Has the bubble burst?

[juretrn]

The US has a lot of gold, we know our paper money is worthless. The gold is our real assets.

Not every country has or had their currency backed by gold, you know. 

[wpirobotbuilder]

Even if bitcoin stabilizes as a currency, its value in most other currencies will likely go up due to inflation. Bitcoin is unique in that there are only so many of them (similar to the gold standard backing currency a long time ago).

 

But it will likely never take off as the de facto currency anywhere. If money needs to be pumped into the economy (say, during an economic depression), bitcoin wouldn't allow for it, because we wouldn't be able to de-value it.

 

The US has a lot of gold, we know our paper money is worthless. The gold is our real assets.

 

No. The only thing backing most currency in the world today is trust.

[helping]

No. The only thing backing most currency in the world today is trust.

His statement isn't untrue. While the US is not backed by gold (or anything really), it remains as a hard currency safety net and can be used as asset in place of credit (dollars and debt) especially in global trade. 

 

apologies for OT

[Vitalius]

 (say, during an economic depression), bitcoin wouldn't allow for it, because we wouldn't be able to de-value it.

I believe the purpose of allowing BTC to be cut into 0.0000001 (or however many zeroes) pieces is to allow some pseudo-devaluation. Like, you actually trade less BTC, which is less value. You can't really do that with dollars because that requires whole new bills/coins to be made or some massive class saying "this is worth this much now, and this isn't." or wtv.

[FlakeyBanana]

no its a cycle that happens.

 

Pro tip : clever people buy low and sell high

[helping]

no its a cycle that happens.

 

Pro tip : clever people buy low and sell high

From my understanding this might be a bit more serious as it completely bars out BTC from China (it's unclear, some articles say discourage from, some say outright ban) which has a bigger negative affect than others promoting it (i.e. Bank of America)

 

It shouldn't be permanent, but it will definitely slow it down on the way back up. It doesn't help that the difficulty is increasing rapidly. 

[Vitalius]

From my understanding this might be a bit more serious as it completely bars out BTC from China (it's unclear, some articles say discourage from, some say outright ban) which has a bigger negative affect than others promoting it (i.e. Bank of America)

 

It shouldn't be permanent, but it will definitely slow it down on the way back up. It doesn't help that the difficulty is increasing rapidly. 

Which just reinforces his point to "buy low, sell high".

[helping]

Which just reinforces his point to "buy low, sell high".

If you're confident in it in the long term and are willing to, you would get that from it. I think I misinterpreted, I'm antsy of sticking money in there and would much rather invest in hardware for the sake of safety, which isn't looking very good right now, especially to the people who as of lately have been dropping a lot of cash on mining builds. 

 

Going to really have to be in it for the long haul, since depending on the severity of the recent events in China it might seriously impede adoption. 

 

this also brings into question what you think the expected absolute ceiling of speculation would be.

[Henry]

I'm glad the holier than thou bitcoin dropped. There was no reason for it to even be so inflated in the first place. Outside of a few lucky people, the real people that benefited from the BTC race was scam companies like Butterfly Labs. For LTC, maybe it will become the more stable of the two and grow over time. BTC is far too unstable to take serious stock in it.

Butterfly labs is a scam company?

 

How so?

[RuecanOnRails]

Bitcoin is not a bubble, while a mania of new "investors" may have jumped on to make a quick buck, Bitcoin has value. The "bursting bubble" in this case does nothing more than shake the confidence of the newest investors who don't understand the disruptive, and innovative technology behind Bitcoin and Crypto-Currencies. They get scared and jump ship causing a downward trend which is quickly eaten up by those who see the potential of Bitcoin.

 

http://www.youtube.com/watch?v=qHUPPYzzZrI

 

 

 

@Henry butterfly labs may not be a scam company, but they are not reputable, trustworthy, or consumer friendly. From delays, to refusing refunds, to general bad business practices and gouging customers. Avoid at all costs.

[LAwLz]

Bitcoin is not a bubble, while a mania of new "investors" may have jumped on to make a quick buck, Bitcoin has value. The "bursting bubble" in this case does nothing more than shake the confidence of the newest investors who don't understand the disruptive, and innovative technology behind Bitcoin and Crypto-Currencies. They get scared and jump ship causing a downward trend which is quickly eaten up by those who see the potential of Bitcoin.

 

 

 

Definition of 'Bubble'

 

1. An economic cycle characterized by rapid expansion followed by a contraction.

2. A surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs.

3. A theory that security prices rise above their true value and will continue to do so until prices go into freefall and the bubble bursts.

Not sure about you, but I think this description fits a bitcoins perfectly, which makes it a bubble.

[RuecanOnRails]

Of course it could be a "bubble" which caused the price to increase then correct due to over saturation of the market and a shift in supply/demand. That does not make the currency have no value nor does it mean it's over valued and heading towards 0. You can call anything that increases in price a bubble. Look at the Gold and PM bubble. Calling something a bubble does not de-value or remove it's ability to be disruptive. Bitcoin has value and it's price is almost entirely irrelevant. The decentralized distributed ledger which solves the double spend issue is the single most important and innovative invention this century in Computer Science. That invention is what gives Bitcoin it's value as a disruptive currency, monetary system, and trading platform. That is what the speculators are unknowingly investing in even if they don't understand it. Because they don't fully understand what they are buying into, they are quick to jump out at any sign of a dip. The volume of this recent "crash" has been minuscule compared to what happened last April. More people understand the technology and are willing to hold through the ups, and downs.

 

https://soundcloud.com/casper-cheng/peter-schiff-debate-with-erik

Erik's written follow up. http://www.reddit.com/r/Bitcoin/comments/1rxmk3/my_open_letter_to_peter_schiff_followup_from_the/

 

http://www.youtube.com/watch?v=IaBREg5rzlI

 

http://techonomy.com/2013/12/bitcoin-bubble-maybe-wave-future-definitely/

[Henry]

 

@Henry butterfly labs may not be a scam company, but they are not reputable, trustworthy, or consumer friendly. From delays, to refusing refunds, to general bad business practices and gouging customers. Avoid at all costs.

Umm my friend got a miner from them problem free.

 

well its in their terms that all pre-order sales are final. I believe their an ok company.

[helping]

Umm my friend got a miner from them problem free.

 

well its in their terms that all pre-order sales are final. I believe their an ok company.

anecdotal compared to the line of others that say otherwise. 

[RuecanOnRails]

Umm my friend got a miner from them problem free.

 

well its in their terms that all pre-order sales are final. I believe their an ok company.

 

Ignoring all complaints, poor business practices, delays, refusal of refunds or repairs, etc.

They still overpriced everything with incredibly high $ per hash ratio's. I believe they charge some of, if not the highest prices in the industry. This is for items that have shipped, are planned to ship, and even their pre-orders.

http://mining.thegenesisblock.com/ has a list of ASIC's at the bottom of that page, if you sort them by "$/GH" You will see Butterfly Labs ends up right at the bottom of the list with the most expensive rates. Even their newer product line is still more than double the cost per hash than competitors.

 

I'm not saying it's a scam company because they do deliver... long after they have chance of being profitable but they do still deliver eventually. Perhaps in the future they will change and be competitive in the industry, but that does not appear to happening anytime soon.

[LAwLz]

Of course it could be a "bubble"

No, it IS a bubble, and it has burst several times in the past. Anything that rapidly increases in value and then drops in value like a rock is called a bubble. Bitcoins went from being worth like 100 dollars, to 1200 dollars, and then down to ~600 dollars very rapidly. That is a bubble.

 

 

 

You can call anything that increases in price a bubble.

No you can't. It has to have a very rapid increase in value, followed by a very rapid decrease in value.

 

 

I do agree that calling something a bubble does not defame it or anything. Saying it is a bubble simply describes the market trend. I really dislike your way of writing because you are extremely defensive as soon as someone says anything that can even be remotely interpreted as that person disliking Bitcoins, and your posts sound like a slick marketing campaign because you fill your posts with words like "innovative!" "decentralized!" "most important invention of the century" etc etc.

[RuecanOnRails]

I'm not against someone who refuses see Bitcoin for what it truly is or can become. I could care less if you choose to read up on it or not.

What I'm defensive towards are ignorant comments which spread FUD  because the person posting doesn't fully understand the underlying technology. These are the people that you see posting daily who take one look and start shouting ponzi scheme, pyramid scheme, tulip mania, bubble, scam, get rich quick, etc. They jump to conclusions before looking into, or even attempting to understand it. They read a few terrible media headlines and hang on their every word. It's not my fault they are ignorant to innovation and importance this technology brings on a global scale.

(This is not a shot at you, but at the general people who post in a similar manner like you appear to be doing.)

 

I'm not spamming a making a marketing campaign, Bitcoin doesn't need PR. Innovative, decentralized, and most important computer science invention of the century are all either fact or subjective facts. I'd like to hear your arguments on how this disruptive technology is not "decentralized", is not "innovative", and not an important invention the likes of which can, will and is changing how we view the global monetary system.

 

The ability for people to jump in and out of Bitcoin nearly seamlessly, into fiat, goods, services, precious metals, or diversification. This acts as a tool to help keep bubble like behavior from occurring. What you are seeing is uneasiness in the free market where a large sell off can trigger a panic panic sell between new investors, who like yourself, believe it's a bubble. When people believe a stock or market is in a bubble they are preventing bubble behavior by causing the sell offs and rises while encouraging balanced adoption and growth. When a market is closed off or difficult to get out of, for example the housing market circa 2008, it created a bubble and an inevitable collapse because there was no way for these sell offs and corrections to occur. When a closed or low liquidity market faces a crash it can be devastating.

Or it could also be an attempt of market manipulation known as short and distort.

 

Bitcoin is in it's early phase of price discovery, expect there to be many ups and downs over the next 5-10 years.

 

 

Bitcoin and Crypto-Currencies are going to change the future.

Crypto-Currencies aren't a new idea either, they have been around for decades, but it took Bitcoin to solve every issues of it's predecessors and introduce the solution to the double spend problem.

 

 

 

 

On a side note here's what I'd call a bubble based on your description. The Gold and PM market has had a massive rise over a relatively short time followed by a massive fall in price.