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

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

#191

Post by pjc50 » Wed, Jan 14, 2015, 10:49 AM UTC

jasonisalive wrote: post #146

simonh wrote: post #106

Earlier quoted context omitted.

>...all your deposits and interests disappear with it The US, EU and many other countries have deopsit insurance* schemes that limit risk to depositors. You may not get all your money back if you have large deposits, but for example in the EU you're generaly guaranteed to get at least the first 50,000 Euros. * http://en.wikipedia.org/wiki/Deposit_insurance

This isn't better. It encourages savers to be reckless in their choice of bank, and thus banks to be reckless in their lending policies, because the profits of risky loans are privatised while the losses are socialised. The ultimate loser is everybody, because the cycle of bank bailouts can only be sustained by printing money, devaluing everyone's savings and damaging the economy by degrading economic signals. You mi…

reckless in their choice of bank

There is no way not to be the potential victim of this, because bank customers do not have enough information to determine whether a bank is sound or not. Worse, soundness is dependent on what everyone else is doing; a bank can be fine one day then destroyed due to a bank run. Risk is hard to deaggregate in the mortgage business because house prices all move together.

You're onto something with "profits of risky loans are privatised while the losses are socialised", but bitcoin really isn't a good solution to that.

any benefit is on average far, far outweighed by the costs

A cost-benefit analysis with no numbers! Convincing!

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

#192

Post by jasonisalive » Wed, Jan 14, 2015, 10:51 AM UTC

If you truly believe in Bitcoin, this is just one more insignificant blip on a path, driven by inexorable network effects, that leads to Bitcoin becoming the sole world currency and savings commodity, leaving the fiat currency milieu of 2014 in the dustbin of monetary evolution. A chance to buy at a relative discount and nothing more.

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

#193

Post by Normati » Wed, Jan 14, 2015, 10:53 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…

The time to make these complaints was years ago, possibly on the way up a big boom just to show that you're confident in yourself despite the apparent evidence to the contrary. Now that it's going down doesn't mean it was caused by people realizing it wastes power, doesn't scale or doesn't pay interest. These are age old criticisms that haven't stopped the price from still being 10 times higher than it was when I first heard about bitcoins.

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

#194

Post by brazzy » Wed, Jan 14, 2015, 10:53 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…

Computational costs of traditional banking goes down in theory (in practice, they seem to easily overcompensate for that with increased complexity), but other costs (payroll, physical infrastructure, security thereof, etc.) do not. Unless you're proposing that the future of money is 100% digital, with minimal physical infrastructure. Admittedly, that is not entirely unrealistic, though I doubt things will go quite that far anytime soon.

Your thought experiment misses an important point: the cost of energy. AFAIK that's already dominating hardware costs for miners.

That means: since the cost of bitcoin mining will tend to scale up (or down) linearly with the total value of bitcoin, so will energy usage (barring changes in energy price). It will not keep going up when the bitcoin value has reached a plateau (for whatever reason).

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

#195

Post by lxcid » Wed, Jan 14, 2015, 10:54 AM UTC

bigbugbag wrote: post #96

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…

You may be mistaken here, the day your bank disappear all your deposits and interests disappear with it. You probably this cannot happen which is what people believe until it happened to them, and this happened all around the world. In Europe a 2013 law is now in effect which basically states no more bank bail-outs, from now on it will be bail-ins. In other words if a bank fails it will use its customer's deposits to…

This comment is why sometimes we techie are kinda delusional.

We despise existing solution thinking that we could and should disrupt everything. Tear down everything and build everything from scratch; Our way or the high way attitude.

Bitcoin definitely have some innovations here and regardless of what happen in the future, it's impact will be felt. It was a great experiment, probably the greatest social experiment of the 21st century. The best is that it's self contained and sandboxed. Allowing it too roam freely in unchartered water.

But the financial industry is not as un-innovative as we hope they are. To innovate means you have to experiments, to experiment mean there will be failures. Over the years we seen financial industry fail and fail again. In fact, the incentive to "innovate" is so high, you constantly see the cat and mouse game between the regulators and the industry players, and the revolving doors of the prison cells never really stop.

While the greed and failure of the financial industry has irked us and certainly bred a level of mistrust. Trust in the financial system is at the highest level in human history. You have to understand that they are no stranger to mistrust and throughout human history it is a recurring problem they have to solve over and over again.

The current floating currency and central banks structure which provides deposit insurance among many other things are the result of many iterations over thousands of years. This system run the global economy, it scale is unimaginable large in human scale. There's a lot to appreciates.

Sure there's room for improvements. Many people treats Bitcoin like it must replace the financial system but the problems it facing now is exactly what the financial system had solved. What I'm pretty sure is that Bitcoin's will definitely had an impact on the next iteration of the ever evolving financial system.

The Bitcoin community I have seen fails to recognized the important of trust in finance. Not just trust between computers, but trust between humans. Like the 90's and 00's software industry fails to recognize the important of simplicity and good user experience. The next Steve Jobs of the cryptocurrency is in my believe one who understand these ideas to heart.

There's a lot to celebrate about Bitcoin and what we had done, as I always like take a contrary position. Bitcoin is not a replacement of the existing financial system, it is, or will be if it haven't, part of the system. Thus, the rise and fall of its price is part and parcel. It's kinda exciting to see this great experiment in the running, although I'll dread experiencing it first hand.

As Bruce Lee once said, "In great attempts it is glorious even to fail." I wouldn't consider this a failure but it's definitely glorious.

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

#196

Post by Daviey » Wed, Jan 14, 2015, 10:55 AM UTC

zamalek wrote: post #159

TheDong wrote: post #139

Earlier quoted context omitted.

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…

> Yes, bitcoin mining would be worse. Provably worse. ... and exponentially worse as time goes on (by design).

Computation complexity and power consumption do not necessary correlate with emerging technology. If anything, power consumption could decrease.

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

#197

Post by synchronise » Wed, Jan 14, 2015, 11:01 AM UTC

spiritplumber wrote: post #138

TheDong wrote: post #110

Earlier quoted context omitted.

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…

I'd like something like Foldcoin where your proof-of-work is actually doing something beside keeping my home warm inefficiently.

I personally like the idea of Gridcoin more, because BOINC lets you use your processing power for other things than just folding proteins (although with Rosetta you can still do that) like searching for aliens or looking for gravitational anomalies.

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

#198

Post by jasonisalive » Wed, Jan 14, 2015, 11:01 AM UTC

pjc50 wrote: post #191

jasonisalive wrote: post #146

Earlier quoted context omitted.

This isn't better. It encourages savers to be reckless in their choice of bank, and thus banks to be reckless in their lending policies, because the profits of risky loans are privatised while the losses are socialised. The ultimate loser is everybody, because the cycle of bank bailouts can only be sustained by printing money, devaluing everyone's savings and damaging the economy by degrading economic signals. You mi…

reckless in their choice of bank There is no way not to be the potential victim of this, because bank customers do not have enough information to determine whether a bank is sound or not. Worse, soundness is dependent on what everyone else is doing; a bank can be fine one day then destroyed due to a bank run. Risk is hard to deaggregate in the mortgage business because house prices all move together. You're onto some…

bank customers do not have enough information to determine whether a bank is sound or not.

Bullshit. Customer reviews, third party audits, history and reputation, secondary signals (quality of website, customer support, advertising, quality of investors). The list goes on [1] Your only limit is your imagination and your confidence in the intelligence of your species my friend. You've been tricked by the miserable current state of banking (a product of socialist intervention) into thinking that this is the way banks are and must be. You'd see how quickly things will change when a) banks live and die by their reputation b) anyone can build a bank from anywhere to service the world (enabled by Bitcoin.)

bitcoin really isn't a good solution to that.

Why not? Bitcoin supersedes political violence. No government can order more of it to be created at gunpoint. Therefore there is no way to enact "backdoor" taxes (inflation) to support inherently-broken schemes such as socialised deposit insurance. The only way is frontdoor taxation, which people are far better at measuring and disliking. The success of Bitcoin would cut off the last life support tube for dysfunctional government

[1] Yes, I know you'll have point by point reasons why each one of those techniques is somehow uniquely impossible to work with the 100% success rate uniquely required by this and all other regulated industries (health, inter-city transport et al), which for some reason work just fine in the industries which escape regulation (online commerce for instance) which for some reason are much more forgiving.

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

#199

Post by Normati » Wed, Jan 14, 2015, 11:07 AM UTC

ballpoint wrote: post #127

ploxiln wrote: post #84

Earlier quoted context omitted.

Except wire transfers take one or more days and are a huge pain in the ass to initiate online. In the US at least. If you go to a third world country, it's even less convenient to pay for stuff. For example, you can't get a hotel room last-minute with a credit card in Vietnam, where I checked, because they need to verify your ownership/control of your credit card with a pair of small debits, probably because of the f…

As far as I can tell, most UK wire transfers are essentially immediate (at most a couple of minutes), even between different banks.

That won't be wire transfers, that'll be some kind of local interbank transfer. A wire transfer is still complicated (paper forms), slow and expensive to send to other countries.

You also have to give your name and address to the recipient bank to somehow prove you're not laundering money or funding terrorism.

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

#200

Post by sanswork » Wed, Jan 14, 2015, 11:10 AM UTC

EricBlair wrote: post #190

sanswork wrote: post #5

Not really surprising. 2014 was meant to be the year of bitcoin and it flopped as far as the general public was concerned. Bitcoin picked up some more merchants but they almost universally saw disappointing sales or dramatic drop offs(Overstock the poster child which at one point was claiming serious expectations of $15-20m in bitcoin sales ended up with a 5th of the lower end of their claim). Mining companies are cl…

"2014 was meant to be the year of bitcoin and it flopped as far as the general public was concerned." "as far as the general public was concerned" :) Yeah, they were too busy watching the big bottom Kim and losing their home. "(Overstock the poster child which at one point was claiming serious expectations of $15-20m in bitcoin sales ended up with a 5th of the lower end of their claim)." Did you see how poorly Amazon…

>"as far as the general public was concerned" :) Yeah, they were too busy watching the big bottom Kim and losing their home.

They are the ones that matter when you're trying to promote a new currency. And yes they don't care.

>Did you see how poorly Amazon did? They're a much larger and better store. No coins on Amazon.

I don't understand what you're trying to say here?

>What would those, 'more profitable ventures' be? You of course don't say because those miners aren't good for anything else.

For Vault of Satoshi it was apparently streaming video.

>If you're pretty sure, you would say why, but you don't. Apparently cirucular logic is big on the HH. That and or Tourette's.

I've said why. You are throwing out a lot of personal insults here to cover up the fact that in all your posts you've added zero content. You've attacked things that people have said without providing counter points and insulted them to mask your lack of content.