Bitcoin Is an Escapist Safe Haven • Hacker News Board

Re: Bitcoin Is an Escapist Safe Haven

#51

Post by edblarney » Thu, Jan 05, 2017, 4:24 AM UTC

baddox wrote: post #12

MarcusBrutus wrote: post #9

Bitcoin fails to satisfactorily answer von Mises' regression theorem. It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. Not to mention that once it is perceived as more than just a nuisance by some major government it will be shut down in a hear…

> It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. I don't get this argument. Competing cryptocurrencies won't be spendable on the Bitcoin block chain and vice versa, so Bitcoin's scarcity isn't compromised. It's true that Bitcoin could face co…

"Competing cryptocurrencies won't be spendable on the Bitcoin block chain and vice versa, so Bitcoin's scarcity isn't compromised."

Because bitcoin is not backed by any assets, anyone could come along an invent something like bitcoin, claim it has value, and disrupt it.

So it's maybe the wrong wording for the argument, but the underlying premise - the actual underlying weakness of bitcoin as an asset, is the argument.

USD's are backed by TBills, Euros are backed by pretty good quality assets. I understand it's not like you can go and exchange your Euros for landholdings or gold, but there is integrity in that system.

Bitcoin is just an idea, worth whatever a group of random people decide it's worth, which makes it highly volatile and risky.

The USD will not go do 0 tommorow - its's needed for many things. Bitcoin could go to 0 tommorow.

Re: Bitcoin Is an Escapist Safe Haven

#52

Post by Animats » Thu, Jan 05, 2017, 4:25 AM UTC

Bitcoin is basically a way to get money out of China. 97% of the trading is in yuan, as the article points out. All other uses are down in the noise.

Re: Bitcoin Is an Escapist Safe Haven

#53

Post by edblarney » Thu, Jan 05, 2017, 4:26 AM UTC

ericb wrote: post #18

MarcusBrutus wrote: post #9

Bitcoin fails to satisfactorily answer von Mises' regression theorem. It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. Not to mention that once it is perceived as more than just a nuisance by some major government it will be shut down in a hear…

Most of the "value" of gold is by arbitrary societal agreement--there is very low natural use-driven demand compared to the froth from people using it as a store of value. That agreement, in a game theory sense, comes from the original time when participants coalesced around gold because it had the properties that seemed most appealing (limited supply, difficult to fake, measurable, transportable) as a store of value…

However much that is true - gold is still a physical product, impossible to reproduce, has some utility, it's a luxury item, and it has been established as a 'currency' for the last 5000 years. Which is a long time.

So aside from some nice properties, it's like the 'original bitcoin'. We really don't need another.

Re: Bitcoin Is an Escapist Safe Haven

#54

Post by zaphar » Thu, Jan 05, 2017, 4:26 AM UTC

stale2002 wrote: post #34

elif wrote: post #32

Earlier quoted context omitted.

It is resistant to confiscation, but the IRS can still make you a fugitive in most of the developed world.

Not if they don't know that you own an account.

If you buy a bitcoin without using cash or cash out your bitcoin then they can trace your bitcoin wallet to you. It's not really anonymous unless you keep all the transactions inside of bitcoin and never leave it. Which isn't really at all practical right now and has a high likelihood of not being practical in the near to medium term either.

Re: Bitcoin Is an Escapist Safe Haven

#55

Post by alexmingoia » Thu, Jan 05, 2017, 4:28 AM UTC

kristianp wrote: post #43

MarcusBrutus wrote: post #9

Bitcoin fails to satisfactorily answer von Mises' regression theorem. It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. Not to mention that once it is perceived as more than just a nuisance by some major government it will be shut down in a hear…

"Bitcoin fails to satisfactorily answer von Mises' regression theorem." Can you explain this for the non-economists here please?

Economists (notably Ludwig von Mises and Carl Menger) attempted to answer the question, "Why does money have value?" with the explanation that people have a desire for goods (including money) because of what they use them for. With money, they expect to trade it for other goods in the future. But the problem is that argument is circular when using it to explain the market origination of money: Why did people originally want to trade other goods for money before it was money? Mises' regression theorem is to answer this by using Menger's explanation for the origin of money. That is if we take time into account, people expect money to buy stuff in the future because they have memory of what it was traded for in the past, and if you keep going into the past with this logic money must have originated from having some other value. For example, people start trading things for butter because they like to eat it, and when everyone ends up with butter they start trading other things for butter solely because of what they can trade for butter in the future (Money), because many people both have and want butter.

Bitcoin doesn't seem to have originated this way. It doesn't appear to have been originally valued for its own sake (like Gold or butter). So Mises' regression theorem seems to fall apart when applied to Bitcoin.

Re: Bitcoin Is an Escapist Safe Haven

#56

Post by edblarney » Thu, Jan 05, 2017, 4:28 AM UTC

stale2002 wrote: post #27

MarcusBrutus wrote: post #9

Bitcoin fails to satisfactorily answer von Mises' regression theorem. It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. Not to mention that once it is perceived as more than just a nuisance by some major government it will be shut down in a hear…

"Not to mention that once it is perceived as more than just a nuisance by some major government it will be shut down in a heartbeat." People keep saying that, and they keep being wrong. Think of all the illegal things that happen over bitcoin. There are lots of people who would want to shut it down if they could.

"Think of all the illegal things that happen over bitcoin. T"

Sure, but if the US gov makes bitcoin illegal that means most of the buyers and sellers - regular people - have to withdraw from the market.

Many of bitcoins biggest owners are big name dudes - like the twin brothers from Facebook, the Winklevoss own something like 10% of all bitcoins.

If they perceive a change in law, they'll have to sell their bitcoin before that happens, as will all legit owners ... it will flood the market and might very well crash it.

Re: Bitcoin Is an Escapist Safe Haven

#57

Post by tlrobinson » Thu, Jan 05, 2017, 4:29 AM UTC

stale2002 wrote: post #37

bduerst wrote: post #36

Earlier quoted context omitted.

Litecoin has the same blocksize as Bitcoin, but resolves blocks every 2.5 minutes instead of 10, giving it more 4x capacity. ZCash just forces block size increases as hard forks. Like I said, different blockchains solves the blocksize differently, and Bitcoin has demonstrated that it's not capable of addressing it's blocksize issue and can't scale. You can scoff and say, "That's a non-issue.", but even at the start o…

Litecoin's capacity is still nothing compared to VISA or Mastercard. The question is not whether a crytocurrency can do 4X. The question is whether it can do 1,000X or more.

You don't need to settle every transaction on the blockchain itself.

See https://lightning.network/

Re: Bitcoin Is an Escapist Safe Haven

#58

Post by edblarney » Thu, Jan 05, 2017, 4:31 AM UTC

onewaystreet wrote: post #23

MarcusBrutus wrote: post #9

Bitcoin fails to satisfactorily answer von Mises' regression theorem. It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. Not to mention that once it is perceived as more than just a nuisance by some major government it will be shut down in a hear…

I've seen comments like this posted on HN for the past 3 years. Bitcoin's "bubble" has already popped many times but it has rebounded each time. Maybe the next time will be the last, but a lot of people have been wrong about that so far.

Just because there are a few buyers and sellers trading bitcoins at a specific price, does not mean there is any real validity or pricing support for the rest of the market.

Facebook could sell most of their shares for today's bidding price.

If all bitcoins went on the market today, it would probably crash and never recover.

Even in a housing crash, there are creditors, deal-seekers and people who need a place to live who will stop the bidding from getting too low. And then people will come back eventually.

If/when bitcoin crashes, it's gone for good.

Re: Bitcoin Is an Escapist Safe Haven

#59

Post by baddox » Thu, Jan 05, 2017, 4:37 AM UTC

edblarney wrote: post #51

baddox wrote: post #12

Earlier quoted context omitted.

> It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. I don't get this argument. Competing cryptocurrencies won't be spendable on the Bitcoin block chain and vice versa, so Bitcoin's scarcity isn't compromised. It's true that Bitcoin could face co…

"Competing cryptocurrencies won't be spendable on the Bitcoin block chain and vice versa, so Bitcoin's scarcity isn't compromised." Because bitcoin is not backed by any assets, anyone could come along an invent something like bitcoin, claim it has value, and disrupt it. So it's maybe the wrong wording for the argument, but the underlying premise - the actual underlying weakness of bitcoin as an asset, is the argument…

Bitcoin isn't backed by any assets. Bitcoins ARE assets. They don't have value because someone just came along and claimed they do (try to start your own Bitcoin clone and see how much people will buy them for). They have value because people are willing to trade for them, and there are many potential reasons for that (some less reassuring than others).

Re: Bitcoin Is an Escapist Safe Haven

#60

Post by kbody » Thu, Jan 05, 2017, 4:40 AM UTC

MarcusBrutus wrote: post #9

Bitcoin fails to satisfactorily answer von Mises' regression theorem. It also has no scarcity since it can face competition by an infinite number of similar conceivable algorithms / block-chains / virtual currencies that offer much the same features, regardless of how hard its own mining gets. Not to mention that once it is perceived as more than just a nuisance by some major government it will be shut down in a hear…

You dismiss the effect it has on real world and the markets it enables, among many other attributes/advantages.

Obviously it's not perfect, nothing is, but it's upgrade-able and you overlook the value of global decentralized trust, for some it's really valuable and its value will keep increasing the more we get connected (e.g: see R3 and all the banks that try to use the blockchain tech, even if they miss the point).