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Behind bitcoin boom, Japanese retail investors pile in

38 Comments
By Hideyuki Sano

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38 Comments
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bubble bubble bubble!

-2 ( +2 / -4 )

I be missed the boat me thinks.

Oh well.

2 ( +2 / -0 )

I am very skeptical of this crypto currency phenomenon.

Currency is only as valuable as people make it, look at the monetary nightmares called inflation in certain countries.

-3 ( +1 / -4 )

They can buy Bitcoin.... but mining it in Japan is cost prohibitive.

0 ( +2 / -2 )

3,2,1 pop.

1 ( +4 / -3 )

"When I first heard about the bitcoin a few years ago, I thought it was a fraud," said Yoshinori Kobayashi, 39, a former stock trader who took up bitcoin trading two-and-a-half years ago.

You were right the first time - it is a fraud. Even drug dealers and the like using it for transactions on the dark net eventually need to convert transactions to fungible currency. Kind of hard to pay your utilities, rent or mortgage with digital "currency."

1 ( +6 / -5 )

You can't mine Bitcoins anymore, at least not with your computer. They did away with easy mining 2 years ago.

A friend of mine bought 100 of them back in 2013, at $12 each and offered to sell me 10 at $25 each. I said no. Now he's laughing all the way to the bank!

2 ( +2 / -0 )

My question is that if someone made these bitcoins, can't other clever folks make substitutes? If so, won't that cause bitcoin to crash just like turnips did in that turnip bubble in days past?

1 ( +1 / -0 )

"My question is that if someone made these bitcoins, can't other clever folks make substitutes? If so, won't that cause bitcoin to crash just like turnips did in that turnip bubble in days past?"

Not sure what you mean. There are currently 1353 cryptocurrencies for sell. While Bitcoin is the largest with a dominance that currently swings between 50 and 50%, there are some other major players. Litecoin, Ethereum just to name two of the other most popular. There are plenty of trading pairs already established at many exchanges like Bitcoin for Etherium.

And yes, you can't mine Bitcoin unless you buy specially made ASIC miner. But you CAN mine from home in Japan even with the high electricity prices with you GPU. You mine one of the alternative or "altcoins". You either keep the altcoins, but many miners swap them out for bitcoin. Which ever you think might make you the most gains.

3 ( +3 / -0 )

"There's a sucker born every minute."

-- P.T. Barnum

3 ( +4 / -1 )

After two plus years experience as a bitcoin trader Yoshinori Kobayashi, I would assume, has a risk/exit strategy.

It could only be a question of time before regulation will have a determinate affect on market value.

Blockchain in the U.S. Regulatory Setting: Evidentiary Use in Vermont, Delaware, and Elsewhere.........

http://stlr.org/2017/05/30/blockchain-in-the-u-s-regulatory-setting-evidentiary-use-in-vermont-delaware-and-elsewhere/

The dilemma, determining legal ownership at a given point. Here is where legislative regulation could have profound consequences in determining future value.

Basically how a regulatory authority will take shape country by country. I believe ‘Satoshi Nakamoto’ is a syndicate or group, not a single entity or person.

2 ( +2 / -0 )

My question is that if someone made these bitcoins, can't other clever folks make substitutes?

They already have.

If so, won't that cause bitcoin to crash just like turnips did in that turnip bubble in days past?

Why would it?

That's like wondering if I created a search engine, if it would crash Google's stock.

0 ( +1 / -1 )

Well I know enough to know enough that I don't know enough about bit coins to risk my hard earned yens. Will stick to dollars, bonds and maybe real estate. Wish you all luck.

At tail end of Lehman shock my buddy lost all his "savings" of 90,000 real dollars in 24 hours due to margin trading. Another guy I know at tail end of Internet bubble saw his stock portfolio of 800,000 real dollars wither to under 100,000 because he didn't have the wherewithal to get off the roller coaster.

3 ( +3 / -0 )

Let's review: around half the world's trade in bitcoin is in Japan, partly because an entity with the pseudonym Satoshi Nakamoto sounds Japanese and triggers national pride. No irrationality there. And this is after the incredible Mt. Gox debacle here. I'm starting to become convinced that the ultimate value of bitcoin is in the provision of free entertainment. Keep the rally going for laffs, 'retail investors.'

3 ( +3 / -0 )

My friends have made some serious money over the last two months. Wishing now I got on board.

But it ain't that simple...

Now their ever waking minute is spent watching their share move.

Every conversation they have is about bitcoin...zzzzzz

They have the future worry of being taxed on something that they quite easily could have (and may still) lose. Bit unfair that one, given the risks involved.

They are also (as others have said) on the roller coaster and scared to get off.

Beginning to think maybe I was the smart one.

Or was I?

3 ( +3 / -0 )

Being traded on the "Bigger Fool" theory.  I have a few friends who have made quite a bit in the last 6 months buying this holding for a week or so and then selling.  Repeat.  I am highly skeptical and am certain this will end up burning lots of "investors", but good luck to those who make money and get out just in time.

4 ( +4 / -0 )

That's like wondering if I created a search engine, if it would crash Google's stock.

I think the better analogy is to ask whether the stocks of cutting edge companies like Webcrawler, Infoseek, Altavista and Excite would crash if Google created a search engine. We obviously know the answer.

Just like anything which derives its value from popularity and voluntary participation, Bitcoin's decline and eventual demise within our lifetimes is almost inevitable. Something more popular and will come along and people will migrate towards it. Perhaps Elon Musk will develop his own cryptocurrency and use his marketing skills to make it popular? Until then you can try to use Bitcoin as a currency, but you'd be crazy to use it as some sort of asset or store of value.

2 ( +2 / -0 )

I think the better analogy is to ask whether the stocks of cutting edge companies like Webcrawler, Infoseek, Altavista and Excite would crash if Google created a search engine. We obviously know the answer.

The question is whether making a substitute would crash bitcoin. There are substitutes, and they haven't crashed bitcoin. I think my analogy was correct.

Bitcoin's decline and eventual demise within our lifetimes is almost inevitable.

People said much the same when credit cards came around.

0 ( +0 / -0 )

The original 'miners' are creating this stuff out of nothing and people who swap their fiat currency for it are giving the miners their money in exchange for nothing other than what already happens in the old fiat currency system. i.e. a database of transactions. So instead of old evil banks collecting fees at fixed rates, the new bankers aka the miners are collecting fees at exorbitantly higher rates and the whole scarcity nonsense is there to keep that rate ramping up until the original miners decide to pull the plug and walk away after securing all of the beautiful fiat currency that they've collected in nice safe Swiss bank accounts.

Since it all began with the magical white paper, it may simply end with a black paper written anonymously and published magically on the internet where Satoshi Nakamoto (whatever that is) says thanks for playing my game. It was fun.

1 ( +1 / -0 )

The original 'miners' are creating this stuff out of nothing and people who swap their fiat currency for it are giving the miners their money in exchange for nothing other than what already happens in the old fiat currency system. 

On the contrary, there are some very major factors that give bitcoin value other than the old fiat system. If there was nothing to differentiate it, it literally never would have gained any traction.

instead of old evil banks collecting fees at fixed rates, the new bankers aka the miners are collecting fees at exorbitantly higher rates 

You're comparing the minors to banks, whereas the mining part of the operation is the equivalent of mining gold, which theoretically is the basis behind fiat currencies. And what happens when people pull some nuggets of gold out of the ground - they create this 'stuff' (money) 'out of nothing'.

Since it all began with the magical white paper, it may simply end with a black paper written anonymously and published magically on the internet where Satoshi Nakamoto (whatever that is) says thanks for playing my game. It was fun.

While Nakamoto started it, he/they could not stop it even if the/they wanted to.

-2 ( +0 / -2 )

You seem to be very switched on to this Strangerland.

I hope you've made enough to see you right in your retirement.

...and know when it's time to count your blessings and get off the ride.

2 ( +2 / -0 )

It is a gamble, plain and simple.

Since when can I buy stuff with bitcoins ?

Wait and see. Or pray (prey) hard !

2 ( +2 / -0 )

I hope you've made enough to see you right in your retirement.

I haven't put even a single yen (or any other denomination) into Bitcoin, and while I have a small amount from some work I did at a time when the rate was much lower, it wouldn't last me more than a couple of months.

...and know when it's time to count your blessings and get off the ride.

I've already got my value out of it from services I've paid for with the bitcoin I had. Any usage I get out of my it is all bonus now. If/when the value crashes, I'll wait it out. Or if it doesn't crash beyond what it was worth when I got it, I'll continue to use it. Either way, bitcoin is going nowhere anytime soon.

-1 ( +0 / -1 )

@Strangerland

 the operation is the equivalent of mining gold, which theoretically is the basis behind fiat currencies

Can you clarify this because it's not accurate. Gold mining is the antithesis of a fiat currency. The idea behind gold and gold-backed currency is that is has inherent value as jewellery. In this system, the paper currency is a promise that the government will exchange the paper for gold on demand. The idea behind a pure fiat currency is that someone declares (by fiat) that something without any intrinsic value will now be valuable. In the case of Japan, that's the Yen. In the case of Bitcoin, its Bitcoin. Bitcoin has no intrinsic value. Perhaps you can claim that the anti-inflationary algorithm of Bitcoin provides some stability and this gives Bitcoin some value, but the exact same can be said about the stability and inflation targets offered by any central bank.

On the contrary, there are some very major factors that give bitcoin value other than the old fiat system.

Such as? There is nothing Bitcoin can offer that a central bank cannot. The one major thing which Bitcoin lacks that other national currencies do not is violence. The violence and deprivation of freedom that you or your employer will face if you refuse to buy the national currency in order to pay your taxes. This monopoly on coercive force by the state is what fundamentally distinguishes the demand for national currencies from the voluntary system of Bitcoin.

 If there was nothing to differentiate it, it literally never would have gained any traction.

Greed and the bigger fool theory ( mentioned above by wakarimasen). Same a 'Turnip' Mania.

The question is whether making a substitute would crash bitcoin. There are substitutes, and they haven't crashed bitcoin. I think my analogy was correct.

Not yet. But they have certainly affected its value to some extent. The millions being poured into Bitcoin alternatives would likely have been poured into Bitcoin had those alternatives not existed, driving up the price even further. The question is when will an alternative gain enough popularity to overtake Bitcoin. Nobody knows, just like nobody could have predicted that Facebook would overtake MySpace within such a short span of time.

0 ( +0 / -0 )

good luck to you when the bitcoin scam crashes

1 ( +1 / -0 )

If anyone is not clear what Bitcoin is and how you can lose your fortune investing in it:

https://www.youtube.com/watch?v=Vd19SboRhVY

0 ( +0 / -0 )

The idea behind a pure fiat currency is that someone declares (by fiat) that something without any intrinsic value will now be valuable. In the case of Japan, that's the Yen. In the case of Bitcoin, its Bitcoin. Bitcoin has no intrinsic value. 

Gold has no more intrinsic value than bitcoin. It's a rock found on the ground, that people have decided has value.

Value is wherever people attribute it. Value is self-defining. And some people see the value behind bitcoin. I've explained it multiple times so I won't bother repeating now.

Such as? There is nothing Bitcoin can offer that a central bank cannot. 

Ok, I guess I do have to explain it again. It's an anonymous means of currency that removes the middleman and lets people control large volumes of money in a secure fashion. It puts the power of money back in the hands of the people, and takes it away from banks and other financial institutions.

Banks cannot remove the middle man, they ARE the middle man. Banks cannot provide anonymity, their system requires an association of an actual person or institution in order to facilitate any transaction. Bitcoin simply requires a digital signature, which has no requirement to be associated with any person or institution.

Greed and the bigger fool theory ( mentioned above by wakarimasen).

That's not what first drove bitcoin. When it first came out, it had no value.

Not yet. But they have certainly affected its value to some extent. The millions being poured into Bitcoin alternatives would likely have been poured into Bitcoin had those alternatives not existed

We weren't talking about 'affecting value', the question posed was if a substitute would crash bitcoin. And again, substitutes do exist, and not only have they not crashed its value, its value has skyrocketed.

The question is when will an alternative gain enough popularity to overtake Bitcoin. 

Sure, just like the question with credit cards was when an alternative would gain enough popularity to overtake them.

Nobody knows, just like nobody could have predicted that Facebook would overtake MySpace within such a short span of time.

Sure, nobody knows, just like nothing has really overtaken credit cards in the past 30 years, and they are now being used more than ever.

0 ( +0 / -0 )

@Strangerland

Gold has no more intrinsic value than bitcoin. It's a rock found on the ground, that people have decided has value.

Gold actually does have intrinsic value. There is no other element in the universe that shares its unique properties, none. I understand the meta argument you're making about things only having value if people value them, but we live in a world where the reality is that people like gold and always have. I could just as easily say that salt has not intrinsic value because people only buy it since they have decided that they like the taste. That is technically true, but it's not a great insight.

 It's an anonymous means of currency that removes the middleman and lets people control large volumes of money in a secure fashion. It puts the power of money back in the hands of the people, and takes it away from banks and other financial institutions.

I think you are overstating the benefits. Cash is far more anonymous. In terms of security, cash is just as secure. If someone comes to your house with a gun or pulls a knife on you in a dark alley, they can get your Bitcoins just as easily as looking under your mattress or forcing you to empty your pockets. I also don't see why banks and financial institutions pose any threat to society. A few years ago a friend of mine accidentally added another zero to a wire transfer. The shady recipient decided that they would keep the money. My acquaintance called the banks involved and within a few hours the money was scooped out of the receivers account and plopped back into my friend's account. Moral of the story: Yes, banks charge for their services, but they do actually provide a service.

Sure, just like the question with credit cards was when an alternative would gain enough popularity to overtake them.

I'm really not sure why you keep mentioning credit cards. They are not an alternative currency in the way Bitcoin is. They are just part of the credit system that builds up around any currency. It's the same way that I can 'create' money if I buy you a train ticket and tell you that you can pay me back later. There is nothing extraordinary about that unless I insist that you repay me in some alternative currency like M3Coins or Bitcoin.

0 ( +0 / -0 )

There is nothing Bitcoin can offer that a central bank cannot. 

This is really missing the whole point of bitcoin, which is decentralization. A central bank (or central anything) cannot, by definition, be decentralized.

The one major thing which Bitcoin lacks that other national currencies do not is violence. 

Spot on! And what makes a currency backed by violence preferable to one not backed by violence?

I believe ‘Satoshi Nakamoto’ is a syndicate or group, not a single entity or person.

He is pretty clearly one person. Though we don't know who he is/was, he is not a phantom. He exchanged ideas in emails and posts that can still be read today in the forums where he posted them. He was helped by many whose names are public knowledge, but they don't know exactly who he is either.

People are naturally resistant to change, especially revolutionary change. So no surprise that we hear it called a scam, a bubble, tulipmania, or whatever by people who are mostly almost completely uninformed about it. I imagine there is also a bit of resentment at "missing out" by some.

Sure, bitcoin may be replaced, the way Facebook replaced MySpace. Part of the fun is trying to pick that "Facebook" out of a few 100 viable currencies. But the concept isn't going away.

0 ( +0 / -0 )

@commanteer

Spot on! And what makes a currency backed by violence preferable to one not backed by violence?

I'm not sure it is preferable from a moral standpoint, but at least I know that demand is unlikely to dramatically decrease overnight. Every nation state with a reserve currency is likely to outlive Bitcoin.

This is really missing the whole point of bitcoin, which is decentralization. A central bank (or central anything) cannot, by definition, be decentralized.

Spot on! And what makes a decentralised currency preferable to one which is centralised?

Sure, bitcoin may be replaced, the way Facebook replaced MySpace. Part of the fun is trying to pick that "Facebook" out of a few 100 viable currencies. But the concept isn't going away.

I'm glad to see you have no illusions about this. But you are essentially admitting that you are looking at this as a speculative investment opportunity rather than something that can be a purely transactional currency with no financial gain (which is sort of the idea behind Bitcoin).

0 ( +0 / -0 )

Bitcoin along with litecoin and ethereum and the three major coins. They are the currency bases that you buy to trade altcoins, these three major coins will be around as long as traders trade alts like penny stocks but their values worth over time will be the question

0 ( +0 / -0 )

M3M3M3Dec. 14  07:54 pm JST

@Strangerland

Gold has no more intrinsic value than bitcoin. It's a rock found on the ground, that people have decided has value.

Gold actually does have intrinsic value.

Gold has some intrinsic value, but not as much as iron ore, tungsten, copper or even bauxite. Gold's value is mostly magical. It's value is even more of a "fiat" than government issued currencies and has no value as a form of exchange for market determined values for goods and services.

0 ( +0 / -0 )

Of course Bitcoin is a gamble. So is life. So is your marriage. No risk, no rewards. Take a risk, no regrets. If you fall, dust yourself off, and get back on that tricycle.

0 ( +0 / -0 )

Every nation state with a reserve currency is likely to outlive Bitcoin.

I'll have to disagree there. Nation states dissolve all the time, and that is likely to increase.

Spot on! And what makes a decentralised currency preferable to one which is centralised?

I would expect Strangerland has explained this. In short, a decentralized currency is resistant to manipulation by governments, and by anyone eventually. Decentralized currency, internet, hosting or storage cannot be seized, shut-down or hacked easily either. Though people today accept that currencies are issued and controlled by government, there are no good reasons why that state of affairs should continue - especially considering how irresponsible governments have been in managing finances. Yes, they can enforce their currencies with violence, but even violence can only go so far.

But you are essentially admitting that you are looking at this as a speculative investment opportunity rather than something that can be a purely transactional currency with no financial gain (which is sort of the idea behind Bitcoin).

Of course it's speculation. It's early days. But I started speculating because I really saw this as the next era of currency. Right now prices have to settle, so there will be speculation. Crypto will eventually be the preferred transactional currency - I am certain of that. Also, I don't think Satoshi Nakamoto was concerned about people speculating. He expected it to some degree. His goal was a currency, but he recognized it would go through a speculative phase - as all break-through technologies do.

0 ( +0 / -0 )

"Bitcoin isn't a bubble.

It's the pin."

0 ( +0 / -0 )

Bitcoin trade , the digital currency, is certainly something that the world is fascinated to. An in-depth analysis of the buyers' intentions and anticipations, the highs and lows of Bitcoin price, benefits and downsides of the currency are rather worth discussing.

0 ( +0 / -0 )

Gold? I've bought gold from half a dozen countries around the world and exchanged it for local currency in three. It's shiny, made by colliding stars, useful in shielding spacecraft from heat re-entry and I love it..... Bitcoin? Not much to say....

0 ( +0 / -0 )

Bitcoin? Not much to say...

Not much to say. Posts in every thread about bitcoin...

0 ( +0 / -0 )

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