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Neil Lindholm
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Posted: 04 December 2017 at 5:26pm | IP Logged | 1 post reply

 
 QUOTE:
If all Bitcoins are trackable then what happened to the ones the hackers stole? They could never use them, could they?

Not easily. Every transaction since the beginning of bitcoin has a permanent record. We might not know who has these coins but they know where they are and they can be flagged if they surface at an exchange. It is much harder to cover your tracks in the digital world than by simply using cash, which is completely anonymous. Another reason why governments, especially repressive ones, don't like the idea. Corruption is reduced dramatically when there is a chain for every transaction. 

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Neil Lindholm
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Posted: 04 December 2017 at 5:28pm | IP Logged | 2 post reply


 QUOTE:
Some Beanie Babies sold for 5k a piece and some people whipped themselves into a frenzy about them too.

Please explain how Beanie Babies were a disruptive technology that could completely revolutionize society?




Edited by Neil Lindholm on 04 December 2017 at 5:28pm
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Jason K Fulton
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Posted: 04 December 2017 at 5:51pm | IP Logged | 3 post reply

Understanding an investment before purchasing it is usually a good plan.

I don't know that I'd throw my long term savings into something out of a Neil Stephenson novel - but good luck to you!
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Neil Lindholm
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Posted: 04 December 2017 at 7:20pm | IP Logged | 4 post reply

Completely agree. I have read articles about people who don't invest in Apple because they don't understand computers. Fair enough. There are many books and articles about Bitcoin available. The entire blockchain technology is fascinating and the possibilities are staggering. 

The big problem is that it makes a lot of functions currently done by government and banks obsolete and we all know that won't change without a struggle. 
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Wilson Mui
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Posted: 04 December 2017 at 7:32pm | IP Logged | 5 post reply

Neil, Is bitcoin very popular in Asia? I
read that nearly 70% of the coins mined is
in China.
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Neil Lindholm
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Posted: 04 December 2017 at 7:49pm | IP Logged | 6 post reply

Big time. Korea and Japan have embraced the idea and are actively investing in it. The Philippines loves it since remittances are such a huge fact of life there and the banks suck massive user fees for transferring funds.  Bitcoins are instantaneous and cost almost nothing to use. A lot of Asian countries see the chance to bypass Western countries and leap to the new technology. India has zero faith in government money after the last fiasco and is gaining popularity as well. 
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Neil Lindholm
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Posted: 04 December 2017 at 7:59pm | IP Logged | 7 post reply

Coins are mined in China since electricity costs are so low. There is talk about moving a lot of these mining farms to northern countries since China is being China and the higher north you are, the less you pay for air conditioning. Iceland is big on mining as well. 
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Steve Gumm
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Posted: 05 December 2017 at 7:25am | IP Logged | 8 post reply

For those wanting to know a bit more. Netflix has a documentary that covers it's concepts and history - Banking on Bitcoin. 


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Brennan Voboril
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Posted: 05 December 2017 at 7:53am | IP Logged | 9 post reply

Neil I am sure you are familiar with the terms speculative mania and financial bubble when it comes to economics.  

I believe Bitcoin, like the current valuations on the stock market, falls into the category of a bubble; see what Roach said today about the matter  https://www.cnbc.com/2017/12/04/bitcoin-is-a-dangerous-specu lative-bubble-yale-expert-says.html

You don't believe Bitcoin is a bubble and sing its praises, even linking to a site that sells them.   

Time will tell which one of us is correct.  
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Peter Martin
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Posted: 05 December 2017 at 7:55am | IP Logged | 10 post reply

Tulips were not a new technology and they had no useful qualities, other than being pretty.
-------------------------------
They had value and they were pretty, meaning they had one more quality than Bitcoin.

Bitcoin has value, but only because people currently ascribe value to it. It has use as currency -- but far less use than a normal currency like USD or GBP. You will always be able to buy goods in the US with USD. What guarantee is there that vendors will always accept Bitcoin?

Bitcoin has been driven up massively in value by positive sentiment (i.e. the upward curve of the bubble as more people pile on as they see the increasing value). My question is, when the inevitable big correction occurs, what stops the vicious cycle of people selling when they see the value diving? There is no backstop as far as I can see.

If the USD starts to lose value, foreign investment flows into the US economy to buy US goods that are now cheaper, this props up the value of the dollar and eventually you get an equilibrium. If Bitcoin drops, the cost of things you can buy with it will not get cheaper. The prices will just rise to equalise the decline in the value of Bitcoin, meaning there will be no flow of equity into Bitcoin to help prop it up. It seems to me anyway...


Edited by Peter Martin on 05 December 2017 at 7:57am
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Neil Lindholm
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Posted: 05 December 2017 at 8:08am | IP Logged | 11 post reply

There are many economists, whose entire life work has dealt with studying a system that is controlled by governments and central bankers. Quantitative easing, fractional reserves, rampant inflation. Look at Zimbabwe, Venezuela, Greece and Cyprus. India with their messing around with their currency. Bankers manipulating markets for their own gain. Now imagine a currency that is decentralized, impossible to inflate. A currency that is anonymous yet will track every transaction, eliminating the massive corruption prevalent in so many planned economies. This is the system the old-time economists desire to maintain. They attack what they do not understand. 

What is a currency? The USD has a value because people have faith in it. It is backed by nothing more than the belief that the US government will always be around and will do the right thing. Running the printing presses and racking up trillions in debt? You still trust them?

When Bitcoin corrections occur, people rush in and buy. This has been going on for years and years. And remember, there is a fixed amount of bitcoins, unlike the US dollar. Would you rather have a currency that is stable and secure or one that can be manipulated at the whims of whoever is in charge? Since 1933, when the US government abandoned the Gold standard and turned on the presses, the inflation rate since then is 1797.4%. This is a better system?
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Neil Lindholm
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Posted: 05 December 2017 at 8:16am | IP Logged | 12 post reply


Nice little video explaining the reasons and the advantages. 
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Peter Martin
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Posted: 05 December 2017 at 9:02am | IP Logged | 13 post reply

Would you rather have a currency that is stable and secure or one that can be manipulated at the whims of whoever is in charge?
------------------------------------------------------------ -
Explain to me how the value of Bitcoin is more stable than USD?

It you plot a chart of Bitcoin over the last 4 years, it looks like an exponential curve with the customary runaway spike.If you plot a chart of the US dollar index (a measure of USD against a basket of 6 major currencies), you get a very stable line.

How can anything with a 'meteoric rise' be described as stable? Its value is clearly in a state of extreme flux. This may be great if you are a speculator, but not so great as a usable currency.


Edited by Peter Martin on 05 December 2017 at 9:06am
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Brennan Voboril
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Posted: 05 December 2017 at 12:17pm | IP Logged | 14 post reply

Well, would you buy anything with it if it could be at 100k by next week? 
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Neil Lindholm
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Posted: 05 December 2017 at 5:11pm | IP Logged | 15 post reply

Bitcoin is in its infancy right now. If it actually becomes a world currency, this would not happen overnight but would take decades. Imagine a world where the USD is pegged to bitcoin. That's what I meant by saying it is more stable. We know exactly how many bitcoins there are and how many can be mined. We have no idea how many USD are out there and when the government will start quantitative easing again. Why not have something new and better than fiat currency that can be manipulated?

Although it was originally designed for day-to-day transactions, it has morphed into a method of storage, much like gold has become. There are other digital currencies out there that are much better suited for daily transactions and they will soon come forward. 
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Brennan Voboril
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Posted: 06 December 2017 at 7:07am | IP Logged | 16 post reply

Bitcoin hit 13k today.  In one month, it has doubled in price (but don't worry, it's not a bubble). 

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Neil Lindholm
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Posted: 06 December 2017 at 8:26am | IP Logged | 17 post reply

Shall we compare it to another brand new technology and see how this rise compares to other rises? We can't because it is brand new. We have no idea how it is supposed to act because it is new. Nobody has any idea how it will all pan out because there is nothing to compare it to. That's what makes it fun. 

I found this graph online and thought it was interesting. The author claimed that Bitcoin is just starting the mania phase and the blow-off phase will probably happen but not in a while. Below is the link to the page. 


Again, nobody knows. The price will fluctuate wildly for a while but I think there is still a long way to go before there is a correction. 

(I'm just glad I bought during the stealth phase)

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Brennan Voboril
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Posted: 06 December 2017 at 9:34am | IP Logged | 18 post reply

India and China have both issued warnings about Bitcoin today, with the Chinese going so far as to say "we will one day see Bitcoin's dead body float away in front of you."

Also of note: thousands of Bittrex (the world's third largest exchange) customers are locked out of their accounts and unable to withdraw money.  Bittrex is registered in Las Vegas.  That isn't ironic or anything.  
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Wilson Mui
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Posted: 06 December 2017 at 10:22am | IP Logged | 19 post reply

Congratulations on getting in early, Neil. I hope you
make a lot more money on it.

I met this kid at a family gathering years ago. He
was telling me how he was mining bitcoins on his
computer. This was when they were trading at $150 or
so. He made a nice profit on it and his mom told him
to sell. I think if he held onto his coins, he would
be a millionaire now.

The Winklevoss twins' $11 million investment in 2013
makes them a billionaire on paper. They gave an
interview at the time and pretty much predicted this
would happen.

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Brennan Voboril
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Posted: 06 December 2017 at 2:48pm | IP Logged | 20 post reply

NiceHash, the largest crypto-mining exchange hacked, 4000 Bitcoins worth over $50 million stolen 

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Neil Lindholm
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Posted: 06 December 2017 at 5:25pm | IP Logged | 21 post reply

Again, keeping your coins in an online exchange is stupid. There are many inexpensive offline hardware devices available. 

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Brennan Voboril
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Posted: 06 December 2017 at 5:47pm | IP Logged | 22 post reply

Not the point Neil.  Point is people lost a lot of money and no FDIC.  
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Neil Lindholm
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Posted: 06 December 2017 at 6:03pm | IP Logged | 23 post reply

Has the FDIC ever been used? Does it bail out bad investments in the stock market, which has lost orders of magnitude more money than digital currencies? When was the last time a bank failed and the FDIC has had to bail it out? I would not count on it being there in an actual crisis. 


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