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How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

nytimes.com

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Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#71

Post by pishpash »

felipeko wrote: post #15
TheBiv wrote: post #3

>> They said they might look at selling when the value of all the Bitcoin in circulation approaches the value of all gold in the world — some $7 trillion or $8 trillion compared with the $310 billion value of all Bitcoin on Tuesday — given that they think Bitcoin is set to replace gold as a rare commodity. But then Tyler Winklevoss questioned even that, pointing out the ways that he believes Bitcoin is better than go…

There's a difference about Gold's rarity and Bitcoin's. Gold is rare on its kind and rare on its abundance. It may be hard to mine more gold, but it's way harder to find another gold-like commodity. Bitcoin is only rare in the abundance sense. It is hard to mine more bitcoin, but it's pretty easy to find a (arguably better) substitute for what it does. I can agree with it being better (having more utility) than gold,…

It's not even rare in abundance. Every fork (Bitcoin Cash!?) defeats its supposed non-abundance.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#72

Post by jstanley »

saalweachter wrote: post #38
felipeko wrote: post #15

Earlier quoted context omitted.

There's a difference about Gold's rarity and Bitcoin's. Gold is rare on its kind and rare on its abundance. It may be hard to mine more gold, but it's way harder to find another gold-like commodity. Bitcoin is only rare in the abundance sense. It is hard to mine more bitcoin, but it's pretty easy to find a (arguably better) substitute for what it does. I can agree with it being better (having more utility) than gold,…

Another critical difference is that there are commodity uses of gold. The price of gold will never go to zero ; it might go to $100 or $10 per oz if all speculation and hoarding were removed from the market but it wouldn't go to $0.

And what's that got to do with bitcoin? If you're going to assert that gold can't go to $0 and imply that bitcoin can, you need to also give a good reason why bitcoin can go to $0.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#73

Post by frgtpsswrdlame »

saalweachter wrote: post #38
felipeko wrote: post #15

Earlier quoted context omitted.

There's a difference about Gold's rarity and Bitcoin's. Gold is rare on its kind and rare on its abundance. It may be hard to mine more gold, but it's way harder to find another gold-like commodity. Bitcoin is only rare in the abundance sense. It is hard to mine more bitcoin, but it's pretty easy to find a (arguably better) substitute for what it does. I can agree with it being better (having more utility) than gold,…

Another critical difference is that there are commodity uses of gold. The price of gold will never go to zero ; it might go to $100 or $10 per oz if all speculation and hoarding were removed from the market but it wouldn't go to $0.

Sure but what's the importance of that fact? If I buy an ecoin at $1500 and it goes to zero and if I buy gold at $1510 and it goes to $10 it's the same loss. I guess what's the real importance that gold has a floor which is marginally above zero and bitcoin doesn't if both of those floors are far below the current price level.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#74

Post by sytelus »

TheBiv wrote: post #3

>> They said they might look at selling when the value of all the Bitcoin in circulation approaches the value of all gold in the world — some $7 trillion or $8 trillion compared with the $310 billion value of all Bitcoin on Tuesday — given that they think Bitcoin is set to replace gold as a rare commodity. But then Tyler Winklevoss questioned even that, pointing out the ways that he believes Bitcoin is better than go…

That's quite a balony.

- Both are in fixed quantity so none is more rare than other.

- Gold has practical use in industry which puts lower bound on its value. BTC has no lower bound.

- Gold is exchangeable virtually in any country and any culture regardless of how technologically advanced that society is.

- Thousands of years of history has proven that humans have almost natural lust for this shiny metal and it gets displayed as jewelry uses. This again further sets the lower bound for gold prices.

- Gold is not only rare but is virtually rust proof and can be stowed away without any advanced tech for 100s of years. BTC will be pointless if there was a natural or human made disaster and few people had electricity.

- Gold is far more unlikely to be made illegal by governments.

- There are no new rare metals popping up every day like whole slew of new cryptocurrencies which might fragment and trump each other. No one knows which cryptocurrency will end up dominating 10 years down the line.

- BTC has huge risk of getting stolen and hacked because someone exploiting zero day vulnerabilities in your system even if you did everything you possibly could to keep your system safe.

- Governments can start their secret operations to control the crypto market behind the scene, hack in to exchanges, find vulnerabilities or do dirty trades.

- Crypto exchanges are wild west without regulations which means clever deep pocketed traders would be exploiting them by techniques like frontrunning, wash trades, willybot, spoofing etc. This enables big investors to profit at the expense of small investors.

Above arguments should make it clear that btc has very real upper bound that it can rationally reach and its most definitely less than gold market cap. Of course, big investors can juice up things in the short term but it would be impossible to sustain irrational highs on long term.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#75

Post by dahdum »

meritt wrote: post #64
dahdum wrote: post #46

Earlier quoted context omitted.

They are linked very closely, especially with a volatile market like crypto. Besides, the volume is 10x what it was when Novogratz unloaded $250M on a smaller market cap. A billion would certainly move the price, but it doesn't appear it would crash it.

I was playing around with automated trading algorithms this summer on GDAX. With a bankroll of only $2.5k USD I was routinely contributing $500k+ worth of trading volume each day (that's only 100 r/t trades with $2.5k). Surely there's a lot more sophisticated high-volume trading algorithms taking place than what I did. Take a look at GDAX's full book [1] -- Even going all the way down to a BTC price of $8600 (-50% cu…

I don't disagree necessarily, but it's a very useful if somewhat flawed proxy I think? Any changes to the book are going to get arbed away pretty quickly, so a market sell is almost never a good idea with volume.

We've seen those and the price jumps back almost immediately because BTC trades on many exchanges and currency pairs.

If you wanted to measure the current book, I think you'd have to sum up the various fiat books across exchanges to get a good sense of what the market can bear at the moment.

edit: Thank you for forcing me to clarify my thinking, I shouldn't have directly linked volume to liquidity but absent good data I tend to associate them.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#76

Post by quickthrower2 »

jorblumesea wrote: post #26

How will quantum computing impact crypto currencies? Isn't the scarcity based on the slow rate of mining, aka crypto hashing? Seems like its going to be due for some serious future disruption. Until we can find a way to manufacture gold atoms on a mass scale at least gold will continue to be scarce.

I had the same thought as you but then have a look at the Etherium fork, the Bitcoin fork etc.

Bitcoin isn't the original white paper, to be carried on into infinity. Bitcoin is a brand. The white paper(s) and code can change (while honouring historic transactions) and adapt to changes in crypto, but you are still holding bitcoin, you are still buying and transaction bitcoin.

The word Bitcoin is essentially a "pointer" to the current accepted bitcoin implementation.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#77

Post by relics443 »

dingdongding wrote: post #36
relics443 wrote: post #27

This seems like a good indicator of a bubble. Everyone and their uncle knows a crash is coming, and these guys are shooting nonsense about regret and disappointment. 1b is a lot of money. Even for these guys.

> Everyone and their uncle knows a crash is coming A crash is always coming. Be it stock market or bitcoin. Everyone knows that but nobody knows when. It is just like saying we all are gonna die. Nobody knows when.

True, but someone with an end stage terminal illness shouldn't buy a car.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#79

Post by joe_the_user »

dahdum wrote: post #43
felipeko wrote: post #15

Earlier quoted context omitted.

There's a difference about Gold's rarity and Bitcoin's. Gold is rare on its kind and rare on its abundance. It may be hard to mine more gold, but it's way harder to find another gold-like commodity. Bitcoin is only rare in the abundance sense. It is hard to mine more bitcoin, but it's pretty easy to find a (arguably better) substitute for what it does. I can agree with it being better (having more utility) than gold,…

"So I'd agree that the sum of all e-coins will surpass gold, but I see no reason for Bitcoin to do it alone." We could pick any number of gold-like commmodities, but like Bitcoin, gold has had a history of large expenditures to acquire it. Both are buoyed by that past. So many tokens and blockchains are coming out with incremental improvements or niche capabilities, but in the end I think consolidation of market cap…

Both are buoyed by that past.

That bitcoin is a (sort-of) working cryptocurrency and that bitcoin has a history are basically the primary arguments for bitcoin's continued value.

But it seems implausible to claim that this will allow bitcoin to become a store of value investment. I think it's clear those buying bitcoins today either are doing so with an eye to increase their investments through bitcoin's rise or are trying to get money out of some nation which prevents capital exports.

As a thought experiment, if a person knew for certain that bitcoin would have the same price in six months, would that person ever prefer bitcoins to a us savings account with the same amount of money? It seems to me no one would.

Moreover, if bitcoins are essentially always going to be speculative, this leaves that possibility of them always being possibly displaced by an equivalent.

Re: How the Winklevoss Twins Found Vindication in a Bitcoin Fortune

#80

Post by stevenj »

I think the Winklevoss twins were rightly ridiculed for thinking they invented Facebook. However, they've made two prescient bets and deserve credit for those: (1) Getting Facebook stock instead of cash as part of their legal settlement; (2) Not only seeing bitcoin's future potential, but investing in it and sticking with it. While the final result on the second one is still TBD, they deserve credit for investing in something at a time when many thought they were stupid for doing so.
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