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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

#21

Post by jpatokal »

terminado wrote: post #11
SirLJ wrote: post #4

Earlier quoted context omitted.

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…

"POG"?

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

#23

Post by jonnathanson »

Respectfully, I think a lot of comments on this topic are missing the point of the author's advice. Whether there is or is not a bubble, and if there is, how big that bubble might get, are irrelevant here. That's not what this article is about.

First, the author assumes there is a bubble brewing. That's not his thesis; that's his background assumption. His thesis is that, assuming there is a bubble, you should do X, Y, and Z, and not do A, B, and C.

So yeah, after reading this, we could argue once again about whether there's a bubble or not. But the more interesting argument is about whether his advice is sound. Not whether his assumption is sound.

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

#24

Post by jpatokal »

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…

Bitcoins are saving this Venezuelan guy's family from starving. I'm pretty sure that qualifies as value: https://www.reddit.com/r/Bitcoin/comments/6d2w1b/bitcoin_is_...

This is not to say that there isn't an absurd amount of hype and froth right now, but if nothing else cryptocurrencies will continue to serve a purpose for anybody who needs to send money outside capital controls.

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

#25

Post by terminado »

jpatokal wrote: post #21
terminado wrote: post #11

Earlier quoted context omitted.

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…

"POG"?

https://en.wikipedia.org/wiki/Pogs namesake of https://en.wikipedia.org/wiki/POG_(drink)

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

#26

Post by Haydos585x2 »

jpatokal wrote: post #21
terminado wrote: post #11

Earlier quoted context omitted.

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…

"POG"?

Milhouse: I'm really sorry... I kind of traded your soul to the guy at the comic book store. But look! I got some cool pogs:

[shows them]

Milhouse: Alf pogs! Remember Alf? He's back... in pog form!

https://www.reddit.com/r/OutOfTheLoop/comments/3dyh6j/what_i...

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

#27

Post by jcranmer »

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.

> No one loses multiples on their investment.

Leverage is a multiplier in both directions. People do borrow money to invest in bubbles which is what can make the eventual pop so economically devastating.

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

#28

Post by prostoalex »

throwaway9980 wrote: post #6
kevando wrote: post #2

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

I have had multiple affluent friends who are absolutely non-tech non-geek ask me what are the hot coins. They're shoveling tens of thousands of dollars into Bitcoin, Ethereum, and Ripple based entirely on the fact that there's a run up happening. They have no understanding of what it is and the intention is sell to the greater fool after another 10x move. Maybe it isn't a bubble, but it sure does walk like a duck and…

Tens of thousands of dollars can be shovelled into low-probability high-risk outcomes nightly at a single Vegas table, of which there are many, at a single casino, of which there are many. The state lottery jackpot can swell by tens of millions of dollars in a single day when the potential payout reaches nine digits.

This is just high-stakes gambling, it's not a systemic bubble until pension funds, university endowments or state sovereign funds get significant exposure.

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

#29

Post by prostoalex »

cbanek wrote: post #13
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 g…

How many Chinese buyers of BTC are buy-and-hold investors into BTC itself versus just using cryptocurrency as a transfer mechanism for real estate, commodities or fiat currency investments?

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

#30

Post by dageshi »

Ologn wrote: post #20
lobster2 wrote: post #19

Earlier quoted context omitted.

/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…

I have no personal position in bitcoins or any other cryptocurrency but it seems to me bitcoin is the first internet native "money like thing". Based on how powerful and distruptive the internet has been to various industries in the past few decades I'm not sure I would bet against an internet native version of "money".
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