
Bitcoin just passed $4,000 - janober
https://techcrunch.com/2017/08/12/bitcoin-just-passed-4000
======
probe
One thing I think a lot of people get wrong about tech is a "fear of large
numbers". Our mind is trained to think linearly (ex. Path prediction when
we're trying to get somewhere), and so when things don't align to it, it's
very hard to comprehend. A friend gave a great example demonstrating this -
would you bet that Uber/lyft will grow revenues by 25% next quarter or a
boring newspaper company will grow by 3%. Doesnt the 3% seem like such a
tempting answer, even though the former bet is most likely better?

I think something similar is happening when looking at cryptocurrencies (and
several tech phenomenons). This fear of large growth numbers can inhibit
clearer thinking (and you see that among public equity tech investors)

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basicplus2
Seems it would be difficult to use Bitcoin for the payment of goods and
services if its value is changing all the time, or is this not its intended
purpose?

~~~
phaed
Currently, Bitcoin is used as a store of value not so much for day to day
transactions. It's still evolving, its software, and it's upgradable.

~~~
thaumasiotes
That's exactly what you'd expect from a deflationary currency...

~~~
phaed
Whats your point?

~~~
thaumasiotes
That you shouldn't expect Bitcoin to ever behave any differently. It's
specifically set up not to function well as a currency.

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BatFastard
Why? How does this make sense?

~~~
nosuchthing
It doesn't. Especially considering all the other cryptocoin networks which
facilitate the same service the bitcoin network does.

The very limited number of exchanges essentially have an oligopoly, and as
price climbs slowly the fall in price and 'runs on the banks' can happen
extremely rapidly as the exchanges have no obligation to buy your coins for
anything other then 'market rate' which assumes there's a buyer.

Oh, and market demand is largely driven by bots and speculators - not the
actual functionality of the BTC network.

[https://www.theguardian.com/technology/2014/may/29/bitcoin-b...](https://www.theguardian.com/technology/2014/may/29/bitcoin-
bots-bought-millions-in-the-last-days-of-mt-gox)

[http://parasec.net/transmission/order-book-
visualisation/](http://parasec.net/transmission/order-book-visualisation/)

~~~
phaed
BTC is a store of value. How does the functionality of gold figure into its
value?

~~~
nosuchthing
BTC doesn't store value.

What value is it?

Why is it good that bitcoin is so inefficient?

What are the alternatives and is it possible to improve any of the failures of
bitcoin?

Are you speaking with a bias because you have invested in bitcoin and you want
to cash out some day?

The Bitcoin network stores numbers in a distributed database. Why is that
valuable?

Take a look at [http://coinmarketcap.com/](http://coinmarketcap.com/)

What makes BTC rare or valuable?

~~~
hackinthebochs
Bitcoin is capable of storing value because its features allow value to be
exchanged. Of course that doesn't endow it with value. But we endow it with
value because we inherently value a decentralized method for the exchange of
value. Bitcoin's existence bootstraps its value.

>Why is it good that bitcoin is so inefficient?

It helps increase the confidence in bitcoin. We value the energy used to
create bitcoins so that helps us recognize the value of the coins. It's no
different than rare stones being valuable because of the work expended to find
them.

~~~
nosuchthing
Bitcoins are not valuable because it requires extreme amounts of electricity
to sustain each transaction. Most people are unaware of that detail.

    
    
       at the time of Malmo's piece, he calculated that a single 
      bitcoin transaction requires as much electricity as the 
      daily consumption of 1.6 American households, and that 
      number has increased since then. "Adopting Bitcoin as a 
      major currency anytime in the next few decades," he wrote, 
      "would just exacerbate anthropogenic climate change by 
      needlessly increasing electricity consumption until it's 
      too late." 
    

Other distributed ledger networks have designs which offer the same service to
users, and in many cases are vastly more efficient in terms of electrical
usage and actual speed of transactions.

Kidney stones are rare and require lots of work expended to find them. Don't
confuse those precursors with establishing value.

[https://motherboard.vice.com/en_us/article/aek3za/bitcoin-
co...](https://motherboard.vice.com/en_us/article/aek3za/bitcoin-could-
consume-as-much-electricity-as-denmark-by-2020)

------
musikele
It's strange that nobody thinks that the war with North Korea has anything to
do with this. I believe chinese people is buying bitcoins in fear of a nuclear
war.

~~~
srigi
Wheres the logic in that. How do you buy food or medicals in postapocalyptic
world with BTC?

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shadykiller
Wait for a crash. Buy bitcoins. Sell at this bubble high. Get rich quick.
Repeat...

~~~
deweller
But is $4000 the high before the crash? Or will it go up to $6000 first? And
when it crashes, will it go up again? Or is it just the start of a 6 month
bear market?

Attempting to time the market will cause you to lose you money roughly 50% of
the time.

If you believe Bitcoin is undervalued, buy it. If you think it is overvalued
and you own some, sell it.

------
caiob
Honest question: Why should I care?

~~~
heheocoenev
Because something is happening. Large trades from Korean exchanges are driving
very high prices worldwide. It means people are fearful of the existing
financial system and are pouring their savings into "cryptocurrency".

~~~
firekvz
more like, people want to double their spare money/likes to read news where
they see how much "they won" by gambling on cripto.. not their savings

------
phaed
People look at price history of Bitcoin, see the hockey stick, and immediately
call bubble. [http://imgur.com/a/ifk2b](http://imgur.com/a/ifk2b)

What they fail to realize is that these linear charts plot a $5 change the
same distance when Bitcoin is $10 as when Bitcoin is $4000. Yet for Bitcoin to
go up to $15 when it was $10 it had to increase in market cap by 50%. For
bitcoin to go up from $4000 to $4005 it doesn't need jack squat, it's a
rounding error.

A better view of Bitcoin's price is in log scale. Here you can see that the
growth is steady:
[http://i.imgur.com/R9yQ8Dk.png](http://i.imgur.com/R9yQ8Dk.png)

There is nothing special happening now, as there was nothing special when it
went from $5->$10, $50->$100, $100->$200, $500->$1000, $1000->$2000. People
just want them, and they are a finite resource.

~~~
TylerE
Actually the log chart shows a substantial dip after every spike.

~~~
phaed
And what happens after the dips?

~~~
TylerE
So you acknowledge the dips exist?

~~~
phaed
I'm neither blind or deluded. After catastrophes like the MTGox theft where
trust was lost with Bitcoin, and the recent uncertainty with Segwith2x, the
market has taken a dive but has always turned around. There are billions of
dollars waiting in the side lines for opportunities to buy cheap Bitcoins.
Weak hands lose their money to opportune investors when these things happen.

