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Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

nytimes.com

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Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#311

Post by TheSpiceIsLife »

kgwgk wrote: post #28

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…

I don't see any reason the two are mutually exclusive.

It's quite possible (some) people have a (")real(") economic need for a magical fountain of fake dollars.

I put the scare-quotes in parentheses because by real I mean a manic need, in the sense of mania - an excessive enthusiasm or desire; an obsession.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#312

Post by roenxi »

DennisP wrote: post #291
joe_the_user wrote: post #283

Earlier quoted context omitted.

Indeed, though states have boots and guns on the ground to a last resort backup the value of their currency (including protecting against competition). So I'd pick "Fed-coin" as the last one to go down.

I've been reading up lately on how fiat money systems work, and it doesn't seem to me that boots and guns really help. Certainly there have been countries with plenty of soldiers who failed to maintain the value of their currency. You have to pay taxes in the local currency, but if the currency crashes you just have to pay a higher nominal amount of taxes. You can outlaw competing currencies, but you can only do that…

It can help. I'd argue that the US-Saudi deal [1] was in part facilitated by the US being able to offer the Saudi regime military supplies and protection. The military is arguably not the dominant factor, but that is a very debatable point. It is certainly a factor.

[1] https://www.bloomberg.com/news/features/2016-05-30/the-untol...

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#313

Post by vokep »

cecilpl2 wrote: post #260
mr_spothawk wrote: post #171

Earlier quoted context omitted.

while the supply of digital coins is infinite (you could fork btc, or any other chain, or create different coins that could then be forked) the supply of Bitcoins is finite & knowable. this is a component of the argument by "maximalists" who suggest that alternate coins/tokens are bullshit by design, and anybody who thinks they aren't is necessarily in favor of inflationary money. > Objects in the real world have uti…

Bigger diamonds are more desirable than larger diamonds, not because of the price, but because they look better and are sparklier and harder to lose and all sorts of other real-world metrics. If I want $1000 of bitcoin, I don't care whether that value is in 1 BTC, 100BTC, or 0.0001BTC. They are otherwise identical to me. Therefore, the fact that the total of all bitcoins in circulation can't exceed 23 million is irre…

but is the same not true of trading USD for EUR? If I want $1000 of EUR, I don't care whether that is 1 EUR, 100, or .01. The value is in the ecosystem.

Bitcoin is still at the beginning of the beginning of any sort of ecosystem. Everyone expects way more from it than is possible. It is/will deliver on the things it is designed to.

You're correct that I don't care about the value of 1 BTC (or 1 EUR) unless I can sell it, but you imply only selling it for USD again. When it is widespread enough to be a currency, you can 'sell' it for goods and services.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#314

Post by vokep »

kaoD wrote: post #227
RIMR wrote: post #160

Earlier quoted context omitted.

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.

And yet it isn't providing value to 0.05% of the world's population. Even if it did, the energy would go up (exponenially?) I'm not sure the tradeoff is worth it.

Actually it may be more worth it than most energy sucking things.

If it becomes an actual currency, the proof-of-work system will put everyone in an arms race of power/compute efficiency unlike any other.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#315

Post by notahacker »

pshin45 wrote: post #295
notahacker wrote: post #288

Earlier quoted context omitted.

To put the "single large power plant" whose output exceeds Bitcoin usage in context, it's one so big that 1.3 million people were displaced to build it... If one wanted to help lower income populations, it could be difficult to conceive a solution less likely to help them than bidding up energy prices to safeguard the proceeds of wealthy hackers' speculation. I'm going to go out on a limb and say that Bitcoin neither…

> so big that 1.3 million people were displaced to build it. The fact that China built a large hydroelectric power plant (Three Gorges Dam) that displaced a lot of people, shouldn't be an argument against Bitcoin. There are ways to provide electricity for Bitcoin mining that are green and don't displace people. > safeguard the proceeds of wealthy hackers' speculation The people who get richest from the stock market a…

> The fact that China built a large hydroelectric power plant (Three Gorges Dam) that displaced a lot of people, shouldn't be an argument against Bitcoin.

It was an observation about how much of an understatement "a single power station" was, not a suggestion large scale hydroelectric was the world's only power source. I mean, another way of putting it would be 10+ large coal fired power stations which is probably a more accurate reflection of how the additional power generating capacity is supplied...

> The people who get richest from the stock market are those who are already wealthier to begin with. Are you against the stock market and securities in general?

No, but I'd never pretend that, say, an HFT trading shop was going to save the poor, still less that it had such potential to liberate the poor it would be worth using the same amount of electricity as Ireland to run their trading algorithms

> a better comparison would be Bitcoin eventually becoming a popular alternative for gold investment, and/or an alternative to Western Union.

Whether you love gold or find its appeal faintly ludicrous, its demand has survived over several thousand years of increasingly advanced alternative investments, and continued to increase after the end of a gold standard, so arguments that the existence of Bitcoin might seriously dent gold mining are hard to take seriously even before we get to the stage where the actual litmus test is dent gold mining to the extent it cancels out the energy use consequences of Bitcoin

I've used Western Union to send myself amounts in the $1k range to a developing country before. Cost including currency conversion was nowhere near $95 (people have paid more than I did for BTC-BTC transactions!) and I got cash I could actually spend. And I don't think a better Western Union (everything in the history of Bitcoin suggests catastrophically worse Western Union) would be a good use for more energy resources than a typical developing world country either, and am confident relatively few remittance-recipients in those developing world countries would agree. For the tech and price savvy, cheaper options already exist.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#316

Post by RIMR »

vokep wrote: post #314
kaoD wrote: post #227

Earlier quoted context omitted.

And yet it isn't providing value to 0.05% of the world's population. Even if it did, the energy would go up (exponenially?) I'm not sure the tradeoff is worth it.

Actually it may be more worth it than most energy sucking things. If it becomes an actual currency, the proof-of-work system will put everyone in an arms race of power/compute efficiency unlike any other.

That's actually a great point.

FPGA and GPU development has been granted quite the stimulus package from the crypto craze.

There are secondary benefits to this technology.

I bet the economic incentive got a lot more people into coding than before too.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#317

Post by grafporno »

mirimir wrote: post #306

> The new paper helped push down the already sinking price of Bitcoin and other cryptocurrencies on Wednesday. The price of Bitcoin fell as much as 5 percent after the report was published, approaching its lowest point of the year. Bitcoin is now down more than 65 percent from the highs it hit late last year. Well, then. An obvious question is who involved in this paper has just sold Bitcoin short. Maybe there's a di…

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#318

Post by stcredzero »

joejerryronnie wrote: post #201
kgwgk wrote: post #162

Earlier quoted context omitted.

It was said at the time that the Imperial Palace was worth more than all the real estate in California. https://amaral.northwestern.edu/blog/how-much-was-japanese-i...

They should have sold the Imperial Palace and bought California

It was probably impossible to find a buyer.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#319

Post by King-Aaron »

outworlder wrote: post #289
kaoD wrote: post #227

Earlier quoted context omitted.

And yet it isn't providing value to 0.05% of the world's population. Even if it did, the energy would go up (exponenially?) I'm not sure the tradeoff is worth it.

When I am playing a game, my computer's power consumption increases by a lot. I am using more energy and ultimately generating more entropy in the universe. Is it worth it?

Depends on the game.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#320

Post by stcredzero »

mr_spothawk wrote: post #171
tomkarlo wrote: post #159

Earlier quoted context omitted.

Is the supply really "limited"? Sure, there's finite number of "coins" that can be generated. But unlike physical objects, there's not really any special property of that unit. Also, you can just generate a new currency of more units and similar utility (as has happened many times recently.) Objects in the real world have utility that's directly linked to their unit value. That's not necessarily true for Bitcoin... i…

while the supply of digital coins is infinite (you could fork btc, or any other chain, or create different coins that could then be forked) the supply of Bitcoins is finite & knowable. this is a component of the argument by "maximalists" who suggest that alternate coins/tokens are bullshit by design, and anybody who thinks they aren't is necessarily in favor of inflationary money. > Objects in the real world have uti…

while the supply of digital coins is infinite (you could fork btc, or any other chain, or create different coins that could then be forked)

This is bull. It's not zero cost to fork a cryptocurrency. It's not zero cost to mine. The supply of a digital good might well be very large. However, it will most certainly be finite.

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