So what do you guys think about Bitcoin's prospects these days?

[Casual Observer]

I have to listen to you guys about stuff like this because I really don't bother to drill down and you guys know your shit. What do you think about the prospect of Bitcoin going up again? I keep getting linkedin connections from bitcoin traders, the one today said I could get in for 0.05btc which today is $461. I know btc used be up to $3k and fell hard, I'd be willing to gamble the cost of a night away with my wife if there's a chance it won't just drop to zero in the next few years.

What do you guys think of Bitcoin these days?

[RealNC]

I know btc used be up to $3k and fell hard

It was up to 19k. Now it's at 9k.

It doesn't look like there's any rhyme or reason behind the btc price curve. Investing in it is pure gambling. If you get lucky, you win.

[RetroRomper]

The emails you mentioned sound like they're about two steps away from a FORAX scam.
https://www.nasaa.org/2801/cftcnasaa-in ... ncy-fraud/

[Casual Observer]

The emails you mentioned sound like they're about two steps away from a FORAX scam.
https://www.nasaa.org/2801/cftcnasaa-in ... ncy-fraud/

Yeah, they won't even actually email me something, just expect me to give them money through linkedin or something I guess.

[Tdarcos]

The emails you mentioned sound like they're about two steps away from a FORAX scam.

I thought you had discovered something new. What you were referring to is FOREX, short for "FOReign EXchange."

The idea is, let's say your company is going to sell 50,000 tons of #55 white flour to a bakery in Paris. The payment is guaranteed no later than 60 days after delivery by irrevocable letter of credit issued by BNP Paribas, France's largest bank, which is worth about US$2 trillion, so your company will be paid in about 60 days (the baker has to sell those bagels to pay you back, but the bank guarantees payment). They'll pay the equivalent of $2 a pound, or €1.77. That's $200 million, or €177,000,000.

Well, you can't pay your employees or suppliers in Euros, so you purchase a FOREX contract to sell €177,000,000 for dollars in 60 days. This is a guarantee that you will deliver Euros, you have to deliver the contracted amount, if you don't have them when the contract comes due you have to buy a spot option or spot contract ("spot" means "immediate delivery") to purchase them. That's about 2,000 FOREX contracts. Since you will receive euros, the contract will guarantee you will sell €177,000,000 for $200,000,000. Now if the value of euros goes up near the end of the contract, you buy a spot contract or option for the reverse and cash out at a profit. If the value of euros goes down, you let the contract complete and take what you were promised, $200,000,000. It's a form of insurance against currency fluctuation. 2,000 contracts will cost about $25,000 in fees, but if in the 60 days the price of the Euro drops by a mere €0.01, so that US$2=€1.78, you've lost about a million bucks, unless you're protected with a FOREX contract or option. So you could conceivably make a profit, but this way your maximum loss is the fees to book the contract.

What most people would do is buy options, where you purchase the right - buy not the obligation - either to buy or to sell a particular currency a a future date. If you guess right, you by a spot contract or option for the reverse, then exercise both and cash out. If you guessed wrong, you let the option expire worthless.

With a futures contract, you're on the hook if the price goes the wrong way, like you're selling Euros because you think they're going to fall. If their value goes up, and you don't have them, you've got to buy a spot contract for delivery and pay the difference. But if you have them, and their value goes up, you happily buy a spot contract to cover yours and collect the difference as extra profit.

[Casual Observer]

Damn, I was almost hoping the commander had something to say about Bitcoin.

[Ice Cream Jonsey]

It's a senseless crap shoot, CO - I would imagine since 30 million Americans have less money to spend on dumb shit that the price of a bitcoin won't go up much until after the election and we start fixing things.

[RetroRomper]

I actually ended up getting in early on the Bitcoin train (as in, five or six years early I think.. The price of Bitcoin at the time were cents and the whole thing was more of a proof of concept, but I ended up selling like ten or so at $4,500 which went straight to my Student Loans and other debt I'll still never be able to pay off.

Oh... And about $1200 total I blew on a birthday dinner for myself at Commis, a few meals at Chez Panisse and $450 at Smuggler's Cove in SF http://www.smugglerscovesf.com/ Everything is stupidly overpriced and the bartender worked for tips, but it was still an experience and the visit with the friend was beyond memorable.

That was a great year.