[ExI] Buy! Buy! Buy! (Bitcoin again)

Kelly Anderson kellycoinguy at gmail.com
Thu Dec 19 13:11:02 UTC 2013


On Wed, Dec 18, 2013 at 6:57 PM, ddraig <ddraig at gmail.com> wrote:

>
> On 19 December 2013 06:27, Kelly Anderson <kellycoinguy at gmail.com> wrote:
>
>> For anyone not paying attention this morning, bitcoin has hit a snag in
>> China and is now trading well under $600. If you've been putting off
>> jumping in, now would be a great time to do so, IMHO.
>>
>
>
> Or it is going to continue to fall and you'll lose money.
>

It is certainly a tautology that it will rise or fall, so your bets are
covered on both sides now, congratulations. At this point it's back up to
$670, so anyone lucky enough to buy yesterday is already sitting Very
pretty.


> It's insanely volatile at the moment -  I think this is a great time to
> trade in it, but I'm not sure I'd be investing in it, right now.
>

Bitcoin is an insanely awesome solution looking for an insanely awesome set
of problems to solve. The press keeps focusing on the "Bitcoin killer app
of the day", first it was Silk Road, then giving financial mobility to
Chinese millionaires, but trust me there will be more and different killer
apps tomorrow. I'm working on one myself aimed at serving the third world.
The recent Bitcoin+Bittorrent thread is another cool possibility. Trust me,
there are thousands of opportunities out there right now. Think of what you
would do if you could register any .com you wanted right now. That's where
Bitcoin is at the moment. Put your claim down anywhere, and you could be
rich some day. And I'm not talking about hoarding Bitcoin, I'm talking
about implementing killer apps using it.

The insane problem of late is that Chinese billionaires have all their
money trapped in Yuan and the economic pressure to get some of that money
translated into dollars and euros is like a fire hose.*
They want to diversity, but they are trapped in Yuan by a dictatorship. For
a brief moment, Bitcoin was the solution to this very bad problem for a few
very rich people. Imagine what would happen if they had Internet in North
Korea for a few months. While there was a hole in the dike, millions of
dollars worth of value escaped China via Bitcoin and this drove the price
up. Now that dike has been repaired by the communists. The price didn't go
to zero, but returned to the curve where you would expect it to be at this
point. The fact that they had this correction shows the baseline health of
Bitcoin, not the opposite.

Some day, as more and more online transactions are done with Bitcoin, the
volatility will go down as the need for and use of Bitcoin becomes more
diversified. Imagine the volatility of dollars if the ONLY thing you could
really buy with it in volume was oil. Or any one commodity. That's the way
Bitcoin is portrayed in the media, and the way it IS to some extent. It
isn't fungible enough in enough places yet.

As to the idea that it can't function as a currency until the volatility is
down, which was in a recent The Atlantic article, the volatility will go
down as the use diversifies and the Bitcoin economy grows. Small things are
generally more volatile than large.

True, if countries outlaw its use in places like Walmart, it won't have as
big an economic impact as it could otherwise have, but I think it will have
great use online and possibly in third world nations where bad banking laws
keep people from doing the simplest things.


> WRT to other comments in this thread: South Africa? No one in their right
> mind is going to emigrate to South Africa, regardless of it's free market
> policies.
>

Few will. But it isn't zero even now. I would choose Singapore or Brazil if
I absolutely had to go somewhere, but that's just me.

-Kelly

*(BTW, we had a rather significant house fire and smoke damage yesterday,
lots of excitement, three fire trucks and an ambulance at 5 AM, but all is
well now. One room in the basement apartment is totally trashed, but my
girlfriend's daughter saved the day and woke us up before anything too bad
happened. Not one smoke alarm in the whole house went off, there should
have been 5 at least. Check your smoke alarms, you may not have a 12 year
old.)
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