Money isn't useful for anything
Some people commented about why I would be confident of the success of bitcoins, but yet not have 100% of my life savings invested. While I do own a significant number of bitcoins, bitcoins are not the largest asset class I own.
The main reason for this is that money is useless. Money, of course, is necessary for food and shelter, but after one earns enough to live a modest lifestyle, excess money provides no additional benefit. Since taxes are low in that bracket, I believe that someone who makes $30k/yr can live an incredible lifestyle. Myself, I spend something like $25k/yr and the rest goes into the bank. If you "need" $60k to survive, then you are too far in debt with oversized houses and cars.
The poorest people today live better than the richest people did in the past. You can go to the grocery store and buy a can of beans that is a hundred times cheaper and a hundred times better than the beans that were produced a few hundred years ago. Every poor person may not be able to afford anything else, but almost certainly has a cell phone. In some countries, a cell phone is guaranteed to citizens as part of assistance programs. That cell phone provides more computing power, knowledge, communications, and entertainment than anyone from the 1980s could have dreamed of. In 1900, there was a huge difference in the lifestyles of the rich and poor. Today, the rich and poor consume the same media and do largely the same things, perhaps just in a bigger house.
I expect bitcoins to appreciate significantly, so why does it matter whether I end up with $2m or $5m? What am I going to buy - a big house or a new Porsche? Those things are pointless. Money can't make people more respectful and open, I can't buy drugs without side effects that treat my condition, and you still have to get up and go to work every day to earn benefits like health insurance that are unavailable at reasonable prices or benefits for the unemployed. Many people spend their lives working 80 hours a week at high-paying jobs, and then waste their money on boats and houses.
The only thing money can buy that is worthwhile is time. If bitcoins succeed, then I'll have enough money to buy the time to do what I want. If they fail, then I will still be able to cut back my hours at 35 or 40 and won't have lost years of office work in a bitcoin crash. Instead of looking at money as "it costs $60k to buy this Mercedes," look at it as "it costs $60k for two years of time off." Would you rather own a Mercedes, or do whatever you want for two years?
Moderation is key to a good forum
The moderators here are great. They delete posts that attack other users, have banned troublemakers, and set guidelines as to how often jokes can be repeated. Unfortunately, the moderator of /r/bitcoin, /u/theymos, doesn't do those things as rigorously, and it shows. I was never able to sign up for his bitcointalk.org forum, because they had a "waiting period" that discourages new posts - when the signup form works. In his defense, he did post a request for more moderators, however, so perhaps /r/bitcoin will become more friendly in the coming months.
This forum has become the best place to discuss bitcoins on the Internet, and the increasing readership is a demonstration of that.
Calm down
Every time there is a slight downtick, there are all sorts of posts where people start to claim that the bubble is over. It's been three days since the last rise, the price has been about steady since then.
/u/moral_agent doesn't believe the next bubble will start to take off for another three or four weeks. If growth had continued at the rate of last week, then we would have broken the bubble cycle. What's happening now is exactly as expected. It's not a reason to start shorting or panic selling huge lots of bitcoins because there's going to be a crash to $200.
Apple is a huge hindrance to bitcoins
Talking with people last weekend, I was surprised at how much Apple is a hindrance to the adoption of bitcoins. While I don't believe that Apple will succeed, their ban of bitcoin applications from their store makes it difficult for people with iPhones to spend bitcoins. My first question to people is "do you have an Android phone" when I buy them 0.01 bitcoins to get started, because which wallet I recommend using depends most significantly upon the answer to that question.
Fortunately, I found out that Apple has something like only 25% or less of the market and their share is declining every day. I seem to remember that they had 90% of the market some time ago. Times have changed, I guess.
Most likely, Apple will be forced to renege on their policy after the next bubble, because once big companies start to accept bitcoins, there will be some downward pressure on their sales once some Android manufacturers start advertising "bitcoin support."
Is it easy to make money in bitcoins?
In a previous daily discussion thread, someone made an interesting observation: "it's so easy to make money in bitcoins," even going so far as to say "becoming rich can't be this easy!" As many of us have found out, it is indeed pretty easy to earn 10x returns on bitcoins and we have shaved years off of our working lives pretty easily.
But why is this possible? In an efficient market, if there were a way to make easy money, then people would flood the marketplace and there would no longer be an opportunity to get rich. After talking to many people, I think that the reason we have been able to make so much money is because so many other people just don't understand technology.
It's not that they can't understand it, it's that they never take the time to do so. I pointed out yesterday that some people like to make fun of those who talk about intelligent topics. There's another force at work here: despite having access to the Internet, many people feel that they need some sort of formal education or training in order to become knowledgeable about something. When they hear about bitcoins, some people recognize: "this is important, so I'm going to teach myself more about it." Most, however, think: "I don't know anything about computers, so this isn't something I will ever be able to understand" or "I'm a mechanic, not a computer guy."
My brother knew nothing about fixing cars, but then the transmission fluid, brake fluid, and oil needed to be changed in my car. I paid him in mining pool ownership shares and he searched the Internet for one night and taught himself how to change these fluids. He made a list of what he needed, ordered some transmission fluid from Nevada on the Internet for $100 along with wrenches and things he needed to do the job, and spent one Saturday changing the fluids. Rather than my paying a mechanic hundreds of dollars, I kept the money in the family and paid him parts plus about five hours of pool ownership credit.
The Internet is a great equalizer, but most people don't seem to recognize that they can make use of it to understand almost anything. The reason why it has been so easy for us to make money is because I think we overestimate the motivation of people to learn new things, and people who are ignorant don't have the knowledge to see opportunities.
It will be interesting to see the counterargument in /r/buttcoin to this theory.
Other
- Has anyone else noticed, and been pleased with, how the music market has started to move towards disco as one of the dominating forms of music on the charts? There has been disco present in music like Justin Timberlake for a year now, but newer albums are starting to ditch the boring major-key rock that has been at the top for the last five years and sound almost exactly like music from the 70s. Listen to Chromeo's "White Women," for example, which is starting to chart in Canada. This sort of music is even more blatant disco than previous works like Pharrell or Michael Jackson's latest albums. Is there a bubble cycle in music, where different genres cycle on a periodicity of 40 years or so? It would make sense, given that two generations would have passed since the last time the genre came up.
- Days until July 24: 56