Digital currency Bitcoin hits new high before losing S$200 in value in one day

[specuvestor]

(Bloomberg) --
Ray Dalio, who heads the $160 billion Bridgewater Associates, says bitcoin is a bubble.

“It’s very much speculative. People are thinking, ‘Can I sell it at a higher price,’ so it’s a bubble,” he said in an interview Tuesday on CNBC.

Dalio said there are two things that are required for a currency. The first is that it can be used to make transactions, and the second is that it’s a store hold of wealth, he explained.

“With bitcoin, you can’t make much transactions in it and you can’t spend it very easily,” he said. “It’s not an effective store hold of wealth because it has volatility unlike gold."
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Actually I'm amazed pundits think backing by the full faith of the government is not valuable vs bit coin where there is no backing. Govt has power to issue money and to tax. That's why I say people who worry about not getting their SGD CPF back is clueless. Sure get back SGD... the worry should be the purchasing power. Say if you got choice to get back CPF in 10 years in MYR, does a reversion to mean trade sounds good? Or bitcoins in 10 years? So the government has to have credible monetary policies, vibrant economy that demands the currency and good governance.

Even Safra vouchers are local currencies.

[BlueKelah]

@specuvestor agreed. To me, bitcoin/cryptocurrency is nothing more than those "reward points" which big co. started long time ago, just with more security feature and more capability for secure transactions online.

Problem is top economies like USA/China/Japan/Euro and their central banks WILL NOT recognize Bitcoin or any other decentralised online currency which they cannot control/regulate. It's not only about the potential abuse and money laundering aspect, another bigger concern is what if citizens participate in a speculative bubble whether its bitcoin or ethereum, etc and it comes crashing down, a potential financial crisis causing which most governments will not want either.

In fact, most of our big transactions are cashless already nowadays via online banking. Even buying chicken rice from hawker stall also use app liao. And with international tele-transfers clearing in 1 day (e.g. sending SGD overseas to country like Australia) Basically even our SGD can be considered an online currency.

IMO governments WILL NOT recognize cryptocurrencies due to sovereignty/tax/regulatory etc. issues. And when even the taxi uncle or hairdresser auntie start talking about making big money in bitcoins, that's the time bubble will be close to bursting.

Just like Uber, Bitcoin will probably be around for the future. But just like Uber, it will be banned in many countries and places.

[weijian]

Bitcoin is just a by-product of ultra loose policies of central banks since GFC2008 and to an extent, the risk taking temperament as described by Howard Marks. Equities first became a chief beneficiary of Helicopter Ben's money printing, followed by bonds, and then Gold... Eventually, we also found out Gold doesn't always glitters. Now i guess it is somebody else's turn.

It's a short timeframe if we put it into perspective on longer time frames i reckon. Equity/Bond/Gold has been around for a long time (Gold has been around since King Solomon's time, and public equity/bond started while the european nations were fighting each other or looking for financing for their "treasure hunt/explorations") and based on the Lindy Effect principle, i don't think Bitcoin's popularity will survive the next bear market/political upheaval.

https://en.wikipedia.org/wiki/Lindy_effect

[Jacmar]

Bitcoin is just a by-product of ultra loose policies of central banks since GFC2008 and to an extent, the risk taking temperament as described by Howard Marks. Equities first became a chief beneficiary of Helicopter Ben's money printing, followed by bonds, and then Gold... Eventually, we also found out Gold doesn't always glitters. Now i guess it is somebody else's turn.

It's a short timeframe if we put it into perspective on longer time frames i reckon. Equity/Bond/Gold has been around for a long time (Gold has been around since King Solomon's time, and public equity/bond started while the european nations were fighting each other or looking for financing for their "treasure hunt/explorations") and based on the Lindy Effect principle, i don't think Bitcoin's popularity will survive the next bear market/political upheaval.

https://en.wikipedia.org/wiki/Lindy_effect

I used to think that way too but now i am not so sure. Bitcoin/crypto may not survive in it's current form but may possibility evolve into something else to still challenge the central banks. Take for example if the big guns like amazon, alibaba etc start issuing tokens using blockchain technology and to be used in their transactions on their website, it could still instill a lot of confidence.

[specuvestor]

End of the day whether departmental stores accept the currency is an indicative sign. If they start accepting bitcoins or amazon credits it says something, just as the fairly recent acceptance of RMB or Union Pay. Currency strive by transactions.

Blockchain technology on the other hand will likely survive

@BlueKelah yes what worries me is that bitcoin transactions are speculative and mainly illicit in nature, including ransomware. That's not a sustainable business model.

[level13]

End of the day whether departmental stores accept the currency is an indicative sign. If they start accepting bitcoins or amazon credits it says something, just as the fairly recent acceptance of RMB or Union Pay. Currency strive by transactions.

Blockchain technology on the other hand will likely survive

If you are the department store owner, will you accept bitcoins and such?
The gatekeepers (central banks & gov) have already mentioned there is no basis to these digital currency where you can create something out of nothing.
Note how they stop just short of calling them illegal. 

No surprise on acceptance of RMB and union pay. These are all legitimate currency and payment channels.

Technology will survive as one can apply them in other area/domain to improve things.

[opmi]

Go ask around. It is the 20-30somethings are 'investing' in
Crypto$. I told it is their generation's CLOB or dotcom bubble. hahah.

[weijian]

Bitcoin is just a by-product of ultra loose policies of central banks since GFC2008 and to an extent, the risk taking temperament as described by Howard Marks. Equities first became a chief beneficiary of Helicopter Ben's money printing, followed by bonds, and then Gold... Eventually, we also found out Gold doesn't always glitters. Now i guess it is somebody else's turn.

It's a short timeframe if we put it into perspective on longer time frames i reckon. Equity/Bond/Gold has been around for a long time (Gold has been around since King Solomon's time, and public equity/bond started while the european nations were fighting each other or looking for financing for their "treasure hunt/explorations") and based on the Lindy Effect principle, i don't think Bitcoin's popularity will survive the next bear market/political upheaval.

https://en.wikipedia.org/wiki/Lindy_effect

I used to think that way too but now i am not so sure. Bitcoin/crypto may not survive in it's current form but may possibility evolve into something else to still challenge the central banks. Take for example if the big guns like amazon, alibaba etc start issuing tokens using blockchain technology and to be used in their transactions on their website, it could still instill a lot of confidence.

I am referring to Bitcoin itself as either an asset or as a "medium of exchange". It has no intrinsic value (doesn't provide cashflow) nor is it backed by enough faith (mainly either the right to be a tax collector or actually owns guns/ships).

The technology (blockchain) itself is another total different matter. Since ancient times, we started from sea shells to precious metals and when paper was invented, we came up with paper notes. The banking system evolve to involve credit notes, bills of exchange and letter of credit to facilitate trade. Digitization allowed credit cards to strive and kick start the whole consumerism culture to date. So, I definitely can't rule out blockchain as the next contribution to financial evolution.

[BlueKelah]

Bitcoin is just a by-product of ultra loose policies of central banks since GFC2008 and to an extent, the risk taking temperament as described by Howard Marks. Equities first became a chief beneficiary of Helicopter Ben's money printing, followed by bonds, and then Gold... Eventually, we also found out Gold doesn't always glitters. Now i guess it is somebody else's turn.

It's a short timeframe if we put it into perspective on longer time frames i reckon. Equity/Bond/Gold has been around for a long time (Gold has been around since King Solomon's time, and public equity/bond started while the european nations were fighting each other or looking for financing for their "treasure hunt/explorations") and based on the Lindy Effect principle, i don't think Bitcoin's popularity will survive the next bear market/political upheaval.

https://en.wikipedia.org/wiki/Lindy_effect

I used to think that way too but now i am not so sure. Bitcoin/crypto may not survive in it's current form but may possibility evolve into something else to still challenge the central banks. Take for example if the big guns like amazon, alibaba etc start issuing tokens using blockchain technology and to be used in their transactions on their website, it could still instill a lot of confidence.

I am referring to Bitcoin itself as either an asset or as a "medium of exchange". It has no intrinsic value (doesn't provide cashflow) nor is it backed by enough faith (mainly either the right to be a tax collector or actually owns guns/ships).

The technology (blockchain) itself is another total different matter. Since ancient times, we started from sea shells to precious metals and when paper was invented, we came up with paper notes. The banking system evolve to involve credit notes, bills of exchange and letter of credit to facilitate trade. Digitization allowed credit cards to strive and kick start the whole consumerism culture to date. So, I definitely can't rule out blockchain as the next contribution to financial evolution.

@ Weijian, thanks for mentioning the Lindy Effect, I had previously not heard of this term so learnt something today.

with regards to blockchain, it is just simply a transactional database of all the transactions made and this data i think is over 1GB will be on every PC running the Bitcoin client. And what Ethereum and IBM's Hyperledger are trying to do, is to create their own versions of this type of database. In short, blockchain is basically just another type of fancy database platform upon which applications/software can be built. 

The websites/blogs/social media sites we access via browser are just webpages with content generated from data stored in database servers. Even when we do internet banking or trade shares the browser is just displaying webpages generated from stored data coming from the database server from the bank or stock exchange or broker. 

The so called blockchain technology running bitcoin is nothing more than another online database/application implementation of what we already have, just that it is not so centralised as the database is on every PC running it. But this causes a big limitation.

https://securityledger.com/2016/12/analy...of-things/

@Jacmar as I have explained above, blockchain is just another database kind of technology which is not that groundbreaking. Even if Amazon or Alibaba starts issuing their own tokens back by blockchain, it will be no different to for example SIA issuing Krisflyer miles or Qantas Frequent Flyer points using whatever database technology they have on their webservers.

Just like Linux tried to provide an alternative to Windows and Mac OS, blockchain is just another alternative to long established database platforms like Microsoft SQL server , Oracle ,  IBM DB2/Informix,  SAP.

For bitcoin/blockchain its just "move along people, nothing to see here..."
http://s2.quickmeme.com/img/c5/c595586b4...8eaff8.jpg

[YMPL]

Blockchain isn't another conventional database technology. The keywords are the distributed, fault-tolerant, secured and decentralised. Most if not all conventional databased are centralised. Do you have any example of conventional decentralised databases, with similar features?

I reckon, the challenges of Blockchain, aren't the technology, but the implementation. To fit it into a highly-regulated and highly-resisted (reduced labour) environment, take time and effort.