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Our Thoughts on Bitcoin

bridgewater.com

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Re: Our Thoughts on Bitcoin

#51

Post by vmception »

ra88it wrote: post #15

I'm surprised that the energy usage axis does not come up in this summary of his thoughts. Isn't that likely to be a factor in bitcoin's growth and long-term survival?

no?

if there was some successful state-sponsored or populist uprising against bitcoin’s energy then the energy use will decrease and bitcoin will continue functioning as normal

it just incentivizes more efficient hardware or lower yield for miners

the network can decrease in difficulty or have steady difficulty forever

the value that the network can support is still several orders of magnitude higher, and there are at a lot of gigawatts of energy to tap into before it reaches said maximum

Re: Our Thoughts on Bitcoin

#52

Post by swagonomixxx »

jeremyjh wrote: post #33
hackinthebochs wrote: post #7

Earlier quoted context omitted.

The analogy doesn't really work because cryptocurrencies aren't interchangeable the way phones are. A better analogy would be if each phone could only talk to people using the same phone brand. If everyone is on iphone and you need an iphone to talk to anyone you care about, the iphone becomes more valuable because of its scarcity. The network effects of bitcoin and the lack of interchangeability between different cr…

This would be true if Bitcoin transaction fees put it in reach of every-day transactions, but they don't and likely never will. Bitcoin is for HODLing, not for transacting.

Bitcoin can be used for transacting if you're not looking for instantly verified transactions.

In ye olden days, when Bitcoin was a few cents worth, transaction costs were tiny. I really doubt Satoshi et al predicted Bitcoin to be so unstable, so as to make transaction costs pretty much out of reach for 99% of normal everyday transactions.

Re: Our Thoughts on Bitcoin

#53

Post by fxtentacle »

solean wrote: post #47
fxtentacle wrote: post #37

Here's my personal Bitcoin prediction for 2021: 1. Some hedge fund will find a way to short Bitcoins. 2. Someone will inject a lot of illegal sh*t into the Blockchain. People already post images, e.g. https://cryptograffiti.info/ 3. Authorities have to intervene, the price goes down, the hedge fund gets rich. 4. Lots of whining from people who didn't understand how Bitcoin works. Shoulder shrugs from those "in the kn…

It's been trivial to short bitcoin for years

In that case, I wonder why nobody has profited off it yet. I mean the volatility seems very helpful here.

Re: Our Thoughts on Bitcoin

#54

Post by throwsaways212a »

fxtentacle wrote: post #37

Here's my personal Bitcoin prediction for 2021: 1. Some hedge fund will find a way to short Bitcoins. 2. Someone will inject a lot of illegal sh*t into the Blockchain. People already post images, e.g. https://cryptograffiti.info/ 3. Authorities have to intervene, the price goes down, the hedge fund gets rich. 4. Lots of whining from people who didn't understand how Bitcoin works. Shoulder shrugs from those "in the kn…

1. Lots of places to do this already exist

2. This has already occurred

3. This could happen still

4. Something about a tide going out and swimming naked

Re: Our Thoughts on Bitcoin

#55

Post by sebastien_b »

nostrademons wrote: post #43
sebastien_b wrote: post #27

Earlier quoted context omitted.

I stopped reading after that sentence, as I figured any such characterization immediately showed bias - your comment pretty much confirms my suspicions.

They do this for the selection bias effect: they want to weed out anyone whose emotional reaction to the content will prevent them from engaging with the data and the reasoning in it. The company culture is based around radical transparency (within the firm, at least): say anything you want, criticize anyone, don't get mad about the criticism but instead engage with the information content contained in it. It's basic…

> * They do this for the selection bias effect: they want to weed out anyone whose emotional reaction to the content will prevent them from engaging with the data and the reasoning in it.*

To me that sounds like the perfect way to create an echo chamber.

Re: Our Thoughts on Bitcoin

#56

Post by swagonomixxx »

tshaddox wrote: post #4
PragmaticPulp wrote: post #2

The section about the fallacy of limited cryptocurrency supply is one of the key insights missing from many Bitcoin discussions: > For those reasons the “limited supply” argument isn’t as true as it might appear—e.g., if Blackberries were in limited supply they still wouldn’t be worth much because they were replaced by competitors that were more advanced. I agree that Bitcoin is interesting as an alternative asset, b…

What's the fallacy you're debunking, and who commits it? I'm not aware of anyone arguing that Bitcoin is highly valuable because all things with a limited supply are highly valuable.

The deflationary nature of Bitcoin is a commonly used property to assert that Bitcoin is designed to increase in value over time due to artificially programmed scarcity.

However, I don't think GP's parallel lines up, as another commenter pointed out.

In any case, a single satoshi, which is the smallest denomination of Bitcoin (10^-8 of a Bitcoin), is worth about 0.05 cents as of writing this comment. If Bitcoin didn't have such large transaction costs, slow transactions, and price stability, it's scarcity would be way less of an issue due to this really large level of division of a single coin.

Re: Our Thoughts on Bitcoin

#57

Post by tshaddox »

swagonomixxx wrote: post #56
tshaddox wrote: post #4

Earlier quoted context omitted.

What's the fallacy you're debunking, and who commits it? I'm not aware of anyone arguing that Bitcoin is highly valuable because all things with a limited supply are highly valuable.

The deflationary nature of Bitcoin is a commonly used property to assert that Bitcoin is designed to increase in value over time due to artificially programmed scarcity. However, I don't think GP's parallel lines up, as another commenter pointed out. In any case, a single satoshi, which is the smallest denomination of Bitcoin (10^-8 of a Bitcoin), is worth about 0.05 cents as of writing this comment. If Bitcoin didn'…

That doesn't sound right. $50,000 * 10^-8 is $0.0005, or 0.05 cents.

Re: Our Thoughts on Bitcoin

#58

Post by rawtxapp »

hanniabu wrote: post #45
adflux wrote: post #17

Another company shilling a coin, hoping to convince many more greater fools. Only goal of this article is to convince you to buy, and to transfer a part of your wealth to them.

I love how people will always find a reason to remain cognitively dissonant. At first it was just people doing illicit activity, then it was only a tulip bubble, then it's just that retail investors are playing the greater fool. Not that there's financial professionals advocating for it you say that they just want your business. At what point do you consider you may be wrong? What will you say when banks start holdin…

Usually, when someone makes a wrong prediction, it doesn't have huge consequences. But if you knew about Bitcoin early on and didn't research or understand it and wrote it off, your opportunity costs are pretty significant.

It doesn't matter how many use cases or rationales people give, they are still going to be stuck on the negatives. You'd expect HN to understand that everything has tradeoffs, both pros and cons. Is Bitcoin perfect? No! It needs to improve costs and speed through L2, it needs to find ways to reduce energy consumption and use green energy as much as possible, we need to make sure that the money flowing in things like Tether is legitimate. There's still lots of work to be done and it's still just 12 years into it's existence, so you expect price volatility and lots of hype as people are learning and investing into it.

Re: Our Thoughts on Bitcoin

#60

Post by cloudc0de »

hanniabu wrote: post #45
adflux wrote: post #17

Another company shilling a coin, hoping to convince many more greater fools. Only goal of this article is to convince you to buy, and to transfer a part of your wealth to them.

I love how people will always find a reason to remain cognitively dissonant. At first it was just people doing illicit activity, then it was only a tulip bubble, then it's just that retail investors are playing the greater fool. Not that there's financial professionals advocating for it you say that they just want your business. At what point do you consider you may be wrong? What will you say when banks start holdin…

Bernie Madoff ran a ponzi scheme for 30 years and had the entire financial industry and regulators like the SEC fooled the entire time.
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