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Bitcoin and cryptocurrency prices have fallen sharply over the last few days

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Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#51

Post by unhashable »

glofish wrote: post #39
unhashable wrote: post #33

Earlier quoted context omitted.

This is another misconception. Gold can be held, yes. It also is expensive to verify, transport, and protect. This has proved problematic for holders of the past. A paper system had to be built on top of Gold, which severely diluted the value proposition as gold was confiscated and stockpiled centrally. Practically speaking, very few individuals hold gold and the utility of doing so is limited when you consider how l…

> This is another misconception. Care to elaborate on what my misconception was? I never said that bitcoin is not an interesting concept on its own. Just that is ain't got what most people think or need when they talk about gold or money. Especially not in time of economic distress. Can you use bitcoin without the internet? Can you use bitcoin without someone else mining and being allowed to connect to these entities…

To address your point more directly: many think that Bitcoin isn’t tangible because you have to trust that the network of full nodes are verifying transactions, and if they stop then Bitcoin ceases to exist.

Full nodes have financial incentives to run and they do so today at a scale that rivals the internet. It’s not a favor to Bitcoin, it’s a business. They would only stop if the financial incentive ceased to exist. I can’t think of a reason node operators would cease to care about their own financial well-being. That’s baked into our species.

Note that your reservations apply equally (and potentially more so) to fiat. USD is a virtual currency. Cash is on the way out. You will not be able to spend your USD offline. USD is based on a network of centralized banks. You cannot spend your fiat without a computer asking permission from these centralized systems.

The world stops if the internet stops. That’s not a Bitcoin problem. Bitcoin actually improves on the state of things by replacing encumbant authorities and centralized computing systems with math and a decentralized network.

I’ll add this. It’s not the current state of the world, but there is a very real chance Bitcoin can be made available off-internet via a satellite network. This would prevent state-level censorship like what we see when authoritarian regimes cut the internet.

https://github.com/Blockstream/satellite/blob/master/README....

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#53

Post by Finnucane »

majormajor wrote: post #6
zionic wrote: post #3

I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.

My take on the selloff is people looking for liquid cash. Very similar to stockpiling home supplies. People are looking for stuff they can use or trade in the very short term because they don't know how bad it would get. It's a lot harder to do that today with crypto. I haven't seen anyone with strong reason to believe that companies are gonna be that much worse off a year from now than they were a month ago, or for…

That sorta depends. The energy companies are getting squeezed by the oil price war, and they are heavily leveraged and dependent on high prices. A lot of companies loaded up on cheap debt, so the banks are screwed if liquidity issues mean defaults.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#54

Post by wiredfool »

LargeWu wrote: post #34
wiredfool wrote: post #15

Earlier quoted context omitted.

I think Toilet Paper is the preferred currency now.

I know your comment is, at least somewhat, in jest, but it's kind of true. My wife's boss has been spending a good bit of his workdays lately tracking and buying gold. But not buying physical gold. Just buying a promise from some agent that he owns some gold. Of course, that's not going to do him any good in a crisis; you can't eat gold, you can't drink it, pretty sure you can't wipe your ass with it. You can only tr…

Yeah, that was only half a joke. At some point, the only things that are worth anything are things that have utility. Money isn't intrinsically useful, it's only useful in what others will trade for it.

The Postman, while it was resoundingly mocked as a movie, was a really chilling book that dealt with what happens when you get to that point.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#55

Post by nostrademons »

glofish wrote: post #22
unhashable wrote: post #10

It's a common misconception that Bitcoin is a safe haven. It's not. Not even Gold is a safe haven during a liquidity crisis. In sharp downturns, cash is king. Think of Bitcoin and Gold as call options on the entire global monetary system. If Govs become insolvent, Bitcoin and Gold is there. If the masses lose faith in central banks, Bitcoin and Gold is there. If central banks debase currencies too quickly, Bitcoin an…

bitcoin is not really "there" the same way as gold is. The whole point of gold is that it is a tangible asset. You can hold gold in your pocket or under your mattress and it costs nothing to store it. You can't prove you have bitcoin if you don't have internet access for example. You can't have bitcoin if miners don't run their nodes. Basically, you are depending on a resource in faraway lands to let you "own" what y…

Bitcoin is a call option on governments going down but the Internet staying up. Gold is a call option on everything going down and society reverting to how things were done in the 1600s.

They reflect different threat models. If you believe that governments will get swept away by the global market-state, Bitcoin is your asset. If you believe that society will crumble and we'll be back to trading with other villages, gold is your asset.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#56

Post by weego »

unhashable wrote: post #51
glofish wrote: post #39

Earlier quoted context omitted.

> This is another misconception. Care to elaborate on what my misconception was? I never said that bitcoin is not an interesting concept on its own. Just that is ain't got what most people think or need when they talk about gold or money. Especially not in time of economic distress. Can you use bitcoin without the internet? Can you use bitcoin without someone else mining and being allowed to connect to these entities…

To address your point more directly: many think that Bitcoin isn’t tangible because you have to trust that the network of full nodes are verifying transactions, and if they stop then Bitcoin ceases to exist. Full nodes have financial incentives to run and they do so today at a scale that rivals the internet. It’s not a favor to Bitcoin, it’s a business. They would only stop if the financial incentive ceased to exist.…

When you think about it, you realize: USD is also virtual currency. Cash is on the way out. You will not be able to spend your USD offline.

I mean by that definition anything past barter economies are virtual, so sure if that's your definition then your statement stands. It's completely incorrect by any meaningful definition of virtual though.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#57

Post by adventured »

sna1l wrote: post #20

Bitcoin market is like the regular equities market...without the halting capabilities

> Bitcoin market is like the regular equities market

No it's not. The Bitcoin market is the exact opposite: it's unnecessary and of little consequential tangible value to the real economy. The regular equity markets have a large share of the productive output of nations behind them, including the employment and taxation that goes with that. Companies that actually produce goods and services. In many cases goods and services that people and other businesses have to purchase or otherwise heavily depend on.

None of that is true about Bitcoin. It could disappear tomorrow and other than the lost capital trapped in it, it wouldn't matter in a meaningful way; and it wouldn't matter at all to the average person. The masses of people do not need it, they do not depend on it. Government revenue does not depend on it. The lives of billions of people do not depend on it.

Now, for comparison, shut down the top five farm tractor manufacturing companies. Shut down Airbus and Boeing. Shut down Walmart, Costco, Target, and Amazon. Shut down every dental office. Shut down every auto manufacturing company and witness the industrial effects including unemployment. Close every power plant. Shut down the telecom companies and every media company. Shut down every publicly traded energy company. Close every publicly traded bank and financial firm. Close every publicly traded agricultural company including the major food producers.

Compare that to Bitcoin vanishing tomorrow. By comparison, it would have zero consequence, it would not matter at all in any grand scheme of things.

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#58

Post by unhashable »

rideontime wrote: post #41
unhashable wrote: post #33

Earlier quoted context omitted.

This is another misconception. Gold can be held, yes. It also is expensive to verify, transport, and protect. This has proved problematic for holders of the past. A paper system had to be built on top of Gold, which severely diluted the value proposition as gold was confiscated and stockpiled centrally. Practically speaking, very few individuals hold gold and the utility of doing so is limited when you consider how l…

> You can't prove you have bitcoin if you don't have internet access for example. You can't have bitcoin if miners don't run their nodes. Nothing you said addressed this.

Yeah, I missed the point about trusting the math that enables a decentralized network. Addressed here:

https://news.ycombinator.com/item?id=22559645

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#59

Post by megous »

chmod775 wrote: post #45
lcall wrote: post #28

Earlier quoted context omitted.

Its value is not suddenly dropping as the same rate as the other investments. You can (hopefully) buy food with it. (But being good to your family, having low or no debt and some prudent food storage are also wise, among other things our church has counseled us for a long time). (Edit: and savings "for a rainy day".) (Edit: This is considering the definition of "cash" to be not just paper in your hand, but as a regul…

Depends on the crisis and what you consider "currency". Hyperinflation is also a crisis. More generally, in times where people would rather have useful things like food, tools, and gas than pieces of paper you'll be screwed if cash is all you have - because there's going to be one hell of a price hike. Even more so because economic output is likely to go down. Then in case the crisis gets really bad it'll turn out yo…

> More generally, in times where people would rather have useful things like food, tools, and gas than pieces of paper you'll be screwed if cash is all you have...

This may be happening in some limited fashion even in the current crisis. My country still has its own currency within EU, and is undergoing unprecedented levels of lockdown over the last few days. The currency is already tanking compared to Euro (lost 4% over a few days), as people stockpile stuff.

https://www.xe.com/currencycharts/?from=EUR&to=CZK

Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days

#60

Post by defterGoose »

unhashable wrote: post #33
glofish wrote: post #22

Earlier quoted context omitted.

bitcoin is not really "there" the same way as gold is. The whole point of gold is that it is a tangible asset. You can hold gold in your pocket or under your mattress and it costs nothing to store it. You can't prove you have bitcoin if you don't have internet access for example. You can't have bitcoin if miners don't run their nodes. Basically, you are depending on a resource in faraway lands to let you "own" what y…

This is another misconception. Gold can be held, yes. It also is expensive to verify, transport, and protect. This has proved problematic for holders of the past. A paper system had to be built on top of Gold, which severely diluted the value proposition as gold was confiscated and stockpiled centrally. Practically speaking, very few individuals hold gold and the utility of doing so is limited when you consider how l…

I'm truly struggling to understand how gold can be censored.

Also, left out of this discussion is the fact that gold is actually tangible, divorced from some weird semantic backflips. You can build useful things with it.

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