Bitcoin surpasses $50K as major companies jump into crypto • Hacker News Board

Re: Bitcoin surpasses $50K as major companies jump into crypto

#741

Post by sneak » Wed, Feb 17, 2021, 3:34 PM UTC

jmcqk6 wrote: post #737

aphextron wrote: post #374

Earlier quoted context omitted.

>My opinion of Bitcoin will change when it stops using more electricity than entire countries, for something Visa can do for comparatively nothing. To be fair, Bitcoin does not do what Visa does. Visa uses trust in existing institutions to accomplish transactions. Bitcoin mining creates trust out of electricity. And trust is a valuable resource, no different than any other form of value creation.

I really don't understand this usage of the word "trust". Especially when one of the actual primary uses of bitcoin as currency (and not speculative investing) so far has been to pay off ransomware. Who exactly am I trusting? The person I'm transacting with - a transaction that I have no hope of reversing if something goes wrong? Please, if you can be specific about exactly what is meant by "trust" here, I would grea…

The ransomware thing is a red herring. The trust is not related to the counterparty- the trust is in the ledger itself. Once you have the tokens, you know you have them, and as long as your keys are secure, that fact remains true.

That's not the case with any other monetary or payment system or store of value.

You can trust that your balance in your account is what the blockchain says it is, and that nobody but someone in possession of those keys can use it.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#742

Post by sneak » Wed, Feb 17, 2021, 3:40 PM UTC

georgyo wrote: post #80

superbcarrot wrote: post #28

Does anyone else feel like: - they've missed an opportunity to get rich with minimal effort from crypto - still have absolutely no interest in jumping in at this point?

A long long time ago, I mined 3650 coins on a single cpu in a month. Bitcoin was worthless at the time, and I thought the idea was interesting. After a month, I went back to folding at home. A little over a year later bitcoin hit a dollar and I sold it all. On one hand I made a few thousand from nothing. However if I held it I would have been a pretty rich right now. I truly believe that bitcoin is something that can…

I once bought a pair of alpaca wool socks from some alpaca farmers somewhere for 75 BTC, because I liked supporting people who accepted BTC for online payments.

Don't sweat it.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#743

Post by graeme » Wed, Feb 17, 2021, 3:51 PM UTC

bhupy wrote: post #728

graeme wrote: post #724

Earlier quoted context omitted.

That sounds enormously risky for most people. So basically: * Someone has $30,000 in S and P shares * With a smart contract they might put these in escrow for a $20,000 loan * If they pay back the loan they can get the shares back. If they fail to pay back the loan the shares are confiscated, no matter the value the shares are now at. What’s the advantage over traditional finance? You can already get an asset backed…

> If they pay back the loan they can get the shares back. If they fail to pay back the loan the shares are confiscated, no matter the value the shares are now at. You need to make a slight tweak to this statement. Currently, the smart contract enforces a "collateral ratio" of at least 150%. This means that if the underlying collateral appreciates, you can skim off and take whatever appreciation even before repaying.…

Oh wait perhaps I misunderstood. If you have $15,000 in shares pledged as collateral, and they appreciate, and the loan is not repaid, the lender gets the shares, or the shares are sold and the lender gets $15,000 out of the sale proceeds and the rest reverts to the owner?

Re: Bitcoin surpasses $50K as major companies jump into crypto

#744

Post by IkmoIkmo » Wed, Feb 17, 2021, 3:55 PM UTC

Viliam1234 wrote: post #378

IkmoIkmo wrote: post #317

Earlier quoted context omitted.

Yup, same. Hell if I put in money now and it did 2x and went to $100k, I'd get out, too. There's just no way I see myself not getting out at $100k or say $200k. And I'm not risking my money on an investment that can 'only' do 2x or 4x. Bitcoin was cool as it could do 10x or 100x in the span of 1-2 years. But with the numbers where they're at and knowing myself, I'd cash out way before that. In the end because bitcoin…

Interesting to read this, as my instincts are completely different. Wouldn't a better strategy be to e.g. wait until Bitcoin doubles (which you believe is likely to happen), then sell half (so that you get your money back, sans inflation)... and then for the following twenty years, sell 5% of the remaining Bitcoins each year? The greatest risk is that maybe Bitcoin never doubles, and maybe you lose all the money you…

You're making a mental difference that's not an actual difference.

Suppose you have 100k, invest 20k of it in bitcoin and it doubles. You now have 40k bitcoin and 120k in total.

You could say, sell half the bitcoin, you now still have 100k in other assets and 20k in bitcoin. Even if you lose the entire 20k, you'll never lose more than what you put in.

But what does it matter? Fact is, you still lose 20k if bitcoin goes to zero. The fact you already made 20k on it doesn't change that fact.

The source of your wealth should not indicate whether a loss is good or bad, or bearable or unbearable. At the end of the day, a loss is a loss. All your wealth goes into one big pot, you can't say 'this part is from savings, this part is from bitcoin'. It's just money, and losing it sucks.

Of course there is something to be said about reducing your exposure to bitcoin as you grow richer and need to take less risky bets. But that's only great after the fact that bitcoin keeps going up in price. If bitcoin goes down in price, it's of course a poor idea to sell slowly instead of all at once. Again, a loss of $X is a loss of $X.

At the end of the day, virtually everyone holds bitcoin not for the actual value of e.g. owning a small portion of Apple which sells something hundreds of millions of people use daily, profits, which flows back to you. Instead virtually everyone holds it simply because others are, and by doing so together, it keeps going up in price. You could apply the same to any other (scarce) good. Like a useless but rare metal. Or indeed, a useless copy-paste of the bitcoin software, to start a new crypto. Bitcoin's price isn't because it's valuable, it's because of a common idea to buy it because it'll make us rich. And that idea cannot hold true on anything but faith. Humans are pretty crazy and so I wouldn't be surprised if bitcoin goes to $200k within 2-3 years. But it's still an insane investment proposition to me. (coming from a person who held 100% of his net worth in bitcoin for 3 years or so, btw).

Re: Bitcoin surpasses $50K as major companies jump into crypto

#745

Post by jodrellblank » Wed, Feb 17, 2021, 3:57 PM UTC

vinger wrote: post #587

IkmoIkmo wrote: post #317

Earlier quoted context omitted.

Yup, same. Hell if I put in money now and it did 2x and went to $100k, I'd get out, too. There's just no way I see myself not getting out at $100k or say $200k. And I'm not risking my money on an investment that can 'only' do 2x or 4x. Bitcoin was cool as it could do 10x or 100x in the span of 1-2 years. But with the numbers where they're at and knowing myself, I'd cash out way before that. In the end because bitcoin…

If you bought 11 months ago at 5,000 you would have made 10x cashing out today. It's never too late to buy in and if so there are other coins.

You could have made 10x on Tesla (TSLA) last year from March to December from ~$85 to ~$860 and at least Tesla has a factory, employees, a product, plans for future products and expansion of some kind, exists within a legal system, is on an exchange with some regulation, etc.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#746

Post by jmcqk6 » Wed, Feb 17, 2021, 4:10 PM UTC

sneak wrote: post #741

jmcqk6 wrote: post #737

Earlier quoted context omitted.

I really don't understand this usage of the word "trust". Especially when one of the actual primary uses of bitcoin as currency (and not speculative investing) so far has been to pay off ransomware. Who exactly am I trusting? The person I'm transacting with - a transaction that I have no hope of reversing if something goes wrong? Please, if you can be specific about exactly what is meant by "trust" here, I would grea…

The ransomware thing is a red herring. The trust is not related to the counterparty- the trust is in the ledger itself. Once you have the tokens, you know you have them, and as long as your keys are secure, that fact remains true. That's not the case with any other monetary or payment system or store of value. You can trust that your balance in your account is what the blockchain says it is, and that nobody but someo…

is there some widespread issue with trusting the ledgers of banks currently? I wasn't aware that this is a pressing issue, or really an issue at all.

>You can trust that your balance in your account is what the blockchain says it is, and that nobody but someone in possession of those keys can use it.

And there are definite risks around that too.

This really feels like a solution in search of a problem to me.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#747

Post by zzbzq » Wed, Feb 17, 2021, 4:13 PM UTC

rdtwo wrote: post #726

lph wrote: post #425

Earlier quoted context omitted.

> That said, Tesla's Bitcoin purchase does make a lot of sense ... They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. Tesla is a car manufacturer! It doesn't make any sense at all! At any company that made sense, a CEO would lose his job for gambling $1B of company money in a casino totally unrelated to the company's business interests.

Tesla is a hype company with a small side gig in mfg

Tesla is a company that posts to reddit screenshots of tweets about subjects scraped from reddit. With a small side gig collecting government energy subsidies.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#748

Post by [deleted] » Wed, Feb 17, 2021, 4:14 PM UTC

TuringNYC wrote: post #339

ori_b wrote: post #311

Earlier quoted context omitted.

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?

I agree with you in theory. However, over the course of 100yrs you also need to worry about entire countries disappearing. If your index fund is denominated in the wrong currency, held by the wrong custodian, or has too many companies based in falling countries, you might be in trouble. Meanwhile, Gold has survived a thousand generations. In a hundred years, there can be wars, reparations, and lots of damage to equit…

[deleted]

Re: Bitcoin surpasses $50K as major companies jump into crypto

#749

Post by bhupy » Wed, Feb 17, 2021, 4:22 PM UTC

graeme wrote: post #743

bhupy wrote: post #728

Earlier quoted context omitted.

> If they pay back the loan they can get the shares back. If they fail to pay back the loan the shares are confiscated, no matter the value the shares are now at. You need to make a slight tweak to this statement. Currently, the smart contract enforces a "collateral ratio" of at least 150%. This means that if the underlying collateral appreciates, you can skim off and take whatever appreciation even before repaying.…

Oh wait perhaps I misunderstood. If you have $15,000 in shares pledged as collateral, and they appreciate, and the loan is not repaid, the lender gets the shares, or the shares are sold and the lender gets $15,000 out of the sale proceeds and the rest reverts to the owner?

The latter; the lender doesn't get to enjoy the appreciation of the underlying collateral. The underlying collateral is simply meant to de-risk an anonymous loan with 0 credit check.

Re: Bitcoin surpasses $50K as major companies jump into crypto

#750

Post by moralsupply » Wed, Feb 17, 2021, 4:46 PM UTC

azinman2 wrote: post #120

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…

> What am I missing?

You should short Bitcoin and make a lot of money