A salient lesson for those jumping onto financial bandwagons

dryhat

2014 is shaping up to be another great year for Bitcoin.

The 20% price rises of the last couple of days is due to solid fundamentals and a growing recognition of the huge potential of this new technology.

MFW_ASAP

With people losing tens of thousands of pounds, perhaps it's a good time to resurrect this thread about the dangers of jumping onto a bandwagon, especially when encouraged to do so by internet liars.

dryhat

The recent problems are due to theft and/or incompetance at ONE exchange
The Bitcoin network is unaffected and remains as secure as ever.

Despite (or because of) the recent problems, interest in Bitcoin is continuing to grow.

This deosn't look like a crash to me ...

https://bitcoinaverage.com/charts.htm#GBP-averages-1w

https://bitcoinaverage.com/charts.htm#GBP-averages-all

N1AK

MFW_ASAP wrote: »

"To its fans, gold is an inflation-fighting, economy-hedging, dollar-busting superhero asset class. Lately, it has just been a dud. The precious metal this year is on track to record its first yearly fall since the year 2000. On Friday, it closed at $1,313.10 an ounce, down 22% for 2013."

To be fair to gold, as someone who doesn't own any, gold bought in 2011 can't be judged a failure just because in a short window it has performed poorly.
Someone who bought a KG for $10,000 would still be sitting on ~$45,000 worth now.

About 25% of my funds are in Asia or South America and they are performing poorly, especially vs other funds. I don't consider it a 'mistake' though. I know I can't accurately predict when entire continents stock markets are going to rise or fall and I diversify so that the impact of any major crash is limited.

Someone buying gold for that reason, even possibly in 2011, might still have made the right choice. Anyone buying in 2011 and expecting to get rich quick was letting greed get in the way of rational thought.

N1AK

dryhat wrote: »

Despite (or because of) the recent problems, interest in Bitcoin is continuing to grow.

Down 50% from peak and falling consistently since November. Call it what you want but I know I'm not regretting staying the hell away from that ponzi scheme.

dryhat

N1AK wrote: »

Down 50% from peak and falling consistently since November. Call it what you want but I know I'm not regretting staying the hell away from that ponzi scheme.

By definition, a ponzi scheme cannot suffer multiple "crashes" and still exist.

You either know nothing about Bitcoin or nothing about ponzi schemes.

Or both.

MFW_ASAP

N1AK wrote: »

To be fair to gold, as someone who doesn't own any, gold bought in 2011 can't be judged a failure just because in a short window it has performed poorly.
Someone who bought a KG for $10,000 would still be sitting on ~$45,000 worth now.

Anyone buying in 2011 and expecting to get rich quick was letting greed get in the way of rational thought.

Which was the point I was making, early adopters are not jumping on the bandwagon, nor do they tend to encourage others to do so. Rampers tend to be people who are on the tail end of the bandwagon and desperate to get others involved so they make some sort of profit before the inevitable crash.

N1AK

dryhat wrote: »

By definition, a ponzi scheme cannot suffer multiple "crashes" and still exist.

You either know nothing about Bitcoin or nothing about ponzi schemes.

Or both.

Show me a definition of a ponzi scheme that explicitely prohibits multiple 'crashes'. If you're going to make up false definitions as a defence then at least make them less than trivially easy to shoot down.

N1AK

MFW_ASAP wrote: »

Which was the point I was making, early adopters are not jumping on the bandwagon, nor do they tend to encourage others to do so. Rampers tend to be people who are on the tail end of the bandwagon and desperate to get others involved so they make some sort of profit before the inevitable crash.

Absolutely. My comment was with regards to the words in the quoted article, not to the view you expressed. I think we both know far too well what a bitcoin ramper looks like

dryhat

N1AK wrote: »

Show me a definition of a ponzi scheme that explicitely prohibits multiple 'crashes'. If you're going to make up false definitions as a defence then at least make them less than trivially easy to shoot down.

How on earth can a ponzi scheme collapse and then pick up and carry on as if nothing happened with more and more people buying in?