OT: Bubble, Bubble, Fraud and Trouble

Krugman’s credibility evaporated with this prediction in Nov 2016.

"It really does look like 'President Donald Trump' and markets are plunging. If the question is when markets will recover, a first-pass answer is 'never'," Krugman wrote at the time.

I don't have any problem with the people that are using existing cash to purchase Bitcoin, hope it goes up in value, and then convert it back to cash later. That's just like people speculating in any other commodity/stock/currency that they may not know much about. Although, the people who do this, driving up prices, fuel the part I'm not comfortable with . . .

Bitcoin mining. No one truly knows what all those Bitcoin mining programs are REALLY doing. I just can't help being suspicious of a massive distributed parallel multiprocessor supercomputer funded by human greed (the desire for "free" Bitcoins) and under the control of some unknown entity.

@jack - see my post on Bitcoin IRA

Buy! Buy! Buy!

Hahahaha bitcoin mining....

I was mining this month, and I made $100 in bitcoin and my electric bill only went up $300!!!!! I think it’s pretty hard to mine and make money unless you’re somewhere where you aren’t paying for your electric.

How can I be sure I'm not buying "Blood Bitcoins"? I heard Leo DiCaprio is coming out with a movie soon.

Bitcoin mining operations have moved to Washington state where the cost of electricity is about half as much as the rest of the nation.

And Eastern Europe. China had huge operations that they are shutting down. I have some cloud mining contracts out, i do no work and if price stays up i get a nice return based on compound interest purchasing more mining power everyday. If bitcoin loses value i am out sone money that wont hurt me as its not a large amount.

Good article. Krugman & Shiller are two economists who you ignore at your own peril.

@random - Who you gonna believe, a couple of Nobel prize winning economists or the financial experts here on TUSCL?

Well written article which makes the obvious and undeniable point that bitcoin is fake money, with nothing more behind it than Monopoly money. It’ll crash and be worthless as soon as people like Dougster get tired of playing monopoly.

^^ disagree, but everybody has an opinion. If US dollar were to collapse then Bitcoin’s USD price could skyrocket. Which is the greater speculation? That the US dollar will maintain its purchasing power over the next 50 years despite the massive US debt and low interest rates? Or that we will eventually adopt a new financial technology, just like we did with paper money, that is closer to the concept of “sound money”? If history is any indication, then the US dollar will most certainly NOT maintain its purchasing power.

I think the appeal of Bitcoin is basically the libertarian mantra "Look ma, No Central Bank!". The idea behind blockchain is brilliant to be honest. Unfortunately Joc13's reservations on Bitcoin mining definitely are valid: even more so because it uses up REAL resources, creates waste, and creates nothing of tangible value. Even climate change deniers should be able to comprehend this.

Bitcoin is really a Ponzi scheme, and is just one more example of why Mike Judge's observations in "Idiocracy" are not only prophetic but happening much sooner than he penned it in a future dystopia.

i dont understand bitcoin but if someone were to offer me 1M in USD or 1M in bitcoin i would take the USD. even if the USD collapses i dont think the price of bitcoin would sky rocket, and if it did, the sky high price of bitcoin would not matter. with the collapse of the USD, you would have the collapse of infrasture/government, so you would basically value food, water, shelter, security more than having 1 million in bitcoin.

^^^ except that Bitcoin is international. In the event that USD collapses, if all you had are USD then you’re fucked. If you had Bitcoin, no big deal, hop on a plane and fly to Germany. Cash out your Bitcoin there and go on an FKK tour.

The real reason that Bitcoin is not as popular as it was in November / December of last year is because we hit a bottleneck. The network literally could not keep up with the high volume of Bitcoin transactions, so the miners started implementing transaction fees. To the people who understand Bitcoin, this was not surprising, but rather expected, as the transaction rate is limited to less than 10 per second.

PhD software developers have been working on upgrading the Bitcoin software to allow for a transaction rate that exceeds VISA.

So, it is no wonder that Bitcoin hit a ceiling. In the same way that computers from the 80s are worth peanuts compared to modern computers—because they’re slow and not powerful enough—the current bitcoin implementation can not be valued more highly due to its technological limitation. But guess what... there are hundreds, if not thousands, of developers working on this technology for a reason.

Why don’t you all use Gold? The prices of other commodities are much more stable when priced in gold. Is it not stability that makes the US dollar more appealing? Why not go all the way and get the most stable form of money, gold? Why not pay for your coffee in gold?

Oh, that’s right, because we came up with a better technology....

^^^You could always pay for gold with coffee. ;)

I've been buying and selling bitcoin since January of 2014. The 1 mb block size problem which caused massive transaction delays and huge sending fees is finally subsiding with the introduction of SEGWIT. My fees are finally back down to under a dollar to send, I am so happy....I was really ready to bail from bitcoin and stick with litecoin and ethereum due to the whole fiasco. And to make matters worse, bitcoin miners would intentionally a majority of their hashpower at bitcoin cash instead of bitcoin causing really bad backups and very high fees. They flip between bitcoin case and bitcoin, coming back after the high fees pile up.
Anyway, bitcoin is finally becoming usable for spending again and that is a good thing. Once lightening networks become more evolved, even micro transactions should be nearly instant and very cheap.

^^^ One of maybe three people on this site that understand Bitcoin.

this bitcoin stuff makes no sense to me, so if everyone that owns bitcoin decides to cash out, are there enough dollars to pay everyone out? i know the USD is backed by the federal reserve and you buy bitcoin using USD. So are bitcoin buyers hopeing that legal tender switches to bitcoin instead of the USD. I dont think the US government will allow that. Crypto means secret, and i think you should have made your money by now. crypto currency are too main stream now to be secret/hidden. i dont know shit about bitcoin, thats just my logic.

@SN there is no dollars in bitcoin just like the stock market the price will rise and fall on the strength of buyers and sellers. Everything is available for the right price be it high or low.

^^^thanks, whenever i can walk into a SC thats when i will start buying bitcoin

@Hugh_G._Rection,

To be clear, libertarians believe that cryptocurrencies should exist and that they should compete with fiat currencies, but not necessarily that Bitcoin should go to $20,000 in value. Similarly, libertarians believe that drugs should be legal, but not necessarily that everyone should be getting high all the time.

Here's a funny little video about Bitcoin that was produced by ReasonTV, a libertarian outlet:

https://youtu.be/UG7zLhEWanc

Bacon!

If I knew how, I think I might create my own cyrpto currencies seeing how limited the supply of bitcoins are, then everyone could buy my currency. I could even claim there is a limited supply of each currency just like Bitcoin. What could go wrong? If people drive the price up several times, it could become the talk of the town. Might be my best chance to be a cyrpto millionaire. Create the next best thing.

In other news Facebook stock dropped on news that viewer hours dropped by 50 million hours. Then they said that cutting views of the viral cat video wasn't going to result in any loss of revenue and the stock is up 2%.

Coming up, juice creates a stink viral video at McDonalds. Toilet overflowing. People running away from turds. Just a matter of time before captured on video. Facebook viewing hours jumps 200 million hours. Just a matter of time.

There's nothing to understand. It's currency. I don't think one is supposed to invest in liquid assets. (usually I understand what an investment is, and perhaps I don't). But by all means, continue to deep throat The Fed and VISA.

^^^Why wouldn’t you invest in liquid assets those would be the strongest investments

Appearances are more important to certain people than substance. It’s hard for the people who live on the surface to comprehend that.

When you begin to wrap up your self worth with how your money is doing, usually your self esteem goes out the window. It can be confusing to navigate the landscape of finance, but that doesn’t absolve your from taking responsibility for it.

@twentyfive, aren't investments supposed to be capital assets that appreciate in value? If liquid assets fulfill that, and you say they are among the strongest investments, I will believe you. I trust your judgement.

^^

Since nothing is free, you should expect a trade-off between liquidity and expected rate of return. Liquidity is really just the ability to convert an asset to cash. So a checking account is more liquid than a savings account, which is more liquid than a money market account, which is more liquid than stocks, etc. It's easy to sell a stock, and in that regard they are indeed quite liquid, but there are transaction costs and significant price fluctuations over time. The most liquid asset is cash itself, in your pocket. But cash yields no income and is likely to lose value over time due to inflation. So to make a long story short, you should be willing to sacrifice at least *some* liquidity in an effort to earn some return, unless you know for a fact that you'll need the money immediately or almost immediately. Even if it's just by putting the money into one of those high yield online savings accounts I mentioned in the other thread.