wachtwoord

I don't see this happening. A corporation would want control over it. They would never create something they couldn't control then release it. If there was an AmExCoin, AmEx would be in essence the Federal Reserve of AmExCoin where they could and would inflate it at will. Take a look at Amazon Coins, that is about all you can expect from these players in this area, IMHO. EDIT: The only large company that I can think of where doing something like this would even be a remote possibility would be Google. The value lies in the decentralization. With a (large) corporation being the seed this would be lower indeed. Especially if they pre-mine (allocate coins to themselves or don't properly announce that mining will commence). Of course there's also the first-movers advantage that Bitcoin has. Overall I think it is an order of magnitude more likely that another crypto-currency will take over the lead from Bitcoin because of a true evolution than the scenario you describe and I don't think that's very probable. I consider the largest "threat" to my investment still to be the time horizon. Even though things are progressing much much faster than I expected it to go, it's still possible it will take upwards to 100 years (that order of magnitude at least, making predictions this far out is extremely unreliable) for Bitcoin (or another crypto) to be fully accepted, as gold is today. Of course I only have a limited lifespan ;)

I'm not looking to sell but might diversify a little at some point.

It's common sense. How would you estimate future $ fees earned by miners per transaction, next week or next month or next year? You would look at current $ fees earned by miners per transaction. $100 per transaction is not sustainable. Let's say $10 per transaction is a fair price. Either transaction volume has to increase 10x or BTC has to drop 90%. It's a silly exercise to try to estimate it. Transaction volume will go up by many orders of magnitude when Bitcoin succeeds. Your estimation will be so unprecise it's completely and utterly useless. Any time spend trying to predict this is wasted time.

How do you figure transactions are way cheaper? They're not when you take the indirect cost of mining into account. Transaction cost what is needed for miners to include it into blocks. For non-spammy transaction (small or non-recently moved inputs and/or small transaction size) this is free. Otherwise it will usually cost 0.000 BTC What this author has used in his calculations is the block subsidy. This is the main incentive to mine while Bitcoin becomes mainstream and sufficient transactions are processed to support the mining network. This subsidy was 50BTC for the first 4 years and is halved every 4 years until it reaches zero. In meanwhile the market will discover what transaction fees are required for an efficient mining market (which will become a marginal business). Using the block subsidy to estimate this during the bootstrap of the Bitcoin economy is just silly. For the first 4 years this was

Yes, it's called bootstrapping. The above blogger clearly missed the point. Transactions are way cheaper.

Porn.com and their franchise accepts Bitcoin payments

You don't see Bitcoin go up a 100x from here so you prefer the casino? I'd say investing in Bitcoin is a (very) profitable decision EV-wise while investing in a basket of altcoins is negative EV. I'm not saying it's impossible, but neither is 31 black ;)

The only altcoins I owned some of were LTC and PPC (the only 2 legitimate ones in my opinion) and I sold it all for Bitcoin after the recent run-up. LTC and PPC are overvalued and most others don't have a value north of zero.

Sold AZN to buy SEP and more EXC yesterday. I should have waited a day :P

http://finance.fortune.cnn.com/2013/12/31/fortress-is-forming-a-bitcoin-fund/

Yes I wondered about that too.

Everyone: at least 10 positions are required.

1. DDD 2. CZR 3. CSGP 4. JASO 5. MU 6. NFLX 7. SHLD 8. SPWR 9. TWTR 10. UA 11. YGE

It's definitely not just you. I just don't know the answer. Your line of thought does sound plausible and I never thought of it this way. I thought they would be allowed to invest however they choose and their sheer size would allow them to take the hits (and if you don't think it can, don't buy insurance from them). Having read your recourse it does sound very plausible. But if you're right then the guys at FFH are being suboptimal (not impossible of course, people do make mistakes) or we're missing something.

Please continue this argument I really appreciate it (but have no valid contribution, other than thank you).

I wasn't around for the 2008 crisis since I started investing in 2011, but I've never bought a bank stock. Even though everyone here is saying that BAC and C are great investments (and I'm sure they are) I don't truly understand it and can't value it. Further, the moats of banks are provided by the state (basically being allowed to borrow very cheaply and handing out loans expensively) and could (potentially) be taken away if the public finds out what a great scam that really is. Banks without that monopoly would make far less money. I also never owned insurers. I think those businesses are far more stable, but I've yet to investigate how to analyze both the safety and valuation.

Thanks! Bookmarked :)

Hidden question: Please share all your material ;)

You're welcome :)

FYI: http://www.ofnumbers.com/wp-content/uploads/2013/12/medium_transactioncosts1.jpg The blog post accompanying is a good read too http://www.ofnumbers.com/2013/12/18/charles-stross-takes-on-the-bitcoin-community/ (I actually like Charles Stross as a SF author)

I don't want to sound condescending but you really really don't understand why gold has value. What you describe isn't it at all. In fact, it has nothing to do with it. Secondly, it's gold which isn't secure. Bitcoin is the most secure asset on the planet. Stocks I have to hold with a third party who I need to trust. Gold can easily be stolen (Bitcoin can be encrypted).

Capital gains at the time of selling or spending it.

Why is "Bitcoin replacing gold" a forgone conclusion? Yes I get that there is ease of transfer, but you are saying that even if it's not used as currency, it will replace gold. But as someone else pointed out in this thread, gold has been ingrained in our civilization for thousands of years, and holds the confidence as a store of value for the vast majority of people around the world. So I think it's flawed to say as if Bitcoin should be $300,000, just because it's better than gold. And I wouldn't even say it's better than gold. Gold has other uses besides store of value and currency, bitcoin doesn't. If the whole system breaks down, or if the Government puts restrictions on the use of bitcoins, the ease of transfer doesn't work anymore; and then it doesn't have that advantage over gold. Gold you can store in your house, sew in your garments. As someone else pointed out, the government is not going to be able to check every single household. Everyone knows gold. Everyone knows it's valuable. It's shiny and pretty. It has the "share of mind" that Buffett talks about. Bitcoin doesn't have any of these qualities. Please read the source I linked to, than you'll agree Bitcoin is better than gold. It's simply because it implements the properties (scarce, fungible, uniform, transportable, have a high value-to-weight ratio, are easily identifiable, are highly durable, and their supplies are relatively steady and predictable) better than PMs. To respond to your last point: Bitcoin is also easier to store "in your house" with less chances of confiscation. If someone looks through your house they'll find you gold storage much easier to however you stored your private keys. Add to that that private keys can be encrypted. Crypto is taking over, simply because it's better :) What if the government says bitcoin transactions are illegal? Maybe they can't confiscate it, but they can shut down its use. Or what if shit hits the fan and the internet doesn't work tomorrow, and all we have is here and now? Also I added an edit to my previous post. Nation states can technically make anything illegal they wish. It'll be difficult to uphold the law though (and will have unexpected side effects such as the rise of the US maffia because of th prohibition). Also, the US has made gold illegal in the past. That has had no long term influence whatsoever. I personally believe the revolution will happen faster if they do fight it so I actually don't mind if they do. I agree with your edit and have never held any PMs for this very reason (I do hold stocks). PMs are just an inflation hedge, nothing more. The reason I do hold Bitcoin is that I believe its extremely undervalued. Once the revolution is done, it will have taken PMs place and I'll likely use it for the cash portion of my portfolio only. If you hold and ounce of gold (or a Bitcoin) for 100 years it's still an ounce of gold (or 1 Bitcoin).

You are completly missing the point here. Volatility is a problem because it directly interferes with practical use. You think google would have succeeded if they randomly decided to take down their server every other day? We would all be using bing now. You cant compare the value of a currency with a freaking stock price lol. They are 2 different things. People ddidt have to use google stock to pay for stuff for google to be succesfull. And i claim overvalued because of this: https://blockchain.info/nl/charts/n-transactions Before anyone besides some hackers and online drugbuyers had ever heard of bitcoin, transactions were pretty much the same as they are now. And no you cant just exclude popular adresses. With 2 periods of big exposure this year, almost no one is using it to pay for stuff. Another thing to prove my point is that bitpay only had 100 million$ in transactions. This may look like alot but consider this chart: https://blockchain.info/nl/charts/estimated-transaction-volume-usd?timespan=1year&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address= 100 million$ in volume is literally 4 easy days in july. Or maybe 5 days in january. So if it was like 2 or 3 billion, that would actually show adoption. But everyone i just buying to hoard, and no one buys to pay for stuff. And with 15k merchants accepting it and all the coverage, there is really no excuse for that. My prediction is that this wont become any better next year. Gold has been very successful throughout history but must have been very volatile at the start. So volatility is moot. Transaction volume is a very weak proxy to determine the amount of sales (at the very least right now possibly ever). This includes every transaction, so also me shuffling my coins in my own wallets as part of general bookkeeping, but also moving them to exchanges to sell or trade them (which causes the huge peaks in the graph on the 3 times in history Bitcoin price has risen super-exponentially) and gambling games. The gambling games create a single transaction for every bet made (not just for depositing and withdrawing). It's unfair to use this to determine general purchasing volume as such a purchase only produces 1 transaction in the blockchain. (oh and btw: I'd use this smoothed graphs myself so: https://blockchain.info/nl/charts/n-transactions?timespan=all&showDataPoints=false&daysAverageString=7&show_header=true&scale=1&address= and https://blockchain.info/nl/charts/estimated-transaction-volume-usd?showDataPoints=false&show_header=true&daysAverageString=7&timespan=all&scale=1&address= ) The sales volume of Bitpay is a much better proxy and still low indeed. It did grow substantially. In the end, Bitcoin is greatly undervalued even if no-one will ever use it as a currency (which isn't true today) because merely replacing gold requires a valuation of $300,000 per Bitcoin. And as you may recall: Bitcoin is better than gold http://evoorhees.blogspot.nl/2012/04/bitcoin-libertarian-introduction.html ) Anyway, I really doubt we'll come to agreement (see how I just repeated and summarized my argument that volatility is fine?). Let's just let time decide who's right, but we both made the points we wanted to make, now others can do their own due diligence if this sparked their interest :)

Like what? The USD? :D Merchants need to have far higher merchants to account for losses due to chargebacks. Credit card companies take huge fees. Do you really believe the small cash back you get is higher than what you would save if the middle man was taken out? I don't think you understand the business model of credit card companies. Me too. I only know one other person with a brokerage account and when exchanging money to go on holiday it's not like I can withdraw foreign currency from IB. Add to that the fact that a fiat withdrawal in Euro's will cost me ~20 Euros. Banking fees are huge and are much lower when using Bitcoin, not to mention much faster. An most importantly, no-one can block you. I don't like a third party deciding what I do with my money. Banks have blocked transfers of mine in the past. First they accused me of having a virus but when I kept complaining I got someone higher up and she admitted the bank just didn't want me to transfer money where I wanted to transfer money. The fact that the money was mine didn't seem like a valid argument to them. This was ING Bank btw. So buy 1 BTC if you think that's enough. $1M might be a long way out though :)