Re:A Family Who Sold Their Belongings for Bitcoins
by holydude on Thursday November 09, 2017 @05:43AM
(#15661366)
I have heard about bitcoin when it all started and did not give a damn about it.
Then my friend invested a lot into mining not because of financial incentives but because it was fun. It was fun for him that he bought the GPUs and then ASIC miners.
Bitcoin was worth peanuts back then.
Then prices started to grow.
I thought it was too late when it was on 200.
Then the value dropped. And then again the price increased to 1000$ and again I waved it that it's too late. Then the price dropped to
400 and then again it continued to grow until today.
You will always be late to invest if you do not do your homework or are too risk averse.
Re:A Family Who Sold Their Belongings for Bitcoins
by hackerguy99 on Thursday November 09, 2017 @06:08AM
(#15661455)
>You will always be late to invest if you do not do your homework or are too risk averse.
The stock market is full of "investment" ideas like this, rising thousands of percent over short periods. Are you researching all those penny stocks? Why not?
Re:A Family Who Sold Their Belongings for Bitcoins
by bob_theslob646 on Thursday November 09, 2017 @06:57AM
(#15661666)
Great point. Seriously. Wait until all those people who mined it using not their own hardware ( yeah, you know who are ) are litigated by their company and secondly, has the U.S government reconized it?
Blockchain is here to stay, bitcoin is unproven, especially with scale.
Re:A Family Who Sold Their Belongings for Bitcoins
by csomar on Thursday November 09, 2017 @05:16AM
(#15661254)
I still have to gain experience as a day trader. But even if we lose everything, that's not really what it's about. As long as we have each other, everything will be fine. And if necessary, I'll find myself a job and start from scratch. But what if things go really well? If it makes us financially independent and makes possible the life we all dream about? Sometimes it's so wrong to take a step back. With a bit of luck, it'll bring you three steps forward.
Re:A Family Who Sold Their Belongings for Bitcoins
by phaemon on Thursday November 09, 2017 @06:28AM
(#15661541)
What's wrong with that? Are you so attached to material stuff that you'd be devastated if you lost it all? Seems reasonable to me. Worst that happens, you go back to working like most people do.
Re:A Family Who Sold Their Belongings for Bitcoins
by charlesdm on Thursday November 09, 2017 @06:49AM
(#15661624)
Or they could be set up for life. Everyone has different comforts with risk. They're the only ones who can decide whether they're comfortable making that bet.
Also, since this article was posted, Bitcoin probably doubled. If he invested a few 100k, that's a pretty decent (paper) gain so far.
Re:A Family Who Sold Their Belongings for Bitcoins
by aaron-lebo on Thursday November 09, 2017 @06:51AM
(#15661634)
Of course, that's the tradeoff. That's why with kids it is a little different, it's not just your comfort with risk, you are now risking their future and they don't really get a say in that.
Re:A Family Who Sold Their Belongings for Bitcoins
by charlesdm on Thursday November 09, 2017 @07:14AM
(#15661753)
Maybe. My cousins husband is quite wealthy, but they are frequently leveraged to the hilt (margin debt, mortgages, etc). All for investment and tax purposes though, not spending.
He's done really well (probably made €50m+ since 2008), but they were pretty much all in at several points. As long as you know why you're taking certain risks, it's probably fine. Even if they don't all work out.
Re:A Family Who Sold Their Belongings for Bitcoins
by loudandskittish on Thursday November 09, 2017 @05:24AM
(#15661283)
I just don't understand Bitcoin as an investment, especially in 2017. Isn't it too late to do this? How much higher can the price possibly get? (Edit: Of course, I just remember saying the same thing when the price hit $2,000)
Re:A Family Who Sold Their Belongings for Bitcoins
by Slartie on Thursday November 09, 2017 @06:10AM
(#15661469)
You can short Bitcoin (with respect to USD or other cryptos, but I assume you're interested in shorting BTCUSD) on pretty much all the bigger exchanges. Bitfinex offers it, Kraken too. You'll have to pay a lending fee for the BTC that you short on Bitfinex, which differs depending on the current short-to-long ratio (more people shorting = higher lending fees) and which can get quite high in extreme cases, so long-term shorting on Bitfinex can become an expensive endeavour. Kraken on the other hand has a fixed fee for open short positions, which is quite affordable also in the long term, but they have a limit on the amount of BTC shorts that they allow to exist concurrently on their platform, so it's possible that you can't open any more shorts until someone else closes his positions.
Shorting can be quite lucrative, especially during bear phases. However, you can just as easily burn your fingers - I did quickly earn a nice 4-figure amount shorting ETH (and some BTC) in the middle of the year, during the first bear phase, but I got caught up during the bull phases afterwards, since I expected a pattern more closer to the bursting of the 2013 crypto bubble which was an overall bear, but with bull phases in between. This time it was an overall bull phase with short bear phases in between, and by the time I accepted my fail, I had lost all my nice shorting proceeds (and quite a bit more, but made up for that easily with price appreciations of cold storage cryptos, so I'm at least net positive now).
Shorting is king when the overall pattern is a bearish one, but when it's not clearly bearish, you've been better off longing at good entry points, as cryptos have historically been more likely to grow in price than to shrink. But as always...past market trends are no useful indicator for future trends.
Re:A Family Who Sold Their Belongings for Bitcoins
by joosters on Thursday November 09, 2017 @06:31AM
(#15661548)
Beware: Many exchanges are especially dodgy, and possibly insolvent. (Bitfinex in particular!) If the market price plummets, the exchange might collapse and you will struggle to get your winnings out...
Re:A Family Who Sold Their Belongings for Bitcoins
by Slartie on Thursday November 09, 2017 @07:11AM
(#15661735)
True, but unfortunately you'll need the services of an exchange if you want to short. Longing is possible by putting cryptos in a wallet you have the private keys for, but not shorting.
As I think about it, this is actually another benefit of longing over shorting - it allows you to eliminate the risk of putting value on exchanges, at least if you're okay with limiting your ability to quickly react to market action.
Re:A Family Who Sold Their Belongings for Bitcoins
by testloop on Thursday November 09, 2017 @07:38AM
(#15661869)
Not the parent, but the way in which Bitfinex paid everyone back was extremely dodgy[0].
They also decided to help themselves to 15% of everyone's BCH after the August 1 fork[1]. I don't understand why anyone would trust them.
Re:A Family Who Sold Their Belongings for Bitcoins
by zaarn on Thursday November 09, 2017 @05:30AM
(#15661315)
It's a neat investment for nerds like me. I put most of my money into ETH but have some (32% initially, 45% now) in BTC, with some 15% in other diverse coins.
Re:A Family Who Sold Their Belongings for Bitcoins
by jamiegreen on Thursday November 09, 2017 @05:57AM
(#15661426)
One thing I struggle with is what is the 'right' price for a bitcoin. How do you calculate that? You hear such wildly divergent claims I just have no idea.
Re:A Family Who Sold Their Belongings for Bitcoins
by mirimir on Thursday November 09, 2017 @06:11AM
(#15661470)
You can't calculate it. There is no right price.
But damn, the price has increased by 10^5 since I started using Bitcoin. Looking back, it's been a pretty steady exponential. Looking forward, I have no clue.
Bottom line, don't bet more than you can stand to lose.
Re:A Family Who Sold Their Belongings for Bitcoins
by mcv on Thursday November 09, 2017 @07:05AM
(#15661702)
There is no "right" price. There's a limited amount of bitcoin, and a lot of people who want it. As long as more people keep wanting bitcoin, the price will go up. When demand drops, prices will go down.
Bitcoin has the problem that there's no real value backing it up. You can't eat a bitcoin, or use it to make something. It has value only as long as other people think it has. But as long as people keep trusting bitcoin, it could keep growing.
The real interesting question is not so much what the price is, but how much actual commerce there is in bitcoin. If people are merely hoarding it, it's vulnerable to collapse as soon as people start to realise it's not actually doing anything. But if there's actual sustainable trade in it, then that could be seen as the economy backing up the value of bitcoin.
Re:A Family Who Sold Their Belongings for Bitcoins
by hackerguy99 on Thursday November 09, 2017 @06:04AM
(#15661439)
>One thing I struggle with is what is the 'right' price for a bitcoin. How do you calculate that?
Do you think Bitcoin is money?
Then the right price is simple: The amount of goods you can buy for 1 hour of labour should be equal between USD and BTC. If you can buy an apple pie for $5USD, then you should be able to buy a pie with $5USD in BTC. The problem is no one is actually selling anything in BTC in the real world.
If you think Bitcoin is money, you shouldn't be "making money" off it anymore than buying another currency in USD. The fact that it is increasing exponentially in price is a bug, not a feature.
Re:A Family Who Sold Their Belongings for Bitcoins
by tom_mellior on Thursday November 09, 2017 @07:29AM
(#15661821)
> Do you think Bitcoin is money?
Let's say yes.
> Then the right price is simple: The amount of goods you can buy for 1 hour of labour should be equal between USD and BTC. If you can buy an apple pie for $5USD, then you should be able to buy a pie with $5USD in BTC.
OK. So how exactly do we compute the "right" price for Bitcoin from this? I struggle to do this simple math.
Re:A Family Who Sold Their Belongings for Bitcoins
by hau on Thursday November 09, 2017 @08:06AM
(#15662024)
You're selling an apple pie for your own currency piecoin. If I to buy a pie from you I have to buy x piecoins first to match your price whatever it is. My need of a piecoin is defined by the need of our settlement for a pie ('right' price). Usually, pie like yours costs $5 so I have no incentive to pay more for your pie. If your price for a pie is x piecoins then I will buy x piecoins for $5 and 1 piecoin will cost me x/5.
'Wrong' part of a price is about modelling other people need for piecoins which in turn is about modelling need for pies and other people speculation and that's can be incredibly complex. As you can easily see 'wrong' part of a price makes your coin shitty currency.
Re:A Family Who Sold Their Belongings for Bitcoins
by tom_mellior on Thursday November 09, 2017 @11:48AM
(#15663862)
None of this answers my question for how exactly to do the parent's math for Bitcoin, which the parent claimed was simple. None of this even talks about Bitcoin, which was specifically what I asked about.
Re:A Family Who Sold Their Belongings for Bitcoins
by hau on Thursday November 09, 2017 @07:09AM
(#15661726)
Part of bitcoin price that's defined by needs of settling between different parties is the 'right' price. The 'wrong' part of the price is defined by speculative interest - expectations of bitcoin growth. Of course, any price is right if bitcoin is a pure speculative asset in your eyes.
Then prices started to grow. I thought it was too late when it was on 200. Then the value dropped. And then again the price increased to 1000$ and again I waved it that it's too late. Then the price dropped to 400 and then again it continued to grow until today.
You will always be late to invest if you do not do your homework or are too risk averse.
The stock market is full of "investment" ideas like this, rising thousands of percent over short periods. Are you researching all those penny stocks? Why not?
Blockchain is here to stay, bitcoin is unproven, especially with scale.
Just my opinion.
Oh, SHIT!
They live in the Netherlands. They're not going to be left starving and homeless just because they don't have money.
Also, since this article was posted, Bitcoin probably doubled. If he invested a few 100k, that's a pretty decent (paper) gain so far.
He's done really well (probably made €50m+ since 2008), but they were pretty much all in at several points. As long as you know why you're taking certain risks, it's probably fine. Even if they don't all work out.
"2017" isn't a very exact date. The current price is about 7x what it was on January 1.
(Note: I'm not claiming anything about the future.)
A lot. If bitcoin becomes the standard currency for all online and international trade, a single bitcoin could become worth millions of dollars.
But it could also become completely worthless.
Shorting can be quite lucrative, especially during bear phases. However, you can just as easily burn your fingers - I did quickly earn a nice 4-figure amount shorting ETH (and some BTC) in the middle of the year, during the first bear phase, but I got caught up during the bull phases afterwards, since I expected a pattern more closer to the bursting of the 2013 crypto bubble which was an overall bear, but with bull phases in between. This time it was an overall bull phase with short bear phases in between, and by the time I accepted my fail, I had lost all my nice shorting proceeds (and quite a bit more, but made up for that easily with price appreciations of cold storage cryptos, so I'm at least net positive now).
Shorting is king when the overall pattern is a bearish one, but when it's not clearly bearish, you've been better off longing at good entry points, as cryptos have historically been more likely to grow in price than to shrink. But as always...past market trends are no useful indicator for future trends.
As I think about it, this is actually another benefit of longing over shorting - it allows you to eliminate the risk of putting value on exchanges, at least if you're okay with limiting your ability to quickly react to market action.
[0]https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t...
[1]https://news.bitcoin.com/bitfinex-bitcoin-cash-deposits-with...
It gives a decent ROI.
But damn, the price has increased by 10^5 since I started using Bitcoin. Looking back, it's been a pretty steady exponential. Looking forward, I have no clue.
Bottom line, don't bet more than you can stand to lose.
Bitcoin has the problem that there's no real value backing it up. You can't eat a bitcoin, or use it to make something. It has value only as long as other people think it has. But as long as people keep trusting bitcoin, it could keep growing.
The real interesting question is not so much what the price is, but how much actual commerce there is in bitcoin. If people are merely hoarding it, it's vulnerable to collapse as soon as people start to realise it's not actually doing anything. But if there's actual sustainable trade in it, then that could be seen as the economy backing up the value of bitcoin.
Do you think Bitcoin is money?
Then the right price is simple: The amount of goods you can buy for 1 hour of labour should be equal between USD and BTC. If you can buy an apple pie for $5USD, then you should be able to buy a pie with $5USD in BTC. The problem is no one is actually selling anything in BTC in the real world.
If you think Bitcoin is money, you shouldn't be "making money" off it anymore than buying another currency in USD. The fact that it is increasing exponentially in price is a bug, not a feature.
Let's say yes.
> Then the right price is simple: The amount of goods you can buy for 1 hour of labour should be equal between USD and BTC. If you can buy an apple pie for $5USD, then you should be able to buy a pie with $5USD in BTC.
OK. So how exactly do we compute the "right" price for Bitcoin from this? I struggle to do this simple math.
'Wrong' part of a price is about modelling other people need for piecoins which in turn is about modelling need for pies and other people speculation and that's can be incredibly complex. As you can easily see 'wrong' part of a price makes your coin shitty currency.
Why? The amount of goods I can buy isn't equal between USD and GBP. Or between either and EUR. So why exactly should it be equal for BTC?