Archive for Investing

Economics – The value of bitcoin

Posted in Computer Software, Economy, Income with tags , , , on 2015/08/24 by rmolby

I have been involved in bitcoin mining from the early days, but with mining becoming more and more difficult, I have decided to not expend any more regular money on the endeavor, instead to concentrate on bitcoin faucets.

So I was looking at an app called BitMaker on my smartphone, an app that trades viewing ads for small amounts of bitcoin called Satoshi.

A Satoshi is one unit at the 8th decimal place, or 0.00000001 BTC. Since there will be a maximum of 21 million bitcoin ever mined, and there are roughly 7.5 billion people on the planet, and growing, we will need approximately 0.0028 BTC, or 280,000 Satoshi, per person at the current population levels.

To figure out what it take at a minimum to survive in the USA, including food, rent or mortgage, utilities, etc, I will be looking back to 1964. There is a reason for this I will get into shortly.

In 1964, you could live at the transition point from lower to middle class, pay all your bills, live in a decent house, drive one car, have one TV, and not be at the brink of poverty. It meant being frugal. The minimum wage in 1964 was $1.25 and it would provide that level of minimum living on ONE income. FIVE quarters (25 cent coins for those outside of the USA) per hour would pay that level of income!

Now, the reason why I chose 1964 is the fact that there still was silver in quarters, 90% to be exact. If we go to Coinflation.com, we see a single pre-1965 quarter is worth $2.6403 in 2015 dollars. So 5 quarters would be $13.20, that is more than today’s minimum wage in most areas of the USA. That is $27,459.12 per year in 2015 dollars. Back in 1964 you could live decent, today that makes you poor and in some cases eligible for welfare!

But let’s assume that today we COULD eek out a living on $28,000 per year. I rounded the number to make the math easy. As you saw above, there are about 280,000 Satoshi per person, per year, so, that would make each Satoshi worth $0.10 or 10 cents. If this is the case, then 10 Satoshi make $1, and one bitcoin would be worth 10 million US dollars.

Right now, BitMaker allow me to bring in around 16000 Satoshi a week, currently, at about $280 per BTC, that is about 4-5 cents, however, if bitcoin would be worth what it should be as described above, this would represent US$1600, a significant amount of income.

I wrote the above over the last two weeks in short bursts without posting it here. So then today I read an article on beta Kim Dotcom recommends investing into bitcoin due to the current stock market down turns in China, EU, and USA.

So, if bitcoin ever achieves it’s real value, I can totally see my currently meager income of a few Satoshi here and there add up to significant retirement savings. $1600 per day, could turn out to be $584,000 in the future.

Are you acquiring a few Satoshi today?

Silver trading

Posted in Uncategorized with tags , , , , , on 2011/07/12 by rmolby
American Eagle, design by Adolph Alexander Wei...

Image via Wikipedia

OK, a new subject for the blog.

I have been tracking silver prices for 10+ years because I think every middle class family should own a little silver as part of their investement portfolio.

So, I figure I might as well start sharing my data analysis with everyone here on this blog and maybe someone can benefit from this, but let me put on a disclaimer up that non of what I discuss here is financial advice, and you should consult your portfolio manager or family financial advisor before using anything you read here as investment advice.

So, here goes:

Silver Analysis Image

Almost everything in the financial markets follows Fibonacci cycles…more on that in another post.

Anyway, if you look at that chart, you can see that second faint gray line above the 30.0000 line… that’s the $34 line, and that is a support line, starting back in May it never really went below $34 very much, it’s been hovering right at $34 since then…

Then the rising AVG150 line reached the support line in late June, and the London/NY spot price tried to push below that, but the markets refused to stay below $34, and this last week and a half of trading is staying above the AVG150 support… so, I would anticipate that the $34 support line and the AVG50 and AVG150 cycles converged and we are beginning a new cycle starting with a flat plateau with a consequent slow rise back to low $40’s.

I suppose we will see if my analysis is valid.

More later, gotta get back to work, folks.

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