Bitcoin breaks above $20k • Hacker News Board

Re: Bitcoin breaks above $20k

#101

Post by RedditKon » Wed, Dec 16, 2020, 5:15 PM UTC

isuckatcoding wrote: post #48

But why...? > When this [rally to near $20,000] happened in 2017, there was a real lack of products for the new converts to experience, whereas today there are endless uses, protocols, services across farming, lending, standard trading, etc Is this really true though? My first instinct isn’t at all to go to blockchain/cryptocurrency for farming.

It's definitely true on the DeFi / lending front. Check out BlockFi for example.

But I wouldn't say these are the _main_ reason why Bitcoin is going up. More likely reasons:

- Inflation concerns from the massive QE efforts in 2020 - Equities market are very overvalued right now, people are looking for alternate asset classes and fiat isn't a great option (see point #1) - Institutional (more risk adverse) names are getting in. Ex: Mass Mutual bought $100M of BTC last week. Because this was for their general account it needed Fed approval, which is a big milestone. - The idea of BTC as a true alternate store of value to gold is becoming more widely accepted.

Specifically in regard to the point around Bitcoin as an alternative to gold, the market cap of gold is around $9T. If even half of that moves to BTC we'd hit about $130k/BTC.

Re: Bitcoin breaks above $20k

#102

Post by hn_throwaway_99 » Wed, Dec 16, 2020, 5:15 PM UTC

ur-whale wrote: post #92

syntaxing wrote: post #50

The appreciation and depreciation of Bitcoin is one of the things I don’t really understand. I get currency, capital flow, and asset to capital conversions. But for Bitcoin, where exactly is the value? Why is holding one Bitcoin appreciating so much faster compared to the USD? Is it because us as a society is perceiving the value of Bitcoin to appreciate (even though it’s illogical IMO to think so)?

You may want to consider that the value of Bitcoin a constant. The implication is that the value of the USD isn't.

> You may want to consider that the value of Bitcoin a constant.

That seems like a foolhardy assumption given that what I can go to the store and buy with $1 stays relatively constant day-to-day, while what I can buy with 1 BTC fluctuates wildly.

Re: Bitcoin breaks above $20k

#103

Post by flignats » Wed, Dec 16, 2020, 5:15 PM UTC

syntaxing wrote: post #50

The appreciation and depreciation of Bitcoin is one of the things I don’t really understand. I get currency, capital flow, and asset to capital conversions. But for Bitcoin, where exactly is the value? Why is holding one Bitcoin appreciating so much faster compared to the USD? Is it because us as a society is perceiving the value of Bitcoin to appreciate (even though it’s illogical IMO to think so)?

It's the world's first globally accessible, decentralized, transparent, immutable ledger.

Re: Bitcoin breaks above $20k

#104

Post by csomar » Wed, Dec 16, 2020, 5:16 PM UTC

arez wrote: post #82

csomar wrote: post #54

Earlier quoted context omitted.

My understanding as someone who trades these markets is that Tether issues has been addressed, although not transparently. We still don't know how the money moves around, and a big portion of its market cap is probably not used for trading bitcoin. They still have the risk of the government clamping down on them but I could hardly see it affecting bitcoin. Maybe a 5-10% price suppression at most.

how are they addressed? You don't know if it's 1:1 backed, if you don't know that it can collapse any moment

It's hard to fake because people can cash out of Tether. You can sustain a ponzi only if you had tight control of inflow-outflow until it collapses.

For example, Okex froze withdrawals a month ago on its exchange. I had a 5 figures there that I was able to move by mirror trading on another exchange. If many people mirror traded (which they probably did), the prices will start to diverge. The prices very slightly diverged, which means a well capitalized third-party had strong conviction/guarantees that Okex is good for the coins/money, and played the reverse trade by injecting even more capital into Okex (they still allowed deposits).

If you are trading and notice these patterns, this gives you an idea about the probability that the exchange is going back to business. Same thing for Tether, their liquidity and price stability is even better than USDC.

Re: Bitcoin breaks above $20k

#105

Post by joshuakelly » Wed, Dec 16, 2020, 5:16 PM UTC

Let's pay tribute to the very first Hacker News thread about Bitcoin back in May, 2009 with this classic comment: https://news.ycombinator.com/item?id=599852

> Well this is an exceptionally cute idea, but there is absolutely no way that anyone is going to have any faith in this currency.

Re: Bitcoin breaks above $20k

#106

Post by NovemberWhiskey » Wed, Dec 16, 2020, 5:16 PM UTC

gruez wrote: post #69

syntaxing wrote: post #50

The appreciation and depreciation of Bitcoin is one of the things I don’t really understand. I get currency, capital flow, and asset to capital conversions. But for Bitcoin, where exactly is the value? Why is holding one Bitcoin appreciating so much faster compared to the USD? Is it because us as a society is perceiving the value of Bitcoin to appreciate (even though it’s illogical IMO to think so)?

>Why is holding one Bitcoin appreciating so much faster compared to the USD? Is it because us as a society is perceiving the value of Bitcoin to appreciate (even though it’s illogical IMO to think so)? Same reason why asset (stocks, housing) prices have skyrocketed even though there's a pandemic going on: money printing.

And yet, somehow, during various other periods of money printing its value has crashed. So are you asserting this period of money printing is different, and if so how?

edit Even the post facto explanations of Bitcoins price fluctuations generally do not seem to be agreed or understood.

Re: Bitcoin breaks above $20k

#107

Post by asdfadsfgfdda » Wed, Dec 16, 2020, 5:16 PM UTC

syntaxing wrote: post #50

The appreciation and depreciation of Bitcoin is one of the things I don’t really understand. I get currency, capital flow, and asset to capital conversions. But for Bitcoin, where exactly is the value? Why is holding one Bitcoin appreciating so much faster compared to the USD? Is it because us as a society is perceiving the value of Bitcoin to appreciate (even though it’s illogical IMO to think so)?

1. facilitating "illegal" activities (ransomware, dodging capital controls and taxes, drugs, etc), similar to cash

2. speculation: "Someone speculating on Bitcoin over a week cares little about its fundamental value: even if you told her that Bitcoin would crash to zero for sure in three years, it would make essentially no dent in her trading profits, since you can make a lot of money in a volatile market over the course of a week if you get on the right side of the volatility."

https://review.chicagobooth.edu/finance/2018/article/bitcoin...

Re: Bitcoin breaks above $20k

#108

Post by snicksnak » Wed, Dec 16, 2020, 5:16 PM UTC

tomlue wrote: post #53

syntaxing wrote: post #50

The appreciation and depreciation of Bitcoin is one of the things I don’t really understand. I get currency, capital flow, and asset to capital conversions. But for Bitcoin, where exactly is the value? Why is holding one Bitcoin appreciating so much faster compared to the USD? Is it because us as a society is perceiving the value of Bitcoin to appreciate (even though it’s illogical IMO to think so)?

The value of bitcoin doesn't need to increase in absolute terms for its USD value to increase.

This makes no sense to me. Isn't the value of bitcoin measured in USD?

Re: Bitcoin breaks above $20k

#109

Post by ur-whale » Wed, Dec 16, 2020, 5:17 PM UTC

_sm6n wrote: post #94

It's kinda sad that the pricing or market capitalization is the only thing that is being talked about in the "cryptocurrency community", instead of focussing on how the technology can be useful for society. Like for example if you look at /r/Bitcoin, there's a sidebar with "Submit text/link NOT about price", yet virtually every post is about price, even if just indirectly (Paypal joins the cryptocurrency bandwagon an…

Thank you for this, and I totally agree.

The price of Bitcoin is largely irrelevant given how interesting the tech. that powers it actually is.

Bitcoin is a fluid that aims to power a hydraulic machine, and once Lightning gets to where it should be (it's been a while, yes :\), my bet is that many of the naysayers will have no choice but to take a second look at it.

The rise in price is just a side-effect.

Re: Bitcoin breaks above $20k

#110

Post by shrimpx » Wed, Dec 16, 2020, 5:17 PM UTC

Gunax wrote: post #52

marta_morena_91 wrote: post #20

Earlier quoted context omitted.

But it's really not. Bitcoin isn't anything special. If there were any real-world use cases for it (which there don't seem to be), this would have been done long ago or would have been done organically. As it stands, interest in bitcoin was largely null, until people realized that it's a great investment opportunity where everybody can get rich (tulips, anyone?)... The rest is history. Now alt coins were popping up l…

You're right about the economics of it, but I think seibelj is discussing something else. To give a goofy analogy: if it turned out that space travel was mostly gimmicky and used to cheat people, that would not undo the great technical achievement that it is. Crypto is one of those things that no one saw coming. I dont think most people--even rather technical and well read--even considered such an idea prior to 2007.

People had been thinking about digital money for decades but didn’t know how to solve double spend. Proof of work was around since 2000 or so (hashcash) but it wasn’t until satoshi that these ideas were congealed together in the form of the blockchain.