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

nytimes.com

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

#271

Post by tomkarlo »

craigc wrote: post #245
tomkarlo wrote: post #236

Earlier quoted context omitted.

The problem isn't that it's unpopular, it doesn't seem (from the post) like you have some kind of underlying economic or financial principle supporting your argument. * why would it have an inverse relationship with other assets? It's not a short. It's still valued based on purchase price vs sale price, adjusted for risk. If risk has risen and nothing has changed about purchase or sale price, why would it rise? * if…

Well can we at least agree that no one knows with absolute certainty what will happen to Bitcoin and other crypto currencies during the next recession? The reason I believe it will be inversely related is because it is still a relatively new market whose market cap is minuscule compared to other established markets. During a recession people will naturally look for other places to put their money and gold will be the…

Obviously, nobody can predict the future, but the whole point of talking about what's likely to happen is to make reasoned guesses based on the best available data and economic models.

The nature of a hedge, in particular, is that you do it before a market downturn, not after. Once the market has dropped, you want to unwind that hedge, which in the case of gold or Bitcoin means selling. If you look at gold's performance during recessions since we unlinked it from the dollar, it's as likely to decline as rise. That makes it a poor hedge against recession.

In terms of supply and demand, it's true that supply is constrained, but that's only half the equation. Demand is extremely volatile, as there's no inherent "consumption" of crypto currencies (aside from lost wallets and other breakage), not is there any production occuring that requires btc to continue. The demand is entirely composed of people buying it with the expectation of a future sale at a higher price... that's speculative demand, and it's not a stable or dependable type of demand.

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

#272

Post by __s »

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?

Small transactions should be happening on the lightning network. It's live now, allows for transactions which are optimistically both fast & cheap

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

#273

Post by robocat »

kaoD wrote: post #227
RIMR wrote: post #160

Earlier quoted context omitted.

Seriously, the way people talk about it you would think that a third of the world's energy supply was getting pumped into NVidia cards. The global average energy consumption is 110,000TWh. Every cryptocurrency in circulation collectively uses about 55TWh, or 0.05% of the world's energy usage.

And yet it isn't providing value to 0.05% of the world's population. Even if it did, the energy would go up (exponenially?) I'm not sure the tradeoff is worth it.

Mostly what we think others should spent their money on is irrelevant.

For example the global pet care market has sales of approx $100 billion. Many people think that is a waste.

H Other examples more than 0.05% simple to find!

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

#274

Post by CryptoPunk »

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?

>>If I attempted to buy an ice cream cone with Bitcoin, will the money be transferred before the ice cream melts?

The transfer is instant. To get a guarantee of settlement takes 6 confirmation, or about one hour, which is much quicker than the 6 weeks it takes for a credit card transaction to become irreversible. Unless you're purchasing something like a house, you don't need the payment to settle to complete the purchase, with either cryptocurrency or credit card payments.

Ethereum's confirmations take 15 seconds, to Bitcoin's 10 minutes, and you need about 12 to have a virtual guarantee of irreversibility.

Only the large-cap cryptocurrencies can provide a high assurance of irreversible payments:

https://news.ycombinator.com/item?id=17173051

>>What costs more, the transaction fees or the ice cream cone?

In (small-block) Bitcoin, at any reasonable level of adoption, the transaction fee, which is why small transactions could only be economical using an off-chain protocol like the Lightning Network, which has been in development for several years and is still largely unproven as a full substitute for regular Bitcoin transactions.

Bitcoin (Cash) guarantees low fees into the future as a result of a high maximum block size. With Bitcoin Cash, there is a higher risk of settled transactions being reversed with a 51% attack, given it has only 10% of the hashrate of (small-block) Bitcoin.

Ethereum's transaction fees are currently much lower than the cost of an ice cream, but that wouldn't persist with higher levels of adoption. That could change once it implements sharding, with promises to increase maximum transaction throughput 100X, or has the sub-chain plasma protocol deployed, which potentially enables virtually infinite scaling.

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

#275

Post by tomkarlo »

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's an infinite supply, but there's non-zero cost associated with accessing incremental units in that supply. (And some would say diamonds are an artificially constrained market anyway.) With crypto, there's arguably an unlimited supply at zero cost.

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

#276

Post by gomox »

vidarh wrote: post #158
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 just made a transfer to someone just yesterday that had never dealt with Bitcoin before. Beyond explaining why "confirmations" were needed, it was surprisingly simple to get a total beginner set up with an account somewhere suitable, and even though I was transferring from an exchange account where I had to get verified (the account predated new KYC requirements), it tooks ~10 minutes to complete the verification p…

I recently helped a techy friend with this and there were a number of pitfalls when dealing with the addresses and the long confirmation timed. The UTXOs abstraction is super unintuitive. Ethereum's account system is much simpler.

Still eithet are a piece of cake and lightning fast compared to normal banks.

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

#277

Post by Semirhage »

CryptoPunk wrote: post #274
scj wrote: post #194

Earlier quoted context omitted.

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?

>>If I attempted to buy an ice cream cone with Bitcoin, will the money be transferred before the ice cream melts? The transfer is instant. To get a guarantee of settlement takes 6 confirmation, or about one hour, which is much quicker than the 6 weeks it takes for a credit card transaction to become irreversible. Unless you're purchasing something like a house, you don't need the payment to settle to complete the pur…

The long irreversible period of a credit charge is not a technical limitation, it’s a feature.

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

#279

Post by gtlondon »

the_mitsuhiko wrote: post #230
gtlondon wrote: post #228

Earlier quoted context omitted.

The original article is a joke. Large buy orders will obviously increase the price, and to describe this as manipulation is completely misleading. There's also zero evidence that Tethers are a scam. I'm pretty sure it would have been discovered by now, and also unlikely that Circle would pay $400m for an Exchange whose main currency is USDT if that was the case. Both NYT and Bloomberg seem to love an inaccurate Crypt…

There is also zero evidence that it’s not a scam.

This conversation is 6 months old though.

Quite suspicious the New York Times have come to this incredible revelation now, yet didn’t mention it in Nov 2017 when it was actually a hot topic.

I must admit I find most crypto journalism hard to agree with. Hopefully that will change.

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

#280

Post by anm89 »

lazyasciiart wrote: post #268
mr_spothawk wrote: post #172

Earlier quoted context omitted.

I know people who use Bitcoin as a currency.

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

I know someone who uses their nobel prize as a kind of currency.

I'm more impressed by the guy who managed to figure out how to transact in bitcoin.

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