
Bitcoin, I've Been Here Before - krambs
https://medium.com/@Wuntusk/bitcoin-ive-been-here-before-bf3279e67f27
======
nadam
These "bitcoin = tulip maina = .com bubble" articles get a bit boring after a
while especially if one is relatively deeply involved with the space. This has
been discussed at very great depths thousands of times already.

What shows how superficial these articles are is that almost all of these
articles (and most of the mainstream media articles) single out BTC, (which is
less than 50% of total crypto market capitalization) without going into
specifics of the given coin (like discussion of cons and pros of on-chain
scalability solution vs. second layer scalability solutions, POW, POS,
small/big block sizes etc...)

I think it would be a bit more interesting to speak about the price of a
continously rebalanced, market-cap weighted index of the top 10 coins or
something for mainstream purposes. This would prevent these articles focusing
too much on the current state of BTC (which they cannot really focus on anyway
without going much deeper), zoom out a bit more, and put the focus more on the
possibilities in the whole evolving cryptocurrency space, which would be more
interesting for a mainstream audience (they just don't know, because everybody
tells them bitcoin, bitcoin, bitcoin).

~~~
ardit33
Nobody is using bitcoin for any daily transactions.... at this point is just
bits... so, it fails as a cash.

The the second argument is made, it is a "storage" medium, like gold/silver,
etc...

At least you could argue that gold/platinium/silver have some intrinsic
industrial value, but bitcoin?

~~~
nadam
The vision of the BTC community is that on-chain scalability for payment has
no chance anyway (1MByte is capable of 5 orders of magniutde less tx/sec than
VISA), so using second layer methods (like lighting network) to do payment is
absolutely inevitable anyway. So they keep blocksize small enough that a
regular guy with a regular PC can realistically sync-up the network and become
a full node, because they think this is needed to be truly decentralized and
secure. This possible lighting network future, and also that BTC is the most
battle tested, and most forked coin, and has by far the biggest network effect
are all included in its price.

My portfolio contains other coins from the top ten so I hedge it with other
solutions for scaling, but BTC's share in my portfolio is close to its share
in the crypto market cap (a bit less, admittedly).

~~~
brucephillips
You've described how BTC can scale as a currency, but haven't addressed
ardit33's first point, which is that not many people seem to want to use it as
a currency in the first place.

~~~
nadam
I speculate that at first people want to use it as a store of value, but after
a critical amount of holders, and having a lighting network, users and
merchants could also adopt it as a currency.

A conservative scenario is that cryptocurrencies will not really become
adopted other than store of value: I think even in this case BTC value can go
up tremendously. It has benefits over gold: like easy and fast transport
accross countries.

~~~
brucephillips
> I speculate that at first people want to use it as a store of value, but
> after a critical amount of holders, and having a lighting network, users and
> merchants could also adopt it as a currency.

Why would they? Why should I buy things with BTC instead of USD? The fact that
I've yet to hear a convincing answer to this most fundamental question is the
strongest indicator that BTC is a bubble.

I do agree that BTC could become gold, though.

~~~
nadam
If you already adopt it as a store of value it can be convenient to use it
also for payment if:

\- it is convenient

\- has low transaction fees

\- fast

But I agree, store of value is the most realistic mainstream usecase of
cryptos.

~~~
brucephillips
USD beats BTC in all of those features.

------
olalonde
If this article interested you, you might like
[https://99bitcoins.com/bitcoinobituaries/](https://99bitcoins.com/bitcoinobituaries/).

And here's more or less the same article from 2013 when price was $84:
[https://whistlinginthewind.org/2013/04/12/the-bitcoin-
bubble...](https://whistlinginthewind.org/2013/04/12/the-bitcoin-bubble-has-
burst/)

"So what now for bitcoin? It will crash and disappear like Pets.com, Leheman
Brothers and Anglo Irish Bank, existing only in the memories of economists."

"There have been some slight recoveries which have given hope to bitcoinites.
They cling to the hope that this is only a correction and that bitcoin will
bounce back stronger than ever. They fail to realise that all crashes include
a slight recovery followed by another crash."

I'm not saying the author is necessarily wrong, just highlighting the fact
that no one knows what the hell they're talking about or what's going to
happen.

~~~
saalweachter
I will say, as a Bitcoin "hater", Bitcoin is far more resilient than many
things it might be compared to.

With Pets.com or Leheman Brothers, there was a corporate structure that could
stop existing. It could go bankrupt, the C-executives could be arrested,
something could happen beyond which it'd be fair to say it was over.

With Bitcoin, you could have all of the exchanges go defunct, you could have
99% of the miners close up shop, and as long as a few people kept the
blockchain going, a few years later it could be back, the same as before.

~~~
nkrisc
Or just continue on being useful to a small fraction of people. It doesn't
have to be this massive market.

~~~
therein
In case of a massive and rapid reduction in the number of miners and therefore
the network hashrate, it would take Bitcoin network difficulty too long to
adjust to be useful in short term.

------
jerkstate
To all of those wondering if this article compares Bitcoin to the .com bubble
or Tulip bulbs, it's the .com bubble this time. Saved you a click.

~~~
krambs
Username checks out.

------
bbrx
Pardon my very limited knowledge about those things, but one thing I wonder
and find fascinating about bitcoin is this : I understand that a very limited
number of people, probably the initial developers, hold a very hight
percentage of available bitcoin. (disregard the rest in case i'm even
completely mistaken in that assumption...) Those people have an asset with an
incredibly high face value. Of course, the market is probably far too shallow
for them to cash out even a small part of this face value.

The question is this : for those people, assuming or not that they can
coordinate, what is the optimal strategy? I'm thinking something like draw
regularly, in order to build a war chest to "defend" the cryptocurrency
against too violent crashes, such sustaining the confidence of the public. In
a way controlling and fine tuning the influx of external money coming in from
fools wanting in on the pyramid effect.

Is it realistic to think such strategy could be feasible, and if so, for how
much time those people could/would want to sustain it?

~~~
michaelchisari
On the flip side of that, how do you build an economy around a currency that
front loads such massive wealth inequality out of the gate?

~~~
bbrx
The moral angle is indeed the mindblowing part, but I wanted to sollicit the
acute minds of hackernews to shine a light on the practical aspect of it.

------
feelin_googley
As I recall, back in the day, SoundForge was the lightest and fastest audio
editor for _Windows_. (On the Mac there were of course many choices for simple
editing, going all the way back to SoundEdit16.) It was a little sad to
SoundForge sold to Sony. The author should be proud of that software. There
was nothing else comparable for Windows back then, to my knowledge.
Interesting that he became involved with something as different as Bitcoin.

~~~
frik
SoundForge and Vegas used to be great software tools in the 1990s and early
2000s. Unfortunately you had to sell them. Thanks anyway for your story.

Recently Sony sold them to Magix from Germany. Unfortunately the software is
lagging behind, basically stayed for decades in low maintenance mode, and
Magix software is known to be a cobbled together buggy mess. Their other own
video software Video Deluxe is still 32bit buggy unstable piece that relies on
decade old dlls and can't be installed on up to date Windows 7/8/10 without
deactivating security functions, changing registry settings by hand and
renaming the Windows cert folder. Nowadays the open source Audacity is a great
alternative to SoundForge, and Premiere/etc are better alternatives to
Vegas/VideoDeluxe.

------
ripberge
Still long on bitcoin, but also wouldn't be surprised if it lost 70% of its
value in short term.

He does bring up some great points regarding transaction throughput and the
team productivity.

It seems like lightning network is the tool to get a lot of cheap, fast
transactions done via bitcoin and turn it into a really useful viable
currency.

However, that has taken a long time just to get to test mode. Much of the fate
of bitcoin is tied to that github repository and pull requests. There has
never been another open source software project with this much money riding on
it. Can this team continue to deliver value?

There are other concerns like deflationary spirals, volatility, etc., but my
bet on bitcoin is largely a bet on the dev team and whether or not useful pull
requests get created & merged and what that velocity is.

------
0x445442
Or... AMZN, I've Been Here Before. 5.97 in August 2001

~~~
justboxing
> Or... AMZN, I've Been Here Before

Me too. Ahh the good old days. We'd be coding and day trading back and forth
all day. Take turns watching for the Boss to come towards our area, so we
could all hide the trading window and get back to coding.

My co-worker dev lost 3K on PETS.COM's stock in 1 day.

I'd gotten in on 100 shares of AMZN Apr 2000 at $57-ish, ate a loss of about
30$ / share in Oct 2000, sold at $28-ish. All I have left now is war stories
...ending very badly lol. The rush of trading on volatility makes it 'not a
complete loss' tho.

------
HenryBemis
Bitcoin as an investment option is pure gamble, unless someone has a better
idea e.g. has put its value side-by-side to Gold, Silver, Oil, Adamantium ;)
and has noticed a pattern. Perhaps there is pattern, and it is related to the
"petyas" of this world (new malware that is massively cashin in/out).

------
stale2002
50$ in fees per transaction, I never thought I'd see this day.

For the last 3 years, there has been a bitcoin civil war about how to scale
bitcoin, as people have warned that the problems we are seeing now would
happen.

And unfortunately for bitcoin, the side that wanted high transaction fees, and
wanted to prevent all scaling won the war.

And now we are seeing those problems come home to roost, as segwit (which was
marketed as an immediate fix) adoption has been minimal, and the mythical
lightning network and layer 2 or 3 solutions that the core development team
promises will that will solve everything is perpetually 2 years away from
completion.

Things are going exactly as people had predicted.

Those of us who are fed up with these problems have moved on to other coins,
such as Ethereum and Bitcoin Cash.

~~~
pmlnr
> Those of us who are fed up with these problems have moved on to other coins,
> such as Ethereum and Bitcoin Cash.

What do you use those for? In the article above the author mentions you were
able to pay for dinner, for various bits and pieces in BTC - even for pizzas,
as we all know.

You can't do that with ETH, BCH, or any altcoin, and you can't use BTC for it
any more either.

So why move on to other coins?

~~~
namelost
Stripe maintains a big list of prohibited businesses. Some of these are honest
consumer protection. Others are there to try to instil Christian values into
our money, for instance you may not use Stripe to sell sex toys.

If you ask Stripe, they'll tell you that these restrictions are there because
of the requirements of Stripe's partners. And that is exactly the problem.

If we are heading towards a cashless society (and we are), then we need an
electronic payment system that does not consult the Bible before deciding
whether to allow your payment or not.

~~~
cat199
> that does not consult the Bible before deciding whether to allow your
> payment or not.

or the HRC either, for that matter.

------
pimmen
My main problem with Bitcoin is that it’s a deflationary currency, that’s
really why I _hope_ it doesn’t have a future.

I have paid this months bills and rent, I have budgeted some money for
groceries and fun, I have put 10% of my pay check in my pension fund.

Something is very wrong if you feel conflicted when you’ve invested money or
spent money to get by because you missed out on your money being worth more.

------
EastLondonCoder
I think Satoshi marketed bitcoin as a currency, but the intention was
something that more resembles gold than currency.

Bitcoin as a currency does not make sense from a macroeconomic point of view.
Whats the incentive of spending something of a fixed resource?

Maybe I'm old fashioned but I prefer monetary policy to be decided by a small
cabal of professionals.

~~~
jpadkins
It's not the small cabal of professionals that irks me. It's the method of
increasing the money supply to generate inflation that bothers me. Central
bank fiat systems use credit to increase money supply, so banks and people who
consume large amounts credit (large capital projects) get the hot money first.
Inflation does not apply evenly to everyone in the economy at once. As new
money works its way into the economy, price levels rise. It's a rigged system
for those close to the central bank.

~~~
EastLondonCoder
So currently most money gets created when a back offers a loan, how and much
is decided by the central bank. The thinking behind the current system is that
easier access to credit will increase productive investments and grow the
economy, hopefully to offset the inflation incurred by the increase in the
money supply.

I agree its a quite blunt instrument, things like mortgages for houses doesn't
really tend to grow the economy.

But its a hard problem, personally I would like to see some tinkering with
helicopter drops

------
moneytide1
Bitcoin will be more relevant soon because there is exponentially more
gold/silver/platinum/uranium in the solar system than on Sol-3.

It would be silly to ship in paper every 2 years so people could trade "cash"
while working at the methane harvesters and excavators.

Just keep that price constant and we can finally move forward.

~~~
pbhjpbhj
I haven't carried paper currency as a matter of course for something like 12
years. Most transaction since the Summer in our small UK business have been
"contactless" (debit/credit card), though we still took 2 cheques IIRC.

Bitcoin isn't the only alternative to cash.

~~~
moneytide1
Then the currency will be debit/credit with your bank which has Assets on
Sol-3 and the consistent activity there guarantees a steady value on the value
of USD, GBP, EUR, etc.

If things do come to pass and a significant carbon mass is shifted off Sol-3
(human population), then currencies will fluctuate since that is what drives
steady value. This value will fluctuate as bitcoin is now doing "if" the
abundance of rare-earths is transmitted back to the Origin planet.

I'll say it again: "if".

------
goldpineapple
Opinions on streamer bs iota?

------
moab9
Blasphemy!!! <jk>

------
CryoLogic
Bought at $230, sold at $19450.

That's enough roller coaster for me. I'm out for good.

Here are my issues with Bitcoin:

1\. Transaction times are insane, 30-45 minutes at peak hours. Bitcoin
blockchain can only handle ~10TPS. 2\. Fees, upwards of $30 / transaction a
few weeks ago. This makes it not practical for any real purchasing or as a
currency.

Both of those issues are solved by IOTA and the tangle, so that's where my
money is going. I want to invest in a currency that has real world usability.
Bitcoin doesn't have that at current scale.

~~~
etr-strike
Way to pimp your altcoin at the end there. IOTA isn’t even in the same league
as bitcoin. It’s not decentralized and it’s not trustless. Just use SQL at
that point...

~~~
CryoLogic
Those points are not accurate.

IOTA uses the coordinator as a security measure right now (against 34%
attacks) and will be removed once the coin is distributed enough to diminish
probability of attacks. So saying it is not decentralized isn't honest.
Without the coordinator it is decentralized.

Point two is also refuted once the coordinator is gone.

~~~
goldpineapple
Opinions on Streamr v Iota?

