Bitcoin surpasses $50K as major companies jump into crypto • Hacker News Board

Re: Bitcoin surpasses $50K as major companies jump into crypto

#581

Post by efwfwef » Wed, Feb 17, 2021, 4:50 AM UTC

azinman2 wrote: post #120

So it sounds like lemming group think. It seems like someone one should hold “just in case,” but no real valid reason to do so yet (that I’ve heard). We know transactions are slow and expensive, so it’s not a good replacement for ordinary commerce. It can be used to transfer across borders, but there often is asymmetry in capital movement that makes this difficult in the places you need it most (poor countries with r…

> So then it becomes a digital store of value, one that is only as valued as the market gives it, and typically markets eventually correct when there’s no underlying true value proposition (as we can see with $GME).

You're not missing anything, you said it yourself it's a store of value. Maybe markets eventually correct, but in the last 10 years Bitcoin has only gone up, so if you had planned to use it to store value for 10 years a decode ago, then it worked pretty well.

> It also pushes only towards deflation, so it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy

Well it's a store of value, not a tool for the gov to handle the economy.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#582

Post by [deleted] » Wed, Feb 17, 2021, 4:50 AM UTC

the_giraffe wrote: post #420

ori_b wrote: post #311

Earlier quoted context omitted.

Over the last 100 years, you'd have done significantly better by putting your money into an index fund -- and had less volatility. As far as I can tell, gold is just a lousy place to keep your money. What kind of long term are you talking about?

Did index funds exist 100 years ago? I'm pretty sure passive investing is a more recent phenomenon.

[deleted]

Re: Bitcoin surpasses $50K as major companies jump into crypto

#583

Post by efwfwef » Wed, Feb 17, 2021, 4:54 AM UTC

tylerhou wrote: post #252

mandelbrotwurst wrote: post #169

Earlier quoted context omitted.

> it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy (dealt with debt via inflation aka printing money How does a static rather than unconstrained supply make something a LESS good store of value?

Econ 101: the value of ordinary goods are determined both by supply and demand. Bitcoin-fanatic-USD-bears claim that Bitcoin is a good store of value because it has constrained supply. But they miss the demand side of the equation. Similarly, they claim that the USD is a bad source of value because it has "unlimited" supply. That also misses the demand side. The demand for USD is robust because people need USD to pay…

I don't buy this argument, it sounds like you're just convinced that Bitcoin can't be a store of value because X and Y and completely ignore the fact that it is being used as a store of value.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#584

Post by graeme » Wed, Feb 17, 2021, 4:54 AM UTC

intev wrote: post #118

robjan wrote: post #114

Earlier quoted context omitted.

Which models? The only thing I can find to support your claim is random people tweeting that they think it will be worth 1M. I guess when enough people say something it becomes a "fact"

Plan B's (in)famous model: https://digitalik.net/btc/ Notice how the trend is eerily aligned? Just because you couldn't find it doesn't mean you have to be snarky about it.

That model appears to be nonsense. There’s no “stock to flow” price relationship in economics or investing. The author made it up for their piece, looked at gold, and extrapolated.

They say in the piece:

> Now contrast Bitcoin's dynamic stock-to-flow with Gold's, who's stock-to-flow of 62 is not likely in increase. As a thought experiment, try to imagine what would happen to the price of gold if were to be halved one day?

That did happen, in 1940! Gold production fell in half for years. And the gold price subsequently fell.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#585

Post by oraphalous » Wed, Feb 17, 2021, 4:54 AM UTC

tylerhou wrote: post #469

oraphalous wrote: post #447

Earlier quoted context omitted.

>Citing "latent demand" or "induced demand" as counter-evidence to my original statement shows your (mis)understanding of basic economics. Your original statement: >The demand for USD is robust because people need USD to pay taxes and to purchase most goods ...remains an absurdly simplistic explanation of USD demand. I wasn't citing latent demand as a counter example to this explanation - just an illustration of easy…

> remains an absurdly simplistic explanation of USD demand. Are you willing to provide a more sophisticated explanation for USD demand? The biggest thing missing from my explanation is demand as an investment, or foreign demand to hedge risk. Which right now isn't huge, given interest rates are at 0. > just an illustration of easy to intuit scenario where demand responds dynamically to supply Sorry, I was not correct…

>Are you willing to provide a more sophisticated explanation for USD demand?

I don't particularly feel the onus is on me to provide a full explanation. You are the one providing one in order to show Bitcoin demand is illusory or foolish. All I wanted to do was to point out enough of what yours was missing to show that Bitcoiners are at least not FOOLISH... that there is nuance enough here that if they are wrong, it's likely not because of some 101 mistake.

I did this by pointing out how an explanation of demand of currency must include an account of how supply itself can influence demand. The scenario I painted where supply grossly outstrips initial demand - thus further reducing demand - is possible; it can and has happened - Weimar, Zimbabwe etc... You responded by adding even MORE nuance by pointing out that added supply, rather than representing a hyperinflationary scenario - might itself just be a response to increased demand. And it might indeed! But are we in your scenario or are we heading further and further down the road of over supply? That's a HUGE empirical question... surely. And surely in determining whether or not I want to keep my wealth in USD vs something else, I need to know more about reality than just whether or not I can pay my tax in it, or purchase various things.

Thus I feel I have adequately demonstrated your explanation of currency demand as simplistic - without having to supply a fully rigorous account of my own.

The rest of your reply is worthy and deserving of response - but time is short! :)

Re: Bitcoin surpasses $50K as major companies jump into crypto

#586

Post by dlubarov » Wed, Feb 17, 2021, 4:55 AM UTC

incrudible wrote: post #509

unstatusthequo wrote: post #464

Earlier quoted context omitted.

Because our government just printed a LOT of money. Look into what money supply does to inflation. More supply of money means things cost more. Interest rates go down, and it’s better to not have cash but assets. I just loaded up on gold, platinum, silver, art, crypto, and real estate. Those will all fare better than cash or savings as hyperinflation grips the country.

> Because our government just printed a LOT of money. That may be true, but the broader money supply hasn't really changed much: https://tradingeconomics.com/united-states/money-supply-m2 It's also not really clear how it would. Banks aren't out there giving out loans like candy to everyone for anything. The little bit of helicopter money doesn't even cancel out the lack of spending due to COVID layoffs. You just can…

> broader money supply hasn't really changed much

Did you zoom out? M2 money supply increased 25.6% in the past year. Might be easier to see at https://fred.stlouisfed.org/series/M2

Re: Bitcoin surpasses $50K as major companies jump into crypto

#587

Post by vinger » Wed, Feb 17, 2021, 4:57 AM UTC

IkmoIkmo wrote: post #317

kungito wrote: post #42

Earlier quoted context omitted.

What helps me sleep at night is that even had I entered all this time ago with BTC I would have exited 100 times by now. There have indeed been many 2x,3x,5x multipliers with BTC but there have been so many instances when it was unclear how everything is going to turn out which would personally prompt me to consider exiting with what I had. As my friend nicely put it: only way we could have gotten rich from BTC is ha…

Yup, same. Hell if I put in money now and it did 2x and went to $100k, I'd get out, too. There's just no way I see myself not getting out at $100k or say $200k. And I'm not risking my money on an investment that can 'only' do 2x or 4x. Bitcoin was cool as it could do 10x or 100x in the span of 1-2 years. But with the numbers where they're at and knowing myself, I'd cash out way before that. In the end because bitcoin…

If you bought 11 months ago at 5,000 you would have made 10x cashing out today. It's never too late to buy in and if so there are other coins.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#588

Post by [deleted] » Wed, Feb 17, 2021, 4:57 AM UTC

aphextron wrote: post #374

Wowfunhappy wrote: post #355

Earlier quoted context omitted.

My opinion of Bitcoin will change when it stops using more electricity than entire countries, for something Visa can do for comparatively nothing. I would hold the same opinion of any technology which used so much energy when there was a less wasteful alternative. I also happen to be skeptical of Bitcoin's long-term outlook, but that's not why I'm actively against it as a technology. If it wasn't for the planet, I'd…

>My opinion of Bitcoin will change when it stops using more electricity than entire countries, for something Visa can do for comparatively nothing. To be fair, Bitcoin does not do what Visa does. Visa uses trust in existing institutions to accomplish transactions. Bitcoin mining creates trust out of electricity. And trust is a valuable resource, no different than any other form of value creation.

[deleted]

Re: Bitcoin surpasses $50K as major companies jump into crypto

#589

Post by dragontamer » Wed, Feb 17, 2021, 4:57 AM UTC

bitexploder wrote: post #550

dragontamer wrote: post #531

Earlier quoted context omitted.

But if it's off chain, why use Bitcoin at all? If you never actually use the blockchain, then you don't really know if those BTC you 'bought' even exist.

It’s still backed by the currency. Kind of like how when you make a stock trade the actual trade isn’t cleared for some time. In this way the blockchain of Bitcoin is simply transparent and easy to follow, if slow and expensive.

A big criticism of the current market is that Tethers aren't backed by anything. Nonetheless, there's a huge BTC and USDT and USD trade going on.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#590

Post by efwfwef » Wed, Feb 17, 2021, 4:58 AM UTC

dragontamer wrote: post #531

6nf wrote: post #522

Earlier quoted context omitted.

Every minute, there are thousands of bitcoin transactions happening at dozens of exchanges, and it's happening instantly with very low cost. Because it's off-chain. That's what you're missing here, not everything needs to be on-chain to be valuable. Exchanges and businesses and services can aggregate.

But if it's off chain, why use Bitcoin at all? If you never actually use the blockchain, then you don't really know if those BTC you 'bought' even exist.

The same reason why when you use Venmo you don't think "wait, why use USD at all if it's all a database?"

The truth is, the current financial system is just a large number of databases trying to sync with one another, and one of cryptocurrencies' goal is to decrease this amount of databases.