Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin and almost every other cryptocurrency crashed hard today

techcrunch.com

Post reply on HN
Print view View original

171–180 of 426 posts

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#171

Post by IkmoIkmo »

dithering wrote: post #125
tanilama wrote: post #93

Earlier quoted context omitted.

> not rare Interesting. Don't really know how crytos work, but isn't rarity is guaranteed by the BitCoin algorithm itself?

Algorithm is defined by consensus. Changing the algorithm just means gaining consensus amongst the miners. "Would you like to continue printing free money?" sounds like an easy sell to me.

I doubt it's that easy to gain consensus on that. Half a decade of billion-dollar incentives have already provided a real-life experiment in which this issue didn't come up, although it may in the future.

The reasons are that bitcoin's value is derived from its scarcity and decentralised properties. If you completely break that philosophy, it's sorta-kinda just a digital ledger controlled by a small group of powerful companies like any other system you could think of.

So you'd momentarily print money that'd soon lose much of its value. And you'd be doing it on specialised mining equipment which are purpose-built by all the big mining companies, that can just has a single algorithm that bitcoin uses (and is useless for mining many other coins), which then also all lose their value.

Again, it could happen, but the incentive structure certainly isn't designed for this to occur naturally. Even a small printing of money would be immediately noticed.

Rather, the rarity to me stems from the fact that indeed, anyone can run a blockchain. It's just software on 1 or more computers. I can run 100 blockchain clones on my computer with trillions of tokens. And bitcoin tokens themselves can be split to ridiculous numbers, as you can send 0.000001 bitcoin. That fraction of a bitocin is a token that can carry information and put it on the blockchain, and you can agree that this information represents any asset. As such, there's no scarcity of databases (blockchains) or tokens (bitcoin fractions), and thereby it isn't 'rare'. Of course, most blockchains have no security strength because there's not enough value to incentivise a large group of independent miners like with bitcoin. But the idea that you can clone/improve bitcoin, run your own and create a healthy market is reality, and it means that ultimately there's no real rarity for bitcoin usecases that couldn't happen on another chain that's supported by users.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#172

Post by bsaul »

55555 wrote: post #147
bsaul wrote: post #75

Earlier quoted context omitted.

What do you consider a "bottom" price for bitcoin ? or a "high" price ? This thing has no possible valuation, because it has no utility, no intrinsic value. The whole thing is just crazy.

> it has no utility People buy drugs with it. People evade tax with it. People evade currency controls with it. When will people stop making this crazy false claim?

Yes, illegal activities, you're right. But betting on something as famous and easily accessible keeping evading law for a long time is a risky bet.

As for "Evading currency control" it doesn't mean anything for individual, i'm sorry (unless you're an autonomous region trying to get rid of central bank policy, but i don't think any has adopted bitcoin yet)

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#173

Post by djsumdog »

mtgx wrote: post #38

The Big Boys (bankers) entered the market now, so expect some Big Manipulations to happen.

I think big manipulations were already happening. That's why we saw the price driving up.

With a currency so based around absolute mathematical constants, with just a little coin and testing, it'd be a really easy system to manipulate as well.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#174

Post by cocktailpeanuts »

Cthulhu_ wrote: post #121
cocktailpeanuts wrote: post #83

As someone who owns and believes in cryptocurrency, I'm actually glad this happened. I was getting sick of all the get rich quick people who've been driving the price lately, even for the coins that shouldn't be pumping. It was almost as if the entire cryptocurrency space had turned into a huge unregulated casino. I was at a couple of Bitcoin meetups recently and was surprised to find that most attendees were proudly…

> It was almost as if the entire cryptocurrency space had turned into a huge unregulated casino. [/thread]. That's really what it is, but instead of casino, call it a stock market. With that one there's a lot of regulation in place - including new European legislation, MiFID II ( http://europa.eu/rapid/press-release_MEMO-14-305_en.htm ), which in part is aimed at protecting clueless investors from themselves. The cry…

I agree and disagree.

I agree that currently it's purely based on speculative supply and demand. But I disagree that's what cryptocurrency is.

Bitcoin became popular because people actually used it to buy and sell stuff in the early days. And its main value was that it could provide very low transaction fee. Nowadays that's become impossible because the BTC transaction fee has risen to a ridiculous state.

For something to function as currency it needs fungibility. That used to exist in BTC but it's gone now. They're trying to come up with a solution with lightning network, sidechains, etc. But in the meantime all the vendors who used to take payments in Bitcoin have all pulled off because of the transaction fee. And we see all the other cryptocurrencies have risen up because BTC couldn't provide the value it used to provide. To be honest it's been pathetic watching the "civil war" between Bitcoin people because they've been deluded enough to believe they've already won that they were doing petty in-fighting over ego. This crash should be a wakeup call for those complacent devs to realize there's still long way to go.

So you're right that currently BTC deserves to drop all the way down, because it doesn't deserve to be a currency. Which is why I'm glad this happened. Because I was getting sick of all those people who've been parroting the "Bitcoin is fine as just a store of value" narrative. It's not, and this crash is the proof. All those people who thought they were "storing value" when there was no fungibility deserve to learn it the hard way.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#175

Post by stinkytaco »

Cthulhu_ wrote: post #142
laythea wrote: post #92

Earlier quoted context omitted.

I am struggling to understand what currency you would define fundamental value - Loafs of bread?

Things you can walk to a shop to and buy things with. Things employers will pay you for. Things that are backed by a government and guaranteed by a national bank. Things that are protected by laws and monitored to prevent large value shifts. Things that can be transferred in many transactions (like, more than four per second) Things that don't need the energy production / consumption of a small country just to functi…

> Things that are backed by a government and guaranteed by a national bank. Things that are protected by laws and monitored to prevent large value shifts.

I'm no crypto-anarchist, but plenty of currencies do not meet this definition, and have failed as a result. Indeed, it's a time honored method of spurring growth to simply create money, and it's a time tested cause of instability. Certainly a well managed central bank is an asset, but it's hardly a reliable method of keeping currencies useful. There are plenty of reasons to be concerned with bitcoin's deflationary nature, but arguing that it's not as inflationary as government backed currencies is an argument that can damage both side of this debate.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#176

Post by bpicolo »

djsumdog wrote: post #96
candiodari wrote: post #84

Earlier quoted context omitted.

You mean, like the US dollar ?

Like all dollars, yen, pounds, euros, silver, metal and gold? None of these things, paper or earth metals, really have any intrinsic value. You can't eat gold. You can't put euros in your car. I guess you can burn money to keep warm, which is what happened to German Marks once people lost confidence in their currency prior to WW2. The value of money is based off belief systems. When a very large scale economic or sta…

While you can’t eat gold, it does have a variety of uses.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#178

Post by 24gttghh »

Wh1zz wrote: post #116
24gttghh wrote: post #56

Ha! I needed a good laugh this morning. Thanks internet. What I don't get, is how do these prices actually change? For btc or a stock. The mechanism seems very voodoo.

If the last traded price was 20k, then that's the price. If you have some btc and are looking to sell really quickly before it goes down, and I make a buy offer for 19k that you accept, then the last traded price is now 19k, and that's the new price. Nothing voodoo really, just a bunch of people making buy/sell decisions based on how they think the value will move.

I guess the voodoo i feel is the speed at which these happen, and the unseen offers for prices different (+/-) from what is the "current price"

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#179

Post by cs702 »

What we're seeing right now is a shakeout of all those unsophisticated individuals who have been purchasing crytocurrencies in growing numbers, mostly without understanding them, and in many cases with borrowed money and even by taking out home mortgages.[a] Those unsophisticated buyers are the ones who pushed the price of Bitcoin from ~$1000 at the beginning of the year to $18000+ a couple of weeks ago.[b] Now they're surely wondering what the heck is happening to them.

The question is: who is buying? Remember, for every sale there is a purchase on the other side of the transaction. Trading volumes have grown from around US $2B/day at the beginning of the year to $20B/day right now, excluding Futures volume, which means that there are people or firms buying $20B/day of Bitcoin in the face of a substantial price decline.[c] Who are these buyers?

[a] https://www.cnbc.com/2017/12/11/people-are-taking-out-mortga...

[b] https://www.coinbase.com/charts

[c] https://coinmarketcap.com/currencies/bitcoin/

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#180

Post by artur_makly »

aviv wrote: post #111
cocktailpeanuts wrote: post #83

As someone who owns and believes in cryptocurrency, I'm actually glad this happened. I was getting sick of all the get rich quick people who've been driving the price lately, even for the coins that shouldn't be pumping. It was almost as if the entire cryptocurrency space had turned into a huge unregulated casino. I was at a couple of Bitcoin meetups recently and was surprised to find that most attendees were proudly…

Just FYI and very anecdotal, I know a guy who was confronted in the parking lot after a bitcoin meetup by 2 guys demanding that he send some coins to their wallet. Be careful at those meetups.

the 1st crypto stickup?
Post reply on HN