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It can all go to zero

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Re: It can all go to zero

#291

Post by walrus1066 »

raiyu wrote: post #233
danhak wrote: post #198

Earlier quoted context omitted.

> 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…

I don't think the value of an asset is derived purely from scarcity, or the effort required to make it. What if the asset itself has no use?

If I spend 1000 hours making a really bad doesn't, it'll have a value of zero, even though it's unique and a lot of work was put into it.

I haven't created value, I've destroyed it, I.e. All that time and nothing to show for it.

Re: It can all go to zero

#292

Post by adamnemecek »

Jtsummers wrote: post #283
adamnemecek wrote: post #275

Earlier quoted context omitted.

Describe to me how it's a run, I'll tell you why it's not. How about that. Is it really that unbelievable that bitcoin breaks certain economic rules and that some economic theory might have to be rethought? Is that what you are implying? That economics is like "science"?

> Is it really that unbelievable that bitcoin breaks certain economic rules and that some economic theory might have to be rethought? Yes, yes it is. It's incredibly remarkable that bitcoin could rewrite our economic theories so completely. It offers nothing novel in any way economically.

Didn't say completely nor all. "breaks certain economic rules and that some economic theory might have to be rethought?"

> It offers nothing novel in any way economically.

Ok, can you explain bitcoin in economic terms?

Re: It can all go to zero

#293

Post by adamnemecek »

JumpCrisscross wrote: post #281
adamnemecek wrote: post #275

Earlier quoted context omitted.

Describe to me how it's a run, I'll tell you why it's not. How about that. Is it really that unbelievable that bitcoin breaks certain economic rules and that some economic theory might have to be rethought? Is that what you are implying? That economics is like "science"?

> Is it really that unbelievable that bitcoin breaks certain economic rules and that some economic theory might have to be rethought? Yes. Particularly when the basis of this rethinking is “there are so many people involved, how could it possibly crash.”

That's not even my main argument.

Re: It can all go to zero

#294

Post by adamnemecek »

twblalock wrote: post #290
adamnemecek wrote: post #246

Earlier quoted context omitted.

I meant google as a company. Very little of Google's value is in real estate. Do they even own all of their offices?

> I meant google as a company. I'm not sure what difference this makes. As you can see here, Google has billions of assets, of which $19.7 billion are buildings.

Which is only a fraction of google and no one buys google for their real estate.

Re: It can all go to zero

#295

Post by adamnemecek »

virgilp wrote: post #282
adamnemecek wrote: post #277

Earlier quoted context omitted.

It would have to heavy regulation everywhere in the world.

Not "everywhere". Just a few countries. China, US, EU would probably suffice.

Not gonna happen like 100% the same and what not. How do you even outlaw crypto?

Re: It can all go to zero

#296

Post by Robotbeat »

monort wrote: post #263
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.

This is not possible because public keys you want to crack are in hashed form RIPE-160(SHA256(public_key)). Grover's search algorithm can help with it, but speedup is much less, than with Shor's algorithm and won't be of much help with sha256.

You are correct that the blockchain has hashed the public key and so isn't directly attackable, except that the public key must be revealed at some point. Therefore, it is still possible to recover the private key (and if you can do this faster than the transaction can enter the blockchain, you can potentially steal the bitcoin).

However, if you wanted to break the hashed private key, you don't need to solve 256 bits. Grover's algorithm is a search, thus difficulty scales with the final hash key length, not the intermediate hashes. Still, it's only a quadratic speed-up and 160 bits is still pretty tough. But that's fine, as you can still intercept the public keys before they're hashed on the blockchain.

Re: It can all go to zero

#297

Post by stale2002 »

roma1n wrote: post #287
stale2002 wrote: post #232

Earlier quoted context omitted.

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?

"censor" is a loaded term. Why not "forbid"? Also, what if the solution to an abusive government is not a technological tool but a plurality of governments, many of which promote (some vision of) human rights? Central power, authority is not inherently evil.

Yes, there are different governments, some of which are good, and some of which are bad.

Which is exactly why tools for fighting censorship are important.

To fight the bad governments.

"just make the government better" isn't a solution. People have been trying to make terrible, abusive governments better for thousands of years.

But until the problem of bad governments is solved, tools to fight those governments are important.

Just like tools that allow people to engage in anonymous and protected speech and political disagreement are important.

And right now there are a lot of really freaking terrible governments.

I'd argue that around ~20 percent of people in the world right now live under a government that I'd describe as "Nazi level bad". (ex, much of the middle east has laws that literally give the death penalty for being gay. That's Nazi level bad... ).

When you have this many people living under terrible governments, tools for these people are extremely important.

Re: It can all go to zero

#298

Post by narrator »

rlucas wrote: post #195
narrator wrote: post #45

Earlier quoted context omitted.

Every bubble has money coming from somewhere. The mortgage bubble had all the BBB- derivatives that were ridiculously underpriced turning trash into treasure. Bitcoin is all about money trying to get out of China. There is a bit of people in countries with trashy currencies trying to save, some illegal commerce and some greater fool speculation on top of that, but that's not a lot of money comparitively. As China squ…

Why do you think the mortgage derivatives were broadly speaking underpriced? There are a lot of kinds of risks you can buy that exhibit "picking up dimes in front of a steamroller" risk, and are priced fairly. That is, 99% of the time you get a free dime...

Seems AIG was the designated bagholder and lynchpin of the whole thing. Many derivative buyers got 100 cents on the dollar on all their derivatives they bought from them because the government picked up the obligations.

Re: It can all go to zero

#299

Post by qsucvatz »

coldcode wrote: post #179
nlh wrote: post #165

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…

I've always wondered what Bitcoin would be worth if (1) Nuclear war destroys the internet or cloud servers (2) Mining costs more than its worth and no one mines any more (3) It becomes impossible due to legal or other reasons to convert bitcoin to a real currency without extra-legal efforts.

If mining is too difficult,the difficulty drops, until a single PC is finding every block on schedule. I'll mine, so that won't happen.

Re: It can all go to zero

#300

Post by qsucvatz »

tbabb wrote: post #184
Jtsummers wrote: post #107

Earlier quoted context omitted.

These currencies, as they like to call themselves, will only become stable when there's a basket of goods you can exchange them for at a consistent price. Right now it's all speculative investing and a little bit of spending as a currency. Once you can buy $10 of goods, consistently, for 0.0001 BTC (or whatever) then the price will be stable and the currency can establish itself. The same is true for the other crypto…

Agree 100%. Cryptocurrency can't be money until it measures stable value. And that stability is literally impossible without a central bank. http://www.bzarg.com/p/what-bitcoin-shows-us-about-how-money...

That long term stability may be impossible with a central bank.
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