Hacker News Reader

Comment by rfnslyr | Hacker News Reader

FUCK. Is all I have to say. When it was $200, I said "Fuck, I should probably wait". Same thing when it was $300. I'm so on the fence in investing in bitcoin. I feel like it's going to reach $10k/btc and I'll be living in a lifelong depression of "what could have been".

Tempted to drop like 5k into it...

I truly don't know what to do at this point. I could wait and see a drop that may or may not come, and I'll constantly be in the state of indecision that I feel ultimately will cripple me in the future.

I think I'll buy 1BTC/mo and see where it goes from there.

View on HN

Speaking as someone who owns more than a few bitcoins, there are still many threats that could drop the value to near 0 in a matter of hours.

1. An exploit or bug in bitcoind that either takes down the network or allows theft of coins.

2. Discovery of a weakness in the underlying cryptographic primitives, or their specific implementation in bitcoind.

3. A hack of several mining pools at once that allows a 51% attack.

4. A crippling hack of multiple of the main exchanges or wallets at once: Mt. Gox, BTCChina, Coinbase, and BitStamp.

5. Regulatory action threatening to outlaw or severely restrict bitcoin.

6. Real brute-force 51% attacks may still be possible by an attacker with access to cutting-edge semiconductor fabs and a very large budget.

I think it's clear by now that the general concept of digital currency has a bright future, but betting on bitcoin specifically is still a risky investment.

Don't be sorry, you're looking at executing a buy high, sell low strategy.

When you want to buy bitcoin is when it's just experienced a big drop, you're too late to the party, when it hits $50 again, buy.

Pick a price point, make a buy order, as soon as your buy order executes pick another point, make your sell order. Don't time the market, price the market.

On a related note: Is the bitcoin infrastructure mature enough to support short selling in a sane way yet? I've yet to find a decent way to do this.

I use BTC-E. Too bad I'm an idiot and traded over 50BTC for litecoins. I'm legitimately stressed.

I refused an offer for my house in Aug 2007, don't sweat it.

Go into trades with a clear head not thinking about the past. Whatever you did you did, stressing about it will not help you make better trades in the future.

If you think BTC is going up, cut your litecoin losses and trade, if you don't stick with litecoin or something more stable til BTC reaches your price.

Hey, I remember first hearing about them on 4Chan /g/ back in late 2011, when they were maybe $6 a pop. We used to call them "Buttcoins" and laugh at all of the people mining them.

Of course, we look pretty stupid at this particular moment, but who's to say it won't all go to shit next week?

Easy, friend. There will be many more waves to ride.

> On a related note: Is the bitcoin infrastructure mature enough to support short selling in a sane way yet?

I work in finance so I'm very familiar with shorting but I don't know what you mean by "a sane way".

What way's sane or otherwise are you referring to?

Normally for shorting. you do the following: 1) borrow the stock from a broker 2) put in your short order 3) get your order filled 4) continue to pay a borrow each day for the stock you borrowed to short 5) buy back your stock 6) return the borrow and settle with your broker

You can't borrow bitcoin right now.

The only way to go short is to use sketchy futures and options exchanges.

That's fair but I highly doubt it will drop that low. I really, really hope it does though, wouldn't mind popping a few grand into it.

By not buying, you're betting that the price won't go up. Good luck with your strategy of not investing in exponentially growing, disruptive technologies.

That's the whole problem though. It's going up, but who's to say it won't crash?

Want to buy my webvan stock? They're disrupting safeway!

Exactly what is bitcoin disrupting? Those who want to take 10 minutes to buy a cup of coffee? Africa's stranglehold on unstable currencies? Thieves being able to steal your electronics and money all at once?

It's disrupting gold, money transfers, credit card fees, foreign exchange, and online gambling at the same time.

LOL. That's about all there is to say to that.

It's a hoarding scheme for libertarians. Good luck with that.

I think you forgot pump and dump OTCBB stocks, pink sheets, and pyramid schemes.

https://news.ycombinator.com/item?id=6728463

Regarding the 10 minute coffee... You can leave as soon as you pay, at some small risk (which could easily be absorbed by the payment provider), you don't necessarily have to wait for the 10 minute confirmation.

> Africa's stranglehold on unstable currencies?

You misspelled "insanely inflating". At least BTC is deflationary, albeit unstably.

> Thieves being able to steal your electronics and your money all at once?

If you're irresponsible (weak passwords, no backups, leaving things decrypted, using Windows... hehe), sure. If you keep your money at somewhere like Coinbase (where they keep 90% of their funds offline in cold storage) and use 2 factor authentication, very unlikely.

Funds in BTC can't be kept 'offline', if you know the private key you can spend the coins.

So the key is never to keep the private key decrypted, anywhere. And to make it extremely hard to brute-force.

https://en.bitcoin.it/wiki/BIP_0038

You could also split/shard it into pieces where M of N pieces are required to reconstitute the original key.

http://point-at-infinity.org/ssss/

It will drop, but you would not have guts to buy it at $50, because you would be scared of the downtrend.

My recommendation for you is to stay away from trading (whether bitcoin, stocks, FX or anything else).

Rule of thumb: Don't make speculative investments unless you know something that everyone else doesn't know.

How many other people are thinking the _exact same thing_ right now?

I bought when only programmers knew ($4 / BTC) buying now would be buying when only techies and finance people know ($400 / BTC) if bitcoin continues to succeed and starts to get used for say, people sending money home to Pakistan it will be AT LEAST ($40,000 / BTC) and probably much much more depending on its usefulness. But the bet now is that it becomes very successful, not that it gains some momentum.

Out of curiosity, how much did you buy at $4/BTC?

Out of even more curiosity, have you unloaded, if not, why is a 10000% return insufficient?

Re: 10000% return...that's sort of a reverse-sunk-cost fallacy, isn't it? (Found gold fallacy?)

Whether or not bitcoin is a good investment is an orthogonal matter.

I don't share that online, but I have sold about 80% of what I bought at different levels. I'm holding on to the rest in case bitcoin gets north of $10k. I'm not a bitcoin millionaire, please don't kidnap me and force me to send you bitcoins :(

> Don't make speculative investments unless you know something that everyone else doesn't know.

Bitcoin has not caught on in the general worldwide population.

Simply knowing of its existence and understanding it at this point in time could be the hallowed knowledge you speak of here.

You're not comparing your knowledge to the median human - that would be insane. In five minutes you can become vastly more informed than the median human on any specific given investment, because there are millions of possible investments and most people spend most of their time on other things.

You're comparing your knowledge to the smartest, richest people looking at the same possible investments as you, because the market has already priced in their predictions.

That's just the kind of advice that could lose some keen programmers (with no financial background) a lot of money.

It's not advice at all, and I'm not sure why anybody would take it to be.

Fairly obviously because you're saying those in this thread have some kind of inside track on the future of BTC.

Taking fairly random speculation on the internet from a stranger--which contains no suggestions whatsoever on whether to take any financial action at all--as personal investment advice is the sort of behavior that could lose some keen programmers a lot of money.

I'm glad we agree :)

There are many people who bought real estate in 2006 with this same mindset.

And this is why:

* It's referred to as "speculation".

* You don't "invest" more than you can afford to lose.

Eventually bitcoin will crash again. The big question is when. Some people will win, some people will lose. That's just how it is. There are many advantages and disadvanteges to bitcoin - non-centralized, not controlled,but also volatile, prone to hoarding right now, etc. To have a more stable currency a few wrinkles will need to be addressed.

"it may or it may not crash soon, it has many advantages and disadvanteges, there's stuff to be adressed"

Indeed, less verbose, but also less artistic :)

If you were to wake up tomorrow and realize all the money you put into Bitcoin vanished into thin air, how much would that amount be that it wouldn't ruin your life? $100? $1,000? That's a good way to figure out how much you should invest. But with Bitcoin, think long-term.

You're thinking of Bitcoin like a stock. It is not a stock. Everyone agress that it is likely to either go up my orders of magnitude, or not do that.

"Not do that" includes local price fluctuations that aren't predictable anyway, which is what you are trying to predit--like a stock.

Either invest in it because you want to invest in something that will either be the next HTTP or will be the next Gopher, OR don't invest in it because you don't want to invest in high-risk obsenely-high-return vehicles.

The more speculation changes, the more it stays the same...

Yeah, I vividly remember in April 2012 (when it was ~$5) whether I should buy a couple K worth of bitcoins and then decided not to.

As always don't invest more than you are willing to lose. There are a million ways that bitcoins could drop to nothing.

This is why I invested 1k at ~$100. If it goes to zero...well, it's not that much money that I'd really care. And it will have been fun to watch all the ups and downs.

But if that $1k ends up being worth $50k and I didn't buy in...I would be so pissed.

Definitely don't invest anything you're not okay losing.

Yeah... well I somehow managed to sell a couple days ago at 275.... right at the bottom of the quirky crash - and I feel ... depressed.

Did you sell for personal reasons, or because the drop scared you off, or what?

I decided to sell at 350. I sat down on my computer, and put in my sell order at 352.Then it started to drop. Then suddenly, it crashed, 2 dollars a second. I watched it get down to 275, and then I just lost my nerve.

Basically, it was incredible, incredible bad luck. As I havent really "watched" the price, for about 2 years.

tl;dr; Bad luck can actually happen to you

Hang on, that sounds like a serious limitation in the trading platform if you can issue a sell order at one price and have it fulfilled at a different one?

Every trade platform I've used provides two options: sell at current market price, or sell at a specific, unchanging price. So it sounds like he misunderstood the option he was selecting, or something.

That reads like (s)he was sitting at the computer with the intention to sell at $350, and happened to be there to see it quickly drop to $275, got nervous and cashed out. The unlucky was that (s)he never would have thought to sell it except for seeing the price crash in real time.

That's how every trading platform works. You can put in a limit order where you buy or sell at a certain price, but it's not guaranteed to go through because there has to be someone else willing to take that price. You can also put in a market order, which will always go through, but the price will be whatever is available on the market at the time.

One advice: ALWAYS use a Limit order with bitcoins. Both limit buy orders and limit sell orders. That way you're guaranteerd to buy/sell for the specified price instead of the next best offer.

I know it's a cliché to bring this up but even with BTC being (arguably) instruments for speculation, it helps to keep Ben Graham's "Mr. Market" in mind when you're worrying about what the current exchange rate is. If you went to a store and they discounted your favourite [grocery item], would you rush home and sell all that you had in your cupboard, or buy it up while you can?

Reply on news.ycombinator.com