
Bitcoin ‘More Than Just a Fad,’ Morgan Stanley CEO Says - sjcsjc
https://www.bloomberg.com/news/articles/2017-09-27/bitcoin-more-than-just-a-fad-morgan-stanley-ceo-gorman-says
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dogruck
Key quote from Gorman in the article: "I haven't invested in it."

~~~
andruby
Well, he would sound like he's pushing an agenda if he says "I have invested
in it".

~~~
dogruck
Are you saying that you think Gorman has actually invested in Bitcoin, but he
lied because he didn't want to make it seem like he was touting his book?

~~~
andirk
I think people at his level trade on traditional assets (stocks, metals,
whatever) but always with an insider's edge. He probably does not have that
edge in Bitcoin.

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Robotbeat
I hope Bitcoin is more than just a fad because it would provide a really
convenient way of harnessing solar energy in space without having to beam it
all back to Earth. But this can only happen if Moore's Law slows way down
(which is happening) and if mining ASICs hit an efficiency plateau lasting for
years (is this happening?).

Currently, it costs about 9MWh per BTC, or about $1000 in electricity per
bitcoin to mine on a pretty efficient S9 antminer. S9s currently go for about
$2/Watt and require about 100 J/TH and weigh, I don't know, maybe 1kg per
kilowatt (or 1000W/kg).

Solar modules are about 30 cents per watt on the spot market, produce about
100W/kg (if weight optimized, i.e. not such a thick aluminum frame). Since all
the heat must be dumped into space at the ASIC's operating temperature,
radiators are about 100W/kg and probably cost as much as solar modules
($0.30/W) if mass produced.

So 1000W of mining capacity would weigh 21 kg and cost $2000+$300+$300= $2600.
To launch 21kg at $100/kg to GSO (this is an incredibly low cost, but could be
achieved with SpaceX's or Blue Origin's long-term ITS/BFR or New Armstrong
rockets) would cost about $2100. So a total of about $4.7/W.

Assuming the lifetime of that whole thing is about 12 years (a reasonable time
for a risk-free doubling of an investment), that's about 12 BTC, or about
$47,000 at today's prices, or a factor of 10 return.

(Today's BTC returns ~40 cents per kWh invested, this scheme would break-even
at about 4 cents per kWh generated.)

...but: 1) There's a whole bunch of glue, like a network link and spacecraft
subsystems that must be included as well as spacecraft processing.

2) Moore's Law in the strict sense is over, but progress still continues.

3) ASIC improvement is possible.

4) We don't have Musk's or Bezos' huge reusable rockets quite yet.

5) If return was this well-proven, you'd likely have a bunch of competition
from even cheaper sources of energy.

6) I still think Bitcoin is far too volatile and speculative to justify this
kind of investment. Given the reduction in mining rate, if you knew Bitcoin
would be able to justify this kind of investment over decades, then you'd
probably be better off just buying a bunch of BTC right now and holding it.

But maybe the future of cryptocurrency will eventually enable a less volatile
and more proven return, making stuff like this worth investing in. I hope so.

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wslh
Beyond all this noise that is patticularly annoying in this space, I really
like articles trying, at least, to provide more fundamental analysis. Last
week Chris Burniske provided an article about cryptoasset valuation:
[https://medium.com/@cburniske/cryptoasset-valuations-
ac83479...](https://medium.com/@cburniske/cryptoasset-valuations-ac83479ffca7)

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jmkni
* Call it a fad

* Price goes down

* Buy

* Say it's not a fad

* Price goes up

* Sell

* ...

* Profit?

~~~
ghostbrainalpha
I don't think you need the "...", usually that indicates a mysterious step
will never actually materialize.

But the Profit cycle is fully complete here.

~~~
mburst
[http://knowyourmeme.com/memes/profit?full=1](http://knowyourmeme.com/memes/profit?full=1)

~~~
Kiro
Comment is still valid. There is no mysterious step here.

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adamnemecek
Good thing that all these Wall Street CEOs share these nuggets of wisdom with
us uncouth plebeians. Their charity is out of this world! Now I just need to
know what Jim Kramer thinks of this and I'm good.

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theWatcher37
Like it or not, major figures in the financial industry saying “this is legit”
helps bitcoin’s image which has knock-on effects. Bitcoin still struggles from
the “its only used to buy drugs” stigma even with some on here.

~~~
adamnemecek
The point of crypto is making these figures irrelevant.

~~~
jsmthrowaway
...and replacing them with cryptocurrency CEOs and HN and Reddit commenters
whose economic experience is limited to googling the word “fiat” and talking
points on free markets? Is that what you mean?

Occasionally people are listened to because they have something to offer,
like, say, running one of the world’s largest investment banks. His remarks
immediately made Bloomberg, CNBC, and so on, which is just free PR. From the
head of Morgan Stanley. Who in the current world, and not the glorious future
one you want, commands respect and attention. Talk about biting the hand
throwing your passion a bone.

And what’s your plan to make Gorman and other investment banks irrelevant with
cryptocurrency? You’re talking about something like, what? A third of the
world economy? I made that number up, but it’s probably even more. Nobody will
have financial planning services and investments in your cryptographic future?
End capitalism? How should I explain what you want to the soybean farmer next
door who needs an ag loan from _one of those very banks_ to buffer crop loss
from an imported Asian pest? The free market will figure it out, and the
entire system of capital allocation we all know is fundamentally broken and
useless? If only he mined Litecoin?

The single biggest thing holding crypto back is tone deaf arrogance like this
from its biggest proponents. Slow down, buddy, you’ve successfully monetized
files of bits. Completely disrupting the entire world economy and making banks
irrelevant is a wee bit far fetched and even if it isn’t, should be approached
with a little more caution than a lot of crypto folks give it. You’re talking
about the (imperfect) global system that feeds billions of people and keeps
them alive. Show it some respect; only hundreds of thousands of people, nigh,
millions, worked on it before the engineers with vim showed up and declared
they know better.

Cryptocurrency is good. Let’s be reasonable when discussing it.

~~~
deadmetheny
Shh, half the fun of cryptocurrency threads is watching its proponents re-
learn every single harsh lesson banking and financial industries have learned
over the past couple hundred years! It turns out a lot of regulations and
whatnot involved with Fiat™ don't just exist for arbitrary reasons.

~~~
adamnemecek
Sure but it’s also naive to think that banks aren’t trying to fuck you over.

~~~
jsmthrowaway
And surely, nobody in the basically unregulated cryptocurrency world has ever
done that, right? Bad actors are bad actors, and it’s disingenuous to point at
some and ignore others.

~~~
nosuchthing
One of the largest cryptobank (exchange) is ran by someone who openly praised
one of the major ponzi scams, even after it shut down and was known to be a
scam. [1]

Said cryptobank is now allegedly using fake orders to buy up significant
amounts of BTC (recently a 50,000 BTC order [2]) during market crashes.

[1]
[https://www.reddit.com/r/btc/comments/6xpddt/as_20m_more_tet...](https://www.reddit.com/r/btc/comments/6xpddt/as_20m_more_tether_are_issued_today_i_think_its/)

[2]
[https://twitter.com/Bitfinexed/status/908718464671641602](https://twitter.com/Bitfinexed/status/908718464671641602)

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orbitur
This seems like a decent place to ask:

What is the most legit and safe method for creating a wallet and just buying a
bit of Bitcoin? I wouldn't mind being able to drop a couple hundred on it and
seeing where it goes, but it's hard to trust websites/subreddits that look
like posts were written by nerdy 15 year olds.

~~~
blhack
Coinbase is the only answer here, and it makes me frustrated to still see the
"buy a hardware wallet" recommendations.

I recently had my hardware wallet (a trezor, which is the nicest one) fail
during a firmware update. Now, obviously I have a backup of my seed, but for
those few minutes that backup became a VERY expensive little widget.

When I travel, I have to worry about where my backups are stored. Storing them
in a bank vault means I have to worry about the bank vault.

If I have a hardware wallet, I'm essentially betting that I am better at opsec
than coinbase, a >$1billion company who devotes a non-trivial amount of
resources to opsec. Keeping my own wallet means I am arrogant enough to
believe that I can out-opsec the team of security people they have there.

That's absurd.

There ARE reasons for a hardware wallet (which is why I have one). The bCash
split recently is why I have mine.

Keeping your own wallet and "being your own bank" is a really fun cyberpunk
fantasy, but there are plenty of practical reasons to use banks.

If you are asking the question about how to buy bitcoins in 2017, then the
answer is unquestionably that you should both buy and store you coins on
coinbase.

~~~
gozur88
>If I have a hardware wallet, I'm essentially betting that I am better at
opsec than coinbase, a >$1billion company who devotes a non-trivial amount of
resources to opsec.

I'm sure people who were using Mt Gox felt the same way. Part of the equation
is you're betting you place your own interests at a higher priority than the
people who run Coinbase. Which is almost certainly true.

~~~
chrisco255
Coinbase is U.S. based, insured and licensed. Very different from Mt. Gox,
which started as a trading depot for Magic: The Gathering cards.

[https://support.coinbase.com/customer/en/portal/topics/79436...](https://support.coinbase.com/customer/en/portal/topics/794360-security/articles)

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noipv4
if I invest in Bitcoin today, am I still an early adopter?

~~~
matthewbauer
I think invest is the wrong term. Investments have some kind of builtin return
like interest or dividends. You're buying bitcoin in the same way you buy gold
or a lottery ticket. Maybe you have some solid reasoning on why price will go
up but you aren't getting any returns like in an investment.

~~~
fenwick67
Boiled down to the base principles it's the same... money goes in, more money
might come out, or you might get less money out. The only difference is
predictability and odds.

~~~
RyanCavanaugh
The entire profit motive from Bitcoin "investing" comes from selling it to
another human for more than you bought it for. They're digital Beanie Babies.

Real investments have a return derived from capital. A house, for example, can
be rented out for money. Or a business can earn profit and distribute it to
its shareholders. You can try to buy and sell houses like people did during
the RE bubble for profit, or try to buy and sell stocks like a day trader, but
these are still fundamentally different from an "asset" which has no means by
which to generate a return on its own.

~~~
mcjiggerlog
> Real investments have a return derived from capital. A house, for example,
> can be rented out for money.

You can buy goods and services with Bitcoin. It's just another currency. Do
people claim that forex is not investing?

~~~
RyanCavanaugh
> Do people claim that forex is not investing?

Yes, all the time. It's clearly speculation (in the technical sense)

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beepboopbeep
I'm here for the shit posting.

~~~
lr4444lr
I thought I was the only one!

~~~
beepboopbeep
Popcorn?

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rb808
> "The concept of anonymous currency is a very interesting concept --
> interesting for the privacy protections it gives people, interesting because
> what it says to the central banking system about controlling that."

I don't think he means bitcoin in particular, it could be any crypto currency.
Bitcoin is still a ponzi scheme in bubble phase.

~~~
oculusthrift
hey that's not fair... it's a pyramid scheme, not a ponzi

~~~
d0lph
It's neither of these things.

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lotyrin
Most of its value is speculative and if you buy you have to hope there's a
bigger sucker somewhere in the future in order to get your payout, that's not
exactly Ponzi-shaped, but I can definitely see why people might consider it a
decentralized form of the pattern.

~~~
d0lph
According to your interpretation, wouldn't gold also qualify as a
decentralized ponzi scheme? You're just hoping some bigger sucker buys your
over inflated metal right?

~~~
jack9
People actually use gold, as it's optimal (or solely suited) for a number of
electric and chemical tasks. Also, it's pretty and used as a status symbol. It
has utility, which has been overblown in the market for a long time (like
diamonds).

~~~
d0lph
The utility of bitcoin is as a secure currency, it's not possible to forfeit
or dilute, and limited in nature.

