It can all go to zero • Hacker News Board

Re: It can all go to zero

#231

Post by CPLX » Tue, Jan 16, 2018, 8:28 PM UTC

tbabb wrote: post #50

maxxxxx wrote: post #31

This reminds me so much of the .COM bubble. Same kind of discussions. I think there will be a place for cryptocurrency but before that has been established there will be a lot of people taking a lot of pain. People who have bought them a few years ago will only take paper losses but now there is real money flowing into this.

I have seen comparisons to the .com boom/bubble, and I don't buy it. There was a lot of economic movement while the entire economy moved over to the internet. Those who didn't adapt failed. Those who tried models which didn't translate also failed. Lots of experimentation, and lots of reinventing things from scratch. So lots of failure and lots of speculation-- but ultimately around a real sea change. I don't see how…

I keep asking people this simple question, which goes something like this:

Before the internet, I would wake up in the morning and have to go to a store and buy clothes, then the travel agent to book flights, then Blockbuster to get a movie to watch. After the internet I could wake up in the morning and do all that myself. That was valuable.

Before smartphones I would wake up in the morning and print out my airline tickets, then call a taxi service and have to explain to them where I was, and I couldn't tell where the driver was if I didn't see him.

OK, got all that?

Now, with cryptocurrency I will wake up in the morning and do what? I could send money to buy drugs, that's a pretty killer use case. There are some things like transferring money out of a war torn country that maybe it would help that have some value, but I'm not in a war torn country. So... where's my killer use case?

It's important to note that all the internet/smartphone examples above are INCREDIBLE use cases, and that's just scratching the surface. Booking travel used to SUCK now it's better. I can get books instantly. I can collaborate on music or video production across the country. And so on, these are big deal things. There are TONS of examples. The business opportunities here were utterly massive. Nearly everything people and businesses did on a daily basis changed in consequential ways due to the internet in ways that opened up opportunity for profit.

And even with that said most of the people who saw the promise of the internet in 1997-2000 and put money into passive investments got creamed.

Now, in all seriousness, what's my morning going to be like with crypto as a mature technology, how will it be different and better and why will I care? When will this happen, why hasn't it already happened, and how are all these people going to profit from the change?

Re: It can all go to zero

#232

Post by stale2002 » Tue, Jan 16, 2018, 8:29 PM UTC

logicallee wrote: post #101

sputknick wrote: post #14

Earlier quoted context omitted.

What value does Bitcoin add to society? IF you don't add value, what's the point of having you around? Bitcoin could absolutely go to zero. I say this as a holder of some.

>What value does Bitcoin add to society? the value is that you can have anyone in the world murdered without it ever conceivably getting back to you.[1] (that value is obviously negative.) Therefore the appropriate value of bitcoin is $0 because literally all of society is set up for the exact and sole purpose of ensuring that the availability of bitcoin is $0. This is literally the only purpose for which the past 10…

What about the value of fighting financial censorship?

There are lots of governments and people that attempted to censor perfectly moral and reasonable transactions.

Just because it is "the law" doesn't make it right.

Do you also dislike Tor because it allows political dissenters to hide from the government?

Re: It can all go to zero

#233

Post by raiyu » Tue, Jan 16, 2018, 8:31 PM UTC

danhak wrote: post #198

aitrean wrote: post #33

Time for the monthly cryptocurrency panic thread. While I fully agree that most cryptocurrencies are grossly overvalued, these articles always pretend a 20% selloff is the beginning of the end, when, in crypto land, 20% selloffs are a pretty standard bad day for the market.

> While I fully agree that most cryptocurrencies are grossly overvalued... Could you please explain what “overvalued” even means in this context, and how one might go about determining fair value for cryptocurrency? I’ve yet to receive a straight answer on this.

Think of it this way. Let's say that to get 1 Bitcoin I could just install an app on my computer, and within 1 second get a Bitcoin. Then everyone in the world can make as many bitcoins as they want, there are no limits on the number of bitcoins, and the process to get more doesn't increase in difficulty.

So now we have bascially infinite bitcoins so the value of them is zero, because why would I buy one, when I can just make one at any time.

The opposite of this is where Bitcoin derived it's value. First there is a fixed number of Bitcoin, so you can't simply make more past a point. Secondly, the effort required to mine Bitcoin increases over time.

This effort requires real world currency exchange. I need to buy a powerful computer and then pay a lot of electricity, cooling, space.

So effectively my mining operation costs $x. Now as time goes on to get the same number of Bitcoins I need to increase my spend because the computational needs increase as well.

Effectively, I'm exchanging my USD to equipment and energy, which are giving me Bitcoins.

A reasonable value for Bitcoin would be to calculate the total amount of hardware and energy invested in mining and there you have a decent floor value. You can then extrapolate this for the future, since the total amount of Bitcoin to be created is known, you could say that multiplying that out you get a total amount of value.

To say that they are overvalued would mean that the total current dollars invested in mining bitcoin is far less than the current total market cap of said coins. If you look at the price of Bitcoin 2014 to the start of 2017, you see a gradual increase in price, which would be explained by the amount of money going into mining and with some markup.

In 2017 you see a 20x increase, but that isn't matched with a 20x increase in spend for minting Bitcoins, so the increase is irrational.

Re: It can all go to zero

#234

Post by twblalock » Tue, Jan 16, 2018, 8:32 PM UTC

adamnemecek wrote: post #223

twblalock wrote: post #214

Earlier quoted context omitted.

It applies to any kind of asset that derives 100% of its price from network effects rather than intrinsic value.

Ok. Would you say the same thing about Google stock? If people stop using Google tomorrow, the stock will plunge right?

Only because the value of the underlying company would plunge as well, due to loss of revenue. But it wouldn't hit zero. Google would still have other products than search, a lot of valuable IP and patents, real estate, etc.

Re: It can all go to zero

#235

Post by adamnemecek » Tue, Jan 16, 2018, 8:33 PM UTC

martin1975 wrote: post #225

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?

1) Bitcoin becomes too expensive to mine or even sustain due to energy prices 2) Bitcoin's blockchain grows to petabytes or exabytes in size thus becoming horrendously slow to both replicate or even host 3) Bitcoin is surpassed by a better technology, such as Cardano or IOTA. This won't kill it but it will stunt/cap its growth indefinitely. 4) Bitcoin fails to integrate into the legacy world fully by remaining pseudo…

We actually kinda agree. I'm fundamentally saying that crypto wont go away.

Re: It can all go to zero

#236

Post by gamblor956 » Tue, Jan 16, 2018, 8:33 PM UTC

cantrip wrote: post #116

Author publicly admits to giving insider trading advice.

Insider information that is publicly disclosed is by definition no longer "insider information".

Indeed, if this had been an equity, it would have been illegal for him to trade the equity without disclosing the insider information prior to the trade.

Re: It can all go to zero

#237

Post by softawre » Tue, Jan 16, 2018, 8:34 PM UTC

adamnemecek wrote: post #216

virgilp wrote: post #191

Earlier quoted context omitted.

Let me tell you a story. My parents, before I was born, worked as teachers in Africa. They were sent via an agreement of our (communist) state with the Belgian government and were paid "expat" money. Only problem is, they knew that when they came back the government would take all their money (coerce them to exchange it at shit exchange rate, for a currency that was basically worthless). So they invested - they bough…

Let me preface this story by saying that your parents did a shit thing and I'm glad they were duly punished. Fuck ivory. But I'm getting distracted. Bitcoin is unlike your situation as with ivory you have to have physical contact with the shady person. With BTC you don't. People online don't care as much about dealing with shady people. It's also kinda hard to tell who's a shady person online.

Bitcoin is so divisive you've managed to shit on his parents to win an argument.

An argument that you then concede, saying that it doesn't matter whether BTC is legal or not because you can always sell it online.

If it's illegal, doesn't it's value go way down? If you literally risk jailtime to sell it (or more accurate, to convert it to fiat eventually)

Re: It can all go to zero

#238

Post by [deleted] » Tue, Jan 16, 2018, 8:34 PM UTC

overhang wrote: post #194

singularity2001 wrote: post #63

it might even go to minus one if there is another bug in ethereum. jokes aside it can't go to zero because I will buy all bitcoins once it goes back to $0.01/BTC, where it was just some years ago.

And then it will well and truly be stuck at $0. It would be foolish indeed to buy a coin of any cryptocurrency when all the coins are held by one individual.

[deleted]

Re: It can all go to zero

#239

Post by stanleydrew » Tue, Jan 16, 2018, 8:35 PM UTC

api wrote: post #121

aitrean wrote: post #33

Time for the monthly cryptocurrency panic thread. While I fully agree that most cryptocurrencies are grossly overvalued, these articles always pretend a 20% selloff is the beginning of the end, when, in crypto land, 20% selloffs are a pretty standard bad day for the market.

People who see and call out bubbles are always wrong N-1 times where N is the number of times a prediction is made. Look at the fundamentals. What we have here is a bad currency (volatile and deflationary) whose utility is diminishing as its price increases. There aren't a lot of value investors in cryptocurrency at this point. The vast majority of the people who hold it are holding it on the theory that it will cont…

> Most people look at price charts in linear not logarithmic mode

Do you have any tools you recommend that make it easy to see these logarithmic charts?

Re: It can all go to zero

#240

Post by adamnemecek » Tue, Jan 16, 2018, 8:35 PM UTC

Retric wrote: post #93

adamnemecek wrote: post #73

Earlier quoted context omitted.

You are fundamentally arguing that cryptocurrencies, all of them, will be gone? That like 30 years from now, there will be 0 things that are basically cryptocurrencies or something that replaced them?

That's irrelevant. If every cryptocurrency around in 30 years has yet to be created then every current cryptocurrency would be dead. Consider, what happens if the Internet dies? Well you could run a private coin on an old laptop, but that's not really meaningful.

It's not an overnight thing. Like the transfer from Bitcoin to the new thing would be very gradual, standard technology adoption rate curve. And like, it's not clear by how much would you really diminish Bitcoin. Like crpyto became a thing but I dont think it was at the stock market.