I'm the worst investor ever. I sold at 2.30 after I bought at 7. Now it's back up to 4. I'm done trying to play. Good thing I only tested it with 40 bucks.
BTW, Dave, what happened to your updates?
Condolences, Sam.
Bitcoin has a microscopic market cap, which makes it completely vulnerable to hostile manipulation which is apparently what happened with the Mt. Gox crash. The "fiat money for the black market" argument has perhaps a grain of truth to it and whatever value Bitcoin maintains above $0.01 I would imagine is down to these uses. At root, however, Bitcoin is speculation in nothing.
I think that every digital currency is doomed on the irreconcilability of two features which the ideal digital currency ought to have: auditing and reserve anonymity. It should be audited in a way that gives holders of the digital currency reason to have confidence in that currency. And the reserves (particularly, their location) should be anonymous so that they cannot be raided and plundered by political authorities on whatever pretext they trump up. But you can't have both features at the same time, they are mutually exclusive.
I've batted around the idea of a network of cash micro-reserves (say, private individuals holding a few thousand dollars) that are in a constant state of "bank run", i.e. the reserves are constantly being transported from one micro-reserve to the next. The idea would be that the auditing is thus done anonymously (since no one knows where they are getting reserves from or where they are going to) but it is done, continuously.
Clayton -
I decided from the first to mention every new drop of fifty cents, until it hit zero. Bitcoin fell to $2.11, and then hung in there. Now it's at about $4.
But fear not. Since its all time high of $33, every new low has been lower, and every rally has failed to regain the previous high.
Think of a drunken homeless guy, grasping at branches as he falls off a cliff, inching up a little bit when he grabs a branch, only to have it get uprroted in his hands, so he tumbles down more.
That's been bitcoin's progress, for all to see on the chart posted a little ways up in this thread.
So my next update will be when it goes below $2, and it might take a while. Perhaps some fools thinks its a safe haven from the euro collapse or something, so we will have to wait for euro situation to be dealt with by money printing before bitcoin drops further.
And Sam, let that be a lesson to you. Listen to Smiling Dave, not Mike and Pete and bitbutter and Moondog, or whatever his name is.
Or at least try to figure out what I'm saying before ignoring it. Hey, maybe I know what I'm talking about.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Smiling Dave:Hey, maybe I know what I'm talking about.
I found no evidence to support this.
Clayton:And the reserves (particularly, their location) should be anonymous so that they cannot be raided and plundered by political authorities on whatever pretext they trump up.
If the reserves are anonymous, you cannot enforce redeemability. If a currency is based on this assumption, it cannot work. Furthermore, you neglect the problem that electronic currency based on debt instruments (i.e. having "reserves") necessarily has higher transaction costs than one that isn't based on this. So not only it wouldn't work, it would not be able to compete either.
Sam Armstrong: I'm the worst investor ever. I sold at 2.30 after I bought at 7. Now it's back up to 4. I'm done trying to play. Good thing I only tested it with 40 bucks.
It looks like you already learned the most important lesson of speculation: don't spend more than you're willing to lose.
An admission that buying bitcoins is for losers.
At least I knew enough to not buy at $33. I still stand by my video though.
So, uh, did I win?
It is the first currency of its kind. It would be a bit surprising, I think, if it succeeded right off the bat. It's current existence means it's been a gigantic success, it's around and being used. That's already incredible. It's proved the viability of digital-distributed currency. And I think there's a great case to be made that it's a far safer currency than any paper currency controlled by a government.
If and when the US dollar blows up from debt and printing-presses, here then is a currency that cannot be inflated by bastard politicians.
Bitcoin may look like a life-raft to people trying to escape a sinking ship. All it may take is one dying currency for a mass migration. Need not even be the US dollar that sinks first. Any mass migration to Bitcoin at any point in the near future will establish it permanently (assuming its mathematical foundations stand up to the test of time).