
Is There a Cryptocurrency Bubble? Just Ask Doge - nemild
https://www.nytimes.com/2017/09/15/business/cryptocurrency-bubble-doge.html
======
aml183
I have great respect for Kevin Roose, but this was a disappointing piece.
Dogecoin was a meme. It gained popularity and is still worth something.
Jackson Palmer might not believe it has value, but clearly, there are people
who own Doge that think otherwise.

There is definite frothiness in the market. Some token sales are scams, some
are overpromising, and some that look promising will probably blow up. Take a
look at SEC Fraud statistics for 2016. Crypto scams are a small fraction of
these crimes:
[https://www.sec.gov/news/pressrelease/2016-212.html](https://www.sec.gov/news/pressrelease/2016-212.html)

Reporters need to separate Bitcoin, Ethereum, Litecoin (and some of the other
older cryptocurrencies) from token sales and other crypto assets. Bitcoin has
existed for 9 years and has real users with real use cases (remittance &
cross-border payments)

I can keep going, but reporters really need to make an effort to do more
research and separate fact from fiction (I guess this can be said for many
areas of journalism though).

~~~
chrishacken
What do you do with Dogecoin though? It's market cap is $91MM and yet its
creation was a joke.

~~~
aml183
I guess sell it. People think it's valuable. Cryptocurrencies are priced not
valued. You can't just go Dogecoin is valued at X. Dogecoin is priced based on
supply and demand which is saying it's worth $91MM.

~~~
runeks
All Dogecoins in circulation are not worth $91m. For that to be the case,
there’d have to be people willing to buy all 111 million Dogecoins for
$0.000796 each, which is not the case at all. People are only willing to pay
this price for a tiny fraction of all Dogecoins in existence; as we go beyond
that, the bid price starts approaching zero.

~~~
CamelCaseName
The opposite is also true, and not just in assets like stocks but cryptos as
well.

The price of any asset increases substantially if you try to buy a significant
stake.

------
craigc
I think there is a difference between a cryptocurrency bubble and an ICO
bubble, and this article fails to distinguish between the two.

You can see Tom Lee, a financial strategist, talk about Bitcoin here:
[https://www.cnbc.com/2017/09/15/bitcoin-could-surge-
another-...](https://www.cnbc.com/2017/09/15/bitcoin-could-surge-
another-600-percent-to-25000-dollars-in-5-years-says-strategist-tom-lee.html)

He points out that there are only 300,000 Bitcoin wallets that hold $5,000 or
more. In the grand scheme of things that is very small compared to the overall
global economy. He also refers to Jamie Dimon’s comments that Bitcoin is a
“fraud” (It is worth nothing that JP Morgan bought up millions of dollars
worth of Bitcoin after the price crashed following that statement – on behalf
of their clients).

ICOs, on the other hand, are absolutely in a bubble. Companies are raising
hundreds of millions of dollars without even having a product. It doesn’t take
a rocket scientist to understand how absurd that is. In my opinion,
regulations in this area would actually do more of a service than disservice
to crypto, and I welcome them with open arms. For one, it will legitimize
token sales as a fundraising method, and for two it will remove most of the
scams and illegitimate projects that seem to be popping up daily.

I think Blockchain technology is here to stay. Even if 99 out of 100 ICO
projects fail (they will), that still leaves a few that will survive and may
become quite valuable. While the recent explosion in crypto prices seems
unsustainable, if it really does become the money of the future then the
prices now are going to look like pennies in five or ten years time.

~~~
subroutine
Noob question... What is the "product" that underlies the value of
cryptocurrency that is so much more valuable than what underlies an ICO? What
is the value of a machine churning hashes? It seems like the value is
underlied by securing a transaction ledger + an arbitrarily difficult math
problem. So is the value the security of the ledger?

~~~
craigc
That is a very good question. I didn’t do a good job making an argument for
why I think the value of a currency like Bitcoin could be so much higher than
an altcoin that did an ICO.

In my opinion, Bitcoin has the first mover advantage in this space. It was the
first real use of the blockchain, is still the gateway to pretty much every
other crypto currency, there is a maximum supply of coins, and is one of the
only coins that can be purchased/exchanged for US dollars (or other fiat
currency). In order to purchase an altcoin such as BAT (the token behind the
brave browser the article refers to), you have to first purchase Bitcoin. If
you want to sell your BAT tokens, you will receive Bitcoin.

Also Bitcoins do cost real money to actually mine (electricity costs).

Other tokens such as Ethereum are gaining popularity as well and have some
advantages over Bitcoin, but I don’t see Bitcoin being displaced anytime soon.

In the case of Ethereum, the value is that the token is used as “gas” on the
Ethereum network. Any action you want to take or data you want to store will
require that you send a certain amount of Ether in order to perform that task.
Since Ethereum is a platform that many of these ICO companies are building
apps on top of, it stands to reason that the value of the platform should be
greater than the value of the company building on top of it.

~~~
EGreg
Question:

Bitcoin is a global cryptocurrency. Sure it has a first-mover advantage but so
does Google. Today someone searches with google, tomorrow they may switch to
Bing. Can't the same be said of Bitcoin and say Litecoin / Dogecoin /
whatever? So why is Bitcoin worth more than Litecoin let's say? Both are
accepted by Coinbase etc.

~~~
koonsolo
Bitcoin has brand positioning. It might not be technically the best, but brand
positioning is really important if you are in a market. It occupies a clear
position in people's mind.

Does the common man think of "cryptocurrency", or does he think of "bitcoin"?
If in that persons head, "bitcoin" is the same as "cryptocurrency", then it
will be really hard for a competitor.

Google is a nice example. "I will google it for you". Nobody says "I will bing
that", or, sadly for other search engines, "I will search the web". We say "I
will google it". In our head, google is the search engine, and the search
engine is google. So if bitcoin is in that same ballpark, good luck to the
competitors.

But I'm not saying other cryptocurrencies can't bring anything new to the
table, such as Ethereum or Monero. But bitcoin definitely has the brand
positioning advantage.

------
jdormit
> A group of Bay Area programmers this year used an I.C.O. to raise $35
> million for their project, an anonymous web browser called Brave

As in Brave, the new browser from Brendan Eich (founder of Mozilla, famously
invented JavaScript in 10 days)? Hardly a scam...

Either the reporter didn't do their research or twisted the facts to fit their
story.

~~~
madamelic
>Either the reporter didn't do their research or twisted the facts to fit
their story.

It is quite obvious it is both.

\- Dogecoin creator was always a cryptocurrency skeptic. The article even
admits it but papers over it.

\- Blockchain =/= Bitcoin. The article insinuates that any blockchain-related
startups are built on top of Bitcoin.

\- ICOs =/= Bitcoin.

\- "early adopters often used it to buy drugs, weapons, or other illicit goods
on the dark web"

\- "including Jamie Dimon, the chief executive of JPMorgan Chase, who last
week called Bitcoin a “fraud,”" This line makes it clear what NY Times'
outlook is, they quote an opponent of cryptocurrencies like he is an expert.

~~~
srj
The NY Times recently restructured their reporting operations in a way that
reduced the amount of fact-checking done[1]. FWIW I'm a daily reader and
definitely feel the quality has suffered.

[1] [https://www.poynter.org/news/new-york-times-copy-desk-top-
ed...](https://www.poynter.org/news/new-york-times-copy-desk-top-editors-you-
have-turned-your-backs-us)

------
noddy1
I was a longtime ethereum sceptic, however I was guilty of being a cynical old
curmudgeon; the type that poo-poo's anything and everything novel on the
grounds that I'll be right 95% of time, ignoring the fact that I'll poo-poo
everything that will ever change the world.

Bitcoin made currency decentralised and permissionless.

Ethereum has made capital raising and equity holding decentralised and
permissionless. Sure, lots of people talk about SEC compliance, but in reality
anyone can raise equity for anything now. You can issue a token to fund for a
drugmarket if you wish, and pay dividends, and noone can stop you really. The
market cap of ethereum is 22 billion.. is that to high or too low for the
promise of permissionless securities?

~~~
hn_throwaway_99
> Bitcoin made currency decentralised and permissionless.

This is a common misconception, that cryptocurrencies can somehow exist
outside government control, and it makes me doubt some of the long term value
of Bitcoin. A government can basically make anything it wants illegal, and
once cryptocurrencies become large enough, there will be tons of additional
regulations and control.

~~~
josu
Drugs are illegal almost everywhere in the world and they are one of the
largest consumer markets. Something similar happens to US dollars in
Venezuela. So I don't know if making bitcoin illegal will really hurt its
value in the long run.

~~~
csallen
Your conclusion doesn't follow your observation. It's one thing to say that
the government can't stop something, and quite another to say the government
can't hurt it. Who knows how much bigger the drug trade would be without anti-
drug laws.

~~~
SomeStupidPoint
> Who knows how much bigger the drug trade would be without anti-drug laws.

In a few years we'll have a good idea based on marijuana in several US states.
We _will_ have to sift out the tourists though, because there do seem to be a
lot of those. At least, here.

We could also look at alcohol prohibition for a historic example.

------
madamelic
Really tired of mainstream hit pieces against cryptocurrency.

I wouldn't call myself a bitcoin fanatic (I hold a very small amount, just for
the fact of making myself learn about blockchain and cryptocurrencies), but
these articles are not well-researched.

They don't understand the difference between Bitcoin and Dogecoin, let alone
the difference between ICOs and Bitcoin, not to mention their misunderstanding
that blockchains are a technology, not Bitcoin.

The article even admits Dogecoin's creator was always skeptical and made the
coin as a joke, so him suddenly saying he is skeptical is just about the least
shocking thing.

~~~
forgingahead
Indeed, and since this is the NYTimes, it's worth remembering Gell-Mann
Amnesia once again:

“Briefly stated, 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.”

~~~
rtpg
For every story you read where you notice wrong facts, tens or hundreds of
stories are getting things fine.

Almost no one sits down and says "oh, indeed, this article is competent and a
correct statement of fact"

~~~
droidist2
It just so happens that all the stories where we know about the topic are the
ones with the wrong facts?

------
ritarong
One of the reasons Doge was successful was because it was, at its heart a
meme, and something fun. Bitcoin is sort of a meme too but it seems to keep
recreating itself. New 'Bitcoin Myths' keep popping up of why it should be
valuable. Bitcoin will make micro-transactions on the internet feasible.
Bitcoin will upend tyrannical governments. Bitcoin will be adopted by
countries with hyperinflation. Bitcoin is a hedge against financial collapse.

GOt that idea from here: [https://publication.widmerdun.com/the-perpetual-
bubble-machi...](https://publication.widmerdun.com/the-perpetual-bubble-
machine-d7e8ec7ca973)

------
cairo_x
I think the thing to remember with ICOs and new altcoins is that HODL, block
your ears and walk away does not apply.

People are making a living simply by flipping, insider trading, fake insider
rumours, companies stringing out claims and updates, releasing of Alpha's that
are paper models (not really even prototypes), teams with a lack of devs with
relevant crypto background, ideas that have no use of a blockchain at all,
tokens that offer no utility, or whose utility is yet to be determined, etc.
Tokens that have utility, but whose utility is relatively small, yet whose
investor base and node base is YUGE. It's turning into a bloodbath of fuckery.

~~~
michaelchisari
This is what an unregulated market looks like, and the more chaotic it gets,
the more I think people should understand why we regulate markets.

------
dagaci
Some have posted and argued that these currencies do not have "real" value. I
would argue that CrytoCurrencies do actually have inherent value. A few
reasons:

1# CrytoCurrencies are free from the existing monopolies of the banking
sector, money exchangers and politics. You can argue that those hegemonies
should have control, but it is undeniable that there is tremendous value to
many in that control weakening and being eliminated.

So you can see a source of inherent value.

#2 CrytoCurrencies are incredibly secure, can be extremely private and become
ever more secure overtime because of the effect of mining, every watt burned
acts to secure the network in an irreversible way

#3 Mining is the first application, mining secures the network and
participants are rewarded. More generalized applications with things like
solidity only increases the value of the network.

CrytoCurrencies are very much in an early phase, and not cleanly understood.
There's a long way to go.

~~~
zby
These are features that are useful only after you accept that the coins have
some value. If they don't store any value - then there is no use in security,
privacy etc.

But the point is that it is the same with all money - people don't want it for
itself - but rather because they expect to exchange it for something that
they'll want in the future.

~~~
dagaci
If your paper money does not store value directly. Which means you can't eat
it or directly build anything useful with it. And your checking account is
simply a digital representation of that paper then i would argue that a purely
digital currency is simply an evolution of that and not actually massively
different from paper. The difference being the removal of the requirement of
centralized control.

------
cvsh
This is possible enough that anyone putting a significant amount of money in
crypto is playing with seriously dangerous fire.

On the other hand, the fall of one cryptocurrency to scammers doesn't mean all
of them are destined to pan out the same way. This article doesn't really
offer any evidence for that extrapolation, either.

------
brownbat
Coins could be useful for many ends, some dubious and some benign. Criminal
purchases, inflation hedging, remittances, tax avoidance, online transactions,
payments between friends, store of value / speculation. Any one of these could
be affecting its value.

I often wonder though if Cryptocurrency's killer app is just capital flight
from China, with every other use case just so much noise.

While that toy theory may seem reductive, it's miles more explanatory than the
models offered by either the 'bubble' or 'will soon replace global financial
system' camps.

------
perpetualcrayon
The real "value" in cryptocurrency IMO is public-key encryption, which
everyone on the internet already uses every day for free.

The blockchain idea is novel, but I think way less valuable than the hype has
led us to believe.

------
InclinedPlane
Is there a cryptocurrency bubble? Of. Fucking. Course. Only those who are
extremely naive or cryptocurrency zealots could possibly believe otherwise.

Now, here's the core problem preventing people from understanding the reality
of the bubble: in almost all bubbles there is still a kernel of honest, real
value inside the bubble. That's the impetus for the bubble, but it doesn't
prevent the bubble from being a bubble. Housing values during the 2000s were
based on a strong economy and increasing demand in some fast growing cities.
In some places housing values merely plateaued during the financial crisis, in
some they never stopped going up. But, of course, across America there was a
vast drop in housing values, a huge increase in foreclosures, and a recession
that spread across the entire planet. It was a bubble, the bubble popped, bad
things happened.

A decade prior to that was the dot-com bubble. Many new internet businesses
were growing like crazy, investment and stock valuations had gone off the deep
end, leaving rationality behind. Businesses with no prospects for ever turning
a profit were having money rained down on them from VCs and IPOs. Then
eventually the bills started coming due, people became more skeptical of
dubious business plans, venture capital dried up, stocks started getting
dumped. Money stopped flowing so freely from investors into ridiculous
startups and from there into the rest of the economy. The entire world economy
was pushed into severe recession. But, of course, that doesn't mean there was
nothing of value inside the dot-com bubble. Amazon cut its teeth in that era,
and grew from a fledgling book store into a fulfillment powerhouse expanding
into a variety of goods and services. Easily tens if not hundreds of billions
of dollars in real honest to goodness value was built by internet companies
during the dot-com boom, and many companies weathered the bust just fine, some
even getting stronger. Google was born _during_ the recession, in fact, in an
era when basically the only way you made it with a dot-com company was to
already be turning a profit or to have a _very_ good and well executed idea.

Of course there is real, substantive valuable stuff happening with
cryptocurrency. But is that the majority of what's happening? Or is most of
the activity, most of the valuations and "market caps" driven by speculative
investment? It's pretty clear that it is the latter and that cryptocurrencies
are in a huge bubble. And just as with all bubbles, when it pops it's going to
be painful. Maybe something of value will survive? But only then will we know
for sure what the true, hard-nosed practical value of cryptocurrencies is.

~~~
topmonk
I don't think it is a bubble. Everyone seems to equate real estate, stocks,
and currency as all the same thing. Unlike the first two, currency increases
in intrinsic value the more people believe it has value. So saying that how
can bitcoin increase 1000x and still not be overvalued, you have to understand
that now (people x perceived value) has had to increase 1000x as well. This
means the currency is now accepted 1000x by more people and in greater
amounts.

This is a snowball effect that won't apply to real estate or stocks, but does
apply to currency.

Until people see the difference, they are going to be continually blindsided
by the increase in value of crypto currency.

~~~
lloyd-christmas
This is only true if the people buying it actually think of it and use it as a
currency. I own some bitcoin and ether and have never used them as a currency.
If its usage is not primarily as a currency, it isn't a currency. I struggle
to believe there is more value on a daily basis in transactions of btc for
goods and services than there is for "forex".

~~~
topmonk
I think you're putting the cart before the horse here. The reason that USD is
used to buy goods and services is not because everyone woke up one day and
began to "think of it and use it as a currency".

USD just happens to be the most convenient financial instrument for a lot of
people.

The more people that own and value BTC, the more convenient it will become to
transact with, the more stores that will accept it, and _then_ people will
think of it and use it as a currency (if it succeeds, that is).

Any item of value is priced according to its future utility. So BTC's price
now relates to what it's value as a currency will be, adjusted by the
probability it will succeed, in the future.

If you don't believe that BTC will ever be used as a currency, then you don't
believe in the success of the bitcoin experiment in general, and since that's
its only purpose, then of course you would have to conclude its in a bubble.
But if you do believe in the success of the experiment, then the price does
not seem out of whack at all.

~~~
lloyd-christmas
> I think you're putting the cart before the horse here.

I'd argue that you are the one doing this. You're labeling something as what
you'd _like_ it to be and what it's _intended_ to be, not what it _is_.

> If you don't believe that BTC will ever be used as a currency, then you
> don't believe in the success of the bitcoin experiment in general, and since
> that's its only purpose, then of course you would have to conclude its in a
> bubble

This is irrelevant to me. If I can profit off something, I don't need to form
conclusions as to whether or not it's a bubble or whether or not it will
succeed. I worked as an equities trader for half a decade. I didn't need to
know the 5 year plan of AMZN before I bought it, nor did I need to know the 5
minute plan of a company stock that dropped 50% in a minute because of one
large seller. All I needed was some clue that other people are willing to buy
it for more than I did at some point in the future. At this moment in time,
that's exactly what BTC is to me. I think it would be neat if it succeeded,
but that isn't why I own it _at this moment in time_.

~~~
topmonk
> I'd argue that you are the one doing this. You're labeling something as what
> you'd like it to be and what it's intended to be, not what it is.

What does "labeling" mean? I'm just saying the value of cryptocurrency depends
on whether in the future it will be used as a currency. If it will, then it's
value is much higher than it's current price. If not, then it's value is zero.

> This is irrelevant to me. If I can profit off something, I don't need to
> form conclusions as to whether or not it's a bubble or whether or not it
> will succeed.

I thought we were talking about whether crypto is in a bubble or not. No? Then
what are you talking about? Irrelevant to what?

------
zby
What is a bubble? """ An economic bubble or asset bubble (...) is trade in an
asset at a price or price range that strongly exceeds the asset's intrinsic
value. """ from wikipedia
[https://en.wikipedia.org/wiki/Economic_bubble](https://en.wikipedia.org/wiki/Economic_bubble)

What is intrinsic value of Bitcoin? There is none. But it is the same with
dollars actually, yes if you live in the US then you can pay taxes with it,
but you mostly pay taxes only after you earn dollars. And then the same with
gold - the intrinsic value of gold as a technical material or for jewellery is
probably a small fraction of its current market value. I tend to think that
being in a bubble is a defining feature of _money_ \- people want it not for
its value - but because they believe they'll later exchange it for something
valuable.

Money is a perpetual bubble, a bubble that does not pop. I am not sure if
there is a place for thousands of inflated bubbles. There is too much friction
in such a system - you never know if the seller will accept your coins.

Not all cryptotokens are money - some are just securities with an intrinsic
value - for example [https://zrcoin.io/](https://zrcoin.io/) which is backed
by a promise to buy it back for the market price of 1kg of ZrO2.

~~~
dtech
> Money is a perpetual bubble, a bubble that does not pop

The bubble can very much pop if people stop having faith in the currency and
stop accepting it (or demanding larger amounts to compensate), making the
currency lose its value.

This is a very large risk for most current cryptocurrencies, bitcoin included.

I would also argue that the Dollar has a very strong link to useful physical
goods: it's the only currency OPEC oil is sold in.

------
LMYahooTFY
"Bubble" has been used with so many contextual implications that it's
practically meaningless.

In this case it's effectively used to describe the digital divide in a new
network protocol, just as the dot-com bubble before it.

The casino analogy is accurate only if you ignore what most commentators fail
to comprehend: Cryptocurrencies are both a technological innovation and a
COMPETING CURRENCY.

[https://en.wikipedia.org/wiki/Free_banking#History_of_free_b...](https://en.wikipedia.org/wiki/Free_banking#History_of_free_banking)

[https://en.wikipedia.org/wiki/Alternative_currency](https://en.wikipedia.org/wiki/Alternative_currency)

The Federal Reserve is very simply a banking cartel, which gives the United
States a single stable currency to conduct transactions efficiently and
maintain a unified economy. Obviously the trade-off in this system is a
permanent banking oligopoly.

The casino analogy works better if you include the notion that we all live and
work within a dramatically larger casino.

To answer the underlying point of the article, most of these cryptocurrencies
are as much a scam as CompuServe, Usenet, Netcom, or whatever else is still
walled off from the internet stack.

------
mrb
The current Bitcoin bubble is much tamer than previous ones. There were
multiple periods in 2010-2013 where Bitcoin saw 10x gains in 2-3 months. In
fact it's so tame that even some large-cap stocks have matched or outperformed
Bitcoin recently eg. AMD who is up 6-7x over last 2 years, like Bitcoin.

I don't see the NY Times writing articles about AMD being in a bubble...

------
MustrumRidcully
The problem of bitcoin is that there is a finite amount of it that will be
available.

As use of bitcoin is scheduled to grow, the pace of the production of bitcoins
needed to support the market does not keep up.

This results in a steady increase of the value of bitcoin, which is good for
adoption (more people will buy it to speculate and sellers will accept it),
but endangers it as a mean of paiement as buyers are always better of paying
in $, which devaluates over time, instead of Btc, which will increase over
time.

The reason bitcoin will not be used for daily exchanges is the same as we do
not use gold anymore. But since Btc has no intrisic value, I hardly see it as
a reserve money.

~~~
koonsolo
> The reason bitcoin will not be used for daily exchanges is the same as we do
> not use gold anymore.

Everybody has a cellphone. You pay and receive "money" with your cellphone.
Wallets will be redundant in the future, everything that is in your wallet
will be stored in your phone.

And you know which currency can be paid with your phone? Exactly!

~~~
MustrumRidcully
Well you could do the same with paper-gold. But since its value increases over
time you have no incentive to prefer it over $, which have a decreasing value.
Stop focusing on tech and try to think about underlying market forces.

~~~
koonsolo
I don't know about you, but I prefer to store the value that I work for, in
something that doesn't burn 2% off each year.

And if I have to buy something, I will just trade in my value stored with the
thing I want to buy. I don't see any need to go to an intermediate thing that
keeps decreasing in value.

Paper money was preferred over gold because it was inconvenient to keep
working with gold, not because the paper loses its value.

~~~
MustrumRidcully
Said in another way, do you prefer paying for your car in bitcoins, which is
likely to increase in the next years, or $, which will decrease?

Bitcoin may be good to store value (gold or land being the best), but isn't
adapted for exchange, as no one wants to use it to buy something. Sellers
should offer steep discount for the opportunity cost in order to obtain the
money, which isn't very likely.

------
rvern
Scott Sumner:
[http://econlog.econlib.org/archives/2017/09/how_do_we_evalu....](http://econlog.econlib.org/archives/2017/09/how_do_we_evalu.html).

------
thinbeige
Two simple patterns (and there is nothing wrong with either one):

\- People who say crypto is a bubble missed to invest

\- People who hype crypto are invested

However, the key is still to have a balanced portfolio and not just with
crypto.

------
eddieone
There is a bubble some where. Looking at the total supply of bitcoin and the
current maximum of 21 million, bitcoin's inflation is slowing while fiat
inflation is growing exponentially. Expect more big waves and mass capital
flight as currency transitions into the crypto economies.

------
eighthnate
Given the low interest rate environment the past 10 years by major central
banks around the world, couldn't you argue that everything is a bubble at this
point?

If the world is awash in cheap money, then it's almost tautological that most
"assets" are in a bubble.

~~~
droidist2
It seems hip to say things are in a bubble so I'm going to say yes, everything
is a bubble, well except the things that are "dead" because that's even cooler
to say. So, hmm, maybe Bitcoin is dead. Time to write a Medium article called
"Bitcoin is Dead, Long Live Blockchain!"

------
miralabs
Here is where's the bubble's at [http://www.marketwatch.com/story/heres-how-
the-us-got-to-20-...](http://www.marketwatch.com/story/heres-how-the-us-got-
to-20-trillion-in-debt-2017-03-30)

------
SubiculumCode
True or False: Crypto currency's value is determined by its utility to the
black market.

------
dhuramas
Whenever I hear of "bubble" I am reminded of this quote - "“The market can
stay irrational a lot longer than you can stay solvent!”

So yes it may be a bubble- but the bubble may very last a few months, a few
years, or a few decades...who knows?

~~~
dogruck
Agreed. It's too bad there aren't effective mechanisms to go short though, so
people who think we're at a peak can back their view with money.

~~~
fwdslash
What are you talking about? Also every exchange out there will let you short
any number of cryptocurrencies.

~~~
dogruck
I do not personally believe the bitcoin markets will function properly for the
shorting mechanism to pay off in interesting scenarios.

If I borrow your bitcoins, how will you force me to sell them? If we agree
that a third party will warehouse those coins, how can I trust them? And if
BTC plunges, who's to say that 3rd party will still operate?

All very different from shorting a stock.

But if you want to loan me your bitcoins, let's talk!

I'm also interested in borrowing any other bearer instrument that you possess?
(Now thinking of bearer bonds in the movie Heat)

~~~
PretzelPirate
People successfully short cryptocurrencies every day and reputable exchanges
pay out, even during massive drops. If you really want to short, sign up at
GDAX and enable margin trading.

~~~
dogruck
"It has worked ok so far. Therefore there's no problem."

~~~
qznc
You want to suggest that they would not pay out if Bitcoin crashes to zero?
Maybe. They are not regulated after all. They might also be bankrupt before
Bitcoin hits zero.

Still, you can short these 30% drops without problem.

Did shorting the housing market work out well in the crash? I remember a movie
with Christian Bale, where it did.

~~~
dogruck
Yes, some people successfully shorted the housing market. But they did not use
bearer instruments to take their positions.

[https://en.m.wikipedia.org/wiki/Bearer_instrument](https://en.m.wikipedia.org/wiki/Bearer_instrument)

Also, counter party risk was a major issue during that financial crisis.

------
jokoon
It's true that libertarians are really fans of crypto-currencies.

To be honest, as long as you trust a government, banks can be trusted with
your money, especially since the government regulate banks since the
government doesn't regulate crypto-currencies (yet).

Libertarian when you profit from crypto-currencies, until somebody steal you
bitcoin wallet or until bitcoin crashes again. Then you're pretty happy to
still use an insured bank account.

I would not be surprised to see bitcoin being used to launder money. All you
would have to do is to sell a pile of dirty cash online against bitcoins, and
send those dollar bill by the mail. I'm sure somebody already thought about
that and is doing it already.

To be honest I would not understand why bitcoin is so high right now, a
logical explanation would be drug money.

------
tpallarino
Ironically, Doge had a market cap of over 400 million a few months ago. It is
now below 100 million. Does that mean the bubble already happened according to
this article?

------
Geee
This thread is history book material, once again. Coming generations will roll
on the floor laughing that we actually used pictures of dead people for money.

------
jondubois
He is probably just upset that Dogecoin has been going down for a while now.
The fact that Dogecoin is going down could be seen as proof that
cryptocurrencies are becoming more serious.

