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Thoughts on Bitcoin

blog.samaltman.com

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Re: Thoughts on Bitcoin

#161

Post by thaumasiotes »

gwern wrote: post #102
TreyS wrote: post #90

Earlier quoted context omitted.

Citation?

Read the Wikipedia article on Tulipomania, or _Famous First Bubbles_. OP should too, actually, since his comment that > The price of tulip bulbs has yet to recover from its 1637 peak. betrays several fundamental misunderstandings of the tulip market at the time. Of course the top tulip bulbs depreciated. That is like saying 'a patent has never recovered its peak value' or 'Windows 3.1 never recovered its March 1992 p…

That wikipedia article seems to fully support the idea that tulips did "go that high"; it also notes that a legal change transformed tulip futures contracts into tulip option contracts, which enabled the price of tulips to rise substantially without costing speculators extra. It shows a catalog page of the time offering one tulip bulb for over ten times the contemporary annual earnings of a "skilled craftsman". If I assume that a "skilled craftsman" in the US earns $20 / hour (less than I made as a summer intern at amazon before graduating college), that puts the price of the bulb at at least $400,000. For the price listed in that catalog, you could also have bought 25,000 pounds of cheese.

It also notes that while flowers in general averaged 40% annual price depreciation at the time, tulips averaged a more impressive 99.999% annual depreciation.

Re: Thoughts on Bitcoin

#162

Post by [deleted] »

wpietri wrote: post #84
ljd wrote: post #49

Earlier quoted context omitted.

I actually think the decentralized nature of bitcoin is what gives it all it's value. The fact that no bank can control it, inherently holds value. Currency manipulation is a really big problem right now, and knowing that you can buy a currency that won't be artificially controlled by it's issuer is an asset in itself. Having the currency centrally controlled again isn't special and it doesn't deviate enough from a c…

That argument doesn't make much sense to me. If first-world currencies were being drastically manipulated in ways that cost currency-holders lots of wealth, then I'd expect to see currencies decline relative to things that are directly valuable, like commodities. But that's clearly not the case: http://www.economist.com/news/economic-and-financial-indicat... The price of gold is down, too: http://www.bullionvault.com…

[deleted]

Re: Thoughts on Bitcoin

#163

Post by rrich »

matthiasb wrote: post #27

Have you check Bitcoin sales on Craiglist? http://austin.craigslist.org/search/?sort=rel&areaID=15&subA...

Funny thing about that are the people selling the shovels. I had no idea BFL was selling firmware upgrades to increase hash rates on existing ASIC miners. Simply brilliant.

Re: Thoughts on Bitcoin

#164

Post by iiAAIiajj98 »

XorNot wrote: post #158
behold- wrote: post #150

Earlier quoted context omitted.

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'…

If any of those places were unhappy they would stop buying US treasuries. But they keep buying them. There isn't a "can't be happy" feeling to a market - just what people actually do. At the scales and volumes involved, it is literally impossible for any of those countries to divest themselves of treasuries suddenly (for one thing, bonds don't work that way). Moreover, governments only invest in real things. The prod…

If an individual or group were to purchase the computing power to "take over" the currency Bitcoin would lose all of its value.

Re: Thoughts on Bitcoin

#165

Post by crystaln »

sjtgraham wrote: post #15
modeless wrote: post #3

If a receiver of bitcoins sells them for dollars right away, that isn't necessarily money laundering or tax avoidance. I don't know if you've tried to transfer money overseas lately, but banks tend to make it difficult and expensive. An international wire transfer is not a trivial thing to set up; in many cases it still involves faxes . If bitcoin succeeds only as a payment network, where users convert from and to do…

International transfers are not intrinsically difficult or expensive, the real cost is in pennies. The reason why cross border payments are priced like they are is due to the lack of incentive, either economic or regulatory. BTC is a massive economic incentive for banks to charge more in line with the their true costs. Even if BTC fails as a currency itself, its greatest success might be catalysing innovation on pric…

Have you ever had to deal with a large number of international transactions?

They are - in fact - difficult and expensive.

Re: Thoughts on Bitcoin

#166

Post by brisance »

>Tax is a big deal, of course, but even nations can't always compete with the popular sentiment tidal forces enabled by the internet.

How has the Internet outrage about NSA spying affected the US government?

Re: Thoughts on Bitcoin

#167

Post by XorNot »

iiAAIiajj98 wrote: post #164
XorNot wrote: post #158

Earlier quoted context omitted.

If any of those places were unhappy they would stop buying US treasuries. But they keep buying them. There isn't a "can't be happy" feeling to a market - just what people actually do. At the scales and volumes involved, it is literally impossible for any of those countries to divest themselves of treasuries suddenly (for one thing, bonds don't work that way). Moreover, governments only invest in real things. The prod…

If an individual or group were to purchase the computing power to "take over" the currency Bitcoin would lose all of its value.

Which perhaps should highlight why nationstates aren't going to buy it?

Because the money levels being talked about are large enough that you could trivially destroy it. Which means your entire foreign exchange rate is subject to whether someone wants to screw with the blockchain.

Which means at any junction, some third actor can hold the entire currency hostage - unless the governments invest in huge amounts of hashing hardware to protect it. Which is (1) a colossal waste of money and energy and (2) would, in turn, give them the capability to do the exact same thing.

Bitcoin will never be a currency held or traded by governments.

Re: Thoughts on Bitcoin

#168

Post by foxhedgehog »

notdrunkatall wrote: post #13

I've been watching bitcoin since $30, bought at $80, and sold last night. I think that Stefan Molyneux (or however you spell it) is right on when he says that bitcoin is "a revolutionary protocol for information synchronization." However, it is by no means unique, and as we've seen, anyone can start their own bitcoin-type cryptocurrency. Apparently, the Canadian government is working on their own, and I don't think i…

"the Canadian government is working on their own"

is there a citation for this?

Re: Thoughts on Bitcoin

#169

Post by ahmadss »

fat0wl wrote: post #34
sjtgraham wrote: post #8

I think this is spot on. All sorts of people I rarely speak with have been coming out of the woodwork to ask about Bitcoin. These people are invariably regular folks that have heard about this thing that has been appreciating at an unbelievable clip. This is extremely alarming for me.

Same. I've tried to warn them about this whole mess (even if the value is appreciating I think it's at best a risky investment and at worst partaking in an immoral scheme). This article reiterates 2 of my favorites points -- 1. the lack of real-world transactions, coupled with 2. the fact that these transactions are usually done via 3rd party processor or immediate conversion back to USD. If vendors had faith in it a…

Re: #2 - Vendors need to pay rent, suppliers, and employees - all of whom presumably don't accept BTC. So that's probably why you see Coinbase, BitPay, and others that default to converting BTC to fiat the moment of transaction.
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