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Is Bitcoin a Bubble? Economists Say ‘Yes’

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

#141

Post by dimillian »

googletazer wrote: post #106
jandrese wrote: post #53

Earlier quoted context omitted.

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.

You don't understand how trading bitcoin works. Trading is not done on the chain, its the centralized exchanges which keep the books. Its instantaneous, with people who are involved in arbitrage between the exchanges keeping the prices level across all.

A bubble explosion would inevitably bankrupt the exchange platform first, then you. GDAX/Coinbase will never be able to create money out of thin air if everyone are selling and the BTC is dropping to $5. So even if you sell before everyone, even if you get your money on Coinbase virtually, they'll never honour the wire transfert.

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

#142

Post by [deleted] »

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.

[deleted]

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

#143

Post by deadmetheny »

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…

How are these people without basic necessities accessing their coins, exactly? It's hard to trade Internet Fun Bucks without Internet access.

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

#144

Post by DennisP »

billmalarky wrote: post #120
placeybordeaux wrote: post #66

Earlier quoted context omitted.

I was just reviewing the avg tx fee on major coins. Micropayments aren't possible on any widely accepted coin. BTC has hit 20 USD a tx (albeit without segwit). It's looking a little rough. Might be time for a draw back. EDIT: I was pulling together the avg tx fees from https://bitinfocharts.com/ $BTC: 24.4 USD $ETH: 1.07 USD $BCH: 0.17 USD $LTC: 0.632 USD $DASH: 0.62 USD $XMR: 5.49 USD My other thoughts on the subjec…

The one justification for skyhigh valuations is believing there will be a deus ex machina technology solution that comes out to solve the scalability problems of crypto. Honestly, it could happen ( https://lightning.network/ or something else, ideally for on-chain transactions), but in _my_ opinion, betting on that outcome at this time is just not worth it. I believe a more likely scenario is we have a major correcti…

It's not deus ex machina, because it's not unexpected. Lightning has a working alpha on Bitcoin, and Ethereum has something similar with Raiden, plus the Plasma paper and early code, a recently-published spec for the first version of sharding with a 100x throughput improvement, various special-purpose off-chain solutions like FunFair's fate channels, TrueBit for verifiable computation off chain, a simple multicore hack, and simulation code for full proof of stake.

I'm not saying there won't be a market correction, since they happen on a regular basis. Just a few months ago Ethereum dropped from $420 to $130.

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

#145

Post by gonzoflip »

Jsarokin wrote: post #119
whiskyant wrote: post #86

Earlier quoted context omitted.

It's not currently possible to have a crypto with 0 fees that's both distributed/non-centralized as well as very secure against attacks. If there is, Bitcoin can easily incorporate the technology.

I'd say IOTA might fit your criteria, although it's still early stage. I don't think bitcoin could integrate their tech since it's not a blockchain, but a DAG (what they call a tangle). Interesting stuff.

I have been following IOTA for a while now and while concept of IOTA is very neat, it appears that the community/leadership surrounding it are in shambles. The network is not really working unless you run a full node, and even then if you send your IOTA to an address you have transferred IOTA out of you can lose them forever. These issues make me very nervous about the whole project.

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

#147

Post by JamesBarney »

Meekro wrote: post #131

"Experts" predicting bitcoin's impending doom is nothing new. Does anyone remember Professor Mark Williams, a top economist who is so well regarded that he has been called to testify before Congress many times? In late 2013, he predicted that bitcoin would crash from $1200 to under $10 within the next 6 months [1]. After he was proven wrong, he revised his claim to say that the crash would happen eventually. I guess…

This is true of every bubble ever. No one knew how to predict when the real estate bubble was going to collapse. And they wouldn't have been able to make any specific predictions, despite real estate being an obvious bubble.

It was very easy to see that the price did not reflect the fundamentals. And Bitcoin is similar. The fundamentals of Bitcoin do not support the price.

Also in terms of putting your money where your mouth is, there isn't any reliable way to profit off of bubble's unless you know the timing. And that's very hard. There are no laws of the universe that keep Bitcoin from rising for another 12 years, or tripling in value before it crashes.

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

#148

Post by DennisP »

placeybordeaux wrote: post #66
billmalarky wrote: post #35

Both the founder and lead dev of Ethereum and Litecoin think they are both significantly overvalued. Vitalik Buterin (Ethereum): https://mobile.twitter.com/VitalikButerin/status/94085013791... Charlie Lee (Litecoin): https://twitter.com/SatoshiLite/status/940353265585160192 I've been bullish on crypto past few years but it's gone too far. I've flipped to bear until the tech catches up.

I was just reviewing the avg tx fee on major coins. Micropayments aren't possible on any widely accepted coin. BTC has hit 20 USD a tx (albeit without segwit). It's looking a little rough. Might be time for a draw back. EDIT: I was pulling together the avg tx fees from https://bitinfocharts.com/ $BTC: 24.4 USD $ETH: 1.07 USD $BCH: 0.17 USD $LTC: 0.632 USD $DASH: 0.62 USD $XMR: 5.49 USD My other thoughts on the subjec…

Most of the time Ethereum is less than a penny for a simple value transfer, and it does more than twice as many transactions per day as Bitcoin. It's also pretty easy to implement simple payment channels:

http://www.blunderingcode.com/a-lightning-network-in-two-pag...

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

#149

Post by placeybordeaux »

azinman2 wrote: post #90
placeybordeaux wrote: post #66

Earlier quoted context omitted.

I was just reviewing the avg tx fee on major coins. Micropayments aren't possible on any widely accepted coin. BTC has hit 20 USD a tx (albeit without segwit). It's looking a little rough. Might be time for a draw back. EDIT: I was pulling together the avg tx fees from https://bitinfocharts.com/ $BTC: 24.4 USD $ETH: 1.07 USD $BCH: 0.17 USD $LTC: 0.632 USD $DASH: 0.62 USD $XMR: 5.49 USD My other thoughts on the subjec…

Bitcoin doesn’t HAVE to be used for micropayments to be useful.

I sent my friends 50 bucks worth of BTC for christmas time. At that point the fees for regular tx were ~5 bucks so I just bundled them and payed less than a dollar per send, making sure to send the change into a segwit address. I missed someone so I went ahead and sent a one off from a segwit address. That was only 1 buck tx fee. Totally doable for a $50 tx.

But if the valuations are anywhere close to proper we need to have significantly higher throughput.

If I can't send someone 10 bucks on bitcoin it loses a lot of value for me. I've previously used it to pay for lunch/poker w/e when I don't have my wallet and someone that I am with is interested in it. Even litecoin is hitting 1 USD avg tx fee.

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

#150

Post by placeybordeaux »

DennisP wrote: post #148
placeybordeaux wrote: post #66

Earlier quoted context omitted.

I was just reviewing the avg tx fee on major coins. Micropayments aren't possible on any widely accepted coin. BTC has hit 20 USD a tx (albeit without segwit). It's looking a little rough. Might be time for a draw back. EDIT: I was pulling together the avg tx fees from https://bitinfocharts.com/ $BTC: 24.4 USD $ETH: 1.07 USD $BCH: 0.17 USD $LTC: 0.632 USD $DASH: 0.62 USD $XMR: 5.49 USD My other thoughts on the subjec…

Most of the time Ethereum is less than a penny for a simple value transfer, and it does more than twice as many transactions per day as Bitcoin. It's also pretty easy to implement simple payment channels: http://www.blunderingcode.com/a-lightning-network-in-two-pag...

I was just pulling up avg tx fees. I realize that tx cost on ETH varies highly, do you have a preferred site to tell what contracts are economically viable for what amounts?

For instance I would be happy to buy a cryptokitty or two at the ~1 USD price range, but if the tx fees are ~1 USD then it's obviously a no go.

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