The Daily Paul has been archived. Please see the continuation of the Daily Paul at Popular

Thank you for a great ride, and for 8 years of support!

Comment: I explained to you very

(See in situ)

In reply to comment: I already explained it. But (see in situ)

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 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.