Quote from: Grafzep on April 15, 2014, 09:13:23 PM

Quote from: Newfeeling on April 15, 2014, 08:25:27 PM

I like what that one dude said about buying bitcoin being akin to buying options with no expiry date. It changed my way of looking at things.

This is exactly what I thought when I started buying. I traded gold and silver options back in the day to gear up my physical positions and I always hated rolling over (or not) on expiry. With BTC I loved the idea of (amongst other things) taking a hedge against the shaky-looking financial system (Chancellor on the brink...) without value time decay and in fact a good chance, by design, of appreciation over time.

It amazes me that anyone with an interest in economics or PMs or trading of any kind wouldn't take a position in BTC, even a small one. The downside limit is just your stake, but the upside possibility is immense. People talk about diversifying, usually into a less risky asset when another has done well, but diversifying is also about having a little something from the wild side, just for the chance of a moon shot. That's how you beat the averages, that's how you break out. In those terms BTC is a no-brainer.

When I first started buying in summer '12, there was still a real risk of complete collapse - that's why it was cheap. In the 22 months since the protocol has withstood a hacking/stealing technical onslaught and the tech odds are very much more in favour of survival, so the risk/reward has changed. Now the price is weighed down by regulatory uncertainty and is cheap because of the PTB onslaught. It may successfully come out the other side in which case the price would obviously go nuts, but even it doesn't there will be some market for a proven, robust, near-anonymous, trans-national, transferrable store of value.

Why on earth wouldn't you hold a least a few as a portfolio outlier? No need to trade, no need to guzzle the kool-aid or even hang around here, it's simply the easiest bet of trading lifetime.

This is an excellent and profound insight that I have also harboured for some time ... and one that most people get to at some point. The cost of holding a few bitcoins as percentage of total holdings is minimal, and dropping as services get better. Ever since it started trading for fiat the middle-of-the-road position has been "why not hold a few?".

There is an interesting exercise in statistics that backs up this reasoning in the case surrounding buying lottery tickets. Just living in the city, state or country where a lottery is taking place puts you minimally in the game, whether you like it or not, because there may be a very, very slim chance that someone, a friend or relative, will gift you a lottery ticket as present or you find one on the street. Now the odds that you will win the lottery from a gift/found ticket are clearly astronomically less than winning the lottery with a ticket that you brought for yourself so as risk/reward the first dollar you spend on buying the lottery ticket is improving your odds by a greater margin than than buying more and more tickets. In this sense, buying a lottery ticket makes more sense economically than not buying just by the fact that you are in the proximity of a lottery taking place. The cost of reducing those first odds is much less than decreasing them further after the first ticket.

The same is true now for the whole globe, by buying a few bitcoin you are much more likely to gain from them than by not buying but by being gifted or finding some e.g. It is somewhat scary, especially for people like Jorge Stolfi, that you are already in the bitcoin game now, whether you like it or not!!! ... unless you are an undiscovered Amazonian tribe member.

TL;DR .... you can NOT afford to be out of bitcoin as an economic risk/reward proposition by mere fact of you being on the Internet.