2 votes

Bitcoin up, Precious Metals down

So I, like so many people, have put their savings away in Gold and Silver.
Now, it seems like the cartel wants to slap us in the face again.
Figures I only bought one Bitcoin.
Bitcoin is up to $105 and climbing while Silver has been smashed down to $27.50.

Will you buy Bitcoins or Silver?



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Um no thats the point.

Um no thats the point.

One Bitcoin Enthusiast

One Bitcoin enthusiast makes physical coins that have a corresponding private key. (https://www.casascius.com/)

There's another group working on a device that uses solar power and creates a point-to-point mesh network, making the need for electricity and "the internet" completely irrelevant.

Even during a short power outage, I can still use my phone, so I don't see what the big deal is.

If you're someone who believes we will experience massive, sustained power outages and that TPTB will EMP the entire planet to kill the internet, then hold some PMs too, like many of us Bitcoiners advocate...

If the whole reason gold and

If the whole reason gold and silver people have gold in silver is to survive after a power failure and or economic collapse. Why do you follow the price each day? Better yet how will you know much its actually worth in the case of power failure?

SteveMT's picture

Think this through some more.

Will that physical gold and silver still be there is the power fails for a year let's say? Answer: Yes, and that metal can be used during this time. What gold will buy is variable, but it's better than nothing. The same cannot be said for Bitcoin. You would have nothing to barter with for one year.

Maybe you haven't

thought of the benefits of owning BOTH precious metals and bitcoin? Are you strictly using metals now or do you use USD's as well? This isn't a competition between metals and bitcoin. Try to keep an open mind to the possibilities, this is new territory.

Well most on here have a dire

Well most on here have a dire view of what the future will be like. Of course the future does seem dim with the old ways. But Bitcoin offers a possible solution to avert this dark scenario while at the same time opting out of the centralized controlled currencies.

I've been waiting for this so called "collapse" for years and years and years and many people before me. (still waiting). Oh some guy on the news said it would be in april...

It seems that people get upset if any other solution is given besides the mad max scenario that is implanted in their head. (mostly by people that are heavily invested in the metals industry I might add).

There doesn't need to be a

There doesn't need to be a Mad Max scenario in order to feel the need to preserve your wealth and hedge against inflation. It just so happens that history has proven that for thousands of years pm's have held their value. You seem to have a distorted view of pm's.

SteveMT's picture

Hard kill versus soft kill. Which one or both?

There is a lot of soft kill so far. What will happen first: a nuclear war or gun confiscation, FEMA Camps, and martial law? Looks like all of the later are to reality than the former. With soft kill also comes internet 2.0 meaning a filtered web. Is the possibility that the government will turn-off any sight associated with Bitcoin or go after anyone transacting with Bitcoin more likely than say anthrax killing off 80% of the world's population? You must decide that for yourself.

You seem to have so much fear

You seem to have so much fear of the government that it stops you in your tracks. Bitcoin is worldwide sure the US government can completely ban it outright (if they can figure out how to define it) But it will just speed up the demise of their currency and other fiat currencies.

SteveMT's picture

Does the government lie?

Does the government kill?
Does the government commit genocide?
Is the government buying 2 billion hollow point bullets?

Everything is just fine and rosy. No fear here.

So what are you doing to

So what are you doing to change it? Voting doesn't work. Time to hunker down in your house with your ammo and wait for them to come get you?

As the creator of the 3d printed gun project says.

"holding dollars is a political statement"

SteveMT's picture

Using the system the least that I can.

Minimal cash, and rest in commodities of all kinds. There is no place to run to. I'm already in a fairly remote area. There is not much else I can do. I talk to people of course. Will buying Bitcoin change anything? I don't know. I know that I'm into the real, not virtual. I'm willing to listen to any other ideas. What are you doing differently besides Bitcoin?

I hope people

understand this shouldn't be an either or question. My advice is stick with precious metals for the large large majority of your long term savings. At the same time be aware of how Bitcoin can ALSO be helpful for payment liberty. Hold as much bitcoins as you're comfortable with, if that's zero, so be it.

who's to say someone else

who's to say someone else won't create another bitcoin algorithm? after all, it is just a series of 1's and 0's, it can be replicated indefinitely. when another system comes along you'll have twice the supply, and the price for bitcoins will fall dramatically.

There is another competing cryptocurrency

It's called litecoin:

http://litecoin.org

________________________________________

Those who expect to reap the blessings of freedom, must, like men, undergo the fatigue of supporting it. ~Thomas Paine

competing currencies are a good thing

There are already competing digital currencies. For one, Litecoin is based on the Bitcoin algorithm.

If you have been paying attention, Ron Paul has been pushing competing currencies for some time and for good reason.

I plan to buy some Bitcoin, some Litecoin and whatever else comes along that promotes freedom.

Bitcoin has some shortcomings and an ideal currency wouldn't be so speculative. Everyone should confront the same barrier to entry for a good medium of trade. Individuals shouldn't be punished for coming in late in the game. At least for a fair and honest medium of trade.

Early adopters are making a killing in BTC at the moment. This is exactly why competing currencies are a good thing as they work to level the playing field.

A free market will correct itself. Competition is good.

my point was that there can

my point was that there can be an infinite amount of bitcoins created through various algorithms, but an infinite amount of gold or silver cannot be mined.

if bitcoin is "the ideal" digital currency, then because of its nature it can be recreated exactly by another person, then we'll have double the supply of "ideal" currency. if bitcoin isn't the ideal, then people will flock to the ideal, but then it too will also be recreated and its supply inflated.

one could argue that this is similar to the 1 dollar bill (mint mark D) competing with the 10 dollar bill (mint mark C). we both know they are the same value, they are created separately, but they both serve the same purpose and people treat them equally because any dollar is the "ideal" for paper currency.

And how do you propose that

And how do you propose that they create more BC than 21 million? I'm not sure you entirely understand the method which BC utilizes to prevent itself from being copied.

Even if they could copy the BC code, it wouldn't work for the reason that BC is not just a normal program. It's a PROTOCOL and that makes all the difference. A protocol is like a language. If you speak English and modify a large number of words, it won't be English anymore. That's why you can't add more BC to the network if you have a similar digital currency, but with different code.

And what if you copy the BC protocol in EXACT DETAIL? Then the protocol is programmed to automatically revert to the largest existing version of the blockchain. The blockchain is hardwired in BC's DNA. The BC protocol (assuming same version number) only accepts ONE version of the blockchain, it cannot accept any other. It would simply revert to the existing blockchain and would be forced to adhere to the 21 million limit.

The only way people could add more BC to the supply is if the MARKET accepted a close BC copy and pegged this new currency to have the same worth as BC. But how likely do you think the market would accept such a proposition?

I won't say the above is impossible, but I'm pretty skeptical of a free market accepting such a notion without a fight.

The only way people could add

The only way people could add more BC to the supply is if the MARKET accepted a close BC copy and pegged this new currency to have the same worth as BC. But how likely do you think the market would accept such a proposition?

Why should somebody reject another version of Bitcoin, let's call it "Bytecoin", if he accepts Bitcoin? Where's the difference?
What is the reason, in your opinion, that the market rejects Bytecoin but accepts Bitcoin when they're just one and the same thing?

Many reasons. For one, the

Many reasons. For one, the name matters. Yes, even such a small matter as the name can make a big difference. Do not underestimate brandnames and the first mover advantage.

There have been many examples of people copying original ideas and yet still failing. Even in the event that the copy had superior backing.

It's been general knowledge that the only way to beat an original idea, is if you have an idea MUCH better than the original. Copying an idea or having a slightly better idea simply doesn't work. As a matter of fact, we've already seen this particular phenomenon with BC. BC is not the only digital currency in existence. There have been others. And from what I've heard, some of them were even slightly better than BC in concept. But most of them still failed, simply because they didn't have the first mover advantage. Only Litecoin managed to put up a fight. Ripple might have a chance as well.

People simply go with the most established brand and simply don't bother with other brands. The reasoning is that there must be a reason why a particular brand must be more popular than the other brand. While this kind of thinking is not really deep reasoning (most people don't do that stuff), there's some element of truth to this assessment. As an example, there have been tablets that rivaled the Ipad in specs and even had some capabilities that the Ipad didn't have. But people who did choose these slightly superior copies found out that the support was shitty as hell. While companies could copy specs and even beef them up, copying the infrastructure and support of the Ipad was an entirely different matter alltogether. The Ipad had a well developed app marketplace (which is the main draw of the Ipad) which copies simply couldn't rival. And the reason the Ipad had such a well developed app space was because of its brandname and the firstmover advantage.

The main reason something like Android was able to compete, was because of the power of the brandname behind it (google) that was backing it.

Now, getting back to this hypothetical Bytecoin, what you guys are saying is that this Bytecoin would be able to suddenly overtake a 4 year advantage, overcome the brandname and first mover barrier and get accepted by the same people that accepted BC, getting magically accepted by people and companies whose normal tendency is to to only go with the established brand and then suddenly have a similar infrastructure as BC, where all markets and exchanges decide to denominate their products in Bitcoins as well as Bytecoins, even though we have already seen other digital currencies crash and burn.

And then we haven't even hit the main problem with this hypothetical scenario. The scenario described above would result that this new currency would have a different exchange value. If you try to force the market to have this Bytecoin be the same value as a BC, it would be neccesary to have the exchanges like mtgox incorporate the Bytecoin on their sites. If the exchanges don't accept this, these Bytecoins will be forced to have its own seperate exchange. As a result, you won't be able to prevent the Bytecoin from having a different exchange value. It will essentially be a different currency to BC, and thus couldn't be regarded as being part of the BC supply.

And trying to sell these Bytecoins through a different means (in an attempt to peg the coin to BC) than through exchanges only works if you have enough people that denominate their products in Bytecoins. To employ such a strategy is not something that can be done through the free market. It would be necessary to force people to denominate their products in Bytecoins. Only nations have that particular power, to force people by decree to denominate their products in their particular fiat currency. That's why nations are able to peg their currency to the dollar, because they have the power to force people to accept the pegged currency.

Last but not least, is the entire idea itself regarding the notion of PURPOSELY trying to add to the BC supply. The entire reason BC got popular to begin with is because markets were FED UP with all the money printing. What you are telling me is that the markets would suddenly turn around and say that they WANT to add to the supply and contradict ALL of their previous actions by accepting BC and suddenly support this Bytecoin. Good luck in trying to convince the market to accept this new hypothetical currency that is essentially based on money printing.

You've got a couple of things

You've got a couple of things upside down here...

First of all, a brandname doesn't fall from the sky. It emerges out of something that is related to the name.
So what created the brandname "Bitcoin"? The protocol that is running the currency! If you create another version of this protocol, it is exactly the same thing. Why shouldn't this currency evolve in the same manner as Bitcoin did?

Your example with the Ipad doesn't fit in this scenario, because if you got an Ipad you don't need another tablet and vice versa.
To the contrary, you can put half of your value in Bitcoins and half of your value in Bytecoins. This is even better than only to put it in one currency, because of diversification.

Now, getting back to this hypothetical Bytecoin, what you guys are saying is that this Bytecoin would be able to suddenly overtake a 4 year advantage, overcome the brandname and first mover barrier and get accepted by the same people that accepted BC, getting magically accepted by people and companies whose normal tendency is to to only go with the established brand and then suddenly have a similar infrastructure as BC, where all markets and exchanges decide to denominate their products in Bitcoins as well as Bytecoins, even though we have already seen other digital currencies crash and burn.

This is again the reasoning completely turned on its head.
People don't accept a currency because other people do so, they aceept it because the characteristics of the currency are good.
If they only accept it because of other people, well then this is a very clear sign of a big bubble.

As the characteristics of Bitcoin and Bytecoin are exactly the same, why should anybody accept only one of those currencies?

Further, there is no need for everybody to denominate their products in Bytecoin. If someone doesn't, you can go to the exchange, sell your Bytecoins and get some Bitcoins. This could even be done automatically by payment systems.

And then we haven't even hit the main problem with this hypothetical scenario. The scenario described above would result that this new currency would have a different exchange value. If you try to force the market to have this Bytecoin be the same value as a BC, it would be neccesary to have the exchanges like mtgox incorporate the Bytecoin on their sites. If the exchanges don't accept this, these Bytecoins will be forced to have its own seperate exchange. As a result, you won't be able to prevent the Bytecoin from having a different exchange value. It will essentially be a different currency to BC, and thus couldn't be regarded as being part of the BC supply.

How does the exchange value of a currency affect its acceptance? Do you care if you have to buy 10 Bitcoins to store your value or 10000? You only care about the currency keeping its value. The price is completely irrelevant.

It's my opinion that you are

It's my opinion that you are the one that got matters upside down. Your post simply reveals that you don't understand the mechanism of how one product overtakes another product. If what you were saying was the absolute truth, we should have seen the other digital currencies similar to BC start gaining more traction. It's simply a case where reality meets theory and guess what, your theory fails.

Before I start adressing your other points, start explaining to me why you believe that the other digital currencies failed to gain traction and why you think that it doesn't contradict your theory.

It's my opinion that you are

It's my opinion that you are the one that got matters upside down. Your post simply reveals that you don't understand the mechanism of how one product overtakes another product.

Oh, ok. So why don't you just explain it to me, how one product overtakes the other and disprove my argument. Where is your reasoning? I can only see claims...

I didn't even talk about one product taking over the other. I talked about two or more products being used simultaneously and thereby driving their value down alltogether.

Before I start adressing your other points, start explaining to me why you believe that the other digital currencies failed to gain traction and why you think that it doesn't contradict your theory.

Which other currencies are there who "failed to gain traction"? What about Litecoin?

I already explained it. But

I already explained it. But somehow, by saying that I make "claims" (which is true btw), you seem to imply that you do not? I gave my reasoning and you did as well. They are both "claims". But it seems to me that reality seems to favor my claims abit more.

Because even if Litecoin managed to hold on, your theory still can't explain why Litecoin was the only one that managed to succeed, even though there exists other BC copies. If you insist on holding to your theory, I request you don't dodge the question on that one.

As for the other currencies, I'll oblige you and give you a list of the other crypto currencies:

https://bitcointalk.org/index.php?topic=134179.0

As for Litecoin (because I don't want to be accused of dodging your question) the reason it gained in value is relatively simple. It's being used as BC's backup. People have ZERO faith in dollars/euro's, so instead of exchanging BC for fiat, they choose to exchange their BC for another cryptocurrency. LC was the best candidate for that.

If BC's price crashes, they exchange their BC for LC. And the nice thing about doing it this way, is that multiple people had this idea and they KNOW that more people are doing this, making the risk relatively low. So LC's exchange value is almost sure to rise in value when BC prices go down. Whenever BC prices rise again, they exchange their LC back for BC.

So LC rises, because of the rise of BC. But even so, the growth of LC simply can't compare to BC's rise in growth. That certainly doesn't suggest that it could ever serve as BC's second supply of coins. Not to mention that it's a bad example, since it has a different exchange value. Only another cryptocurrency with almost the exact same exchange value as BC (in other words pegged to BC) could ever serve as this theoretical expansion of BC's supply that you claim should be possible.

But before you adress this, first address why you think that that list I just gave you doesn't contradict your theory.

I already explained it. But

I already explained it. But somehow, by saying that I make "claims" (which is true btw), you seem to imply that you do not? I gave my reasoning and you did as well. They are both "claims". But it seems to me that reality seems to favor my claims abit more.

I explained to you very detailed, why your reasoning is wrong. All you had to say about that was "It's my opinion that you are the one that got matters upside down".
So you don't give any argument or explain where my criticism is wrong, according to your opinion. You just say it ain't so.
If you want to adhere to your opinion, you have to disprove my criticism. If you can't do that, how can you be sure you're right?

Because even if Litecoin managed to hold on, your theory still can't explain why Litecoin was the only one that managed to succeed, even though there exists other BC copies. If you insist on holding to your theory, I request you don't dodge the question on that one.

The currencies in your list are not the same as Bitcoin. The protocols are manipulated and you can even read the reasons why they failed. Litecoin is the only one that runs the same protocol except that it is created faster.

By the way, there is no need for me to give proof why those currencies failed. I never said it was impossible for a such a currency to fail. I just said there is no limit to create other Bitcoin versions with the same protocol. Bitcoin was accepted - why should another currency with the same protocol not be accepted?
It's up to you to explain where the difference is so that a new currency is rejected even though it runs same protocol, because that was your claim. I disproved your explanation and now it's again your turn to tell me where I'm wrong.

As for Litecoin (because I don't want to be accused of dodging your question) the reason it gained in value is relatively simple. It's being used as BC's backup. People have ZERO faith in dollars/euro's, so instead of exchanging BC for fiat, they choose to exchange their BC for another cryptocurrency. LC was the best candidate for that.

So a second crypto currency is possible, but a third is not?
Why do people want to exchange their Bitcoins for Litecoins if Bitcoin is such a great and safe currency that for another currency is impossible to compete with? Why don't they just hold their Bitcoins? You're contradicting yourself...

If BC's price crashes, they exchange their BC for LC. And the nice thing about doing it this way, is that multiple people had this idea and they KNOW that more people are doing this, making the risk relatively low. So LC's exchange value is almost sure to rise in value when BC prices go down. Whenever BC prices rise again, they exchange their LC back for BC.

This is again upside down logic.
A Bitcoin crash doesn't happen by some miracle. A crash happens because the people are selling BCs and not the other way around. This sell-of must have a reason. If the reason applies to Bitcoin, why doesn't it apply to Litecoin when they're the same except the name and the rate of creation?

What you describe here with Bitcoin going up and down like a rollercoaster and Litecoin in the different direction and back and forth without a real reason behind it are exactly the characteristics of a bubble. A bubble emerges when people buy something only because other people do so and sell something out of the same reason. Doesn't that fit to those crypto currencies very well?

So LC rises, because of the rise of BC. But even so, the growth of LC simply can't compare to BC's rise in growth. That certainly doesn't suggest that it could ever serve as BC's second supply of coins. Not to mention that it's a bad example, since it has a different exchange value. Only another cryptocurrency with almost the exact same exchange value as BC (in other words pegged to BC) could ever serve as this theoretical expansion of BC's supply that you claim should be possible.

...because???

I explained to you very

I explained to you very detailed, why your reasoning is wrong. All you had to say about that was "It's my opinion that you are the one that got matters upside down".

So you don't give any argument or explain where my criticism is wrong, according to your opinion. You just say it ain't so.
If you want to adhere to your opinion, you have to disprove my criticism. If you can't do that, how can you be sure you're right?

Pointing you towards real world events is not giving a reason or giving evidence? That's the entire reason I keep pointing to other alternative currencies. To provide a real world example that what you say cannot be true. Real world examples work even better as proof than mere theories or reasoning.

The currencies in your list are not the same as Bitcoin. The protocols are manipulated and you can even read the reasons why they failed. Litecoin is the only one that runs the same protocol except that it is created faster.

Apparently you haven't read the page carefully enough. Litecoin is not the only copy of BC. Almost all of the currencies under MINOR are copies of BC with only minor differences. Only SOME of the currencies have reasons listed why they failed.

By the way, there is no need for me to give proof why those currencies failed. I never said it was impossible for a such a currency to fail. I just said there is no limit to create other Bitcoin versions with the same protocol. Bitcoin was accepted - why should another currency with the same protocol not be accepted?
It's up to you to explain where the difference is so that a new currency is rejected even though it runs same protocol, because that was your claim. I disproved your explanation and now it's again your turn to tell me where I'm wrong.

Well, for starters, what you claim can hardly be regarded as proof. At the very least, you could provide a realworld example demonstrating that what you say is true (like I did or atleast attempted to do). From my experience, people copying popular ideas has never proven succesful in my memory. Not unless the company behind the copy had a powerful brandname as well. But who knows, perhaps I haven't lived long enough and you can show me such an example.

Also, you seem to contradict yourself somewhat. If we go by this quote of yours:

First of all, a brandname doesn't fall from the sky. It emerges out of something that is related to the name.
So what created the brandname "Bitcoin"? The protocol that is running the currency! If you create another version of this protocol, it is exactly the same thing. Why shouldn't this currency evolve in the same manner as Bitcoin did?

it makes it seem like brandname is created solely by the underlying protocol/idea and that this idea is enough to propel a copy to similar heights as the original. Yet you now claim that you never said that a copy couldn't fail. This is contradictory. If two or more similar ideas compete with each other, yet one fails and the other succeeds, then you can only conclude that some OTHER factor than the usage of a similar idea must be the reason that the other copy succeeded.

So a second crypto currency is possible, but a third is not?

Actually, there's a third one, though not as popular as LC. It's called namecoin. But even these two currencies won't be able to overtake BC, simply for the reason that they don't bring anything significantly different to the table that makes it worthwhile.

Why do people want to exchange their Bitcoins for Litecoins if Bitcoin is such a great and safe currency that for another currency is impossible to compete with? Why don't they just hold their Bitcoins? You're contradicting yourself...

It's only contradictory to people that have no experience with trading. Really, this paragraph almost wants to make me want to go facepalm. If you posted this on the speculator forums on bitcointalk (or ANY speculator forum for that matter), you would be laughed away. And I'm not trying to insult you here, cause you do seem to be somewhat reasonable based on the tone of your posts, but this paragraph only shows that you really don't understand how currency exchanges work.

And I'll try to explain this before I get accused again of making claims without trying to back it up: Suppose you have a coin worth 10 us dollars and that confidence in this coin is relatively high. After one month the relative value rises to 50 dollars. Now assume that it doesn't reach this price level in a straight line, but that the line goes in a zig zag JAGGED manner (=high volatility). You have two strategies that you can employ. You can buy the coin at 10 us dollars and you only sell it when it reaches 50 dollars. Your profit will be 40 dollars with this method. OR you buy the coin at 10 dollars, sell it when it reaches the highest peak of a jagged edge and then rebuy the coin at the lowest peak of a jagged edge, rinse and repeat till it reaches 50 dollars. If you employ this second method, you make MORE profit than 40 dollars.

Don't take my word for it, ask around on a speculator forum or try calculating the scenario yourself.

This is again upside down logic.
A Bitcoin crash doesn't happen by some miracle. A crash happens because the people are selling BCs and not the other way around. This sell-of must have a reason. If the reason applies to Bitcoin, why doesn't it apply to Litecoin when they're the same except the name and the rate of creation?

You are assuming here that BC and LC always have the same level of demand, simply because of how similar they are. This is an overly simplistic notion of how currencies work. That's like saying that because the dollar has the same concept as the euro that the dollar will always rise along with the euro. Which is a ludicrous idea.

Most of the selloffs in the BC price are caused by speculators. That's what most people that have any inkling about economics say and that's what I say as well, because I've actually traded on the BC exchange and witnessed the various methods traders use to manipulate the price. The reason they sell their BC, is because they are risk averse people and want to secure their profits right away. Only the stupid ones take the risk to invest longterm (they make less money that way as well), especially considering all the risks that exist around BC.

And some people that trade their BC, don't trade them for fiat, but for LC. You already stated that selling BC would result in lower BC prices. If you have any consistency, there can be only one conclusion as to what happens when they buy LC: LC prices rise (denominated in BC). And once again, don't take my word for it. The real world is all the proof that is required. Simply compare the two charts of BC and LC. What you will see is that LC prices denominated in BC will tend to rise whenever BC prices go down denominated in dollars. You can simply look up the charts yourself if you don't believe me.

What you describe here with Bitcoin going up and down like a rollercoaster and Litecoin in the different direction and back and forth without a real reason behind it are exactly the characteristics of a bubble. A bubble emerges when people buy something only because other people do so and sell something out of the same reason. Doesn't that fit to those crypto currencies very well?

No, it's a situation that is perfectly possible in higly volatile markets that have no bubbles. In less volatile markets, the strategy is harder to employ.

Make no mistake, I'm not saying that BC isn't a bubble. It's highly likely that it's a bubble. But that's a different subject alltogether.

...because???

Because having a different exchange value essentially makes it a different currency. It's like how adding euros to your dollar supply won't devalue the dollar. Because they are different currencies. To add to the BC supply, an alternate cryptocurrency must be seen as being COMPLETELY EQUAVALENT to BC, which includes the exchange value. If it has one slight difference, you won't be able to prevent people from treating it as a different object. If it's a different object, it won't be able to be regarded as being part of the BC supply. This is fairly obvious.

The thing is, your post is highly theoretical and for anyone unfamilar with the subject, you might even make some sense. But anybody who actually deals with the real world can easily see that you have no experience or have little knowledge of either finance or economics. Because your theories simply have no connection to the real world or any existing economic theory. Did you actually ever study finance or economics?

And once again, you can accuse me of making claims of you being wrong without saying the reason why your theories have no connection to the real world. I've already given enough real world examples, so I would disagree with such an assesment. But really, you don't have to take my word for it. Simply talk with people you trust that actually studied finance and economics. Go to a teacher or a professor. Whatever. Once again, you don't have to take my word for it.

Pointing you towards real

Pointing you towards real world events is not giving a reason or giving evidence? That's the entire reason I keep pointing to other alternative currencies. To provide a real world example that what you say cannot be true. Real world examples work even better as proof than mere theories or reasoning.

If that is your opinion, we can stop discussing, because we won't find a common ground from where to start. Analyzing real world examples and making a theory out of it, is exactly what the Keynesians do.

However, this never works in economics. There are too much variables that are impossible to know. You always have to start from the individual and his personal subjective valuation.

And I'll try to explain this before I get accused again of making claims without trying to back it up: Suppose you have a coin worth 10 us dollars and that confidence in this coin is relatively high. After one month the relative value rises to 50 dollars. Now assume that it doesn't reach this price level in a straight line, but that the line goes in a zig zag JAGGED manner (=high volatility). You have two strategies that you can employ. You can buy the coin at 10 us dollars and you only sell it when it reaches 50 dollars. Your profit will be 40 dollars with this method. OR you buy the coin at 10 dollars, sell it when it reaches the highest peak of a jagged edge and then rebuy the coin at the lowest peak of a jagged edge, rinse and repeat till it reaches 50 dollars. If you employ this second method, you make MORE profit than 40 dollars.

Look, this is exactly what I was talking about all the time. The people you mention are buying Bitcoins because they want to make a profit and not because they want to store their value.
If there are only a few people who buy Bitcoins because they want to store value, then the whole thing is one big bubble and not a real currency. If this is the case, the price will go up until there are no more buyers and then it will go down through the floor.

Because having a different exchange value essentially makes it a different currency. It's like how adding euros to your dollar supply won't devalue the dollar. Because they are different currencies. To add to the BC supply, an alternate cryptocurrency must be seen as being COMPLETELY EQUAVALENT to BC, which includes the exchange value. If it has one slight difference, you won't be able to prevent people from treating it as a different object. If it's a different object, it won't be able to be regarded as being part of the BC supply. This is fairly obvious.

Again upside down logic...
It's not the price that makes a currency a different one, the price is different because it is another currency. The individuals value the currency differently and this is what makes the price.

What you say about the Dollar and Euro is wrong. If I buy Euros instead of Dollars, the price of Euros will rise slightly while the price of Dollars falls a bit. I could go 50% each for example.
Making the assumption that people will always have the same trust into the Dollar and the Euro (which is true for Bitcoin and Litecoin, because again, where is the difference?), you could drive the value of the Dollar down by printing Euros. Of course, in reality this won't work, but only because the trust wouldn't be the same.

And don't say again that the difference is the price. The price is irrelevant if you want to store your value. Or don't you buy silver because it is cheaper than gold?
The only thing you care is whether the currency keeps the value.

Simply talk with people you trust that actually studied finance and economics. Go to a teacher or a professor.

To the Keynesian fool around the corner?
Do you even know Austrian Economics? I studied Mises and Hayek and I can assure you, they would tell you the same.

There is also Ripple, but I

There is also Ripple, but I think Bitcoin has the first-mover advantage.

i plan on buying a bit coin.

i plan on buying a bit coin. virtual currencies are the future. anyone can create a virtual currency. its a free market, survival of the best principle. right now bit coin is the answer to fractional reserve banking and fiat currency. f__ govt, buy bit coins.

pgrady
f___ all forms of govt.

SteveMT's picture

"virtual currencies are the future."

Remember what the word 'virtual' means:

1. Existing or resulting in essence or effect though not in actual fact, form, or name: the virtual extinction of the buffalo.
2. Existing in the mind, especially as a product of the imagination.

Please don't forget that definition when you buy into Bitcoin versus looking into some gold or silver. History is the ultimate tester.