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Beyond the Bitcoin bubble

nytimes.com

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Re: Beyond the Bitcoin bubble

#121

Post by soundwave106 »

cryptofyodor wrote: post #38
aaron-lebo wrote: post #33

Earlier quoted context omitted.

The SEC is warning people so they don't get scammed. Good for them. Their actions aren't unwarranted because there's been a lot of scams. You're asking for an open market so that people can be defrauded.

Not really, first of all when SEC warns it is usually when people already actually get scammed. Second - if my father kept telling me "son, don't go there" I wouldn't know why, and how to distinguish safe places from unsafe. All I mean is that by scarring you don't protect people from being defrauded. And I wouldn't care if I'd like to see people being defrauded, but in fact I do care, and don't find the "scarring/wa…

What is wrong with the SEC's statement on Bitcoin? (https://www.sec.gov/news/public-statement/statement-clayton-...)

My opinion is, if you read that and believe this is the SEC attempting to merely "scare" you, that you really shouldn't be investing in Bitcoin. None of their statements seem incorrect.

Bitcoin is new, but it is most similar to forex IMHO, and all the disclaimers to forex apply. Forex has higher than average risk, particularly in developing countries where volatility can be very high -- the possibility of losing almost everything is above average. It is also quite a bit more prone to scams compared to other investment platforms. It can work out well, but I wouldn't plunge into forex without doing a heck of a lot of research, and I wouldn't bet the farm on a single forex investment.

That applies to Bitcoin too. But there are some additional specific risks not linked to forex though. With forex, you can use various economic indicators of the nation of the currency to attempt to make a more solid investment. I'm not sure what economic indicators are out there to help with Bitcoin. Bitcoin's not backed by any government, furthermore, so there is higher risk for government intervention as we've seen to some degree in China and South Korea, which will at the very least cause greater volatility. Furthermore, bitcoin has a huge disadvantage compared to forex right now: it is relatively illiquid. All that adds up to a very risky investment from my perspective at this point. Some might be willing to take the plunge anyways. But the office talk I hear on Bitcoin is way too casual compared to the actual risk.

Re: Beyond the Bitcoin bubble

#122

Post by IncRnd »

tomaskafka wrote: post #74
catbird wrote: post #64

I don't understand the transit example presented in this article. I feel like I am missing something fundamental about the utility of any of these distributed services backed by their own type of coin. For the transit example you have some people who want to request rides, and some people who want to provide rides. OK. Someone develops an application to process these requests, in some kind of bidding system... How ar…

This - all things that can by done by SomethingSpecificCoin can be equally well done on smart contract platform ala Ethereum. There is no reason (except for rewarding founders and early investors) someone who want to provide taxi rides own specialized mining equipment for maintaining blockchain of a proprietary coin. I rode a taxi few months ago, and I don't remember having to change my currency for a TaxiCoin which…

> In fact, it is illegal for him not to accept the national currency.

What country are you referencing? It can't be the US.

https://www.federalreserve.gov/faqs/currency_12772.htm

Is it legal for a business in the United States to refuse cash as a form of payment?

Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency [including Federal reserve notes and circulating notes of Federal reserve banks and national banks] are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.

Re: Beyond the Bitcoin bubble

#123

Post by v64 »

gist wrote: post #116
v64 wrote: post #108

It's strange to me how there are many among the Hacker News crowd who can read an article like this and have doubts about its thesis. You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have on…

So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? After all you don't go around thinking that a country like (insert small insignificant country) is ever going to pass the United States in ability but sure 'anything is possible'. It could happen after all the US surpased Europe in man…

> So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case?

At what point do you believe the internet had made its case as a technology? 1975? 1985? 1995? 2005? In each of those years, you had naysayers saying the internet would never become something people use in their daily lives, but here we are. The evidence of today should not stifle the innovation of tomorrow.

> Also with respect to things like 'nobody will ever need a computer in their house' or what Watson of IBM said (regarding the need for only a small amount of computers in total) you are also not looking at the times that that type of statement ('will never work and here is why' or 'not needed because xyz') was true.

It's not just Watson who made that statement. Many business owners in the 90s looked at computer and internet technology and dismissed it as a fad that would cease to exist in 5 years (and after the bubble popped, they were 100% sure they were correct). I believed in computers and the internet then because they solved unsolved problems, and offered better solutions than existing ones. In the field of trustless services, I believe the blockchain will be an essential part of that. And maybe it won't exactly be the blockchain we have today, but it will either be an improvement upon it, or an alternative idea created to address the problems of the original. Regardless of how the blockchain is and will eventually be used in practice, it's a simple theoretical model that offers a proof of what's possible in this space that we didn't have before.

If you don't think the blockchain is "it", then what other technology do we have today that solves the same third party trust problems as the blockchain? Or do you believe that reliance on third parties in business and finance is something we don't need to overcome?

Re: Beyond the Bitcoin bubble

#124

Post by vec »

DSMan195276 wrote: post #104
vec wrote: post #63

Earlier quoted context omitted.

There's two separate things that get conflated in these discussions. The first is the blockchain, which is a technical innovation that allows a client to decide which version of a shared event log to trust, even if it doesn't trust any of the servers attempting to perform the update. The ELI5 version is that the record that took the most total work to generate is correct. Since generating a fraudulent record requires…

The problem with the 'blockchain without a coin' idea is the incentive. Why would people spend money to mine a blockchain which provides nothing to pay them back for it? Without the incentive, why would you care who is mining the blocks, and why would care about mining blocks faster then other people? You wouldn't. But at the same time, without having that race to have the most mining power, the argument that it is c…

It's true miners have to have some incentive, and Bitcoin chooses to make that incentive a financial reward, but it's not the only possible incentive structure.

For example, imagine banks wanted to replace their clunky old ACH system with a blockchain. They could design their protocol such that it refuses to process transactions from or to an address that hasn't contributed a block to the chain in, say, the last 24 hours.. That requires each bank to contribute some minimum amount of computing power to maintaining the chain, even though it doesn't directly reward them for it.

(I've spent literally 2 minutes thinking through this example. I'm sure it has some glaring holes in it. Still, I hope it illustrates the point.)

Re: Beyond the Bitcoin bubble

#125

Post by oculusthrift »

bigdubs wrote: post #115
v64 wrote: post #108

It's strange to me how there are many among the Hacker News crowd who can read an article like this and have doubts about its thesis. You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have on…

Not sure the parallels are as strong as you're making them out to be; there are deep, deep flaws with proof of work as a concept because of the energy consumed. There will probably be a better end state for distributed trust, but we're legitimately not there yet.

proof of stake.

Re: Beyond the Bitcoin bubble

#126

Post by IncRnd »

cryptofyodor wrote: post #38
aaron-lebo wrote: post #33

Earlier quoted context omitted.

The SEC is warning people so they don't get scammed. Good for them. Their actions aren't unwarranted because there's been a lot of scams. You're asking for an open market so that people can be defrauded.

Not really, first of all when SEC warns it is usually when people already actually get scammed. Second - if my father kept telling me "son, don't go there" I wouldn't know why, and how to distinguish safe places from unsafe. All I mean is that by scarring you don't protect people from being defrauded. And I wouldn't care if I'd like to see people being defrauded, but in fact I do care, and don't find the "scarring/wa…

In all your posts you write "scarring". I think you mean "scaring," if you refer to what which will scare. Scarring somebody means they are being scarred.

Re: Beyond the Bitcoin bubble

#127

Post by dragonwriter »

mhb wrote: post #97
tomaskafka wrote: post #74

Earlier quoted context omitted.

This - all things that can by done by SomethingSpecificCoin can be equally well done on smart contract platform ala Ethereum. There is no reason (except for rewarding founders and early investors) someone who want to provide taxi rides own specialized mining equipment for maintaining blockchain of a proprietary coin. I rode a taxi few months ago, and I don't remember having to change my currency for a TaxiCoin which…

it is illegal for him not to accept the national currency According to the United States Department of the Treasury’s site[1], there is no federal law requiring that businesses accept currency or coins as payment for goods or services. [1] https://www.treasury.gov/resource-center/faqs/Currency/Pages...

post-service payment is a debt, taxi payment is usually post-service, and as your own link says “This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor”.

The import of this is that such an offer (even if rejected) has a substantial impact on the creditors legal ability to pursue a debt.

Re: Beyond the Bitcoin bubble

#128

Post by IncRnd »

fastball wrote: post #76
dublidu wrote: post #55

Earlier quoted context omitted.

A 40% drop in any other asset price would already be considered a deflated bubble.

Not when it increased by 100% over the last 3 months...

> Not when it increased by 100% over the last 3 months...

Actually, yes, that is a pretty good indication of a bubble.

Re: Beyond the Bitcoin bubble

#129

Post by [deleted] »

v64 wrote: post #123
gist wrote: post #116

Earlier quoted context omitted.

So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? After all you don't go around thinking that a country like (insert small insignificant country) is ever going to pass the United States in ability but sure 'anything is possible'. It could happen after all the US surpased Europe in man…

> So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? At what point do you believe the internet had made its case as a technology? 1975? 1985? 1995? 2005? In each of those years, you had naysayers saying the internet would never become something people use in their daily lives, but here…

[deleted]

Re: Beyond the Bitcoin bubble

#130

Post by fooblitzky »

v64 wrote: post #108

It's strange to me how there are many among the Hacker News crowd who can read an article like this and have doubts about its thesis. You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have on…

I see one fundamental problem that needs to be solved before blockchain can become a mainstream technology platform in the same way the Internet and the WWW did.

Without a centralized authority, there is no recourse in the event of theft. None. Someone stole your identity? Guess you need a new one.

Building an entire life on blockchain makes the security of the private keys extremely important, and surely we have more than enough examples that any connected system cannot keep its secrets forever (or even for very long)?

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