'Litecoin Is Silver To Bitcoin's Gold' — Here's What That Actually Means

The reason why the internet analogy doesn't work:

1. There is only one internet, without competition. Huge competition in the digital currency market, it doesn't matter you call them, hump and dump...

2. The cost of internet went down with more users and usability and general adoption. Bitcoins value is supposed to go up with the same.

So it is apples and bananas at best...
 
Quote from Pekelo:

The reason why the internet analogy doesn't work:

1. There is only one internet, without competition. Huge competition in the digital currency market, it doesn't matter you call them, hump and dump...

2. The cost of internet went down with more users and usability and general adoption. Bitcoins value is supposed to go up with the same.

So it is apples and bananas at best...
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You constantly mix up two things. The word Bitcoin, is used for a Currency as well as a Protocol. It would have been much better if Satoshi named both things differently, but he hasn't....
 
Quote from scriabinop23:

exactly. If you look, this is much sillier than the tulip bubble.


Just think of it, the median priced home in the US ~$200K can be purchased for 200 Bitcoins.

200 Bitcoins on 1/1/2011 could be purchased for 0.299998 each, or approximately $60.

Created out of thin air with no/little intrinsic value or government backing. Hell even gold with little industrial use has more intrinsic value. At least it is visually appealing. Government backing meaningful of course because factors of labor, capital, and military within the sovereign translate through -- that is why fiat has some value.

While bitcoin offers the dream of limited supply, there's no barrier of entry into the currency business (litecoin, altcoins etc as examples) and no exclusivity in the domain. While there is smuggling value, people could decide ultimately to put that same valuation on any arbitrary exclusive asset OR concept (such as bitcoin).

That said, I built a Litecoin rig 1 week ago to mine with a hopeful payback of 3-4 months. I ordered when prices were at $6-8/litecoin. Now if prices stay here at or above $40, my payback happens in 1 month. But this a project for fun and has no financial materiality to me. In fact, just thought I'd put a tiny bit of skin in the game to get comfortable with using and exchanging these currencies, so at least I understand what's going on. It provides entertainment value (kind of like playing SimCity of yesteryear), and worst case I have some gaming hardware I could play with or resell. But to those greedy bubble chasers who buy the long run story, I bid congratulations in buying perhaps into the most absurd bubbles ever created. At least tulips have some natural beauty. This is just a bubble of hash codes.
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I saw bubble chasers go from a $75k account well into the Millions back in 99. Some had no idea what a stock was the month before they started chasing. Anything with a dot com on the end. Many of those dot.coms are no longer with us or in the single digits. Just saying
 
Quote from Hoi:

You don't understand what an S-curve investment means. This virtual-currency adoption is an S-curve, and quite normal (and yes crashes, volatility, greed and fear and even dead, are all normal phenomenons inside the S-curve as well).

If you are "open" to learn what an S-curve is, then please watch this:
http://www.youtube.com/watch?v=qHUPPYzzZrI&list=PLzctEq7iZD-7-DgJM604zsndMapn9ff6q

But I agree 100%, that those 37 other virtual currencies startups are all pump-and-dump-scams. Same like all those nonsense internet IPO's during the Internet-bubble in 1999/2001. Still Yahoo/Google/Amazon survived and ran the whole S-curve.
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The virtual currency competition is a farce.

Bitcoin 1.0 has 21 million coins
Bitcoin 2 has 21 million
Bitcoin 3.0 has 21 million.
each has exactly the same protocol...

Now where do you see the limit?

Mathematically, bitcoins work like MLM.

Imagine there are 1 trillion dollar bills total in the world. Lets say right now 1 billion $ is going into bitcoins. At a point in time, at bitcoin 999.0, only 1 billion dollars is left.

Does this seem plausible?

THERE ARE NOT ENOUGH DOLLARS IN THE WORLD TO SERVE ALL VIRTUAL CURRENCIES.

As always in a tulip bubble, you CAN make money going LONG.
 
Quote from Hoi:

Unbelievable ! (maybe "hypocritical" is a better word)

Calling it a silly bubble, not understanding it's valuable features.... but STIL investing in hardware and energy/electricity to connect to the network and Mine?
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Not understanding its valuable features? I fully comprehend that you can use it to buy drugs and smuggle money, and there is some dominance in that domain. But these coins are vulnerable to someone coming up with a business that achieves the same goals without placing value in the medium of exchange. That is what bitcoin/altcoins are valuing - shares in the ability to exchange illicitly. But there is no exclusivity in the domain -- thats the problem. People will get wise to this.

I got familiar with Bitcoin's white paper, am mining, and turning coin to cash. Mining litecoin with some non-exclusive hardware (which has salvage even if litecoin goes to 0) is hardly what I'd call a huge risk.

Litecoin, Bitcoin, etc. will go to zero within the next decade. Not that I'd short it, and they could definitely appreciate 5x before they crash. But this is all about greed, and short term greed.
 
Quote from failed_trad3r:

The virtual currency competition is a farce.

Bitcoin 1.0 has 21 million coins
Bitcoin 2 has 21 million
Bitcoin 3.0 has 21 million.
each has exactly the same protocol...

Now where do you see the limit?

Mathematically, bitcoins work like MLM.

Imagine there are 1 trillion dollar bills total in the world. Lets say right now 1 billion $ is going into bitcoins. At a point in time, at bitcoin 999.0, only 1 billion dollars is left.

Does this seem plausible?

THERE ARE NOT ENOUGH DOLLARS IN THE WORLD TO SERVE ALL VIRTUAL CURRENCIES.

As always in a tulip bubble, you CAN make money going LONG.
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exactly, no exclusivity. people will get wise to this when the fear stage kicks in.
 
Let me give you an example what happened to me a few weeks ago.

A good friend Skyped me from South Africa (he emigrated a few years back from the Netherlands), and at some point Bitcoin was discussed. I explained him some of the benefits, and then he asked me if he could use it for transporting his monthly income from the Netherlands to his bank in Capetown. As this took days and each time he had to pay 40 Euros to the banks involved. I don't know, I said...40 Euro's isn't that much (compared the 10-20% fees WesterUnion charges), but still he insisted to try it (just as experiment) and asked me how to proceed. It took some days to setup an Bitstamp-account, as well as an exchange in Capetown (don't know the name, but they offered a straight link to his bank-account converting BTC into Rand). A few days ago we tried it with 300 Euro (Dutch-bank SEPA to bitstamp, then exchange to BTC, transport to Capetown exchange, and to Rand on his Bank-account).

We were both surprised that that the total fee was only 1 dollar. This partly because of the BTC-exchange rate in Capetown is higher than Bitstamp.
Our conclusion was that it's doable but (still) too much work for earning 39 dollar. Still, for people using WesternUnion it will be a game changer (which is a 400 trillion dollar market). And it surely will, when paying with BTC is accepted all over the world (in which case exchanges to EUR and Rand aren't needed anymore).
And of course BTC's price should stabilize which will happen if we enter the right-side of the S-curve.

Just stop telling it's useless, it has real-life properties.
 
Quote from TrendPlayer:

Wait until the regulators get their hands on this
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I think the only possibility bitcoin or litecoin survive is if the regulators of some major domestic sovereign officially sanction the currency as acceptable and exclusive in the domain, and likewise prosecute cases of exchange between state-fiat and cryptocurrency that isn't sanctioned. If the coinbase, btc-e, etc. companies can't find safe haven to do their business, the whole thing dies.

I think this bubble is a major example of market confusion making valuation difficult.
 
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