patrick.net

50% plunge since before Christmas, fad investments come and go so quickly...

A patnet bitcoin investor by any chance?

zzyzzx says

Aaaah, the rocket started :( not all of my buy orders filled. We are Witnessing a mega rally now.....wish I could have picked up more but happy I got a steal on a few ones. Gotta be happy for what I got during this dip. Would not be surprised if we see new all time highs soon.

anon_b7985 says

Aaaah, the rocket started :( not all of my buy orders filled. We are Witnessing a mega rally now.....wish I could have picked up more but happy I got a steal on a few ones. Gotta be happy for what I got during this dip. Would not be surprised if we see new all time highs soon.

I wish I had more ETH

I’m curious to here the reasoning of all the people who keep saying that it is a bubble and how they’re so sure it’s going down. I just glanced at the charts, I’m not so certain that it’s a bubble or that it’s popped. Bitcoin is 50% off it’s peak deserves some context. How many ‘bitholders’ were created at the peak?

Ethereum is still up 50% from 5 weeks ago lol.

errc says

anon_b7985 says

Aaaah, the rocket started :( not all of my buy orders filled. We are Witnessing a mega rally now.....wish I could have picked up more but happy I got a steal on a few ones. Gotta be happy for what I got during this dip. Would not be surprised if we see new all time highs soon.

I wish I had more ETH

I’m curious to here the reasoning of all the people who keep saying that it is a bubble and how they’re so sure it’s going down. I just glanced at the charts, I’m not so certain that it’s a bubble or that it’s popped. Bitcoin is 50% off it’s peak deserves some context. How many ‘bitholders’ were created at the peak?

Ethereum is still up 50% from 5 weeks ago lol.

It's backed by nothing, at least the supply is limited, but nobody knows what the intrinsic value is and the turnaround times for buys and sells are way too long to not get stuck. As a form of payment it is here to stay but I doubt we will see new highs any time soon, more likely more corrections. I'd agree though that the frenzy/mania hasn't settled yet and it may be too soon to call it done.

errc says

I just glanced at the charts, I’m not so certain that it’s a bubble or that it’s popped.

What charts would you compare it to? Being serious here. I don't think there's another asset, product or company this compares to. I seriously wish you luck in your endeavors in this market. I just don't think your typical chart strategy works with crypto as it's not a "normal" market if that makes sense.

I think I've said this before in a crypto thread, maybe even this one. If you're not maxed out in your tax deferred account and you're investing in this I do have to question your intelligence. If you're playing with funny money after fully funding those accounts, have fun and I wish you well.

If you don't understand this perspective (not you personally errc) then you likely don't make enough money to be buying crypto currencies. You're literally gambling and pissing away immediate tax savings and the compounding nature of those savings over time.

Just get out while you can!!!

NuttBoxer says

50% plunge since before Christmas, fad investments come and go so quickly...

and all those Patnetter that bought using their credit card will really be crying soon when the card statement comes due at the end of the month.

I would not buy on a cc. Bank acct works fine. Just dollar cost average by using some of your paycheck money. Worked well for me. On dips like we had the last two days I take a chunk of money, set buy limits, wake up and made already money. Love it. Crypto is a once in a life time chance to make some serious dough. If 2018 is going to be as profitable as 2017 was I am set financially.

Errc,
“I wish I had more ETH”
Same here, I bought a few more on the dip. I am also long on Cardano (ADA). The founder is a co-founder of ETH. ADA seems to be a very promising platform with major improvements compared to ETH. They are very early stage though. I bought a bunch and are looking to add as soon as it dips to 50 cents or below. EOS is also a platform that I heard good things about. Planning on making a move into EOS as well.

WookieMan says

If you don't understand this perspective (not you personally errc) then you likely don't make enough money to be buying crypto currencies.

I read an article the other day that said close to 25% of crypto buyers are using their credit card for purchases. This tells you that they don't have spare cash laying around to gamble with. It also tells you that a good chuck of these buyers are Millennials searching for the next "get rich quick scheme" or the newest version of the "Nigerian email scam".

How many current buyers are college kids using their school loan money to buy crypto?

This is going to end badly.

“Just get out while you can!!!”
Why? We have not even really started yet. Institutional money is coming in. A lot of buyers are waiting on the sidelines until they can sign up on exchanges. Lite coin, bitcoin cash will be more and more accepted as payment form, lighting network is coming for bitcoin etc. 2018 will be big! Once we hit a few trillion market cap I might start cashing out. But we are 1-2 years away from that IMO.

I asked a co-worker if he got out today and he said no. He said this exact pattern happens every year at this exact time and that the scale is just higher each year. Something about Chinese New Year and some other stuff. That it'll be back up in a month and so he's just riding it out.

Wow.

Damn I'd have sold last year maybe before it reached 7K, but that's just me.

Kids these days need to read a book or two on investment before wasting money.

“YOLO” investors are featured in every investment book as bad examples of how investment should not be done. They don’t last long.

errc says

I’m curious to here the reasoning of all the people who keep saying that it is a bubble

it's a bubble since day 1 because it will go down to 0 or near zero.

gov will eventually ban it because they can't track and tax bitcoin payments.

Cyber Currency/bitcoin etc. with near certainty, are a bubble. I'd put the probability at over 99%. Though it may be early in its bubble life, all the cyber currencies we know of, will eventually crash to near zero if not actual zero.

Here, I'll start with Nasdaq's "why bitcoin is not a bubble" and dismantle their thesis point by point:
http://www.nasdaq.com/article/five-reasons-why-bitcoin-is-not-a-bubble-cm864891
1. growing acceptance as legal tender. Maybe, but that could reverse just as easily. However, that will literally not help bitcoin at all in the long run. Bitcoin will only maintain significant value if people hold it as an INVESTMENT. If they use bitcoin to pay for stuff, but keep their money in regular money, in their resident country, then they only fleetingly have bitcoin, so it makes no difference as an investment. Further, there are actually better/easier/quicker ways to pay for stuff. Why would I or anyone else care if a restaurant accepts bitcoin to pay for my dinner, when I can toss a credit card down and get 2% or 3% in benefits, while paying $0 transaction fees. Also, it will be processed instantly, not with however godawful minutes are sometimes required before bitcoin confirms. AND, there are already better/easier ways to send money around the world.

2. Increase merchant adoption. Nope, doesn't matter at all. See my response to #1 above. Further, bitcoin's volatility literally makes it useless for anything but an instant transaction. If I wrote a rental contract in bitcoin, the freaking rent could triple, or go down by half in a few days! So, it only really works for instant transactions, and then you could buy the bitcoin/pay/receive/sell the bitcoin; However, that is just an overly complicated way of paying for your latte!

3. Bitcoin is increasingly acting as a store of wealth in some distressed countries. Yeah! We finally have a reason that isn't just silly on its surface! Yes, as a store of wealth, you'd have to keep the bitcoin as bitcoin, hence creating demand. Dr. Robert Shiller mentioned that, say you'd been living in Latvia or Lithuania, when the Soviets rolled in, well bitcoin would have been a better option than holding your money in a bank, or owning a house. The communists seized homes, they seized bank accounts. But your bitcoin would have been safe. However, we don't really have communists anywhere anymore; People own homes in China, Russia, they have bank accounts. The fear of that is really tinfoil hat level. Also, any sophisticated government taking like that, could seize the bank records, and find out that you bought bitcoin, so you'd only be really getting minimal protection.

4. Bitcoin has only just gone mainstream. Seriously? EVERY bubble has a point where it suddenly goes mainstream! Remember 2005, when everyone was talking about how much their home went up in value? flip my ass was on tv all the time? Remember the dot.com craze? Beanie babies? Arabian horse investment pools? Nifty Fifty stocks? Tulips? They all do this! So, while that may mean it has a ways to grow for now, by no means does that mean it won't crash later!

5. Bitcoin's supply is limited. There will only end up being 21 million coins. But there is a problem with this logic: Limited supply is only one factor that causes something to be valuable. You show me an old car that is in limited supply and has high collectable value, I'll show you an old car that has limited supply and junk value; You show me A valuable renaissance painting that has limited supply, and I'll find 100 other painters from the same period whose art is sold at garage sales;

And now for some real potential problems with bitcoin:
1. Government crackdown. While the transactions in bitcoin itself can't be stopped, at some point, you'll need to either put money in, or take money out, and those are vulnerabilities for regular financial institutions to report you.

2. Duplication. There are already something like 1000 cyber currencies. we could add a 1000 more in the next couple of months.There is really very little barrier to designing a cyber currency. Do you think they will all stay around, and go up in value like crazy? No? only certain ones? well, how do you know Bitcoin1000 won't come out tomorrow, with a better program, a better methodology, or just even better marketing, and be the new hot one? Just because Bitcoin or Ethereum are the first doesn't mean they will survive long term! Ericsson phone, or blackberry ring a bell?

3. Value. Bitcoin literally has a value of zero, as an investment. By that I mean fundamental value analysis from economics. You can value a stock by its predicted future earnings. You can value a house by its predicted rental amount. Of course, those predictions vary on lots of factors: future rents, economic growth, future interest rates, repairs to the house etc, but as inexact as it is, there is a value to a future income. A bitcoin makes nothing. Ever.

4. Bitcoin has become a stampede of "greater fools." Look up THIS THREAD, to see people saying essentially, "buy it, because it will go up!" When the fundamental reason to buy an investment, is because it is going up.... You got yourself a bubble!

Go ahead and make fun of me!
Everybody made fun of me when I predicted the housing bubble in 2005!
Everybody made fun of me when I claimed the bottom was in for housing 2009-2010!

“gov will eventually ban it because they can't track and tax bitcoin payments.”

Oh, that’s very incorrect. People still think bitcoin transactions are anonymous? You haven’t kept up with the news. There is a variety of software solutions designed for exactly that purpose. It took just a few minutes for me to do my crypto taxes utilizing this software. Even though I used several exchanges and hundreds of transactions. Made it easy for me. Do you think the IRS is not capable of doing the same? Just google it. If you invest in crypto you better pay your taxes!! You want to work with the system not against!

https://bitcoinexchangeguide.com/bitcoin-taxes-irs-tracking-software-cryptocurrency-classification/
Here is just one link of how the IRS utilized tracking software. If you had holdings of a certain amount some exchanges have to report you to the tax man no matter what:
http://fortune.com/2017/11/29/irs-coinbase
Sure, nobody likes paying taxes but I don’t mind it that much. It just showed me how massive my crypto gains were.

just_passing_through says

I asked a co-worker if he got out today and he said no. He said this exact pattern happens every year at this exact time and that the scale is just higher each year. Something about Chinese New Year and some other stuff. That it'll be back up in a month and so he's just riding it out.

Wow.

Damn I'd have sold last year maybe before it reached 7K, but that's just me.

Smart co-worker! Every time it crashes weak hands sell. It’s too bad for them but I sincerely thank them for the buying opportunity and massive discounts.

Sure sign of a topping market, big plunges, and holders who don't sell until they've lost every penny, and then some. That's a market trend you can set your watch to. Even Ethereum is only $200 above it's mid-December price(down $400 from peak).

NuttBoxer says

That's a market

I don't remember beanie babies going to nothing they are still being traded on ebay.
And tulips. They've dropped down to less than a buck a piece but they can be planted to grow beautiful flowers.

As far as I can see when you buy bitcoin you are buying a unique sequence of bits.

Problems with bitcoin:
Not good for transactions, too slow, fees.
Not a stable store of wealth.
Not a real investment. Depends on "the greater fool" to cash out with a profit; pyramid?
Not environmentally friendly. "Mining" bitcoin now uses the same amount of electricity as New Zealand.

It's backed by central bank fiat currency.

Breaking News!
Tulip bulbs can be had for less than a dime!

You are talking about bitcoin trade transactions done through an exchange. This is easy just like tracking stock trades done on E*TRADE. They don’t even need any software. It’s only a matter of accurate and complete reporting on the exchanges’s part.

I’m talking about peer to peer transaction. No one can track that. Bitcoin p2p transaction is designed to evade tracking.

Tracking can only be done when the users exchange bitcoin for money or money for bitcoin at the exchange. But this is why bitcoin cannot get popular (from the IRS perspective):

- it needs to be converted to another currency to be tracked. In other words, it cannot function alone or ever replace the dollar.
- when it gets popular enough that people no longer need to convert bitcoins to money, because enough people accept it, the gov loses tracking ability and tax evasion will rise, causing them to ban it.

There are two groups promoting Crypto currencies. The “smart” ones who get crypto currencies but spew out half truths hoping to make more money from new comers and the new ones who don’t know how crypto currency works very well.

anon_3a1a3 says

“gov will eventually ban it because they can't track and tax bitcoin payments.”

Oh, that’s very incorrect. People still think bitcoin transactions are anonymous? You haven’t kept up with the news. There is a variety of software solutions designed for exactly that purpose. It took just a few minutes for me to do my crypto taxes utilizing this software. Even though I used several exchanges and hundreds of transactions. Made it easy for me. Do you think the IRS is not capable of doing the same? Just google it. If you invest in crypto you better pay your taxes!! You want to work with the system not against!

BorderPatrol says

I’m talking about peer to peer transaction. No one can track that. Bitcoin p2p transaction is designed to evade tracking.

Interesting read on the subject: https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/

If I really want to be anonymous, cash still works pretty well. I didn't fully read the article, but I assume if my computer were ever seized and I was swapping bitcoins with others, it would be blatantly obvious that I had bitcoin to any IT type detective.

I get there are bank regulations, but until stores stop accepting cash, you can transact and use it pretty anonymously. If you're getting into 5 figures that needs to be anonymous, then you're just tax evading for the most part or dealing drugs. Either way there's this: The Currency and Foreign Transactions Reporting Act of 1970. There will be something similar to this that will likely shut down or at least devalue bitcoin. This is a certainty.

And then there's this:

BorderPatrol says

There are two groups promoting Crypto currencies. The “smart” ones who get crypto currencies but spew out half truths hoping to make more money from new comers and the new ones who don’t know how crypto currency works very well.

I don't believe any of them understand it. They're all doing technical trading (the smart ones), but I don't think they even understand bitcoin or any of these cryptos. They are just taking candy from a baby (new investors) and understand how markets work but not necessarily bitcoin. They have to be careful not to get burned on this either.

I wouldn't even call this a bubble necessarily. This is probably the greatest pump and dump scheme I've ever seen. It will look like a bubble in the end. There's not a soul on this planet that predicted bitcoin at $17k at the start of 2017. If someone did I'd love to see an accurate link to when that was predicted.

just_passing_through says

I asked a co-worker if he got out today and he said no. He said this exact pattern happens every year at this exact time and that the scale is just higher each year. Something about Chinese New Year and some other stuff.

Chinese New Year is one month away.

Soviet Bitcoin, military grade:

Satoshi_Nakamoto says

Interesting read on the subject: https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/

that article talks about something else. no one can track bitcoin transactions done by people who don't want to be tracked (tax evaders).

it certainly doesn't have a solution for the IRS's inability to track p2p payments. unless you consider wiretapping 200 million tax payers a potential solution.

anon_fad35 says

Satoshi_Nakamoto says

Interesting read on the subject: https://www.technologyreview.com/s/608716/bitcoin-transactions-arent-as-anonymous-as-everyone-hoped/

that article talks about something else. no one can track bitcoin transactions done by people who don't want to be tracked (tax evaders).

it certainly doesn't have a solution for the IRS's inability to track p2p payments. unless you consider wiretapping 200 million tax payers a potential solution.

I disagree: all it takes for you to be tracked is your counterpart to get sloppy once. You don't have control over your counterparts.

Satoshi_Nakamoto says

Chinese New Year is one month away.

Yup, he said they sell to buy stuff in preparation then buy back in after that.

anon_3a1a3 says

Smart co-worker! Every time it crashes weak hands sell. It’s too bad for them but I sincerely thank them for the buying opportunity and massive discounts.

Well, I hope you and he both make out like bandits. Not my thing but I certainly don't begrudge other folks for making out like bandits.

WookieMan says

If I really want to be anonymous, cash still works pretty well. I didn't fully read the article, but I assume if my computer were ever seized and I was swapping bitcoins with others, it would be blatantly obvious that I had bitcoin to any IT type detective.

there are ways you can encrypt your HD so they can't read the data without your password. same as them not being able to get into people's iPhone.

they can try to sniff your unencrypted bitcoin communication traffic but they'll need to know where you are located in the first place. and they won't know that because you hide your IP with many different ways available to even non-hackers these days. this is probably too geeky for the average reader. but bottom line is it's not difficult to remain 100% anonymous when sending, receiving bitcoins and avoid paying taxes.

cash doesn't work well. as you mentioned as the amount gets large, you get tagged by the bank as you withdraw money. and you can't safely carry millions with you as you travel without being detected. bitcoin takes tax evasion and money laundering to the next level.

WookieMan says

If I really want to be anonymous, cash still works pretty well.

John Mcafee thinks bitcoin and similar cryptos will eventually be replaced by a segment called privacy coins - which are apparently truly anonymous.

Excluding the NSA being in your computer or whatever paranoia's one (not you) might have.

Satoshi_Nakamoto says

I disagree: all it takes for you to be tracked is your counterpart to get sloppy once. You don't have control over your counterparts.

you don't realize that people who want to remain anonymous do not use the same address twice. and they are not using real name and address, so you can track them back to their one time public bitcoin address with a fake name and fake IP then what?

that article doesn't even scratch the surface of bitcoin's anonymity.

I don’t care much about anonymity. I just hope 2018 will be as awesome as 2017 in terms of crypto gains.

anon_3a1a3 says

I don’t care much about anonymity. I just hope 2018 will be as awesome as 2017 in terms of crypto gains.

You kind of need to be concerned with the anonymity of it though if you're investing in it. That will be the reason governments shut it down and if you're averaged in at $10k a coin after this recent drop, you will lose a lot of money when the government shuts it down and the value goes to zero. Notice I didn't say if the government shuts it down.

BorderPatrol says

there are ways you can encrypt your HD so they can't read the data without your password. same as them not being able to get into people's iPhone.

Someone created the system and algorithms or whatever to encrypt. They can get into it or maybe have buddies that know how to crack it because it's shop talk or whatever. Others can figure out how to crack it just by being bright with computers and that type of stuff. To think the biggest, richest & most powerful governemnt in the world can't get into someone's computer if they really wanted to is a little naive honestly. I'm genuinely not trying to come across as a dick if it does sound that way.

The whole FBI thing with the San Bernardino cell phone was a joke. Why in the world would the FBI just come out and say they had zero problem getting into the cell phone? That would cause an absolute panic and TOTAL loss of trust in the government, more so then there already is. It would also destroy the faith in the world largest company, which so happens to be an American company that pays a lot of taxes. The next largest phone maker? Samsung. There's zero benefit for our governemnt to ever disclose any of their capabilities, especially in that situation.

All this said, the government can't and won't be able to track down all the people doing in anonymously. So you are correct that most people will never get caught and it is 99.9% anonymous because there aren't the resources to go after everyone.

My question is how does the tax evader extract the value out of bitcoin? Or are they just buying shit with bitcoin? That's one aspect I don't understand. Like if you had a $1M windfall by getting in low and selling high. I don't think you can just throw that cool million in an account and start buying shit. Maybe you can and I guess that's why I'm asking. It's fine you can trade the currency anonymously, but everyone still need their local currency to buy things for the most part and I don't see how putting say $1M into a bank account doesn't flag some regulation.

Some people seem to be overly focused on Bitcoin

The technology is Blockchain

The usage here is in crypto-currencies

The most popular and well known one, currently with the largest market cap is Bitcoin.

Personally I think Ethereum has more potential

For those pontificating or investing in crypto, may I pose a thought exercise? More than half of the inflows are from Japan, but we talk USD here at Patnet. So when deciding how to valuate cryptos, we do it in USD.

What if the USD was a crypto using blockchain?

How many USD are there in circulation?

errc says

What if the USD was a crypto using blockchain?

Our economy would screech to a halt waiting for transactions to process.

errc says

For those pontificating or investing in crypto, may I pose a thought exercise? More than half of the inflows are from Japan, but we talk USD here at Patnet. So when deciding how to valuate cryptos, we do it in USD.

What if the USD was a crypto using blockchain?

How many USD are there in circulation?

I guess we should be scared when Japan shuts crypto currencies down? Or at least for those invested in it.

The USD is the USD, not sure I'm following the question. Unless the system is as seamless as the current world (currency wise) we're in, I don't really get the point of these digital currencies. I'm 35, tech savvy enough and see zero value in this stuff. Bitcoin, Ethereum, etc. I currently pull out my credit card, get 3-5% cashback on about $100k in charges a year. Pay it off monthly, rinse and repeat.

I don't need to evade taxes. I've bought weed in Colorado just like I would buy bread at a grocery store and the FBI isn't knocking my door down. Anyone that owns bitcoin will take my $5,000 in USD cash for their used car. I still haven't seen a compelling argument for the value of any crypto currency outside of those doing illicit activities or those gambling on it to make a buck.

I'll fully admit I'm rather naive on the subject. I've looked into it as much as I have time to. The reality is, nothing has presented itself worthy of investing more time into finding out more about cryptos. I've read all the comments in this thread and still have not seen a valid argument why any digital currency will overcome the USD, Yen, Euro, etc. or why they're even stick around. It's pure speculation and I'm fine with that aspect of it. Show me why any of these cryptos will have any value in 5 years and I'm all ears. I'm being serious. I'm not an echo chamber guy, but I do need to hear valid arguments and points as to why these will be there in the future for me to change my stance.