How can Bitcoin stabilize if it's a Keynesian Beauty Contest? • Hacker News Board

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#41

Post by mikeyouse » Mon, Oct 22, 2018, 11:57 PM UTC

retsibsi wrote: post #37

andreygrehov wrote: post #27

Earlier quoted context omitted.

This is chart is not off at all. There is, actually, an updated version https://cryptoslate.com/wp-content/uploads/2018/10/chart.png . I have no idea if the trend will continue.

> There is, actually, an updated version https://cryptoslate.com/wp-content/uploads/2018/10/chart.png . That's a different chart. It's closer to being accurate because it's been modified to fit more recent data.

Notably, the updated version moves their $100k/BTC projection from 2021 to 2025. Yikes to anyone who thinks these tea leaves have any meaning.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#42

Post by chillwaves » Mon, Oct 22, 2018, 11:59 PM UTC

charlesdm wrote: post #22

AnimalMuppet wrote: post #21

Earlier quoted context omitted.

Gold has a 3000+ year track record of being a store of value. Yes, people worldwide could decide that gold was just a fad that we've moved past. But I'd regard it as a pretty safe bet that they won't, at least not in my lifetime. Gold may be a Keynesian Beauty Contest, but it's been winning for long enough that it's almost in a different category by now. Bitcoin, on the other hand, is still firmly in KBC territory.

It will eventually come down to the fact whether people feel it is or will end up becoming digital gold. It's very much a binary situation; true or false. That outcome will likely also result in a further 50x return from here, or a further decline.

Doesn't seem binary at all -- as the market price fluctuates, clearly there is room for disagreement (middle ground).

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#43

Post by wilg » Mon, Oct 22, 2018, 11:59 PM UTC

mrb wrote: post #23

Bitcoin has actually become a lot less volatile, when measured objectively over the last few years: https://twitter.com/lsukernik/status/864920873718951937 https://news.bitcoin.com/volatility-decreasing/

Yes these two links to two images presented without comment from a cryptocurrency VC and news.bitcoin.com scream "objective" to me.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#44

Post by ironSkillet » Tue, Oct 23, 2018, 12:00 AM UTC

andreygrehov wrote: post #27

brokensegue wrote: post #19

Earlier quoted context omitted.

that chart is currently off by like 100%

This is chart is not off at all. There is, actually, an updated version https://cryptoslate.com/wp-content/uploads/2018/10/chart.png . I have no idea if the trend will continue.

Your first chart stated that BTC would be over $10,000 by the beginning of 2018, and be somewhere in the ballpark of $20,000+ by now. Your second chart drastically reduces that forecast. You do know you are just overfitting a curve to data here, right?

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#45

Post by rpearl » Tue, Oct 23, 2018, 12:03 AM UTC

craigc wrote: post #30

ummonk wrote: post #9

Earlier quoted context omitted.

There is a powerful entity (the Fed) focused on keeping it stable in reference to consumer goods and services.

Right, and how is that going for them? The average home cost around $3,400 in 1913 (when the FED was created), and today is around $200,000. And $1 is still worth $1.

some amount of inflation is a desired property to have in a currency, and this result is for the most part the intended result

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#46

Post by fjsolwmv » Tue, Oct 23, 2018, 12:06 AM UTC

charlesdm wrote: post #39

doyoulikeworms wrote: post #34

Earlier quoted context omitted.

I think there's something to be said about gold's utility as money . It's remarkably good at being money compared to other materials. It's easy to store, identify, divide, it's fungible, and it's scarce enough. If civilization were to collapse, I think that there's a fair chance that we'd be using gold and other precious metals as money again, whether or not it was used in the past.

I'm not sure I believe that. If civilization were to collapse, you'd want food, medicine, potentially gas. Potentially solar cells, and some other things. I think you'd see more traditional bartering than money being introduced again in its earliest stages.

The problem with bartering is that useful but rare products are a poor store of value because peot need to use those things. Useless but rare things are better as money, as long a users are confident that there is economic growth to spend money on (decoupling consumption from production)

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#47

Post by apo » Tue, Oct 23, 2018, 12:07 AM UTC

The meaning of the word "stabilize" isn't clear from the article, despite being used 12 times in the body and once in the title.

It would have been easy to make the article more clear. Simply explain what aspect of Bitcoin is supposed to stabilize.

Given the unending fascination with the USD/BTC exchange rate, it can be assumed that the author is referring to this metric. The inclusion of the heading "Does the price of Bitcoin have a Nash equilibrium?" also supports this idea.

However, if this is the case, why does the author include the following quote the middle of the article:

Why has Amazon stabilized, and will bitcoin do the same? When Amazon shares debuted back in 1997, earnings were non-existent. […]

The USD price of AMZN has in no way stabilized:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?s...

As you can see, it's a concave-upward curve, punctuated by various declines, all the way back to 2003.

This may sound like hair-splitting, but I think there's a real possibility the author is actually talking about USD/BTC exchange rate volatility. This is an animal of a completely different stripe.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#48

Post by andreygrehov » Tue, Oct 23, 2018, 12:10 AM UTC

ironSkillet wrote: post #44

andreygrehov wrote: post #27

Earlier quoted context omitted.

This is chart is not off at all. There is, actually, an updated version https://cryptoslate.com/wp-content/uploads/2018/10/chart.png . I have no idea if the trend will continue.

Your first chart stated that BTC would be over $10,000 by the beginning of 2018, and be somewhere in the ballpark of $20,000+ by now. Your second chart drastically reduces that forecast. You do know you are just overfitting a curve to data here, right?

The red curve is an average price. The first chart states that BTC would be $10,000 on 22-11-2017. On that day, the price was $8310. The prediction was made in 2014, so this is pretty accurate I must say. There is also a belief that the reason for inaccuracy of the first chart is because of a hardfork (Bitcoin Cash), that "ate" part of the Bitcoin's market. Afaik, the second chart was made by the same author a few days ago. It's obviously different, because it takes recent prices into consideration.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#49

Post by fjsolwmv » Tue, Oct 23, 2018, 12:12 AM UTC

craigc wrote: post #36

DINKDINK wrote: post #28

Bitcoin doesn't need to stabilize to be successful. In the same way that the exchange rate of the hyperinflating German Mark and gold didn't need to stabilize. All bitcoin needs to do is continue to operate with it's programmed monetary policy such that its value can't be inflated away through coercion. Money is a commodity whose goal is to transport value through space and time. We are living through -- in human-spe…

Thank you for posting this. Not surprising to see you getting downvoted to oblivion here, but this is something that people really need to keep an open mind about.

It's downvotes because it's using false facts as a basis for opinion, and using weak logic to connect them. Fiat money is over 90years old, Bitcoin is deflationat by design, and neither of these facts matter. The open market is subject to manipulation (counterfeiting and cornering) as much as government fiat.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#50

Post by fjsolwmv » Tue, Oct 23, 2018, 12:14 AM UTC

nostrademons wrote: post #33

brokensegue wrote: post #19

Earlier quoted context omitted.

that chart is currently off by like 100%

Interesting that it called $10K/Bitcoin only a month early, though, and did so 3 years in advance. The actual Bitcoin price underperformed the model by about an order of magnitude throughout 2015 as well as a long stretch in 2012; Bitcoin seems to have a "big bubble, then it bursts and plateaus for years" pattern.

A standard die roll is right 1/6th of the time.