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

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#131

Post by danmaz74 » Sun, Sep 17, 2017, 2:19 PM UTC

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,…

My argument is that you can't detect a bubble by the logic "people thinking X has value" - because that's true for a bubble, and for a non-bubble. I don't understand how your response applies to my argument.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#132

Post by brownbat » Sun, Sep 17, 2017, 2:43 PM UTC

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.

It's along the lines of: internet plus sufficient crypto[1] makes speech free everywhere.

It seems theoretically true, but not in practice. While I have several hunches,[2] I admit I don't fully understand why it shakes out this way.

[1] Plus steg, to the extent you think that's a separate discipline.

[2] Like, we don't yet have good enough crypto[1], or it takes time, or most people don't care enough to participate in networks that enable others to speak freely, or authoritarian police forces let governments cheat at information security games (they don't actually have to prove anything to torture you), or some mix of all of those. I change my mind at least daily as to which of these is most important.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#133

Post by subroutine » Sun, Sep 17, 2017, 3:03 PM UTC

koonsolo wrote: post #119

subroutine wrote: post #112

Earlier quoted context omitted.

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 c…

I do like the idea of distributed efforts, and I think Bitcoin has some really positive aspects. Still regarding Bitcoin as the stable alternative to USD is a major stretch, and I think that is partially due to it being decentralized.

For one, with no state backing, what does a country risk in simply banning Bitcoin? China has already proven they are paying attention to crypto exchange, and their willingness to institute bans. Do you not fret the US could do the same at any moment? What options are there if the US put a ban on bitcoin exchange? Do you think it would still retain its value?

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#134

Post by maneesh » Sun, Sep 17, 2017, 3:08 PM UTC

tim333 wrote: post #109

imaginenore wrote: post #98

Earlier quoted context omitted.

You should look into Zimbabwean dollars, Russian ruble, Venezuelan bolivar history. No amount of government intervention will help to keep the value once the population loses faith in the currency. Even if you start giving away gold bars for each unit of currency, you will quickly end up with no gold bars and lots of worthless paper. If you restrict the supply of currency, people quickly invent their own money, which…

I think with Zim dollars and the like the problem is too much money chasing too few goods. Without that they would behave normally. I can't think of practical instances of restricting the currency supply leading to people inventing money getting far. Sometimes if the local currency is not taken abroad people will try using USD or similar instead but inventing some new money doesn't help much for that.

bitcoin or creating a new token helps for that

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#135

Post by dredmorbius » Sun, Sep 17, 2017, 3:36 PM UTC

chrishacken wrote: post #55

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…

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

As David Gerard notes, market cap of cryptocurrencies is a false and misleading metric. Look to total circulation volume/time, and realise it is exceedingly thin.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#136

Post by MustrumRidcully » Sun, Sep 17, 2017, 3:38 PM UTC

koonsolo wrote: post #128

MustrumRidcully wrote: post #125

Earlier quoted context omitted.

Well you could do the same with paper-gold. But since its value increases over time you have no incentive to prefer it over $, which have a decreasing value. Stop focusing on tech and try to think about underlying market forces.

I don't know about you, but I prefer to store the value that I work for, in something that doesn't burn 2% off each year. And if I have to buy something, I will just trade in my value stored with the thing I want to buy. I don't see any need to go to an intermediate thing that keeps decreasing in value. Paper money was preferred over gold because it was inconvenient to keep working with gold, not because the paper lo…

Said in another way, do you prefer paying for your car in bitcoins, which is likely to increase in the next years, or $, which will decrease?

Bitcoin may be good to store value (gold or land being the best), but isn't adapted for exchange, as no one wants to use it to buy something. Sellers should offer steep discount for the opportunity cost in order to obtain the money, which isn't very likely.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#137

Post by droidist2 » Sun, Sep 17, 2017, 3:44 PM UTC

rtpg wrote: post #18

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…

For every story you read where you notice wrong facts, tens or hundreds of stories are getting things fine. Almost no one sits down and says "oh, indeed, this article is competent and a correct statement of fact"

It just so happens that all the stories where we know about the topic are the ones with the wrong facts?

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#138

Post by droidist2 » Sun, Sep 17, 2017, 3:51 PM UTC

eighthnate wrote: post #114

Given the low interest rate environment the past 10 years by major central banks around the world, couldn't you argue that everything is a bubble at this point? If the world is awash in cheap money, then it's almost tautological that most "assets" are in a bubble.

It seems hip to say things are in a bubble so I'm going to say yes, everything is a bubble, well except the things that are "dead" because that's even cooler to say. So, hmm, maybe Bitcoin is dead. Time to write a Medium article called "Bitcoin is Dead, Long Live Blockchain!"

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#139

Post by coralreef » Sun, Sep 17, 2017, 4:07 PM UTC

runeks wrote: post #113

hn_throwaway_99 wrote: post #63

Earlier quoted context omitted.

> 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 hav…

Even though democratic governments are supposed to be representative of the people, a government is still a separate entity from the people, meaning it has its own motivations and tendencies.

An example of this is the military-industrial complex (disproportionate spending linked to politics). Or the way marijuana has been illegal for the past 100 years (a false campaign under the guise of protecting people).

If Bitcoin is banned early enough to harm liquidity and adoption between itself and fiats, and a government approved cryptocurrency is introduced as a competitor, then I think Bitcoin could basically be killed in an economy.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#140

Post by coralreef » Sun, Sep 17, 2017, 4:20 PM UTC

josu wrote: post #65

hn_throwaway_99 wrote: post #63

Earlier quoted context omitted.

> 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.

Drugs are illegal almost everywhere in the world and they are one of the largest consumer markets. Something similar happens to US dollars in Venezuela. So I don't know if making bitcoin illegal will really hurt its value in the long run.

Consumers demand drugs because they like the way it makes them feel, and they derive utility from that.

In a country where Bitcoin is banned, a consumer derives almost no utility from Bitcoin because they can no longer immediately exchange it for fiat currency or goods unless they leave their country. Thus the demand for bitcoin falls, and if less people use it, it becomes less valuable (network effects). That directly hurts its value in the long run.

If you were to imagine a world where Bitcoin is banned by all governments, then no one would desire to own it or trade it, and it has virtually no value.