Is Bitcoin the Next Big Thing?

[ausername]

That's both nasty and offensive. Am I a bagholder? I put some money into an exciting technology / speculative investment a couple of years ago and deserve to be derided for it, really?

Fair enough I retract "Idiot".

Although bagholders aren't the only ones being labelled here are they... people who suggested selling at $20k have become "naysayers", and that was the rest of my point.

Rephrase:

It would have perhaps been wise for bagholders to liquidate their bitcoin when the price was very high, as many of us 'naysayers' suggested in December and then repurchase at a lower price during or after the inevitable correction

There you go... polite.

 

[websaway]

Most of them can't afford 0.05 bitcoin, and half of them don't even have internet access.

But at least 2 billion do.

 

[ian]

ps. Do you know why lapdance clubs don't accept credit card for lap dancers?

Because people wake up sober and get buyers remorse, and issue a chargeback.

If there have been loads of people issuing chargebacks on crypto transactions that they regret, claiming that they were unauthorised.... therefore costing the banks loads of money processing them and refunding them.... isn't it fair enough that they refuse to transact them until they can work out a better way to treat those transactions?

The solution perhaps is a special crypto account with some sort of blockchain verification, so the banks can prove that a purchase was authorised?

Banks are just a business after all.... if you ran a pub and there was some bird who wore some lipstick which your employees really struggled to was off wine glasses, at your expense, but every other lipstick stain was easy to wash off... you'd be within your rights to say that you're not willing to pay somebody £2 for the 15 minutes it takes to wash her glass each time she spends £3 on a Pinot Grigio.... and would get fed up enough with it to politely refuse her custom unless she changes her lipstick brand?

Probably a terrible analogy, I've got a bad cold today, but you get the point.

Lipstick and lapdancers...where did I put my credit card

 

[RobM]

Interesting chart of the percentage price change of Bitcoin. Notice anything? It's as stable (or not!) now as it has ever been.

And that's a good thing? Some people are just gluttons for punishment. Go back a horse or get a lottery ticket

 

[Edwin]

Interesting chart of the percentage price change of Bitcoin. Notice anything? It's as stable (or not!) now as it has ever been.

View attachment 1843

View attachment 1842

Source: https://www.quora.com/Is-the-bitcoin-bubble-about-to-burst/answer/Andreas-Kitzing-1

Meaningless to talk about % change to the exclusion of other considerations. I thought that was well covered a few pages back.

Back in 2011, Bitcoin dropped 95% from $35 to $2.29. In other words, BTC investors theoretically lost $32.71 in the drop for each Bitcoin they had. In the most recent plunge, it went from $19,290 to $8,520 (graph figures) i.e. they lost $10,770.

Put another way, the recent Bitcoin selloff was 329.25 times worse than the 2011 Bitcoin sellofff.

Summary: something can drop a huge % when it starts off low, no big deal. A smaller % drop when it's very very high is a huge deal.

Added: (even) the media fall into this trap. For instance, they pillory large companies when their growth rate tails off, not pointing out that 5% of £1,000,000,000 is higher than 10% of £100,000,000. Nearly every article panning a company for a falling growth rate I've ever seen goes straight for the %. It's the pounds-and-pence change that should be driving the good/bad news headline. But no...

 

[martin-s]

you sell when the price is high, then buy when the price is low. What part of that do you dispute?

It's hard to guess when the price is low or high without hindsight. Far easier to hold until your planned exit

 

[martin-s]

Summary: something can drop a huge % when it starts off low, no big deal. A smaller % drop when it's very very high is a huge deal.

That's not true. You don't talk about share price rises and falls in absolute value terms. You talk about them in percentage terms because (multiplied by your holding and price per share) that's your gain or loss.

 

[websaway]

The speed of the rise and fall and the fact that it is not regulated makes it more like a roulette wheel than a regulated investment vehicle. There is nothing wrong with playing roulette but I think we are just calling a spade a spade, defining what it is. I personally hope that anyone on here who is involved wins big. Hope that helps.

 

[Admin]

Big difference between high and highest. BTC price is high to me relative

That's not true. You don't talk about share price rises and falls in absolute value terms. You talk about them in percentage terms because (multiplied by your holding and price per share) that's your gain or loss.

Yes ok but I understand Edwins point, hes just trying to say that the 'nominal value' of a fall when something is 'worth a lot' is a bigger deal than a catastrophic fall when the nominal values are low.

 

[RobM]

Well there was talk of regulating it which apparently is seen as a victory by some gamblers... although I always thought that one of its main attractions was not being regulated....

 

[Edwin]

I have updated my earlier post. Headline figure: the recent drop was 329.25 times worse (not % worse, TIMES worse) than the 2011 selloff, in pounds and pence impact.

Anyone who lost their bottle and sold in 2011 was a few quid worse off per Bitcoin. Anyone who bought at the peak and sold in the plunge a couple of days ago lost over $10,000 per coin. Utterly different.

If you only look at % and ignore that, it's beyond useless commentary. Sorry. Don't mean to be rude, but % just is meaningless in a vacuum.

 

[Edwin]

That's not true. You don't talk about share price rises and falls in absolute value terms. You talk about them in percentage terms because (multiplied by your holding and price per share) that's your gain or loss.

My point is that IF you are trying to minimise (as the Quora author was) the recent Bitcoin plunge by talking ONLY in % terms, that's really "cheating the reader".

 

[websaway]

The speed of the rise and fall and the fact that it is not regulated makes it more like a roulette wheel than a regulated investment vehicle. There is nothing wrong with playing roulette but I think we are just calling a spade a spade, defining what it is. I personally hope that anyone on here who is involved wins big. Hope that helps.

 

[Edwin]

Yes ok but I understand Edwins point, hes just trying to say that the 'nominal value' of a fall when something is 'worth a lot' is a bigger deal than a catastrophic fall when the nominal values are low.

Yes, that's part of it. But it's also important to remember that something with nominal value can fall catastrophically on a very small (money terms) market movement. The 95% crash in 2011 probably involved a few million dollars, tops. But the recent crash involved $billions in trades. That's also a very key distinction when trying to judge whether it was "just as bad", "worse" or "much much much much much" worse than previous Bitcoin crashes.

 

[ausername]

Actually completely wrong in markb's case, Ians case and anyone else who wants to buy with their money and not a loan or credit card balance. It's their money, its not a credit line or the banks money.

https://www.coindesk.com/how-fraud-sunk-bitcoin-exchange/

Credit card fraud + crypto has been a problem for a long time.

Perhaps in December and January this problem grew exponentially with the number of transactions, both fraud + buyers remorse.

There is a lot of cost involved in hiring people to process disputes, and perhaps this is why banks have made a move to ban card transactions.

A special "crypto visa" of some sort would be the solution perhaps? Perhaps there could be a £10 a month account fee to contribute towards administration costs.

Inevitable I feel that a lot of people in December gambled their student loan / car payments on bitcoin and were left desperate in January.

Even if the person on the other end of the line can prove that the transaction happened, the bank still has to pay for office staff to process the disputes. Its an administrative burden.

Some lapdance clubs actually do accept card payments, but they take a thumbprint with the signature!

 

[Edwin]

Just to put a bit more meat on the bones...

In October 2011 (95% crash territory) there were about 7,500,000 BTC issued. At the pre-crash price of $35, that meant the total capitalisation of Bitcoin was US$262,500,000.

When BTC hit its all-time high of $19,290 there were about 16,750,000 BTC outstanding. So the total capitalisation of Bitcoin was US$323,107,500,000.

In other words, the BTC market during the recent crash was 1,230x bigger than it was in 2011. So there is absolutely no way in a trillion years the two crashes are in any way "comparable".

The fact that somebody on Quora tried to equate the two to justify recent events suggests:
A) mistaken delusion
or
B) deliberate attempt to mislead their audience

 

[Edwin]

On the "but it's your money" argument front: yes, that's absolutely true. But the bank might still have concerns that if you spend it on Bitcoin, you won't also be able to make mortgage payments (or you'll buy less "stuff" with your money, or invest less in products they sell or savings accounts they offer, meaning less juicy fees for them). There are so many reasons why they might be choosing to block such transactions.

 

[ausername]

On the "but it's your money" argument front: yes, that's absolutely true. But the bank might still have concerns that if you spend it on Bitcoin, you won't also be able to make mortgage payments (or you'll buy less "stuff" with your money, or invest less in products they sell or savings accounts they offer, meaning less juicy fees for them). There are so many reasons why they might be choosing to block such transactions.

Or worried that they'll be hit with future "duty of care" lawsuits, from people who argue that the banks should have noticed their crypto addiction.... crazier things have happened, we've got a growing sue culture.

If this sounds crazy then read this thread by a gambling addict, from February 2017: http://www.gamcare.org.uk/forum/should-banks-have-duty-care

Blame culture.... and people like blaming banks don't they.

 

[Edwin]

Some lapdance clubs actually do accept card payments, but they take a thumbprint with the signature!

That will be the future (generally, I mean - not just lapdance clubs): once biometrics are perfected to 99.999% accuracy, people will be required to provide various things (retinal scan, thumbprint, etc.) that nobody else will be able to forge, and that will be the most solid guarantee possible that a transaction is valid and solicited.

 

[RobM]

It's not right for the bank to refuse you access to your OWN money because you might not make mortgage payments etc. I don't think that's an excuse that would hold up in a legal challenge.