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Is There a Cryptocurrency Bubble? Just Ask Doge

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Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#111

Post by runeks »

aml183 wrote: post #66
chrishacken wrote: post #55

Earlier quoted context omitted.

What do you do with Dogecoin though? It's market cap is $91MM and yet its creation was a joke.

I guess sell it. People think it's valuable. Cryptocurrencies are priced not valued. You can't just go Dogecoin is valued at X. Dogecoin is priced based on supply and demand which is saying it's worth $91MM.

All Dogecoins in circulation are not worth $91m. For that to be the case, there’d have to be people willing to buy all 111 million Dogecoins for $0.000796 each, which is not the case at all. People are only willing to pay this price for a tiny fraction of all Dogecoins in existence; as we go beyond that, the bid price starts approaching zero.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#112

Post by subroutine »

koonsolo wrote: post #83
danmaz74 wrote: post #78

Earlier quoted context omitted.

> Jackson Palmer might not believe it has value, but clearly, there are people who own Doge that think otherwise If there is one way you really can't detect a bubble, it's relying on "people thinking X has value". Also people buying tulip bulbs for a house worth thought those bulbs had value, as in every other bubble in history.

> it's relying on "people thinking X has value" Where do dollars or euro's get their value from? Let me give you the wikipedia definition: "Fiat money is a currency without intrinsic value established as money by government regulation or law." What do you think happens to fiat money when people stop believing it has value? Look back to 19th century France, were fiat money collapsed. Bitcoins have no intrinsic value,…

Why would you trust a novel currency over the collective interests that stand behind the USD or Euro? Currencies backed by powerful democratic governments, huge corporations, advanced military industrial complex, research, educational, and financial institutions, and basically all the people that live in those countries aside from a miniscule fraction that prefer cryptocurrency, a currency that must be converted into USD/Euro if you want to do things like buy milk or put gas in your car.

Do you reasonably think that if those currencies collapse, you will be just fine with a stockpile of bitcoin? If bitcoin collapses though, the USD will not even notice a ripple.

I'm not saying that bitcoin or other cryptocurrencies are not currently a lucrative investment, but I am far from convinced that crypto offers more stability and is a safer bet that dollars or euros

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#113

Post by runeks »

hn_throwaway_99 wrote: post #63
noddy1 wrote: post #50

I was a longtime ethereum sceptic, however I was guilty of being a cynical old curmudgeon; the type that poo-poo's anything and everything novel on the grounds that I'll be right 95% of time, ignoring the fact that I'll poo-poo everything that will ever change the world. Bitcoin made currency decentralised and permissionless. Ethereum has made capital raising and equity holding decentralised and permissionless. Sure,…

> Bitcoin made currency decentralised and permissionless. This is a common misconception, that cryptocurrencies can somehow exist outside government control, and it makes me doubt some of the long term value of Bitcoin. A government can basically make anything it wants illegal, and once cryptocurrencies become large enough, there will be tons of additional regulations and control.

> A government can basically make anything it wants illegal, and once cryptocurrencies become large enough, there will be tons of additional regulations and control.

Only totalitarian states have this power in practice. In a democracy, where e.g. 75% of people use Bitcoin, the government can’t criminalize it — if it were able to, that government wouldn’t be democratically elected. A democratic government does not have an opinion separate from the people; indeed that’s the whole idea of democracy.

If only a small fraction of people are using Bitcoin, it will not pose a threat to government, and it will have no incentive to criminalize its use. Only when a large part of people are using Bitcoin can it pose a problem to government, and once we reach that point the opposition to make it illegal will be too great.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#115

Post by MustrumRidcully »

The problem of bitcoin is that there is a finite amount of it that will be available.

As use of bitcoin is scheduled to grow, the pace of the production of bitcoins needed to support the market does not keep up.

This results in a steady increase of the value of bitcoin, which is good for adoption (more people will buy it to speculate and sellers will accept it), but endangers it as a mean of paiement as buyers are always better of paying in $, which devaluates over time, instead of Btc, which will increase over time.

The reason bitcoin will not be used for daily exchanges is the same as we do not use gold anymore. But since Btc has no intrisic value, I hardly see it as a reserve money.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#116

Post by jacobush »

Aunche wrote: post #97
koonsolo wrote: post #83

Earlier quoted context omitted.

> it's relying on "people thinking X has value" Where do dollars or euro's get their value from? Let me give you the wikipedia definition: "Fiat money is a currency without intrinsic value established as money by government regulation or law." What do you think happens to fiat money when people stop believing it has value? Look back to 19th century France, were fiat money collapsed. Bitcoins have no intrinsic value,…

The key words are "by regulation or law." Bitcoins are completely unregulated right now. Coinbase can do whatever they want with people's crytocurrency and the government won't bat an eye, which is basically what happened with Mt Gox. At least your bank account is FDIC insured.

Isn't Bitcoin considered a liquid asset by most jurisdictions? So even though it's not money, you can't do just anything without culpability whatsoever.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#117

Post by jacobush »

fapjacks wrote: post #99
aml183 wrote: post #41

I have great respect for Kevin Roose, but this was a disappointing piece. Dogecoin was a meme. It gained popularity and is still worth something. Jackson Palmer might not believe it has value, but clearly, there are people who own Doge that think otherwise. There is definite frothiness in the market. Some token sales are scams, some are overpromising, and some that look promising will probably blow up. Take a look at…

> Reporters need to separate Bitcoin, Ethereum, Litecoin (and some of the other older cryptocurrencies) from token sales and other crypto assets. Not even actual crypto speculators seem to be able to do this. The second anything drastic happens on one of the crypto markets, all prices immediately peg to Bitcoin, and they all rise and fall in unison.

I see that as a sign that the markets (BETWEEN cryptocurrencies) work and are highly liquid.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#118

Post by SuoDuanDao »

subroutine wrote: post #112
koonsolo wrote: post #83

Earlier quoted context omitted.

> it's relying on "people thinking X has value" Where do dollars or euro's get their value from? Let me give you the wikipedia definition: "Fiat money is a currency without intrinsic value established as money by government regulation or law." What do you think happens to fiat money when people stop believing it has value? Look back to 19th century France, were fiat money collapsed. Bitcoins have no intrinsic value,…

Why would you trust a novel currency over the collective interests that stand behind the USD or Euro? Currencies backed by powerful democratic governments, huge corporations, advanced military industrial complex, research, educational, and financial institutions, and basically all the people that live in those countries aside from a miniscule fraction that prefer cryptocurrency, a currency that must be converted into…

I think bitcoin is best understood as a countercyclical bet. Like gold, it is highly volatile but trouble in mainstream markets will always lead to an increase in its value.

So one would trust a novel currency over the collective interests that stand behind the USD or Euro if one expects a prolonged downturn in those economies or a divergence of the interests behind them.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#119

Post by koonsolo »

subroutine wrote: post #112
koonsolo wrote: post #83

Earlier quoted context omitted.

> it's relying on "people thinking X has value" Where do dollars or euro's get their value from? Let me give you the wikipedia definition: "Fiat money is a currency without intrinsic value established as money by government regulation or law." What do you think happens to fiat money when people stop believing it has value? Look back to 19th century France, were fiat money collapsed. Bitcoins have no intrinsic value,…

Why would you trust a novel currency over the collective interests that stand behind the USD or Euro? Currencies backed by powerful democratic governments, huge corporations, advanced military industrial complex, research, educational, and financial institutions, and basically all the people that live in those countries aside from a miniscule fraction that prefer cryptocurrency, a currency that must be converted into…

I consider Bitcoin more of a "collective interest" than money produced by governments. History is full hyperinflation horror stories.

Do you trust professional encyclopedia writers more than a bunch of anonymous volunteers collectively writing articles? But Wikipedia is a fact no? It works. Distributed things seem to work, in practice.

I agree that Bitcoin still has to prove itself. But if such a thing as Wikipedia can work, why not Bitcoin?

But I get your point. Although the world is bigger than US and Europe alone. What about current unstable states?

One thing will never happen to Bitoin: hyperinflation.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#120

Post by eddieone »

There is a bubble some where. Looking at the total supply of bitcoin and the current maximum of 21 million, bitcoin's inflation is slowing while fiat inflation is growing exponentially. Expect more big waves and mass capital flight as currency transitions into the crypto economies.
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