As long as everyone believes and buys Bitcoin it is a great investment, as soon as people realize the emperor has no clothes the bottom will fall out.
I know the currency we currently use does not have intrinsic value too, but it has a thousand years of history and governments behind it.
Here's a balanced write up by a smart fellow
http://awealthofcommonsense.com/2017/07/bitcoin-stocks-the-fear-of-missing-out/
Actually the more current piece he wrote is here--sorry
http://awealthofcommonsense.com/2017/12/how-does-something-like-bitcoin-happen/
No. It is nothing like a Ponzi scheme.
Bitcoin is an investing mania. You're buying into something whose price is transparent but the risk I s unknown. Nothing is being hidden from you. No one is defrauding you. The value and risk is determined by the risk tolerance and greed of the investors. Of course faith in the block chain technology is a factor as well, but pretty much everyone agrees that it is sound.
In a Ponzi scheme management isn't reporting to you the actual value of your shares. It is fraud. Generally, but not always, the fund managers are paying themselves generous salaries and dipping into the fund to support a lavish lifestyle.
I think the most interesting thing I've read about bitcoin lately is the 40% of bitcoin is held by only 1000 different accounts, and 17% is held by 100. There is somewhere between 16 and 17 million bitcoins out there now out of the current limit of 21 million.
So what you're saying is Bitcoin wealth distribution is about as lopsided as regular wealth distribution?
Bitcoin is currency with no backing. It's like if we traded paper dollars without gold or silver backing up its value. This makes it hard for me to want to get involved with it.
Then there is something like Ethereum that acts as an equity since it creates its own value by having corporate uses. I can more understand getting behind it. Except its success then depends upon people adopting it as their preferred platform and the fact that it is a currency becomes less important.
I don't think Bitcoin is worth the risk now that it's on the open market. Maybe it doubles or triples again in the next 10 years, but it's just as likely to plummet. The blockchain that succeeds will be the one that can actually computer more than a dozen transactions per second.
You are aware that the United States currency isn't backed by gold or any physical value anymore, right?
ACL Thief wrote:
You are aware that the United States currency isn't backed by gold or any physical value anymore, right?
Got one.
Hahaha
Bitcoin is a pure Ponzi scheme, the intrinsic value is zero. That is not to say the price must necessarily converge to the fundamental value of zero in the long run. Given the energy usage, I think this will be the case though. Nobody can tell you how much longer the price is going to increase. Also, look at transaction fees, Bitcoin is not very efficient.
The analogy to gold is wrong because, at least for some people, gold has intrinsic value.
Modern currencies like the dollar are not backed by gold either, that is fiat money too. However, you can pay your taxes with dollars, that is the fundamental difference. This is why next year, a dollar will still be useful, a Bitcoin might or might not be useful.
Peter Schiff thinks the bubble is about to pop
Schiff is always screaming the sky is falling. If you say the same thing every single day you're bound to be right once or twice!
jamin = Libertarian vegan ??
I don't think it (Bitcoin) has intrinsic value , unless you try to put a valuation on sentiment in the same way we try to put valuations on goodwill. Sure the USD is not back by the gold standard any more but it is backed by the full faith of the credit of the US fed--as good as anything else
It is. It will probably continue to go up and the pimply faced teenagers with no investing experience will probably get excited, but in the end it will not be pretty for most investors. Bitcoin has also attracted a lot of of the uneducated to throw some money in. Every day I see this on Facebook.
I respect Warren Buffett. That dude knows what he's talking about. He says invest in Vanguard S&P for long long long term. Also says the best holding period is FOREVER. I've been following that dude's advice since I had a Bar Mitzvah and I'm up to almost 200K in savings as I enter my 30s.
Warren Buffett warns to stay away from bitcoin and I am following his advice.
What's amazing to me is some of the same younger millennials who were saying the housing market will crash big time last couple of years are all bull'ish about bitcoin and dont mind throwing a few hundred dollars in and waving up their hands saying look IM UP 300% IM RICH
I do not think this fits the legal definition of a ponzi scheme.
Ponzi schemes pay interest from other investors' principal (rather than any actual return on investment). Bitcoin does not pay interest; it is simply market value.
Luv2Run wrote:
I do not think this fits the legal definition of a ponzi scheme.
Boy, I sure as hell hope you're not also invested heavily in bitcoin, but judging from your posts in the past, it wouldn't surprise me.
https://www.forbes.com/sites/johnwasik/2017/11/06/why-buffett-sees-bitcoin-bubble/#be9ee9562a82The intrinsic value of Bitcoin is the ability to participate in the payment system which has advantages over other payment systems. Whether that justifies the price it's currently trading at is another story.
above_average_joe wrote:
Bitcoin is a pure Ponzi scheme, the intrinsic value is zero.
That is nothing at all to do with whether it is a Ponzi scheme (it isn't), lookup what a Ponzi scheme is. This is not to say that I don't think it is a highly speculative bubble based solely on confidence but then you can level that accusation against a lot of established financial trading.