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Do you think Bitcoin is a safe store of value?


mikazo
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http://image.bayimg.com/7fad3268e22cc8e67d58f4bcbc3f5859fd1b16ae.jpg

 

Doesn't look like a store of value to me. More like a tulip mania. But I might be biased because I'm angry I never went all in :).

 

The concept is very interesting though.

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There will very likely be a day in the near future where the U.S. government will crack down on Bitcoin. It is inevitable. When the government makes it difficult for people to convert Bitcoins back to cash (they will likely target the exchanges, and they'll start going after people who use Bitcoin for illegal activities), the value of Bitcoins will plummet.

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Warren Buffett on Bitcoins from an interview from 2023

 

I will say this about Bitcoins. If you took all the bitcoins in the world, it would roughly make a cube of 67 micro millimeters on a side…Now for that same cube of bitcoins, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils and you could have a trillion dollars of walking-around money…And if you offered me the choice of having some 67 micro millimeters of bitcoin which you can not even look, touch or fondle it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.

 

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Warren Buffett on Bitcoins from an interview from 2023

 

I will say this about Bitcoins. If you took all the bitcoins in the world, it would roughly make a cube of 67 micro millimeters on a side…Now for that same cube of bitcoins, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils and you could have a trillion dollars of walking-around money…And if you offered me the choice of having some 67 micro millimeters of bitcoin which you can not even look, touch or fondle it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.

 

That's gold. Bitcoin is an improvement over gold (e.g. fungiblity, not fakeable, fast/cheap/easy movable and truly limited) but trades for a 0.03% valuation (@ $200 a BTC, it's quite swingy) compared to gold.

 

Buying BTC for an increase in value is a speculation because there is no good which will ever produce anything. However it is truly undervalued so buying and waiting for the market to correct itself can be highly profitable.

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Warren Buffett on Bitcoins from an interview from 2023

 

I will say this about Bitcoins. If you took all the bitcoins in the world, it would roughly make a cube of 67 micro millimeters on a side…Now for that same cube of bitcoins, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils and you could have a trillion dollars of walking-around money…And if you offered me the choice of having some 67 micro millimeters of bitcoin which you can not even look, touch or fondle it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.

 

I'm glad Buffett will be around in 10 years  :D

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That's gold. Bitcoin is an improvement over gold (e.g. fungiblity, not fakeable, fast/cheap/easy movable and truly limited) but trades for a 0.03% valuation (@ $200 a BTC, it's quite swingy) compared to gold.

 

Buying BTC for an increase in value is a speculation because there is no good which will ever produce anything. However it is truly undervalued so buying and waiting for the market to correct itself can be highly profitable.

 

And I hear that Indian brides are demanding bitcoin jewelry for the weddings instead of gold  :P

 

Most forms of currency have some form of intrinsic value. Gold can be used for jewelry. Cigarettes can be smoked. Dollar bills can be used to pay taxes to the government. The only way a currency with no intrinsic value can establish itself is through a huge entity like a government or massive corporation providing it with value by accepting it in exchange.

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That's gold. Bitcoin is an improvement over gold (e.g. fungiblity, not fakeable, fast/cheap/easy movable and truly limited) but trades for a 0.03% valuation (@ $200 a BTC, it's quite swingy) compared to gold.

 

Buying BTC for an increase in value is a speculation because there is no good which will ever produce anything. However it is truly undervalued so buying and waiting for the market to correct itself can be highly profitable.

 

And I hear that Indian brides are demanding bitcoin jewelry for the weddings instead of gold  :P

 

Most forms of currency have some form of intrinsic value. Gold can be used for jewelry. Cigarettes can be smoked. Dollar bills can be used to pay taxes to the government. The only way a currency with no intrinsic value can establish itself is through a huge entity like a government or massive corporation providing it with value by excepting it in exchange.

 

Gold wouldn't be valued at 1% of the current price if it was for use in jewelry and industrial usage alone.

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In Google Trends searches for "Bitcoin" have also gone parabolic:

 

http://www.google.com/trends/explore#q=bitcoin&data-ipsquote-timestamp=1%2F2006%2089m&cmpt=q

 

It has now surpassed "Megan Fox". However, it remains below "bieber", who is trumped by "gold".  :D

 

http://www.google.com/trends/explore#q=bitcoin%2C%20megan%20fox%2C%20bieber%2C%20gold&data-ipsquote-timestamp=1%2F2006%2089m&cmpt=q

 

 

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In Google Trends searches for "Bitcoin" have also gone parabolic:

 

http://www.google.com/trends/explore#q=bitcoin&data-ipsquote-timestamp=1%2F2006%2089m&cmpt=q

 

It has now surpassed "Megan Fox". However, it remains below "bieber", who is trumped by "gold".  :D

 

http://www.google.com/trends/explore#q=bitcoin%2C%20megan%20fox%2C%20bieber%2C%20gold&data-ipsquote-timestamp=1%2F2006%2089m&cmpt=q

 

 

Oh good, gold is still on top.  I don't want to have to listen to people talking about the Bieber standard.

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Amazon Coins:

https://developer.amazon.com/sdk/coins/landing.html?ref_=pe_132830_29076940

 

Where are the Fairfax and Berkshire coins?

 

Amazon coins isn't even something closely resembling Bitcoin. These are just US Dollars (literally).

 

Google once considered creating something related to bitcoin (before Bitcoin) but didn't because the legal mess this would bring.

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Guest hellsten

http://dealbook.nytimes.com/2013/04/11/as-big-investors-emerge-Bitcoin-gets-ready-for-its-close-up/

But the 6-foot-5 Winklevii were unfazed by the latest tumult. Indeed, the brothers said they used the low prices to buy more. They argue that bitcoin will have much further to soar once a broader audience sees its virtues: a unit of exchange that can be moved around the world at the click of a button without requiring any payments to Western Union or American Express.

 

“People say it’s a Ponzi scheme, it’s a bubble,” said Cameron Winklevoss. “People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.”

 

“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said.

 

LOL, sounds like they are going to learn about politics and behavioral economics the hard way.

 

The case was settled with the brothers being given $20 million in cash and Facebook shares that are now worth over $200 million.

 

They have parlayed that fortune into Winklevoss Capital. Their first two investments were in Hukkster, a start-up shopping Web site and SumZero, an online community for professional money managers.

 

I didn't know they were behind SumZero.

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I sure hope he enjoyed it.  I like the post shortly after where he withdraws his offer and says "I can't really afford to keep doing it since I can't generate thousands of coins a day anymore".

 

I wonder if he saved any or he spent it all on pizza?

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The best possible outcome of all this Bitcoin business is if it increases the interest in digital currencies and creates a competition to create a better one (more secure, more decentralized, better privacy, faster, etc...).

 

Bitcoin Isn’t the Only Cryptocurrency in Town - Currencies designed to fix perceived flaws in Bitcoin could lead to competition that makes the idea of digital “cryptocurrency” stick.

 

and another one:

 

Big-Name Investors Back Effort to Build a Better Bitcoin - Some of Silicon Valley’s best-known venture funds have backed OpenCoin, a startup with a new digital currency called Ripple.

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The best possible outcome of all this Bitcoin business is if it increases the interest in digital currencies and creates a competition to create a better one (more secure, more decentralized, better privacy, faster, etc...).

 

Bitcoin Isn’t the Only Cryptocurrency in Town - Currencies designed to fix perceived flaws in Bitcoin could lead to competition that makes the idea of digital “cryptocurrency” stick.

 

and another one:

 

Big-Name Investors Back Effort to Build a Better Bitcoin - Some of Silicon Valley’s best-known venture funds have backed OpenCoin, a startup with a new digital currency called Ripple.

 

The only thing you are right about that could be improved is privacy. (Basically Bitcoin has no anonymity other than the decoupling of Bitcoin addresses and identities).

 

Furthermore, the crypto-currency Ripple is not an improvement over Bitcoinn. The "Ripples: are owned by the company which created it. They are handing them out for free for now but there is an active market for it. Further it is centralized and not secure due to the absence of mining. Ripple as a p2p IOU system (so ignoring the ccurrency) could be very nice, but that's not a competitor for Bitcoin.

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  • 4 weeks later...

The coming political battle over Bitcoin

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/15/the-coming-political-battle-over-bitcoin/

 

On Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at the request of federal investigators. It’s the first federal action against the currency.

 

CNet has confirmed that the asset seizure was initiated by Homeland Security Investigations, a division of Immigration and Customs Enforcement. Among other things, that agency has the power to enforce laws against money laundering and drug smuggling.

 

-----

 

The Feds Are Cracking Down On Mt. Gox (Not On Bitcoin)

 

http://www.forbes.com/sites/kashmirhill/2013/05/15/the-feds-are-cracking-down-on-mt-gox-not-on-bitcoin/

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