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Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

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Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#11

Post by terminado »

SirLJ wrote: post #4
kevando wrote: post #2

Does anyone think that when the crypto bubble bursts, that will cause a stock market level crash?

A+... this is like a geek storm in a glass of water... the average investor will not be harmed at all...

I try to think of crypto-currencies, and their collectors as a class not unlike POG collectibles and POG collectors. The age bracket associated with each probably experiences significant overlap too, so the idea seems fitting.

Taken to extremes, if any given POG collector suddenly went bankrupt, due to a crash in values in the POG collector's price guide, how many people are associated with a particular POG collector? Would they notice, when that POG collector's business failed, because of an inability to meet obligations, now that all POG collections are worthless?

If banks and businesses accept The POG as legal tender, how many transactions disappear with the POG craze, leaving them unpaid, or stuck holding worthless assets?

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#12

Post by tveita »

krabpaaltje wrote: post #10
olavgg wrote: post #5

Earlier quoted context omitted.

Not really, but the crypto currency community looks like a pyramid scheme. First users gets most of the coins.

First users also have the risk of their investment becoming worthless.

All the users risk their 'investment' becoming worthless, that is not a risk exclusive to first users.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#13

Post by cbanek »

kevando wrote: post #2

Does anyone think that when the crypto bubble bursts, that will cause a stock market level crash?

It's entirely possible it might be the catalyst for a large unwinding. Let me just set up a hypothetical scenario:

Bitcoin prices begin to unwind (trigger: emotion? unknown unknown?). Chinese holders of bitcoin, who have been using them to get out of the yuan and avoiding capital regulations, start selling, accelerating the problem. Chinese WMPs (wealth management products) that may hold bitcoin start to default or go under, accelerating the deflation of the current Chinese debt and borrowing bubble. Global market contagion risk from China causes markets to rethink what is going on? The US has been calling for a correction for months, and the VIX is stubbornly low. Central banks have interest rates very low but are trying to tighten, and if they tighten into weakness it might cause a recession.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#14

Post by product50 »

olavgg wrote: post #5
kevando wrote: post #2

Does anyone think that when the crypto bubble bursts, that will cause a stock market level crash?

Not really, but the crypto currency community looks like a pyramid scheme. First users gets most of the coins.

Do you have any idea what is going on here or are you ignoring away in bliss? This is as much a pyramid scheme as VC industry is in that early investors make disproportionate gains (and losses). Finding the right tokens to invest in is the challenge.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#15

Post by khazhoux »

product50 wrote: post #14
olavgg wrote: post #5

Earlier quoted context omitted.

Not really, but the crypto currency community looks like a pyramid scheme. First users gets most of the coins.

Do you have any idea what is going on here or are you ignoring away in bliss? This is as much a pyramid scheme as VC industry is in that early investors make disproportionate gains (and losses). Finding the right tokens to invest in is the challenge.

Only disproportionate gains, not losses. When a startup goes bust, every investor can only lose what they put in. No one loses multiples on their investment.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#16

Post by product50 »

khazhoux wrote: post #15
product50 wrote: post #14

Earlier quoted context omitted.

Do you have any idea what is going on here or are you ignoring away in bliss? This is as much a pyramid scheme as VC industry is in that early investors make disproportionate gains (and losses). Finding the right tokens to invest in is the challenge.

Only disproportionate gains, not losses. When a startup goes bust, every investor can only lose what they put in. No one loses multiples on their investment.

It is generally a portfolio investment approach in which you would invest in multiple coins in the hopes one of them gains 100x and you lose your money in the rest. If you think it is so easy and there are only gains to be had, why don't you go ahead and make a few investments and come back with results?

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#17

Post by Ologn »

The difference is the dot-com stocks had some theoretical value - even Pets.com, people buy pet supplies online after all.

Unlike commodities, equities and so forth, cryptocoins have no value whatsoever. So to try to make it sound like it has worth, its pushers have to cast about for anything they can and finally come upon the only thing they can - the dollar. In fact, they say, it's even better than the dollar.

It would take too long to explain here why the Bitcoin is not like the only thing they have left to compare it to, the dollar. Also, an explanation won't sway anyone who has already had a drink of the kool-aid any how.

May I recommend another message board for all those high on cryptocoins here - 4chan ( http://boards.4chan.org/biz/catalog ). 4chan /biz/ is filled with uneducated, poor kids all looking to get wealthy with little work on the cryptocoin get rich quick schemes.

I think it's a much better message board for all of you of this bent. Here on HN there are still some people who believe in studying math and science and engineering and CS at universities, and then going and doing a lot of hard work and creating wealth. 4chan is mostly filled with your types - the get-rich-quick scam artists. Go read 4chan /biz/ right now - it's filled with no work, no study, get rich quick types like yourself. Leave and go there. HN will be stuck with those "out of it" old fogies who actually believe in study, hard work, that commodities need value to have worth in the long-term, and old-fashioned, out of touch ideas like that.

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#18

Post by oculusthrift »

tveita wrote: post #12
krabpaaltje wrote: post #10

Earlier quoted context omitted.

First users also have the risk of their investment becoming worthless.

All the users risk their 'investment' becoming worthless, that is not a risk exclusive to first users.

yeah but it obviously takes less risk to invest in Apple in 2015 than 1978

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#19

Post by lobster2 »

Ologn wrote: post #17

The difference is the dot-com stocks had some theoretical value - even Pets.com, people buy pet supplies online after all. Unlike commodities, equities and so forth, cryptocoins have no value whatsoever. So to try to make it sound like it has worth, its pushers have to cast about for anything they can and finally come upon the only thing they can - the dollar. In fact, they say, it's even better than the dollar. It w…

/biz/ has been great for me, I bought some MOONCOINS at 1 satoshi and I will sell next week at 5 sat at least once the current sell walls have been broken. There also is a very active community behind MOONCOIN.

Why are you so dismissive of this new technology? Can you expand on your idea?

Re: Lessons I Learned from the Dotcom Bubble for the Coming Cryptocurrency Bubble

#20

Post by Ologn »

lobster2 wrote: post #19
Ologn wrote: post #17

The difference is the dot-com stocks had some theoretical value - even Pets.com, people buy pet supplies online after all. Unlike commodities, equities and so forth, cryptocoins have no value whatsoever. So to try to make it sound like it has worth, its pushers have to cast about for anything they can and finally come upon the only thing they can - the dollar. In fact, they say, it's even better than the dollar. It w…

/biz/ has been great for me, I bought some MOONCOINS at 1 satoshi and I will sell next week at 5 sat at least once the current sell walls have been broken. There also is a very active community behind MOONCOIN. Why are you so dismissive of this new technology? Can you expand on your idea?

> Why are you so dismissive of this new technology?

I'm skeptical of the idea that Bitcoins have value in the way commodities and other things which can be traded and exchanged have value.

People might find some use for blockchain technology, but the speculation around the value of Bitcoins is ridiculous. It's a bubble like any other bubble. The notion that a Bitcoin can remain at a $2000 value is absurd.

The current top comment says "Internet companies during the dotcom bubble had market value of several trillion dollars. The total market cap of crypto-currency is still only ~$70 billion. I agree with the principle, but this boom is still pretty modest." Well there you go. I have an old worn sock with a hole in it that I am throwing away. It is worth $500. It is worth $500 because I am willing to pay $500 for it. I am capable of creating a bubble of that size. Even a $70 billion bubble can be created apparently. Once it reaches a certain point it will pop. Your point about Mooncoins points to it - as a Bitcoin is worthless, clones like Mooncoins can be created as speculative bubbles. Eventually it will no longer be a micro-economic oddity like my $500 sock, but will bump up against the market as a whole and collapse like every other speculative bubble.

It's not blockchain technology, which may or may not have worth at some point. It's the speculative bubble on cryptocoin choice.

As I said, Pets.com and Webvan made sense on some level. Just not the valuations they had at the time. And Bitcoins valuation is even sillier than theirs, since Webvan was not a bad idea, it just had a few problems including being ahead of its time.

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