FBI seizes 1.5% of bitcoins, deflation kicks in, zeppelin laughs to bank

The Core RPGC Main Forum
#1

So I’m sure many of you are aware that the largest single use of bitcoins was to buy drugs on a web site called Silk Road. Well, somehow the FBI figured out who the guy who ran it was (he called himself the Dread Pirate Roberts for you Princess Bride fans) and so they shut the website down and seized nearly 180,000 bitcoins, or 1.5% of the total supply of bitcoins (of which there are about 12m in total in circulation). The market currently thinks the FBI will simply throw the bitcoins away, meaning they will never re-enter circulation again. there is already only a limited number of bitcoins in existence, so removing 1.5% of the currency has caused a massive deflationary spike in the currency, sending the value of 1 bitcoin up well over $200, meaning your good friend zeppelin’s investment of about $550 is now worth over $30,000!

Of course, it doesn’t compare in the slightest to this guy:

http://www.theguardian.com/technology/2013/oct/29/bitcoin-forgotten-currency-norway-oslo-home

This has been your weekly buttcoin news brief.

#2

Did you really buy $550 worth of buttcoins?

#3

I’m more curious if he was the one who tipped the FBI off.

#4

So bitcoins passed $750 today, bringing my measly $550 investment to over $113,000. And you all laughed about disregarding females.

#5

I suspect that it might behoove you to cash out now while the cash is still good.

Additionally, you’ll be able to start regarding females again with your Internet fortune safely lining your pockets.

#6

The moment anyone tries to cash any significant amount of it out 2008 will happen all over again except with imaginary value instead of a real house

#7

Maybe, but a 90% crash in the price would still leave me with a ~3,300% return or so…

Rumor has it that bitcoins have become hugely popular in China as a means of moving money freely across borders. Given there’s basically an insatiable demand to get money out of China at the moment, if it’s true that’s a major cause behind the appreciation then it could continue quite a bit further. The fact that Bitcoins are infinitely divisible is one reason I bought 'em in the first place, because buying goods and services with Bitcoins hasn’t technically become more expensive in real USD terms. If I’m a business accepting bitcoins, I’m simply adjusting the exchange rate to keep it relatively on par with the USD price. So it’s not quite the same as an increase in gold prices, cause I can’t just chop up my block of gold into something smaller, I can still use the currency while it’s appreciating.

I suspect that it might behoove you to cash out now while the cash is still good.

Additionally, you’ll be able to start regarding females again with your Internet fortune safely lining your pockets.

That’s the same thing people told me when they were worth 30, 50, 100…

Sadly even with $150,000 in bitcoins I’m still technically in debt. Thanks, ridiculously expensive business education.

#8

You REALLY should have told me when you were buying Buttcoins. I might have been willing to throw ~$200 down the drain on a lark. And now…

#9

Well, that’s the benefit of being a real early investor.

Are you still frequenting China btw?

#10

Did your expensive business education mention tulips at any point? I hope you were inspired to turn your bitcoins into $$$ while they were around $1000 a piece.

#11

I was back in September to visit my ASIAN WAIFU’s family and endure two weeks “so when we getting that grand kid?” and I’m like to them “soon soon” but in my mind I’m like “lol not any time soon LOSERS my wife is 21 ain’t gonna happen”. but later that night I was weeping in the corner cause actually years of abusing my body with alcohol, drugs and chinese pollution have left me impotent and frail.

But yeah, I’m back in Chicago and looking for a job here after I graduate. Not going back to that pollution-filled nightmare even for all the poontang in China.

Pretty sure everyone learns about the great tulip bubble. Even If I sold my 151 bitcoins (yeah my favorite drink, so, you wanna fight about it?) at $1,000 a pop, I’d still be in debt after I paid my taxes on the money…I’m thinking about trying to liquidate them into my Chinese bank account (bitcoins have become huge in China as a way of smuggling money in and out of the country to get around caps on capital flows, some say a big reason for the bidding up of the price), so I could avoid paying the capital gains on them. But then the problem is getting the money out of China and back to the U.S., I could do it $10k at a time (well $20k technically since both my wife and I could take $10k aboard the plane) every time we go back to visiting her family. Or maybe I’ll just man up and pay the taxes.

But I think I’m just gonna ride the wave til they’re worth a million or zero.

#12

zepp is a modern day Underdog.

#13

China is cracking down on Bitcoins as I’m sure you know. Don’t be a fool and sell immediately if you haven’t already. Paying 15% (or whatever your capital gains rate is) and then reinvesting in something that’s not on the bad side of a speculative bubble is better than holding your coins until they’re down under $50. I’m not sure exactly in what - interest rates have been near zero for years and don’t show any signs of going anywhere anytime soon, as as far as stocks go my portfolio is all super-aggressive stocks and its up almost 50% over the last year. If it were me I’d just hold onto the cash and wait for the inevitable correction. Or maybe gold if people start getting panicky about inflation, gold is really low right now.

There is a huge demand out there for some digital version of cash, but Bitcoins aren’t it. Without government support it can never be a real fiat currency, the lack of any kind of oversight makes it vulnerable to manipulation, and its volatility prevents much legitimate trade being executed in Bitcoins. Their main use seems to be as a speculative vehicle and a proxy for more well-established currencies.

#14

We really need Zepp to update us on all the buttcoin drama now that Magic: the Gathering Online Exchange is declaring bankruptcy and lost like a million buttcoins.

#15

I didn’t lose anything…since I didn’t use MtGox. I sold one bitcoin for about 850 about a month ago (before the MtGox hacking)…prices haven’t completely crashed, they’re still around 500 or so. What I’m wondering is…with all these bitcoins being stolen and hacked…are they returning back into the supply or just disappearing? If the latter…then ironically this could all lead to another huge price surge once everything settles down, but otherwise there could be a pretty big dip if all these stolen coins end up flooding the market elsewhere.

Anyway…some dude on my facebook is crying every hour that he lost a house worth of bitcoins…so i’m guessing he lost hundreds of thousands of dollars in the hack. Why you would keep that much money concentrated anywhere in one place like MtGox, which was known to be unsecure…I just don’t know what he was thinking.

#16

So what you’re saying is we should put or money on Dogecoin? Because I’m totally putting my money on Dogecoin.

#17

As ridiculous as dogecoin is obviously, the idea of an inflationary crypto currency makes a lot more sense for encouraging using it for actual online transactions. Given the limited number of bitcoins that will ever be created, the deflationary pressure just makes everyone hoard them instead of actually using them. I think this is part of the reason governments are classifying them as investment assets like stocks or bonds, rather than currencies. So the answer is, no don’t “invest” in dogecoin, the implied inflation rate of 5% per year at the beginning is well above what most currencies are inflating at, and so the value will likely fall relative to dollars.

#18

But dogecoin is sponsoring a NASCAR driver!

#19

Don’t forget the World water day donation and the Jamaican Boblsed team. To the moon!

#20

Zepp, I was thinking of you in the aftermath of MtGox (yet missed the thread update, obviously) - I was hoping you’d sold in time.