
A tale of two bubbles, the dot-coms and Bitcoin - fraqed
https://www.marketwatch.com/story/a-tale-of-two-bubbles-the-dot-coms-and-bitcoin-2017-12-07?siteid=rss&rss=1
======
hectorr1
The question that I keep coming back to is what are the implications of
investing/speculating in a technology well before its implications are
understood?

Adam Ludwin, the CEO of Chain, talks about how when the dot-com bubble
happened, everyone knew at least to an extent that online retail would be a
thing. Social networks would be a thing. Digital media would be a thing. The
required ingredients were competition, Moore's Law, and time.

Bitcoin is different for a few reasons. It doesn't solve economic problems for
most people in developed countries. It's also a development far deeper in the
technology stack, a change in ledger management and accounting procedures. The
last major update to this was double entry in the Italian Renaissance, which
allowed the formation of corporations. The one before that was the invention
of zero.

We don't know what the implications of Bitcoin will be. I think a much better
analogy for the current bubble is the South Sea Company, since that was
essentially people speculating on a new asset class (equity) that was poorly
understood at the time. But saying that it's a bad investment because the use
cases are not immediately obvious misses the forest for the trees.

~~~
spookthesunset
All this was thought about the last time bitcoin spiked. Bitcoin is 9 years
old. The iPhone wasn’t even around when it was born. If bitcoin was gonna
revolutionize money, bookkeeping, governments, and life in general, it would
have happened already. The truth is, all bitcoin is at this point is an
advanced form of gambling....

~~~
hectorr1
The pace of technological development in the past 20 years has been driven by
scaling processing, storage, bandwidth, and networks. The intellectual, legal,
cultural, and social infrastructure to make that happen already existed for
the most part. When tech has an impact deeper in the societal stack, it takes
a lot longer for its impact to be felt.

NB: Eternal September was in 1993, when Usenet went mainstream. Facebook,
Twitter, etc weren't invented for another decade. Since then, they've both
toppled dictators and elected a reality TV star to the Presidency. Change
happens gradually, then suddenly.

------
stillbourne
The block chain is an interesting concept. I just don't think entropy should
be a valid commodity currency. Here, let's trade spent compute cycles, and
then spend more compute tracking where my compute has gone! Yo, dawg! I heard
you like entropy so I put some entropy on your entropy so you can track
entropy. Meta-Entropy is all the rage these days.

~~~
wyldfire
I will posit that the proof-of-work is the only way to have: (1) a trustless
decentralized network with (2) equitable distribution/minting of the coin.

I will concede that other coins exist that don't use a proof-of-work (instead
proof-of-stake or other). Those forfeit trustlessness and/or equitable
distribution. I will also concede that it may be possible for those coins to
fulfill a need and be useful without all of those things. Though I doubt they
ever could have been created if not for bitcoin having been created first.

~~~
stillbourne
Explaining your reason for trusting it doesn't detract from the fact that you
are just trading entropy around. "Proof-of-work?" What work? I spent a
undefined amount of power from the grid to render a string of digits in a
specific pattern? I can flail against my keyboard or pipe /dev/urandom to a
file is that worth $16k? Can't you see that you are engaging in madness? Just
because you have defined the method of your madness doesn't make it any less
insane.

~~~
wyldfire
It's not madness. I think you're dismissing it as "insane" without
understanding some critical issues. It's [proof-of-work] the only way to do
that [what bitcoin does], or rather no one has yet suggested an alternative
that preserves those qualities.

The work done for the bitcoin network has utility, that much we can agree on?
And you think perhaps that the utility provided by the network is not a net
benefit considering the cost of the PoW? Well, unfortunately that much is
subjective and there's enough folks out there willing to spend resources on
it.

However it's not madness. Proof-of-work is required in order to have a
mechanism that has bitcoin's qualities.

If you want to fight against what you might perceive as waste or madness, it
seems like tilting at windmills IMO. But the best thing you could do is build
a better mousetrap -- or invest/promote one of the non-PoW coins out there.

EDIT: clarified some uses of "it" in the first paragraph.

~~~
stillbourne
> The work done for the bitcoin network has utility, that much we can agree
> on?

No, I do not agree, there is no intrinsic value in wasted compute. The only
value that wasted compute can have would be a measure of the amount of entropy
spent generating that "value." Entropy has no value. It's just energy that
cannot be spent again.

~~~
wyldfire
Ah, ok, well let me lay out my argument for why it has utility.

Your bank and other organizations (Western Union, etc) spend a great deal of
their time and money to create and maintain networks that permit them to move
money from one place to another on Earth. Your bank probably pays to some
network in order to be able to send and receive "wires" of money to and fro.
Migrant workers use Western Union and the like to send money from the country
they work to their families back home. For this, Western Union and the global
banking networks charge fees. The fees charged by bitcoin to relay funds can
be significantly lower. Probably not universally so, but I'd say all
transactions above a certain dollar amount would be cheaper. They'll probably
be as fast or faster than traditional remittances. Bitcoin does this as good
or better. Western Union and friends could decide that leveraging the bitcoin
network might actually be cheaper than their current network, or they might be
forced to realize this by competitive pressure from other bitcoin-based
remittance companies.

Ok, so that is one use that is IMO unassailable. The people on this planet is
putting money into building retail locations for Western Union, they're paying
for the power to keep the lights on at Western Union, and they're paying the
salaries of the employees at those retail locations, and the folks who staff
the armored cars moving the actual cash from place to place. That's not a
waste, right? It's spent by us collectively in order to get that value. And
maybe bitcoin's difficulty-scaled PoW is not spending electricity well. But
it's useful and that's why people do it.

Now your claim is regarding the value of entropy and I will claim that you
cannot get a mechanism with bitcoin's qualities (trustless + equitable
distribution) unless you have a PoW. But I will concede that you can have a
delegated-trust proof-of-stake coin that has _some_ of bitcoin's qualities
without a proof-of-work.

~~~
PeterisP
I see no current evidence to support "The fees charged by bitcoin to relay
funds can be significantly lower."

In the world of finance, the effective _cost_ of technical transactions is
tiny (<0.02USD for mass straight-through processing transactions that can
handle batching and delay, <1USD for real time settlement of large amounts).
Western Union and friends won't realize that leveraging the bitcoin network
might actually be cheaper than their current network, because it's not
cheaper, not even close to it.

The _fee_ for payments tends to be much larger because of everything else
bundled with the payment, but an equivalent service that provides the same
things on top of bitcoin would also have to charge similar fees. For example,
a large part of credit card fees pays for chargeback and fraud insurance, and
all kinds of bonuses/miles/etc which customers like, so if a BTC service wants
to take over that business, it'd have to compete with that. Bitcoin transfers
are irrevocable, but most consumers want most of their payments to be
revocable in certain conditions, so a future "buying stuff with BTC" payment
will have to include an escrow service for an additional fee. The branches
that allow you to hand over your local currency cash for a remittance, those
are expensive, so a remittance service that uses BTC will cost the same as a
remittance service that does not.

------
jondubois
There are some huge differences between the dot-com bubble and
cryptocurrencies.

Firstly, practically everyone who invests in cryptocurrencies knows that there
is a chance that they could drop massively - Nobody is being deceived. If
anything, I would say that most buyers tend to underestimate the technical
accomplishments and the amount of vision behind most popular cryptocurrencies.

Secondly, unlike companies, cryptocurrencies can never* go bankrupt. They
cannot be shut down by any single government. There will always be developers
with machines somewhere willing to mine coins.

It's already possible to build businesses/services on top of blockchains and
these businesses have a huge advantage over regular businesses; they can never
go bankrupt. Also, they are completely autonomous. There was a lot of
publicity around DAO (and its subsequent failure) but in spite of this, there
are already value-creating businesses based on Blockchain technology which are
currently operating under the radar: e.g. IOTA is a cryptocurrency but it's
also platform that lets users buy and sell data directly from internet-
connected sensors also Siacoin is a file-storage service, Power Ledger is an
electricity marketplace... There are many others.

Another huge advantage of most blockchain-based businesses is that anyone with
hardware (or virtual machines) can participate in the value-creation process
and be rewarded for it.

* Unless maybe there is another massive Carrington Event... But even then it's unlikely that the blockchain of major cryptocurrencies will be completely wiped out.

~~~
drcode
Actually, I'm happy to go on record and say I'm 100% sure Bitcoin/Ethereum/etc
will never collapse completely (i.e. obtain a value of $0)

~~~
cbr
If a sha-256 exploit came out relatively suddenly, such that anyone could
generate private keys for a given account key, bitcoin's value really would go
to $0. I don't think this is likely, but I think maybe 1% over the next 10y is
reasonable.

~~~
sciyoshi
Not quite. A sha256 preimage attack would possibly let one mine blocks more
quickly, but would be significantly more difficult than a collision attack,
which won't help you in this case. On the other hand, finding private keys for
a given account would require solving elliptic curve discrete logarithms, and
only then for bitcoin addresses which have been used as inputs to
transactions. (This is one reason why change addresses are a good idea).

~~~
cbr
Generating a private key for a given public key is computationally infeasible
with current approaches: right now you'd just have to brute force it. But if
someone finds a vulnerability they might be able to cut that time down to
where it's commercially viable to get the private keys. At which point there's
no way for anyone to prove they're the true owner of an address.

------
mavdi
I will say what I've always said about crypto...

Keep telling me it's a bubble. Keep writing long educated articles about it.
All while I consistently get rich. All while it's getting late for you to get
rich too.

~~~
stephengillie
Remember 2013 and 2014? What's different this time?

~~~
mavdi
Nothing is different. I said back then it would hit $1M in 10 years, I will
say the same now except perhaps now 2 years.

People are really underestimating what a shit storm Bitcoin and other crypto
will cause in finance.

~~~
deadmetheny
The financial shitstorm that it's gonna cause is when the world comes to its
fucking senses and realizes that burning electricity to move around Internet
Fun Bucks is a massive waste, the bottom falls out entirely, and this whole
thing is finally behind us. I'm gonna feel vaguely sorry for everyone who put
their life's savings into Dunning-Krugerrands to get a handful of lucky nerds
who got out at the right time rich.

~~~
pessimizer
> everyone who put their life's savings into Dunning-Krugerrands

I'm pretty sure that's going to turn out to be pension, mutual funds, and
banks, just like last time, and everyone is going to be screwed. The question
as bitcoin rises is how much has been borrowed against bitcoin holdings in how
many ass-backward, half-fraudulent, made-legal-by-obscure-clauses-in-
amendments-written-by-lobbyists-and-attached-to-unrelated-bills-with-
bipartisan-support ways.

------
dpflan
_If you 're interested in the concept of bubbles in general:_

The economist John Kenneth Galbraith wrote about bubbles in his book _A Short
History of Financial Euphoria_. If you're intrigued by such economics events,
this is a good, quick read (on the "tulip craze", junk bonds, etc):

 _A Short History of Financial Euphoria_

> [https://www.penguinrandomhouse.com/books/321392/a-short-
> hist...](https://www.penguinrandomhouse.com/books/321392/a-short-history-of-
> financial-euphoria-by-john-kenneth-galbraith/9780140238563/)

_

JKG's Bio:

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

_

_-_ _UPDATE_ _-_

Shiller also published _Irrational Exuberance_ , each new edition filled with
more analysis of recent "bubbles":

>
> [https://en.wikipedia.org/wiki/Irrational_Exuberance_(book)](https://en.wikipedia.org/wiki/Irrational_Exuberance_\(book\))

------
paulpauper
$16k lol wtf

bitcoin solved a problem..A few weeks ago I could not login to my paypal
account due to verification BS, so I was able to pay instantly with Bitcoin.
problem solved.

~~~
stinky613
Instantly? I thought the transactions took an average 10min. Am I wrong?

~~~
rocqua
It depends. If you send me a signed transaction that spends some of your
money, you can simply put that into the blockchain.

The issue is that you might send multiple such transactions spending the same
money. If I want to guard against others trying to spend the same money I have
to wait until the transaction is a few blocks deep. Generally the advice is 6
blocks which should be about an hour.

~~~
spookthesunset
In other words, for any useful transaction... Bitcoin isn't instant at all.

~~~
joshvm
Define useful though. If you have to wait an hour to confirm an online order,
is that a problem if the item won't ship for hours anyway?

A bigger problem right now is that you pay whatever the current rate is. With
the current volatility you could easily overspend or underspend by a large
amount.

~~~
j_s
Steam blamed volatility when they bailed yesterday.

Steam is no longer supporting Bitcoin |
[https://news.ycombinator.com/item?id=15863182](https://news.ycombinator.com/item?id=15863182)

> _due to high fees and volatility in the value of Bitcoin_

------
increment_i
Could you imagine if Bitcoin was the catalyst for the next economic recession?
That would certainly be out of left field.

~~~
ifdefdebug
By now I think it's essentially zero-sum gambling what's going on. No dollars
are going to be destroyed when the bubble bursts (if it is a bubble). They
just change owner. No factories will close. Probably no major banks are going
to crash. Just individuals losing or earning money.

All of this of course might change if/when factories/banks begin to invest
heavily in bitcoin.

~~~
nostrademons
Right now it'd probably be a net positive to the economy. Many of the people
who were in early and have made paper millions weren't all that rich before
and just happened to get lucky, while the money that's cashing them out now is
largely coming from wealthy people & institutions that don't want to be left
behind. Redistribution from rich -> poor is usually an economic plus, because
it shifts cash from people who have a tendency to sit on marginal dollars to
people who have a tendency to spend it.

This could reverse if the average man on the street starts investing
significant amounts of money, enough that they'd miss it if it evaporated.
_Then_ we'd get a big recession when the bubble popped.

------
noddy1
Big picture time:

1) Do you think in 50 years there will be 150 nation state currencies or
mainly a single global one?

2) Do you think the world superpowers (china, russia, US) will refuse to let
another superpower's currency become the single global currency?

3) What will the total market cap of this currency be?

4) What is the chance that bitcoin or some derived form in which current
holdings are preserved is that currency?

Now put a value on probability or amount for each of these statements. Here's
my personal belief for example:

1 x 2 x 3 x 4 = ?

50% x 70% x 30 trillion x 10% = 1.05 trillion

~~~
marvin
With the market cap of Bitcoin at $250 billion, we are already 1/4 of the way
there. So if your numbers are right, you won't make more than 4x by buying BTC
at the current price.

------
CryptoPunk
Bitcoin really worries me. I don't think cryptocurrency is a bubble, but I
believe Bitcoin could be, and that its crash could cause a lot of market
chaos, and hurt a lot of people.

What the general public doesn't understand about Bitcoin is that its promise
was betrayed by its ruling elite. It is no longer peer-to-peer electronic
cash, because it cannot scale to allow widespread peer-to-peer usage. It is
increasingly becoming a pure speculative vehicle, with no utility other than
as a store of value (and a very expensive to transact one at that).

In other words, the advocacy done years ago to put Bitcoin into the public
consciousness was all based on a premise that turned out to be a lie. The
investing public doesn't know any of this.

Why I say it 'could' be a bubble, rather than that it _is_ a bubble, is that
it could find utility as a form of central bank money. While the masses
wouldn't be able to use it, it's conceivable that it could have enough utility
to large financial institutions to maintain a very high value.

~~~
hnarn
Crypto currencies are like TCP/IP in a world with no use cases for networks.
I've said from day one that the day I will start using Bitcoins is when it's
"market ready", meaning that my mom can use it and it meets the demands put on
regular payment services today in terms of reliability and speed. BTC is
nowhere close, more specifically no cryptocurrency at all is anywhere close.
Bitcoin has barely moved from being a cool proof of concept, which is
worrying. And now people are "investing" heavily in something they don't
understand, if buying a currency can even count as investing.

------
xutopia
He's saying Bitcoin is shit by using example another cryptocurrency as his
example. This is simply disingenuous.

~~~
wyldfire
Yeah, the fact that he mentioned ICOs so many times is really disappointing. I
think many/most ICOs are crap, too, but how does that impact bitcoin?

~~~
PeterisP
In order to justify the current valuation of bitcoin, there needs to be some
(at least one, but preferably more) future use case that's extremely useful to
masses and would have a very large market cap because of it's large scale
usefulness.

The author mentions a bunch of candidate use-cases that might perhaps somehow
justify it (including ICOs), but finds them all insufficient. If it's not
competitive to replace a large portion of world wide consumer payments, then
the author doesn't see any other use case (other than pure speculation i.e.
holding BTC with expectation that they'll appreciate) that's sufficiently huge
for the valuation/market cap BTC is currently trying to fill.

------
elmar
CryptoKitties that's the real bubble.

~~~
sf_rob
When the USD collapses, you're going to wish you had a rare Gen 0 kitty to
trade for ammo and rice.

------
mirimir
> ... whose backers posit its primary value as a way to avoid the rule of law
> ...

Sounds bad. But here's what Ari Paul actually said:[0]

> So there are quite a few use cases. I think the biggest and clearest, and
> easiest to understand, is as a store of value that can't be censored and is
> resistant to seizure. And so, the really clear example of demand for this,
> that I see, is the offshore banking system. Which is roughly 20 trillion
> dollars today. And it's not just people trying to dodge taxes. Apple,
> Amazon, every billionaire on the planet, has wealth stored there. And firms
> like JPMorgan collect fees to offshore law abiding citizens’ wealth. And
> people want to store their wealth securely, in a way that no single judge
> could freeze all of their assets. Right? Amazon doesn't want their entire
> global business operation to be shut down by one judge in Brussels. They
> want to be able to go through a lengthy appeals process and keep their
> business operating. So cryptocurrency performs that same task of the
> offshore banking, of keeping wealth secure an order of magnitude better. So
> we see massive real fundamental demand for this use case.

Makes sense to me.

0) [http://www.businessinsider.com/cryptocurrency-value-
explaine...](http://www.businessinsider.com/cryptocurrency-value-explained-by-
crypto-hedge-fund-cio-ari-paul-2017-11?IR=T)

~~~
PeterisP
An offshore account in Belize (forgive me Belizeans, I'm not sure about your
taxes, your name just came to my mind) is useful because an USD transfer from
an anonymous Belize company can be used to buy a yacht or mansion in USA.

Bitcoin is currently (mostly) unrestricted because it has many use cases, it's
unclear which are the main ones, and there's a lot of posturing about the
legitimate use cases. However, in the long run, if it becomes clear that the
other use cases fail and only this one remains, then this one will be (made)
useless as well - a single act of law requiring all legitimate sellers to
verify the identity (and tax status) of every transaction in bitcoin above USD
$1000 (like
[https://en.wikipedia.org/wiki/Currency_transaction_report](https://en.wikipedia.org/wiki/Currency_transaction_report)
for cash), and it's suddenly not worth to store billions in it. Sure, the
small scale people will use it to stash their wealth, but they don't have that
much wealth to begin with, and _that_ usecase won't justify the _immense_
market cap associated with a $19000 BTC price.

~~~
mirimir
There are ways to get dollars from Bitcoin that the US government can never
stop. That's one of the key benefits. Whether sellers are "legitimate" or not
doesn't require approval from any government.

That's especially so for the wealthy, who can afford requisite bribes and
whatever. That includes the newly Bitcoin-wealthy, many of whom are
libertarians or anarchists. But as you say, "small scale people will use it to
stash their wealth", and that's another key benefit. It democratizes privacy
from government intrusion.

------
dumbfounder
There are 2 basic things that the writer misses the point completely on that
he uses to "prove" his point: Bitcoin isn't a business. ICO's are not Bitcoin.

~~~
workthrowaway27
His point is that Bitcoin/the blockchain doesn't enable any new applications
that people care about[0], while it was obvious to everyone at the time that
the internet enabled all sorts of new businesses. He's not claiming Bitcoin is
a business anymore than he's claiming the internet is a business. And the ICO
stuff is just supporting the his argument that the technology has no
underlying value.

[0]: Someone will probably comment, "but Bitcoin[1] enables decentralized
blah-blah-blah". Okay, but why is the decentralized version any better?
Centralization works fine for almost everything, and in fact is the trend in
technology.

[1]: Someone else will probably say, "Bitcoin is just an instance of a
blockchain/a distributed consensus protocol/whatever you want to call it and
that's what's revolutionary." Okay, fine, but what applications does it enable
that aren't better served by existing technology?

------
singularity2001
people thinking "Oh I just get out when the price starts falling" are utterly
mistaken:

Transactions now taking several hours might then take several days.

Already getting Error 520 on Kraken

------
mamon
It's official: Bitcoin bubble will burst in the next few weeks/months. Just
wait for Goldman Sachs clients to buy enough shorts...

[https://www.bloomberg.com/news/articles/2017-12-07/goldman-s...](https://www.bloomberg.com/news/articles/2017-12-07/goldman-
sachs-is-said-to-clear-bitcoin-futures-when-they-go-live)

------
659087
The "it's a sure thing" posts have really been ramping up in recent days. Lots
of talk on reddit about how people should take their money out of the evil
banks and put it in Bitcoin where it's "safer" and "sure to make them more
money".

------
swlkr
I just think it's an amazing opportunity to be part of a bubble. I missed the
last two bubbles (real estate and dot com). Bubbles pop, sure, but putting at
least some money into them can pay off, of course I'm willing to lose whatever
I put into it.

~~~
workthrowaway27
If you assume that a bubble starts and ends at the same place[0] then a bubble
just serves to transfer wealth from one group of people to another. If you
think you know something that allows you to be on the receiving end, great,
you might even be right. Otherwise you're just gambling.

[0]: Simplifying somewhat since some assets like stocks, homes, etc. have
upward trends so the bubble probably ends slightly higher than it started.

------
etr-strike
An article claiming bitcoin's a bubble? Wow, hadn't considered that before!

Just yesterday it came to light that the ECB was purchasing fraudulent bonds
that are now worthless. The Bank of Japan is directly buying ETFs. The Federal
Reserve increased the money supply to levels never seen before using QE, and
has yet to reduce its balance sheet even slightly. Housing is more expensive
than it's ever been. Stock markets are more expensive than they've ever been.
Everyone knows the official rate of inflation is well below the real rate. Our
savings accounts have effectively negatively interest rates. But bitcoin is
the bubble.

Bitcoin is the only safe haven asset available for purchase right now. It's
the only asset that doesn't require me to trust an institution or an
individual. It can't be confiscated. It's rules are known.

I'll trust in Bitcoin, thanks.

~~~
spookthesunset
The quickest way to tell that bitcoin is a bubble is when shysters start
making breathless posts like yours.

Bitcoin as a populist movement?? No sir. It is pure greed (and probably a
healthy dose of good old fashioned MtGox style exchange manipulation) driving
this bubble. Nobody buying right now is participating in some kind of mass
uprising against the man. They are buying, holding, and praying they can
unload their stash onto some greater fool right before the whole thing
collapses.

No safe haven asset is as volatile as bitcoin. Bitcoin is over 9 years old. It
still can’t, and never will, scale to handle even an order of magnitude less
transactions than visa. The blockchain is worthless for almost every
application. Bitcoin, at this point, is pure hype.

~~~
etr-strike
Bitcoin is under perpetual innovation:

Here it is yesterday performing a lightning transaction on mainnet:
[https://www.youtube.com/watch?v=a73Gz3Tvx3k](https://www.youtube.com/watch?v=a73Gz3Tvx3k)

Here's an implementation of Ethereum smart contracts running as a bitcoin
sidechain on mainnet: [https://www.rsk.co/](https://www.rsk.co/)

Here's Greg Maxwell discussing scaling while keeping the network
decentralized:
[https://www.youtube.com/watch?v=EHIuuKCm53o](https://www.youtube.com/watch?v=EHIuuKCm53o)

Bitcoin has been taken as a joke for 9 years by anyone unwilling to actually
learn about it. It's come a long ways since Mt Gox and is arguably the freest
market in existence. There are online exchanges in every major country that
run 24/7\. You can trade without an exchange at all using localbitcoins.com.
Anyone is allowed to participate and no one can manipulate the fundamental
rules of the currency.

Keep living in denial.

~~~
freeone3000
But what can I actually buy with it? It's not really useful for anything.

~~~
nrhk
How is censorship free money not useful for something.

You've got an entire darknet, you've got 80% of the world's population living
in areas where censorship resistance is valuable. Chinese wanting capital
flight, inflation infested countries looking for an alternative, areas of high
political risk and instability.

To say its not really useful for anything is just facetious. Bubble sure, tech
isn't there yet sure, no future use cases, now that's definitely not true.
Will the use cases be worth 400 billion, that's a better question.

~~~
spookthesunset
> you've got 80% of the world's population living in areas where censorship
> resistance is valuable

Setting aside the fact that censorship is _not_ a technical problem but a
political and societal one, Bitcoin's max transaction rate is so pathetically
low that if 80% of the world's population used Bitcoin, they'd be lucky to
make a single transaction every 45 years! Bitcoin can't even scale to what
would be required to service a single football stadium during halftime.

> To say its not really useful for anything is just facetious

It's useful for anything illegal -- money laundering, drugs, murder for hire,
etc. And even then, the traceability, extreme volatility, and long
confirmation times make Bitcoin a poor choice for even the sketchiest of mob
bosses.

Bitcoin's primary use case is scamming naive, starry-eyed libertarians, an-
caps, and goldbugs out of their hard earned dirty fiat.

(source:
[https://www.wolframalpha.com/input/?i=(5.7+billion+transacti...](https://www.wolframalpha.com/input/?i=\(5.7+billion+transactions\)+%2F+\(4+transactions+per+second\)))

------
crispytx
"Even for a survivor of the dot-com bust, bitcoin is breathtaking"

------
0xCMP
(just read the title, couldn't get past the bylines)

I just saved this article so I can laugh at Tim in the future.

First off. This-is-a-bubble. I'm not saying it's not. But, bitcoin IS solving
major problems and it WILL fix the problems it has. Will it still be worth
~$20K/BTC? Maybe not, but maybe it'll be more. Hard to say.

I can not imagine how Tim could think that cryptocurrencies, and more
specifically blockchain technology, "doesn't solve anything." This is such a
stupid statement to make.

How exactly does a way to do trustless computing around the world equal
"doesn't solve anything?" Brain dead opinion.

~~~
workthrowaway27
Some questions:

1\. Why is trustless computing important?

2\. What does trustless computing allow us to do that we can't/won't do now at
a comparable or lesser cost?

3\. What evidence do you have that anyone cares about trustless computing
other than the price of bitcoin and other cryptocurrencies?

~~~
0xCMP
1\. Removing the central party was always key for making a system that could
benefit everyone and not create rules that favored the powerful. Your question
is phrased such that it’s talking about trustless computing as a whole so it
can be applied to things such as creating a true and verifiably secure direct
democratic system that everyone can trust and understand given some level of
tech knowledge.

2\. To establish a system of trust requires physical secuirty, political
power, and financial resources that make this kind of computing only possible
for the rich and powerful unless it’s already in their interest.

3\. Price is an excellent indicator and the fact that we see coins being
created means there’s innovation around it, but excluding those I think the
best place to look is before there was a financial motive and look at the
crypto punk movements and those who’d been trying to do trustless computing
since the 90s in order to use technology to make society more fair and
democratic.

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mderazon
Isn't the whole point of a bubble is that you don't know you're in one until
it bursts ?

> Because it is often difficult to observe intrinsic values in real-life
> markets, bubbles are often conclusively identified only in retrospect.

[1]
[https://en.m.wikipedia.org/wiki/Economic_bubble](https://en.m.wikipedia.org/wiki/Economic_bubble)

------
thisisit
The gaggle of articles on the Bitcoin bubble is amazing.

Most interesting thing is, at least for me, that these are not doing a great
job convincing cryptocurrency supporters that there is a bubble. The logic
goes - If everyone thinks it is bubble, it probably is not a bubble.

I wonder how much of this record rally can be attributed to the upcoming
Futures market. Anyone has theories on this?

~~~
paulgb
When has there ever been something that everyone thought was a bubble but
wasn't?

~~~
iopq
"The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's
law'–which states that the number of potential connections in a network is
proportional to the square of the number of participants–becomes apparent:
most people have nothing to say to each other! By 2005 or so, it will become
clear that the Internet's impact on the economy has been no greater than the
fax machine's."

-Paul Krugman, 1998

------
cerealbad
is bitcoin the new html?

