Is Bitcoin a Bubble? Economists Say ‘Yes’ • Hacker News Board

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#51

Post by pep_guardiola » Thu, Dec 14, 2017, 4:42 PM UTC

AznHisoka wrote: post #22

If there's 1 thing I've learned in the past 2 years, it's that experts can be deadly wrong (Trump being president, Brexit). They seem to be good at predicting things with known variables, but not with unknown unknowns. I'm making a contrarian bet that experts are wrong this time as well (at least in the near term). People are jumping the gun, trying to look smart and predict the right outcome. The same people that ne…

I would advise you to read "The Black Swan: The Impact of the Highly Improbable" by Nassim Taleb if you haven't already. events

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#52

Post by krrrh » Thu, Dec 14, 2017, 4:42 PM UTC

adamnemecek wrote: post #16

The one thing they aren't accounting for is that there really hasn't been anything like bitcoin. In most bubbles, eventually the whales start selling which triggers an avalanche, however bitcoin is distributed enough that this might not happen. Too many different people are interested in it doing well now. E.g. rich people in 3rd world countries, boy are they pumped for bitcoin. I've mentioned it before, and I was ki…

> You know how at tech companies, the economics are different from other companies?

People saying stuff like this is exactly what presaged the collapse of the “new economy” bubble in the late 90s.

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#53

Post by jandrese » Thu, Dec 14, 2017, 4:43 PM UTC

kiddico wrote: post #18

Everyone that I've talked to seems to be aware of the (seemingly) inevitable price drop, but that doesn't seem to be stopping them from buying in. Most people just assume they'll be able to sell what they have when the price drops before all the 'dumb' people have a chance to do the same. They just assume they'll be the lucky ones. I don't think everyone can be the lucky ones though. I think after this all calms down…

That's textbook bubble behavior.

One caveat with Bitcoin is that the network is so slow (effectively just 3 transactions per second) that a crash would be spread out over time. If a panic starts you won't be able to get a slot to sell your bitcoins unless you pay an enormous transaction fee. It could be an interesting situation where the rich literally pay to get to the head of the line and avoid the crash.

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#54

Post by darkstar999 » Thu, Dec 14, 2017, 4:43 PM UTC

KasianFranks wrote: post #26

Gotta love how the negative crypto articles rise to the top on HN immediately. What's not understood is that crypto is a way for the un-banked (1/3 of the people on earth who barely have clean water, toilets or telephones, yes telephones and that make $1/day) now have access and participation in a global trading platform. Disruption for the first time is happening to both VCs and traditional investment bankers and th…

Except that bitcoin transaction cost is what, $10 or $15 now? There's no way "unbanked" people will benefit from that, at all.

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#55

Post by the_gastropod » Thu, Dec 14, 2017, 4:43 PM UTC

Akujin wrote: post #20

evanwise wrote: post #6

I'm committing the cardinal sin of commenting before I'm done with the article, but whenever this discussion comes up, I feel like asking: why not both? Could it be that Bitcoin is currently overvalued and in a "bubble", but it or something like it still may have huge value and utility in the long run? The idea that the Bitcoin bubble is something more like the Dot Com bubble than Tulipomania seems plausible to me.

Tulipmania lasted 6 months. Bitcoin is now 8 years old. Stop comparing Bitcoin to flowers. It's not even close to the same thing.

Believe it or not, tulip bulbs existed for a reaaaaaally long time before tulip mania. For the vast majority of Bitcoin's history, it has been known by virtually no-one outside of the tech circle, and its price was relatively stable/low [1]

[1] https://www.xe.com/currencycharts/?from=XBT&to=USD&view=10Y

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#56

Post by excalibur » Thu, Dec 14, 2017, 4:43 PM UTC

tedeh wrote: post #10

Well, there's already talk that Bitcoin is the biggest financial bubble in world history: http://www.zerohedge.com/news/2017-12-12/its-official-bitcoi...

Well, we still have that apocalyptic "derivatives bubble" hanging over our heads, which is estimated to be around $1.5-2 quadrillion (with a q). I don't think Bitcoin is competing in the same league.

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#57

Post by Evgeniuz » Thu, Dec 14, 2017, 4:43 PM UTC

AznHisoka wrote: post #22

If there's 1 thing I've learned in the past 2 years, it's that experts can be deadly wrong (Trump being president, Brexit). They seem to be good at predicting things with known variables, but not with unknown unknowns. I'm making a contrarian bet that experts are wrong this time as well (at least in the near term). People are jumping the gun, trying to look smart and predict the right outcome. The same people that ne…

> They seem to be good at predicting things with known variables, but not with unknown unknowns.

Exactly. 96% consensus on a guess is just as good as 99% or a 1%. It doesn't matter how many experts agree if they base their decision on unreliable information.

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#58

Post by jandrese » Thu, Dec 14, 2017, 4:44 PM UTC

adamnemecek wrote: post #16

The one thing they aren't accounting for is that there really hasn't been anything like bitcoin. In most bubbles, eventually the whales start selling which triggers an avalanche, however bitcoin is distributed enough that this might not happen. Too many different people are interested in it doing well now. E.g. rich people in 3rd world countries, boy are they pumped for bitcoin. I've mentioned it before, and I was ki…

Every crash is preceded by people saying "It's different this time".

Edit: Fixed autocorrect goofery

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#59

Post by porter » Thu, Dec 14, 2017, 4:45 PM UTC

Sean Snaith from UCF is quoted in the article calling bitcoin a tulip bubble.

Back in 2007 I watched his presentation in person where he said the U.S. would experience a "soft landing" and nothing major.

A few months later the stock market crashed 60%.

Economists are terrible at predictions.

Re: Is Bitcoin a Bubble? Economists Say ‘Yes’

#60

Post by montecarl » Thu, Dec 14, 2017, 4:45 PM UTC

donquichotte wrote: post #36

Oh dear. I don't own any bitcoins, but I sure af don't trust the judgement of people who invent fantasy signal processing strategies like fibonacci retracement [1], support and resistance levels [2] and Elliott Waves [3]. Sincerely, a dude who does actual signal processing for stuff that has to work. [1] https://en.wikipedia.org/wiki/Fibonacci_retracement [2] https://en.wikipedia.org/wiki/Support_and_resistance [3] h…

I second your opinion about these goofy strategies. I have several friends and family members, who when they look at stock price charts see lots of patterns and think that you can analyze them using various kinds of simple formulas or rules and beat the market. This gets reinforced by people who have used these techniques "successfully" to make money. You usually don't hear from the sheepish retail investor who is losing 10% trying to swing trade; you hear from the few guys who got lucky. All of these approaches are just gambling with a pseudoscientific approach.