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The Bitcoin thread
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DrugAdvisor Offline
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Posts: 156
Joined: Jul 2013
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Post: #5026
RE: The Bitcoin thread
Why did Armogan get banned?

His info was a lot more on point and concise, not to mention, profitable.
Today 05:09 AM
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_Cicero Offline
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Posts: 197
Joined: Feb 2014
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Post: #5027
RE: The Bitcoin thread
So, I'm doing a bit more research into bitcoin -- sorry, I'm a total newbie here! -- and I should correct some of what I wrote above.

First, bitcoin leaves a trail, and so isn't really that useful for druglords, criminals, etc. to pay each other without worry. Second, as Armogan mentions above, it's both slow (or, at least, not that fast) and costly. In addition, it's apparently easy to get your coins hacked. Third, exchanges are requiring increasing amounts of information about users, and setting them up is neither quick nor easy, as I'm learning. Some of the exchanges (e.g., coinbase) are filled with software glitches, poor customer service, etc.

The other problem is that the price is too volatile for it be a real store of value long term. Oh, sure, when the music is playing, who cares? You hold your money in bitcoin, buy things using it when you need, and make insane amounts of money. But when the price starts to drop it will be different. There will/can be panic selling. But the volatility means that people will want to get in and out of bitcoin quickly when they use it. And when they do so, they will likely be relying on a bank, or a bank-like entity to do so. Thus, instead of making transactions easier, it seems it will simply require one more layer to the transaction.

The real argument for bitcoin -- I'm happy to debate anyone here, I'm still thinking through these issues -- is essentially that many more people will need to be blown away by the technology and jump on the bandwagon as a medium of exchange. There are network effects here, so if many people are using it, it is more useful. And, if it does become mainstream all over the world, the price will be much, much higher than it is right now. But given that a wide range of outcomes here is possible (including crashing to zero), the price is going to be a wild ride.

Indeed, to look at market of cryptocurrencies, it looks like a full stock market of fake companies. There is a closed end fund that sells at a vastly higher par value. It does so precisely because it's not that easy to invest in bitcoin.
(This post was last modified: Today 06:07 AM by _Cicero.)
Today 06:06 AM
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