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Is There a Cryptocurrency Bubble? Just Ask Doge

nytimes.com

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Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#91

Post by Drakim »

dagaci wrote: post #89

Some have posted and argued that these currencies do not have "real" value. I would argue that CrytoCurrencies do actually have inherent value. A few reasons: 1# CrytoCurrencies are free from the existing monopolies of the banking sector, money exchangers and politics. You can argue that those hegemonies should have control, but it is undeniable that there is tremendous value to many in that control weakening and bei…

> Some have posted and argued that these currencies do not have "real" value.

I was always puzzled about this. Real people are buying real stuff with crypto currency. It sounds like a Monty Python skit: "Your money isn't real! You didn't buy that! You didn't sell that! This transaction never happened, stop it!"

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#94

Post by subroutine »

aboodman wrote: post #37
subroutine wrote: post #23

Earlier quoted context omitted.

Noob question... What is the "product" that underlies the value of cryptocurrency that is so much more valuable than what underlies an ICO? What is the value of a machine churning hashes? It seems like the value is underlied by securing a transaction ledger + an arbitrarily difficult math problem. So is the value the security of the ledger?

The utility is a way to send value ~instantly, ~anonymously, relatively inexpensively, and irrevocably from one side of Earth to the other, without any intermediaries. That hasn't existed before.

It's interesting to think that the value of cryptocurrency as both the value derived from the platform's utility and the value ascribed to the coins based on consumer demand.

Because these are both embedded into the coin valuation it feels more like stock to me than currency. Specifically it might be like owning stock in eTrade, which has utility value as a platform for trading stock, and an arbitrary value based on consumer demand.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#95

Post by aplummer »

koonsolo wrote: post #83
danmaz74 wrote: post #78

Earlier quoted context omitted.

> Jackson Palmer might not believe it has value, but clearly, there are people who own Doge that think otherwise If there is one way you really can't detect a bubble, it's relying on "people thinking X has value". Also people buying tulip bulbs for a house worth thought those bulbs had value, as in every other bubble in history.

> it's relying on "people thinking X has value" Where do dollars or euro's get their value from? Let me give you the wikipedia definition: "Fiat money is a currency without intrinsic value established as money by government regulation or law." What do you think happens to fiat money when people stop believing it has value? Look back to 19th century France, were fiat money collapsed. Bitcoins have no intrinsic value,…

I agree with what you are saying to an extent (it is just paper), however at a minimum the value of government backed money could possibly be expressed by the mobilisation of resources a government would rally to give it value.

Lets say everyone declares USD is worthless, the government could 1) sell things of value demanding explicitly USD in return. 2) Impede movement or other activities, use of public goods using force and demand a toll explicitly in USD. I.e. this much $ is worth 100km of highway travel. Like calculating the value of a person's life to the government in free health coverage countries based on where they draw the line on spending to keep them alive, I think the value is the inverse of the cost the government would go to to prop it up.

You could argue without money how would they be able to enforce, however enforcement of a government order has not always required money, and that's one hypothetical too deep for me.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#96

Post by topmonk »

InclinedPlane wrote: post #59

Is there a cryptocurrency bubble? Of. Fucking. Course. Only those who are extremely naive or cryptocurrency zealots could possibly believe otherwise. Now, here's the core problem preventing people from understanding the reality of the bubble: in almost all bubbles there is still a kernel of honest, real value inside the bubble. That's the impetus for the bubble, but it doesn't prevent the bubble from being a bubble.…

I don't think it is a bubble. Everyone seems to equate real estate, stocks, and currency as all the same thing. Unlike the first two, currency increases in intrinsic value the more people believe it has value. So saying that how can bitcoin increase 1000x and still not be overvalued, you have to understand that now (people x perceived value) has had to increase 1000x as well. This means the currency is now accepted 1000x by more people and in greater amounts.

This is a snowball effect that won't apply to real estate or stocks, but does apply to currency.

Until people see the difference, they are going to be continually blindsided by the increase in value of crypto currency.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#97

Post by Aunche »

koonsolo wrote: post #83
danmaz74 wrote: post #78

Earlier quoted context omitted.

> Jackson Palmer might not believe it has value, but clearly, there are people who own Doge that think otherwise If there is one way you really can't detect a bubble, it's relying on "people thinking X has value". Also people buying tulip bulbs for a house worth thought those bulbs had value, as in every other bubble in history.

> it's relying on "people thinking X has value" Where do dollars or euro's get their value from? Let me give you the wikipedia definition: "Fiat money is a currency without intrinsic value established as money by government regulation or law." What do you think happens to fiat money when people stop believing it has value? Look back to 19th century France, were fiat money collapsed. Bitcoins have no intrinsic value,…

The key words are "by regulation or law." Bitcoins are completely unregulated right now. Coinbase can do whatever they want with people's crytocurrency and the government won't bat an eye, which is basically what happened with Mt Gox. At least your bank account is FDIC insured.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#98

Post by imaginenore »

aplummer wrote: post #95
koonsolo wrote: post #83

Earlier quoted context omitted.

> it's relying on "people thinking X has value" Where do dollars or euro's get their value from? Let me give you the wikipedia definition: "Fiat money is a currency without intrinsic value established as money by government regulation or law." What do you think happens to fiat money when people stop believing it has value? Look back to 19th century France, were fiat money collapsed. Bitcoins have no intrinsic value,…

I agree with what you are saying to an extent (it is just paper), however at a minimum the value of government backed money could possibly be expressed by the mobilisation of resources a government would rally to give it value. Lets say everyone declares USD is worthless, the government could 1) sell things of value demanding explicitly USD in return. 2) Impede movement or other activities, use of public goods using…

You should look into Zimbabwean dollars, Russian ruble, Venezuelan bolivar history. No amount of government intervention will help to keep the value once the population loses faith in the currency. Even if you start giving away gold bars for each unit of currency, you will quickly end up with no gold bars and lots of worthless paper. If you restrict the supply of currency, people quickly invent their own money, which you don't control.

EDIT:

And people will happily pay for goods and tolls with worthless paper, but your demand to accept dollars and fix the prices has one outcome: empty shelves and lots of people in prison (because how else do you enforce dumb demands?). Both were tried in Venezuela and USSR with the same result.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#99

Post by fapjacks »

aml183 wrote: post #41

I have great respect for Kevin Roose, but this was a disappointing piece. Dogecoin was a meme. It gained popularity and is still worth something. Jackson Palmer might not believe it has value, but clearly, there are people who own Doge that think otherwise. There is definite frothiness in the market. Some token sales are scams, some are overpromising, and some that look promising will probably blow up. Take a look at…

> Reporters need to separate Bitcoin, Ethereum, Litecoin (and some of the other older cryptocurrencies) from token sales and other crypto assets.

Not even actual crypto speculators seem to be able to do this. The second anything drastic happens on one of the crypto markets, all prices immediately peg to Bitcoin, and they all rise and fall in unison.

Re: Is There a Cryptocurrency Bubble? Just Ask Doge

#100

Post by johncolanduoni »

justifier wrote: post #85
aml183 wrote: post #41

I have great respect for Kevin Roose, but this was a disappointing piece. Dogecoin was a meme. It gained popularity and is still worth something. Jackson Palmer might not believe it has value, but clearly, there are people who own Doge that think otherwise. There is definite frothiness in the market. Some token sales are scams, some are overpromising, and some that look promising will probably blow up. Take a look at…

But what I want to see is proponents of cryptocurrencies acknowledge that the value requires a specific outcome to a yet unproven problem in mathematics(o) How many people bullish for andor excited by cryptocurrencies know that? any answer to that would leave you wondering: what are the implications? If the majority answer: of course I know it could all be found to be worthless tomorrow Or even if the majority answer…

It's pretty much the same story for anything that depends on cryptography, including virtually all transactions involving normal currencies.
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