Live data from Hacker News

Is Bitcoin a Bubble? Economists Say ‘Yes’

blogs.wsj.com

91–100 of 238 posts

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

#91
post #39

Earlier quoted context omitted.

>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). Be very careful with those conclusions. In both cases the predictions were that the elections were very close. Trump winning the presidency when the best models we had gave him a 30% chance is not a failing of prediction at all.

> Trump winning the presidency when the best models we had gave him a 30% chance is not a failing of prediction at all. How accurate the "best models" were isn't really relevant to the accuracy of the predictions of experts as a whole. The media was running that Clinton had a 98% chance of winning the morning of the race.

Sounds like the model was correct. We just fell into the 2%.

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

#92

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…

It's somewhat mythical that the "experts" got Trump and Brexit completely wrong. Fivethirtyeight, the most-famous among the poll aggregators, had Trump at 25% in their last prediction, for example.

That's not perfect, but they have literally written hundreds of articles trying to tell everyone that their predictions are just that, predictions. They also have an analysis showing that the polls were more accurate than in previous elections. That's not very helpful when +-0.5% can make all of the difference, but I'd expect HN of all places to have some appreciation for the concept of probabilities and uncertainty.

What's more important is that the experts got almost everything right in regard to, for example, the UK/EU negotiations. Which is why you can currently earn more money selling "Told you so!" t-shirts in Brussels than investing in Bitcoin.

But ultimately "is bitcoin a bubble?" isn't a popularity contest–it's a question of fact. It's the same as "is their any underlying value that makes a bitcoin worth $20,000?".

I'd argue the answer is almost certainly nope, because bitcoin has failed spectacularly at the mission it initially set out on. It is useless for transactions, as shown by $20 fees. It's far less secure than cash under your mattress. And it's not anonymous to any reasonable degree.

Basically all of bitcoin in active circulation is held for speculation, which sets it apart from other currencies. The only analogue is gold, and one could reasonably say that gold is in as much of a bubble as bitcoin. The only question remaining is if bitcoin can pull of becoming the second bubble-that-doesn't-pop.

It's not impossible. But my guess is the bubble pops as soon as BC stops being in the evening news every day. Take away the FOMO, and people will prefer a store of value they can touch.

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

#93
post #72
post #3

In the end Bitcoin is so similar to Gold. It is a means of storing wealth and is valued on a shared belief of finite quantities and that it is an effective/secure means of storing wealth. It is hard for me to call a shared belief a bubble, because there is a clear understanding I think now that there is no underlying fundamental asset value.

Bitcoin is like gold, except we have alchemy, and an infinite series of new elements between 78 and 80.

brb buying bars of uranium...

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

#94
I'm curious how much of an understanding of coding and computer science gives you an edge here in terms of making money. It's weird seeing people on the news talking about different cryptocurrencies when they obviously don't understand the technical merits of each. For example, Litecoin and Bitcon differ by the block mining times and the hash function used and Ethereum allows more complex smart contracts etc. but these kinds of details aren't mentioned. Bitcoin seems to be facing scalability issues (in terms of the protocol and the community) but I'd be very surprised if the news picked this up.

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

#95

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

Preceded.

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

#96

Earlier quoted context omitted.

Gold has a floor value though, sure it has a value above that based on being used as a store of wealth but the whole thing is predicated on the fact that gold is actually useful and has thousands of years of human history of being valued.

bitcoin will still have a sort of floor value for the various illegal things it was and is still use for. Obviously though that is far far lower than what it is now.

Except there are other coins that are better for illegal transactions.

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

#97
post #82

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…

> If there's 1 thing I've learned in the past 2 years, it's that experts can be deadly wrong But most of the time, they are in fact right. I don't know why a couple instances of wrong-ness proves that experts are unreliable. Other than selection/confirmation bias.

The experts typically aren't experts in any sense of the word. Columnists get paid to write articles by the word to sell advertisements and get people riled up. Let's not glorify bloggers.

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

#98

Seems to me international fiat currencies are the bigger, more pressing bubbles. But what do I know? How many people know about QE, NIRP, or PPT?

This. I'm amazed state currencies still have the slightest credibility. In the computer age, the least that can be asked about a currency is that the total amount in circulation should be public. And it's not. The monetary aggregates are only estimated, and we're supposed to trust the economists who do those estimations. And let's not forget about forgery : not later than today I was reading an article about fake euro coins, and there are lots of them. When you think about it, the fact that we still use pieces of non-precious metals and paper notes for money is ridiculous. They are certainly very easy to counterfeit for anyone with enough means and determination. The whole thing is a mess.

Cryptocurrencies can not be forged and their ledger is public. That alone makes me trust them more than I trust state currencies.

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

#99
post #39

Earlier quoted context omitted.

>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). Be very careful with those conclusions. In both cases the predictions were that the elections were very close. Trump winning the presidency when the best models we had gave him a 30% chance is not a failing of prediction at all.

> Trump winning the presidency when the best models we had gave him a 30% chance is not a failing of prediction at all. How accurate the "best models" were isn't really relevant to the accuracy of the predictions of experts as a whole. The media was running that Clinton had a 98% chance of winning the morning of the race.

That may be true, but "trusting the media" is a different issue from "trusting the experts".

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

#100
post #39

Earlier quoted context omitted.

>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). Be very careful with those conclusions. In both cases the predictions were that the elections were very close. Trump winning the presidency when the best models we had gave him a 30% chance is not a failing of prediction at all.

> Trump winning the presidency when the best models we had gave him a 30% chance is not a failing of prediction at all. How accurate the "best models" were isn't really relevant to the accuracy of the predictions of experts as a whole. The media was running that Clinton had a 98% chance of winning the morning of the race.

"Experts" and "the media" are not the same set.
Post reply on HN