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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
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Yeah 20% move in three days. The crypto bulls will all re-emerge from the shadows and be back in force soon.
How anybody can think that something that moves 20% like that on nothing, could possibly be a currency or storage of wealth amazes me.
My take is that the SEC non approval wasn't unanticipated. I am not convinced that this is a significant change event because there are still developments in Europe and additional uncertainty and possibility for eventual SEC approval.
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I have always felt Bitcoin might be worthless. However, I can see no real reason that it should be any more worthless today then when it was priced at say 17347.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
This is interesting, basically says that "AS CURRENCIES" use of crypto's has declined significantly which raises the question if they are not currencies what are they?
After peaking at $411 million in September, the amount of money the largest 17 crypto merchant-processing services received in the best-known cryptocurrency has been on a steady decline, hitting a recent low of $60 million in May
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
That was interesting. Worth noting that Voorhees said at the beginning that he is talking about "Bitcoin or a similar form of cryptocurrency", which to me is a completely different position than arguing for Bitcoin specifically.
It's also worth noting that he (Voorhees) has been a very long term investor in Bitcoin, sold one of his companies for 126,315 Bitcoins and claims to keep 85% of his net worth in Bitcoin. Well 126,315 * 6910 * 0.85 = would mean he has Three Quarters of a Billion Dollars worth of Bitcoin!
Crypto, of which Bitcoin is the most dominant, is a new technology. People make mistakes when they extrapolate the current capabilities of a new technology into the future and use those extrapolations to justify why the new technology won't become more prevalent. For example, the original web was much more limited then today's web. Bitcoin is analogized as a currency because it acts similar to a currency but most people know that it does not have all the properties of traditional currencies and has additional uncorrelated properties.
I feel like there were some inaccuracies in that article, consider that:
1. Notice that it references the "largest merchant services" as its basis. But people do not need to use merchant services to use Bitcoin as a currency. On the contrary, this is a huge benefit.
2. It references high cost but I just checked the most recent costs and, at least, simple transactions were already below credit card fees. The multi-signature transactions are more expensive and that might be a problem. It looked like simple transactions were around 10-20 cent last I checked.
3. Many of the limitations are real but can be overcome by either on-block or off-block technology. For example, reversibility could be solved by a trusted escrow (on block) or centralized party (off block). Other problems like the high energy might be solved by regulation such as only allowed Bitcoin to be mined using green energy.
That said, I agree the technology is highly speculative for now. I am not convinced what type of price or value it will retain long term. Even given, I have been impressed with its resilient nature given it has not flash crashed into oblivion.
As for other analogies, Bitcoin is a game. It appears this is how the creators thought of it. It is also a distributed database technology. When you "buy" Bitcoin, you gain access to the technology. What does the technology allow you to do? It gives the owner control to make transactions. What is Bitcoin worth? It is worth, however, people value it. But, there are two things that tend to propel it upwards. First, because of the high divisibility, there is no disincentive to high prices among users. Second the limited supply encourages hoarding and holding. Crypto is also similar to other digital assets but has a more general utility value.
In many ways, Bitcoin is a new economic model. It is a new economic philosophy. For example, traditional currency is rooted in credit created money by the state for the state and distributed to the people based on credit. Bitcoin is distributed by a known algorithm to miners and traded. Value is based on the utility. If your network becomes larger then your currency becomes more valuable but pricing is more variable.
The way I reason about it is that before Bitcoin was traded for tangible goods then it was worthless. There was no rational reason to give it value. But, once it was traded for something of value then it obtained value. I suspect crypto will be here for a long time and will become more prevalent. However, I am not sure what crypto, if it even exists today, will be the ultimate winner. I agree it is highly speculative and uncertain at this stage still.
