Is Bitcoin Becoming a Good Investment? (inc.com) 177
The price of Bitcoin "is surging again," now up to more than $6000, writes Inc. columnist Eric Mack:
In its decade-long history, the value of the pioneering cryptocurrency has actually followed a pretty reliable trajectory. That is to say, over the full term Bitcoin's value has only grown, much like many stocks, real estate and precious metals. It has seen dramatic run-ups in price followed by painful crashes, but it has consistently retained a significant portion of its previous gains each time it plummets. In other words, Bitcoin has reliably taken two steps forward and only one step back when it tanks. While the crypto captain lost roughly 75 percent of its value after peaking at a price of almost $20,000 per digital coin at the end of 2017, its lowest price from the last twelve months was still double where it stood in May of 2017.
Now, that price point is up again by 75 percent from its bottom in January, leading many to wonder if another great run-up in price could already be underway. If that turns out to be the case, and Bitcoin follows its historic pattern of increasing in price by an order of magnitude, we could be looking at $100,000 per Bitcoin....
A few other factors support the idea that this latest Bitcoin recovery should be taken seriously. As CNBC reports, institutional investors have taken an increasing interest in cryptocurrencies... Of course, there's still plenty of naysayers, headlined by Warren Buffet, who continue to maintain that crypto is nothing more than the latest bubble. But if that's the case, how many times will it burst and refuse to die only to come back stronger? While $6,000 is well below the 2017 high price, it's worth noting that the first time Bitcoin crossed the $6,000 point was in October, 2017.That was only two months before tripling in price to reach its peak. So when cryptos get up a head of steam, they tend to trigger all sorts of FOMO and go "parabolic."
A disclaimer at the bottom of the article notes that its author owns "a small amount of Bitcoin and a few other cryptocurrencies."
"Can't wait to see what the next few months hold for Bitcoin," his article concludes, "and the slew of cryptos that tend to follow its price chart."
Now, that price point is up again by 75 percent from its bottom in January, leading many to wonder if another great run-up in price could already be underway. If that turns out to be the case, and Bitcoin follows its historic pattern of increasing in price by an order of magnitude, we could be looking at $100,000 per Bitcoin....
A few other factors support the idea that this latest Bitcoin recovery should be taken seriously. As CNBC reports, institutional investors have taken an increasing interest in cryptocurrencies... Of course, there's still plenty of naysayers, headlined by Warren Buffet, who continue to maintain that crypto is nothing more than the latest bubble. But if that's the case, how many times will it burst and refuse to die only to come back stronger? While $6,000 is well below the 2017 high price, it's worth noting that the first time Bitcoin crossed the $6,000 point was in October, 2017.That was only two months before tripling in price to reach its peak. So when cryptos get up a head of steam, they tend to trigger all sorts of FOMO and go "parabolic."
A disclaimer at the bottom of the article notes that its author owns "a small amount of Bitcoin and a few other cryptocurrencies."
"Can't wait to see what the next few months hold for Bitcoin," his article concludes, "and the slew of cryptos that tend to follow its price chart."
Still thinly traded. (Score:4, Insightful)
Price is easily manipulated by miners 'trading' among themselves, as it was in the past and will be again.
Has anybody been paying attention? The principle is sound, bitcoins implementation is broken.
Basically, treat it like a penny stock. Spot the pump and dump, then dump before the pumper does.
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All this talk of pumping and dumping is making me horny and needing to poop.
Re:Still thinly traded. (Score:5, Interesting)
Price is easily manipulated by miners 'trading' among themselves, as it was in the past and will be again.
Has anybody been paying attention? The principle is sound, bitcoins implementation is broken.
The challenge as I see it is liquidity. Can you dump several million, or even 500k at one time? If not, you're forced to ride the roller coaster as you try to collect your gains. More to the point, does the exchange have the cash reserves to cash out a significant portion of their holdings without having buyers on the other side? If not, assurances you have no withdrawal limits are worthless. I suspect most are relying on matching sellers and buyers for a small cut and a significant withdrawal would either bankrupt them or they would only cash in a smaller amount.
Basically, treat it like a penny stock. Spot the pump and dump, then dump before the pumper does.
Certainly, the challenge is to spot the dump and dump a large amount at one time; and then actually getting cash for a significant withdrawal.
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The challenge as I see it is liquidity. Can you dump several million, or even 500k at one time?
No.
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Can you dump several million, or even 500k at one time?
Nope, not as far as I can tell. There doesn't seem to be any place that will give you $500K in cash or gold or diamonds Bearer Bonds or whatever for Bitcoin.
That, to me, is a red flag.
I can't walk into my local car dealership and buy a car from them in Bitcoin, and the same goes for real estate or other tangible goods. Sure, there may be exceptions but that's what they are: exceptions.
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You also can't pay a car or real estate in gold bars, that doesn't mean gold bars are worthless.
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You also can't pay a car or real estate in gold bars, that doesn't mean gold bars are worthless.
Oooh, I don't know...I bet there are indeed car dealers that would take gold bars (after an assessment) in exchange.
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You also can't pay a car or real estate in gold bars, that doesn't mean gold bars are worthless.
I can guarantee you gold bars are more likely to be accepted as payment for a car or a house than bitcoin.
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Re: Still thinly traded. (Score:2)
The keys to those wallets may have been lost.
The ledger is public. There's no reason to fear manipulation. Anyone can see those wallets are not being used for manipulation.
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Of course you can. If I had $1 million worth of bitcoin, I could go to pro.coinbase.com and trade it for cash right now in a single trade.
Coinbase Limits [coinbase.com]
Re: Still thinly traded. (Score:2)
That's the opening for new customers. You can get your limit raised very easily. I asked for $100k, and they gave it to me.
Re: Still thinly traded. (Score:2)
It proves that the aforementioned $10k limit is bullshit so the original comment about a daily limit to withdrawal is specious at best.
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Can you dump several million, or even 500k at one time?
Nope, not as far as I can tell. There doesn't seem to be any place that will give you $500K in cash or gold or diamonds Bearer Bonds or whatever for Bitcoin. That, to me, is a red flag.
There are quite a number of places that will give you $500K in illegal drugs, dubious-legality weapons, and similar. Mind you, that's an even bigger red flag.
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Liquidity is basically the number of transactions over time - ideally from different buyers and sellers. Lack of liquidity means there are not as many transactions, meaning there are no buyers and sellers. So you've basically defined the problem as "nobody wants bitcoin because nobody wants bitcoin". In a way, that's true. If more people wanted bitcoin, then more people would want bitcoin. However in no way does it give any insight as how to get from here to there.
Dumping "a large amount at one time" and
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Coinbase GDAX exchange and many other have no issue handling that kind of volume that goes to an FDIC insured bank, plus there is OTC
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Re: Still thinly traded. (Score:2)
So, obviously you are taking advantage of this easy-to-manipulate market and are raking in millions of $. Good for you, you winner.
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'Treat it like a penny stock'...that implies a strategy, but it also implies you're a fool for even trying.
No (Score:2, Interesting)
I don't think it'll ever go away since there's always gonna be some money laundering (it's useful for layering even if you can't u
Even if it were good, still not investment (Score:2)
> bitcoin's price is mostly tied to speculation ... Speculation is just gambling on a "Greater Fool"
And that's why when someone asks "is Bitcoin a good investment", the answer is "no". Because whether Bitcoin is good or bad, it's a gamble based on speculation. It's not a bad investment, it's not a good investment, it's not an investment.
You *invest* $10,000 in a machine which produces $200,000 of widgets. You spend some value (represented by money) in order to produce something of greater value.
You *in
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That's unpossible! How did you do it? (Score:2)
You must be a billionaire! Otherwise that's impossible. That's what I've read on Slashdot, anyway. How did you do it?
How *I* did it is for my bachelor's I went to a state school, WGU.
For my master's, probably the number two school in my field is Georgia Tech. Georgia Tech has an online master's degree that costs just a few thousand dollars - minus the $1,500 / year tax credit.
How did YOU do it? Save $200 / month for several years? Did that investment quadruple over time?
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ALL currency's value is tied to speculation.
I speculate that I'm going to have to pay taxes, therefore I keep some local currency. This is not a gamble I see myself loosing out on.
Afaik very few people have stashed cash as speculation, it would only make sense if there was a high rate of deflation and I have never heard of anyone expecting to get rich doing so.
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Of course there is currency speculation so I take that part back, but I highly doubt that it has a very strong influence in currency valuation. I can only think of Soros speculation against the fixed exchange rates of any notoriety.
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I speculate that I'm going to have to pay taxes, therefore I keep some local currency.
You are free to do that. You can do both.
Afaik very few people have stashed cash as speculation
It's more about flows than stocks. The flow matters a lot.
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Price != Liquidity (Score:5, Insightful)
There is no story for Bitcoin except "the price goes up," so it becomes an existential imperative to make sure that keeps happening.
When distribution is even more comically concentrated in the hands of a small minority than virtually any other well-known commodity, replaying the bubble script over and over is the rational thing for them to do.
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There is no story for Bitcoin except "the price goes up," so it becomes an existential imperative to make sure that keeps happening.
When distribution is even more comically concentrated in the hands of a small minority than virtually any other well-known commodity, replaying the bubble script over and over is the rational thing for them to do.
Of course. that allows them to cash out over time, dumping fewer amounts when the market is high and even buying back when it is low to drive it back up and sell. They don't have to worry about a huge crash since they can prevent a significant percentage of the coins from ever entering the market; all they have to do is ride the roller coaster over time. As long as there are greater fools to teach a lesson in basic economics and finance they are in business.
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"There is no cashing out now. There is no legal way to process cash withdrawals. Coinbase is about the only one left that *might* allow cash withdrawals but then regulators and LEO will be crawling up your ass."
Man, there's a lot of ignorance on here. There are literally 10 exchanges in the US you could use to legally withdraw cash. Why would regulators or LEOs be on you? I declared it on my taxes and paid my daughter's tuition. No problem. No regulators or LEOs involved at any point.
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Btifinex executive is on record saying provately that if Tether collapses then Bitcoin will drop to below $1k. That was disclosed in the lawsuit filed by the NY AG a couple weeks ago. The entire thing is a house of cards now and the exchanges know this. Tether WILL be shut down, which will crash Bitfinex and cascade to all the other exchanges. Not if, but when.
Bitcoin's current price is totally dependent on fake money propping it up.
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As the disclaimers always say (Score:1)
"Past performance is no guarantee of future results. People can and do lose money. Before investing, obtain a prospectus and read it carefully."
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That perception is driven by articles like this.
At least: That's what the author of this article is hoping.
Hell no (Score:2, Interesting)
Bitcoin is surging because the Tether/Bitfinix fraud has been exposed and Binance has frozen withdrawals. Bitfinex has been printing Tether out of thin air without anything backing it and then that Tether is used to buy Bitcoin, driving up the price.
Sure Bitcoin is going up and probably will continue to until Tether is hut down completely but no one can get any real $$$ out of it. It's just wash trading between bitcoin and shitcoins driving the price. The exchanges will collapse when tether is shut down
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Tether is fully backed up, just part of their bank account was frozen and probably they'll get it back. Binance has frozen withdrawls because of a hot wallet hack which they can absorb in a month's profits.
Gotta get your facts right.
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Tether is NOT fully backed. They changed their TOS recently (when they got caught) to say that instead of being backed 1:1 with USD they are backed by "cash equivalents". That means other shitcoins at best, or worthless loans at worst. Tether is a gigantic fraud.
They have always refused to be audited. Why on earth would you believe a company that just sent $850 MILLION to a money launderer with no contract?
Sure it is (Score:2, Insightful)
different this time (Score:3)
Do you know the definition of insanity?
https://youtu.be/OIfXdtml2gU [youtu.be]
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Holy broken fucking clock, Batman; you actually wrote something that wasn't asinine... kudos; there's hope for ya yet.
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I'm not the most beloved commenter on Slasdot for nothing, you know. But I welcome your belated support.
Betteridge’s law of headlines (Score:5, Insightful)
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While it's obviously true in this case, I disagree with the notion that *any* headline that is a question can always confidently be answered with no.
It's not an inviolable law, just a rule, and like most rules, there will be exceptions.
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The attractiveness of bitcoin speculation compared to forex is precisely that you can play the game of chicken without any margin calls - the volatility is so drastic there's pretty much no need for leverage (though some exchanges do offer it for calm periods when the market goes sideways).
Investment? (Score:2)
That's like asking if buying Dinar or AUD is an investment.
This is the fourth bubble (Score:2)
It's like all investment (Score:2)
"Is Bitcoin Becoming a Good Investment?"
Yes, if (like any other investment) you don't mind it becoming devalued and/or losing all your money.
This is no different than buying shares in XYZ Company. Maybe it'll go up, maybe it'll fall through the floor.
Please stop referring to Bitcoin like it has some Magical Secret Sauce that's unlike any other investment. It's worth whatever people will pay for it. Why is this sooooooo hard to understand?
Headline containing a question... (Score:2)
Is Dogecoin becoming a good investment? (Score:2)
Dogecoin is a safe investment, because while it will never go up it will also never go down.
If you want proof, check it's trading ratio history: one Dogecoin has always been worth one Dogecoin since the day it was released!
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And what's a Dogecoin worth compared to anything non-Dogecoinian? In the 1920's, one could also make the exact argument that one German mark was worth one German mark; so what if it took a millions of them to buy some bread? A is A. Yours is a cyclical comparison that means nothing.
High Tech penny stocks (Score:2)
BItcoin is in the pump part of their perennial pump and dump cycle, no different than penny stocks.
Is Betteridge's law of headlines still in effect? (Score:1)
haha no (Score:2)
Bitcoin isn't an investment. It's a lottery ticket (Score:2)
As a short term currency, as in "transfer of value", there's nothing wrong with Bitcoin.
You want to sell me something worth $50, and accept Bitcoin.
I want to buy your something.
I buy $50 worth of BTC and transfer it to you.
You then give me the something.
But the people trying to use BTC as an "investment" are simply gambling.
When taking into account the instability and corruption of exchanges, and the general, periodic lack of liquidity, "virtual currency" like BTC is downright STUPID as an "investment".
It's
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Looking at bitinfocharts.com the average transaction cost today is a bit over $2 with the median cost slightly below $2, so unless you need the pseudonymity you could probably find a cheaper alternative.
Not in real dollars (Score:3)
People are mostly trading Bitcoin in terms of Tether, which was supposed to be pegged to USD, with each Tether coin attached to a real dollar. Tether turned out not to be backed by anything, so people are trying to get rid of Tether. The easiest way to convert it to another currency is to use it to buy Bitcoin. So the price of Bitcoin appears to be rising.
Not a bad idea for small amounts (Score:2)
Flop? (Score:1)
Can it flop, making it it's final move? Certainly.
It may be decent speculation and gambling toy, but I would not count thus potent virtual invention to be good investment.
With extraorbitant valuation-upon-whims amplitude, its lower end seems to be missing liquidity.
Owning it and securing its ownership have shown to have their complications as well.
Price is the intersection of supply and demand (Score:1)
For it to be a good investment, you want price to increase faster than other alternatives, and to not go down.
Many bulls trumpet the fact that BTC's supply is constrained. It's an economic half-truth. Equilibrium price is the intersection of supply AND demand.
It's much harder to predict what might drive the demand, so I stay away.
Speculation (Score:2)
This is like asking if we should be on black.
It's not an INVESTMENT (Score:4)
Number one rule of investing... understand the difference between investing and speculating.
Investments have fundamentals you can run the numbers on, calculate estimates, returns and basically have a steady rate over a long term.
Speculation is you hoping it will change one way or the other with nothing behind it.
Real estate, you can calculate mortgage payments, insurance, rental income, various expenses and know your Return On investment and other numbers with pretty good accuracy and can reasonably expect to earn 5-10% annual returns.
Index funds long term you can invest and wait, depending on your risk portfolio you can expect 3-20% with less confidence the higher your risk.
Speculation is... I buy a bunch of gold and hope the economy crashes making it worth 10x. (I'm not going to argue with gold holders, you may be right, it just doesn't historically grow much long term or at a consistent rate)
Or
I buy a warehouse full of Beanie Babies and hope they come back in style.
Or
I buy a digital currency and hope many others do as well so I can cash out. AKA "The Greater Fool" strategy.
To summarize. Buying into Digital currencies is not investing, it's speculation.
And there's nothing wrong with speculating. Just know the difference.
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Due to a lack of mod points, I am giving you a good ol' thumbs up instead. Agree wholeheartedly.
Pump-and-dump aimed at gamblers? (Score:2)
I occasionally visit casinos and play poker. Lately, I have noticed quiet a lot of "regulars" (not hard to pick them out) discussing bitcoin "investment strategies", sharing stories how much they made or lost, in the same manner as they share their slot machine adventures. The terms they use don't even make sense sometimes, like they read it in some spam email and believed it because it sounds scientific. Is it possible bitcoin schemers found a new playing field, targeting casino mailing lists?
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Bitcoin is a tax on ignorance and greed. (Score:2)
Since bitcoin doesn't actually represent nothing tangible, why would it be a good investment?
At least with stocks you get a fractional interest in actual tangible property.
Just because other people may pay money for bitcoin, doesn't mean it's a good investment.
Just because it uses "blockchain" doesn't give it value. To date, there is no example of a blockchain application that is superior to a non-blockchain application.
Something that has no inherent value (or usefulne
Sure tell us AFTER it's gone up 100% (Score:2)
Investment? No. Speculation? Yes (Score:2)
The primary differences between investment and speculation are the level of risk, timeline, and opinion vs. fundamentals.
The risk level of crypto is high, which is obvious from the wild price swings. Most people are in it for short term, get rich quick chances. And, they're not basing their decision on any kind of investment fundamentals...ROI, P/E, assets, debt, etc., etc.
If you're in crypto, you're just a gambler.
fool me once (Score:2)
shame on you
fool me twice....
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Buying Bitcoin as an investment is worse than trading futures.
You should have some other reason to buy Bitcoin. Maybe you find it entertaining, like playing roulette.
I kinda agree, but for the most part at least you get free drinks while playing roulette, and if your waitress is good enough, you can make up your gambling losses in alcohol consumption...
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The Tulip thing though is fake. A myth. A pathetic misunderstanding of the way that rich people of the time wrote about their hobbies.
There was not even any economic upset at the time of the supposed problem; that's how far from the truth it is! It isn't a false explanation for a historical economic collapse; it is an entirely false story with no actual economic collapse. People get confused because some rich person wrote a letter about the failure of their attempt at tulip dominance and was taken literally
holding cash is the opposite of investing (Score:2)
Buying Bitcoin as an investment is worse than trading futures.
That's a perplexing claim as futures are a useful form of investment. Moreover futures can be done either with the intent to profit from it or as a losing hedge to minimize downside risks on another investment. Just randomly buying futures is of course throwing darts. But because there is actually some rationale for which futures to buy for any given investor there's a lot of non-random aspects to it.
You should have some other reason to buy Bitcoin. Maybe you find it entertaining, like playing roulette.
Bingo. And if that's the case why not invest in zimbabwe currency. Sure it's inflating now but if you
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why not invest in zimbabwe currency. Sure it's inflating now
Zimbabwe was forced to abandon its own currency and has been using the US dollar for quite a few years now. Oh wait were you talking about the US dollar?
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Bitcoin is the single worst investment short of setting paper money on fire.
1. It has, what traders would refer to "insanely high volatility" and since you can't short something like bitcoin, you can only lose money when you buy or sell it, you can't short sell it as it goes down and then buy back.
2. It is intangible, intangible assets have no real world value, and the only thing that changes it's value is bitcoin trader systems getting hacked or "cold wallets" being lost/destroyed.
3. Do you really want to
Re: No (Score:3)
There are all sorts of places to short Bitcoin. Try Google sometime. It's this great place where you can learn all about all the things you know nothing about.
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Crime IS a legitimate reason.
It's a crime for a Chinese citizens (not related to central committee members) to move more than about 50k$US out of China per year. Bitcoin is one way around this bad law. Yeah bitcoin (for that).
Those people are in and out fast. Same as 'commodity wholesalers' in the USA and in the commodity growing/processing nations.
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They're not allowed to invest overseas in excess of about 50k$/year. That's the whole problem.
Of course connected people can move their money anywhere, anytime.
There are also a bunch of open scams, e.g. Take the money to makkau, bet it on the lowest house odds games, winnings are now legally overseas.
The problem with the open scams is paper trail and expostfacto laws (normal laws in China).
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They're not allowed to invest overseas in excess of about 50k$/year. That's the whole problem.
No, they are not allowed to export over $50K USD (exactly - in any foreign currency, it cannot total more than $50,000 USD) annually. You can invest it, however, in qualified investments such as new business ventures, real estate, and other hard-to-convert assets.
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Bitcoin is one way around this bad law. Yeah bitcoin (for that). ...
No, it is not. It is in no way more legal than carrying more than 50k in cash
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Goddamn law abider.
Things don't have to be legal to be 'ways around' laws.
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You commit three felonies per day. No avoiding it, contradictory laws.
Once you accept it, it's freeing. Another five or six don't matter. Go ahead, apply insecticide other than in the exact way described on the label. Remove the tag from a cushion. Bump fire with your belt loop. Install some non CARB compliant ponies on your car. Do something on a computer that might someday piss off a federal judge enough for him to wave his hand and say 'felon'.
Do it. Breakin the law, breaking the law / Beavis
Don't
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It is in eye of a beholder. When an individual withdraws large chunk of money, it seems innocent. When a lot of customers do so, it is a run on a bank, which requires protection against for the sake of stability of economy.
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> opportunities to use Bitcoin legally are decreasing. They seem practically nonexistent in relation to illegal trade, tax evasion and circumvention of currency control.
I'm no fan BitCoin at all, but to play Devil's advocate:
[[Citation]]
Also, either BitCoin is:
* private (digital) property (so the governments can fuck off trying to lay ownership claims) OR
* private currency that is publicly traded (again the governments can fuck off regulating Math since ZERO governments created it)
Which is it?
I agree tha
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The value of a Bitcoin was less than a dollar ten years ago.
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In 10 years it has plummeted from less than one cent to over 6000 dollars.
That's quite a downtrend!
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Is pump and dump becoming a good strategy? What is the difference between bitcoin and any collectible item? No different than everyone deciding that beanie babies are now currency.
Tuuuulips...get yer TUUUUULIPS.
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LIke just about every other opaque investment, it's the little guy who'll end up getting screwed.