The Bitcoin bubble – Greater fool theory • Hacker News Board

Re: The Bitcoin bubble – Greater fool theory

#31

Post by throw2016 » Thu, Nov 09, 2017, 2:44 PM UTC

brndnmtthws wrote: post #11

Frankly I'm astounded by the vitriol toward Bitcoin on HN. Bitcoin has the potential to actually change the world (unlike most of the BS startups coming out of SV), and yet all these voices on HN poo-pooing Bitcoin appear (to me at least) to outweigh those who are willing to give it a shot. Why is this? Do people fear what they don't understand? Are they mad because they feel like they missed out? Does Bitcoin's succ…

Bitcoin is a massive waste of electricity for no good reason other than indulge early adopters fantasy for unearned wealth.

All the fantasies and benefits it was originally promoted for have fallen by the wayside and only greed remains. It's an inefficient protocol and is now simply a store of speculated value and can't perform any other function by design.

The bitcoin ecosystem is eager to sell out to the very financial establishment they were ranting about throughout its history. News of any bank even thinking about crypto sees thousands of excitable news articles and soaring prices.

Re: The Bitcoin bubble – Greater fool theory

#32

Post by dhosek » Thu, Nov 09, 2017, 2:45 PM UTC

HorizonXP wrote: post #21

The article makes a valid point. Everyone can not possibly sell all of their Bitcoin, and if they tried, it would be defined as a crash. I would be lying if I said I wasn’t worried about this. But I think it’s wrong to think of Bitcoin as a commodity, or that it needs some killer application. I really think Bitcoin is best thought of as a currency. Fiat currencies work because as a whole, we agree on its value. Usual…

The problem with bitcoin as a currency is that it's inherently a deflationary currency which provides a disincentive to use it as a currency at all. If your BTC will buy more tomorrow than today, why spend now? Thus it turns into a speculative vehicle and not a currency and prone to a big crash.

Re: The Bitcoin bubble – Greater fool theory

#33

Post by ska » Thu, Nov 09, 2017, 2:45 PM UTC

brndnmtthws wrote: post #19

frgtpsswrdlame wrote: post #16

Earlier quoted context omitted.

There's not that much vitriol here? Tons of people here own bitcoin and obviously believe in it and tons of people here are skeptical about it. I don't usually see anyone actually "mad" about bitcoin.

Try making a positive comment about Bitcoin or any cryptocurrency, and watch the downvotes come flying in.

downvotes == vitriol?

Re: The Bitcoin bubble – Greater fool theory

#34

Post by ufo » Thu, Nov 09, 2017, 2:48 PM UTC

SirensOfTitan wrote: post #24

I really love Ethereum and have been invested in it for a while. I think @vbuterin and crew have a clear idea as to how to move past problems, and I find it exciting to watch the Ethereum foundation execute their vision well. Bitcoin, on the other hand, doesn't perform its simple functions well in the short term, and seems to have very little idea on how to scale long term: 1. Transactions are still pretty expensive…

Smart contracts are an inusual programming environment, both in termos of what you are doing (managing state transitions, etc) and computing resources available (CPU and RAM are very expensive).

I suspect that this is better solved by more domain specific languages instead of an existing FP language

Re: The Bitcoin bubble – Greater fool theory

#35

Post by Ajedi32 » Thu, Nov 09, 2017, 2:48 PM UTC

HorizonXP wrote: post #21

The article makes a valid point. Everyone can not possibly sell all of their Bitcoin, and if they tried, it would be defined as a crash. I would be lying if I said I wasn’t worried about this. But I think it’s wrong to think of Bitcoin as a commodity, or that it needs some killer application. I really think Bitcoin is best thought of as a currency. Fiat currencies work because as a whole, we agree on its value. Usual…

> But eventually, Bitcoin will reach a value high enough that more and more people will start accepting it alongside fiat

I think you've got the causality there a bit backwards. The exchange price of bitcoin is mostly irrelevant to a business deciding whether to accept it as a currency or not. What businesses care about is stability, transaction fees, customer convenience, and the difficulty of implementing and maintaining the payment system. They couldn't care less what the _current_ exchange rate is.

Whereas on the other hand I suspect Bitcoin speculators care very much about mainstream acceptance of Bitcoin, and therefore wider adoption by businesses is indeed likely to drive the price up.

Re: The Bitcoin bubble – Greater fool theory

#36

Post by scurvy » Thu, Nov 09, 2017, 2:48 PM UTC

brndnmtthws wrote: post #11

Frankly I'm astounded by the vitriol toward Bitcoin on HN. Bitcoin has the potential to actually change the world (unlike most of the BS startups coming out of SV), and yet all these voices on HN poo-pooing Bitcoin appear (to me at least) to outweigh those who are willing to give it a shot. Why is this? Do people fear what they don't understand? Are they mad because they feel like they missed out? Does Bitcoin's succ…

It comes down to politics really. While Silicon Valley has a large Libertarian contingent, European tech crowds are dominated by statists.

The statists are fundamentally opposed to bitcoin on many levels, so the vitriol runs hot and heavy there.

The Libertarians love bitcoin like their forebears liked gold and distrusted the government.

What is money today but the ultimate manifestation of politics in everyday life?

Re: The Bitcoin bubble – Greater fool theory

#37

Post by gedrap » Thu, Nov 09, 2017, 2:49 PM UTC

nxsynonym wrote: post #15

simias wrote: post #9

The article is perfectly right when it describe what drives the current Bitcoin craze and its insane valuation but the conclusion is frankly a bit lazy: >When the crash comes, and it cannot be too far away, it will be dramatic. People have been saying that Bitcoin was going to crash for years now. And it has, multiple times, but always recovered so far. Seems like there's no shortage of "fools" willing to pump the cu…

Yeah I'm pretty disappointing in the quality of this article, especially considering its coming from the Economist. The summary is a coin flip in essence. It did, however, get me to think about this question: Is there a point where enough "fools" get involved that Bitcoin becomes "too big to fail"?

> Yeah I'm pretty disappointing in the quality of this article, especially considering its coming from the Economist.

The Economist is not really written having crypto enthusiasts or HN crowd in mind. The article is a decent summary of the current state of affairs to someone who's just curious about what the hell is bitcoin.

Re: The Bitcoin bubble – Greater fool theory

#38

Post by wickawic » Thu, Nov 09, 2017, 2:49 PM UTC

andrewmutz wrote: post #14

Both can be true: - that bitcoin is an important tech that will eventually gain widespread adoption - current high price of bitcoin is due to speculation and is a "bubble"

question at this point though: If a crypto currency were to gain widespread adoption, why would it be Bitcoin?

Re: The Bitcoin bubble – Greater fool theory

#39

Post by andyhmltn » Thu, Nov 09, 2017, 2:49 PM UTC

_rrnv wrote: post #7

ptero wrote: post #3

Is there a non-paywall version?

I didn't get a paywall - maybe try a clean browser? Unless the last sentence is not "When the crash comes, and it cannot be too far away, it will be dramatic." But up to that point the article is weak, and these last words are lame. Bitcoin price increase is embedded into it, since it has limited supply by design. It will crash and burn when most of its participants quit it - which for now is unlikely. The fact that…

>Bitcoin price increase is embedded into it, since it has limited supply by design

Well no. A limited supply of something doesn't guarantee value. There has to be a need and a want for it in the first place. I could issue one of my socks a day for 20 days claiming a limited supply, but that doesn't mean they are going to be worth anything by the end of it.

Re: The Bitcoin bubble – Greater fool theory

#40

Post by scott_s » Thu, Nov 09, 2017, 2:50 PM UTC

brndnmtthws wrote: post #19

frgtpsswrdlame wrote: post #16

Earlier quoted context omitted.

There's not that much vitriol here? Tons of people here own bitcoin and obviously believe in it and tons of people here are skeptical about it. I don't usually see anyone actually "mad" about bitcoin.

Try making a positive comment about Bitcoin or any cryptocurrency, and watch the downvotes come flying in.

HN is a large community, with many people who have opposing views of many issues. I think you're experiencing a common phenomenon in large communities: you feel the people who disagree with you much more than those that agree with you. This is, I think, a form of confirmation bias.