691–700 of 830 posts
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Would you rather buy all the shares of Facebook for $1 or all the bitcoin?
Shares of Facebook for sure. Bitcoin's value is in the network effect, you can easily create a bitcoin clone but it's worth nothing if you are the only one hogging all the coins.
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Econ 101: the value of ordinary goods are determined both by supply and demand. Bitcoin-fanatic-USD-bears claim that Bitcoin is a good store of value because it has constrained supply. But they miss the demand side of the equation. Similarly, they claim that the USD is a bad source of value because it has "unlimited" supply. That also misses the demand side. The demand for USD is robust because people need USD to pay…
"The demand for USD is robust because people need USD to pay taxes..." You cite this a priori - but it's so much more complicated than this. Demand is intimately connected with supply in many cases. Soemtimes this can be because demand is latent. If production of food goes through the roof - and people were previously starving because the price of food was too high, then that latent demand will be released when suppl…
Whether wealth disappears or not is purely dependent on what the money is spent on. If there is a food shortage you can actually spend government money on producing more food and thus end up with more wealth than before. In this scenario each new unit of currency is backed by additional production capacity that guarantees that you can exchange the same amount of currency for food. Since the price of food is still the same but there is more food you actually do need to increase the supply of money to match the supply of food, otherwise the price of food would be going down and we would get deflation.
For those who are surprised by this: Bitcoin has shifted in the mind of investors from a currency to an “asset class”. What this means is that to investors it is more like gold than dollars. Gold’s value is not linked with its usage in the industry or jewelry. Holding gold doesn’t yield interest. its value comes mostly from people scared of devaluation. While the interest rates are still low and the economy is not do…
Its like the low hanging fruit of engineering has been picked, or we are waiting for the next big technological breakthrough to come about. I look at even the lifestyle 30-40 years ago, and despite more efficient engines in cars (which isn't a problem with cheaper fuel anyway), the mobile phone and the internet (which isn't all good news IMO) not much has changed lifestyle wise. In some measures such as food prices, house prices, deep social connections, and other more base needs its gotten worse for the average middle class worker in a typical Western country.
IMO it feels like we've hit a stagnation which is reflected in investor preference to hoard value.
Bitcoin has been around for a while now and it has been down talked quite a bit on HN whenever it comes up. It now has a larger market cap as Facebook - so the market sees more value in Bitcoin than Facebook. The sentiment on HN seem still be mostly against it whenever it comes up. I wonder why that is? I'd imagine 10 years from now Bitcoin will still be around and likely much larger than today - I'm less positive ab…
Nothing. It's an ugly system, for soulless players: it's eating up hardware production capacities, energy supply, and the money of the ordinary folks.
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For 12 years, just bubbles? First it was over 1 cent, then over $1, over $1000, now over $50k.... when will you consider the possibility you may have been wrong? At $100k? At $1M? (which most models indicate as a plausible target price in 10 years) Let me give you my favorite quote, pulled from another HNer comment: "I enjoy reading comments about Bitcoin here because even without any venture backing, it achieved a b…
All the Y Combinator companies combined have created value. What has Bitcoin created? I struggle to come up with an answer which isn't overwhelmingly just a way to fund illicit activities, for which sure there's always been a market, but it's a far cry of it's origins. Who actually uses bitcoin for transactions today other than extortionists hackers and drug dealers? Everyone who owns is just planning to HODL and hop…
I used it to buy the phone I'm typing this on:
https://news.ycombinator.com/item?id=25598831
Despite the run-up since, I'm still happy with that transaction!
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"The demand for USD is robust because people need USD to pay taxes..." You cite this a priori - but it's so much more complicated than this. Demand is intimately connected with supply in many cases. Soemtimes this can be because demand is latent. If production of food goes through the roof - and people were previously starving because the price of food was too high, then that latent demand will be released when suppl…
The demand for USD, as with most things, does fluctuate regularly. The value of USD is stable because there is a more-or-less omnipotent central bank that can alter the money supply to match demand and target 2% annual inflation. The way we pay taxes does not matter nearly as much as the Fed. By design, BTC can never have such a central entity that ensures price stability, so its price is practically doomed to swing…
It matters, in the sense that the government could just adopt a foreign countries' currency and thus the value of that foreign currency would benefit from the power of the USA. The USD would lose its value as a result. I can run my own central bank and mint the hacker news dollar and the currency would still be worthless because of a lack of government adoption.
The US government has decided for itself to be dependent on the USD via taxation and thus it will do everything in its power to protect it. It's that simple. So, yes taxation has a huge second order effect that completely dwarfs the first order effect.
Compare that to oil dependent countries that get paid in dollars for their wealth. They tend to protect their USD based economy at the expense of everything else. Their local currency tax base tends to be pathetic in comparison to the oil money and thus they neglect it.
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It might be a good store of value (aside from its extreme volatility), but the GP comment would be correct if you substitute "medium of exchange" for "store of value".
Gold is short term volatile as well. Long term average is all that matters to be an effective value store. Its like a more volatile gold right now through price discovery.
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We used to call them Ponzi schemes. This is the same but in slow motion. People are going to start taking their profits at some point and whoever takes them last will be holding the bag.
Counterpoint: People are going to start getting rid of their dollars at some point, and whoever gets rid of them last will be holding the bag.
When you tell them BTC is slow and expensive they tell you BTC will never replace dollars so it's not a real issue, when you tell them BTC is a ponzi scheme they tell you that it will replace dollars. Even in the pro BTC group nobody agrees what it is, what it should be and what it should become.
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Over the last 100 years, you'd have done significantly better by putting your money into an index fund -- and had less volatility. As far as I can tell, gold is just a lousy place to keep your money. What kind of long term are you talking about?
Did index funds exist 100 years ago? I'm pretty sure passive investing is a more recent phenomenon.
https://en.wikipedia.org/wiki/S%26P_500#History
This is just a technicality however. In practice you have to buy stocks according to the index yourself or invest into a fund that mirrors the index for you. The secret sauce in ETFs is that algorithms do the work of the fund manager and thus reduce costs.
So it sounds like lemming group think. It seems like someone one should hold “just in case,” but no real valid reason to do so yet (that I’ve heard). We know transactions are slow and expensive, so it’s not a good replacement for ordinary commerce. It can be used to transfer across borders, but there often is asymmetry in capital movement that makes this difficult in the places you need it most (poor countries with r…
I know you don't control who upvotes your comment, but I find it funny this is the top rated comment. It has become a total HN cliché that the top comment is a negative takedown of the tech or startup in question. From Dropbox, to Coinbase, to Ethereum, and now to Bitcoin at 50k. Not refuting anything you're saying here. Just find it amusing to have seen this pattern play out so many times here on HN.