BITCOIN

lozzy1965

My take on this thread:  Too many long posts that I don't want to devote the time to read! And:
Bitcoin IS NOT a currency yet.
Bitcoin IS NOT a store of wealth yet.
Bitcoin WILL NOT solve the 'broken fiat system' because it's not broken.
Bitcoin IS looking for a use.
Currently it has no value other than perceived future possibilities.
Currently, all it is is another asset class to bet on.
Confidence is everything in investing.  Bitcoin still needs a wider uptake and greater confidence and it needs regulation - which is a 180 with the reason for its invention.  We are currently at a crossroads where Bitcoin genuinely could go to zero - or very close to - in my opinion.  If it gets through this tough period then who knows.

On the other hand, I know nothing about anything!

uk1

fwor said:

darren232002 said:

The exposition of nuance and technical knowledge takes time.

And, as you can see, he is also a master of condescension.

Surely Darren232002 blew any credibility that he might have had here by writing this:

darren232002 said:

People aren't buying Bitcoin to get rich, they are buying it because its a fairer system.

To be honest, if the quality of your reasoning is such that you conclude that because someone says something that is wrong or perhaps even dumb - or simply turns out to be wrong because the situation has evolved - then that in your opinion that means that they have no credibility, then I presume that to be consistent and fair to those others you  judge so harshly you use that same rather bewilderingly high bar to every pronouncement that you have ever made.  It is possible for extremely clever people to say dumb things at times and if you were as clever as you appear to consider yourself to be,  then you would have understood that and understand you have something to learn from almost anyone in life. 

Also, to really make progress with learning in life you also have to perhaps reluctantly accept and learn that you can learn from people you think you do not like as much as from people you do.  You certainly will logically find that you will learn much more from listening to those  who hold different views to your own than by simply listening to people that agree with you.

I predict that you will find something or other in this note to disagree with instead of considering whether  I’m making a reasonable point …. but hey ho.  

Jeff

benwhistler

I feel like a lot of people probably aren't familiar with the way Bitcoin tends to get discussed online. Darren's comments on here are very much par for the course in that they're effectively promoting Bitcoin rather than analysing it as an investment opportunity. The way people tend to do that online often follows a similar pattern.

First they try to establish credibility. This usually involves emphasising their intelligence and success. Darren claims to have a mathematical background, makes vague comments about how he was exposed to Bitcoin due to his previous work (implying some kind of sophisticated appreciation of the technology from an insider's perspective), claims to have invested in Bitcoin at an opportune time, implies he has substantial wealth, suggests he has an advanced understanding of statistics, and so on. Some of this might be true or it might all be made up (the statistics thing on the last page was particularly unconvincing given the slightly odd reference to using MATLAB for basic regression analysis) but it doesn't really matter, it's all about reeling people in with the appearance of being highly educated and successful.

Second, people who are promoting Bitcoin often make a number of claims about it that are largely based on some privileged vision of the future that only they have access to. It usually boils down to them appearing to have an inside track on future trends but emphasising that your time to act by investing in Bitcoin is limited so you'd better move quickly. Darren has made countless statements like the one below that follow this format: 

The end state of Bitcoin will be a globally adopted asset that is incredibly liquid and stable. It will be the boring asset you plan for your retirement in, like bonds today. The volatility is decreasing over time and will continue to do so. But the time for buying it for returns at that point will be gone.

Of course in the real world, nobody knows what the "end state" of Bitcoin will be and the evidence that's been posted to justify these claims is lacking. For instance, he's claimed on multiple occasions that volatility in Bitcoin "is decreasing over time and will continue to do so". Yet he attempted to evidence this on the last page and actually just pasted some simple charts that fall far short of proving what he's saying. The first is just the standard deviation of daily returns which he then described by saying "it seems pretty clear that a moving average of this line would be trending down over time". That isn't sophisticated statistical analysis, it's just eyeballing a simple chart. Modelling Bitcoin's future volatility in the long-term is practically impossible and if Darren were capable of doing this he would be best served by publishing it in a leading academic journal rather than spending hours upon hours arguing with people on the MSE forum.

The point in all this isn't to make robust, evidenced arguments, it's just about having the appearance of credibility and convincing people (especially inexperienced investors) that there's some time-limited opportunity to put money into Bitcoin and get once in a lifetime returns. If you actually go through everything he's posted on here it's like an exercise in throwing spaghetti at a wall, where he appears to know not only how Bitcoin will develop but also how the entire world economy and global society will look decades from now. The reality of investing is that we don't have a clue what's going to happen next week, far less decades from now. 

Third, those who promote Bitcoin tend to relentlessly attack anyone who doubts their claims. Darren again is pretty par for the course in this - everyone who says anything remotely nuanced gets hit with a 3,000 word diatribe that it would take them all day to respond to. In no sense is this a normal way to discuss investing. I invest in a number of things including some single stocks and it would never enter my mind to come on here and argue for hours on end about my investment strategy. It's just fundamentally weird to do this unless you're explicitly trying to promote something.

So why do people act this way with Bitcoin? For some people it's because they're just trying to pump up something they're already invested in. The internet has been full of that for years and a high percentage of media experts/analysts fall into this camp. For others, they do this because they've gone down a rabbit hole on the internet and have bought into it completely. These people tend to treat Bitcoin like a facet of their identity, a bit like their political ideology or religion. Again, fundamentally weird. Which camp Darren falls into is anybody's guess, but if anyone wants some advice, never ever invest in something because someone told you they know what the future will look like.

Zola.

Bit harsh, in my view...and not lacking in word count yourself... 

A valid reason for long posts discussing bitcoin at such a level is that it is incredibly fascinating and also takes a long time to actually understand deeply. It is profoundly different from fiat money, which is just another idea that everyone is used to. 

If it does go where many believe it to be then its a monetary game changer for the world. Not going to happen smoothly after 13 years. 

bugbyte_2

benwhistler, brilliant first post and encapsulates my thoughts exactly, all be it a lot more elegantly than I could write.

 I think darren in his response to my post demonstrated exactly what I was trying to say. Take the two points I happened to mention:

Volatility: As darren picked out deviation, the following is factually correct: Number of days bitcoin swung more than two deviations from its average:

2017  23
2018  21
2019  18
2020  10
2021  19

 As you can see, 2021's figure is 9 days more than 2020, therefore volitivity on this measure has gone up year on year. Interesting to see what 2022 will look like but I bet it is more than 23 days, probably already.

Energy use: In darren's response to my concern on energy use, he never once addressed the issue, but wrote several paragraphs on how ESG investing is a scam and something about carbon offsets and airlines. The weight of words in the response gives the impression of knowledge, but actually says nothing at all.

As this is a common occurrence, can I add 'mis-direction' and 'excessive word count' to your list?

 I admit I do find the methods used to gain credence here fascinating.

Frequentlyhere

I agree with most of what Ben says, but I like to address arguments on their merits nonetheless and there have been some interesting points raised I think.

Where I do most agree though is the uncertainty about how the World/global economy will pan out. It's easy to relate to a picture painted of a world of current economic problems, which there are, but then the segue into any one certain answer sounds alarm bells for me. I'm sure in some corner of the internet there are still goldbugs feverishly buttering each other up about the inevitability of overwhelming inflation rendering their asset as the one true money too, and I don't feel much different about their certainty either.

There are just too many improbable events required in the scenario that sees bitcoin becoming very meaningful to warrant anything more than a notional investment (if anything at all). Darren seems to appreciate many elements of this uncertainty in events and their timing and has admitted changing his mind about things, but clearly still feels it best to pin the majority of his wealth in it anyway. Which seems rather odd to me.

Likewise the idea to me that Bitcoin would, if it somehow achieved real status, solve lots of problems for everyone seems very wishful. Whilst it's challenging/impossible to theorise exactly how it would pan out, the notion that a fixed supply currency operating without any centralised governance would solve more problems than it introduces seems more than optimistic.

uk1

I  haven’t read all of the thread, so I accept I’m at a disadvantage.

I thought Daren said that he has only used cash he can afford to lose.

Can you indicate were in the thread he said “but clearly still feels it best to pin the majority of his wealth in it anyway. “-

Thanks

Jeff

Adyinvestment

Am I the only one who thinks it a little weird that a brand new poster writes such a long winded first post with every one of the paragraphs dedicated to discrediting one specific poster?

Whilst saying "those who promote Bitcoin tend to relentlessly attack anyone who doubts their claims. Darren again is pretty par for the course in this - everyone who says anything remotely nuanced gets hit with a 3,000 word diatribe that it would take them all day to respond to. In no sense is this a normal way to discuss investing."  in the middle of a very lengthy post themselves.

I am not trying to defend Darren as I don't agree with everything he posts and half of it goes over my head anyway.

Also how come Benwhistler's post count 0 when I have just read one...

Grenage

Adyinvestment said:

Am I the only one who thinks it a little weird that a brand new poster writes such a long winded first post with every one of the paragraphs dedicated to discrediting one specific poster?

Whilst saying "those who promote Bitcoin tend to relentlessly attack anyone who doubts their claims. Darren again is pretty par for the course in this - everyone who says anything remotely nuanced gets hit with a 3,000 word diatribe that it would take them all day to respond to. In no sense is this a normal way to discuss investing."  in the middle of a very lengthy post themselves.

I am not trying to defend Darren as I don't agree with everything he posts and half of it goes over my head anyway.

Also how come Benwhistler's post count 0 when I have just read one...

I also immediately assumed it was another member with a new account.

Zola.

No doubt it is...