
Bitcoin hits a new record high above $5,100 - sAbakumoff
https://www.cnbc.com/2017/10/12/bitcoin-price-record-high-above-5000.html
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peoplewindow
It seems that no matter what goes wrong with Bitcoin the price hardly reacts
at all. It's been practically banned in China, its community is centralised,
riven with censorship and infighting, the ledger split in two, it is
presumably about to split again, fees are sky high, the network is saturated
and unreliable, the innovation has gone to Ethereum, Lightning Network is
nowhere to be found and actual usage can't increase due to the block size cap.
Overall it's just a constant stream of bad news.

Yet the price keeps going higher. Where is this money coming from and where is
it going? Is it really all coming from speculators who don't actually use the
system at all or even read about it?

~~~
xiphias
Most of the drama around Bitcoin doesn't change the fact that Bitcoin seems to
be the best store of value in the history of humanity.

For us who take it seriously and trust the Core team to be a great team of
cryptographers and cautious programmers, Bitcoin is maintained well and
doesn't need any new feature to be good as a store of value. It's great that
it can scale somewhat, but I consider all those improvements as an extra.

If we look at fiat currencies actually, they are a low bar as a store of value
to hit.

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Mc_Big_G
This is probably due to an imminent hard fork. People are buying up bitcoin to
get automatic profit when the fork gives them 2 coins. It happened recently
with Bitcoin Cash. It will be interesting to see which fork wins out and what
the aggregate price will be after the fork.

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mercer
Is it actually the case that it'll work out like that, similar to Bitcoin
Cash? Or is it more complicated. Asking for a friend who has some ether...

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yodsanklai
How many people did get rich by investing in bitcoin? it blows my mind that it
went from virtually nothing in 2010 to $5000 a bitcoin. Is it accurate to say
that 200 bitcoins in 2010 (a couple of dollars) makes you millionnaire today?

~~~
zzalpha
What blows my mind is the massive wealth transfer this represents.

Bitcoin has no intrinsic value. It's simply an abstract asset with no value
other than what someone else is willing to pay for it. And there are no
fundamentals that justify its price. So it's just pure wealth transfer from
later arrivals to early arrivals. It's a zero sum game.

It'd be fascinating to chart the transfer of wealth in Bitcoin across the
globe to identify the big winners and losers.

~~~
conanbatt
I dont think this captures the value of purchasing bitcoins. If its true that
a large part of the volume is people moving the money out of china, its like a
banking service to them, even if they take a hit with a large cut by playing
the ponzi.

Even at its downs, bitcoin has found demand still. That is a very interesting
signal. If it were just the ponzi as you say, it would have come crashing down
on its downturns.

~~~
zzalpha
_Even at its downs, bitcoin has found demand still. That is a very interesting
signal. If it were just the ponzi as you say, it would have come crashing down
on its downturns._

That is profoundly faulty reasoning.

For a _lot_ of people, a drop in bitcoin is just a signal to buy because they
have an irrational belief that it can never really go down permanently (which,
to anyone who remembers 2007, should sound familiar).

A ponzi scheme can go on as long as you can find new market entrants, and what
makes Bitcoin remarkable is that it can tap into revenue sources throughout
the entire world, and in particular in places where socioeconomics and
geopolitics makes something like Bitcoin extremely attractive. That's a _lot_
of fuel for this particular fire to burn before it fizzles out (presuming
fundamentals aren't established before then).

The world has never really seen anything quite like this, and it'll be
fascinating to see what happens over the next 10-15 years. And, meanwhile,
again, there is a _lot_ of wealth being transferred, and I'd love to see where
it's going...

~~~
conanbatt
> That is profoundly faulty reasoning. For a lot of people, a drop in bitcoin
> is just a signal to buy because they have an irrational belief that it can
> never really go down permanently (which, to anyone who remembers 2007,
> should sound familiar).

Its not faulty at all. When a ponzi stops paying out it crashes. Bitcoin had
long periods of not paying out. The never ending demand for it signals the
opposite of a ponzi: all assets with demand have a floor where people stary
buying again.

I also dont see bitcoin's value as most people. I sold most at 60, figure that
out. Who knows where this ends..

~~~
zzalpha
Which is why this isn't as simple as a direct Ponzi scheme where actual cash
payments are passed around (and why I never actually called it one).

It's more like a MLM where sellers are buying their own product for resale
with the expectation of future returns.

This breaks the normal dynamic of a Ponzi scheme since there's latent
inventory lying around that can be bought, sold, or held until another sucker
comes along. And that delays the crash.

Of course, the big difference is a normal MLM at least offers a product with
some nominal base value, whereas the base value of Bitcoin is precisely zero.

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jdhn
As usual, this recent move is China related. I had a feeling that the
exchanges were shut down in the first place because they were too porous and
were acting as a new method for Chinese citizens to move their money out of
the country. I wonder if the government will force the exchanges to report on
the movement and quantity of Bitcoins that are moved to addresses outside the
exchanges.

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vinchuco
Not long ago, a bitcoin was worth less than a dollar. Uncanny.

~~~
blueside
I don't think there ever has been an asset in the history of mankind that has
appreciated so fast and so high like this.

~~~
BjorksEgo
Tulip bulbs...

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abtTwp
Is there a real market? Are there any known cases where someone has sold
$100,000,000 in bitcoin over, say, 3 months?

~~~
Atheros
So far no one has advertised that they have completed that sort of
liquidation. But they might just be being quiet as smart rich people do. We
just don't know.

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conanbatt
Bitcoin for me is one of those big indicators that asset prices being high
could really be because china is outflowing massive amounts of money to the
world.

It might actually be a canary in a coal mine that if it went bust, then all
other assets could promptly follow.

~~~
dmoy
I would guess that Bitcoin is only a tiny fraction of the capital flight from
China. I could imagine a few scenarios where China's access to Bitcoin gets
cut off somehow, tanking Bitcoin, but leaving the other more utilized capital
flight methods intact.

~~~
conanbatt
Of course, I agree, you can always scare the canary to death by yourself.

The big question is what is actually happening with china: is the outflow of
money permanent, increasing or decreasing? If china was strangled by a crisis
and devaluated internally, for example, and money came back into china, that
could be devastating for the world.

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jron
Bitcoin is now valued a little higher than a major shoe company.

The cognitive dissonance around Bitcoin was understandable during the first
move to $1000 but anyone yelling bubble now really needs to consider how tiny
86 billion actually is.

~~~
zzalpha
I disagree.

Let's take the American real estate bubble. According to Wikipedia:

"Total home equity in the United States, which was valued at $13 trillion at
its peak in 2006, had dropped to $8.8 trillion by mid-2008 and was still
falling in late 2008."

Two years, a 5 _trillion_ dollar haircut.

The Bitcoin Bubble? For an asset that taps into capital markets across the
entire globe, $86B is adorably small.

IMO, the bubble is still inflating and there is a long way to go, yet. To me,
the real test will be when the next major worldwide recession sets in...

~~~
jron
Sorry. What don't you agree with? I think we're saying the same thing here.

~~~
zzalpha
LOL, so I read this statement:

 _but anyone yelling bubble now really needs to consider how tiny 86 billion
actually is._

As a statement that the current price means the bears were wrong and that this
isn't a bubble.

I probably misunderstood! I'm still working on my first coffee...

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LaikaF
I remember reading people on Reddit that were saying 2000 by the end of the
year. I didn't believe them and it turns out they were wrong just not in the
way they expected. Makes me wish I had held onto more.

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ca98am79
HODL!

