
Bitcoin is a Bubble - wskinner
https://www.theguardian.com/commentisfree/2017/dec/24/bitcoin-is-a-bubble-the-technology-behind-could-transform-world
======
alew1
Whether or not the economics are right, this author doesn’t understand the
technology:

> To explain: essentially, “blocks” are segregated, vast bundles of data in
> permanent communication with each other so that each block knows what the
> content is in the rest of the chain. However, only the owner of a particular
> block has the digital key to access it.

I know journalists need to simplify the technology, but those simplifications
should basically be correct. This is just... wrong.

~~~
sschueller
I wonder how many journalists don't understand what they are talking about and
we think they do. I stopped reading the local paper after a tech article in my
field was so wrong that I doubt other articles in fields I don't know anything
about are factually correct.

~~~
doots
"the Gell-Mann Amnesia effect is as follows. You open the newspaper to an
article on some subject you know well. In Murray's case, physics. In mine,
show business. You read the article and see the journalist has absolutely no
understanding of either the facts or the issues. Often, the article is so
wrong it actually presents the story backward—reversing cause and effect. I
call these the "wet streets cause rain" stories. Paper's full of them. In any
case, you read with exasperation or amusement the multiple errors in a story,
and then turn the page to national or international affairs, and read as if
the rest of the newspaper was somehow more accurate about Palestine than the
baloney you just read. You turn the page, and forget what you know."

Michael Crichton

------
wsc981
Bitcoin is going to grow to 50.000 - 100.000 USD within the next year:

* The limit of coins will increase the value of each individual coin (deflation), while the USD's value will still inflate. For miners this doesn't have to be a problem in the long term, since money can still be earned on processing transactions.

* The problems with high transaction fees and slow transaction times will hopefully be solved with the Lightning Network. I know people have been working on the Lightning Network for a long time, but I truly believe it will be introduced for Bitcoin in 2018, because there is a huge need. If Bitcoin will not adopt the Lightning Network by 2018, perhaps some other crypto currency could take over as the number 1 crypto.

* Lost coins will push the value of the existing coins higher.

Do I think block-chain will take over? I do believe so. We should take a very
good look at Asia, I believe the most important developments regarding
blockchain tech will happen over there. One of the projects that is of great
interest to me (I've bought some coins) is Omise GO. Omise GO could give
banking capabilities to people without needing them to sign up to bank
accounts. It means people without bank accounts might be able to purchase
products over the internet using their Omise GO wallets. It also means people
can receive money easily without needing a bank account. Asia still has a lot
of people without bank accounts. Of course many other interesting applications
with block chain tech are developed as well. For example software to track
inventory for shipping companies like Maersk.

If some important economy destabilises, look for more common people move into
crypto as trust into central banks erode as has been seen already in e.g.
Venezuela and Zimbabwe. I believe this could happen in the Eurozone as I
believe the Eurozone's economy is still very weak and a small event could
evolve into a big crisis over there.

Look for increased efficiency in the block chain and decreased power of
governments and banks in the longer term future.

~~~
babypistol
I don't understand why people still do this type of "X will grow" predictions.

You have nothing to lose by making such predictions, just like how everyone
who predicted the rise of tulips is now laughed upon. Furthermore, even if
Bitcoin DOES go up, it's not like you'll be applauded for being an 'oracle'
just because you predicted this either. Pretty much everyone who's invested in
Bitcoin, hoping to get rich, and doesn't understand the technology is saying
the same thing.

Why not actually learn how the technology works, so that you don't make these
shallow deceptive remarks that sound exactly the same as the conversation I
had with my blockchain-entrepeneur friend last night, and instead maybe stop
trying to get rich quick by hyping Bitcoin?

Regarding all the reasons you pointed out, except for the Lightning network
solution, the rest are really big problems. Just because more and more people
buy Bitcoin you think it will go up to 100.000? Just because you have some
Bitcoin because of your speculative greed, you think Bitcoin will go up to
$100.000?

The limit and distribution of coins are really the biggest issues right now,
and there are tons of different approaches people are working on to keep it
that way. Just like tulips were unfairly distributed and overvalued. I'm sure
people will see through the get-rich-quick scheme.

One thing I find annnoying about Cryptocurrency enthusiasts saying Bitcoin
will grow is how they think Bitcoin is some evolving thing that's sure to
succeed because they bought into it early. Bitcoin was designed to enable
people a decentralized currency and that's the whole point. People will find
various ways to lure people into buying Bitcoin (or Omise GO) without clear
benefits because financial inventivization comes from them already owning some
coins.

~~~
cocktailpeanuts
Wow, is this s bot account? It looks exactly like my comment here
[https://news.ycombinator.com/item?id=16028673](https://news.ycombinator.com/item?id=16028673)
yet has different content.

I sort of hope this really is a bot account, that would be super impressive
how you can take a paragraph and transform it into something else.

~~~
wsc981
I think it was done manually. This guy probably noticed that my comment was a
play on another comment in this topic:
[https://news.ycombinator.com/item?id=16028553](https://news.ycombinator.com/item?id=16028553)

:)

~~~
nkkollaw
This is amazing.

------
0wing
This author is either lying or has no idea how blockchains work.

See: [https://hackernoon.com/ten-years-in-nobody-has-come-up-
with-...](https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-
case-for-blockchain-ee98c180100)

    
    
      Blockchain will administer similar shocks to insurance, healthcare 
      and all mass payment systems.
    

Blockchains can do nothing useful for insurance and healthcare.

Publicly accessible databases with auditing and security mechanisms (double-
entry accounting, git, and merkle trees predate bitcoin and blockchains) and a
public API which will likely be branded as blockchain tech will always outpace
any sort of PoW/PoS style blockchain protocol replicated database.

    
    
      Intermediaries in the service industries will face a new world in 
      which their routine functions will be performed by machines, 
      programmed by artificial intelligence, while the blockchain becomes 
      the new means to do business safely, faster and less riskily. 
    

This is just a poor writer grasping at buzzwords. SciFi writers at least try
to paint a more detailed picture to fit their buzzwords in. Blockchains are
notably irreversible, so there's an inherent risk and immense inefficiency in
their use.

    
    
      the blockchain economic model is more efficient and more effective 
      the larger the network.
    

This is absolutely false.

Blockchains are insanely inefficient as a design feature attempting to prevent
a single group from having write access to the database. As the network grows
larger and more computing power is added, the effectiveness and efficiency
goes down and transaction throughput remains the same (blocksize bandwidth
usually has a hard limit, in rare cases blocksize can be variable and grow but
this is unaffected by addition of computational work added to the network,
granted the blocktime/hashrate consistency readjustment stabilizes)

~~~
aiCeivi9
> This author is either lying or has no idea how blockchains work.

Or just doesn't care and created whole article from older one mostly by
replacing `cloud` by `blockchain`. I guess someone could update
[http://www.andrewdavidson.com/gibberish/](http://www.andrewdavidson.com/gibberish/)
to generate such fluff pieces.

------
randomerr
Bitcoin is going to drop to $300-600 within the next year:

* There are only a limited number of coins out there so people are going to stop mining for them as he near that limit. You can see that now with fewer people buying ASIC and similar FPGA modules.

* The transaction fees are getting be as great as the cost of a pizza transaction

* Lost coins - There are millions of wallets out there with people exploring BitCoin that has just been lost. Its a lot easier to lose your wallet hash then your physical wallet.

Do I think block-chain will take over? Yes and then it will crash
spectacularly. I honestly look for the markets to take off over teh hype and
then die death crashing into a universal central system.

Look for more slow downs with chat-bots, games, and video services, onion
routers piggy backing on the service. Then there purposely bad transactions in
DOS terrorism to destroy confidence in issued currency. Eventually this will
force the 'new banks' take us back a world centralized bank with sharded nodes
that a UN like structure will control.

~~~
cocktailpeanuts
I don't understand why people still do this type of "X will die" predictions.

You have nothing to gain by making these predictions, just like how everyone
who predicted the fall of the Internet are now laughed upon. Furthermore, even
if Bitcoin DOES go down, it's not like you'll be applauded for being an
'oracle' just because you predicted this either. Pretty much everyone who's
risk-averse or doesn't understand the technology is saying the same thing.

Why not actually learn how the technology works, so that you don't make these
shallow snarky remarks that sound exactly the same as the conversation I had
with my uber driver last night, and instead maybe yourself could come up with
a solution?

Regarding all the reasons you pointed out, except for the transaction fee
issue, the rest are really non-problems. Just because fewer people buy mining
devices you think it will go down to $300? Just because you lost your Bitcoin
because of your carelessness, you think Bitcoin will go down to $300?

Transaction fees are really the biggest issue right now, and there are tons of
different approaches people are working on. Just like the Internet had hard
time scaling in the early days I'm sure people will figure it out.

One thing I find annoying about mainstream media saying Bitcoin will die is
how they think Bitcoin is some fixed thing that's doomed because it won't
evolve at all. I expected better from HN audience. Bitcoin is designed to
evolve through forks and that's the whole point. People will find various ways
to fix all kinds of challenges because financial incentivization is built into
the protocol.

~~~
spyder
Hah, nice comment recycling :) (
[https://news.ycombinator.com/item?id=16028809](https://news.ycombinator.com/item?id=16028809)
)

~~~
cocktailpeanuts
Wow that's so weird, what's going on? Did that guy just copy and paste my
comment there?

I don't really care about getting credits for this comment (which by the way
got downvoted tons) but it's still really weird that someone would copy and
paste the same comment on the same thread.

------
spyder
> _" instantaneously"_

Looks like the writer didn't even tried to use bitcoin.

------
joeblow9999
"Humanity’s earliest, truly transformative general purpose technologies were
the ability to cross-fertilise plants and cross-breed animals. Suddenly, it
made more sense to farm than to hunt and gather"

This article opens up immediately with a stupid and facile analysis of the
birth of the Agricultural Revolution. I stopped reading here.

