Bitcoin pulling away from Gold. Is the race to $2000 over?

mrees999
By mrees999 on Wed, Apr 26, 2017 - 5:01pm

Today, as of now - bitcoin average price at the time of this writing is btc = $1284 and Gold is at $1269.

Bitcoin price has risen over gold a few times in the past, but now it is gaining significant momentum which doesn't seem to be subsiding. 

It has shown the quality of being a new class of safe-haven asset. 

 

Tracking price on localbitcoins.com shows a number of transactions growing more than 10-fold in most, if not all, countries with currency problems.

  • In Greece - during monetary emergencies - bitcoin price rose significantly
  • In Venezuela - the price on the exchange  "Local Bitcoins" rose significantly as locals trade with each other in person. Underground networks of Bitcoin mining was the only way some families are able to survive by trading and buying food through amazon.com and having it shipped back to them. Some of these mines were recently discovered and shut down by their military.
  • India - the transaction count rose about 10 fold the week that India announced discontinued honoring their highest denomination notes. The price premium also rose over 25%.
  • China showed the same percent and portion of rising even though they've worked to reduce corruption in some of the bitcoin exchanges. 
  • Argentina - the travel industry has made way to accept bitcoin in an effort to attract foreigners to vacation and bitcoin money changers thrive.
  • When a country announces restrictions or attempted bans, the trading activities actually increase.
  • During the Brexit announcement - the price spiked.
  • During the first hours of Trumps announced win - Bitcoin price spiked. It has proven to be a prized uncorrelated asset. 

Looking at LocalBitcoins.com - is a good trend indicator for use of common people as some locations do not have exchanges so all business must be conducted face-to-face (or phone-to-phone as the case may be).

It seems that Every time there has been a short-term panic in the bitcoin ecology it's not long before the price rebounds as more people realize the utility and benefits of bitcoin continue to outshine the panics and a rush of confident people who understand the technology at a deeper level greedily buy the dips.

Bitcoin has been pronounced dead 127 times as of today - as tracked on bitcoinobituaries.com. yet it's still alive and looking healthier than ever. 

In 2011 - bitcoin was ignored, even though it was the highest performing asset in any class

In 2012 bitcoin was ignored. Even though the price was the highest performing asset in any class

In 2013 bitcoin was laughed at and called a beanie baby and tulip bulb as it was the best performing asset class again.

2014 - it retraced from the massive bubble peak in 2013 of over 8,400%- and it was pronounced dead and fought and laughed at by "I Told You Sos"

2015 - It was the best performing currency against the USD raising again over 35% and being one of the best asset classes of everything.

2016 - bitcoin again was the best investment of any asset class - and many started to take it seriously

2017 - bitcoin bobs and weaves - fights off bad news, and raises above gold price several times by April. Yet is still owned by a tiny fraction of common people outside of countries experience hyperinflation or government crisis where it is seen as easier to obtain than gold being able to receive it from family and friends around the world at a moment notice. 

In just seven years it grew from literally nothing and has been the best performing asset in six out of the last seven years. This resembles paradigm changes of historical proportions throughout history as the type of change Gandi's wisdom through times of revolution.

First, they ignore you.

Then they laugh at you.

Then they fight you.

Then you win.

Why is this?  Victor Hugo answers. "Armies cannot stop an idea whose time has come."

 

Are you still ignoring or laughing?

 

 

 

 

 

 

 

 

61 Comments

PaulJam's picture
PaulJam
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Bitfinix withdrawl difficulty driving recent price runup?

Maybe so, but after reading this, I wonder whether the current BTC run-up is caused by withdrawal difficulties at Bitfinex.  I just looked and the Bitfinex BTC/USD conversion rate is $1404, while it is around $1300 at other exchanges.  Bitfinex ETH is at $62, while in the mid-50's at other exchanges.

https://cointelegraph.com/news/bitcoin-price-breaks-all-time-high-hits-1...

I'm still on the learning curve on this one - I feel like I have a long way to go, but its been fascinating so far. Thanks for all the information you have been sharing!

mrees999's picture
mrees999
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Little Bitty Bitfinex

I don't think so. You can see the bitfinex accounts for less than 2% of all trading for bitcoin.

 

http://coinmarketcap.com/currencies/bitcoin/#markets

 

Still pulling away - over $1300 now,

 

mrees999's picture
mrees999
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Bitcoin at $1800 - GOLD WHO?

Bitcoin continues its mad rush to $3000 be the end of the year.  Gold 2.0 looks unstoppable now as its role seems to be defined as a store of value rather than a payment network for everyday items. It's the 'gold standard' because of its incredible miner network that is orders of magnitude more powerful than any other network devised on earth.  

The price increases just give more incentive for more miners to join the network as it makes it more profitable. Thus the network becomes even more powerful still. Now Litecoin and others are rising in value to help take the load off from Bitcoin to handle more transactions. I look for significant rises in these networks as well. Etherum looks particularly promising as China is experimenting with creating a digital yuan on the Ethereum network.

One of these blockchains, or both will be measured in trillions one day.  If you think the ranking as the best investments of 6 of the last 7 years was a 'fluke' you are kidding yourself and robbing yourself again for the worst financial mistakes of your life.  How long will it take before you correct your mistakes?

 

Good Luck!

 

 

 

davefairtex's picture
davefairtex
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bitcoin & RSI

Hmm.  Bitcoin's RSI is in the 90s as of yesterday.

For the record - are you suggesting now is a good entry point?

 

TechGuy's picture
TechGuy
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Re:Soaring Bitcoin & Tulip Mania

mrees999 wrote:

"Bitcoin continues its mad rush to $3000 be the end of the year. Gold 2.0 looks unstoppable now as its role seems to be defined as a store of value rather than a payment network for everyday items. "

I see this as another Tulip Mania, mostly driven in China by people looking to avoid banking and currency problems & regulation. From what I read there are a lot of unscrupulous people in Asia selling bogus bitcoins as a large majority of people in China aren't tech savy enough (ie Bitcoins are being traded like paper gold). Currently there are few people in Asia using Bitcoins for buying goods as the majority are hoarding them due fears in banking and currency. Sooner or later the bottom of the bucket will fail and the price of bitcoin will collapse.

Rarely when an asset/commodity soars relative to other assets/commodities does it maintain its value over the long term. Consider in the past decade we saw all these items soar in value, only later to collapse back to the mean: Gold, Silver, Oil, Real estate, Stocks* & bonds*.

* Stocks have collapse back to the means in past market corrections (2000, 2008). Bond will eventually collapse at some point. We will see the bond prices collapse in sectors were risks are growing (Corp & Muni for example) Probably Gov't bonds will be able to retain high prices for sometime. Its possible that Central banks will step in to bailout failing companies and insolvent state/local gov't, thus limiting a bond correction.

 

 

 

MJB's picture
MJB
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Not Tulips..

hmm. Dave and Tech Guy

Have either of you checked out the price of the stock indexes lately? The 10-year treasury? What about the value of your house (if you own one)? You are pointing one finger at BTC... funny thing is when you do that you have 3 pointing right back at you. Precious metals can be the thumb because we all agree on the importance of those.

The last big story out of China was that their exchanges were shutting down and BTC price was going to fall through the floor. What really happened was that China Gov went in and said no more leveraged trading. As such, volumes collapsed but we sure didn't see that in the price. Kind of funny that China is the one saying "you have to own it to trade it."As for the 'bogus Bitcoins' being sold. Well, you will have that, you do all the time on ICOs. Thankfully Mark takes the time to steer most people clear of these when he sees them.

Sooner or later the bottom of the bucket will fail and the price of bitcoin will collapse.

Boy-o-Boy by sitting on the sideline you have already missed tremendous gains, the kind of gains that allow you to play with many, many more x house money. I think Mark is closer than you are.. let’s call it $3,000/BTC by the end of September, not the end of the year. That would be a lot of house money wouldn't you agree? 

* Stocks have collapse back to the means in past market corrections (2000, 2008).

True but then they shot right back up.. over history markets spend half of their time above the mean and half below.. we haven't been anywhere close to spending significant time below the mean. 

Its possible that Central banks will step in to bailout failing companies and insolvent state/local gov't, thus limiting a bond correction.

It took about $1T to get banks out of MBO trouble what do you think it will take to get the biggest US Corps, local and State GOVs out of trouble? Through their pensions States are leveraged to the hilt as well! How will you react when the Federal Gov turns the printing press into HIGHEST gear? Many in the US and around the world will turn to BTC but it will be to late, at least to buy a whole one.

Common guys, join in, we aren't running in a tulip field we are swimming in pool of champagne and the bottles (not bubbles) keep popping!   

TechGuy's picture
TechGuy
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Re: Not Tulips..

MJB Wrote:

"Have either of you checked out the price of the stock indexes lately? The 10-year treasury? What about the value of your house (if you own one)? You are pointing one finger at BTC"

Yup, they are all in deep bubble territory, but BTC is going up much faster than any other commodity or asset. Tulips did this for a few years too about 400 years ago. BTC will very likely crash before other major investments (PMs, Real estate, etc) crash.

 

MJB Wrote:

" let’s call it $3,000/BTC by the end of September, not the end of the year. That would be a lot of house money wouldn't you agree?"

Sure it could go to $3K or even $10K, but that does not mean its not in a bubble. I think the faster it rises the quicker it will likely collapse. I would not be supprised if BTC exceeds $3K during this  summer. However, an asset in a bubble, does not make a good long term storage of value. Any asset/currency or commodity that rises faster than a basket of assets/commodity/currency does not reflect inflation. its in a bubble driven by a price mania. 

"How will you react when the Federal Gov turns the printing press into HIGHEST gear? Many in the US and around the world will turn to BTC but it will be to late, at least to buy a whole one."

I doubt people will turn to BTC during the next major crisis. Its very likely that BTC will be banned by all of the industrial powers (ie currency controls), probably including Precious metals too.  I doubt  the majority of businesses will accept BTC for payment. Today you cannot walk into a supermarket and offer to pay your groceries "directly" with BTC. At best you have to convert it to a fiat currency. I don't think this will ever change.

I am not bothering relying on any currency for storing value. I am in the process of investing in a homestead and self-reliance. Being able to grow my own food, supply my own wood for heating/cooking, generate my own electricity, is a better option than gambling on which currency/assets will survive or maintain long term value.. To sum it up, I don't want the death of money and the global economy to be the death of me. BTC,PMs, or fiat currencies will not be useful at closed stores, empty supermarket shelves, or closed gas stations.

 

 

skipr's picture
skipr
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Homestead Utopia

Hmmm.  I wonder how you will get replacement parts for those complex and thus fragile photovoltaics if currencies goes south?  I have a friend who lives on a remote 150 acre homestead site in Montana.  They generate all of their electricity 24/7 with a much simpler hydroelectric system, and they have to bring it down for repairs fairly often.  They also have a backup propane generator, but its fuel as well as the hydro’s replacement parts requires, gulp, money.  In 20 years they have gone through all of the dead cedar on their property.  Last year they had to buy (with money) some more from the Forest Service that were chopped down due to bark beetles.  That entire area already looks like a clear-cut checker board with Google Earth.  If things break down so far that even gold is worthless you better put a welcome mat out for the roaming gangs of urbanites.  You will be able to spot them from the trail of devastation they will leave behind.

I’m diversifying.  I own gold, silver, bitcoins, and will soon relocate to a fairly self-reliant small town.  I’ll probably have to throw out the welcome mat long before gold becomes worthless.

davefairtex's picture
davefairtex
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a specific question

MJB-

I asked a very specific question.  With bitcoin's RSI7=94, is TODAY a good entry point for bitcoin?

Should you buy TODAY?  Or, instead, should you wait for a pullback?  Or maybe you are suggesting there simply won't be any pullbacks from here on out, because this time is different, and that bitcoin is going to rocket to $3000 and then it will move sideways because that's the "fair price" for the thing?

In my experience, bitcoin behaves a whole lot like other financial instruments.  It goes through cycles when prices get driven very high, and then it corrects.  Right now, RSI tells us we are probably much closer to a near-term high than a low.

Are you making an explicit call here, today, that says "we will hit 3000 before any pullback takes place?"

Just curious.

See, I have no problem with people playing the bitcoin lottery.  My problem is when they get advice that's basically telling them to buy a probable near-term high.  If you buy the tops, you end up making a whole lot less money - and you go through a lot more heartache - then when you buy the dips.  So if you want to buy bitcoin, I'm suggesting you at least try to be smart about it.

mrees999's picture
mrees999
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You forget there's whales in here

David, your trading rules have a little more difficulty in crypto. There probably will be some pullbacks but strait TA doesn't account for the agenda of Whales with an oversized amount of bitcoin waiting to swamp anybody with the bellicose to think they know what the whales will do next.  They eat TA for breakfast. See the kraken hack a few days back for example. I see people crying on redit forums that were wiped out. But they don't teach that in TA training.

THe ONLY people who haven't lost money in bitcoin are the ones who bought and held (on for dear life).

Making 4 fold since last summer makes the tulip criers look silly. See 2013, 2014, 2015, 2016 for those that thought you were the first to cry tulips. These guys should look up bitcoin obituaries for a good look at themselves.

Youtube is another hilarious place to see them yelling tulip at $30.  Then take a look at all the crypto world and ecosystem if you just think it's about money. That was so 2013.

 

davefairtex's picture
davefairtex
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repeating my question

So I'm a really simple guy.  I'm going to repeat my question.  I'll put it in bold so you don't miss it.

Is buying here, today, at RSI=94, a good entry point for bitcoin?

Let's add in timeframes.  A call needs a timeframe.  Is buying here, today, at RSI=94, a good entry point for:

a) the next week

b) the next month

c) the next year

d) the next 5 years

A related question.  I'm going to ask you to make a call for what the low point for bitcoin will be in the next (say) 1 month forward period.  Will it be:

a) $1700

b) $1000

c) $800

d) $200

Last point, but related: several years ago, the last time you and I had talks about entry points, bitcoin was trading at $1100, and you were saying what a fantastic time it was to buy.  I suggested it was probably better to wait for the inevitable correction, likely down to $150-$200.

I thought it was really unfortunate that when bitcoin hit $200, you were not here encouraging people to buy the lows.  Anyone who did so would have made at least 5x the money they did from following your advice to buy at $1100.

But I know.  My "financial analysis" stuff doesn't work.  TA got eaten for breakfast.  Except, of course, it didn't.

TAMsharp's picture
TAMsharp
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Posts: 4
Hi mrees (Mark)

Hi mrees,



Im sending you ether soon. I want to get your opinion on Tezos ICO and others. Im actually an old member rejoining. You and I had conversations about litecoin back in 2013 (TAMWO was my username). What a rally today and last few days with segwit and coinbase addition. Im actually diversified in several coins so when bitcoin corrects or trades sideways the others rally. Win/Win. Im about 1/3 bitcoin, 1/3 litecoin and ether, and another 1/3 in golem, ripple, NEM, auger and a f

Tammy

Seeking Alpha- 6 reasons to buy bitcoin at its all time high
https://seekingalpha.com/article/4071226-6-reasons-buy-bitcoin-1722-reco...

mrees999's picture
mrees999
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Once again, The is your brain on crypto trading

broken heart crying

Any questions?

 

This is your brain when buying an holding at:

 

a) $1700  indecision

b) $1000 smiley smiley  smiley smiley  smiley smiley  smiley smiley

c) $800  smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley

d) $200 smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley  smiley smiley

Any Questions?

mrees999's picture
mrees999
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Silly David, Your answers given visually

Today btc is priced at $1760

This is your brain at:

 

a) $1700  indecision up 53% annualized

b) $1000 smileysmiley roi 70%

c) $800smileysmileysmileysmiley roi 120%

d) $200 smileysmileysmileysmileysmileysmileysmileysmiley roi 780%

When you bought and held.

Any questions?

 

mrees999's picture
mrees999
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David, Since I'm not a

David, Since I'm not a trader, and you're not a buy and hold guy. I will put this simply and visually.

 

mrees999's picture
mrees999
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Tammy's answers

Hi Tammy, 

I've learned over the years to invest in people more than the projects as sometimes better things come along in the technology - but smart people keep up, or better, even invent to future.

I'm interested in Tezo because Tim Draper is.  And he is a very smart guy who keeps up with technology.

He bought a ton of bitcoin at $600. He didn't care that it dropped to $200 for a while because he was funding an ecosystem around blockchain technology He's not tripled that investment and he likely isn't even thinking about selling as he expects it to reach $15,000 and more.

The entire sea is rising in crypto as you can see so the good ones will stick around while the shallow ones will pump and dump. Look at the teams - bet on the people.

By far the most interesting to me is Ethereum. Look at who started it - it itself is a paradigm change. And there is some VERY big news coming soon that will take your breath away.

-Mark

 

MJB's picture
MJB
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Trading

Dave,

There is a difference.. I do see BTC as a store of value, long term investment. Using this strategy $1,700/BTC is a great entry point.

Short term and more to your trading question I think BTC still has some legs. Buy here and sell at $2K. I will give it one month and a $300 profit on $1,700 investment is 15% return. Do I think there will be lower entry points for BTC in USD terms? Yes. A pullback to $1,400 (18% drop) is not out of the question in the next 2 months. I do not think we will see it trading under 1K for any long term period. May be able to scoop some up if you have an order in and you are one of the lucky ones that gets filled. 

Reading the above, the upside potential isn't worth the downside risk for the next 2 months. At least for traders and IMHO.

I do not know your time value of money though, you look at many more assets to trade than I do (I'm fairly confident in this). I feel that BTC and alt coin trading is safe, especially in the long term. Each day I get more and more comfortable with it. Again this is just me.

Look for some of the other alt coins to take off much faster than BTC. ETH is a good example and not much more risk factor.

Lastly to be clear, I am personally not buying BTC here. The last conversion from fiat USD to crytpo I made was on May 2nd and it was for ETH @ $79.04. My trading activity currently revolves around BTC/ALT and ALT/BTC ratios. I have no intention to convert back to fiat as I am comfortable losing what I put in if they go to 0.00. I measure my success in increasing my overall BTC or BTC equilivant holdings.

 

TechGuy, Man that is awesome! I really hope to follow you in creating a homestead one day. I guess the difference for me is that my family lives in rural America. We own almost 400 acres even though we don't live on it. We are very lucky that the farm is about 5 miles from the Mississippi river and we have a spring fed creek that runs year round. We have good neighbors who have cattle and the trees are loaded with squirrels if it gets too bad (I have A LOT of .22 ammo because I'm not the greatest shot :) We have seed banks as well even though we don't currently garden. My wife and I do have lots and lots of other dry-bulk food. We leave the gardening to my Grandfather and one of my best friends. All summer long I will be eating fresh garden fruit! We are into storing some of it for the winter as well. We also have many fishing holes stocked with bass and bluegill. We are in agreement that a "hold on for dear life" moment is upon us, but I don't think it will last forever. It can't, otherwise kiss humanity goodbye and that's not something I'm interested in preparing for, nor would I even know how. When it comes time to 'hunker down' for a few months I think we will be better than most.

For me, I'm not quite there... yet. I am fortunate enough financially that I am even able to invest in crypto currencies and precious metals. I think when the debt bubble blows people with real assets (not junk like many hoarders have) will come out ok. I think several of these real assets will rise in relation to others. A scenario I often think about is that in today's world it would cost somewhere in the vicinity of 200oz for gold or 12,000oz of silver to build a nice home in my area from scratch. It currently cost anywhere from 2-10oz of gold or 150-750oz  for an acre of land in my area. These are the important ratios I watch. In the new world after the debt blows up I think these ratios will change and I think they will be much lower. Just for the record I think cryptos have a role to play in this as well. 

For now this is fantasy land, I am fortunate that I am fairly young and have time to wait. I feel sorry for the people with the same mindset as me, who have shaped my way of thinking as to what real money is, who have been waiting since the 70's before I was even a thought. I am happy to go back to these people and show them BTC and block chain technology now! 

Cheers!

Michael

MJB's picture
MJB
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I missed..

While posting I missed Mrees comments.. I agree with him.. BTC @ $200?!!!! Throwing everything but the kitchen sink at it. 

TechGuy's picture
TechGuy
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Re: Homestead Utopia

Skipr wrote:

"I wonder how you will get replacement parts for those complex and thus fragile photovoltaics if currencies goes south? "

What makes you think I am relying on PV for power generation? I will be using a basket of systems to produce power. As far as PV, monocrystalline PV panels are robust and can last more than 30 years. That said, the issue is with the inverters that are not as robust and likely only have a 10-12 year lifecycle. 

Skipr wrote:

"If things break down so far that even gold is worthless you better put a welcome mat out for the roaming gangs of urbanites."

I doubt it. I am located in a rural area and most of the land nearby is owned by a logging company. or is undeveloped. Urbanites will be long dead before they are able to get to my location. You cannot see any building from the road either, There is more than 1000 foot buffer of woods between the road and the open field area. The only threat is the few neighbors on the my road, and most of the are well into retirement age. Am I absolutely sure that I can survive? No, but my odds are better than 99.9% of the rest of the population. My biggest worry is not the golden horde, but Nuclear war and wide spread containation via pollution from burned out cities and nuclear power plant meltdowns.

 I think 99.8% of the urbanites would die off in a collapse. Most will remain in cities have no means of transportation, lack of prepration resources to make a long distant foot trip, getting picked off for their resources as they flee by roving gangs. Then there are problems like wide spread fires (arson, candles, backup gensets, etc), riots and perhaps nuclear plant meltdowns as major obstacles. I am sure that towns  they have to pass through, will put up road blocks and try to pick off refugees to protect their own town/resources. Perhaps anyone that somehow makes it to my homestead will be offered a job. If they are able to survive the trip then its likely they would be useful :) 

FYI: For now, it I don't think we will see a full economic collapse. Either it will end with a Bang (nuclear war) or we'll see full police state, with draconian capital controls (including banning PMs and BTC). Consider that during the Great Depression Gold ownership was banned with a 10 year prison sentence. I don't believe this time will be any different. Between WW3 and a police state, I would guess the odds are 95% for WW3. We can see the US is preparing for war in Europe, the Middle East and Asia, all at the same time. If WW3 happens I think my odds of long term survival is less than 2% since my land is likely to become contaminated (all of the planet would be) from fallout from burning cities (deposting toxic ash) as well as radioactive fallout from nuclear power plant meltdowns. 

Michael_Rudmin's picture
Michael_Rudmin
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Is that the new electric lamborghini Tulip?

Not to be offensive, but the arguments made here in favor of Bitcoin look like classic bubble to me. 

That said, a lot of gold is classic bubble, too.  Palladium, definitely.  Real estate, definitely.  Unless you have a direct use for it.

Let me contend, that there ARE those who have a direct use for Bitcoin.  There are those who have a direct use for gold, platinum, palladium.  For those people, these things aren't bubble; they're bread and butter.  So if you want to get into gold, palladium, or bitcoin, get into an industry for which those things are the stock in trade.  Find a way that your pottery can make good use of gold, and sell at a profit ... and gold is your cow.

Kodak was never poor.

Just sayin'....

 

MJB's picture
MJB
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Ratio Trading

Something else I watch is PM/BTC ratio.. When I first got into BTC the Silver Eagle to BTC ratio was about 40:1. I converted a little yesterday at a 91:1 ratio via JM Bullion.

The transaction left a little bit of a bad taste in my mouth because they use bitpay. They were about $40 off what Coinbase and $70 off of what Poloniex Exchange says a BTC is worth. The ratio should have been closer to  93-94:1 Either way a pretty decent trade.

I don't see how this ratio can get much over 100:1 but if it does I will be converting more of the BTC trading profit into the shiny metal :)

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davefairtex
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Posts: 5422
a promoter

Mrees-

You avoided answering my question.  Either you don't understand the question (which of course is possible, but it means you are a bit feeble-minded) or you simply decided that answering it simply didn't serve your purposes.

The weight of evidence indicates you're actually pretty smart, so I'm going to go with option #2.  This leads me to believe that you are probably just a promoter.  You have your position already, you could care less about other people's entry points, and so the more OPM you can get flowing into bitcoin, the more money goes directly to your bottom line.

Being an optimist, I'll give you one last chance to answer my question.

Do you believe that buying NOW, at $1750, with RSI7=94, is a good entry point for NEW BITCOIN BUYERS?

Or do you think there will most likely be a correction coming soon that will afford them a better entry point?

If you don't understand future tense, or the word "correction", or the words "entry point", please let me know and I'll be happy to define them for you.

MR - I'm pretty much with you.  We might hit $2000, or we might well correct back down to $1200-1300.  I think its more likely we'll correct before we hit $2000, but that's just a guess.  Risk/reward looks iffy right now.

MJB- I called the $200 entry point several years ago.  Mrees was nowhere to be found when bitcoin corrected to $200.  He had been urging people to buy at bitcoin $1100.  He prefers not to remember this.  I mean, I can understand why, because it calls into question his advice to you today.

Now, from what I can see, he's saying $1750/today is a great time to buy.  Because you'll miss out on the big run to $10,000.  Or $100,000.  Or whatever.  He made a terrible call last time around.  Is he doing better this time?  I have my doubts.  He pretends not to understand a very basic question.

I suspect for him, "now" is always a good time to buy - because he's already got his position, and your buying does nothing but put money in his pocket.

Kind of reminds me of Wall Street.

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MJB
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No offense

Not to be offensive, but the arguments made here in favor of Bitcoin look like classic bubble to me. 

I look at it as the crowd you run with.. if the people are all talking BTC then yes you may think BTC is in a bubble. By coming to a BTC and block chain group there will be A LOT of BTC talk and cheerleading.

The overall public is still oblivious. More and more are joining the community every day though. The rate of participation will increase not decrease. Mrees like to say when your barber is giving you ALT coin advise it may be time to get out :) My barber doesn't even know what BTC is yet..

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davefairtex
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property values & cap rates

MR-

Rental prices provide an anchor for property values.  If you have a house, the theoretical cap rate you have on the home gives you a measuring stick - you can see just how high the current bubble happens to be.

If your cap rate is 3%, that's a clue your home is probably in a bubble - probably time to sell.  If your cap rate is 15%, that means your home is probably undervalued.

Bitcoin doesn't provide you any sort of anchor.  Neither does gold.  Both of them are "just a price", providing no income stream to anchor them.  Both bitcoin and gold's value depends entirely on what someone else will pay for them.  You can't really know if bitcoin is in a bubble or not.

Gold has some historical ratios vs other commodities, so there is that as an anchor, but gold's anchor isn't nearly as solid as rents and cap rates.

MJB- I like your ratio approach.  Having a sell-discipline helps you to avoid buying high and then having to hold through the corrections, which is often really painful.

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MJB
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Not privy to the history

Dang Dave you got in @ $200! Super good for you. I didn't know what it was back then.

I will defend Mark though. I have had discussions with him outside of PP and I have nothing but great, wonderful, amazing things to say about him. This includes his personality as well as his willingness to TEACH and offer opinions. I have tracked his opinions, guess what? Not ONE has lost. NOT ONE Dave. So please don't call him a pumper and dumper.

Why don't you offer a trade or trading advise? Give a real life Dave's portfolio example with dollar or BTC amounts. The way I did. 

As I say I don't know the history between you two but Mark was saying buy at $1,000 BTC and $7 ETH. You were saying BTC is in a bubble and the infrastructure is crap. Oh, and my favorite, the scenario where internet connection is broken world wide therefore rendering BTC worthless. Now what is more likely? internet connection breakdown or $2,000 BTC? If that was a Nadex Binary Option listing I'd take the $2,000 BTC and quite heavily.

Look at where we are now. $1,700+ BTC and $80+ ETH. It's OK to advise profit taking here but you have to have a 'BUY' suggestion before you can recommend profit taking. I have not heard one of those from you...

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mrees999
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The power of exponents

I invested small amounts into crypto. Nothing I would loose sleep over. But then the power of exponents took over. Every year people said it was a tulip bulb and a bubble. Every year people told me very convinced in themselves that I would lose everything because it has no intrinsic value (although I argued the point that it does once you understand the technology. But it's too complex to understand in polite conversations or small blogs. Volumes of books are now being written on it.

Bitcoin is extremely short sided. There are Hundreds of blockchains and money makes up 1% of the applications. Yet, that's what uninformed concentrate on. They don't look beyond the surface to actually attempt to understand the people and companies \ countries, families behind it. There are real people of all kinds including the very poor and in countries of oppression that depend on it for their survival (see Venezuela for just one example). So it is extremely funny to listen to people that only think about one the currencies \ digital assets in only one way, that is as a trader thinking about bubbles.

I've sold it locally for people desperate to get it back to their families in Argentina and Ecuador to save their family and can have it within minutes. You can't do that with any other currency that is accepted by just about anybody in the underground economy as their national currency has been destroyed with

So tell people in these countries it's in a bubble or Japan who just legalized and other digital asset currencies as a legal currencies recognized for debts. It's obvious that few people actually know what they are talking about and could use a few hours with some Google searches before offering advice. If you take advice from fools - you are no better.

Could it be in a bubble?   Who cares?  Trading this stuff is a fool's game in my opinion. See the exchanges get DDOS attack while they short it and trigger margin calls all they way down leaving fools with nothing. Read their tears on Reddit. Is it manipulated?  Of course. It's a tiny market and just a drop in the bucket. The entire market cap of all crypto currencies is less than 50 billion. Or one half of the percent that Apple has cash on hand. 

taken as a world-wide phenomenon and savor for corrupt countries - and the platform for the new internet (See Enterprise Ethereum Alliance) - and many futurist working on it (including Tim Burner Lee) and have a little faith in the future rather than the doom and gloom that eats away at your heart - gives your reason to wake up rather than hunker down each day.

That said, I'll put my return on investment for the last four years against anybody on this site. Get ready to calculate four or five digits. Because I started small - it's not enough to buy a ranch in Texas - but pretty good for a regular guy. The power of exponents will make that possible within a year.

I bought silver in 2007 for around $16 per ounce. It nows sells for around $16 per ounce. In the meantime we've seen 20-40% inflation - so my silver is actually down 20-40% and the same complaints about silver manipulation sound the same as the broken record for 10 years and "Any Day" predictions echo on and on and on. 

 

 

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Jim H
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Posts: 2385
Kranzler....

I am glad to see the passionate discussion of Crytpo's.. Thank you Mrees and all.   Dave K appreciates both Bullion and BTC.. here's what he is saying.. and I agree with his view;

http://investmentresearchdynamics.com/is-the-u-s-ponzi-scheme-about-to-end/

In the absence of the ability to manipulate the market, this is the same message that gold and silver would be sending to the world, only the scramble for gold and silver bullion in any form would be more frenzied and it would be widespread. There actually is a somewhat frenzied scramble for gold and silver in eastern hemisphere markets based on the premiums to melt being paid for refined products in places like India, China, Turkey and Viet Nam.

At some point the western Central Banks will lose the ability to manipulate the gold and silver price and the Comex will default.  That’s when chaos will break out in the physical gold and silver markets.  That may be what it will take to trigger the collapse of the U.S. Ponzi scheme.   Apparently JP Morgan understands this inevitability.  Prior to 2011, JPM did not operate a Comex vault.  It had zero Comex silver.   Currently JPM is holding nearly 108 million ozs of silver, or 54% of the total silver reportedly held in Comex silver vaults.  ...

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klhHouse
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mistake of thinking linear

The issue with most of the discussion in this chain is that everyone is thinking linear.  Bitcoin is very clearly in an exponential growth stage. To recognize/understand what is a bump in the road versus a bubble or a disaster you need only look at the log plot of bitcoin price versus time.  What's been going on for the past 2 years is a growth rate of .23% per day ( = 7% per month = 130% per year).  On a log plot a fixed percent growth per day shows up as a straight line:

In this log plot (the BTC price scale on the right is logarithmic not linear) you see a pretty much straight line with a half dozen or so "bumps in the road".  These bumps were the various minor bubbles that bitcoin encountered over the past 2 years.  As of today BTC price is about $500 above the line. So that'd indicate its not the best time to buy.  But not necessarily the worse either - edtending the line into the future indicates the BTC price of $1800 that to be right on the line about 4 months from now.

So why has the bitcoin market been growing exponentially?  because it is not anywhere near having reached its market potential.  And because it is largely unknown.  Useful knowledge tends to spread exponentially.

And how long can this go on? Obviously it cant go on forever.  I expect BTC price to go on growing exponentially until it reaches about 30% of its market potential. 

What is its market potential?  The market that is currently filled with cash and gold.  All of the world's paper currency amounts to $10T.  All of the world's gold is $7T. My estimate of bitcoin's market potential is $8.5T, half of $10T+$7T.  (That is to say, bitcoin would take half of this market from gold and paper.) Given that bitcoin supply is limited to 21 million, the BTC price to expect once it has filled its market = $8.5T/21M = $400,000.  

The price where BTC will end its exponential growth is 30% of 400,000 = $120,000.  Once that price is reached its growth will be close to linear - then you guys and the economists can start talking about booms and crashes

So there is a lot left to the exponential ride up.  In this stage I wouldn't discourage anyone from grabbing a ride on this particular rollercoaster.

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klhHouse
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logplot for last comment
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davefairtex
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bitcoin, scenarios, pump/dump

MJB-

I'm more of a bitcoin user rather than a bitcoin trader.  Its useful.  I like it.  Something with its functionality will definitely stick around.  Maybe not this particular version, but something like it will happen.  Maybe ethereum, who can say?

As a software architect, I see problems.  I laid out the problems.  You can assess for yourself the likelihood of those problems manifesting.  I don't see any of them happening if the status quo remains in place.  But if we do go into a "power down" situation, bitcoin will not survive.  If we have a big war, that too will cause problems for bitcoin.

Additionally, bitcoin does have political risk.  If the gang in charge of the central-banking-warfare system decide they don't like it anymore, bitcoin goes away.  Bitcoin is much more subject to centralized control than (say) gold.  I can go into detail how that gets done, technically.  You can assess for yourself the likelihood that they will end up wanting to pull the plug.  That's another scenario.

Lastly, bitcoin has banking system risk.  Without a banking system, bitcoin doesn't trade.  I mean, you will still be able to swap them amongst yourselves, but you can't convert them to local currency, and that conversion ability provides the underlying utility for bitcoin.  No conversion = no money flow in.  Another scenario.

If we remain in the status quo, with lots of liquidity, and none of the scenarios I've laid out come to pass (which I'd say is probably 90% likely for the next 6 months to a year - modulo an Italian election, or a big move lower in SPX) I think bitcoin will have a "buy-the-dip" ascent.  The key here is buy the dip.  We are currently not in a dip.  So therefore, I'm suggesting newcomers not buy with the chart looking like it does today.  I'd wait for a correction.

I'm glad you have determined that mrees is not just a pumper, and has been helpful in explaining the particulars to you.  I just get suspicious when someone doesn't answer a simple question.  I'm used to seeing pumpers.  Gold pumpers - never a bad time to buy gold, for them.  Stock pumpers - saw plenty of them during dotcom.  Eyeballs, I'll never forget eyeballs.  Housing in 2005.  Cheerleaders get most vociferous at exactly the wrong time to buy, generally speaking.  Their egos become massive because the rally is at its greatest extent, and price movement has convinced them that they are geniuses.

When I hear people speaking with that level of certainty, when the future is so bright we all gotta wear shades, I start to eye the exits.  That's usually when things are close to correcting.  Especially when that RSI level gets into the 90s.

Of course, this time might be different.  :)

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MJB
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Peak Prosperity

Dave,

I'm glad we will both have a front row seat for the economic troubles that are headed our way.. I will thoroughly enjoy many more vigorous conversations!

Fair warning for the future.. I think I may be a little more 'out there' than you are. I enjoy most good conspiracies, call me gullible. The one that I'm focused on now is that the USD won't exist as we know it for much longer. If I'm wrong? ah well, at least no one can take my birthday away!

Cheers,

Michael

 

 

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mrees999
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Posts: 424
RS17 = 94... Finally David's answer... Whew...

I don't speak trader talk - I suppose that is the reference you are using - I could spend the time Google search, but I don't really care to - it won't make a difference to me and I can answer your questions more creatively and to the point.

You insist on measuring things with dollars which is not stable and not the foundation for measurement but this seems to be the only reference point you continue to use for your dark arts Technical Analysis.

I've teased David a lot through the years and I would imagine the ribbing I give him all in good fun. I even gave him his first bitcoin to experiment with back in 2013. Just enough to buy lunch that day - but I thought it would be helpful.

I've taught thousands of people since then. Written published articles taught many free community classes. I've taught everybody I know to store their digital assets (you may think of as crypto-currencies still) on local hardware wallets.  to protect themselves against thieves and hackers. My work at the magazine is now featured in the Smithsonian institute. I've advised not to trade because I've been around for many years and seen people get wiped out on margin. I've counciled suicidal people online after mortgaging their house to cover their shorted trading positions that were swamped by the crypto whales that troll the exchanges. 

I've answered more personal emails on this site that I can count. - Free if charge, only accepting a donation or tip here an there recently to help justify and the 10,000 hours I've spent studying this paradigm and giving free advice.

I like David a lot and appreciate that he's written over 4,000 posts here. I assume about gold and silver trading, which much take a ton of patience and dedication over the years because I have an extremely difficult time reading most of them all the way through while staying awake. When I give up on counting sheep - I pull up the website and try to make it to the end of one of his post. and ZZZZZZZ

Of course, I tease him again here.  He mentioned my time off from my usual posts here was during the year I spend writing for Bitcoin Magazine and that took 30-40 hours of research a week on top of a regular job. This was time I dedicated for practically free as I wanted to be part of history. Having me cover-story now in the Smithsonian was much faster than I expected and quite an honor. (See it under "The Future of Money" section). Those issues I wrote in all the monthly publications are now collector's items fetching a nice price. Just so you know I didn't abandon anybody or tuck tail and run during the needed downturn (the bubble of 2013 rose 13,000% and needed to cool off). I still managed to pop in now and then for a quick update and answer questions but people get excited during hot markets and cool when it's slow so there weren't many people wanting answers so there wasn't much to do.

Perhaps somebody not knowing me well might think I'm just a pumper.  But while David he only talks about the bitcoin itself, I have far less than 3% of my net worth in bitcoin. I do own several digital assets and I share with people what I'm excited about. It now turns out that I have so many people wanting to know more than I have time to spend and give complete answers that give my heartfelt and honest opinion. I encourage people to invest because I can see the future developing in this technology and I have an extremely rare and valuable (in some people's opinion)  skillset. Hopefully, I've earned a good reputation with those who know me well and I don't think I've ever lead anybody astray if they've followed my advice. I wonder if David's 4,000 + posts are because he owns no silver and gold. There's no way 4,000+ posts could be there because he doesn't own any. As the price really hasn't done much during 4,000+ posts  I suppose he wouldn't consider himself a very good pumper as the market seemed to ignore his important entries. 

Now I did call him out when he tried to convince the PP readers that he was an expert in quantum physics and cryptography.  I couldn't find it within myself to let him get away with 10 or more logical fallacies he used in one post. At the time, I thought it helpful to list and name them for him one-by-one so he would recognize them next time he tried to rationalize his imagined new remarkable skill.  He quit responding to my posts for a while after that, so he might still be sore. I won't pretend to know what goes on in his head.

 There's probably a history of that remaining here if you cared to find it - but please don't. I don't want him to feel embarrassed again because I really do like David - he cracks me up. I've even answered his questions or posts in a friendly way to the best of my knowledge and admitted when my knowledge was incomplete.

I can understand his frustration as his hard work and dedication to return comparatively embarrassing returns get overshadowed by the new paradigm he doesn't understand. As he is looking at the past paradigm rather than the future and completely missed out on the potential investment of his entire life. Anybody caught in his trance were also missing out. What must sting even worse was he was throwing FUD at it the entire time. I feel for somebody in that position. Perhaps I would even donate some eth his way if he could bring himself to get an ethereum wallet to show I'm a good sport - and if he could swallow his pride and perhaps apologize for trying to insult me.

Just say the word David and I'll send you some - it will be worth big money some day. You might be able to buy a lot more shiny silver with it.

In the meantime - here's a picture to start your road down the path of not using dollars as your yardstick.

 

 

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davefairtex
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my answer

mrees-

Thanks for finally coughing up an answer, which if I can distill down to one sentence, comes to: "there is never a bad time to buy bitcoin."

I will admit to one crime amongst the many you charge me with, and that is the crime of writing far, far too much.  Of that, I am guilty.  If I had more time, I'd write less.

So with that in mind...I'm outta here!

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Luke Moffat
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Posts: 377
Bitcoin got Religion?

Am I the only one here who thinks that Bitcoin just got religion? The whole Secure Hash 256 algorithm and the platforms required to mine blocks are derivatives of our highly complex, energy intensive economy. And now I'm supposed to believe that in 3 years time a single BTC will buy me a high end sports car? 

Here's something to consider....

Top 4 Bitmining Companies are Chinese (amounting to 68% of the network) as of June 2016

http://uk.businessinsider.com/bitcoin-pools-miners-ranked-2016-6/#18-p2p...

With that in mind, I'd go a bit further - Bitcoin is a derivative of the Chinese growth 'miracle' summed up nicely in this article;

https://bitcoinworldwide.com/mining/china/

e.g:

1) Cheap electricity in China

2) Excess Coal Reserves in China

Here's an interesting video of a Chinese Bitcoin Mine. 

 

Does that look sustainable to anybody here? Just look at all that soon-to-be redundant hardware. As goes China so goes the world...

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mrees999
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EXACTLY!

When you buy and hold.

smiley

 

Thanks for being a good sport.

 

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mrees999
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Posts: 424
Luke. Luke.. Luke...

Am an not your father.

 

I've told you several times about bitcoin mining. Do a search on bitcoin and mining...or even your name, perhaps that will remind you.

 

Until then, perhaps think about working in a well-ventilated area and put the caps back on the glue securely.

If you don't like proof of work, pick up my recommendation - ethereum. They will be switching to proof of stake.  Something is telling me that you have no idea it is what I'm talking about.

 

Google is your friend.

Google is your friend

Google is your friend

Google is your friend

*I realize that I need to repeat myself four times before you remember so I'm saving you the trouble of asking again.

 

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TAMsharp
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Posts: 4
Well okay Mrees,   I sent

Well okay Mrees,

    I sent you a nice amount of ether per your request for advice for ICO's and other advice.  I see you have time to respond to others debate so could you please respond to my request or give me back my Ether payment?  Im feeling insulted. You are so harsh on those that trade digital currency or trading period I feel you must have lost a lot of money doing so yourself.  There is no way you hate on traders this much unless youv'e lost a lot yourself.  So what happened to all that litecoin you mined years ago?  You should be a litecoin millionaire by now if you had BOUGHT AND HELD these few years.  Please share with us how your litecoin mining investment went. I myself have traded a small portion of proceeds to gain more bitcoin value and at first I failed and now im succeeding.  I learn from my mistakes.  Im very modest with my trading and avoid the FOMO.  Most times I succeed but its easy to  wonder why I didnt invest more but I realize to be happy with my modest gains.  I was so excited to see you again on PP once Bitcoin rallied again and to read all your insightful posts.  Again, I joined and spent 80 bucks just to send you just as much ether for your advice.  I guess that was a mistake.  I think Ether is the smart phone to bitcoins landline but it is way ahead of its time and not worth its market price now.  I see a correction.  Dont hate on those that modestly trade and succeed.  Its also why bitcoin and the cryptospace is growing in volume and price. If you are insulted by my opinion, please send my ether back this address:     0x85f71cf951E6d25cf7013d208Cd7642618057BDA

 

Sincerely,

Tammy

TechGuy's picture
TechGuy
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Posts: 420
Peter Schiff on BTC (Tulip Mania)

 

BTC discussion starts at 12:50

Ep. 247: Fantasy Trumps Reality

 

FWIW: I don't know or work with Peter Schiff, but he saids pretty much the same thing I did about BTC is in a bubble. Including a reference to the Tulip Mania.

 

 

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mrees999
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Posts: 424
Hi Tammy - I've sent back your tip

Sorry Tammy, I sent you a reply but for some reason, it didn't go through, that was early this morning so I thought you were happy with my response all this time.

 

No worries. I've sent back your tip. That was very generous of you. My words at the time were 'kind'. I suppose you probably are kind.  I don't blame you for wondering what is going on?  I sent you a more detailed note in PM.  But for now you can see it for yourself here:

https://etherscan.io/address/0x16930e6df9317a62cc14c4085b35a6f6a7431591

According to the record on the blockchain at the link above, you sent .564 ether to my address - this equates to about $50 dollars. (ETH=90, .56 = $50). You can check my math. But above you said it was $80 so I was wondering if you could show me where the other $30 went.  The blockchain shows everything as it is the "trust machine". I'm sure you can show me on the blockchain where it is.  I sure don't want you to feel like your donation was lost. Also, if you don't mind- show me where I requested any kind of payment. A copy and paste would be great. 

I just got home and plugged in my laptop after playing with my dogs and kissing my wife, I hope that didn't seem like I wasted to much time getting back to you.  Some people keep their funds on an exchange for trading but not me, I practice what I preach, always have a hardware wallet.  I told you this in my response back as well. As far as the Tezo ICO you asked me about - I said I would need to look into it further, but Draper is a smart guy - and I follow smart people.  There was a bunch more about ICO's I like, but I won't get into that now. I've got a wife looking stern at me right now and I need to give her some more attention. :-)

 Hope your night is going well.

 

-Mark.

 

 

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mrees999
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Oh ya, good old Peter his company took me to the cleaners

I  listened to old Pete,  Even rolled over some IRA to his group. Was shocked at the commission they took. Wow. Then put me in a gold fund that lost 20% - from the time I went in, to the time I finally got the heck out of Dodge, I was fleeced over 30 grand for my trouble. Still trying to make up for that one in another IRA. Bit crypto has done, shall we say...far better.

 

Hope it works out for you,  For entertainment - take a look at his youtube videos from 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016. 2017 - hide the year - and guess which year he is talking about.  

I've seen parrots that come up with more original material.

For my money, I'll take Chris Martenson and  Mike Maloney, as worlds better at giving good solid advice. The Crash Course was excellent and influential. 

 

For a kick, listen to old Pete try making his point over bitcoin over talking and yelling at poor Erik Vorheese while Erik was trying to have a reasonable debate. When Pete get's cornered, his go-to strategy is to keep talking over somebody so they can't respond back. He tries to bully so I can bring up lots of examples.

When he completely lies about bitcoin - telling audiences things that are so untrue I can prove it point by point and could back then - I yanked my funds out of his company.

Hope those gold investments are working out for you.

 

 

 

 

mrees999's picture
mrees999
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Posts: 424
Oh ya, good old Peter his company took me to the cleaners

I  listened to old Pete,  Even rolled over some IRA to his group. Was shocked at the commission they took. Wow. Then put me in a gold fund that lost 20% - from the time I went in, to the time I finally got the heck out of Dodge, I was fleeced over 30 grand for my trouble. Still trying to make up for that one in another IRA. Bit crypto has done, shall we say...far better.

 

Hope it works out for you,  For entertainment - take a look at his youtube videos from 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016. 2017 - hide the year - and guess which year he is talking about.  

I've seen parrots that come up with more original material.

For my money, I'll take Chris Martenson and  Mike Maloney, as worlds better at giving good solid advice. The Crash Course was excellent and influential. 

 

For a kick, listen to old Pete try making his point over bitcoin over talking and yelling at poor Erik Vorheese while Erik was trying to have a reasonable debate. When Pete get's cornered, his go-to strategy is to keep talking over somebody so they can't respond back. He tries to bully so I can bring up lots of examples.

When he completely lies about bitcoin - telling audiences things that are so untrue I can prove it point by point and could back then - I yanked my funds out of his company.

Hope those gold investments are working out for you.

 

 

 

 

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TechGuy
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Joined: Oct 13 2008
Posts: 420
mrees99 Wrote: "I listened to

mrees99 Wrote:

"I listened to old Pete, Even rolled over some IRA to his group. Was shocked at the commission they took. Wow. Then put me in a gold fund that lost 20% - from the time I went in, to the time I finally got the heck out of Dodge, I was fleeced over 30 grand for my trouble. Still trying to make up for that one in another IRA. Bit crypto has done, shall we say...far better."

Sorry about your loss. I don't have any investments with Schiff, I don't agree with his investment strategy, I figured his commissions were excessive considering all of homes he's been buying.  But he does agree with me on BTC. When Gold was above the $1300 price I thought it was in a bubble and posted that it was in bubble back then, but no one listened.. I think when the next recession hits Gold may drop down to near $1000, and BTC will also take a big hit, probably below $600 (guess)

As I stated early I don't believe in gambing in any currrency/commodity for long term storage of value, I think they will all lose value over the long term and be subject to capital controls & taxation in the future. I am converting capital into a homestead. To be honest there is no ideal investment, but I select options with the lowest risks. I think the risks trying to bet on curencies/commodities are excessive.

FWIW: If you choose to play the investment game, my only suggestion is to buy low and sell into a bull market, preferably, sell it all before it tops and crashes. Only buy after it collapses or major correction, and sell into the bull market. Never buy in a bull market, especially when there is a buying frenzy that drives it up by double digits faster than other major investments/assets/commodities. 

 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5422
if you don't like proof of work...

Heh.  Let's say I don't like proof of work because at its core, its unsustainable, and depends on a world of ever-increasing "more".

How does that line up with: "its always a good time to buy bitcoin"?

I'll answer my question for you.  "If you don't like POW, why, we have a brand-spanking-new POS implementation right over here!"

Does it make you nervous that nobody has really run an economy on "proof of stake"? It would make me nervous.  That's why I like gold.  It isn't as flashy as bitcoin, and it certainly won't buy me a Ferrari in three years, but the system has been "up and running" for millennia.

In some sense, this whole *coin industry is a big moving target, centered around solving one of those "hard" computer science problems: a distributed database, combined with synchronizing periodic software updates, with a currency system layered on top.

My experience with doing stuff like this is, you don't really know how a design will actually work until you deploy it.  There are so many unintended consequences deriving from each design decision - and the consequences of each decision doesn't become apparent until the thing has been running in the wild for a few years, and the participants have the opportunity to push the model (i.e. game the system) as far as it will go.

Take bitcoin.  Blockchain is now 80GB on disk.  4 chinese companies effectively control the blockchain.  Its a derivative of cheap electricity prices, the ability to rev your hardware every six months, a (more or less) completely connected Internet, and the good will (or at least the acquiescence) of the gang in charge of the central-banking-warfare system.

And hovering in the background, there is always the "black swan" prospect of a hardware breakthrough that would allow one clever player to own the network.

What could go wrong?  :)

I do think something really interesting will eventually pop out the other end of this whole messy process.  Probably. But I don't think we're there just yet.

I do think there is a lot of fun to be had along the way.  I think mrees betting 3% of his net worth on bitcoin is just about right.  FWIW.

One more guilty plea: FUD.  I definitely have fears, uncertainty, and doubts about bitcoin for sure.  That is because that's how I feel about trusting my cash to an untested currency system that has yet to go through a recession or a war.  Cash/gold are the ultimate safe havens - both do well, under different circumstances.  Bitcoin is the polar opposite - its a leveraged speculative play with insane volatility.  It feels to me like playing with SI (silver) futures.  You don't know what those are, no doubt (google is your friend?) but the feeling of terror when trading them is quite similar.  5000 ounces of price exposure, evil people who will spike price lower just to mess with your emotions, all for about $5000.

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 424
Btc momentum

There have been several countries now make it a legal currency to use by banks and regular payments lately. More are to follow. I wouldn't expect a big pullback anytime soon.  

See that Japan, Russian, Australia already made the move and many more like India are studying it (rumored to preparing for it this summer) as they want to stay digitally competitive. The swiss have likely the most companies base camped there for innovation.  This thing is building all around the world so it may be wise not to consider just the US.

But I've been wrong before. And I seriously don't give financial advice. I'm just a well-meaning techie that teaches and was at the right place at the right time.  I've learned to just hold on for dear life and enjoy the ride. I never invested anything I couldn't afford to lose and like to play with new things from the future. So it's all a game to me and I can't take it too seriously. I don't really care about the money part except how I can use it to help more people. What else is there? I've put a lot of smiles on a lot of faces that have an open mind.

Keep smiling!

 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5422
currency risk

[duplicate]

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5422
currency risk

Unless your debts and taxes are denominated in bitcoin, it will always act as a "foreign currency" from the point of view of the holder, regardless of how many banks accept it.

That means a bitcoin holder will be faced with currency risk.  If you have a bank deposit with $1000 in it, you know you can always use that to pay down your $1000 debt.  If you have 1 BTC in your bank account, you cannot know for sure that it will always be able to cover that $1000 debt.  Today, sure.  Tomorrow?  Who can say.

That added "currency risk" ends up driving behavior - sucking money out of bitcoin (and other 'foreign currency' options) when the economy turns down.  When people go "risk off", they tend to sell things that behave like bitcoin.

The gold super-enthusiasts here don't like it when I say that the same thing is true about gold, but I believe that to be the case.  When times get tough, people retreat to the bare necessities - paying rent, buying food, etc, and they move into asset classes that assure their ability to do this.  Your wife will become quite angry if your rent money is in bitcoin, the BTC/USD rate takes a tumble, and you end up getting evicted as a result.

mntnhousepermi's picture
mntnhousepermi
Status: Silver Member (Offline)
Joined: Feb 19 2016
Posts: 159
just because they cant do it right
skipr wrote:

Hmmm.  I wonder how you will get replacement parts for those complex and thus fragile photovoltaics if currencies goes south?  I have a friend who lives on a remote 150 acre homestead site in Montana.  They generate all of their electricity 24/7 with a much simpler hydroelectric system, and they have to bring it down for repairs fairly often.  They also have a backup propane generator, but its fuel as well as the hydro’s replacement parts requires, gulp, money.  In 20 years they have gone through all of the dead cedar on their property.  Last year they had to buy (with money) some more from the Forest Service that were chopped down due to bark beetles.  That entire area already looks like a clear-cut checker board with Google Earth.  If things break down so far that even gold is worthless you better put a welcome mat out for the roaming gangs of urbanites.  You will be able to spot them from the trail of devastation they will leave behind.

I’m diversifying.  I own gold, silver, bitcoins, and will soon relocate to a fairly self-reliant small town.  I’ll probably have to throw out the welcome mat long before gold becomes worthless.

Just because your friend isnt doing it right, doesnt mean it cant be done. You seem to be implying they have run out of wood. But, it is so easy to grow coppiced wood sustainably for heat. Way, way, way less acreage than your friend has is needed for wood and food. My photovoltaic system is 19 years old, and doing fine. But, home electricity is a nicety, not a neccessity.

It is true that none of us can live long term in isolation, as we prefer to have things made from metal, for example, for tools, to have a minimum standard of living. Nevertheless, reducing inputs needed, getting skills and supplies to be able to live without constant and immediate inputs means being resilient and able to more comfortably make it thru disruptions than the unprepared, and may in some locations be the difference to making it at all.

Good luck thinking anytype of money will be the answer

skipr's picture
skipr
Status: Silver Member (Offline)
Joined: Jan 9 2016
Posts: 129
Optimum size communities

My MT friends could have significantly increased the amount of insulation in their house.  It was a misjudgment on their part since they used to build custom homes in milder climates.  They were considering a Russian Stove for heating, but went with a radiant floor heating system that used an insulated boiler to heat the water that circulated in the floor.  During the coldest days, they had to feed that boiler several times a day with some pretty large cedar logs.  Those trees do not grow back over night.  They also used a backhoe to collect them during the summer and plow the 6-mile-long unpaved logging road they lived near in the winter.  That thing is being repaired all the time.  There is also an Amish community nearby.  UPS packages for the region are dropped off there.  I wonder how many were for the Amish.

Charles Hugh Smith wrote a few very interesting articles on PP about self-sufficiency.  I might be wrong, but I think he said that the generally accepted optimum community size is 150.  Unfortunately, that means we will have 3 million of these communities roaming around the lower 48 when TSHTF.  Where will they all go?  If the soil and aquifers in the Midwest and Southwest are depleted they will go to areas with better soils and plenty of water.  The east coast has plenty, but they also have plenty of people.  The California farmers have been moving up to Oregon and Washington during these pre-TSHTF times.  If you think that a city with a population of 3 million individuals will be hell, just wait. 

This reminds me of those cable TV shows about homesteaders in Alaska.  They take great pride in being self-sufficient, but when they need to hunt, they grab their high-tech rifle and jump on their snow mobile.  Along the way, they will stop by a drop point where the train drops off their supplies.  A while ago I vacationed in AK and went into Wrangell National Park.  The old mining town McCarthy was being rebuilt as a tourist hub.  The curator of the museum there told me about how the miners worked 16 hour a day jobs and only got 2 days off a year (out of 365).  Could that be the future for the people who survive TSHTF?

I guess this makes me a doomer’s doomer.

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 424
Bitcoin is one big experiment - it's still in BETA

I can't really find anything in David's sentiment that I don't agree with. There's a few facts and figures that are a bit off but in general, that was a fair assessment, except I don't think it will ever be a replacement for national currencies of some kind. I exaggerate for comedic effect the ongoing Meme in the bitcoin geek space about buying Lambo’s with their future earnings. It’s a bit of an inside joke as that has become the ‘geek’ benchmark goal of when “they’ve struck it rich’. But I seriously doubt anybody actually wood.  When it comes time to talk seriously about it, they hope to pay off their debts and lead a comfortable life.

I could fill this message board with a meme of Lambo’s of the future that they’ve created. They idea that bitcoin would replace a national currency is far-fetched and I don’t think any rational person in the crypto world would think that is possible. My interest in bitcoin proper has waned with the invention of other, better crypto inventions. Ethereum has far more potential and network effect of huge corporations and increasing governmental and environmental groups increasingly taking a look.

It makes an awesome accounting system in a distribution network with the ability to verify things like the supply chain where every point of origin can be tracked with electronic thermometers, check in gates, rfc destination verifications and so forth so you can trace items on the blockchain to their original province. This can reduce fraud for things being stolen somewhere along the line. In medicines, we can verify they are originals and not black-market fakes that were swapped along the line. The UN is using it to distribute food in impoverished nations to verify the food isn’t stolen along the way. There are thousands of examples of where it can make a real difference and bring efficiencies the world has never seen before.

The ability to charge electric autonomous cars automatically at charging stations where the car can contain it’s own digital wallet is just one example of how the future machine-to-machine financial transactions will be commonplace. This is going to reduce the need for oil around the world and the nature of transportation. What does this do to ‘peak oil’?  In the not too distant future, the need for oil could drop huge and the prospects of the world running out look far less likely. So Ethereum might have a huge impact that changes the dynamic on a lot of what is discussed on this forum and could possibly pull the rug out of our feet. It’s worth watching and not ignoring. With another 200-300 major companies announcing they are joining the Enterprise Ethereum Alliance this month, the price of Ethereum could again go to multiples in addition to the 900% increase in price this year.

That’s worth discussing. That might allow people on this website ‘win’ enough money to buy the land and equipment many believe will be necessary one day. Not by itself but as a continuum of the progress it has made so far, and the future as see it going with the potential it has. I state only a couple of use-cases people talk about. Entire industries are being born around this new technology and most of the people on this forum have no idea. The future may look far different than they were expecting. That point of view deserves a seat at the table to be discussed as it might offer returns on investment they would never have dreamed on only possible in a tiny slice of world history before the rest of the world catches on. This is a head start. It is for common people to discover and get there first before the mad rush of big money rushes in to claim it. It will be over in the blink of an eye if history is any guide.

Ether itself is a commodity and has several unique qualities that allow it to act as a transport layer for all kinds of stuff needed for an accounting system that is thought of as a new dimension in a future nobody could have imagined just a few years ago,  If you not paying attention, you might miss it.

Here’s just a sample of new technology, business, organizations, and others that are already building on top. Most probably wont make it as most car manufacturers went out of business, and computer manufacturers and software companies in the 80s – and the list goes on. Every paradigm change sweeps away the old guard and replaces it with something far different and unexpected. Blockchain technology is this new generation of disruption and should not be ignored or discarded out of hand.

https://ico-list.com/

Good luck

 

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