Bitcoin discussion and news

[kabbes]

So what do you call the potential winnings in a risky endeavor?

What kind of risk?

 

[free spirit]

Money's not supposed to produce anything.

when invested it should, otherwise it's just gambling and usually has a negative impact where someone else loses a similar amount to your gains.

It's the difference between investing money in a company to enable them to buy equipment / train up staff etc to improve the business, then generate long term returns in the form of dividend payments vs pure short term speculation. One is capital serving a useful function, the other is capital being used to destabilise the economy in the hope of making false short term profits based on little more than a confidence trick and understanding of how bubble operate.

 

[camouflage]

when invested it should, otherwise it's just gambling and usually has a negative impact where someone else loses a similar amount to your gains.

It's the difference between investing money in a company to enable them to buy equipment / train up staff etc to improve the business, then generate long term returns in the form of dividend payments vs pure short term speculation. One is capital serving a useful function, the other is capital being used to destabilise the economy in the hope of making false short term profits based on little more than a confidence trick and understanding of how bubble operate.

no, money does not produce anything, anymore than Bankers are 'wealth creators'.

Of course you use it to facilitate and organize and claim rations of material or time for the production of things, or perhaps like a carpenter may use inches to build a table. Inches however don't produce tables.

Money is an idea, you can't use it to dig holes or hammer steel, it's a form of data.

Not sure what you're saying about investments, bitcoin infrastructure is sprouting across the world funded by bitcoin and dollar investments. Likewise you can take your dollars and inflate a massive housing bubble.

 

[kabbes]

no, money does not produce anything, anymore than Bankers are 'wealth creators'. Of course you use it to facilitate, organize the production of things, like a carpenter may use inches to build a table. Inches however don't produce tables.

Money is an idea, you can't use it to dig holes or hammer steel, it's a form of data.

Not sure what you're saying about investments, bitcoin infrastructure is sprouting across the world funded by bitcoin and dollar investments. Likewise you can take your dollars and inflate a massive housing bubble.

Let's start with the first question on my list.

 

[Sunray]

The only reason this currency isn't worth diddly squat is that drug dealers accept it to buy their goods. Its current and medium term future value is entirely based on the continued success of a single website.

Remove the Road and suddenly the value of bitcoin = 0.nothing.

 

[Fez909]

The only reason this currency isn't worth diddly squat is that drug dealers accept it to buy their goods. Its current and medium term future value is entirely based on the continued success of a single website.

Remove the Road and suddenly the value of bitcoin = 0.nothing.

That's not true. There are other markets than the Silk Road, just that that's the most well known. If the Silk Road went down for good tomorrow, another would take its place immediately.

 

[camouflage]

Let's start with the first question on my list.

Investment and speculation, yes, sure. That carpenter again, buying a saw and nails and a bunch of lumber or paying to have a workshop built or even contributing along with others for the cultivation of woodland or something.

Speculate, more like gambling... not inherently a bad thing mind, perhaps even playing an important role... not really productive though, any more than money is productive sat there by itself as claimed above.

For some reason some people critical of bitcoin want it to be black and white, it's all speculation and investment in bitcoin is forbidden by the laws of the universe because I say so.

It's just a more complex world than that, sorry.

 

[camouflage]

The only reason this currency isn't worth diddly squat is that drug dealers accept it to buy their goods. Its current and medium term future value is entirely based on the continued success of a single website.

Remove the Road and suddenly the value of bitcoin = 0.nothing.

lol.

 

[butchersapron]

Investment and speculation, yes, sure. That carpenter again, buying a saw and nails and a bunch of lumber or paying to have a workshop built or even contributing along with others for the cultivation of woodland or something.

Speculate, more like gambling... not inherently a bad thing mind, perhaps even playing an important role... not really productive though, any more than money is productive sat there by itself as claimed above.

For some reason some people critical of bitcoin want it to be black and white, it's all speculation and investment in bitcoin is forbidden by the laws of the universe because I say so.

It's just a more complex world than that, sorry.

I keep waiting for you to explain a) how and b) how other people are really saying the simplistic things that you insist they are saying.

 

[kabbes]

Investment and speculation, yes, sure. That carpenter again, buying a saw and nails and a bunch of lumber or paying to have a workshop built or even contributing along with others for the cultivation of woodland or something.

Speculate, more like gambling... not inherently a bad thing mind, perhaps even playing an important role... not really productive though, any more than money is productive sat there by itself as claimed above.

For some reason some people critical of bitcoin want it to be black and white, it's all speculation and investment in bitcoin is forbidden by the laws of the universe because I say so.

It's just a more complex world than that, sorry.

It's nothing to do with simplicity of purpose and it's nothing to do with what is and isn't allowed. I'm talking about what risk and reward mean -- the absolute fundamentals. If you don't understand those, how can you talk about what is happening in something as complex as this?

Buying bitcoin is not investing and it is not a risk-reward payoff. That isn't a value judgement, it's just the fundamentals of the transactions involved.

And so we move on to question 2. It was you that wanted an explanation, remember? Well, this is how we get there.

 

[camouflage]

It's nothing to do with simplicity of purpose and it's nothing to do with what is and isn't allowed. I'm talking about what risk and reward mean -- the absolute fundamentals. If you don't understand those, how can you talk about what is happening in something as complex as this?

Buying bitcoin is not investing and it is not a risk-reward payoff. That isn't a value judgement, it's just the fundamentals of the transactions involved.

And so we move on to question 2. It was you that wanted an explanation, remember? Well, this is how we get there.

Simplicity of purpose has nothing to do with it, more like simplicity of analogy.

What do risk and reward mean... I wouldn't have used the term reward, but it's basically a matter of considering what are the chances of a positive outcome, what's wanted, an asset or a pay-off? Some speculators might look at btc as a means to a fat wad of cash, others- investors, see an asset of increasing value.

Others still just take the bitcoins they've gotten through mining or trade or buying at a cheaper price to the dollar and pay programmers, artists or web-hosting companies to create and host the stuff of a new business venture. who are you to say that they are not investing in something because they have used bitcoins to pay for part of the venture?

risk is a complex subject, I'm no risk-assesor, or quant! I've not the time or interest to get into all that stuff, if you've studied or worked in risk then, more power to ya, I'm sure you know your stuff. Doesn't mean that people aren't exchanging bitcoins in return for non-money things and services they want to yield a productive future with.

 

[not-bono-ever]

It's nothing to do with simplicity of purpose and it's nothing to do with what is and isn't allowed. I'm talking about what risk and reward mean -- the absolute fundamentals. If you don't understand those, how can you talk about what is happening in something as complex as this?

Buying bitcoin is not investing and it is not a risk-reward payoff. That isn't a value judgement, it's just the fundamentals of the transactions involved.

And so we move on to question 2. It was you that wanted an explanation, remember? Well, this is how we get there.

Ive just remembered what you do for as living.very good.

 

[Idaho]

What kind of risk?

The risk of losing or getting a reduced amount of the money staked.

 

[kabbes]

The risk of losing or getting a reduced amount of the money staked.

That's not necessarily investment risk. That's more likely to be a gamble.

I might choose to bet on Elvis landing a flying saucer on the loch ness monster during Thatcher's funeral, but that doesn't mean that my risk at stake can expect a return. Just because you take on a risk, doesn't mean you get a return.

There are lots of ways of categorising risk, but one key one is systemic vs diversifiable risk. Systemic risks are endemic to the nature of a project, whereas diversifiable risk vanishes if you take on enough of it. Investment return can only be expected for taking on systemic risk.

Then we have returns. Return on risk is generated in investment returns from added value as a result of how the capital is used. If there is no added value, there is no expected return. Returns in the absence of added value can only be from the exploitation of volatility, and they are a zero-sum game. That's not investment, it's speculation.

There is a lot of financial talk being thrown around here, but it reminds me of homeopaths using medical terms. It creates the veneer of knowledge, but it jars if you know what the underlying fundamentals actually are.

 

[kabbes]

Even "risk" is actually pretty meaningless without context, actually. It has to be a risk of something. Generally, investment is to meet a contingent liability, and risk is interpreted as a failure to meet that liability. However, even pure investment risk needs to be placed into some kind of framework. It certainly isn't just the risk of a pure gamble.

 

[Idaho]

So what you are saying is that Bitcoin should be discussed in gamblers terms rather than investment speak? Seems reasonable.

 

[Idaho]

Bitcoin allows you to move digital markers of value across the internet. These markers are difficult to forge or replicate, transfer with reasonable anonymity and can't be reversed. This process is useful enough for a variety of things we already know of, and a few we haven't cooked up yet.

The thing that is unclear is how much these markers are actually worth in terms of normal money. Their worth is relative to the amount of money they need to represent. which is currently not that much. As/if more people use them, with their relative value to, say, dollars increase? Will they just prompt a bank or other big business to create something similar but set the value?

 

[kabbes]

So what you are saying is that Bitcoin should be discussed in gamblers terms rather than investment speak? Seems reasonable.

Yes, exactly.

 

[camouflage]

Yes, exactly.

Hadn't noticed the language thing, it is permitted for anyone to speak of buying, selling, investment and risk. Perhaps the issue is bitcoin lowering the barriers to entry so the great unwashed can come swarming in to advanced conversations about fiscal concepts without so much as seeking the advice of properly trained and qualified individuals. This may be the case but it's not really a decent criticism of the technology. You can bet a lot of people got learned about a scruffy attitude to things like risk in the last pop though, degenerated pro-speak or no.

Certainly different attitudes people have will reflect in the language they try to use and there is a clue there about peoples different perceptions. But again just because the headlines are only ever about the speculation it would be inaccurate to assume that bitcoiners are all gamblers (and alcoholics probably).

It's certainly a hummer to assert that nobody's using btc to produce anything going forward, not just swapping tokens of one sort or another at the spin of a die but using btc to gather together resources to produce things that are not money but are valued.

Still think there has to be a better way than capitalism obviously.

 

[Sunray]

That's not true. There are other markets than the Silk Road, just that that's the most well known. If the Silk Road went down for good tomorrow, another would take its place immediately.

That's delusion.

You forget how difficult it is to ensure the site is truly hidden. Then there is getting people to trust the site. That took ages for the road. Can you imagine how difficult it will be given that there will be people out there that see the road as infinity scam ahoy.

We're talking dodgy dealing websites that has bitcoin wallets. People selling near wholesale levels of drugs. The dpr has the ability to set up scam accounts and rip people off at a whim.

Without this site, there just isn't the number of people who want bit coins for other purposes than speculation. What happens when a market has all sellers and no buyers.

 

[kabbes]

Hadn't noticed the language thing, it is permitted for anyone to speak of buying, selling, investment and risk. Perhaps the issue is bitcoin lowering the barriers to entry so the great unwashed can come swarming in to advanced conversations about fiscal concepts without so much as seeking the advice of properly trained and qualified individuals. This may be the case but it's not really a decent criticism of the technology. You can bet a lot of people got learned about a scruffy attitude to things like risk in the last pop though, degenerated pro-speak or no.

Certainly different attitudes people have will reflect in the language they try to use and there is a clue there about peoples different perceptions. But again just because the headlines are only ever about the speculation it would be inaccurate to assume that bitcoiners are all gamblers (and alcoholics probably).

It's certainly a hummer to assert that nobody's using btc to produce anything going forward, not just swapping tokens of one sort or another at the spin of a die but using btc to gather together resources to produce things that are not money but are valued.

Still think there has to be a better way than capitalism obviously.

Language about something technical gains a precision for a reason. You can ignore it and start reinventing the wheel all over again, of course. And in the process, you will make the same mistakes that got us here all over again.

Meanwhile, if buying bitcoins in order to profit from hoped-for increases in value of bitcoins is anything other than speculation, if it is investment in any meaningful sense whatsoever, I am still yet to see any evidence of it. You could start by suggesting what the investment capital is being used for in such a process.

 

[Idaho]

@ Sunray - Maybe. Time will tell.

 

[camouflage]

Language about something technical gains a precision for a reason. You can ignore it and start reinventing the wheel all over again, of course. And in the process, you will make the same mistakes that got us here all over again.

Meanwhile, if buying bitcoins in order to profit from hoped-for increases in value of bitcoins is anything other than speculation, if it is investment in any meaningful sense whatsoever, I am still yet to see any evidence of it. You could start by suggesting what the investment capital is being used for in such a process.

Far be it from me to dismiss the need for precision in technical language, and bitcoin is proving something of a learning curve for anyone that looks into it. I'm sure yours is not the only discipline whose sensibilities have been offended by the audacity of this upstart. Who the bloody hell do these people think they are anyway who don't even speak right.

Anyhoo, aside all that... btc is kind of like a currency as far as being a medium of exchange, but also a commodity and also a stock. People buying bitcoins in the hope of gaining value are doing so like someone buying shares in some promising looking start-up. It also means people selling bitcoins know there are buyers for them. They can continue to accept btc in payment, or invest in the network, and work on their ideas for whizzy new apps etc. It takes money to buy rigs, it takes the knowledge that people will exchange dollars etc for bitcoins to spend significant amounts of time developing code and ideas etc that may deliver future value. What does any plc do with the money people hand over for shares? I dunno, all sorts of stuff I imagine, mostly to do with it's various business plans.

Personally, I reckon if you want bitcoin you should work for them, accept them as payment for something. You can just rock up and exchange some Blighty-marks or Yank-tokens for Bitcoinland money, but that's just a matter of exchanging one money for another and doing arbitage or speculation or whatever. Right now Bitcoinland has a lot of development to do before it can be considered a major exporter of goods and services, but it's growing. New immigrants everyday with roots in the old country, prime undeveloped mind-share as far as the eye can see, and no pesky Injuns to have to genocide away before the railroads can get built.

At the end of the day this thing walks like a duck, barks like a dog, inflates like a blow fish and releases spore clouds. Everyone's a little puzzled about how it's supposed to behave and what it can be trained to do. It definitely can bite though, we've established that.

 

[Idaho]

There is no doubt that the majority of trading is speculative at the large end of btc. What is not clear is whether any kind of real economy will come out of it.

 

[ffsear]

You can now speculate on Bitcoin at IGindex
http://www.igindex.co.uk/spread-betting/bitcoin-binary-bets.html

 

[joustmaster]

My crystal ball predicts that it has dropped as far as it is going to, and will now rise to about 150USD

 

[ffsear]

I think its going to stay in a range between $50 and $100, driven mainly by those trying to profit from short term price movements.

 

[Idaho]

My crystal ball says that new money will prop up the price for a bit longer, but it is still a bubble, and will be headed down to nearer $30 soon.

 

[camouflage]

I wonder if bitcoin will evolve toward being a store-of value and not really a means of exchange after all. Volatility makes exchange too choppy for now, but if mass convention establishes btc as something that people will buy to store value because they know people will buy btc to store value...

The levitating coin trick, could it come true?

 

[FridgeMagnet]

Far be it from me to dismiss the need for precision in technical language, and bitcoin is proving something of a learning curve for anyone that looks into it. I'm sure yours is not the only discipline whose sensibilities have been offended by the audacity of this upstart. Who the bloody hell do these people think they are anyway who don't even speak right.

.

Well, that's definitely not an "if you don't agree you don't understand" post.