161–170 of 400 posts
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Fraud seems to be easier than you might think. For comparison Bitcoin is about the size Madoff was dealing with. Bitcoin is still loose change in terms of the global economy.
Too bad it isn't also loose change in terms of global energy use :(
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I'd say there's a simpler explanation. Bitcoin has a limited predictable supply, so its price is mostly a function of the demand. And demand correlates with expectations, that typically follow the hype cycle [0]. I'm not sure how much someone managed to single-handedly manipulate the price, but the plain old human psychology, FOMO and the positive feedback loop for media writing about bitcoin demand definitely played…
Whenever some kind of good has a truly limited supply, that can fuel the most massive of bubbles by making the “bubble” look rational at first. The bubble hides itself under the guise of being about “supply and demand”. The one thing that leaps to mind is the Japanese real estate speculation in the 1980’s. Everyone claimed, very logically, that Japan is a mountainous island with very limited space, so real estate wou…
https://amaral.northwestern.edu/blog/how-much-was-japanese-i...
Today Matt Levine talks about this paper in his daily column: https://www.bloomberg.com/view/articles/2018-06-13/judge-rul... "of these two explanations— 1) Bitcoin’s rapid and sustained rise is due to the fact that it satisfies a real economic need in an elegant way, and people have responded to that; or 2) Bitcoin’s rapid and sustained rise is due to a magical fountain of fake dollars that everyone just decided to…
In either of these situations it seems like hodling until victory pays off. The real loser is, well, the planet as the network continues to consume more and more power.
However, I agree that its rapid and consistent growth rate is concerning and can't be ignored.
It's an area I'm really interested in and have been reading a lot about, because most of the news and "analysis" of the issue on both sides has been obnoxiously biased.
I tried to write a balanced summary article of the situation (below). Long-term, Bitcoin's electricity consumption could really go either way i.e. flatten or continue growing indefinitely. There are some causal factors like price that are out of our control, but there are others like the Lightning Network that are both feasible and in our control, and could significantly moderate Bitcoin's electricity consumption.
https://medium.com/@petershin45/bitcoin-is-killing-the-plane...
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This is the internet, and those weapons can't fire down here. Try, instead, to delete a two week old transaction from the bitcoin blockchain. You will find that even with military-sized funding, you can't. That's what is backing up bitcoin's value
The ETH/ETC fork essentially reversed a month old transaction. It's not Bitcoin, but they still have a 1/2 marketcap. If the value comes from irreversibility, their marketcap should be almost 0. [Moreover, ETC is the irreversible chain and the value is 1/30 of the value of ETH.]
Also, the ETH/ETC fork did not technically reverse anything. The fork allowed the inclusion of an "irregular" transaction that moved funds from the DAO account to a "Withdraw" account.
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What you are quoting about banks and bubbles is all in hindsight. At that time everyone and their grandmother thought real estate could only go up. So, if you have data to backup the fact that bitcoin is not in a bubble, please show that. Until then it is just your gut feeling nothing more. > What gives gold its value? It is not that it is used in jewelry. But statistics disagrees with this point: https://www.statist…
All valid points. I personally am very eager to see what happens to Bitcoin and crypto currencies during the next recession.
(And you see this kind of rebalancing effect in general when a major asset class declines - eventually it pulls down other, unrelated asset types because as it goes down in price, it becomes a relatively more attractive investment.)
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a fraction of a percent is pretty much the definition of loose change
Seriously, the way people talk about it you would think that a third of the world's energy supply was getting pumped into NVidia cards. The global average energy consumption is 110,000TWh. Every cryptocurrency in circulation collectively uses about 55TWh, or 0.05% of the world's energy usage.
To be sure, it's the growth rate of that consumption that is more concerning. But at the same time, there are lots of reasons to believe that Bitcoin's electricity consumption will naturally moderate and flatten over time.
If you think Bitcoin has even a 1% chance of changing the world for the better e.g. via increased financial inclusion for lower-income populations, I think that amount of electricity is a reasonable "investment" to make (for now).
[1] https://medium.com/@petershin45/bitcoin-is-killing-the-plane...
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> How can it "become backed"? 1. Create 1m Tether out of thin air (unbacked). 2. Use them to buy 1000 BTC (when the price was 1000$). 3. BTC Price goes up to 10,000$. 4. Sell 1000 BTC for $10m. Keep $9m, and put $1m into a bank account to "back the tether".
The big generation of Tether occurred around the top, as Bitcoin neared US$20,000. Now it's around $6,000. If that was their strategy, they lost big.
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Whenever some kind of good has a truly limited supply, that can fuel the most massive of bubbles by making the “bubble” look rational at first. The bubble hides itself under the guise of being about “supply and demand”. The one thing that leaps to mind is the Japanese real estate speculation in the 1980’s. Everyone claimed, very logically, that Japan is a mountainous island with very limited space, so real estate wou…
> Curiously, at the height of the housing crisis homes were about 5.5 times the median national income. In San Francisco right now (another place where supply looks limited by the water) homes there are 17.2 times the median national income. You're comparing national home prices in Japan vs national income in Japan. Then you're comparing local prices in SF to national income in the USA. You're then comparing these co…
That a 13.6 median price to income ratio. 2018 median house price is $1.61 million, so for wages to keep up the 2018 median income would need to be $118,382 to maintain the 13.6 ratio.
Edit: I agree with parent it probably still doesn't make sense to compare cities with nations. These numbers are just for your entertainment. I think median price-to-income ratio for Tokyo now is now about 4. I am sure in the bubble it was much higher. Though again apples to oranges, it seems that the peak bubble average price to average income ratio for Tokyo was 18 [3].
1. https://www.deptofnumbers.com/income/california/san-francisc...
2. https://sf.curbed.com/2018/4/5/17201888/san-francisco-median...
3. http://japanpropertycentral.com/2014/08/apartment-price-to-i...
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a fraction of a percent is pretty much the definition of loose change
Seriously, the way people talk about it you would think that a third of the world's energy supply was getting pumped into NVidia cards. The global average energy consumption is 110,000TWh. Every cryptocurrency in circulation collectively uses about 55TWh, or 0.05% of the world's energy usage.