
Bitcoin Blows Past $9,000 - ourmandave
https://gizmodo.com/bitcoin-blows-past-9-000-1820747737
======
habosa
I've been playing with Bitcoin since 2010, the first price I remember was
$0.10 a coin. I even did some CPU mining (!). I have never seriously invested
in BTC but I've been paying attention.

It's amazing to watch the price go up as utility has gone down. In 2012 or so
Bitcoin was legitimately useful. Coinbase was around so it was easy to buy.
You could move it for reasonable fees / transaction times and it gave you
access to Darknet Markets which offered services you couldn't get anywhere
else. We also believed it to be private because law enforcement had not yet
developed any block chain analysis software. Bitcoin was the only credible
coin, everything else was a joke or lacked critical mass.

Now none of that is true. If you're interested in privacy you don't touch BTC
with a 10 foot pole. If you want an actually usable currency with speed and
low fees you use ETH or any other. And if you're a financial institution
you're looking at Ripple. Oh and let's not forget all the BTC forks and
exchange hacks.

Yet the price just climbs and climbs, and many people are getting quite rich.
I can't say I'm not jealous, but I still won't invest because the fundamentals
are all wrong. Someone will be left holding the bag.

~~~
empath75
I think people aren't as rich as they think they are. Let them try and cash
out the bitcoins on bitfinex and discover that what they actually get are
funny-money tokens called 'tether' which they can't exchange for dollars
anywhere.

~~~
alanfalcon
... nobody would do that though. I can sell my BTC for USD on Kraken and
withdraw to my bank account. And I have.

~~~
sparkie
Kraken is the only exchange where you can actually exchange USDT for USD.
However, at the time of posting, you can only redeem 320k Tether before the
price of it will half. Only 320k out of 650M+ (and growing) has any real
value. Where are the remaining 649780k USDT going to be redeemed for USD?
(Hint: Not from Tether themselves, they clearly state in their own terms of
service that they're not redeemable for USD).

~~~
alanfalcon
Right, Tether is a scam. But my point is that Bitcoin can be sold directly for
USD (not USDT) on some exchanges.

~~~
empath75
I like how you just sort of blithely say that tether is a scam when there’s
nearly a billion dollars of it trading on margin, inflating the bitcoin price.

------
delsarto
I love Bitcoin (and the broader ecosystem). The promise of great riches if you
can survive long enough in a lawless new world, navigating the schemes, scams
and intrigue and the government besides. It must be a glimpse of what got
people to pack up and and head west for the gold rush.

The mysterious author, watching mtgox grow, collapse and subsequent
revelations, "we found Satoshi" debacle, the DAO heist and reaction, altcoins,
block size schism, ICO's, segwit activation, segwit2x deactivation and bugs,
Teather's "theft", this rally ...

Chinese mining pools, Russian hackers, the dark web, struggles for control;
it's like living in a Neal Stephenson novel. Worth the price of admission just
for the entertainment value.

~~~
alexasmyths
"The promise of great riches if you can survive long enough"

Except that there is no net new value being created - and it's a zero sum
game. So any 'riches' you make are from some suckers pocket.

No thanks.

The Valley and tech works because we are doing a lot of non-zero sum game
stuff. Whenever anyone invents/creates something new - we can grow the whole
pie.

Yes - I see how it could be considered fun ...

But most of the 'riches' from the 'Wild West' went to those who were just
willing to be the most brutal.

So in reality ... no thanks.

~~~
gonvaled
Value is created by destroying friction: if financial transactions become
decentralized, cheap and fast, you already have created some value.

Even more: having the masses controlling the capital would allow for novel
allocation of financial resources: nobody would have killed the electric car
40 years ago if research capital had been more distributed (just an example,
not trying to bring up any specific conspiration theory).

More applications, taken from git: before git took the development world by
storm, everybody was pretty much used to cumbersome and slow merges when doing
team development. Once a fast vcs tool appeared, the possibilities multiplied,
and whole new industries emerged. A couple of simple features (speed, low
cost, easy setup) where enough to create a miriad of new applications.

Money being at the base of everything, from economics to politicis to science,
the blockchain is poised to revolutionize society as no other technology has
achieved before.

~~~
alexasmyths
" if financial transactions become decentralized, cheap and fast, you already
have created some value."

\+ There is no evidence of value from a 'decentralized' system - in fact,
there's considerable value from a managed currency which we know will expand
as the economy needs it - not an some arbitrary and ridiculous parameter such
as the availability of computing power.

\+ Most monetary transactions are already cheap and efficient.

"having the masses controlling the capital would allow for novel allocation of
financial resources:"

A) BTC in no way enables 'the masses to control the capital' \- it's probably
more concentrated in terms of ownership than other currencies fyi - moreover -
it's just a currency. It's not capital, per sey. B) There's no indication that
the masses are better investors than the very large category of investment
managers. C) "nobody would have killed the electric car 40 years ago " this is
patently false. People have been working on electric cars basically forever
and it's been ongoing.

As for GIT ... 'faster merges crated new industries'? If that's what you meant
to say then I don't really buy the argument at all. And this has nothing to do
with BTC nor is it even analogous.

"Money being at the base of everything, from economics to politicis to
science, the blockchain is poised to revolutionize society as no other
technology has achieved before."

From your comments I might argue that you might not know what 'money' is.

BTC is not 'money' \- it can kind of be used as that, but is not, and is used
less and less as such.

BTC has many structural elements which make it not very useful as a currency.

Having a 'Central Bank' is not a drawback in the opinion of most people - this
'decentralization' stuff is technology/libertarian ideology, nothing more. A
well managed Central Bank is preferable to a fairly strict currency with
arbitrary control mechanisms. An economy that loses the ability to have
monetary policy ... well ... loses a lot.

There is a huge ugly factor with VISA/AMEX taking 2% of so many transactions
... but that's another story.

Aside from that transaction fee - our monetary system works pretty well - far
better than BTC. The 'problems' that BTC is trying to solve are not real
problems. Many of the opportunities it creates are simply the result of
bypassing regulations which are there for the most part to protect us.

~~~
gonvaled
> Most monetary transactions are already cheap and efficient

Say that to peple sending wires with Western Union at 40% commission, and
waiting one week for them.

> BTC is not 'money' \- it can kind of be used as that, but is not, and is
> used less and less as such

Revolutions take some time (this one is going pretty fast). Would I work for
bitcoin now? No. Do I consider working for bitcoin in the short future? Yes.
Is it important for me to have government approval to work for bitcoin?
Haven't decided yet.

> People have been working on electric cars basically forever and it's been
> ongoing

As said, my comment was not specifically about electric cars, that was just an
example. Any other example would do. It would be naive to think that powerful
interests have never succeeded in halting progress.

> Having a 'Central Bank' is not a drawback in the opinion of most people -
> this 'decentralization' stuff is technology/libertarian ideology, nothing
> more.

Most people do not know or care about this. Whether that is good or bad for
them is debatable.

> A well managed Central Bank is preferable to a fairly strict currency with
> arbitrary control mechanisms. An economy that loses the ability to have
> monetary policy ... well ... loses a lot.

Sure, amongst other things:

\- the ability to debase savings of people and force them into brainless
consumption, ensuring everybody is playing the rat race.

\- the ability to privatise profits and socialize losses (see financial
crisis)

And other niceties.

> The 'problems' that BTC is trying to solve are not real problems.

You are just not seeing the problems, as nobody could see clearcase's problems
pre-git. And, more importantly, you are not seeing the possibilities.

~~~
GFischer
I've sent and received money with Western Union... where does it take 40%
commission or one week?

It takes about 10% commission at most and it's same-day.

Definitely can be improved upon but you're exaggerating.

Plus, bitcoin has huge friction for people unfamiliar with it - Western
Union's network is great.

------
tudorw
My store of wealth, denominated in GBP, is no more 'real' than bitcoin,
however, the issuer is a large entity, with deep and diverse global assets and
the military means to protect those assets.

The GBP I hold is a promise that the issuer will go to almost any means
necessary to maintain the value of my wealth in respect to its fungibility.

While there is a raft of risk associated with my wealth, it may diminish in
respect of its inter currency value, it may suffer hyperinflation, as a part
of my 'deal' with the issuer, they additionally provide a framework for a bank
to operate, the bank has insurance, this means that a proportion of my wealth
would be preserved even if the institution with which I entrusted my wealth
turned out to be a bad actor.

Furthermore my currency is protected from entropy, the accounting system used
to store the value of my wealth is secure, by design, and by insurance by the
issuer.

In 'good times', I am rewarded for making my wealth available as capital for
other users, or interest as it is known.

Bitcoin is exciting, as a follow of everything from e-gold to beenz and an
original CPU miner, not to mention possibly the only person to actually profit
from the first generation ASIC you have to believe me when I say I am not here
to detract from Bitcoin, I'm here to say it's not a currency, it's not an
asset, it's really something novel, the value is indeterminable.

~~~
makomk
With current interest rates and inflation, I believe that GBP stored in
savings accounts actually decreases in value over time in real terms... There
doesn't seem to be many great places to store money in general, which arguably
has resulted in bubbles in absolutely everything.

~~~
mikekchar
Inflation is a feature, not a bug. It encourages you to spend your money
which, in turn, allows others to use it to produce "growth".

The reason we need money, from a societal sense, is that there is a time gap
between when we decide to build something and when that thing is finished. You
need access to raw materials, or labour _before_ the thing you are building is
completed. The premise is that the thing you are building is more valuable
than the raw material and labour that went into it. Money is basically a
lubricant that allows you to pay people before you start and then balance the
books after you finish.

If money increased in value over time, we would have a problem. Let's say that
the thing you are building will return an extra 5% on the investment. If
holding on to money and doing nothing returned 10% in the same time period,
you would be stupid to build the thing. You will make more money by doing
nothing.

In a deflationary system, people will tend not want to risk the money they
have by spending it to build something. This means less demand for goods and
services and causes people to be idle. Access to capital is harder because why
would I lend you money when I can just make a return by doing nothing? If I'm
going to lend it to you, you had better lock in a _really_ good rate -- which
means you need to have a spectacular return on investment in your enterprise.

Essentially, rich people are rewarded and poor people are screwed. Society has
no incentive to build things and poor people can't bootstrap themselves out of
poverty without incredible risk.

I think the easiest way to verify this for yourself is to look at BTC. If you
own BTC, what value does it have on society sitting in your wallet? Now
consider _using_ those BTC to buy something and employ people. Would you do
it? Or would you rather park the BTC in your wallet and hope for a 2-300%
return through deflation? Imagine I wanted to start a game company and I would
like to borrow your BTC so that I can hire artists, musicians and programmers?
Would you lend me your money? What kind of promises would it take to entice
you to lend me your money?

Now imagine a currency where the value decreases over time. So you have a
million units and over the period of your lifetime, the value will decrease to
almost nothing. How does that change your view of whether or not it's a good
idea to lend me your money? How does that ultimately affect society?

~~~
appleflaxen
you make the argument that inflation is good, but prove it by specifics which
only suggest that deflation is bad.

Why is inflation better than no-inflation and no-deflation?

~~~
AznHisoka
I would love to hear a decent answer to this as well. To this day i have never
received a satisfying answer to this as most inflation supporters think I am a
deflation supporter. While i really support No-deflation and No-inflation.

------
loudandskittish
Sometimes I kick myself for not buying any BTC for the novelty factor...you
know, back when the primary use was buying illicit substances online.

Then I realize, I would've sold it off when it hit $250 per BTC and I'd
probably hate myself more.

~~~
Robelius
I remember buying a couple dozen BTC for $0.10, and thinking I was amazing
when I sold all of the coins for a total of $20.

Still don’t regret it though because I know the next few years of my early 20s
would have been spent tracking BTC like a bloodhound rather than spending that
time on things I enjoy.

Then again I’m probably telling myself that so I don’t feel bad for missing
out on 100s of thousands of dollars.

~~~
QAPereo
So... is there a “Bitcoin” now, that we’ll wish we’d taken seriously in ten
years? What do you think it might be?

~~~
RodgerTheGreat
Buy a winning lottery ticket. Spending a little now to earn millions later-
you'd be crazy not to! It's easy money!

Most people buy lots of lottery tickets that don't win. What a waste of money!
What a bunch of suckers! If only they'd been paying more attention to the
lottery tickets that won, they'd be rich now!

~~~
hackinthebochs
This lottery comparison is wrong and obnoxious. With the lottery you have a
known chance of success (minuscule). With crypto you have some measure of
control of your expected returns. Having foresight and the technical ability
to judge promising projects goes a long way.

~~~
closeparen
The ability to convert insights about the future success of projects into
returns has always existed via self-directed brokerage accounts. That’s
probably the closest analogy, except that crypto might not (yet) have
skyscrapers full of people paid seven figures to know more about it than you.

------
sunseb
Is Bitcoin a bubble or not? No one knows for sure, but it reminds me a lot of
the 2000 dot-com bubble, when Internet companies were overvalued like crazy.
We had basically the same selling line: it's a new economy, a new paradigm, an
exponential growth, you better join if you do not want to be left out, it will
rocket to the moon, and so. I fear it will end up badly for a lot of people in
Bitcoin. Make sure you exit before you end up with nothing.

~~~
charlesdm
The entire market cap of crypto is around $250bn at the moment. The .com
bubble went up to $6.7 trillion before correcting back down to 1.7tn. In
todays dollars that's close to $8tn.

One can only hope this will be "the next" .com bubble -- there will be money
to be made. Given the amount of liquidity that was pumped into the market by
the fed, it will be interesting to see what stops this train.

The more and more you look around, money isn't worth anything anymore. Like
that recent Leonardo Da Vinci painting that was sold for $450m. Assets and
companies selling for a 10-12x multiple, excessive property prices in prime
locations, etc. Asset prices have been driven up significantly across the
board.

~~~
yyyyip
Yep, it's like Fiat currency is some crappy thing poor people use to live on
while the rich accumulate actual scarce resources with infinitely appreciating
prices.

~~~
charlesdm
There are advantages as well though -- for those being able to create assets
(companies, profitable products, etc), those will generally sell for a higher
multiple than before.

------
Kiro
I don't think you can compare Bitcoin to stocks, housing, tulips or any other
commodity and draw bubble conclusions based on that. I think we're dealing
with a whole new area of economic psychology that the world simply hasn't
experienced this before.

Not saying it won't crash though but I think the reasons will be different
than traditional bubbles.

~~~
aphextron
I tend to agree with this assessment of global markets in general. Things have
accelerated to a point that no one has any idea what's going to happen
anymore. Past experience is not only misleading, but meaningless now.

~~~
wils1245
A quote from The Four Pillars of Investing:

"Of the four key areas of investment knowledge — theory, history, psychology,
and investment industry practices — the lack of historical knowledge is the
one that causes the most damage. In finance, there is no controversy: the same
speculative follies play out with almost clock-like regularity about once a
generation."

A whole lot of investors have come to believe that history is obsolete, and
later regretted it.

~~~
kgwgk
“The four most expensive words in the English language are 'This time it’s
different.'”

------
huffpopo
I live in a retirement town where many of the retirees have put their entire
life savings and more into USI Tech. As far as I can tell USI Tech has
properties of a classic pyramid scheme. I wonder how much this and other
similar schemes are driving the price of bitcoin. I also wonder what will
happen when entire towns get wiped out without recourse.

~~~
spilk
I see a lot of similarities in the kind of people that get pulled into
Amway/Herbalife/etc and Bitcoin people.

~~~
wrinkl3
In my experience there's stark difference between those who got into the
cryptocurrency culture at large, and those who just trust some specific
platform/service to make them rich riding the Bitcoin wave. The latter group
certainly tends to have MLM mentality and the services they use usually have
all markings of a scam.

------
jorblumesea
Bitcoin is really starting to resemble a pyramid scheme or penny stocks. No
one can really cash out without people cashing in, otherwise the entire
pyramid collapses. And the cult-like mentality of many Bitcoin holders does
strike me as a multi-level marketing attitude. Just visit any forum or thread
about bitcoin and there will always be that one person with some kind of
tagline "it's not too late to get in!" which is a classic FOMO sales tactic.
You know when the average person is getting into the market, we are in the
late stages of the game.

When suckers enter, smart money leaves.

It's a very interesting technology which will continue to exist but it's
really looks like an out of control bubble. In some ways it would be better
for it to implode and get the snake oil salesman and sketchy white papers out
of the ecosystem.

It used to be a really cool proving ground for cutting edge technologies but
now it's looking more like rampant greed, excess and arrogance.

~~~
closeparen
You have to remember that many of these people are not planning on “cashing
out” but on crypto _becoming_ the new cash.

~~~
jorblumesea
If that were true, why does everyone talk about it in fiat currency terms? Why
would it matter what price BTC is, if the goal is to just use it? Who cares,
then? I don't buy that argument. It seems to be mostly fueled by greed.

------
milesf
What scares me is not the success or failure of BitCoin. What I find troubling
is the spirit of BitCoin is paving the way for the exact opposite result.

The idealism is to produce a system for faster, cheaper, and censorship-
resistant way to transact. BitCoin is actually becoming unusable for that.
It's slower than Etherium, the fees continue to climb when measured against
the US Dollar, and the privacy issues are not being addressed.

Sadly, no one will pay any attention to this while the price continues to
climb. Only when the price crashes will folks come to their senses, just like
when MintPal was hacked which destroyed VeriCoin and when The DAO collapsed
with people voting to roll back and fork.

------
wils1245
I’d be interested to see a timeplot of the timing of ICO’s against the
price/trading volume of bitcoin. My feeling is that there’s a lot of wash
trading / market manipulation of bitcoin going on by the perpetrators of ICO
schemes, to provide themselves with a way to funnel money out of crypto into
dollars. The Bitfinex / tether fraud only works of bitcoin keeps going up.

------
joshfraser
All currencies are based on commonly shared beliefs.

I accept $20 bills because I believe other people will accept $20 bills. The
paper itself is worthless.

Bitcoin is the same.

It's worth $9,000 as long as enough people believe they can find other people
who believe it's worth $9,000.

Meanwhile, trust in governments and banking systems is crumbling. We've seen
the hyper inflation in Venezuela. We've seen Saudi Arabia seize 800 billion
dollars in assets. We've seen the banking bailouts in the US. As uncertainty
rises, a system based on math begins to look like a far safer place to park
your wealth.

Belief in Bitcoin may be at an all time high, but it's still the early days.
Only 21 million bitcoins will ever be created. Most of them have been mined
already & there aren't enough left for every millionaire in the world to own
even a single Bitcoin each.

~~~
dingo_bat
> I accept $20 bills because I believe other people will accept $20 bills. The
> paper itself is worthless.

The real worth of a US dollar bill comes from the US military. In case the
value of USD starts going down, the military will do whatever is "necessary"
to restore economic order.

~~~
joshfraser
how does that work exactly?

~~~
dingo_bat
Suppose there is an increase in oil prices. That means the US now has to spend
more to satisfy domestic demand. That invariably results in devaluation of the
dollar. If this becomes extreme enough, US boots march into the middle east
and "make things right" again.

Another example. Suppose a bunch of terrorists crash a couple of planes into a
symbol of American economic strength. Again, US drones and boots on the ground
would fuck up whatever corner of the earth that needs to be obliterated in
order to restore people's faith.

These two are very direct actions, but most influences are far more subtle.
What happens if China tries to manipulate US currency using its vast dollar
reserves? It won't, because within hours a couple of aircraft carriers would
show up inside Chinese sea waters. Just the existence of capability is enough
to deter China.

~~~
joshfraser
What if the American people wake up to the fact that the dollar is leveraged
beyond reason? And realize that it's all a house of cards? And that military
doesn't think the dollars they're paid with are worth anything?

------
nimos
Well that pays for my Christmas shopping. Made a couple thousand now off ~$10
I spent out of novelty. Hurts a bit seeing what I used to have

I really don't see it personally. It seems pretty clear people are buying and
holding en mass at this point and it just seems like pure FOMO. There is no
underlying asset and I don't think its that useful for replacing cash. Not
going to complain though. I'll go on, take my money and run.

------
flyingfences
Goku would be proud.

~~~
lunaru
By the end, power levels were at absurd numbers (I think in the billions?)
Crypto bulls' collective wet dreams.

------
ganeshkrishnan
Bitcoins aren't backed by anything or to anything. Whether it's worth 1 dollar
or a million dollar makes no difference, it's our perception that gives it
value. Plus they are limited unlike Fiat currency

~~~
jeremyt
The backing of fiat is illusory.

I always posit this question, to which I have never received a satisfactory
answer: What, exactly, would the US do if the world suddenly decided that the
dollar was worth nothing?

Massive buybacks of dollars by the Fed would be seen as an ineffective and
desperate move. Besides that, what other recourse do they have?

~~~
paulcole
>What, exactly, would the US do if the world suddenly decided that the dollar
was worth nothing?

Why would the rest of the world decide this? It’d hurt them more than it’d
hurt the US or else they’d have done it already.

~~~
jeremyt
This is not logical. Just because something hasn't happened doesn't mean it
can't happen.

~~~
selectodude
I think it's about as likely as somebody dropping something and it falling up.
Keep testing the existence of gravity, it could change on you.

~~~
jeremyt
I'm not sure that you realize that the current monetary system is only about
half a century old. Fiat currency, backed by nothing except the government,
has only existed since the 1970s.

------
vinchuco
I don't care what the price is, take a look at those price swings:
[https://i.imgur.com/pR15IgV.png](https://i.imgur.com/pR15IgV.png) Data:
[https://charts.bitcoin.com/chart/price](https://charts.bitcoin.com/chart/price)

~~~
hndamien
Percentages are what matter here.

------
mancerayder
What's the story with Bitfinex (or even Bittrex!) and the Tether situation? It
sounds stigmatized and instilling terror as the medium of exchange, but it's
all you really have when using a system like that internally (I have to use
Tether as an intermediary to swap between coins).

Is that just another component in this house of cards?

If Bitcoin takes a dump, will people panic-sell other cryptos?

If another big crypto explodes, will people panic-sell other cryptos?

The problems and risks in this -- what feels to me, like -- a system, seem
interconnected by human psychology if not ACTUAL structures like the
exchanges.

------
davidw
Someone should write a book like, say, "Bitcoin 36,000".

------
jpatokal
Gizmodo already updated their title to say "past $12000", but that was a
short-lived spike. (For now?)

~~~
cstrat
It is in AUD$

~~~
mancerayder
At least it's not posted in Tether. I should say, I'm almost surprised it's
not.

------
cdiddy2
I encourage everyone to watch this
[https://www.youtube.com/watch?v=DHc81OL_hk4&feature=youtu.be...](https://www.youtube.com/watch?v=DHc81OL_hk4&feature=youtu.be&t=1h44m28s)

especially the Q&A after the talk. Its extremely thought provoking

