Bitcoin going Berko

[Sooz]

Thought this article may interest some who are following this thread - Bitcoin, Gold or Both?

http://www.nasdaq.com/article/bitcoi...-both-cm391244

[Tonz]

difinitely, haha! i spelt that like a kiwi would say it.definitely both especially when/if gold drops under the 1000 mark.

[Sooz]

Things sure get tricksy when one is getting older and deciding what is going to get you through, when you may not be able to work anymore.

I still may end up in a caravan park, lol....

[Tonz]

in one way or another we all all end up under the big tent,see u at the camp fire .

[Sooz]

See ya there brother, lol

[Sooz]

An update on Bitcoin - things not looking so good. See below.

I'm still going to hold onto my small holdings. Early days yet, just like the internet. And I'm old enough to see how that has all unfolded. Or perhaps I'm in denial?

The future will be the judge.

Sooz.

The Perfect Storm Hitting Bitcoin...and How You Can Weather It
September 22nd 2014, by Tim Dohrmann, Melbourne, Australia

Here’s a simple quiz question for you.
Which asset...that could help shape Australia’s economic future...has plunged in price this year by more
than 45%?

If you said ‘iron ore’...you’re wrong.
The answer is bitcoin.

Yes, bitcoin...the currency of choice for thousands of internet-savvy people.
The digital cryptocurrency’s value slipped below US$400 per coin late last week. It slumped to an intraday low of US$380.75 on Friday.
The price action has made fools out of the ‘smartest men in the room’. Investors who bought bitcoins up to November’s US$1,145 peak are licking their wounds.
So what’s gone wrong?

Well, I can see several reasons why bitcoin’s value has cooled off.
Does that make now a good time to think about a bitcoin investment?
Well, that depends...
Nasty trends
Bitcoin suffered a stormy end to last week. You can see it in this seven-day chart of the cryptocurrency’s value in US dollars.

Source: Coindesk.com
‘In US dollars’ is your first hint as to why bitcoins have broken down.
America’s currency is riding a wave of strength. Traders’ bets on an interest rate rise next year have buoyed the greenback.
That means the US dollar is pulling in money like a magnet. It draws cash away from other currencies and commodities.
You might define bitcoin as a currency, a commodity or (as I do) something in between. Either way, the outcome here is the same...a lower value in terms of US dollars.
But bitcoin has sunk against any currency you care to mention...not just the USD.
That means nastier trends must be pushing down the cryptocurrency.

A perfect storm
I tend to ignore most technical charting analysis. I believe asset prices move looking to the future, not because of what happened in the past.
But you can’t ignore bitcoin’s dramatic breakdown through $450 late last week.
It shows all the highlights of a large group of traders who probably had $450 as their lower bound exit point. Once the price breached that figure, they raced for the exit.
A perfect storm of technical, fundamental and macro headwinds is buffering bitcoin.
I never thought I’d point to the central bank of Bangladesh as a market-mover. But the Bangladeshi policy-makers recently made their country the fourth to ban bitcoin.
Their central bank says it’s illegal to deal in cryptocurrencies. Bangladeshi users face up to 12 years in jail.
I’ll put to one side the difficulty...even futility...of enforcing a judgement like this.

But it blows an ill wind across a sector where the biggest challenge is guessing how regulation will shape up.
As I wrote to you back in July, ‘it’s hard to see the regulators staying out of bitcoins. So investing in any bitcoin-related business really is a big risk without knowing what the regulators will do.’

Don’t underrate your government’s ability to re-write the rulebook to suit its goals.
Regimes may choose to pump millions, even billions of taxpayer dollars into surveillance of cryptocurrency users. They could pursue policies that demonise this young industry.
If that happens, the authorities could snuff out bitcoin faster than you think.

Heck, there’s one thing the markets should have taught you over the past six years. Governments and central banks can act in an extremely coordinated fashion when the stakes are high enough.

Of miners and merchants
If you’ve read Sam’s and my articles on bitcoin, you’ll know it’s tricky to identify the forces that drive its value.
New merchants are adopting bitcoin as a payment option every day. Cryptocurrency awareness is rising. Nobody is arguing with that.
But the experts can’t agree on how merchant adoption and ‘mining’ operations influence the bitcoin price.
You see, bitcoin fans have generally viewed moves by firms like Dell Inc [NASDAQELL] or Expedia Inc [NASDAQ:EXPE] to accept bitcoins for laptops or hotel bookings with glee.
But many observers are coming around to a different conclusion.

Lots of merchants convert bitcoins they receive from customers into traditional currency immediately. That puts selling pressure on the bitcoin price.
As long as large merchants view bitcoin as a hot potato to palm off as quickly as possible, this selling pressure will keep a lid on its price.
So bitcoin may become a victim of its own success.

This flies in the face of what bitcoin fans would have you believe...but adoption may do nothing to drive long-term demand.
This makes holding large volumes of bitcoin a potentially risky investment.

By the way, that’s not the only dynamic that looks bearish for bitcoins.
If you follow the Aussie economy, you’ll know that many iron ore miners struggle to make a profit, with the commodity mired near US$80 per tonne.
Similarly, many bitcoin miners may struggle to make a profit when the cryptocurrency only fetches US$400.
It costs plenty of money and takes a lot of computing power to mine bitcoins at an industrial scale.
As the job has gotten more complex, bitcoin miners’ costs have risen.

These cost pressures could force miners to sell their freshly unearthed bitcoins as quickly as possible. If that activity steps up, the bitcoin price could grind lower.
Some observers think these trends will consign bitcoin to niche status...or even ‘history footnote’ status.
I don’t agree with that.

Despite certain governments’ best efforts, cryptocurrencies are here to stay.
The bitcoin system has been developing for several years. But it’s too early to tell what a fair and stable price will be for this digital currency.
Just as Dom Carosa (chairman of the Future Capital Bitcoin Fund) said earlier this year, ‘we’re all exploring without a map.’

These crosscurrents play havoc on the bitcoin price and the value of firms engaged in the industry.
That creates chances to buy mispriced assets...but it brings a huge dose of risk.
That’s why I don’t currently endorse any bitcoin stocks to my readers in Australian Small-Cap Investigator.

I suspect Sam has a similar rationale in holding back on a bitcoin stock tip for Revolutionary Tech Investor.
If you want my advice on how to weather the storm hitting bitcoin, here it is: Don’t invest just yet.

Cheers,

Tim Dohrmann +
Small-Cap Analyst, Australian Small Cap Investigator
Port Phillip Publishing, Melbourne, Australia

[Sooz]

Hi All, just an update on Bitcoin. The price has tanked in recent weeks and people think that's the end of it.

But here is a well-reasoned article by my mate Sam Volkering. He's not really my mate and I don't know him personally, but I love his newsletters because:

a, he's an Ozzy and
b, he breaks down Bitcoin into language anyone can understand, including me

Bitcoin is here to stay, here is his article:

'Why You Have to Ignore the Price of Bitcoin

October 10th 2014, by Sam Volkering, London, UK

In today’s Tech Insider...stupid Bitcoin questions...why Bitcoin and the price of it is irrelevant...two things you need to remember about Bitcoin...and more...

A couple of days ago a friend asked me about Bitcoin. They more or less asked if it was dead, and if the hype truly was bigger than the technology.

After I stopped beating them with my smartphone, I took to answering the question. In short, no, Bitcoin is not ‘dead’. Nor will it ever be dead.
I almost took offence to the question, really. It was abundantly clear that my friend simply still did not understand what Bitcoin is all about.
I started to explain to him about the idea of a decentralised system.

‘So you’re telling me that no one actually has control over it?’
‘Not entirely,’ I said. ‘The system, the users regulate it, it’s self-regulating.’

After some semantics over what the actual definition of ‘regulation’ is, we moved on to price.
‘Well it’s like a third of the value it was about a year ago,’ my friend argued. ‘So if you ask me the hype has worn off and people are beginning to realise its crap.’

I then jumped onto CoinDesk on my phone and showed him the chart of Bitcoin over the last year.

Source: CoinDesk
‘Well actually, it’s about triple the price it was in October last year. It’s a third down from its highs in December about 10 months ago. And it’s still around 123,000% higher than it was four years ago,’ I smugly reminded him.

And then I caught myself and began to explain the biggest problem with Bitcoin at the moment, the exchange rate.

I’ll get to the Bitcoin ecosystem and its potential in a minute. But let me make something abundantly clear. The worst thing about Bitcoin is being able to exchange it for fiat currency. In all honesty the best thing you can do is to completely ignore what it’s worth in USD, or any other currency.

Here’s what I mean.
In order to get Bitcoin you have to exchange your fiat money for it. Whether it’s AUD, USD, GBP or anything else, you need to buy some to get some. (You could mine it, but I don’t have the space to go into that today.)

What a lot of punters do is buy Bitcoin in the hope the price will appreciate. They then plan to sell their Bitcoin and exchange it back to a fiat currency. In short there are many investors (gamblers really) that are doing nothing more than currency trading.

This really goes against the whole principle of Bitcoin. These speculators are solely intent on make a (fiat) currency profit on the price fluctuations in Bitcoin. They often have very little regard for Bitcoin and its potential.The whole point to Bitcoin is to use it as a medium of exchange online. It exists in the digital world and should only exist in the digital world. It’s supposed to be an alternative solution to fiat currency.

Its core premise is it’s a decentralised system with no government intervention. So when people continuously relate it back to a fiat currency, it loses its purpose.

The way we should use Bitcoin:

I’ve always maintained that the success of Bitcoin is dependent on infrastructure. That means you need places to use it with ease for the system to work.
I need to be able to go down to the shops, grab some milk and bread and pay with Bitcoin. I then need to be able to walk past the corner shop, grab a six-pack and pay with Bitcoin.
My pay would be in Bitcoin. My savings would be in Bitcoin. I would use the ‘currency’ in the real world through digital technologies (e.g. a smartphone).
Country currencies would still probably exist. But Bitcoin would truly be the only global currency.

I like to think everywhere that accepts MasterCard and Visa now, will accept Bitcoin in the future. But with Bitcoin, you don’t have to bleed transaction fees or exchange fees and commissions wherever you go.

The other thing is most people likely won’t actually own a Bitcoin. There’s every chance in the future a whole Bitcoin will (if you had to compare it to something) be worth possibly tens or hundreds of thousands of dollars. Most people will deal with Bitcoin in ‘Satoshis’. Satoshis are just smaller denominations of Bitcoin.

This is what’s so great about Bitcoin as a system. It liberates the world from the restrictions of their government’s economic power. It’s the financial tool that breaks down borders.
As an ideal and in practice it’s an extremely powerful financial tool. That’s why countries like the US and Russia are so worried about it. They’re worried because it renders them useless. It allows their citizens to financially operate external to their control.

But while people continuously look to use Bitcoin solely as a way to generate quick profits, it will struggle to achieve widespread adoption.
The thing is, without the crazy price jump in the last year Bitcoin wouldn’t be what it is today. The $1,200 price surge gave it notoriety that literally made it a worldwide phenomenon.
Now, although many people still don’t quite understand it, they’ve at least heard of it. And that’s a good first step.

The next step is for Bitcoin to gain some credibility as a legitimate alternative to fiat currency. The infrastructure is continuing to develop, and this is a crucial element. But then from there people will simply need to start using it more.

Of course there’s a long way to go. And it’s all going to happen step by step. Don’t forget, this is a new financial system that’s barely five years old. The fiat currencies we know today have had a couple hundred years lead in time.

So here’s two key points about Bitcoin you must not forget.

1. Stop thinking about it in terms of price to USD (or AUD/GBP etc.). It’s a standalone entity. It’s not like the conventional currencies we know today.
2. Give it time. It will become far more powerful and widespread in the coming years. And it will not die. It will grow stronger and live longer than any of us likely will.'

Regards,

Sam Volkering +
Editor, Tech Insider
Port Philip Publishing, Melbourne, Australia

[Sooz]

For those interested in Bitcoin and if you have a business, you may be interested in this.

https://blog.coinjar.com/2014/11/05/...your-business/

PS: I have no financial affiliation with Coinjar, I just have a wallet there. This article is from one of their newsletters.

[Sooz]

This is an interesting development. Today from the Wall Street Journal.

Is Bitcoin challenging the global economic order? I'm wondering if it has any place in the anticipated global economic reset. I should point out that BTC is certainly not going 'berko' - it's had quite a volatile 6 months. Down to around $375 AUS atm, but enjoying a bit of a rally - yesterday it was $275 AUS.

http://www.wsj.com/articles/the-revo...035061?mod=ST1