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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

#381

Post by Timpy »

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…

> "Of these two explanation the second is possibly more impressive."

This is really frustrating to read, this is a false dichotomy, there are plenty of other plausible explanations. It's not limited to "EITHER Cryptocurrency's value is fake magic OR it satisfies a real economic need."

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

#383

Post by anthony_barker »

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…

I am not a bitcoin maximalist. But Bitcoin is a new kind of money that no one can take from you. Better than gold, cash or anything that came before in certain circumstances.

That said other tokens have similar characteristics..

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

#384

Post by zrobotics »

arisAlexis wrote: post #300
GuB-42 wrote: post #92

Earlier quoted context omitted.

If anything, Bitcoin is closer to the even older Tulip-mania than to a Ponzi scheme. A Ponzi scheme is a specific kind of fraud based on the promise of an unreasonably high return on investment which is actually payed by late adopters. Bitcoin doesn't make promises and it doesn't have a cover story to hide the source of the money. It may be a bubble, but it is not a Ponzi scheme.

could you explain how tulips had a technological innovation? i can't understand how people can even bring it up as a legit comparison

One of the innovations that drove the tulip prices was new strains/the newness of tulips in general.

>>A university study in 1593 led to the discovery that tulips could withstand the harsh northern-European climate... With their intensely colorful petals, tulips were unlike any other flower popular in Europe at that time [0]

Additionally, another innovation that drove the bubble was the widespread introduction of futures trading, allowing year round trading, as well as traders to speculate without needing to take delivery of the crop.

[0]http://www.thebubblebubble.com/tulip-mania/

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

#385

Post by solotronics »

headsoup wrote: post #330
nostrademons wrote: post #323

Earlier quoted context omitted.

24h trading volume for BTC/USD (excluding BTC/USDT and all non-USD fiat currencies) is over $500M [1], and has been at that rate or higher since last December. That's over $90B in real money that has exchanged hands for Bitcoin. It's not quite the same as the Madoff Ponzi scheme, because in that, all the money went into Madoff's firm, and relatively little came out as redemptions. In a trading market, every dollar th…

That would assume that it is 'different' money changing hands would it not? I.e. that %500M and $90B is unique dollars being transacted and not just promises being passed back and forth.

No exchanges are collapsing so its about as real as you can get. You might ask 'What if everyone withdraws to fiat at once?' I think if you posit that of any stock market the answer would be the same. Cryptos are a pretty pure free market, if it didnt have real utility or value for people the markets would collapse.

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

#386

Post by solotronics »

ceejayoz wrote: post #355
RachelF wrote: post #250

Earlier quoted context omitted.

Indeed, a cynic would say Bitfinex were just copying the Fed's QE. Creating tether out of nothing to buy bitcoin is similar to the Fed creating dollars by QE to prop up asset prices.

> Creating tether out of nothing to buy bitcoin is similar to the Fed creating dollars by QE to prop up asset prices. Sure... if the Fed claimed some secret mega-investor was bankrolling it all, and that of course there are audits but uh they're not finished yet and we fired the auditor but this random guy says he saw our bank account balance so it's all OK...

Actually thats pretty much exactly how the Fed works.

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

#387

Post by solotronics »

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?

I am not sure why nobody else mentioned this but there is a second layer called Lightning currently running very well ontop of Bitcoin. It enables basically instant transactions with fees at thousandths of a cent and people are using it Right Now to pay for VPNs and other goods online.

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

#388

Post by solotronics »

davnicwil wrote: post #148
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.

Nobody uses Linux as an operating system because it's logistically harder for 99.9% of people. It's still incredibly important and foundational, and will continue to be, even supposing this never changes, even if that same 99.9% of people never know what it is. Nobody used the Internet in its early days because it was logistically hard for 99.9% of people. However it made completely new things possible and over time,…

Actually everone uses it and you don`t even realize. Cellphones are all linux/bsd derivitives. All financial transactions will eventually be on a cyptocurrency but maybe nobody will realize it.

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

#389

Post by tomkarlo »

vokep wrote: post #313
cecilpl2 wrote: post #260

Earlier quoted context omitted.

Bigger diamonds are more desirable than larger diamonds, not because of the price, but because they look better and are sparklier and harder to lose and all sorts of other real-world metrics. If I want $1000 of bitcoin, I don't care whether that value is in 1 BTC, 100BTC, or 0.0001BTC. They are otherwise identical to me. Therefore, the fact that the total of all bitcoins in circulation can't exceed 23 million is irre…

but is the same not true of trading USD for EUR? If I want $1000 of EUR, I don't care whether that is 1 EUR, 100, or .01. The value is in the ecosystem. Bitcoin is still at the beginning of the beginning of any sort of ecosystem. Everyone expects way more from it than is possible. It is/will deliver on the things it is designed to. You're correct that I don't care about the value of 1 BTC (or 1 EUR) unless I can sell…

Yes, but people argue that the finite supply of Bitcoin is a fundamental advantage vs. currencies. The supply of a currency isn't really infinite, but it's quite flexible when you consider that giving credit effectively "creates" more currency and expands the monetary supply. (I'm not clear why BTC won't eventually have this issue as well if folks start lending / borrowing it.) All the BTC really avoid is increases in the monetary supply via the printing of additional currency, which is arguably a feature of traditional money, in that the central government can intentionally tighten or ease the monetary supply to help manage economic volatility.

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

#390

Post by tomkarlo »

stcredzero wrote: post #320
mr_spothawk wrote: post #171

Earlier quoted context omitted.

while the supply of digital coins is infinite (you could fork btc, or any other chain, or create different coins that could then be forked) the supply of Bitcoins is finite & knowable. this is a component of the argument by "maximalists" who suggest that alternate coins/tokens are bullshit by design, and anybody who thinks they aren't is necessarily in favor of inflationary money. > Objects in the real world have uti…

while the supply of digital coins is infinite (you could fork btc, or any other chain, or create different coins that could then be forked) This is bull. It's not zero cost to fork a cryptocurrency. It's not zero cost to mine. The supply of a digital good might well be very large. However, it will most certainly be finite.

You don't need to fork it, or mine it. You just use a smaller amount.

My point was that other traditional "store of values" have inherent value based on their utility per amount, which means that the finite supply has implications for people who want to use it. Bitcoin doesn't have that - it's purely useful in terms of what you can trade it for (much like a dollar.) Hence the fact that there's only so many "units" is kind of uninteresting, because a fractional unit is no less useful.

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