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(Quartz)   Hoarding a digital currency is so crazy it just might be genius   (qz.com ) divider line
    More: Dumbass, digital currency, stash, currency  
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3292 clicks; posted to Business » on 08 Apr 2013 at 6:16 PM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-04-08 05:57:39 PM  
A casino doorman once remarked of the tourists, "If they wanted less, they'd go home with more."
 
2013-04-08 06:29:54 PM  
I was under the impression that all currencies were 'virtual.'
 
2013-04-08 06:35:00 PM  
Now is the time to buy!  They're not making any more bitcoins!
 
2013-04-08 06:37:42 PM  
I just can't believe the price is exploding like it is. It sure looks like tulip mania.
 
2013-04-08 06:45:29 PM  
This is precisely why bitcoin, gold, silver, and other severely supply-limited currencies are a bad idea. Any deflationary currency will severely reduce the velocity of money, contracting any economy denominated in that currency. That's one of the reasons every nation on earth has moved away from the gold standard - gold production has a hard cap of total atoms available on the planet (unless we figure out asteroid mining) and a very easily reached soft cap of deposits with greater than background levels of gold. With Bitcoin most of the total possible supply has already been "mined."

I mean, unless you desperately need cash now, unless you're betting on the failure of the currency it almost always makes more sense to hoard them and not spend them. And then when you do need to cash out, you're probably going to cash out all at once, which leads to currency fluctuations in a market with a relatively low velocity - and that's bad for business.

The only way bitcoin can exist and not doom a society that uses it to economic hysteria is if the majority of the transactions that take place are not denominated in bitcoins. It relies for its existence on the very system that it is supposed to destroy, viz. an economic parasite.
 
2013-04-08 06:53:40 PM  

AliceBToklasLives: I was under the impression that all currencies were 'virtual.'


No you can actually physically hold a dollar bill.
 
2013-04-08 07:02:03 PM  
Why would you spend it when you can bury it in a hole in your backyard.
 
2013-04-08 07:05:38 PM  

SockMonkeyHolocaust: Why would you spend it when you can bury it in a hole in your backyard.


You might want to convert it into something else soon.  Real soon.
 
2013-04-08 07:06:38 PM  

Obama's Left Nut: AliceBToklasLives: I was under the impression that all currencies were 'virtual.'

No you can actually physically hold a dollar bill.


Really?  I need a better job!

/what you are holding is not a 'dollar.'  It's only a 'dollar' if someone else recognizes it as having that much value.
 
2013-04-08 07:07:39 PM  

Obama's Left Nut: AliceBToklasLives: I was under the impression that all currencies were 'virtual.'

No you can actually physically hold a dollar bill.


You can also use fiat currency for anything. For example - US dollars are good to pay any/all debts. If I owe the bank money they have to accept dollars in payment for that debt. They don't have to accept Bitcoins. In addition, that whole "full faith and credit of the US government" has the added backing of several thousand nuclear weapons.
 
2013-04-08 07:07:57 PM  

Obama's Left Nut: AliceBToklasLives: I was under the impression that all currencies were 'virtual.'

No you can actually physically hold a dollar bill.


Sure, you can hold that piece of paper. It still only represents a specific value though. We got tired of hauling around bags of coins and trading goats for other goods.
 
2013-04-08 07:08:38 PM  
I'd hate to have my entire fortune wiped out by a hard drive failure
 
2013-04-08 07:29:15 PM  
A lot of sex workers are rushing into the bitcoin mania. Not me. And a platform I have an account on (but don't use) has just added bitcoin to their payment/payout services (minus their fees still, o'course).

I don't know enough about it to be comfortable with it, and I've done hours of research. I've just not seen anything that makes me comfortable with it.
 
2013-04-08 07:32:49 PM  

Lady Indica: A lot of sex workers are rushing into the bitcoin mania. Not me. And a platform I have an account on (but don't use) has just added bitcoin to their payment/payout services (minus their fees still, o'course).

I don't know enough about it to be comfortable with it, and I've done hours of research. I've just not seen anything that makes me comfortable with it.


Probably because if you put your money in a bank and it goes titsup the FDIC will cover your losses. No such guarantee with Bitcoins.
 
2013-04-08 07:39:02 PM  
Do any of you farkers use bitcoins?  If so, is there a particular site you recommend for someone who wants to invest in a few?
 
2013-04-08 07:42:33 PM  

captainktainer: This is precisely why bitcoin, gold, silver, and other severely supply-limited currencies are a bad idea.


Yeah - gold is such a bad idea that the government hoards it in Fort Knox and central banks around the world use it as their reserves.
 
2013-04-08 07:43:40 PM  
This has "bad idea" written all over it.  A currency based on... internet?  lolcats?  what does it actually represent?  It might as well be Microsoft points.
 
2013-04-08 07:47:42 PM  

madgonad: Lady Indica: A lot of sex workers are rushing into the bitcoin mania. Not me. And a platform I have an account on (but don't use) has just added bitcoin to their payment/payout services (minus their fees still, o'course).

I don't know enough about it to be comfortable with it, and I've done hours of research. I've just not seen anything that makes me comfortable with it.

Probably because if you put your money in a bank and it goes titsup the FDIC will cover your losses. No such guarantee with Bitcoins.


Yeah, it just scares me. And I do put my money in a US bank. I also suspect that some rushing into this are doing so to avoid the tax man (or to try to avoid). I've no such need, I pay my taxes and actually honestly declare my income. Though my profession code was really weird, forget what the accountant came up with for it. Something honest, but weird and such that its not blatently obvious what I do.
 
2013-04-08 07:59:56 PM  

Suj_S: Do any of you farkers use bitcoins?  If so, is there a particular site you recommend for someone who wants to invest in a few?


It's mostly being used by syndicates for laundering purposes. Nobody actually uses bitcoins as an actual currency for goods and services, but it's an excellent intermediary for hiding/moving untraceable profits.

So I recommend getting into organized crime.
 
2013-04-08 08:01:45 PM  

Lady Indica: madgonad: Lady Indica: A lot of sex workers are rushing into the bitcoin mania. Not me. And a platform I have an account on (but don't use) has just added bitcoin to their payment/payout services (minus their fees still, o'course).

I don't know enough about it to be comfortable with it, and I've done hours of research. I've just not seen anything that makes me comfortable with it.

Probably because if you put your money in a bank and it goes titsup the FDIC will cover your losses. No such guarantee with Bitcoins.

Yeah, it just scares me. And I do put my money in a US bank. I also suspect that some rushing into this are doing so to avoid the tax man (or to try to avoid). I've no such need, I pay my taxes and actually honestly declare my income. Though my profession code was really weird, forget what the accountant came up with for it. Something honest, but weird and such that its not blatently obvious what I do.


Wait, so you're actually a sex worker?
And pay taxes??
 
2013-04-08 08:04:21 PM  
Invest in My Little Pony bits. You can earn them by picking apples or grooming pets and spend them on cupcakes anywhere in Equestria. CUPCAKES!!!
www.canterlotradio.com
 
2013-04-08 08:05:23 PM  

PanicMan: This has "bad idea" written all over it.  A currency based on... internet?  lolcats?  what does it actually represent?  It might as well be Microsoft points.


It's fundamentally the same as any other non-fiat currency -- an easily transferable, finite resource.
 
2013-04-08 08:05:27 PM  
I wonder how the IRS is going to rule on bitcoin profits. Will they treat it as normal currency trading?
 
2013-04-08 08:05:42 PM  
Yes I'm gullible. Gullible as a FOX!
 
2013-04-08 08:07:27 PM  

hershy799: Lady Indica: madgonad: Lady Indica: A lot of sex workers are rushing into the bitcoin mania. Not me. And a platform I have an account on (but don't use) has just added bitcoin to their payment/payout services (minus their fees still, o'course).

I don't know enough about it to be comfortable with it, and I've done hours of research. I've just not seen anything that makes me comfortable with it.

Probably because if you put your money in a bank and it goes titsup the FDIC will cover your losses. No such guarantee with Bitcoins.

Yeah, it just scares me. And I do put my money in a US bank. I also suspect that some rushing into this are doing so to avoid the tax man (or to try to avoid). I've no such need, I pay my taxes and actually honestly declare my income. Though my profession code was really weird, forget what the accountant came up with for it. Something honest, but weird and such that its not blatently obvious what I do.

Wait, so you're actually a sex worker?
And pay taxes??


Yeah. My work is legal however. I identify as a sex worker because I am, and I have close friends who work as fetish escorts who's work is illicit, but no different from mine. (And shouldn't be illicit).

However, if any of my work was...theoretically of course, outside of the law...Uncle Sam doesn't give two shiats, he still wants his cut.

And perhaps I'm weird, but I believe in paying taxes. I really do. I like the benefits I get from living in this country and I'm proud to pay my share. Corny as shiat, I know.
 
2013-04-08 08:08:11 PM  

Suj_S: Do any of you farkers use bitcoins?  If so, is there a particular site you recommend for someone who wants to invest in a few?


mtgox.com
 
2013-04-08 08:20:48 PM  
Someone on 4chan was boasting that they bought 10,000 bitcoins when the price was 9 cents or something. Now they're, what, over $100? He said he was going to wait until they hit $200 and then cash out.

Think he'll have much luck? I do wonder if it's possible to liquidate that much at one time.

Shrewd move if he gets away with it though.
 
2013-04-08 08:39:05 PM  

spamdog: Someone on 4chan was boasting that they bought 10,000 bitcoins when the price was 9 cents or something. Now they're, what, over $100? He said he was going to wait until they hit $200 and then cash out.

Think he'll have much luck? I do wonder if it's possible to liquidate that much at one time.

Shrewd move if he gets away with it though.


In a ponzi scheme there are some who make money, if the get in early enough and out fast enough. Not saying bitcoins are a ponzi scheme or anything. Same was true of tulip mania.
 
2013-04-08 08:45:51 PM  

BigLuca: Suj_S: Do any of you farkers use bitcoins?  If so, is there a particular site you recommend for someone who wants to invest in a few?

mtgox.com


Weren't they the ones who recently got hacked?
 
2013-04-08 08:48:54 PM  
It's only a good idea if you sell high. Is there a way to short bit coins?
 
2013-04-08 08:52:40 PM  

Suj_S: BigLuca: Suj_S: Do any of you farkers use bitcoins?  If so, is there a particular site you recommend for someone who wants to invest in a few?

mtgox.com

Weren't they the ones who recently got hacked?


No, the recent hack was a site called Instawallet. MtGox was hacked in 2011.
 
2013-04-08 09:22:48 PM  
An exponential increase in the value of your currency, I'm real sure that's not a bubble and is totally sustainable.  Yep, real sure.
 
2013-04-08 09:27:49 PM  
Does this mean that soon the airwaves will be flooded with ads to buy and invest in bitcoins rather than gold?
 
2013-04-08 09:45:07 PM  

Obama's Left Nut: AliceBToklasLives: I was under the impression that all currencies were 'virtual.'

No you can actually physically hold a dollar bill.


The bill is not a dollar; it is a physical token of a dollar.  The U. S. money supply is far greater than the total value of paper currency in circulation.
 
2013-04-08 09:48:04 PM  
How much of that "hoarding" could be explained by the fact that Instawallet is offline?
 
2013-04-08 09:53:05 PM  
I'm still waiting for anyone to give legitimate situations where bitcoins are preferable to the US dollar.

img199.imageshack.us
 
2013-04-08 10:06:18 PM  

spamdog: Someone on 4chan was boasting that they bought 10,000 bitcoins when the price was 9 cents or something. Now they're, what, over $100? He said he was going to wait until they hit $200 and then cash out.

Think he'll have much luck? I do wonder if it's possible to liquidate that much at one time.

Shrewd move if he gets away with it though.


As of the time I post this the price for 1 bitcoin is $190, based on standing buy orders on MtGox.com (the largest of several bitcoin exchanges) someone selling 10k bitcoins all at once would immediately drop the price to $175. He would get an average price of around 180 for a total of around 1.8 million dollars.

As to where the price would end up after every one stopped freaking out about it I have no idea.


Also there are now services available  for businesses that want to let there customers pay in bitcoins but want to get all or part of the payment in US dollars. The largest is bitpay.com.
 
2013-04-08 10:07:07 PM  
After the Alpaca-lypse, the only thing worth anything will be fresh water. Buy up all the gold and "bitcoins" you want - they're both going to be completely worthless probably sooner than later.

/lives off a catchment system in Hawai'i
//not going to elaborate any further
 
2013-04-08 10:12:48 PM  
I know that the idiots doing this just haven't got 'round the read 'bout the tulip mania bubble. you're welcome!
 
2013-04-08 10:25:22 PM  

madgonad: Obama's Left Nut: AliceBToklasLives: I was under the impression that all currencies were 'virtual.'

No you can actually physically hold a dollar bill.

You can also use fiat currency for anything. For example - US dollars are good to pay any/all debts. If I owe the bank money they have to accept dollars in payment for that debt. They don't have to accept Bitcoins. In addition, that whole "full faith and credit of the US government" has the added backing of several thousand nuclear weapons.


Being heavily armed also seems like a good way to renege on your debts. "Screw you, we're not payin' off your bond. Watta ya gonna do about it? Yeah, I thought so."
 
2013-04-08 10:29:43 PM  

Lady Indica: spamdog: Someone on 4chan was boasting that they bought 10,000 bitcoins when the price was 9 cents or something. Now they're, what, over $100? He said he was going to wait until they hit $200 and then cash out.

Think he'll have much luck? I do wonder if it's possible to liquidate that much at one time.

Shrewd move if he gets away with it though.

In a ponzi scheme there are some who make money, if the get in early enough and out fast enough. Not saying bitcoins are a ponzi scheme or anything. Same was true of tulip mania.


not worth "mining" since it costs more for the average home miner in electricity per day than parts of bitcoins earned per day
 
2013-04-08 10:37:55 PM  
From $1 billion to $2 billion in eleven days? There wasn't any place else for Lucky Lucianoski to stash his cash after Cyprus shut the door?
 
2013-04-08 10:40:39 PM  

schrodinger: I'm still waiting for anyone to give legitimate situations where bitcoins are preferable to the US dollar.


Depends on your definition of legitimate.

upload.wikimedia.org
 
2013-04-08 10:45:24 PM  

haterade: not worth "mining" since it costs more for the average home miner in electricity per day than parts of bitcoins earned per day


That's due to too many miners.  The Bitcoin system is designed to assure a relatively stable and slow rate of Bitcoin creation.  When Bitcoins are created faster, the computational difficulty of mining a Bitcoin is increased to slow creation down.  The work required increases, and in this case the main cost of work is electricity to run the mining computer.
 
2013-04-08 10:49:36 PM  

haterade: not worth "mining" since it costs more for the average home miner in electricity per day than parts of bitcoins earned per day


that's what wifi cafés, zombie PCs and the Beowulf cluster at work is for.
 
2013-04-09 12:28:27 AM  

OtherBrotherDarryl: It's only a good idea if you sell high. Is there a way to short bit coins?


^^^^^^I took one look at that chart and that's the first thing that crossed my mind.

/Was actually planning on buying some bitcoins this summer to purchaaaahhh...for the novelty of it but not now, unless the price....novelty factor has also adjusted along with the price.
 
2013-04-09 12:29:46 AM  
A currency whose value is entirely determined by naked speculation? What could possibly go wrong?
 
2013-04-09 12:54:53 AM  

WhyteRaven74: What could possibly go wrong?


If you got in last year, not much.
 
2013-04-09 01:52:27 AM  

BarkingUnicorn: A casino doorman once remarked of the tourists, "If they wanted less, they'd go home with more."


I live just north of Macau.  Oppulance:  They has it.

The casinos are full of priceless works of art, gold, all that.

The tourists think "Wow, there's so much money here, if I could just take a bit of it..."

The casinos think "We'll show you how much we've taken from you morons!"
 
2013-04-09 03:34:30 AM  
help me here.  I am confused.

If supply is dwindling and demand is increasing, how is that deflationary?

What is being deflated?  other currencies?
 
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