Is There a Cryptocurrency Bubble? Just Ask Doge • Hacker News Board

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#21

Post by prostoalex » Sun, Sep 17, 2017, 2:56 AM UTC

madamelic wrote: post #9

Really tired of mainstream hit pieces against cryptocurrency. I wouldn't call myself a bitcoin fanatic (I hold a very small amount, just for the fact of making myself learn about blockchain and cryptocurrencies), but these articles are not well-researched. They don't understand the difference between Bitcoin and Dogecoin, let alone the difference between ICOs and Bitcoin, not to mention their misunderstanding that bl…

I didn't see as a hit piece. This is a mainstream publication that probably feels the need to explain the basics to the mainstream general populace.

Their conclusion after exploring a number of cryptocurrencies is that the environment attracts a fairly large number of fraudsters, scammers and pump-and-dumpers. Doesn't mean the entire ecosystem is 100% scammers, but the probability of an average joe being hit by a scam is quite high.

What other common use case should they have covered for their readers? Micropayments on the Web? Wide retail acceptance? We know the ship has sailed on those two.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#22

Post by tptacek » Sun, Sep 17, 2017, 2:56 AM UTC

forgingahead wrote: post #13

madamelic wrote: post #9

Really tired of mainstream hit pieces against cryptocurrency. I wouldn't call myself a bitcoin fanatic (I hold a very small amount, just for the fact of making myself learn about blockchain and cryptocurrencies), but these articles are not well-researched. They don't understand the difference between Bitcoin and Dogecoin, let alone the difference between ICOs and Bitcoin, not to mention their misunderstanding that bl…

Indeed, and since this is the NYTimes, it's worth remembering Gell-Mann Amnesia once again: “Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it act…

Without any other comment or value judgement it's just worth pointing out that while the Gell-Mann Amnesia Effect is named for Murray Gell-Mann, it doesn't come from him. It's a coinage of the fiction writer Michael Crichton. We should probably call it the Crichton Amnesia Effect, but that doesn't sound as cool.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#23

Post by subroutine » Sun, Sep 17, 2017, 2:59 AM UTC

craigc wrote: post #6

I think there is a difference between a cryptocurrency bubble and an ICO bubble, and this article fails to distinguish between the two. You can see Tom Lee, a financial strategist, talk about Bitcoin here: https://www.cnbc.com/2017/09/15/bitcoin-could-surge-another-... He points out that there are only 300,000 Bitcoin wallets that hold $5,000 or more. In the grand scheme of things that is very small compared to the o…

Noob question... What is the "product" that underlies the value of cryptocurrency that is so much more valuable than what underlies an ICO? What is the value of a machine churning hashes? It seems like the value is underlied by securing a transaction ledger + an arbitrarily difficult math problem. So is the value the security of the ledger?

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#24

Post by shabbyrobe » Sun, Sep 17, 2017, 3:01 AM UTC

forgingahead wrote: post #13

madamelic wrote: post #9

Really tired of mainstream hit pieces against cryptocurrency. I wouldn't call myself a bitcoin fanatic (I hold a very small amount, just for the fact of making myself learn about blockchain and cryptocurrencies), but these articles are not well-researched. They don't understand the difference between Bitcoin and Dogecoin, let alone the difference between ICOs and Bitcoin, not to mention their misunderstanding that bl…

Indeed, and since this is the NYTimes, it's worth remembering Gell-Mann Amnesia once again: “Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it act…

The full essay, for those as curious as I was: http://larvatus.com/michael-crichton-why-speculate/

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#25

Post by LMYahooTFY » Sun, Sep 17, 2017, 3:01 AM UTC

"Bubble" has been used with so many contextual implications that it's practically meaningless.

In this case it's effectively used to describe the digital divide in a new network protocol, just as the dot-com bubble before it.

The casino analogy is accurate only if you ignore what most commentators fail to comprehend: Cryptocurrencies are both a technological innovation and a COMPETING CURRENCY.

https://en.wikipedia.org/wiki/Free_banking#History_of_free_b...

https://en.wikipedia.org/wiki/Alternative_currency

The Federal Reserve is very simply a banking cartel, which gives the United States a single stable currency to conduct transactions efficiently and maintain a unified economy. Obviously the trade-off in this system is a permanent banking oligopoly.

The casino analogy works better if you include the notion that we all live and work within a dramatically larger casino.

To answer the underlying point of the article, most of these cryptocurrencies are as much a scam as CompuServe, Usenet, Netcom, or whatever else is still walled off from the internet stack.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#26

Post by totalZero » Sun, Sep 17, 2017, 3:08 AM UTC

madamelic wrote: post #15

jdormit wrote: post #4

> A group of Bay Area programmers this year used an I.C.O. to raise $35 million for their project, an anonymous web browser called Brave As in Brave, the new browser from Brendan Eich (founder of Mozilla, famously invented JavaScript in 10 days)? Hardly a scam... Either the reporter didn't do their research or twisted the facts to fit their story.

>Either the reporter didn't do their research or twisted the facts to fit their story. It is quite obvious it is both. - Dogecoin creator was always a cryptocurrency skeptic. The article even admits it but papers over it. - Blockchain =/= Bitcoin. The article insinuates that any blockchain-related startups are built on top of Bitcoin. - ICOs =/= Bitcoin. - "early adopters often used it to buy drugs, weapons, or other…

He may not be an expert on cryptocurrencies, but he's certainly an expert on markets in some ways.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#27

Post by [deleted] » Sun, Sep 17, 2017, 3:14 AM UTC

madamelic wrote: post #15

jdormit wrote: post #4

> A group of Bay Area programmers this year used an I.C.O. to raise $35 million for their project, an anonymous web browser called Brave As in Brave, the new browser from Brendan Eich (founder of Mozilla, famously invented JavaScript in 10 days)? Hardly a scam... Either the reporter didn't do their research or twisted the facts to fit their story.

>Either the reporter didn't do their research or twisted the facts to fit their story. It is quite obvious it is both. - Dogecoin creator was always a cryptocurrency skeptic. The article even admits it but papers over it. - Blockchain =/= Bitcoin. The article insinuates that any blockchain-related startups are built on top of Bitcoin. - ICOs =/= Bitcoin. - "early adopters often used it to buy drugs, weapons, or other…

[deleted]

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#28

Post by dhuramas » Sun, Sep 17, 2017, 3:16 AM UTC

Whenever I hear of "bubble" I am reminded of this quote - "“The market can stay irrational a lot longer than you can stay solvent!”

So yes it may be a bubble- but the bubble may very last a few months, a few years, or a few decades...who knows?

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#29

Post by craigc » Sun, Sep 17, 2017, 3:16 AM UTC

subroutine wrote: post #23

craigc wrote: post #6

I think there is a difference between a cryptocurrency bubble and an ICO bubble, and this article fails to distinguish between the two. You can see Tom Lee, a financial strategist, talk about Bitcoin here: https://www.cnbc.com/2017/09/15/bitcoin-could-surge-another-... He points out that there are only 300,000 Bitcoin wallets that hold $5,000 or more. In the grand scheme of things that is very small compared to the o…

Noob question... What is the "product" that underlies the value of cryptocurrency that is so much more valuable than what underlies an ICO? What is the value of a machine churning hashes? It seems like the value is underlied by securing a transaction ledger + an arbitrarily difficult math problem. So is the value the security of the ledger?

That is a very good question. I didn’t do a good job making an argument for why I think the value of a currency like Bitcoin could be so much higher than an altcoin that did an ICO.

In my opinion, Bitcoin has the first mover advantage in this space. It was the first real use of the blockchain, is still the gateway to pretty much every other crypto currency, there is a maximum supply of coins, and is one of the only coins that can be purchased/exchanged for US dollars (or other fiat currency). In order to purchase an altcoin such as BAT (the token behind the brave browser the article refers to), you have to first purchase Bitcoin. If you want to sell your BAT tokens, you will receive Bitcoin.

Also Bitcoins do cost real money to actually mine (electricity costs).

Other tokens such as Ethereum are gaining popularity as well and have some advantages over Bitcoin, but I don’t see Bitcoin being displaced anytime soon.

In the case of Ethereum, the value is that the token is used as “gas” on the Ethereum network. Any action you want to take or data you want to store will require that you send a certain amount of Ether in order to perform that task. Since Ethereum is a platform that many of these ICO companies are building apps on top of, it stands to reason that the value of the platform should be greater than the value of the company building on top of it.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#30

Post by omegaham » Sun, Sep 17, 2017, 3:19 AM UTC

tptacek wrote: post #22

forgingahead wrote: post #13

Earlier quoted context omitted.

Indeed, and since this is the NYTimes, it's worth remembering Gell-Mann Amnesia once again: “Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it act…

Without any other comment or value judgement it's just worth pointing out that while the Gell-Mann Amnesia Effect is named for Murray Gell-Mann, it doesn't come from him. It's a coinage of the fiction writer Michael Crichton. We should probably call it the Crichton Amnesia Effect, but that doesn't sound as cool.

From his talk:

> I refer to it by this name because I once discussed it with Murray Gell-Mann, and by dropping a famous name I imply greater importance to myself, and to the effect, than it would otherwise have.