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

[bwolinsky]

Quote from Hoi:

I'm speechless.....

but will try:

You really should look at the charts before you write such utterly nonsense. My comments are in the middle of a strong uptrend which was very easily to be forecasted if you did research virtual-currencies for months. Even you could forecast that, but your comment about "gold nor silver" tells me that you have no idea at all what virtual-currencies are....

I have a very different view on "virtual currency" as the proponent of alternative real currency known as productivity credits built out of self-hedging investment vehicles across all commodities to be denominated in dollars.

The projection between bits and stacks of gold coins don't look the same to me either because the pixels on the screen saying $1,000 per bitcoin don't really look as valuable as the ounce of gold ready for long term investors to invest in them.

Productivity credits support value way more than bitcoins and their ilk ever will because they are already held to something of value but as a matter of proprietary information will be hedged through the algorithms I've designed and therefore hold value more than a basket holding them would. Hedging will eliminate values from being worth less if you design the right financial instruments.

Basically the periodic table would be the value behind them.

 

[Hoi]

Quote from bwolinsky:

I have a very different view on "virtual currency" as the proponent of alternative real currency known as productivity credits built out of self-hedging investment vehicles across all commodities to be denominated in dollars.

The projection between bits and stacks of gold coins don't look the same to me either because the pixels on the screen saying $1,000 per bitcoin don't really look as valuable as the ounce of gold ready for long term investors to invest in them.

Productivity credits support value way more than bitcoins and their ilk ever will because they are already held to something of value but as a matter of proprietary information will be hedged through the algorithms I've designed and therefore hold value more than a basket holding them would. Hedging will eliminate values from being worth less if you design the right financial instruments.

Basically the periodic table would be the value behind them.

That's your opinion and I have no problem with that.
To me Bitcoin's value lies in the Bitcoin-Protocol: the robust p2p network of hundreds of thousands of the most powerful computers in the world speaking the Bitcoin-language to each other. It has costs billions of dollars to build this huge thing in the past 5 years, and it will change the financial world is a disruptive manner. It will enable you and me to use it for a number of very useful and valuable things: Securely moving money around the world fast and for free is just the beginning. The Bitcoin-protocol is just like HTTP in 1995 when Internet was born. Currently we are 15 years further, and I think you have to admit that this "internet-thing" is much more worth than all the gold and Silver in the world... in 2030 you will see the light, and will understand how virtual-currencies have changed the world in a similar way.

 

[bwolinsky]

Quote from Hoi:

That's your opinion and I have no problem with that.
To me Bitcoin's value lies in the Bitcoin-Protocol: the robust p2p network of hundreds of thousands of the most powerful computers in the world speaking the Bitcoin-language to each other. It has costs billions of dollars to build this huge thing in the past 5 years, and it will change the financial world is a disruptive manner. It will enable you and me to use it for a number of very useful and valuable things: Securely moving money around the world fast and for free is just the beginning. The Bitcoin-protocol is just like HTTP in 1995 when Internet was born. Currently we are 15 years further, and I think you have to admit that this "internet-thing" is much more worth than all the gold and Silver in the world... in 2030 you will see the light, and will understand how virtual-currencies have changed the world in a similar way.

Computers networking with each other isn't a valuable productive process. I'd take the periodic table first.

 

[failed_trad3r]

Quote from Hoi:

That's your opinion and I have no problem with that.
To me Bitcoin's value lies in the Bitcoin-Protocol: the robust p2p network of hundreds of thousands of the most powerful computers in the world speaking the Bitcoin-language to each other. It has costs billions of dollars to build this huge thing in the past 5 years, and it will change the financial world is a disruptive manner. It will enable you and me to use it for a number of very useful and valuable things: Securely moving money around the world fast and for free is just the beginning. The Bitcoin-protocol is just like HTTP in 1995 when Internet was born. Currently we are 15 years further, and I think you have to admit that this "internet-thing" is much more worth than all the gold and Silver in the world... in 2030 you will see the light, and will understand how virtual-currencies have changed the world in a similar way.

we are at the greed stage...
its a tulip bubble, a very good one.
Look at zerohedges chart. Its pure speculation. 37 virtual currencies is not enough, there are $$$ pouring in, but in the FEAR stage when they go, it goes hard.
just at the moment it had good utility as money laundering, but thats it.

 

[Pekelo]

Quote from Hoi:

that this "internet-thing" is much more worth than all the gold and Silver in the world... in 2030 you will see the light, and will understand how virtual-currencies have changed the world in a similar way.

But there was/is only one internet and there are dozens of altcoins. If anybody could have created altnets we would be fighting over which network to use...

 

[scriabinop23]

Quote from failed_trad3r:

we are at the greed stage...
its a tulip bubble, a very good one.
Look at zerohedges chart. Its pure speculation. 37 virtual currencies is not enough, there are $$$ pouring in, but in the FEAR stage when they go, it goes hard.
just at the moment it had good utility as money laundering, but thats it.

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.

 

[Hoi]

Quote from Pekelo:

But there was/is only one internet and there are dozens of altcoins. If anybody could have created altnets we would be fighting over which network to use...

I see it like this: there is one protocol (HTTP/HTML for internet compares to the Crypto-currencies-protocol), and on that there are many business models using that protocol (Google, Youtube, FaceBook, etc, compared to all the crypto-currencies, payment-processors, escrow-services, banking-services, etc...).
And yes there is and there will be a fight, just as in any business. And that's a good thing, as it will drive innovation.

The crypto-currency with the best properties will win. Currently Bitcoin and Litecoin make the best chances, but that may change in Future (like Facebook killed myspace).

 

[Hoi]

Quote from bwolinsky:

Computers networking with each other isn't a valuable productive process. I'd take the periodic table first.

Than stop for a while using your Internet, cell-phone, and cable. If you don't miss it than indeed it hasn't any value for you.

 

[Hoi]

Quote from failed_trad3r:

we are at the greed stage...
its a tulip bubble, a very good one.
Look at zerohedges chart. Its pure speculation. 37 virtual currencies is not enough, there are $$$ pouring in, but in the FEAR stage when they go, it goes hard.
just at the moment it had good utility as money laundering, but thats it.

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.

 

[Hoi]

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.

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?