I Bought a Bitcoin • Hacker News Board

Re: I Bought a Bitcoin

#21

Post by nazgulnarsil » Fri, Apr 05, 2013, 4:05 AM UTC

Bitcoin is a pyramid scheme in that everyone is counting on someone else to want them.

However this is no different from any currency or monetary commodity with no use value. With bitcoin, the "bag holders" at the end of the scheme have something for their trouble: a global, secure, low fee transaction settlement system. Given that such a network would be quite valuable, there's no reason for it to crash to 0, barring threats of violence. Perhaps speculation value will come out over time, but this is fine.

Re: I Bought a Bitcoin

#22

Post by bumbledraven » Fri, Apr 05, 2013, 4:43 AM UTC

nazgulnarsil wrote: post #21

Bitcoin is a pyramid scheme in that everyone is counting on someone else to want them. However this is no different from any currency or monetary commodity with no use value. With bitcoin, the "bag holders" at the end of the scheme have something for their trouble: a global, secure, low fee transaction settlement system. Given that such a network would be quite valuable, there's no reason for it to crash to 0, barrin…

[bitcoin] is no different from any currency or monetary commodity with no use value

No, bitcoin is different insofar as there is no powerful entity that taxes people and requires payment in bitcoin. This makes it even less valuable than currencies that DO have that feature.

Re: I Bought a Bitcoin

#23

Post by InclinedPlane » Fri, Apr 05, 2013, 5:17 AM UTC

Mahn wrote: post #4

I keep wondering whether I should be buying bitcoins now, but I have mixed feelings about it. I'm pretty sure its value will continue going up for a while, but I guess I'm still skeptical.

If you want to buy because you think the value will go up for no other reason than that the value has been going up then you're just participating in a speculative bubble. You might as well be gambling.

Re: I Bought a Bitcoin

#24

Post by colwem » Fri, Apr 05, 2013, 5:17 AM UTC

wyager wrote: post #20

31reasons wrote: post #16

Bitcoins are just a right to participate in a digital crypto economy. They don't have any value in themselves. Its like holding passes to a show in the big theater. If the show doesn't start you passes are worthless. If there is any meaningful possibility of a show in the theater, you might get lucky for holding those passes. The main problem is that people who will participate in the show also need to get the passes…

>people are hoping that its USD rate climb to $1000 or even $1 million, which is pretty ridiculous. Is it really? Not too long ago, a Bitcoin was worth about $.0007. 130/.0007 = 185714 It's only four more orders of magnitude to get to the $1M range. I don't think it's going to happen, but it's not all that far-fetched.

Well right now the entire bitcoin economy is valued at $1.6B so if a bitcoin rises to $1M the bitcoin economy would reach $12.3T . I'm no economist but that seems like it might be an unrealistically huge percentage of the world economy. I really don't think there's enough investable money in the world to get there.

Re: I Bought a Bitcoin

#25

Post by wyager » Fri, Apr 05, 2013, 5:20 AM UTC

colwem wrote: post #24

wyager wrote: post #20

Earlier quoted context omitted.

>people are hoping that its USD rate climb to $1000 or even $1 million, which is pretty ridiculous. Is it really? Not too long ago, a Bitcoin was worth about $.0007. 130/.0007 = 185714 It's only four more orders of magnitude to get to the $1M range. I don't think it's going to happen, but it's not all that far-fetched.

Well right now the entire bitcoin economy is valued at $1.6B so if a bitcoin rises to $1M the bitcoin economy would reach $12.3T . I'm no economist but that seems like it might be an unrealistically huge percentage of the world economy. I really don't think there's enough investable money in the world to get there.

It's true, 12.3T represents a large portion of the world money supply. But not an insurmountably large portion.

Re: I Bought a Bitcoin

#26

Post by etherael » Fri, Apr 05, 2013, 5:36 AM UTC

bumbledraven wrote: post #22

nazgulnarsil wrote: post #21

Bitcoin is a pyramid scheme in that everyone is counting on someone else to want them. However this is no different from any currency or monetary commodity with no use value. With bitcoin, the "bag holders" at the end of the scheme have something for their trouble: a global, secure, low fee transaction settlement system. Given that such a network would be quite valuable, there's no reason for it to crash to 0, barrin…

[bitcoin] is no different from any currency or monetary commodity with no use value No, bitcoin is different insofar as there is no powerful entity that taxes people and requires payment in bitcoin. This makes it even less valuable than currencies that DO have that feature.

That's hilarious, do you even realise what you're saying? You consider it a feature of a currency that there is a violent extortionate power engaged in parasitism of the monetary base.

Re: I Bought a Bitcoin

#27

Post by etherael » Fri, Apr 05, 2013, 5:40 AM UTC

nazgulnarsil wrote: post #21

Bitcoin is a pyramid scheme in that everyone is counting on someone else to want them. However this is no different from any currency or monetary commodity with no use value. With bitcoin, the "bag holders" at the end of the scheme have something for their trouble: a global, secure, low fee transaction settlement system. Given that such a network would be quite valuable, there's no reason for it to crash to 0, barrin…

This is actually untrue, bitcoin can be used as many things, and unless the price is zero for all eternity, which at this point appears to be extremely unlikely, it can be used at the very least as a wealth transfer medium. There is nothing in that particular use case that particularly benefits from a rising or falling or stable exchange rate, only a non zero one.

As a store of wealth, bitcoin is probably better off sitting at a single stable price rather than climbing exponentially as it has been, so even in that case it doesn't make sense to class it as a pyramid scheme.

Pretty much the only scenario where it makes sense to class it as a pyramid scheme is as a speculative investment. And frankly, if the most horrendous negative externality of bitcoin is that people are able to engage in speculation on distant value and are exposed to the risk and reward thereof, that really doesn't sound like a huge criticism to me.

Re: I Bought a Bitcoin

#28

Post by etherael » Fri, Apr 05, 2013, 5:43 AM UTC

31reasons wrote: post #16

Bitcoins are just a right to participate in a digital crypto economy. They don't have any value in themselves. Its like holding passes to a show in the big theater. If the show doesn't start you passes are worthless. If there is any meaningful possibility of a show in the theater, you might get lucky for holding those passes. The main problem is that people who will participate in the show also need to get the passes…

Serious question, why does the price of a single bitcoin matter when they're divisible to 8 decimal places? Beyond a psychological barrier people have thinking about the 1:100 thing, it's really irrelevant if your cup of coffee costs 10 bitcoins or 0.00001 bitcoins, especially if the calculation is made at the time of purchase relative to an underlying stable value like a basket of the largest fiat currencies in circulation or somesuch, or just the boring plain old USD.

1 BTC = 1000000 USD To put it in a less psychologically alarming way is exactly the same as saying 1 Satoshi = 0.01 USD.

Re: I Bought a Bitcoin

#29

Post by rdtsc » Fri, Apr 05, 2013, 6:01 AM UTC

throwawayG9 wrote: post #14

account_taken wrote: post #5

Not sure if Bitcoins are a good investment. All it takes is a western country (say Switzerland) to create an online currency and Bitcoins will sink faster than a Carnival ship.

Do you even Bitcoin? One of the main features of Bitcoin is that it can't be manipulated by a central authority like a bank or government (ie: they can't steal from the people by printing money).

> Do you even Bitcoin?

No but I lift, .... mostly functions, sometimes they have multiple variables ;-)

> One of the main features of Bitcoin is that it can't be manipulated by a central authority

Q: What can a central authority with power to imprison and/or garnish your wage manipulate? A: anything it damn wants.

Yes the Fed Gov. can't print more bitcoin it sure can come after you with a rubber hose expecting to get some sales, or money exchange tax some rather-made-up-new-law-tax. A few high profile case about bitcoin used for terrorism, drug, illegal porn, money laundering and these new laws won't be hard to make.

Re: I Bought a Bitcoin

#30

Post by nazgulnarsil » Fri, Apr 05, 2013, 6:32 AM UTC

bumbledraven wrote: post #22

nazgulnarsil wrote: post #21

Bitcoin is a pyramid scheme in that everyone is counting on someone else to want them. However this is no different from any currency or monetary commodity with no use value. With bitcoin, the "bag holders" at the end of the scheme have something for their trouble: a global, secure, low fee transaction settlement system. Given that such a network would be quite valuable, there's no reason for it to crash to 0, barrin…

[bitcoin] is no different from any currency or monetary commodity with no use value No, bitcoin is different insofar as there is no powerful entity that taxes people and requires payment in bitcoin. This makes it even less valuable than currencies that DO have that feature.

that creates a certain expectation that demand will remain strong sure, but it's still the same thing. People still do divest themselves of national currencies in real life. People trying to divest themselves of currencies they aren't supposed to is another use case of bitcoin.