Quote from: cAPSLOCK on December 10, 2013, 09:18:49 PM

At this time I have a question for our trusty OP.

Why didn't you buy?

I answered this question before. But I'll answer it once again giving more details this time.

1- I can't buy an amount that makes me excited enough to follow its news and be actively trading it. Sure I can spend around 1,000$ buying Bitcoins today, but with today's rates this will only buy me 1 Bitcoin. Is it worth the hassle? in my opinion I'm better of spending my time doing freelance work or finding a good job as the returns I can be making then would be, with a high degree of certainty (at least from my POV) higher than actively trading 1 Bitcoin (or 2 or 3 as a matter of fact).

2- It's hard for me to buy or acquire Bitcoins in the country I live in. As a matter of fact I come from the same country Nassim Taleb comes from and that is Lebanon. If you know Lebanon you'd know how corrupt it is and you'd know the hassle you'd go through if you wanted to buy Bitcoins here.
   a) Fewer then 0.01% of the population here heard of Bitcoin and much less than that own Bitcoins.
   b) If I decided to make a bank transfer and buy it from the open market it would probably be a bigger hassle.
   c) Mining Bitcoins nowadays is out of the question. I'd be better off buying it directly, which is a problem all by itself.

Now you can argue that my first concern is not valid since a Bitcoin can reach a value of 100K or 1 million $ and that this would make it economically attractive for me to even own 1 Bitcoin today (knowing its future value and the gain I can be making over time). I'm sorry to say that I think this is all wishful thinking.

Sure from an economic POV if the total number of Bitcoins to be ever made are limited to 21 million units, then it's easy to imagine that couple of years down the line when its enough spread over the world the market cap of Bitcoins would easily reach 10 - 11 trillion dollars, making each Bitcoin worth 500K dollars (equilibrium when demand = supply). But I don't see this happening for a couple of reasons:

1- If competition enters the market (and it surely started to), and if cryptocurrency always existed couple of years from now (big IF), then the number of total cryptocurrencies in circulation will be much more than 21 million units. So even if total value of those become a couple trillion dollars (to satisfy total market demand), it will be spread over a much wider number of units and so the value of an average unit will be much lower than 500K $. You can tell me here that only few cryptocurrencies will survive as time goes by, but even if that's the case I don't see why those can't be 40 or 50 cryptocurrencies surviving with total units in the market surpassing 1 trillion units. Current market dynamics suggest that it's becoming easier to accept and trade all types of cryptocurrencies, and the survival chance of a big number of them in such conditions i see can be quiet high.

2- If Bitcoin survived, looking at the different parties getting negatively affected by the rise of cryptocurrencies it's easy to see in how many direction it might experience resistance. Be it governments, or be it banks, or be it any type of business that is threatened by it. The pressure that might be exerted on it might make it less attractive to own cryptocurrencies and as a result make it go down in value.

3- Another way current cryptocurrencies may fail is due to all sort of issues innate to them that may not have come to the surface so far. This could be technical problems, economical problems, social problems and god knows what else. As far as I know it's a big experiment and the survival or in this case the death of it will only be proven with the passage of time. I just believe risks are still too high for it to still make a super-high return and survive.

One argument I once had with a user here was about the risk/return of getting into Bitcoins now vs. a couple of months ago and my point was that it would've made much more sense to get into it when the price was relatively low (i.e. 10$ or so) than to get into it today. Today might be less risky, but the risk/return ratio would've still made much more sense back then (I can give you my full analysis regarding that if any of you is interested). I only knwe about Bitcoin once its value surpassed 700$ a unit...

I personally believe it's a bit late for me to get into the game for the sake of making a profit out of it. Sure I might someday acquire some for its ease of use and all the other factors that makes it attractive due to its properties. But to make a super-normal profits out of it, I think this could've only be done couple of months ago when the price of each unit was below a certain value (that's my personal opinion, and the reason why I'm a bit reluctant to get into it now). I might certainly be wrong, only time will tell.

Now if your question was "why didn't you try to benefit from those swings that happened right after the Chinese government's announcement", I'll tell you that it's because I didn't have Bitcoins back then and I couldn't have bought it and made the trade all in a timely manner to take advantage of it.

I'll be happy to hear counter-arguments "that make sense" instead of just talking nonsense. Please back up your counter-arguments with strong analysis.