Bitcoin Crash: Beginning Of The End?

[IdolEyes787]

It's a currency, not a commodity.

Look up the definition of commodity and then look up how exchange rates are determined and then get back to me.

[Rart]

If you aren't sure about who was talking about it, maybe you should have quoted skiz instead of MBM.

Then again, this recommendation might be for naught since you only seem to take in the words of external sites. I'll write an article on a news site about how posts in forums create their own context. Would you read an article from The Onion?

He quoted Skiz which made me assume that he was building upon the topic Skiz brought up, so I didn't think he was "creating his own context". I don't see anything wrong with that... He later clarified what he meant and I realized he was talking about something else.

And I don't see what's wrong with supporting my arguments with outside sources... it's the entire foundation upon which any scientific discovery of the last two centuries, (good) journalism, and heck even Wikipedia is based upon. Seems like a pretty standard practice to me.

[Rart]

Look up the definition of commodity and then look up how exchange rates are determined and then get back to me.

Doesn't change the fact that Bitcoin is still a currency... and there's a pretty important difference between a currency and a commodity.

Were you trying to make the point that the demand for commodities within certain countries affect exchange rates? I'm not exactly an economics guru so maybe you could elaborate more, but I'm not sure how relevant that'd be to Bitcoin since it a global currency that isn't really localized to a certain area.

[IdolEyes787]

Commodity - Merriam-Webster Online

www.merriam-webster.com/dictionary/commodity‎


noun \kə-ˈmä-də-tē\. : something that is bought and sold. : something or someone that is useful or valued.

.investopedia.com

How often do exchange rates fluctuate?

Exchange rates float freely against one another, which means they are in constant fluctuation. Currency valuations are determined by the flows of currency in and out of a country. A high demand for a particular currency usually means that the value of that currency will increase. Demand for a currency is created by tourism, international trade, mergers and acquisitions, speculation, and the perception of safety in terms of geo-political risk. If, for example, a company in Japan sells products to a company in the United States and the U.S.-based company would have to convert dollars into Japanese yen to pay for the goods, the flow of dollars into yen would indicate a demand for Japanese yen. If the total of currency flow led to a net demand for the Japanese yen, then the yen would increase in value.

Currencies are traded around the clock - 24 hours per day. Even though morning in Tokyo occurs during U.S. nighttime, trade and banking continue around the world. Therefore, as banks around the world buy and sell currencies, the value of currencies remain in fluctuation. Interest rate adjustments in different countries have the biggest effect on the value of currencies because investors typically look for safe investments with the highest yields. If an investor can earn 8.5% interest on deposits in England, but can pay 1% interest for the use of money in Japan, then the investor would pay to borrow the Japanese yen in order to buy the British pound. Such trades take place all the time and in very large numbers.

Currency,like housing prices is not so much reflective of actual value but rather the fact that people with a lot of money and/or power think they can gain even more money and/or power by buying it and artificially jacking the prices up.
When they think that their invest has reached a premium then they sell it and the value likely drops and the whole stupid cycle starts again.

Stop being contrary just to be contrary as that is my job here.

[Rart]

Right. But all these rules were theorized and developed with conventional currencies in mind. While certain rules could potentially be analogous to a certain extent with cryptocurrency, I am extremely doubtful. The fact that the currency is decentralized and not associated with any central banks/organizations, that all transactions are public and so anything like this would be sniffed out pretty quickly, and the fact that a simple transaction could take days or weeks (one of the big weaknesses of Bitcoin) makes me hesitant that any of these rules actually apply here.

[IdolEyes787]

Right. But all these rules were theorized and developed with conventional currencies in mind. While certain rules could potentially be analogous to a certain extent with cryptocurrency, I am extremely doubtful. The fact that the currency is decentralized and not associated with any central banks/organizations, that all transactions are public and so anything like this would be sniffed out pretty quickly, and the fact that a simple transaction could take days or weeks (one of the big weaknesses of Bitcoin) makes me hesitant that any of these rules actually apply here.

As I said I know nothing about bitcoins but I do know enough about humanity that I'm certain that if there is any way to corrupt or exploit them then someone will.

Or in other words,remember when the internet was this Utopian dream where all knowledge was going to be freely available?
No,neither does Mark Zuckerberg.

[TheFoX]

Currency used to be tied to the value of precious metal, namely gold. In more recent times, currency is tied to the credit rating of the host nation along with its GDP etc.

BitCoin isn't tied to any one nation or GDP, therefore it becomes an enigma.

Besides, bitcoin mining is serious work. Not for your average PS4 or XBOXOne.

[mjmacky]

Currencies undergo speculation, investment, and all of that other financial nonsense.

Thus it is a commodity by both definition and context.

[mjmacky]

And I don't see what's wrong with supporting my arguments with outside sources...

The subtext blaring context was that you ignore input from anyone here.

[Rart]

As I said I know nothing about bitcoins but I do know enough about humanity that I'm certain that if there is any way to corrupt or exploit them then someone will.

Or in other words,remember when the internet was this Utopian dream where all knowledge was going to be freely available?
No,neither does Mark Zuckerberg.

Fair enough. I'm sure there are and will be plenty of ways to exploit bitcoins (and you're right, where there's a will there's a way). However I think the scary thing and main reason I am skeptical of Bitcoin is from the potential manipulation from an underlying technical perspective, not the fear mongering from every small crash that is bound to occur in a currency so young that the mainstream media loves to perpetuate.

Is bitcoin really secure from a technical standpoint? Are the cryptography methods really secure so that they can't be "gamed", and are we completely sure someone won't find some way to circumvent the system and spend coins others have mined since all transactions are recorded publicly? That's what really concerns me about Bitcoin, and is something I really don't have the technical know how to answer.

Also, since you mention the idea of free knowledge: I paid 100$ for an electronic textbook that can't be viewed offline, can only print one page at a time, has a massive watermark over the entire page if you do print it, has some bizarre requirement that I can't view it without disabling pop ups on my browser, and to add insult to injury takes 20-30 seconds to load a single page that doesn't cache at all so it loads faster on subsequent loads. Want a hard copy? Be prepared to pay twice as much for a textbook that releases a new "edition" every year that is all intents and purposes identical to the last one but with identical passages moved around enough that students are forced to buy the newest edition rather then buy them used. Hows that for "free" knowledge?