I feel like telling this story somewhere. I guess I need to vent.
I don't know if any of you know what Bitcoin is or pay attention to any of that stuff. It is basically a virtual currency that started a few years ago. It is decentralized and no one controls it. Several years ago it was pretty much worthless and some guy spent $27 on a pizza with it just to say he did it. People would "mine" it, or generate it, and then lose their files which kept their balances.
But it kept on rising in value. In 4/13 it was worth around $30 per coin, then this last fall it jumped. It was worth over $1300 a coin with a market cap in the billions. I finally took notice then and realized there might be something there. Since then Tigerdirect, Overstock.com and some other companies have actually started taking it as payment.
It is based on open source code, so people have taken the code and made all kinds of clones, or slightly tweaked coins called "alts". You can no longer mine Bitcoin without spending tens of thousands on specialized mining equipment, so one of the alts tweaked the code to where you could only mine it profitably on graphics cards. One called Dogecoin took that change and added the doge meme and started taking off these past few months.
I saw it spiking, saw as it doubled in value by the week. I figured if I put $1000 in and it doubled in value or more, which it could pretty easily do, I could make some nice money quickly. So I put that in and more. Well, I unfortunately put in at the wrong time. It was spiking in value and I did a "panic buy" and bought when the market was at its height, 280 satoshis (this is like 0.00000280 of a bitcoin). During the next few weeks it dropped to 150 satoshis and I had lost more than $1,000.
I got sick of that, so I sold out of dogecoin back into bitcoin (using online exchanges that exist) to something called Auroracoin. This coin is basically supposed to be like a specialized coin just for Icelanders, but that aspect wasn't too important to me, what did matter was that it had raised by like 100% each day for the past several days. Sure enough, I made my $1,000 and more in a single day. I saw that another coin, Mazacoin, which is a coin that actually has been adopted by a Sioux tribe had spiked by 400% or something crazy. I put my money in and went to sleep.
I woke up the next morning and checked the markets. I misread the number and was disappointed when I saw the value dropped. But I plugged the numbers into my calculator and realized that the markets had actually risen and I had made $4,000 during the night. Then I watched over the next several hours as the number rose more and more, from the 3800 satoshis that I bad bought in at to 18000 satoshis. I was up $10,000 in profit. I couldn't believe it. I just kept thinking how absurd it was, but how awesome it was at the same time.
I was reading on forums about how people were expecting it to raise by another 10x or more. And why not? It was actually a currency adopted by an Indian nation, there was supposed to be a Wall Street Journal article sometime in the next several days and the coin hadn't yet been listed on the biggest exchange. Could it reach $100,000, some real life-changing money? I thought so, so I stayed in the market, even as it started to dip.
It dipped to the point where I only had $6,000 in profit, then $4,000. I actually made a decent day trading move and picked up an additional 1/3 my original stash of coins. But then there was also some blunders, like when I literally sold some of my coins by accident and lost like 1/10th of my stash. Not no big deal....the WSJ journal article would hit, it would get listed on the biggest exchange (Cryptsy), and I'd make my money back.
Well, Friday morning it got listed. It immediately started jumping and I rushed to login to the exchange where my coins where kept so I could buy in before the big land grab. Unfortunately, their servers were overloaded and weren't working. I did manage to put a buy order in but couldn't log in after that. But after the initial it started dropping. It was too late, though, I had put my buy order in, couldn't access the server, and had to go to school.
I wasn't too worried, though. I figured the coin would still rise. Got home. Nope. Value down to just above where I bought in at. What should I do? Sell out right now? I talked to my brother and he said what I felt as well, "the market can't drop much more can it?". Well, today it has.
Now I've lost more money than I lost against Dogecoin, and the markets look to still be falling. But at this point I'm so far in the hole I can't if it is better to sell off what I've got and take my losses or to hope the market spikes and I get at least some of my value back, which knowing the markets as little as I do isn't unlikely.
I guess this story seems more depressing than it is. I just feel like telling it, thought it was crazy. It kind of is psychologically devastating to gain something that quick and then lose it all just as fast. Thankfully I put the money in knowing that I could afford to lose it, but it still sucks.
What a moron.
Edited by phreak, 08 March 2014 - 06:46 PM.