Bitcoin and almost every other cryptocurrency crashed hard today • Hacker News Board

Re: Bitcoin and almost every other cryptocurrency crashed hard today

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Post by saalweachter » Fri, Dec 22, 2017, 5:10 PM UTC

asciimo wrote: post #325

saalweachter wrote: post #222

Earlier quoted context omitted.

Nope! That's the exciting part of an asset with no fundamental value.

You can use US dollars to wallpaper your bathroom, for example.

USD aren't valuable because they have a fundamental value, either. Personally, I think the "you have to pay taxes in USD" argument is stupid; it doesn't factor into my daily thinking and I doubt it does to many other people's.

They're valuable because literally everyone I interact with treats them as if they were valuable. If that changed, I'm sure USD would quickly become worthless.

You can say there's no difference between USD and BTC, but there's some difference between "a million people think they have value" and "three billion people think they have value".

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#342

Post by vec » Fri, Dec 22, 2017, 5:12 PM UTC

stinkytaco wrote: post #140

aviv wrote: post #122

Earlier quoted context omitted.

This right there is exactly why long term it's doomed and cannot be a reliable store of value. You don't see banks and random geeks inventing new precious metals out of thin air. So you have gold, silver, platinum and palladium and that's about it as far as store of values are concerned.

I mean, I suppose anyone can create a currency out of thin air. In fact, I'd wager there's hundreds of currencies, as nearly every sovereign state has one. It's not meant to be a store of value, which is why this bubble will burst, but that doesn't mean it's doomed. It has the characteristics of a currency: 1. scarce. 2. useful.

But not 3. fast and easy to transfer ownership of or 4. stable in value over time. Plenty of things (houses, human toes, pre-release copies of films, etc.) Are both scarce and useful without also being good candidates for a medium of exchange.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#343

Post by thinkling » Fri, Dec 22, 2017, 5:13 PM UTC

bogomipz wrote: post #311

apcragg wrote: post #170

Earlier quoted context omitted.

The dollar is essentially backed by oil and the fact that it's needed to trade with the largest economy in the world, not to mention the country with the largest military.

>"The dollar is essentially backed by oil ..." No, the petrodollar system effectively ended with the 2008 financial crisis[1]. The US dollar is just backed by debt now. EDIT(wrong URL): https://uk.reuters.com/article/uk-usa-bonds-petrodollars/com...

I'm missing how your link supports your claim. The linked article says nothing about the financial crisis and discusses petrodollar behavior in recent years. Much of the reduction in export of petrodollars to asset markets is blamed on sanctions on Russia.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#344

Post by Erlich_Bachman » Fri, Dec 22, 2017, 5:14 PM UTC

asciimo wrote: post #316

Erlich_Bachman wrote: post #210

Earlier quoted context omitted.

You are missing the reason the fees are high: it's because Bitcoins it the most widely used cryptocurrency today. Scaling something like Bcash, which doesn't have that many transactions - is easy. The fees can be low because nobody wants to use it. Because there is no real demand for those transcations, and so the price can be low. For a crypto like Bitcoin, which does have high demand for transactions, some of the f…

What if Bcoin increased the block size?

Increasing the blocksize will never realistically bring a Bitcoin-like network to the truly global scale of say Visa or MasterCard. Many people think that other technical solutions are needed, and that only they can work. These people are broadcasting their choice through the markets and the price of each coin.

Bcash has increased the blocksize (and forked), which is a perfectly valid solution for such a task, in terms of how a cryptocurrency should be governed: no wars, no lawsuits, if some users don't think a certain decision is valid, they are free to fork off their own chain. No one stopped them, no one tried to shut them down. But the market will ultimately show what is a good solution and what is a bad solution. And you can already see what the market decided in terms of the decision of increasing the block size - by comparing Bitcoin market cap to Bcash market cap.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

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Post by monort » Fri, Dec 22, 2017, 5:14 PM UTC

IkmoIkmo wrote: post #134

There's essentially nothing driving the price increase in 2017. Payment processing, remittance, asset-backing, digital identities, micropayments, bitcoin ATMs, VC-backed bitcoin startups, none of these things took off at all in 2017, in fact if anything the exciting years regarding these usecases/infrastructure ventures were 2013-2015. I bet if you ask 100 people why they bought and if they use bitcoin for anything i…

There was a halving of miners subsidy in 2016, that is what drives the price. For some reason the effect is delayed, but it was delayed during previous halving too.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#346

Post by thealfreds » Fri, Dec 22, 2017, 5:17 PM UTC

anonemouse145 wrote: post #100

JumpCrisscross wrote: post #30

Earlier quoted context omitted.

I think there are three elements contributing to the negativity: (1) People may get hurt. I was in an Uber two weeks ago where my driver talked about taking out a second line on his home to buy Bitcoin. By today's mark, he's lost money. That people who clearly have no idea what they're doing are being preyed on is disturbing to many, myself included. (2) ICOs are a cesspool of frauds. They allow promoters to make mon…

And transaction fees. I saw someone reporting over $30 fee to get processed within 20 minutes. That's why Steam dropped Bitcoin. As a skeptic, people thinking this is a good currency are hilarious. Day trading and making money off them is simple sport.

Hoping the introduction of the Lightning Network (or really any tech that can batch transactions together) will help here.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#347

Post by altern8tif » Fri, Dec 22, 2017, 5:20 PM UTC

apcragg wrote: post #170

bogomipz wrote: post #154

Earlier quoted context omitted.

>"- not rare" Its not a commodity it's a currency. Why does it need to be "rare"? The US dollar is also not backed by anything "rare" and hasn't been since Nixon abandoned the gold standard in 1973. >"didn't have any government backing or big institutional backing in case the price dropped from 19,000 to 11,000" You realize this is the exact reason it was created right? That's the whole point. It's not coincidence th…

The dollar is essentially backed by oil and the fact that it's needed to trade with the largest economy in the world, not to mention the country with the largest military.

The dollar is only "backed by oil" if you can take your dollar bill to the US Treasury and get it exchanged a dollop of crude of an equivalent value.

The last time the dollar was backed by any asset was when it was under the gold standard. Boy was that a mistake.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

#348

Post by sowbug » Fri, Dec 22, 2017, 5:22 PM UTC

paulgb wrote: post #334

sowbug wrote: post #304

Earlier quoted context omitted.

Maybe. Or the modem is part of Bitcoin's infrastructure that needs to be replaced. Bitcoin's architecture is reasonably modular, so that is a possible outcome. I can't read tea leaves better than anyone else, but I do agree with Hal Finney's Bitcoin-or-bust observation. If another cryptocurrency besides Bitcoin takes hold, it's likely that all cryptocurrencies will fail. This is because the scarcity argument proves f…

Fair enough, that's a more nuanced reply than I expected and I appreciate it.

Best of luck, whatever you do and believe.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

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Post by mikeschmatz » Fri, Dec 22, 2017, 5:22 PM UTC

55555 wrote: post #205

djsumdog wrote: post #120

Earlier quoted context omitted.

Market manipulation. The prices are really set by the coin exchanges; what they are willing to take/pay. They're all really competing with each other on the best prices for BTC. All of this becomes a feedback loop. A lot of people I talked to really believed prices were being driven by some kind of market manipulation. Either within the coin exchanges or people who were finding a way to manipulate things on the block…

I believe that if you truly understood how exchanges work, you wouldn't hold this belief. I guess I should elaborate. You may know some of this but you likely don't know all of it. There are two types of orders: LIMIT and MARKET. Limit orders get added to a list. There is a list of standing BUY orders and a list of standing SELL orders. They are standing/LIMIT because no one has taken them up on their offer. For exam…

> It doesn't really make any sense.

Whether it makes sense to you or not market price manipulation absolutely does work as shown by hundreds of lawsuits filed by SEC every year.

>The order book has a lot of orders in it. This appears to me to be one of the stupidest things anyone could ever try to do. It would move the market, but it's not clear that there's any reason to believe that it would be anything but massively unprofitable.

Given enough cash/coins you can easily manipulate order book (see "wash sales"). Even easier if you are running an unregulated exchange, duh!

The goal of bidding price up is to attract buyers and establish an upward trend, which later you can sell into at a higher price. Works even better when it causes a "short squeeze".

Works in other direction too, obviously. All this is rather pretty basic and also highly illegal in _regulated_ markets.

Re: Bitcoin and almost every other cryptocurrency crashed hard today

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Post by Klathmon » Fri, Dec 22, 2017, 5:25 PM UTC

root_axis wrote: post #337

Klathmon wrote: post #329

Earlier quoted context omitted.

>The point is that you can't just "create a new company" tomorrow that is in any way comparable to a successful business That's my point exactly! Just because you can replicate the "class" of thing, doesn't mean you can replicate the thing... Just like how a company stock isn't just a piece of paper that anyone can photocopy, a cryptocurrency isn't just the code that runs it. It's the users, the track record of secur…

> Simply making a new cryptocurrency is exactly the same as making a new company, or a new facebook, or a new toyota, or a new anything. No, it isn't at all similar, because business are specialized entities with specific properties that cannot be easily replicated, unlike a crypto-token ledger which can be instantly and effortlessly replicated with identical qualities and capabilities at near zero cost. > So is the…

Why do you think it "costs nothing" to create a successful crypto-token?

I can create a business with a hundred dollars and a trip to the local government building, but that doesn't mean i'll be successful, or that i'm a competitor to facebook. Just like how anyone can fork a cryptocurrency, that doesn't make them successful or a competitor to bitcoin.

And I disagree about how creating a business can cost the creator everything, isn't limiting liability one of the biggest reasons to start a company? So that you don't lose everything if it doesn't work.

But I think you need to really look at what it takes to build a cryptocurrency, let alone a successful one. You seem to be ignoring my point that a currency isn't just the code, but the network, the users, the trust, the amount of hardware and software written for it, the number of implementations, the amount of acceptance at vendors, the number of reputable exchanges, and the amount of decentralization. Replicating all of that isn't going to be any easier than getting everyone to switch from facebook to "klathmonbook" would be.

The fact that there are hundreds of cryptocurrencies created all the damn time that aren't overtaking bitcoin proves my point. If you replace the word "business" with "cryptocurrency" in your last paragraph, it still holds true. A good cryptocurrency needs to provide a benefit, and in bitcoin's case (at least to me) that benefit is decentralization, "push based" payments, the ability to be your own bank, a network of users and vendors that trust and use it, and not needing to trust anyone to transact with them using it.