Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

nytimes.com

Post reply on HN
Print view View original

261–270 of 400 posts

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#261

Post by kitrose »

dragonwriter wrote: post #258
kgwgk wrote: post #28

Today Matt Levine talks about this paper in his daily column: https://www.bloomberg.com/view/articles/2018-06-13/judge-rul... "of these two explanations— 1) Bitcoin’s rapid and sustained rise is due to the fact that it satisfies a real economic need in an elegant way, and people have responded to that; or 2) Bitcoin’s rapid and sustained rise is due to a magical fountain of fake dollars that everyone just decided to…

Levine (assuming he is not being deliberately dishonest) clearly has no knowledge of history of currency because the thing he calls more impressive is a fairly routine failure mode (even when not a deliberate outcome of a planned scam) of privately-issued currencies, especially but not exclusively those pegged to national currencies, and a not infrequent failure mode of national currencies themselves which both the m…

His column is sort of a tongue-in-cheek take on the day's financial stories. He's actually very knowledgeable and has the ability to explain some really esoteric financial market shenanigans in a way even a layman can understand.

There's always a theme of wonderment at the crazy and illegal things people do written from the perspective of an old Wall Street guy.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#262

Post by rib3ye »

scj wrote: post #194
ComradeTaco wrote: post #124

Earlier quoted context omitted.

Bitcoin could go the way of any number of other cyptos; back to zero. In any case, nobody uses Bitcoin as a currency because it's logistically harder for 99.9% of people, and nobody uses it as a store of value because its insanely volitale. Bitcoin is really just a speculative asset.

I haven't used Bitcoin, and from what I've read I have two questions about it being a currency: If I attempted to buy an ice cream cone with Bitcoin, will the money be transferred before the ice cream melts? What costs more, the transaction fees or the ice cream cone?

At this moment, the recipient of the payment will receive notification of an unconfirmed transaction in about 10 seconds, and the fee will be about $0.63.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#263

Post by spinlock »

Bucephalus355 wrote: post #134
john_moscow wrote: post #122

Earlier quoted context omitted.

I'd say there's a simpler explanation. Bitcoin has a limited predictable supply, so its price is mostly a function of the demand. And demand correlates with expectations, that typically follow the hype cycle [0]. I'm not sure how much someone managed to single-handedly manipulate the price, but the plain old human psychology, FOMO and the positive feedback loop for media writing about bitcoin demand definitely played…

Whenever some kind of good has a truly limited supply, that can fuel the most massive of bubbles by making the “bubble” look rational at first. The bubble hides itself under the guise of being about “supply and demand”. The one thing that leaps to mind is the Japanese real estate speculation in the 1980’s. Everyone claimed, very logically, that Japan is a mountainous island with very limited space, so real estate wou…

Why are you comparing regional prices to national income?

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#264

Post by gl00pp »

thousandautumns wrote: post #225
pshin45 wrote: post #163

Earlier quoted context omitted.

Bitcoin's absolute power consumption isn't at a critical level yet — Bitcoin consumes as much power globally as a single large power plant, and roughly 10% of the world's data centers. However, I agree that its rapid and consistent growth rate is concerning and can't be ignored. It's an area I'm really interested in and have been reading a lot about, because most of the news and "analysis" of the issue on both sides…

> Bitcoin consumes as much power globally as a single large power plant, and roughly 10% of the world's data centers Well first of all, according to your own blog post, it is not as much power as a single large power plant, but as much power as the single largest power plant in the entire US. And thats just an estimate. It potentially uses twice that amount. And 10% of the power of all the worlds data centers is abso…

As mining is an economic investment, they want cheap electricity. Cheap electricity is where there is excess that is not being used and would be otherwise wasted. That's why there aren't many large mining operations in NYC but there are in upstate NY near hydro.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#265

Post by lazyasciiart »

achompas wrote: post #238
joe_the_user wrote: post #210

Earlier quoted context omitted.

Creating billions of dollars’ worth of value with a ridiculous perpetual-motion fake-dollar-printing machine is a real innovation. Creating money by printing is not a new thing. Making people believe that the money you've created with whatever hocus-pocus is real and that investment X will just spew money indefinitely is not at all a new thing. It is one very standard old thing. That by itself doesn't prove bitcoin i…

> Making people believe that the money you've created with whatever hocus-pocus is real and that investment X will just spew money indefinitely is not at all a new thing. Across so many people, and at BTC's market cap though? I think that's unprecedented. Penny stocks or pyramid schemes, sure, but they never affect this many people or hit 12-digit valuations. (By the way, fiat money doesn't count as an example becaus…

Almost everything that happens today is unprecedented in 'affecting this many people'. It's probably more informative to ask whether it is affecting a larger percentage of people exposed to it than previous examples- and I don't know the answer to that, but I suspect it isn't.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#266

Post by nootropicat »

ufo wrote: post #177
DINKDINK wrote: post #174

Earlier quoted context omitted.

>magical fountain of fake dollars The problem though is that if ether really were a "magical fountain of fake dollars" that would be reflected somewhere in the market price of tethers. Look at the price charts for tether->USD it's pretty nominally 1:1 https://cryptowat.ch/markets/kraken/usdt/usd The most contrarian one could argue is that people who sold bitcoin for fraudulent tethers haven't tried to withdrawal them…

One problem with the market price for tethers is that it is actually very hard to sell them for USD. For example, Bitfinex does not allow USD withdrawals, only Bitcoin withdrawals.

>For example, Bitfinex does not allow USD withdrawals

Not true, bitfinex reenabled usd withdrawals in November.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#267

Post by rblion »

Called it. I tried to tell this petroleum engineer from Texas last December that this whole thing, as awesome as blockchain is, is very suspect and that the market will crash unless the energy solved is solved simultaneously. The concept is brilliant but human beings are involved, so greed will be a factor too.

There you have it.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#268

Post by lazyasciiart »

mr_spothawk wrote: post #172
ComradeTaco wrote: post #124

Earlier quoted context omitted.

Bitcoin could go the way of any number of other cyptos; back to zero. In any case, nobody uses Bitcoin as a currency because it's logistically harder for 99.9% of people, and nobody uses it as a store of value because its insanely volitale. Bitcoin is really just a speculative asset.

I know people who use Bitcoin as a currency.

I know people who use 'hours of babysitting' as a currency too.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#269

Post by sincerely »

the_gastropod wrote: post #142
grosjona wrote: post #120

Earlier quoted context omitted.

The Fed can inflate away the value of those transactions anytime they want and not only do you have zero control over this process, it is not even possible to predict it. The complexity of the financial instruments used by the Fed is intentional and serves to obscure the fact that they are essentially giving free money to large banks and corporations. Corporations are not getting bigger because they're more efficient…

> The Fed can inflate away the value of those transactions anytime they want and not only do you have zero control over this process, it is not even possible to predict it. Be real. Between USD and BTC, one has lost 70% of its value over the past ~7 months.

You're not wrong but you're also choosing a specific time frame that makes your point sound stronger than it might necessarily be. I could do something similar:

>BTC is worth the same as it was in November 2017

>Between USD and BTC, one has increased ~150% in value over the last year

>Between USD and BTC, only one is worth ten times as much now as it was worth two years ago

At the end of the day I am pretty sure I agree with the point you're trying to make (USD is a lot more stable/predictable/reliable than BTC even taking into consideration inflation) but you shouldn't use arguments that someone who disagrees with you could easily attack.

Re: Bitcoin’s Price Was Artificially Inflated Last Year, Researchers Say

#270

Post by miles »

josu wrote: post #193
tomkarlo wrote: post #159

Earlier quoted context omitted.

Is the supply really "limited"? Sure, there's finite number of "coins" that can be generated. But unlike physical objects, there's not really any special property of that unit. Also, you can just generate a new currency of more units and similar utility (as has happened many times recently.) Objects in the real world have utility that's directly linked to their unit value. That's not necessarily true for Bitcoin... i…

I'd say that an analogy with diamonds works: There is an infinite supply of lab-made-diamonds, however they are not fungible with real diamonds. Them being substitute goods, lab-made-diamonds may have negatively impacted the price, but real diamonds are still considered scarce.

> There is an infinite supply of lab-made-diamonds, however they are not fungible with real diamonds.

Ada Diamonds sells lab-grown diamonds and jewelers can't tell https://news.ycombinator.com/item?id=17228369

De Beers admits defeat over man-made diamonds https://news.ycombinator.com/item?id=17183603

Post reply on HN