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Thoughts on Bitcoin

blog.samaltman.com

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Re: Thoughts on Bitcoin

#141

Post by foobarqux »

tpeng wrote: post #115
foobarqux wrote: post #110

Earlier quoted context omitted.

I don't understand what you are calculating but it's circular in any case: You can't use the current price of bitcoin to derive a value.

Price-implied expectations http://www.amazon.com/Expectations-Investing-Reading-Prices-...

I understand what you are saying now but I'm not convinced by the argument: It does not seem plausible that transaction volume will be affected by value of the medium of exchange. Can you show your reasoning applies to other conventional currencies? Specifically that the transaction volume changes in direct proportion to some numeraire, say USD?

(That book is about DCF and bitcoin and other currencies don't give off cash flows).

Re: Thoughts on Bitcoin

#142

Post by gregr401 »

wmf wrote: post #89
sanderjd wrote: post #58

Earlier quoted context omitted.

Different strokes for different folks. I think its decentralized nature is its least valuable aspect. If the only thing it accomplished were smoother and cheaper internet, small business, and interpersonal commerce, it would be incredibly valuable. The novelty of it (which I think has a lot to do with its decentralization) is currently causing too much volatility to make it useful for actually buying and selling thin…

Decentralization is very expensive because it requires mining, so if you don't think that's important you should probably back a more efficient system like Ripple or Open-Transactions.

Expensive for whom, how exactly do you quantify that? Today we pay fee's to institutions which have massive infrastructure costs (along with their necessary profits). If anything, decentralization offers an incentive for the technically inclined to reap some potential rewards which is far more feasible than today's systems.

Re: Thoughts on Bitcoin

#144

Post by pbhjpbhj »

allochthon wrote: post #133
pbhjpbhj wrote: post #128

Earlier quoted context omitted.

I just looked at transaction costs on 2 exchanges and they were both at 0.2% for Kraken and BTC-E resp.

I might have been a little quick to jump to a conclusion, there. ;) But is there anything currently stopping someone from opening up an exchange whose only fees are an initial membership fee?

Greed?

Or possibly just that an initial-membership-fee model risks not covering costs long term and so looks like a potentially unstable proposition?

Re: Thoughts on Bitcoin

#145

Post by pbhjpbhj »

allochthon wrote: post #133
pbhjpbhj wrote: post #128

Earlier quoted context omitted.

I just looked at transaction costs on 2 exchanges and they were both at 0.2% for Kraken and BTC-E resp.

I might have been a little quick to jump to a conclusion, there. ;) But is there anything currently stopping someone from opening up an exchange whose only fees are an initial membership fee?

Greed?

Or possibly just that an initial-membership-fee model risks not covering costs long term and so looks like a potentially unstable proposition?

Re: Thoughts on Bitcoin

#146

Post by jmilloy »

CamperBob2 wrote: post #67

A currency without the major use case being legitimate transactions is going to fail. Couldn't he have said the same thing about a protocol like BitTorrent?

He means legitimate as in "I gave you bitcoins for a concrete purpose" rather than "recognized as legal by a government." People are using BitTorrent for an actual purpose, so it's different.

Re: Thoughts on Bitcoin

#147

Post by [deleted] »

pbhjpbhj wrote: post #124
sillysaurus2 wrote: post #48

Earlier quoted context omitted.

It is indeed all my savings. But I was saving it anyway, so I won't be out in a doghouse if it vanishes. I guess I'm dumb, but at this stage in my life I'd rather have 9.89BTC than $11k. My theory is, everyone's expecting it to crash. So therefore it's more likely to do the opposite. Not much of a theory, but it seems to have been historically true.

> My theory is, everyone's expecting it to crash. // That's how a crash happens isn't it? It's not driven by any wider economic reality beyond the conviction of "investors". If the investors can be convinced that it's crashing then it crashes. That certainly appears to be how manipulative exploitation of short positions occurs.

[deleted]

Re: Thoughts on Bitcoin

#148

Post by vworldv »

behold- wrote: post #75
CamperBob2 wrote: post #63

Earlier quoted context omitted.

While it wasn't the biggest money mistake of my life, it's certainly a whopper in retrospect. Don't be like me ;) I have a problem classifying random things like this as a mistake. You didn't have enough information at the time to predict that BTC would exceed $1000, and you don't have enough information now to predict what it will do, either. It's just a game of musical chairs. The only "mistake" is to play. Some mi…

IMHO it would be a huge mistake not to invest a few days worth of income in bitcoins . Most likely you'll loose them, but there's a reasonable chance you'll get 100x back in a few years. I invested $2500 in the summer of 2012 and just last week cached a small part to buy a Citroen C5 saloon.

100x back in a few years? So the market cap will be >1T, and Satoshi will be the richest man (?) on earth? Don't think so. Maybe 10x, and the chance of this is probably not great enough to balance against a crash.

Good call divesting some of your BTC in favor of physical assets.

Re: Thoughts on Bitcoin

#149

Post by vijayboyapati »

Sam sees the flaw in his own argument - when he mentions gold and the possibility of its use a store of value. But he doesn't understand the full significance of his own comment. Moldbug has by far the most compelling (imo) theory on the origin of money and why bitcoin (and gold) float far above their use value. These two posts cover it very well:

http://unqualified-reservations.blogspot.com/2011/04/on-mone...

http://unqualified-reservations.blogspot.com/2013/04/bitcoin...

I highly recommend them to anyone trying to understand the economics of bitcoin

Re: Thoughts on Bitcoin

#150

Post by behold- »

vworldv wrote: post #148
behold- wrote: post #75

Earlier quoted context omitted.

IMHO it would be a huge mistake not to invest a few days worth of income in bitcoins . Most likely you'll loose them, but there's a reasonable chance you'll get 100x back in a few years. I invested $2500 in the summer of 2012 and just last week cached a small part to buy a Citroen C5 saloon.

100x back in a few years? So the market cap will be >1T, and Satoshi will be the richest man (?) on earth? Don't think so. Maybe 10x, and the chance of this is probably not great enough to balance against a crash. Good call divesting some of your BTC in favor of physical assets.

IMHO China, Saudi Arabia, Japan, Abu-Dhabi, etc. can't be happy with US printing trillions of USD every year. They need a stable currency to keep their enourmous savings in, but the Fed monetary policy is eroding those savings. Bitcoins would be a perfect alternative. If governments start buying them, the total value can easily go > 1T.

Plus are you implying that hackers, like Bill Gates, Larry Page and Satoshi, can't possibly be (or deserve to be) ultra-rich?

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