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Do you plan to pay for your TM3 with Bitcoins?

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Fun fact - Bitcoin was ~$420 back on April 1 2016 when we all put down $1K for a Model 3.

If, instead, you had put that money in Bitcoin and then sold in December-ish of 2017, you could have made over $35K which buys you a Model 3 ...

If you knew when to buy and when to sell, you could become a billionaire trading any volatile stock or commodity. I met a guy who bought a Model S from the proceeds of his investment in TSLA stock, and still had more money left over after buying the car than he had when he started. In hindsight it's easy to say what we should have bought. But in the present, nobody knows what's going to go up tomorrow or in a year.
 
For sure, but the fact there was a 35X gain over 1.5 years is pretty massive

Yes. Hindsight is wonderful, isn't it? If only our ability to predict the future was as good as our ability to "predict" the past! At any given time there are a gazillion investment opportunities clamoring for our money. For every one that makes money, ten go bust. And for every one that makes a lot of money (35X for Bitcoin, 12X for TSLA, etc.) a thousand go bust.

And every one of those gazillion investments gets a few people to invest. We never hear from the 999 out of 1,000 who lose. But that one out of a thousand who becomes a millionaire will come shouting across the interwebs about how we all should have been as smart (actually as lucky) as they were.

It's selection bias: We hear from the winners, never from the losers, even though the losers outnumber the winners a thousand to one. And the biggest losers are the ones who come in late, just before the bubble bursts. I envy the folks who put everything into Bitcoin at $1 or $250. I envy the folks who put everything into TSLA at $25. But I know that it's only hindsight that makes me wish I'd made those decisions, because at the time I would not have known which of those gazillion possible investments were going to pay off. I think my basis in TSLA is around $40, so that really paid off. (I bought it because I loved my then-new Roadster so much.) But I didn't buy enough to alter my overall finances, because I didn't buy enough that it would have altered my overall finances if Tesla had gone under, which back then was a possibility, when Musk had to put his last personal million dollars into the company to keep it afloat.

So, yes, people who bought Bitcoin can be properly happy that they made a killing (as long as they sell before the collapse) but they were lucky that they happened to hit upon something that turned out to be the next big thing. I've never been a risk-taker. In the words of Hermann the German from Pushkin's The Queen of Spades, "I refuse to risk the necessary in pursuit of the superfluous." I'll never be filthy rich, but unless the entire economy collapses, I won't be poor either.

The people I really feel sorry for? The ones who bought $100 worth of Bitcoin at 1¢ and when they learned it was worth $30,000 realized they had thrown away the hard drive their wallet was on, or their coins were stolen when that exchange was hacked. One of the reasons it's worth so much now is because so many coins were irretrievably lost back when it was worth a few pennies and nobody was paying attention. If one of those early people with a few billion dollars in Bitcoin were to sell out now, the price would drop to about $5. The long-term value of Bitcoin depends in large part on all those lost coins remaining lost.
 
The people I really feel sorry for? The ones who bought $100 worth of Bitcoin at 1¢ and when they learned it was worth $30,000 realized they had thrown away the hard drive their wallet was on, or their coins were stolen when that exchange was hacked. One of the reasons it's worth so much now is because so many coins were irretrievably lost back when it was worth a few pennies and nobody was paying attention. If one of those early people with a few billion dollars in Bitcoin were to sell out now, the price would drop to about $5. The long-term value of Bitcoin depends in large part on all those lost coins remaining lost.

Current estimates are over 2 million of the ~16 million coins are inaccessible. It'd swing short term if 2 million coins hit the market but it's way more important that the other 14 million in coins aren't being sold than it is that minority 2 million.

If half the accessible coins tried to sell it is over 7 million coins and would drown out your supposed requirement that lost coins remain lost.
 
The people I really feel sorry for? The ones who bought $100 worth of Bitcoin at 1¢ and when they learned it was worth $30,000 realized they had thrown away the hard drive their wallet was on, or their coins were stolen when that exchange was hacked. One of the reasons it's worth so much now is because so many coins were irretrievably lost back when it was worth a few pennies and nobody was paying attention. If one of those early people with a few billion dollars in Bitcoin were to sell out now, the price would drop to about $5. The long-term value of Bitcoin depends in large part on all those lost coins remaining lost.

I have/had one of those wallets. It was only $25 many years ago, but no clue which computer it was on or which hard drive crash wiped it out. One of these days I will go hunting again. But I'm guessing it is an impossible search at this point.
 
but they were lucky that they happened to hit upon something that turned out to be the next big thing.

I don't think it's luck, though. People invest in things like Bitcoin and Tesla for the same reason - they believe in the underlying technology and the MASSIVE potential it has for the future. Whether that technology is electric cars or blockchain based currencies, the disruption factor they cause is incredible.

You're totally right that there is crazy selection bias for any investment story, but i think it's a bit unfair to say that it was "lucky". After all, why else did Elon pour the last of his money into Tesla besides truly believing in the technology and how it would impact the future? It wasn't luck, Elon (like some others) simply has a fantastic ability to look at things from a macro scale and determine what is needed and how to get there.

The same is true for cryptocurrencies and the initial wave of people who saw the opportunity to free ourselves from a government controlled, fiat currency with nothing backing it and limitless supply (AKA inflation). It's more or less the equivalent of digital gold, so the opportunity was pretty apparent from the beginning.
 
I don't think it's luck, though. People invest in things like Bitcoin and Tesla for the same reason - they believe in the underlying technology and the MASSIVE potential it has for the future. Whether that technology is electric cars or blockchain based currencies, the disruption factor they cause is incredible.

You're totally right that there is crazy selection bias for any investment story, but i think it's a bit unfair to say that it was "lucky". After all, why else did Elon pour the last of his money into Tesla besides truly believing in the technology and how it would impact the future? It wasn't luck, Elon (like some others) simply has a fantastic ability to look at things from a macro scale and determine what is needed and how to get there.

The same is true for cryptocurrencies and the initial wave of people who saw the opportunity to free ourselves from a government controlled, fiat currency with nothing backing it and limitless supply (AKA inflation). It's more or less the equivalent of digital gold, so the opportunity was pretty apparent from the beginning.

Sorry, but people who think that cryptocurrency could actually function as the principal medium of trade in an advanced industrial or post-industrial economy just don't understand economics. Crypto is indeed an opportunity: for speculation, and it was luck for those early investors that it became such a fad. What happens when there are ten thousand cryptos, indistinguishable from each other except for minor details about their mining and trading and cryptography algorithms? Bitcoin happened to catch on, but a different crypto could have been the one that caught on if the black-marketeers had happened upon it first.

Bitcoin is a form of currency. Like other currencies, it has no inherent value other than what people are willing to give for it, and most importantly, like other currencies, it does not produce anything. You can hold it, hoping its market value rises, or you can lend it at interest, but it produces nothing.

Tesla is a manufacturing company. Like other manufacturing companies it creates value by building things. It creates cars and batteries and solar panels where there were previously only raw materials. (Strictly speaking, it creates these things in collaboration with parts suppliers.) Tesla actually creates value. Some of the value of the stock is due to market speculation, but the company is producing actual stuff that has actual value.

Thus the two are fundamentally different.
 
Sorry, but people who think that cryptocurrency could actually function as the principal medium of trade in an advanced industrial or post-industrial economy just don't understand economics. Crypto is indeed an opportunity: for speculation, and it was luck for those early investors that it became such a fad. What happens when there are ten thousand cryptos, indistinguishable from each other except for minor details about their mining and trading and cryptography algorithms? Bitcoin happened to catch on, but a different crypto could have been the one that caught on if the black-marketeers had happened upon it first.

Bitcoin is a form of currency. Like other currencies, it has no inherent value other than what people are willing to give for it, and most importantly, like other currencies, it does not produce anything. You can hold it, hoping its market value rises, or you can lend it at interest, but it produces nothing.

Tesla is a manufacturing company. Like other manufacturing companies it creates value by building things. It creates cars and batteries and solar panels where there were previously only raw materials. (Strictly speaking, it creates these things in collaboration with parts suppliers.) Tesla actually creates value. Some of the value of the stock is due to market speculation, but the company is producing actual stuff that has actual value.

Thus the two are fundamentally different.
Wrong. Cryptocurrency is NOT a just currency. You are right that US dollar as “dumb” currency has no value because it is just paper blessed with human confidence in it. Thats all it is. However crypocurrency is completely different breed. It is mainly computer code, the internet protocol which happens to be usefull as curreny also. Hundreads of people can work on its code like any other program, make it better more functional etc. It is like saying that Tesla has real value because it make physical cars but Facebook or Amazon has no value as they make “just virtual code”. Please check for example Cardano, it is cryptocurency developed by dozens of high profile scientists and it will enable things that are unimaginable today with “dumb” money, however it takes years to develope and lifetime to upgrade.And once once it is done and adopted by milions, the network effext kicks in and its value is rightfully higher than any company on this planet tesla included
 
For a currency to be useful as currency, it needs to have a stable value, and for that, it needs to be regulated. An unregulated currency will be unstable and this defeats the purpose. Furthermore, a currency that rises in value is a direct cause of economic stagnation. This is because a currency must accomplish two things: It must be a medium of exchange, and it also much be a medium of investment. A market economy requires investment to finance production. But if the currency is constantly rising in value, people do not invest. Why risk it? Just put the money under the mattress (or keep it locked in your digital wallet) and enjoy the increase in value.

This is what happened in the Great Depression: The dollar was backed by gold, so could not be regulated, and as the value rose (deflation) nobody invested, production ground to a halt, nobody had work, and the whole economy went to hell in a hand basket.

For the economy to function, the currency must have a small, steady, well-controlled rate of inflation so that people will invest their savings and industry has access to investment capital to keep it operating. This can only happen with a well-regulated currency. No modern currency (digital or otherwise) has inherent value. It has value because people accept it. But without good regulation, it's a disaster.

And by the way, the U.S. dollar, like all other modern currencies, is digital. Very few transactions are conducted with cash. Nearly all are done digitally, and exist merely as digital records in computers. The difference is that it is regulated, while crypto is unregulated. And the other difference is that when someone hacks into your bank account you have recourse to recover the money. When someone hacks into your Bitcoin wallet, your money is gone and no hope of ever getting it back, which has happened to a lot of people. Similarly, if you forget your bank password you can go to the bank, establish your identity, and recover access to your account. If you lose your Bitcoin password, those coins are gone. You cannot get them back. This, also, has happened to a lot of people.

Bitcoin as a currency is a disaster, really useful only for black-market transactions; as an investment it is a Ponzi scheme; and as a store of value, it's a thieve's wet dream.
 
Sure, USD is regulated, but it's not backed by anything (not since the 60s) of tangible value and can be multiplied to infinity. Inherent value because people accept it only holds true until it doesn't and is no more a solid backing than many cryptos. Crypto is highly speculative, sure, but coins with a limited circulation such as BTC that are "created" with computer cycles ("expenditure") actually have a more solid backing than that provided by corrupt institutions, IMO. That doesn't imply they're without any risk.
 
Bitcoin has no more "solid" backing than USD. Of course, if you believe that the government is an evil cabal that plans to destroy the economy by printing money, you won't want to store any value in it. But the government is made up of rich old white men who would be wiped out by an economic collapse, so it's in their interest to keep the financial system running smoothly.

BTC is unregulated, so it's nothing but a speculative security and a means for trading on the black market. There is literally nothing there but a computer program, and of course hackers who can steal your wallet with impunity because once gone, your coins are gone for good.
 
BUTCHER BANKS' COSTLY FALL happened in my home town, I saw entire bank chains go belly up and it was slow but FDIC made a lot of people whole after the fact.

If you are young you might not have seen the FDIC in action.
Look at how much the FDIC has set aside for account protection compared to how many accounts (and the sum of their values).. if there was a bank run (which has happened multiple times in the history of our country) the FDIC will be woefully inadequate and incapable of protrctipr of all the accounts they say they protect. Your example is a single situation. My example is systemic bank run... Which is not unheard of.
 
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Prices have been crashing out lately, so I've been buying up certain alt coins to prepare for the next market cycle.

I've got several thousand bucks in crypto-coins right now ( ethereum, eos, litecoin, tron, cardano, and ripple), and I'm going to just let it ride until the next big price wave comes along, then profit out. Hoping for 6 figures out of it! :eek:

I figure I'll be hodling my coins for 1-3 years until it's time to sell.

Will Bitcoin or any other coin become an accepted medium of exchange one day? That would be nice to see, but ultimately, I don't care if it does or not. I'm only working the lows and highs of the marketplace to make profits for me.

And remember - when your barber is getting in, it's time to get out!
 
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Hoping for 6 figures out of it!

I saw over 10x returns in 2017, was truly a ridiculous year. And yes, i paid the tax :(

Will Bitcoin or any other coin become an accepted medium of exchange one day?

YES. The fundamentals of blockchain make a lot of sense compared to a fiat currency that can be infinitely devalued. The only thing keeping us from using dollars as toilet paper is our faith in the US Govt. Not sure about you, but i'm not as trusting as I once was...

Who knows when this will happen, but over the long term i have a very hard time accepting that fiat currency in it's current form will be the norm.
 
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I saw over 10x returns in 2017, was truly a ridiculous year. And yes, i paid the tax :(



YES. The fundamentals of blockchain make a lot of sense compared to a fiat currency that can be infinitely devalued. The only thing keeping us from using dollars as toilet paper is our faith in the US Govt. Not sure about you, but i'm not as trusting as I once was...

Who knows when this will happen, but over the long term i have a very hard time accepting that fiat currency in it's current form will be the norm.
All fiat currencies have one thing in common, they all eventually return to their actual value... 0