It can all go to zero • Hacker News Board

Re: It can all go to zero

#311

Post by InclinedPlane » Tue, Jan 16, 2018, 10:57 PM UTC

nrhk wrote: post #308

InclinedPlane wrote: post #187

Earlier quoted context omitted.

Ah yes, "it's different this time". Sure, sure. The reality is that the nanosecond the zeitgeist changes and people start believing that there is going to be an extended period of decreased value in cryptocurrencies then there will be a massive selloff which will just cascade. This is how markets work, this is how speculative bubbles work. Bitcoin especially has almost no value other than speculative investment, it's…

Which is fine, there's plenty of people who believe in it enough to buy at lower price points and think the current level is a bubble. What about $100 billion for the entire market, all the miners, all the companies, venture capitalist, developers etc... Who says Bitcoin even needs to be worth anything, the faster that stuff dies the faster the rest of the crypto world can move on without it. The market as a whole wo…

So you're saying it's "different this time"?

Curious, none of the things you mention indicate how this speculative bubble is any different from houses, stocks, or tulips.

Re: It can all go to zero

#312

Post by tbabb » Tue, Jan 16, 2018, 11:02 PM UTC

adamnemecek wrote: post #275

tbabb wrote: post #267

Earlier quoted context omitted.

> Ok, who's doing this run? There are too many people at this point. There ins't a single entity that is currently capable of controlling all markets at all time. No offense, but I think this proves my point about commenters not having any clue what a run is or how markets work. Explain to me what you think causes a run?

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"?

Here's how this comment sounds:

"I don't understand what a run is, but somehow I'm pretty sure it's bullshit. I don't understand how economics works, but I'm pretty sure all the rules have been rewritten in some unspecified way that makes bitcoin invulnerable, and I'm in a better position to know this than people who actually have the understanding that I'm rejecting. My ignorance, which I have no burden to dispel, is better than your knowledge."

If that's not your viewpoint, then I'd love to hear what exactly you were getting at.

Re: It can all go to zero

#313

Post by koheripbal » Tue, Jan 16, 2018, 11:05 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…

There are numerous other coins. Pick the one you think is better and buy it.

Re: It can all go to zero

#314

Post by klodolph » Tue, Jan 16, 2018, 11:07 PM UTC

twblalock wrote: post #234

adamnemecek wrote: post #223

Earlier quoted context omitted.

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.

A company’s stock hits zero easily, even when the company has assets. Add up valuable real estate and subtract liabilities. Owning the stock doesn’t put you at the front of the line when the company is liquidating.

Re: It can all go to zero

#315

Post by Giorgi » Tue, Jan 16, 2018, 11:11 PM UTC

Jtsummers wrote: post #301

adamnemecek wrote: post #292

Earlier quoted context omitted.

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?

Sure. It's an overvalued, speculative commodity in a bubble. Ostensibly a currency, but without any of the useful features of a currency (effectively unusable for common transactions due to high fees, slow transaction confirmation rates, and highly unstable value). As a currency, assuming that its value stabilized, it suffers from being deflationary which will impede its ability to survive as either a global currency…

>effectively unusable for common transactions due to high fees, slow transaction confirmation rates, and highly unstable value

Correct, but you somehow missed how demand for bitcoin was actually created - it is somewhat untraceable currency therefore used in "black market" transactions.

As those markets develop they will demand such currency in one way or another and that's novelty from an economics standpoint.

Re: It can all go to zero

#316

Post by Jtsummers » Tue, Jan 16, 2018, 11:18 PM UTC

Giorgi wrote: post #315

Jtsummers wrote: post #301

Earlier quoted context omitted.

Sure. It's an overvalued, speculative commodity in a bubble. Ostensibly a currency, but without any of the useful features of a currency (effectively unusable for common transactions due to high fees, slow transaction confirmation rates, and highly unstable value). As a currency, assuming that its value stabilized, it suffers from being deflationary which will impede its ability to survive as either a global currency…

>effectively unusable for common transactions due to high fees, slow transaction confirmation rates, and highly unstable value Correct, but you somehow missed how demand for bitcoin was actually created - it is somewhat untraceable currency therefore used in "black market" transactions. As those markets develop they will demand such currency in one way or another and that's novelty from an economics standpoint.

This is true, I didn't mention that. That is a useful detail but ended up being a short-lived portion of bitcoins life overall as its pseudonymity was fairly quickly foiled through network analysis. Other crypto currencies will fare better in that regard and could become one of or the crypto for black market trade.

But that was also something that held back bitcoins valuation. In 2011/2012 anyone who heard of it either understood its technical features, or thought it was "that thing for buying drugs online". Once it stopped being the latter (at least in common perception) the speculation really began in earnest as the exchanges were able to gain access to banks and other financial institutions.

A blackmarket crypto that retains that reputation, whether used for legitimate business or not, will likely find its global valuation impaired by that reputation like bitcoin and it will be difficult for average folks with no interest in the blackmarket economy from "investing" in it.

It certainly will be interesting.

Re: It can all go to zero

#317

Post by mining » Tue, Jan 16, 2018, 11:21 PM UTC

flush wrote: post #169

wonnage wrote: post #154

Earlier quoted context omitted.

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…

Saying 99/100 doctors think something medical is true isn't an appeal to authority... Doctors /are/ an authority on medical matters. Programmers aren't an authority on economic matters.

Re: It can all go to zero

#318

Post by adamnemecek » Tue, Jan 16, 2018, 11:22 PM UTC

tbabb wrote: post #312

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"?

Here's how this comment sounds: "I don't understand what a run is, but somehow I'm pretty sure it's bullshit. I don't understand how economics works, but I'm pretty sure all the rules have been rewritten in some unspecified way that makes bitcoin invulnerable, and I'm in a better position to know this than people who actually have the understanding that I'm rejecting. My ignorance, which I have no burden to dispel, i…

I understand what a run is, and like, is this high school economics or something? I just dont think that it entirely matches a run. You could say that same thing about stock. I'm not saying all economics, but some currently held believes might be generalized.

Also what exactly do you think is the required knowledge for this? Just economics? If so, you are off.

Re: It can all go to zero

#319

Post by ScottBurson » Tue, Jan 16, 2018, 11:25 PM UTC

MichaelGG wrote: post #262

tbabb wrote: post #261

Earlier quoted context omitted.

It absolutely boggles my mind that so many people in this thread cannot conceive of a run on crypto. I assume they probably don't even know what a "run" is . And it boggles my mind that their only conception of failure is some kind of catastrophe or monumental event, like nuclear war, or quantum computing breaking cryptography. LITERALLY ALL THAT NEEDS TO HAPPEN IS THAT PEOPLE SUDDENLY WANT IT LESS . Excuse my caps.…

Not to zero. I'd personally pay $1, probably more, for even 10% of all Bitcoins, just for the novelty. If there were no miners, maybe not much more than that, and I'd want the current private keys. I'm guessing there's at least someone that'd pay a few million for all of Bitcoin, so maybe a $0.10-1.0 floor, easily? Would be illiquid and hard for small holders to sell though. Also, quantum computers do not break Bitco…

Sure, it won't go to literally zero (unlike stocks; companies can go bankrupt). But the difference between falling three orders of magnitude vs. six, say, is not a very big difference to anyone who bought in at current prices.

Re: It can all go to zero

#320

Post by adamnemecek » Tue, Jan 16, 2018, 11:36 PM UTC

Jtsummers wrote: post #301

adamnemecek wrote: post #292

Earlier quoted context omitted.

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?

Sure. It's an overvalued, speculative commodity in a bubble. Ostensibly a currency, but without any of the useful features of a currency (effectively unusable for common transactions due to high fees, slow transaction confirmation rates, and highly unstable value). As a currency, assuming that its value stabilized, it suffers from being deflationary which will impede its ability to survive as either a global currency…

You are missing a lot of things. Like it's not just economic. Also your argument talks about bitcoin but not the other cryptocurrencies that might not have the some of the features you describe.

> Sure. It's an overvalued, speculative commodity in a bubble.

Overvalued compared with what? Speculative is an opinion.

> Ostensibly a currency, but without any of the useful features of a currency

With a fundamentally different set of features. Like being able to exchange with literally anyone in the world is unprecedented. Again, Bitcoin has opened many new markets, e.g. I can trade with North Korea with it. It also lets the underbanked people fight back against their government. E.g. I can pay a worker in Zimbabwe much easier than before. This could drive up the adoption rate to unprecedented levels.

> Most commodities are, well, something tangible or valued based on something else in the world. Bitcoin as a commodity has nothing backing it up other than its distributed ledger and the massive amount of computational power behind that.

The backing part of commodities is greatly exaggerated. Who cares? Is that why you are using dollars? It's a protocol that lets me plugin to the world economy. That's unprecedented.

You talk about BTC but like BTC is not the end all. There's like 7000 crypto, some of which are shit but some have like ...serious research behind them.

As a trading instrument it's so much better than stock. With stock you have to wait three days. I guess the closest is Forex but forex is just so boring.