I think people often divide things into risky and non-risky. Bitcoin is risky, prize bonds are non-risky - therefore prize bonds are better. This might surprise some but I used to be hugely risk averse, to the extent that I never wanted to take on any debt, even a mortgage if I could avoid it, and I hesitated to invest in anything other than saving fiat and term deposits. Part of this was avoiding things I didn't fully understand and part of it was not wanting to risk my hard earned money.
I eventually realised there is nothing that is non-risky, it's a scale not an absolute, there is just varying degrees of risk. I apply this to a wide range of things in life not just investing, and I consider investing as just a low risk type of gambling. Is it better to sit down at the poker table with 1000 or invest it in a stock? It depends on your risk tolerance, whether you can afford to lose it or not, what percentage of your worth 1000 represents, how good you are at poker compared to the people you'll play against, how much you know about the stock etc... Every case has to be evaluated.
Pretty much everyone can afford to take punts, it's just a matter of how little they can afford to stake. The risk doesn't even have to be directly monetary anyway, it can be the risk of attempting to start your own business instead of going to university for example.I think the vast majority of people don't have the financial freedom (or risk appetite) to take punts on risks where the risk-return equation gives you a probable loss of your entire investment 90%+ of the time
My comments were about their attitudes.As far a millennials are concerned, have you worked with or managed any? I think their approach to risk probably says more about their attitudes than anything else.
It might fall to 10K or 5K or even 2K but zero???
Brendan, you post relentlessly with your anti-shilling, it's frankly quite tiresome.
Inigo it was fairly clear that Brendan would have bet as much as PaddyPower would take. He has also suggested shorting on IG. I wouldn't be surprised if he had a very substantial short position on IG, but I wouldn't expect him to make that position public.I politely propose that you either put up or shut up. Your opinion is always valid but your relentless posting is getting boring now and is bringing down the quality of this forum overall IMO. I don;t think this forum should be dominated by your personal agendas. And I think your post about the end-of-the-world doomsayer is highly ironic.
Edit: even if Bitcoin is priced at 14,999 in 1 year and you win your bet, it means very little. Bitcoin is very volatile and the price could be almost anything on any given future date, that doesn't mean it's going to zero or to a million. In fact, given your statements, if Bitcoin is 14,999 in a year you would have been grossly in error overall even if you technically win that specific bet.
You are the one making definitive statements about it, not me. By all means put your money where your mouth is also.
I think fpalb will admit that there is a non-trivial chance that bitcoin will go as close to zero as makes no difference to anybody who is buying at these levels.It is strange for someone that is usually quite reserved and open to debate, having such a blindspot on this topic, especially when fpalb has been so patient and accurate with all of his responses to questions. There is not one question that has been thrown at him that hasn't had a reasonable response, especially the bit about what gives BTC its value.
It is strange for someone that is usually quite reserved and open to debate, having such a blindspot on this topic, especially when fpalb has been so patient and accurate with all of his responses to questions.
I agree that too much is made of this aspect. Bitcoin is wasteful of electricity, it also seems to appeal to the criminal classes but to use either fact to demonise the hapless "currency" is a side show. What I do think is worth repeating from the Guardian article is the following:
This highlight the nonsense at the core of bitcoin. Why the need for these quintillions of pointless arithmetic? Not to ensure the integrity of the blockchain, that was achieved with a mere fraction of today's effort before. No the reason for this immense artificial effort is because the protocol has built into it that only so many bitcoins can be created every 10 minutes. That is so the target of 99% of the 21M max supply is reached by 2032. If Satoshi knew what was happening today would happen she would have built in a failsafe which simply accelerated the timescale.
I would like to further the discussion on the recent key post when I get time (hopefully at the weekend), and I'd be happy to add more about my thoughts on the threats and risks to bitcoin.I think fpalb will admit that there is a non-trivial chance that bitcoin will go as close to zero as makes no difference to anybody who is buying at these levels.
There is not one question that has been thrown at him that hasn't had a reasonable response, especially the bit about what gives BTC its value.
You explained it very clearly. The point I was making was that requiring quintillions of pointless hash puzzles is way over the requirement to ensure immutability as is evidenced by the difficulty level of the earlier blocks. It is not the need to ensure immutability that is driving the mining effort to these absurd levels but the 10 minute requirement built into the protocol. Unless we have a blind faith that Satoshi has got everything right my guess is that if she had the benefit of hindsight she would have done some things differently, wouldn't we all, and one of the things she would have done differently is to let the time line be more flexible. Does it really matter if we achieve 99% supply by 2020 instead of 2032?I've been thinking that maybe I didn't clearly explain a very important implication of the mining, It's not just to regulate the coin rewards and the transaction blocks, it's to ensure the immutability. This is really important. The blockchain history is for all intents and purposes absolute truth.
It's a good point that in hindsight some of the parameters may have been different, it's certainly interesting to consider, but observations of how bitcoin has worked in practice and experiments with alt-coins using different mining specifications showed that bitcoin's algorithm is actually pretty damn good in general. If you change the parameters you risk messing up the game theory or security. For example if the coin release schedule had not been regulated to be as slow as it has been, and for example 99% of coins had been mined within say the first 3 years, there's a good chance bitcoin mining would have collapsed completely as the reward for miners to continue would have dropped to too small an amount of bitcoin too quickly.You explained it very clearly. The point I was making was that requiring quintillions of pointless hash puzzles is way over the requirement to ensure immutability as is evidenced by the difficulty level of the earlier blocks. It is not the need to ensure immutability that is driving the mining effort to these absurd levels but the 10 minute requirement built into the protocol. Unless we have a blind faith that Satoshi has got everything right my guess is that if she had the benefit of hindsight she would have done some things differently, wouldn't we all, and one of the things she would have done differently is to let the time line be more flexible. Does it really matter if we achieve 99% supply by 2020 instead of 2032?
My understanding (and I may understand nothing) is that at these price levels mining becomes very lucrative and so the competition amongst miners increases dramatically. To make sure only 12.5 BTC are created every 10 minutes the code adjusts the difficulty level based on how quickly the puzzles have recently been solved. The level of difficulty these days is then driven by competition to be the winner in each 10 minute lottery and is far in excess of the level of difficulty adequate to secure integrity/immutability.
Your explanation is also correct.fpalb can correct me if wrong, but the two points (immutability & difficulty level) are different.
It's more accurate to say, that the quicker it is taking to mine a bitcoin, which is driven by the number of machines mining, the more complex the calculation becomes in order to try to keep it as close to a block validated every ten minutes.
His point on the immutability was that in order to change a block written back years ago, you'd have to change that block, mine that block, and re-mine every single block to date to overwrite an old transaction. It is virtually impossible.
Firefly, fpalb has put forward the arguments to explain the price change, and they seem perfectly reasonable to me, being based on an analysis of supply and demand which is the arbiter of price. Everything that happens in this world has an explanation. However, I think you really meant to ask how can you justify the increase in price from $1,000 to $10,000. In pondering this I keep coming up against a basic problem of mine, the relevance of the unit. So I prefer to put the question as follows: how can it be justified that the total value (price) of bitcoin in the world increased from $16bn to $160bn? Of course since I cannot see any justification for the opening value, a fortiori (that's for Dan) I can see none for the 1,000% increase.I don't recall any arguments put forward which can explain why Bitcoin should trade at circa $10,000 now when it traded at only $1,000 this time last year...
even if we know Bitcoin will crash you can’t predict when
I suppose so. BTW I am not having a go at you. I suppose the point is best illustrated by example. The price of tulips went stratospheric due to a speculative frenzy, but it was not justified on any fundamental basis. The price of Apple shares has also had a spectacular trajectory. The earning prospects for the Apple company possibly justify that price performance.I completely agree with considering the 'market cap' value instead of the arbitrary unit price. I don't know how to differentiate between an explanation and a justification, how do you define it? is it in terms of whether the explanation is sustainable and likely to continue?
TheBigShort has posed a similar question. I am talking about a situation were bitcoin is actually growing up as a currency. A typical indicator might be Dunnes Stores pricing in both euro and bitcoin and genuinley accepting bitcoin and not merely facilitating intermediaries who convert from bitcoin to euro. An even bigger indicator would be a major retailer pricing in bitcoin only. Now people would actually need bitcoin to satisfy a want for a good or service as with any other currency.And how would they do that?
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