental analysis and such. I know stock markets can see bubbles and everything. but in the bitcoin market i see bubbles inside of bubble inside of bubbles.

now im just thinking that the price movement is just based on the expectation of future gain, which will be driven by new investors seeking the same.

to be honest i dont think btc will ever see widespread use. but i think it will still see phenomenal growth because people will have the idea that it has value. its kind of a weird idea, but not much different than assigning value to paper currency. depending on how you look at it a dollar is still a piece paper, but it has use as a medium of exchange. people try to argue that btc is too, but the use of bitcoin as a medium of exchange in the past month has not increased(if it even has at all!) in the same proportion as its price. new money is feeding this growth pure and simple. those who get in at the bottom profit from those who buy in after. This is why it seems like a scheme. It might not have been an intended consequence, but it is something to consider.

It just seems so strange to buy this weird intangible thing(BTC) whose current value is based on the possibility of gain rather than its actual use.

Well lets see. Bitcoin top in April was at $300 on the China exchange. China led this rally and it topped at $1000. Coincidence? Haha, I think not! Next correction could be $2000, maybe $5000, but I bet you it will be very very close to an even dollar amount, on the China exchange. Unless of course these whale manipulators want to just let the price rise forever without any "adjustment".

Sometimes I even go as far as to count the candles colors, and see how many in a row there are. Rarely do you see six consecutive green candles on the M15 or H1.

Yeah, the tinfoil hat is strong within me, but it has help me make good calls.

IMO, Bitcoin needs these bubbles, as thats what drives more people into bitcoin. Investors, venture capitalists, and more common people wanting some BTC. Even if its only to hold / speculate on a few coins, it is driving people who normally wouldn't EVER bat an eye towards bitcoin, to start taking steps to learn what it is, and obtain it.

If it stays cheap, then there will always be wild price fluctuations as it can be manipulated by people with large sums of money. Over a long long longgggg period of time, with more ATHs, and increasing value; Bitcoins will become more popular and slowly dispersed between many people. This will drive it to a high value, but it will more than likely be alot more stable, and better suited to being used as an actual currency, and not a speculators toy.

just my 2 cents.

Of course. People can do whatever they want.
But if the restrictions on transactions don't get changed before a possible "mass adoption" it can't be used as currency effectively anymore.
And this will make it unusable as a currency as well as an investment (or gold 2.0), because it's value as a speculation object / investment stems first and foremost from it's possibility to be transfered quickly and cheap.

So, if the rules get adapted (asap), there is a huge chance, that it can be used as either a currency or gold 2.0, or whatever you want it to be, in the future.
If they don't get adapted, there is a huge chance, that it won't be anything of these but another promising invention going down.
If bitcoin fails becaus of it's restrictions and uncomfortability, people won't have any trust in decentralized cryptocurrencies. And in the end it is not about any of us who mined bitcoins in the beginning because it seemed like a brilliant, promising idea. The decision will be made by the "common man". Bitcoin has the opportunity to prove to the people, that decentralization can work, that it doesn't have to be managed by the big brother.

You have just described Warren Buffet and Berkshire Hathaway

No dividends - pure capital appreciation. 

Bitcoin can be used for whatever purpose people find it suitable for.

Correct. But imho it's value depends on whether it features clear advantages over fiat money. And for most people the most important point will be, whether it is cheap and fast or not.
People won't be interested in technical details (the design is definitely beautiful, but people don't even use pgp for their emails because it's to "uncomfortable"), they want to see that they can make a cheap, fast transaction from anywhere to anywhere without using a bank etc.
And right now, there are a lot of speculators who either try to make some fast money or believe, that bitcoin will be a working concept in the future.
Some people think, that people will use bitcoins in the near future to have a secure investment, away from the governments influence. This might be true, but if bitcoin doesn't work as a fast and cheap currency anymore then, this will be a huge bubble. Just like the fucked up debacle we have in a lot of existing financial sectors.

I would like to see bitcoin flourish as an alternative to the existing financial system (which it still is at the moment), not another version of the existing crap.

But saying that it is ONLY a currency because it's cheap and fast... is just as silly as saying it's only gold 2.0.

Ok. So there are (far to...) many people that want bitcoin to be gold 2.0. And imho this idea got more and more fans since the last ath and the media coverage. Because people get $ signs in their eyes and don't see, why bitcoin got so far.
It got so far, because it is fast and cheap and worldwide. Not because it is rare.
If these people define the way of bitcoin, the whole technology will be a giant bubble and we won't have decentralised cryptocurrencies in the future.

What's my name? Anything you want baby 

The purpose of Bitcoin is whatever we want it to be.

This is correct. Sadly more and more people see bitcoin as "gold 2.0".
And this was never the purpose of bitcoin.

And we believe the future value is that of severely impacting or replacing:

PayPal
Western Union
MoneyGram
WebMoney
American Express
Visa
Mastercard
Discover
Banks

If it even replaces 50% of all of those, bitcoin will be worth multiple billions of dollars easily.

Why do you even bother to argue these people , it's totally their loss that they fail to understand what bitcoin really is.

This is true.  This run-up can be seen in the housing market as well, for instance.  Bitcoin is just a lot more exaggerated.

That having been said, there are more than a few conspiracies surrounding Bitcoin.  Price manipulation has been one of them in the past, and probably still is.

Real companies do real business and turn a profit.  And they then pay dividends out of thouse profits.  In the case of companies that don't pay dividends some are reinvesting all profits into growth, but the ultimate intent is to become a Blue chip dividend paying company in a mature industry.  If someone said they were selling stock for a company that would NEVER pay dividends under any circumstances then yes that would be a scam because it's value as a stock would have no link to expected future profits of the company, it would be pure speculation as BTC is.  And yes I think modern stocks get dangerously close to being scams when their value is almost entirely speculative.

Why does bitcoin need to grow exponentially forever??? It would actually work much better if it didn't...

Also, by this logic, most publicly traded companies would be pyramid schemes. Almost all investments are pyramids. What makes an investment a scheme is a useless idea that suckers people into buying. You can believe bitcoin is a useless idea, but many very bright folks would genuinely disagree.

It would best be described as a pyramid scheme, where as a Ponzi scheme has a single 'master mind' at the top who takes in and gives out all monies (and who will inevitably try to abscond with it all).  A pyramid scheme is decentralized, so when people say "BTC is not a Ponzi because it is decentralized" they are correct, but this dose not mean it is not a scam, decentralized scams were created LONG before the internet.  

A Pyramid scheme essentially ranks it's members by how early they were involved and new members must pay old members for joining.  In a Pyramid scheme the earlier adopters often have a finite payout they receive when a quota of members below them is reached, essentially the Pyramid fissions at this point with the second tier individuals now becoming the leaders of their own pyramids.  It is a scam because it can only work if grows exponentially forever and this is impossible in a finite population, the last people to join are the ones screwed over.

BTC modifies this by never mandating a fission of the pyramid, rather it allows early adopters to keep riding and hoping for bigger rewards for as long as they can delay their gratification.  Also it allows a degree of reshuffling of ones hierarchy in the pyramid by continually buying more coins.  But the basic nature of the pyramid is still their, all wealth is merely being redistributed (upwards always upwards) rather then actually generated by real business activity.  The key to making it an effective pyramid scheme was the nature of mining and it's exponential decreasing effectiveness which put huge quantities of coins in the hands of early adopters while guaranteeing future scarcity, thus creating the incentive for them to hunt for more participant, thus elevating themselves.

BTC thus combines the elements of a Pyramid scheme with a speculative Bubble, and it encourages each aspect to feed on and accelerate the growth of the other.

It's a protocol that removes the need for trusted third party validation from a host of functions. Use your imagination. Think of anything that requires a trusted third party for a transaction to occur. Now imagine how to replace that service with bitcoin. It will take time for systems to be built, but they will be built.

As for now, systems have already been built and are being utilized for micro-transactions, incredibly cheap remittance, and significantly cheaper payment processing, and we're just over 4 years into the game. Also, I'm sure I've left out some wonderful uses of bitcoin, but I'm tired and I tend to focus on the backend payment systems aspect more than anything else.

For having registered 5 days ago, you're pretty stupid. I've got a link for you:

https://en.bitcoin.it/wiki/Main_Page


Go read for a bit.