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Bitcoin’s Overnight Collapse Probability Is About 50%

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Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#141

Post by solosoyokaze »

scottLobster wrote: post #134
solosoyokaze wrote: post #12

Earlier quoted context omitted.

It has a social network effect of people who agree that it's the store of value for the future. Your paper dollar bill has very little intrinsic value. It's just a shared acceptance.

Uh, my paper dollar is backed by the might of the US government and the US economy. It's a lot more than just "shared acceptance". Countries couldn't just switch off the US dollar reserve currency for international trade without massive economic repercussions, which is why no country or set of countries has developed a viable alternative to the dollar for a global reserve currency. It's not like China/Russia wouldn't…

Your whole comment is basically an ad for Bitcoin. USD is valuable because we have an imperialistic global army that will kill you or starve you off if you don't use it? Seems like something we desperately need an alternative to.

USD is the dirtiest fiat there is because it's backed by blood at a global scale.

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#142

Post by eaenki »

carlivar wrote: post #136
eaenki wrote: post #131

Earlier quoted context omitted.

If you don’t trust your own gov, wether because they’re a bunch of crooks or you’re doing smth fishy, it’s useful.

Which is why fiat conversion will eventually be heavily regulated. People forget private gold ownership was illegal for decades of the 20th century.

It is still illegal in some countries. E.g Italy I know it goes back and forth between making it legal/illegal. I’d also argue that it is already heavily regulated- you need to give any fiat exchange ur docs. Loopholes with exchanges based in weird island territories will always exist.

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#143

Post by solosoyokaze »

fanciestManimal wrote: post #139
solosoyokaze wrote: post #127

Earlier quoted context omitted.

> And yet more people use dollars, and have bank accounts with dollars or their home country's currency. Those people are losing money due to inflation. This is well known and an issue with people keeping cash in "mattresses". > Bitcoin's block reward can be changed as well, it's not some immutable law of the blockchain. I'm not claiming that it will change, but I also see the potential for there to be a change there…

And yet people still own dollars. I own various investments, and also dollars. I'm aware of what a hard fork is, I'm also aware of what a 51% attack is. The risk of that down the road could be a fair amount of incentive for folks (and the network effect) to get on board. I'm not saying something will happen there. You do need to maintain clarity to understand the reality of what's possible though. It's also possible…

You (and I) own dollars but the government can always print more. It's like owning shares in a company that has the habit of regularly issuing more shares, diluting you. We know the denominator on BTC (21,000,000) the denominator on USD is unknown and always increasing.

The fixed, deflationary nature of Bitcoin isn't the only financial instrument we need, but it is desperately needed in its own right.

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#144

Post by dougk16 »

bhouston wrote: post #40
anm89 wrote: post #23

Earlier quoted context omitted.

Gold doesn't have earnings releases either.

It at least is tied to a physical thing. There are then limits to how high gold can go in price as higher prices means more will come to the market to sell it because the higher prices are not viewed as sustainable. Whereas with bitcoin, it is fairly unmoored from physical constraints. There is no natural price for bitcoin. It could go up forever or drop to nothing and both are acceptable valuations that would be har…

> It at least is tied to a physical thing.

People should know more about the paper gold market. Most importantly how much gold people think they have stored safely in vaults, but is essentially just an IOU that could never be paid if everyone withdrew at the same time. Pretty scary/exciting stuff. I couldn't even begin to describe all the dimensions to this and still learning myself. But long story short, consider the possibility that the price of gold isn't anywhere near tied to a physical thing. :)

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#145

Post by crdrost »

hntrader wrote: post #98
JumpCrisscross wrote: post #87

> contango for financial products isn’t normal, is that you can arbitrage it very easily, as you don’t have storage costs This is a bit hand wavy. Holding Bitcoin has real administrative and compliance costs for financial players in a position to sell Bitcoin futures. Particularly since, to do this properly, you’d need to be trading on the referenced cryptocurrency exchanges. Also, I don’t think that default probabil…

Yeah. There are storage costs. Primarily the counterparty risk associated with current custody solutions.

This is still a really fun and quick argument, even so. The risk might not be entirely "the Bitcoin market collapses in the next year" and the risk is an implicit perceived risk, so it might not map to reality. Those criticisms are valid. Nevertheless correcting for that you get something like “I can’t be more than 70% sure that Bitcoin is going to exist a year from now and I also can't be more than 70% sure that I can actually safeguard my bitcoins from hackers and/or malicious insiders, so combining those together as independent possibilities I can't be more than 50% sure that my investment will still exist in a year” with the belief being a belief-in-action, a ‘revealed preference.’

And the nice thing about any revealed-preference argument is that in some sense it’s also a thrown-down gauntlet. “Is this estimate full of crap, HN? Then put your eggs in this basket. Your fortune awaits.” Like, it’s not saying that your arguments are not valid to me, as if the Hacker News comment thread were some sort of arbitrator of truth if only we could argue loud and hard enough for our points of view. A revealed preference argument is saying that your arguments are not valid to you, in the sense that if you profess other confidences or values then your actions are not in line with your values. Who cares about the bluster on the HN comment thread then? This is something that you need to work out in your own case, wondering if you are convinced enough in the stability of Bitcoin to buy some Bitcoin right now to short the future, and if not then why not. Because if you do not have credit-card debt then that 24% APR should look mighty tempting.

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#146

Post by sammyo »

kirse wrote: post #83

As I watch the total crypto market cap shoot through the roof over the past year, one thing I've been wondering is what will stop a global "bank run" on the exchanges when/if something like this does happen? I was reading thru Coinbase's own insurance wording, and it's clear they dance around it by saying: To the extent these funds are held as USD in U.S. banks, they are maintained as pooled custodial accounts at one…

Very likely in a serious run all the crypto exchanges will crash hard quickly and for an extended time (forever? ;-) essentially stopping trading except for personal direct transactions.

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#147

Post by loceng »

hdjcktnr wrote: post #126
loceng wrote: post #77

Earlier quoted context omitted.

Also @dang, should require every user to add a tag/label that will show us if they are a Bitcoin speculator/owner, and would be great if then upvotes/downvotes had a stat that was viewable to see what % of upvotes/downvotes posts or comments have are by those who are financially incentivized for Bitcoin to succeed. Edit to add: what are the odds this comment would be downvoted in a Bitcoin thread? Would be great to s…

Taleb would say that those people should be listened to more, because they have skin in the game.

Which that logic gets cancelled out because you could claim the person without bias, "skin in the game" - is who should actually be listened to more. Those cancelling each other out then just leaves the financial incentive that the person who owns Bitcoin has.

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#148

Post by loceng »

judge2020 wrote: post #118
loceng wrote: post #77

Earlier quoted context omitted.

Also @dang, should require every user to add a tag/label that will show us if they are a Bitcoin speculator/owner, and would be great if then upvotes/downvotes had a stat that was viewable to see what % of upvotes/downvotes posts or comments have are by those who are financially incentivized for Bitcoin to succeed. Edit to add: what are the odds this comment would be downvoted in a Bitcoin thread? Would be great to s…

Let's make people link their brokerage account while we're at it so that someone can't post Waymo news if they own GOOG stock.

That's a bad faith exaggeration argument you just made: we don't need to know everything someone has financial interest in, just if it's related to the topic. It's why VCs, for example, if writing a blog post about a company - they will write a disclaimer that they own shares in the company. We have laws to require people to disclose if something is sponsorship as well - because it changes the value of what's being said.

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#149

Post by throw8932894 »

mvind wrote: post #137

One point as a researcher working in a central bank and studying state-of-the art macroeconomic theory, is the absolute conviction that some crypto holders have that society is rotten to the core and that the financial industry (and for that matter the broader well established large cap economy) is a malfunctioning/rotten machine only benefiting the 1%. I mean reading journals on monetary policy transmission, central…

I think their opinions were validated quite well. If I would listen to my crazy anarcho-capitalist friend, I would be millionaire today. Other side is represented by Trump...

Re: Bitcoin’s Overnight Collapse Probability Is About 50%

#150

Post by dougk16 »

globular-toast wrote: post #113
bhouston wrote: post #40

Earlier quoted context omitted.

It at least is tied to a physical thing. There are then limits to how high gold can go in price as higher prices means more will come to the market to sell it because the higher prices are not viewed as sustainable. Whereas with bitcoin, it is fairly unmoored from physical constraints. There is no natural price for bitcoin. It could go up forever or drop to nothing and both are acceptable valuations that would be har…

The only plus I can see is a stronger belief that you can't synthesise gold. Synthesising Bitcoin would take an enormous amount of coordinated computing power, but it is technically possible. Other than that I don't see why it matters that gold is a physical thing.

See my peer comment. You can "synthesize" gold pretty easily. I agree most people don't consider this when buying gold though. So "stronger belief" is still accurate. Unfortunately unscrupulous people make fortunes off of that strong belief.
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