It can all go to zero • Hacker News Board

Re: It can all go to zero

#161

Post by otakucode » Tue, Jan 16, 2018, 7:42 PM UTC

A few months ago I listened to an audiobook about Long Term Capital Management, both their rise and their spectacular fall. Their largest error was one I could easily see causing a catastrophe in cryptocurrency markets. Some call it a "liquidity crisis" but really its a matter of no one being willing to buy. LTCM was witness to a situation where it was positively idiotic for everyone to be getting out of the market - but they were anyway.

Humans are skittish, irrational creatures, especially in large groups. If you operate on the 'rational market' hypothesis, you're wrong. Plain and simple, just wrong. That's not how it works, or how it has ever worked. Panics happen. People hurt themselves in order to limit their exposure to even manageable risk.

But, their main insight stands, really. If you can hold long enough, things converge. It's the 'hold long enough' bit that can sometimes require a wait that costs more money than there is in the world.

Re: It can all go to zero

#162

Post by bringtheaction » Tue, Jan 16, 2018, 7:43 PM UTC

ejanus wrote: post #160

Robotbeat wrote: post #156

Earlier quoted context omitted.

Someone announces they have had a large quantum computer for a while and have cracked every public key on the blockchain. That'd probably do it. Quantum Jubilee, y'all. The year of decryption, all private keys revealed, all captive coins set free. It's just a matter of engineering at this point. Give it roughly 10 years.

Not only cryptography coins,even traditional banking,e-commerce,and our modern society would go down. Quantum for all.

Exactly and in fact some crypto currencies claim to be working on making quantum computing resistant crypto currency. So if someone made a claim like envisioned by GP and could prove it, certain crypto currencies might do just the opposite of going to zero.

Re: It can all go to zero

#163

Post by oreo81 » Tue, Jan 16, 2018, 7:44 PM UTC

Joeri wrote: post #66

adamnemecek wrote: post #51

Earlier quoted context omitted.

Ok can you talk more about your failure case then? What are the conditions like what exactly is the end result. There are 0 exchanges?

A bug is discovered allowing fraudulent creation of bitcoins, and no easy or timely fix is possible. That or governments outlaw it entirely.

Governments outlawing numbers, that'll be the day.

Re: It can all go to zero

#164

Post by adamnemecek » Tue, Jan 16, 2018, 7:44 PM UTC

JumpCrisscross wrote: post #99

chocolatebunny wrote: post #92

Earlier quoted context omitted.

There's nothing inherent to anything that says that anything must hold value.

> There's nothing inherent to anything that says that anything must hold value Yet you will find claims, on this thread, that Bitcoin becoming worthless is not possible.

I'm not saying it's not possible, like that the possibility is zero, all I'm saying is that it's not that much more likely that the same happening with other things. And like Bitcoin is actually resistant to some of the factors that could make other things go to zero. All I'm saying, there's a little too much "BTC will be zero, I was it in a Hollywood movie" and not enough of "BTC will go to zero if the following scenarios happened. It will go to the moon if these happened". I wont see these since these don't go with the preconceived notions and one might actually have to understand "economics of online", international relations, cryptography, networking and like so much other shit. The people who I think are qualified to write about crypto is maybe Satoshi Nakamoto but even he didn't quite nail all of it.

Re: It can all go to zero

#165

Post by nlh » Tue, Jan 16, 2018, 7:45 PM UTC

The chances that BTC (or any given crypto asset) goes to zero right now (or in the near future), with the information we CURRENTLY have, are low...market gyrations will happen, things will fluctuate +/- 20, 30, 50%, maybe they'll all go up 10x, maybe 100x, etc.

As long as folks believe there's a get rich quick possibility (or believe in the viability of crypto assets, or whatever), things will keep on as they've kept on.

HOWEVER: What that line of thinking misses is the possibility of new, external, market-shocking information. I don't know what that is or could be (the ol 'we don't know what we don't know'). Maybe someone discovers a massive and fundamental bug that renders them useless. Maybe quantum computing advances faster than we think and factoring large numbers becomes trivial. Maybe ______, maybe _______, maybe maybe maybe.

THAT is what could bring it all to $0. That's what you should be worried about. That's why this isn't a sure thing for ever and ever.

Re: It can all go to zero

#166

Post by ejanus » Tue, Jan 16, 2018, 7:46 PM UTC

rsuelzer wrote: post #152

There are so many glaring issues with BitCoin that it's insane that there are people who are dumb enough to buy it at these prices. 1) 96% of it is controlled by 4% of people. That means if it were to become a currency 96% of the wealth in the world would have to be given to 4% of people either through goods or a fiat currency. 2) It's just a matter of time before enough people lose their private keys that the total…

But US wealth is controlled by less than 1%. So, what is the difference

Re: It can all go to zero

#167

Post by splintercell » Tue, Jan 16, 2018, 7:46 PM UTC

saas_co_de wrote: post #143

hbosch wrote: post #76

Earlier quoted context omitted.

The trend of 15-20% swings is well documented in Bitcoin history, no doubts about that. Crypto is a young economy in general, and it's been thrilling for me (on the outside, as I don't speculate or hold) to watch. But I don't know. If you play with the zoom levels on price tracking sites, the $20k peak onward has been a pretty steady downward trend. BTC is down 20% over three days, down nearly 23% over a week. Is tha…

The interesting thing is that this is what a real free market looks like. This is what any market would look like without being rigged by governments and government backed institutions. Bitcoin may be the best proof yet of how deeply flawed the libertarian free market ideology really is.

> Bitcoin may be the best proof yet of how deeply flawed the libertarian free market ideology really is.

The price of gold isn't stable because the visible hand of the govt has stabilized it, or if there is any law which protects it.

If you have convinced yourself that this is the reason why it is stable, then you're drinking your own kool aide.

The price of gold, or any currency is stable because its market has been discovered, and huge financial assets have been created which allow people to profit off it's price movements, which results in price stability.

Even with that, Gold market can move up and down quite drastically, for instance when in 2009 and 2010 by 25% and 30% respectively, then dropped by 27% in 2013.

The reason why price of Bitcoin moves so much up and down because it's true market hasn't realized yet, once it does, it's price will stabilize too. No govt can make it happen.

Re: It can all go to zero

#168

Post by fortythirteen » Tue, Jan 16, 2018, 7:47 PM UTC

stcredzero wrote: post #132

fortythirteen wrote: post #70

Earlier quoted context omitted.

It's about transaction fees and computing power. The cost of powering the computers that verify transactions has to be covered.

That's a serious design flaw. "It can do it, but it's just too expensive for anyone to afford to do it," is a design failure condition.

I think it's a natural flaw in the mining concept. Any coin that people use in a real sense will create heavy mining competition. That in turn raises the amount of computing power needed to successfully mine, meaning that transaction costs exponentially rise.

Re: It can all go to zero

#169

Post by flush » Tue, Jan 16, 2018, 7:47 PM UTC

wonnage wrote: post #154

flush wrote: post #140

Earlier quoted context omitted.

You understand wrong. And are naive to think that such a simplistic flaw would not be considered by the substantial number of intelligent programmers involved in the Bitcoin project. The transaction fees on the network are incentives for miners to pass transactions in addition to block rewards.

Appeal to authority is one of the most naive arguments out there... especially when it's to some programmers attempting to design an economy

Appeal to authority is a logical fallacy--you cannot use appeal to authority to create a rigorous argument. I agree with that.

But you can gain some idea of probability that something is correct or incorrect. For example, if 99 of 100 doctors agree that vaccines do not cause autism, that does not necessarily mean that vaccines do not cause autism. But chances are really good that the 99% of doctors are correct.

Nice job giving the formal name of a logical fallacy, though. Adds a lot of credibility to your argument!

Re: It can all go to zero

#170

Post by bringtheaction » Tue, Jan 16, 2018, 7:48 PM UTC

rsuelzer wrote: post #152

There are so many glaring issues with BitCoin that it's insane that there are people who are dumb enough to buy it at these prices. 1) 96% of it is controlled by 4% of people. That means if it were to become a currency 96% of the wealth in the world would have to be given to 4% of people either through goods or a fiat currency. 2) It's just a matter of time before enough people lose their private keys that the total…

> 96% of it is controlled by 4% of people

Is that true? Source please