Bitcoin crashes over 25% in 24 hours, under $180 • Hacker News Board

Re: Bitcoin crashes over 25% in 24 hours, under $180

#171

Post by EricBlair » Wed, Jan 14, 2015, 10:29 AM UTC

yen223 wrote: post #114

olalonde wrote: post #77

Earlier quoted context omitted.

> Banks can already transfer fund between themselves electronically and efficiently. And a bank account is exactly storing paper currency digitally. Sure, but it doesn't matter what benefits Bitcoin offers to banks (although I do think you are overlooking a few). If banks ever were to support BTC denominated accounts, it would be because of consumer demand, not because Bitcoin is more efficient for them to store/tran…

The predictable monetary supply of Bitcoin is precisely why it is doomed to fail. Specifically, Bitcoin's deflationary nature. In the best case scenario, Bitcoin will continue to experience unstable boom-bust cycles as prices will rise when people start hoarding their coins, then crash again when people dump their Bitcoin en masse once prices hit a high enough peak. This is great for speculators, terrible for everyon…

"The predictable monetary supply of Bitcoin is precisely why it is doomed to fail"

Sorry but you're backwards there chief.

"Specifically, Bitcoin's deflationary nature."

Of course you don't elaborate. That's ok because another guy will say inflationary then another guy will point out how all fiat is always in a state of either or.

"In the best case scenario, Bitcoin will continue to experience unstable boom-bust cycles "

No, that's the US dollar. As it's economy experiences a crash every six years on average. Little overdue at the moment.

"prices will rise when people start hoarding their coins"

That's always been what's going on.

"then crash again when people dump their Bitcoin en masse once prices hit a high enough peak."

Oh so there's a collective price point where everyone sells is there? That would be a first for any object in the history of the world. You realize that right?

"This is great for speculators, terrible for everyone else."

Yes that is what we saw in 2014 with the introduction of futures markets and are continuing to see. Watch the Chinese exchange. All gamblers with it at the moment making money on the downside.

"In the worst case scenario, Bitcoin prices drop to $0" yes captain obvious, that would be, but people won't give up using it because of it's utility.

"Bitcoin never really solved the chicken-and-egg problem. Not enough merchants accept Bitcoin for customers to bother with yet another currency, and not enough customers use bitcoins for merchants to deal with yet another currency."

Brawker, Purse etc for those that don't. But THOUSANDS now do. Newegg, tigerdirect, anything you need or want can now be had with btc. Bitpay makes it super easy for stores to accept coins.

Lots of talking out your butt. You have no data on how many people use it and for a merchant to accept it, like say Paypal, it's nothing but a good thing because of almost nonexistent transactions costs and elimination of chargebacks.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#172

Post by jasonisalive » Wed, Jan 14, 2015, 10:30 AM UTC

justincormack wrote: post #142

derefr wrote: post #87

Earlier quoted context omitted.

I think you're attacking somewhat of a weak-man: the people saying Bitcoin as it is valued right now is any sort of store of value (and there are, indeed, such people) are obviously slightly insane. But in a long-term sense—an imagined future where all the speculative value has gone out of Bitcoin and it is now just "worth what it is worth"—it would make a fairly good store of value, in exactly the same way gold woul…

It is worth nothing in that case. Why bitcoin not dogecoin or anything else? There is no special intrinsic value in bitcoin over the others, so there is still an infinite amount that can be made.

Bitcoin because it was first. Bitcoin because it has the community, the attention, the history - in other words, the network effect. Bitcoin because it's not a clone. Bitcoin because other people choose Bitcoin. Etc. etc. Bitcoin because it has the initial gravitational advantage, and mass begets mass in the formation of stars.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#173

Post by jokoon » Wed, Jan 14, 2015, 10:31 AM UTC

pjc50 wrote: post #152

jokoon wrote: post #79

Does it really matter ? Wouldnt it smarter to use bitcoin as a secure way to make payments, but not to keep as a currency ? For example, if you want to buy something using bitcoins, you just buy the exact amount of bitcoins you need, you make the transaction, and the people who gets the bitcoins just convert it back to dollar. To escape the fluctuation of the conversion rate, just open a bank that keeps amount in dol…

You incur two sets of transaction fees and bid/offer spreads, so it's quite a pricey way of doing a transaction. And you lose any prospect of getting your money back in the event of a dispute.

At least there's more competition possible between people who sell BTC. right now there's only paypal.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#174

Post by passfree » Wed, Jan 14, 2015, 10:32 AM UTC

EricBlair wrote: post #150

tribaal wrote: post #10

Yeah, as much as I like the concept of bitcoin (and the blockchain), I don't see adoption becoming anything more than anecdotal. No interest rate, and you have to secure it yourself? No thanks. My "big bad bank" guarantees me at least a small interest in saving money, and if my card is stolen, I get a new one in 24 hours and all transactions are cancelled. I'm happy to pay some transaction fees ("extortion!") to get…

I don't think you see many things. Like just how widely Bitcoin has already become. Just yesterday I read about 10,000 Spanish atms being converted to bitcoin. "No interest rate" Why would there be? There's no risk. There isn't a government of Bitcoinlandia with a debt and deficit(s) it needs to finance. Whatever currency you're holding now isn't paying you a real rate of interest. Your stupidity is clearly of the Am…

Oh simply invest into more tangible things, like companies, land and properties, etc. Unless communism becomes modern again it is safe to say that your assets should be secured.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#175

Post by pjc50 » Wed, Jan 14, 2015, 10:32 AM UTC

jasonisalive wrote: post #160

pjc50 wrote: post #143

Earlier quoted context omitted.

People are still upset about 1933, I see. It's an interesting case as both a huge widespread human rights violation (leaning very heavily on the concept of "public interest") while being part of a set of measures which greatly improved the productive (rather than hoarding) side of the economy.

So robbing people is actually striking a blow for economy prosperity? Right, I'm sure all those greedy Jews were wrecking things by coveting their shiny ducats... they should learn to share right? Anyway. Turning "hoarding" into a dirty word is one of the last signs an economy is about to tear itself to pieces, just before the baseball bats come out and shop windows start getting smashed. Stay classy though!

I did take pains to point out that it's a human rights violation, but that didn't stop you going straight for the Godwin, did it?

Re: Bitcoin crashes over 25% in 24 hours, under $180

#176

Post by [deleted] » Wed, Jan 14, 2015, 10:33 AM UTC

brazzy wrote: post #170

throwawayaway wrote: post #133

Earlier quoted context omitted.

https://blockchain.info/charts/hash-rate the hash rate doesn't grow on trees. why the hell would you doubt it would be worse? it does 7 transactions per second. http://www.forbes.com/sites/timworstall/2013/12/03/fascinati... here's on estimate: Bitcoin Mining Uses $15 Million's Worth Of Electricity Every Day

Mining effort is pretty much independant of the number of transactions.

[deleted]

Re: Bitcoin crashes over 25% in 24 hours, under $180

#177

Post by tribaal » Wed, Jan 14, 2015, 10:33 AM UTC

throwawaybit wrote: post #169

tribaal wrote: post #10

Yeah, as much as I like the concept of bitcoin (and the blockchain), I don't see adoption becoming anything more than anecdotal. No interest rate, and you have to secure it yourself? No thanks. My "big bad bank" guarantees me at least a small interest in saving money, and if my card is stolen, I get a new one in 24 hours and all transactions are cancelled. I'm happy to pay some transaction fees ("extortion!") to get…

There's one use of bitcoins, it's a great currency to avoid paying taxes which compensates for the loss of small interests (not saying I'm doing this, but I'm quite sure that some of the users use it for exactly this reason)

Well, that is a compelling argument I guess...

Bonus points for being honest about it (a rarity) :)

Re: Bitcoin crashes over 25% in 24 hours, under $180

#178

Post by olalonde » Wed, Jan 14, 2015, 10:36 AM UTC

TheDong wrote: post #110

tribaal wrote: post #10

Yeah, as much as I like the concept of bitcoin (and the blockchain), I don't see adoption becoming anything more than anecdotal. No interest rate, and you have to secure it yourself? No thanks. My "big bad bank" guarantees me at least a small interest in saving money, and if my card is stolen, I get a new one in 24 hours and all transactions are cancelled. I'm happy to pay some transaction fees ("extortion!") to get…

It's worse than that. To me, the biggest flaw of bitcoin is that you have to constantly spend energy on it (as in computation power / burn coal) for it to remain viable. As soon as enough people get tired of throwing away money at their miners someone can pull a 51% attack, so everyone must put more energy into their miners to protect their investment... forever. Over time the amount of energy wasted by bitcoin could…

Proof of Stake is a proposed solution to that criticism https://en.bitcoin.it/wiki/Proof_of_Stake (although not free of criticism itself).

Re: Bitcoin crashes over 25% in 24 hours, under $180

#179

Post by EricBlair » Wed, Jan 14, 2015, 10:37 AM UTC

redthrowaway wrote: post #72

honeybooboo123 wrote: post #47

Earlier quoted context omitted.

I don't own any bitcoins, but felt like pointing a couple of things out. Whatever shreds of interest your bank gives you will be way, way less than the inflation you're experiencing. In other words, your money's purchasing power keeps decreasing even if you're getting some interest on it, ie. you're losing your wealth. Bitcoin doesn't experience inflation like that, so it should be a better store of value than your f…

There are no grounds to say that BTC should be a superior store of value. Aside from its very public history of being an absolutely abysmal store of value, it also has no central bank tending its value, as fiat currencies do, and no substantial trade denominated in it, which is what gives fiat currencies value in forex markets. It is solely a speculative vehicle. It sucks at commerce and it sucks at investment. Bitco…

"There are no grounds to say that BTC should be a superior store of value."

No grounds... what hole did you emerge from? How about! The over 1800 currencies that have completely disappeared over the past several hundred years? hahahah. Or like, MATH.

"it also has no central bank tending its value"

Oh sweet Jesus... are you running fever? I don't think a central bank does what you think it does xD. and you probably work for one.

"which is what gives fiat currencies value in forex markets."

.... Just WOW.

"It sucks at commerce and it sucks at investment."

Instant, no fees, yep it sucks, you're right... Who said anything about investment? Oh you did, so should be look at the S&P500 today? History of the USD?

So if a guy bought at $10, his investment is just terrible huh? No, you're thinking of the ones you buy at $1000 right? Sure, you can cherry pick like that. Got Enron stock then? Or tens of thousands of others?

"I've yet to see a compelling case for BTC"

I wouldn't wager any sort of coin, psychical or virtual that you've looked very hard. But that's ok because you can experience the joys of hyperinflation in the coming years.

Re: Bitcoin crashes over 25% in 24 hours, under $180

#180

Post by krrrh » Wed, Jan 14, 2015, 10:38 AM UTC

TheDong wrote: post #139

brazzy wrote: post #118

Earlier quoted context omitted.

Do you have any idea how much energy, work and time is being spent on the infrastructure of regular currencies? Minting, ATMs, secure transport, brank branches, all kind of mainframe dinosaurs running 40 year old COBOL code? Even if scaled up to global usage, I very much doubt Bitcoin mining would be worse.

Yes, bitcoin mining would be worse. Provably worse. As computers get better, traditional applications, like databases, perform better and you can either serve more customers, use cheaper (and often more efficient hardware), or do nothing and use your outdated hardware. With bitcoin, your enemy is not the performance of the raw work you are doing (you can hash better), but the fact that everyone else also has these in…

This is an excellent analysis, but I would end it with the statement: "Bitcoin will constantly and provably use more energy until it doesn't." The mining infrastructure has been supported by seniorage, or the printing and distribution of new bitcoins to miners at a very high double-digit inflationary rate. Bitcoin adherents talk about the currency as if it has already entered the "paradise" state of zero money growth. It hasn't, and as it approaches that state and miners stop earning enough to pay for their electricity, the hashrate will either fall precipitously or transaction fees will have to be dramatically increased.