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It can all go to zero

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Re: It can all go to zero

#341

Post by ric2b »

Robotbeat wrote: post #196
ejanus wrote: post #160

Earlier quoted context omitted.

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

Yup. Quantum Jubilee is coming. But interestingly, even just the credible threat of Quantum Jubilee could have devastating effects on Bitcoin classic. Banks might be better prepared to switch over to quantum-resistant encryption since they're already centralized.

Banks are still stuck on 70's infrastructure and hiring 70 year old programmers with 500k+/year salaries to write COBOL because they're afraid to rebuild it.

I'm not sure I'd bet on them having a quicker response than an open-source project with millions of interested parties.

Re: It can all go to zero

#342

Post by ric2b »

specialist wrote: post #211
saas_co_de wrote: post #143

Earlier quoted context omitted.

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.

Which markets exist without the protections provided by governments? Protections in the form of contract law, fair and impartial judiciary, notions of property (ownership)...

Bitcoin is one of them. It works without government protection.

Re: It can all go to zero

#343

Post by CPLX »

cableshaft wrote: post #285
maehwasu wrote: post #269

Earlier quoted context omitted.

An anti-pattern that I see on HN is very smart people spending lots of energy thinking of all the ways that something can't work. Whenever you have a tough problem, there are usually only a couple ways it can be solved, and infinite reasons it's hard to solve. The fact that your imagination can't come up with killer use cases does not mean that those use cases don't exist. It means you haven't exercised your imaginat…

Very insightful. It's all too easy to assume there's no use for something because you haven't seen it yet. There was a time when it didn't seem like there was going to be any commercial use for the internet either. In fact, I read a book written in back in 1914, about the history of aviation up to that point, that was talking about planes being used in WWI, and a sentence struck out at me that said something like "It…

This is patent nonsense. In 1911 the US government started extensive trials of using planes for air mail delivery which were an obvious success by the following year.

The benefits of manned flight to the military, and having a spotter above the battlefield, let alone flying weapons, were massive and immediately apparent to a child.

Maybe some writer was trying and failing to make some kind of point. I don't know the guy.

None of this really changes the point that ten years into cryptocurrency the only genuine killer use cases are contraband and speculation.

Re: It can all go to zero

#344

Post by sobani »

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…

> the effort required to mine Bitcoin increases over time.

Not necessarily. The effort required is based on trying to create blocks every 10 minutes. If the price increases, mining becomes more profitable, thus more effort will be put into mining, which means the blocks will start to be created quicker, leading to an increase in difficulty. The reverse is also true: if blocks take too long, the difficulty decreases.

If you take a look at a difficulty graph [0] you can see that it decreases at times. Compare with a price graph [1]. You can see that significant price decreases also cause minor difficulty decreases, but it's not a 1:1 correlation due to mining efficiency improvements.

[0] https://bitinfocharts.com/comparison/bitcoin-difficulty.html... [1] https://bitinfocharts.com/comparison/bitcoin-price.html#log

Re: It can all go to zero

#345

Post by akvadrako »

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…

But if it did go to $1, mining would become unprofitable until the next adjustment. So the only way forward is the network to fork. Then you wouldn't own "the Bitcoins", just "a Bitcoins".

Re: It can all go to zero

#346

Post by akvadrako »

InclinedPlane wrote: post #311
nrhk wrote: post #308

Earlier quoted context omitted.

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.

He mentioned it - it's different because Bitcoin has "believers". If a few billionaires and millions of others want it no matter what, it'll retain value.

People were investing in houses, stocks and tulips to make money. Many people invest in Bitcoin for religious reasons.

Re: It can all go to zero

#348

Post by rpedela »

imharvey wrote: post #148

https://i.redd.it/twe79v68sea01.jpg Will the history show the future again?

What a misleading chart. It makes it seem like the market drops significantly every January. Yet if you look at a chart of the entire history of Bitcoin, you realize that Bitcoin has never dropped as much as in the last month or so. Not even close.

Re: It can all go to zero

#349

Post by Cyberdog »

danhak wrote: post #284
Cyberdog wrote: post #251

Earlier quoted context omitted.

"Overvalued" means "I don't think it should be worth this much" in this case. The fair value for cryptocurrency, just as with everything else, is determined by the market(s) (at least, when it is unadulterated by government obstruction and price-fixing and such). So to determine the fair value of a bitcoin, go to the exchange of your choice and look at the price. If you don't like that price, try a different exchange…

This is circular logic and not really what I was getting at. Productive assets are valued based on expectations of future cash flows, independent of market value. You’re incorrect in saying the value of everything is determined by the market. To quote Warren Buffett, “price is what you pay, value is what you get.”

Isn't the expectation of future cash flow factored into the current market value of something?

I "overpay" for Apple laptops because I know I'll be able to quickly make my money back by doing productive things with them.

Re: It can all go to zero

#350

Post by dnautics »

seannyg wrote: post #175
dnautics wrote: post #109

Earlier quoted context omitted.

you're describing currencies, not fiat currencies. Even gold has limited 'intrinsic' value. Pretty much all of it 'real' applications have acceptable, cheaper substitutes. Anyone buying gold-plated connectors for their audio equipment is basically an idiot (source: in high school I used to work for radio shack)

There are many reasons gold has become a valuable currency: it has a distinctive density, a distinctive color, it doesn't oxidize easily, it's not radioactive or toxic, and it's relatively rare (compared to, for example, iron). Its scarcity and distinctiveness, together with its aesthetic appeal, have made it a natural choice as a currency. See, for example, http://www.bbc.com/news/magazine-25255957 . Bitcoin has non…

The distinctive color and density are intrinsic properties of gold that relate to its viability as a currency because it makes gold verifiable. In that sense, Bitcoin has intrinsic value due to its verifiability as well.
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