The Economist is owned by the Rothschild concern; just wondering if everyone knows this.
The Bitcoin bubble – Greater fool theory
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Re: The Bitcoin bubble – Greater fool theory
#42Frankly I'm astounded by the vitriol toward Bitcoin on HN. Bitcoin has the potential to actually change the world (unlike most of the BS startups coming out of SV), and yet all these voices on HN poo-pooing Bitcoin appear (to me at least) to outweigh those who are willing to give it a shot. Why is this? Do people fear what they don't understand? Are they mad because they feel like they missed out? Does Bitcoin's succ…
None of the above, IMHO; it's merely a reaction to what, from the "outside", looks like a speculative bubble fueled by the usual hype cycle mixed in with a dose of wanton techno-utopianism.
We're quite used by this point to new frameworks, technologies, and scientific developments promising to "CHANGE THE WORLD!!!!!11!1~~". From this perspective, Bitcoin looks no different: we have people claiming decentralized proof-of-work consensus-finding will solve all our social / societal ills. Currency isn't as internationally portable as it should be? Use the blockchain! Voting systems are broken / poorly designed? Use the blockchain! The NSA is spying on all of us? Use the blockchain!
In this hype cycle atmosphere, I think a good measure of skepticism is healthy: it reminds us that Bitcoin, like other technologies, has limitations, and that those hyping the technology have a vested interest in downplaying those limitations while promising the moon.
While the underlying technology might in fact be part of a reasonable solution to each of these problems, it's easy to forget that the technology is only part of the puzzle. Technology is always embedded in a human context: modifying the habits, social pressures, incentives, laws, etc. that support a broken system is as important, if not more so, than changing the technical implementation. (In fact, I'd argue changing the technical implementation is impossible without addressing some of these social / psychological factors.)
Re: The Bitcoin bubble – Greater fool theory
#43The article makes a valid point. Everyone can not possibly sell all of their Bitcoin, and if they tried, it would be defined as a crash. I would be lying if I said I wasn’t worried about this. But I think it’s wrong to think of Bitcoin as a commodity, or that it needs some killer application. I really think Bitcoin is best thought of as a currency. Fiat currencies work because as a whole, we agree on its value. Usual…
A currency is something somebody somewhere pays enforceable taxes in. That's what helps give a currency wide acceptance - there is always somebody out there that needs it.
Bitcoin is worth only its intrinsic value - which is essentially the value of the electricity used to create it.
Re: The Bitcoin bubble – Greater fool theory
#44Famous NYU valuation professor on how to value bitcoin: http://aswathdamodaran.blogspot.com/2017/10/the-bitcoin-boom...
Without having read the post I can attest: Damodaran is the real MVP.
Re: The Bitcoin bubble – Greater fool theory
#45I really love Ethereum and have been invested in it for a while. I think @vbuterin and crew have a clear idea as to how to move past problems, and I find it exciting to watch the Ethereum foundation execute their vision well. Bitcoin, on the other hand, doesn't perform its simple functions well in the short term, and seems to have very little idea on how to scale long term: 1. Transactions are still pretty expensive…
Smart contracts are an inusual programming environment, both in termos of what you are doing (managing state transitions, etc) and computing resources available (CPU and RAM are very expensive). I suspect that this is better solved by more domain specific languages instead of an existing FP language
> I suspect that this is better solved by more domain specific languages instead of an existing FP language
I don't disagree, but with the current state of current Ethereum languages: Viper and Solidity, I feel as though using the good thinking in an existing well designed language might be more worthwhile to explore in the short to medium term.
Re: The Bitcoin bubble – Greater fool theory
#46The article makes a valid point. Everyone can not possibly sell all of their Bitcoin, and if they tried, it would be defined as a crash. I would be lying if I said I wasn’t worried about this. But I think it’s wrong to think of Bitcoin as a commodity, or that it needs some killer application. I really think Bitcoin is best thought of as a currency. Fiat currencies work because as a whole, we agree on its value. Usual…
How do you run an economy on a deflationary currency?
If someone want's to start a business there is next to no point in me lending them bitcoin in the hopes of getting it back with interest. My bitcoin would increase in value regardless.
>Bitcoin will reach a value high enough that more and more people will start accepting it alongside fiat.
It has value now yet it isn't being accepted by many places. If amazon adopts it i'll change my view here. For now it's just a commodity to me.
Re: The Bitcoin bubble – Greater fool theory
#47I was having a conversation about bitcoin, and I was saying the fact that the price goes up so fast means people cant/wont actually use it as a currency. I think someone bought a pizza with 10k bitcoin? thats now 70 million $. Even in the last year it has moved up so fast, and if people think it will continue to grow 'because of adoption', people cant actually 'adopt' it and use it as a currency, because todays bitco…
You are describing an insane rate of deflation. People do very different things with currencies that evaluate a more normal 3% an year.
Re: The Bitcoin bubble – Greater fool theory
#48Frankly I'm astounded by the vitriol toward Bitcoin on HN. Bitcoin has the potential to actually change the world (unlike most of the BS startups coming out of SV), and yet all these voices on HN poo-pooing Bitcoin appear (to me at least) to outweigh those who are willing to give it a shot. Why is this? Do people fear what they don't understand? Are they mad because they feel like they missed out? Does Bitcoin's succ…
Proof of work is intrinsically dumb.
To store wealth in Bitcoin you are committing to the constant burn of energy in perpetuity.
Re: The Bitcoin bubble – Greater fool theory
#49The article is perfectly right when it describe what drives the current Bitcoin craze and its insane valuation but the conclusion is frankly a bit lazy: >When the crash comes, and it cannot be too far away, it will be dramatic. People have been saying that Bitcoin was going to crash for years now. And it has, multiple times, but always recovered so far. Seems like there's no shortage of "fools" willing to pump the cu…
There is no shortage of money. Yet.
Re: The Bitcoin bubble – Greater fool theory
#50I was having a conversation about bitcoin, and I was saying the fact that the price goes up so fast means people cant/wont actually use it as a currency. I think someone bought a pizza with 10k bitcoin? thats now 70 million $. Even in the last year it has moved up so fast, and if people think it will continue to grow 'because of adoption', people cant actually 'adopt' it and use it as a currency, because todays bitco…
Other motivations exist when using deflationary currency other than hoarding. I don't believe btc deflation is bad.
Fiat currency can also rise and fall 10% in a single day. Problem is that moving the market that much in every day is impossible due to a huge market cap, which BTC does not have.
All cryptocurrencies are not user friendly. Cold, hot wallets, privacy issues, what is the best way to store them, how not to accidentally lose everything etc.
Mass adoption depends a lot on user friendliness which a bunch of cryptographers aren't concentrated on solving.
So, it won't be used as a currency not because of its deflationary nature but because it's just not as convenient as fiat currency.
Scaling issues are also a big blocker. Currently, BTC transaction fees are higher than those imposed by banks. It's no longer a cash, just a store of value.
Core devs are behind a private company, trying to milk the blockchain even more, which will also lead to bitcoin not being used as cash, but they'll sell their own sidechain and offchain solutions, probably just to enterprise.
Blockchain tech is great tech. Cryptocurrencies like Monero are absolutely brilliant. But I'm doubtful of mass adoption, mostly because torrents, free software, as amazing as they are, and convenient for superusers, don't have mass adoption too.