Bitcoin

What can you think of that has zero intrinsic worth?  The US dollar has intrinsic value because it is a government sanctioned means of exchange and is required for paying taxes.  The Zimbabwean dollar has the intrinsic value of the paper that it is printed on and could be used to burn to keep warm or as cat litter.  But finding something that has absolutely zero practical use, zero intrinsic value, is actually quite hard.  One thing that fits is bitcoin.

Bitcoin advocates will claim that its value is its limited supply, like gold.  But this is false because anyone can create another currency just like bitcoin while no one can create a new substance like gold.  The response may be that bitcoin is first.  But again, this really is just a temporary advantage, until other digital currencies gain followings.  In truth, the proper value of bitcoin is zero.

So why has it been the best investment in recent years?  Because members of modern culture most value what is worth the least and least value what is worth the most.  Members of modern culture hate everything good and love everything that is worthless.  And this is why they love bitcoin.

Bitcoin is just the latest example of modern insanity.  The US dollar is also overvalued as is the US stock market.  Everything that modern culture does is insane and the insanity will not end until modern culture crashes.

As I pointed out here on another thread, another different between gold and bitcoin, is that the later has predicted supply for a given time.

One of the examples to demonstrate the appeared insanity is Dogecoin - a cryptocurrency that stated as a joke.. but now it's market worth hundreds of millions of dollars.

That, of course, won't change the fact the the Bitcoin might still rise, so the question of weather to buy or not to buy is different question than the question of it's real value.

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Do you think that it would be worth investing in Bitcoin in the short term? Apparently, its value has increased by a factor of 11 over the past year (http://time.com/money/5042117/bitcoin-usd-price-worth-invest/), so I've been thinking of buying a small amount (about $1,000 worth) and selling in a year, hoping that it continues to rise and doesn't crash before that. Do you think that a Bitcoin crash might be imminent in less than a year, or is there no way to tell?

I think there is no way to tell.

https://www.rt.com/usa/412223-nicehash-bitcoin-hacked-million/

Praise God.

Noobs store their bitcoin on an online exchange. Smart people use a hardware wallet.

Ironically a hardware wallet makes bitcoin physical, with all the problems normally associated with physical assets like gold.  It can be robbed or lost or destroyed.

By the way, I think shorting bitcoin is an opportunity of a lifetime.  I will wait for the price stabilize at a high level and derivative products to mature, and then I will look for a far out of the money long duration put option.

If you lose your hardware wallet (Trezor) you can restore your wallet from a seed (24 words you have written down or memorized). If someone steals it they need your 5-digit (or longer) PIN to get access to the money. (That does sound like a risk if someone creates a robot that tries every possible PIN.)

(It's not. "Each time you enter a wrong PIN, the wait time increases by a power of 2. After the first few failures, you have to wait several seconds before you’ll be able to try another PIN. Trying the top 15 PINs would take about 18 hours. After this, the device wipes itself.")

What's a far out of the money long duration put option?

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I thought more about this and I realized that holding precious metals is effectively shorting bitcoin in a safe way.  When the cryptocurrencies crash, precious metals should rise significantly.

Well, I understand the reasoning behind this, but looking at the recent month it seems we haven't seen, so far, a significant negative correlation between Bitcoin and precious metals prices. so I doubt we will see precious metals rise when the cryptocurrencies crash.

"A cryptocurrency inspired by a popular dog meme, that was set up as a joke, is now valued at nearly $2 billion."

https://www.rt.com/business/415272-dogecoin-crypto-worth-2-billion/

https://www.rt.com/usa/442692-crypto-mining-environment-threat/

More proof that the world has gone insane.  Using up natural resources and polluting the environment to produce something of ZERO real value.