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Is Bitcoin a Bubble? Economists Say ‘Yes’

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

#191

Post by ceejayoz »

mrb wrote: post #160
ceejayoz wrote: post #124

Earlier quoted context omitted.

If you chart them, they're actually right on top of each other. http://www.zerohedge.com/news/2017-12-12/its-official-bitcoi...

This chart shows nothing interesting and is hardly scientific. Of course by lining up price charts of various speculative bubbles they will roughly line up. The chart also intentially discards the first 4 years of Bitcoin trading data (2010-2013) where Bitcoin has actually gained the most. None of the other assets in the chart even remotely compare to Bitcoin's gains in these 4 years. Also, it should really use a log…

> The chart also intentially discards the first 4 years of Bitcoin trading data (2010-2013) where Bitcoin has actually gained the most.

Sure, just like the comment being replied to discards several hundred years worth of tulip sales to say "Tulipmania lasted 6 months. Bitcoin is now 8 years old."

Bitcoin has, until this year, largely escaped widespread public notice beyond "isn't this odd/interesting" pieces in the media.

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

#192

Post by DennisP »

lostmsu wrote: post #188
placeybordeaux wrote: post #150

Earlier quoted context omitted.

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.

It does not make much sense to use avg tx fee to see if a currency is suitable for micropayments. You should be looking at the min tx fee.

Also with various micropayment schemes you don't actually need an on-chain transaction for every payment.

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

#193

Post by option_greek »

chomp wrote: post #180
rubenrails wrote: post #71

Did you guys see this thread on Twitter a couple of days ago? https://twitter.com/TedOnPrivacy/status/940588631709896704 Have you had similar problems selling bitcoin? EDIT: saw -> see

Yes, I used breadwallet to sell some bitcoins, accidentally set the transaction fee at (what I'd later find out to be) ~10 satoshis/byte. Now I have ~$2300 locked up in the mempool, and no end in sight for these high transaction fees. Can't figure out a way to raise the fee. https://jochen-hoenicke.de/queue/#4d

It should expire in 3-4 days. You can also try importing the keys to another compatible wallet and redo the transaction with higher fee.

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

#194

Post by sixQuarks »

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…

it's not really a contrarian bet. If you follow stock bubbles, you'll know that stocks rise on a wall of worry, and fall on a slope of hope. Basically, when everyone is worried about it being a bubble, there's probably still room to grow. The time you gotta watch out is when everyone starts thinking bitcoin is going to keep going up.

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

#195

Post by mancerayder »

So one of the items that keeps coming back to awareness is the potential implications of the Tether fraud. For those few that haven't heard of this by now, Bitfinex is tied closely structurally (in terms of management and ownership) to the company that created Tether, the altcoin that claims to be backed in a 1:1 basis with a USD.

Well, there've been mysterious USDT transactions, in regular intervals, that suggest that there's tens of millions of Tether being pumped into Bitfinex on a regular basis, which of course can be converted into BTC (and other coins). However, no one thinks it's likely due to the soured reputation of Bitfinex (their big hack, their inability to do business with a U.S. bank, among other things) that this is REAL USD being pumped into this suspicious company with ill-reputed owners. This has been mentioned on Bloomberg and other mainstream publications.

So (if this is all true) what in the world will it mean reputationally that people have been pouring 800M of counterfeit coins into Bitcoin, and what does it mean economically?

I can't wrap my head around that second question.

[edit: updated last sentence of p2 for clarity)

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

#196

Post by jfoldager »

dimillian wrote: post #141
googletazer wrote: post #106

Earlier quoted context omitted.

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.

Why will a bubble explosion bankrupt an exchange platform? The platform doesn't need to own any bitcoins and can be unaffected by price swings. The platform likely earns bitcoins through fees, but is free to trade them at any time. In principal all the bitcoins in the care of the exchange can be owned (or owed) to the traders.

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

#198

Post by mancerayder »

“Old Baron Rothschild’s recipe for wealth winning applies with greater force than ever to speculation. Somebody asked him if making money in the Bourse was not a very difficult matter and he replied that, on the contrary, he thought that it was very easy… “I will tell you my secret if you wish. It is this: I never buy at the bottom and I always sell too soon.”

(from https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera...)

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

#199

Post by existencebox »

tbirrell wrote: post #166
pteredactyl wrote: post #23

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?

Fiat currencies are still reasonably stable compared to actual goods right now. I know that can and has changed in the past (pre/post WWII germany), but at the moment, they are not in a bubble. Not at the same level that bitcoin is, anyway. How do I know this? Well, because I can still get a gallon of milk or loaf of bread for ~$3. If I put that $3 into bitcoin, I'd get some fraction of a coin (roughly 0.0001). Which…

Just a comment to chime in with some interesting info.

QE in the UK seems to have actually kicked into the inflation cycle. Commodity prices (butter was a big one, if I remember correctly, at >20% yoy) have been jumping alongside service costs (insurance). I'm sure that Brexit is _some_ sort of variable in this equation but I won't pretend to make heads or tails of how beyond that inflation is in fact happening in some places. [0][1]

Given the level of concern there is over the "missing inflation" in USD that causes so much headscratching by the Fed WRT rate raises, I think the OP is fair to say that we should be at least somewhat concerned about the state of currencies during QE (My intuition as someone not in finance is that it's simply been "absorbed" somewhere in the system that doesn't trickle down to normal consumers, such that it doesn't manifest like the inflation they're looking for; would be curious if someone more informed could speak to this.); and more importantly, the position that a multi-year ZIRP regime puts us in to respond to the next crisis.

Bitcoin is an obvious outlier for sure, and a correction would hurt. But compared to the populations currency exposure, bitcoin's pain would likely be much less widespread.

[0] (because I trust reuters as a source) https://uk.reuters.com/article/uk-britain-economy-inflation/...

[1] (more fine grained breakdown from sketchier news site) http://www.trustnodes.com/2017/12/13/inflation-spikes-britai...

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

#200

Post by riffraff »

luis_espinoza wrote: post #183
eloff wrote: post #136

Earlier quoted context omitted.

Because bitcoin and tulips have nothing in common? Bitcoin is a commodity, tulips are a commodity. Tulips went through a particular phase of hype with a famous bubble (and crash). It's not irrational to look at bitcoin through that lens. Bitcoin might be new tech, but commodity markets and the human psychology and greed that drive them are old as dirt. Those who ignore history are doomed to repeat it.

In my understanding, bitcoin and its supporting technology is a monetary system. So, in my opinion, comparing bitcoins with tulips will be similar to comparing Fractional Reserve Banking with tulips.

but is bitcoin really a monetary system if it's not being used as a currency, but as a commodity?

The increase in dollar value of a bitcoin does not bear any resemblance with an increase in use of bitcoin as a currency.

If anything, there seem to be less hype about using BTC to pay for things these days than a few years back.

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