Silk Road forums
Discussion => Philosophy, Economics and Justice => Topic started by: lesseroftwoweevils on November 03, 2012, 03:04 pm
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As I only started using the Silk Road about 10 months ago, I managed to miss the infamous bitcoin crash in the summer of '11. I initially bought around $4 a btc and have been buying in at incremental levels ever since. I usually hold on to my bitcoins for a few months before spending them, so I've been typically buying things here for about half their actual worth (fuck yeah).
However, I've recently decided to devote a portion of my portfolio to bitcoins themselves an actual long-term investment. Although I was very skeptical of them while starting off here, my increased understanding and awareness of them has made me a believer in their core principles of an anonymous, decentralized currency.
Are you with me on this one or do you think I just threw away my money? And if you agree with me, have you actually invested money in bitcoins outside of the Silk Road that you intend to keep for an extended period of time?
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I am not a financial expert by any stretch of the imagination, but I think if you have the resources, BTC are definitely worth investing in. The market price for it seems to fluctuate wildly, so if you picked up some BTC at a low price and hung onto them until the value rose, you could make a killing.
In the 5 or so months that I have been aware of BTC, I have seen the price rise from approximately $4 per BTC up to about $18 per BTC, and everything in between. If you played your cards right, there is serious money to be made from it. I guess it all comes down to patience and how much money you can afford to invest in it, without bankrupting yourself.
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Remember that bitcoins have zero intrinsic value. They are only valuable because we use them. If more people start using them, value will increase. If the public ditches them in favor of another cryptocurrency, then value will drop drastically. Technology is always updating and getting better, so it's not impossible that something like that will happen.
In the history of humanity, we have never seen anything like bitcoin before, so there is no predicting what will happen. You can invest some money in bitcoin and see what happens. You might make some profit. Just see it as an experiment and a bit of a gamble, make sure you don't go bankrupt if it all crashes.
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Remember that bitcoins have zero intrinsic value. They are only valuable because we use them. If more people start using them, value will increase. If the public ditches them in favor of another cryptocurrency, then value will drop drastically. Technology is always updating and getting better, so it's not impossible that something like that will happen.
In the history of humanity, we have never seen anything like bitcoin before, so there is no predicting what will happen. You can invest some money in bitcoin and see what happens. You might make some profit. Just see it as an experiment and a bit of a gamble, make sure you don't go bankrupt if it all crashes.
Duly noted, but couldn't you make that argument about any currency? We use worthless pieces of paper every day as practical trading tools and no one bats an eye. And to me at least, the decentralized aspect of bitcoins and their mathematically decreasing "scarcity" share more similarities to commodities like gold than it does to a volatile currency. I think you're also forgetting the energy costs needed to "mine" bitcoins, which one could argue has real world value.
The strength of the cryptographic technology behind bitcoins is relatively unknown I agree, but I seriously doubt people will just start using a different cryptocurrency unless forced to. Bitcoin has all the momentum behind it and it's really its game to lose.
Of course, many more people will have to start using it for it to become a mainstream success. I'm a firm believer in the longevity of Tor-based drug markets though, and I think they have and always will bring value to bitcoin. So in a sense, my investment is a long shot hope that bitcoin becomes widely accepted in legitimate settings and a more reasonable bet that drug sites will exist in the next few years and that they will use bitcoin as their currency of choice.
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I am not a financial expert by any stretch of the imagination, but I think if you have the resources, BTC are definitely worth investing in. The market price for it seems to fluctuate wildly, so if you picked up some BTC at a low price and hung onto them until the value rose, you could make a killing.
This alone is why I say yes. Because it fluctuates so rapidly, if you sold out at the right moment, you'd make a TON of money.
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as far as i remember BTC will stop at 21.000.000 right? so if they stop the price will fucking explode I really hope i got that right...
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It's a volatile investment. Meaning it changes dramatically, and there are no good indicators of future price shifts. It's a risky investment, but there's a lot of potential for money to be made. Also, keep in mind there are fees involved.
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What you're talking about is called 'Currency Speculation'. It's been happening for lots of years. I'd say that speculating on BTC is probably less safe and less profitable than speculating on other currencies, especially if you're talking long-term.
Generally in investing, the riskier the investment, the greater chance for profits. Invest in something safe like US government bonds, and you'll make very little money (and have very little chance of losing your investment). Invest in something risky like loaning 100 BTC@100% to some random guy on the forums, and you stand to make a bunch of money real quick (and potentially lose it real quick).
This equation doesn't really change, no matter what you're investing in. Risk=Reward.
IMO, there are much better investments long-term than BTC. How about, for example, a nice no-load index fund from Vanguard? The S&P 500 has a historical average of delivering 10% returns. Too boring? Try an Emerging Market fund, and ride the 3rd World cash-train all the way to the bank! More risk, you say? How about Vegas? Put your money on black, and you've got a 47% chance of doubling it!
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Meh, Bitcoins are only good for short selling aka gambling. I use them asap unless I know a upwards trend is imminent.
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I think you're also forgetting the energy costs needed to "mine" bitcoins, which one could argue has real world value.
Yes, the energy used to mine bitcoins has real world value, but it can't be recovered. It doesn't add value to the coins, but it's part of the mechanism that regulates their scarcity.
Meh, Bitcoins are only good for short selling aka gambling. I use them asap unless I know a upwards trend is imminent.
I agree. For me, BitCoin is a tool to do transactions anonymously, not a method of storing wealth.
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What you're talking about is called 'Currency Speculation'. It's been happening for lots of years. I'd say that speculating on BTC is probably less safe and less profitable than speculating on other currencies, especially if you're talking long-term.
Generally in investing, the riskier the investment, the greater chance for profits. Invest in something safe like US government bonds, and you'll make very little money (and have very little chance of losing your investment). Invest in something risky like loaning 100 BTC@100% to some random guy on the forums, and you stand to make a bunch of money real quick (and potentially lose it real quick).
This equation doesn't really change, no matter what you're investing in. Risk=Reward.
IMO, there are much better investments long-term than BTC. How about, for example, a nice no-load index fund from Vanguard? The S&P 500 has a historical average of delivering 10% returns. Too boring? Try an Emerging Market fund, and ride the 3rd World cash-train all the way to the bank! More risk, you say? How about Vegas? Put your money on black, and you've got a 47% chance of doubling it!
+1
This question has been asked a few times here now and it always comes down to yes, you can make a bunch of money and no, it's not a good idea because you could make more profit elsewhere.
as far as i remember BTC will stop at 21.000.000 right? so if they stop the price will fucking explode I really hope i got that right...
Yes, because the growing demand for coin will no longer be covered by new coins.