
SecondMarket CEO: Wall Street Will Put 'Hundreds of Millions' Into Bitcoin - a3voices
http://www.entrepreneur.com/article/230346
======
adambard
Man with personal and professional interest in Bitcoin prices increasing tells
reporter Bitcoin prices will increase. News at 11.

~~~
yapcguy
If there was a market for grandmothers, they would trade them.

~~~
jljljl
There is a secondary life insurance market, which is close :P

------
interstitial
Can we tranche all the cryptocurrencies, including bitcoins, repackage the
tranches into pools, then sell them to insurance companies as AAA-rated bonds?

~~~
kapilkale
...and buy dirt-cheap credit default swaps on them from the insurance giants?

------
joezydeco
Of course they'll be buying in six months, after spending six months telling
everyone that it's a bad investment and a bubble.

~~~
XorNot
No it's always been a bad investment because it's either a currency (not an
investment) or a commodity (but one absolutely nobody consumes and does
nothing).

~~~
a3voices
Bad investments don't go up 50x in a year. I think you need to adjust your
definition of bad investment.

~~~
harryh
Picking a number on a roulette wheel pays 35x in about 1 minute.

If your number happens to come up was it a good investment?

~~~
etherael
Because the concept of an instantly transferable easily stored and hidden
immune from state control pseudonymous electronic currency having any amount
of success is clearly just as random and unpredictable as the result of a
roulette wheel spin.

~~~
brador
You're picking out the positives and purposefully avoiding the negatives.

~~~
etherael
No analysis no matter how biased is going to seriously come to the conclusion
that bitcoin having any success is purely as random as a roulette wheel. I
challenge you to come up with something even vaguely plausible along these
lines, no matter how pessimistic you want to get.

------
reginaldjcooper
I wonder if you can predict HN comments about Bitcoin depending on time of
day. Sometimes it seems like they're entirely "can't you see it's all tulips",
other times, "all fiat is obsolete."

------
jgalt212
What have the trading volumes been like on Second Market since Facebook went
public? My perception is that pre-IPO Facebook shares was the bulk of their
business.

------
pbreit
I've been on the fence about bitcoin. On one hand, the design is genius, with
a few exceptions (mainly, the fixed supply). And it has garnered an incredible
amount of publicity and usage for a digital nextgen currency.

On the other hand, and I think where I will end up, it's completely stupid.
While the speculative benefits are terrific for marketing, they are totally
incompatible for use as a currency. As is the apparent concentration of
ownership.

~~~
zch
What's really bizarre to me is how a "digital currency" can have such slow
transactions. I want my transactions carried out and verified instantly. Right
now its minutes to hours. But once the network grows, it could be days.

~~~
jnbiche
It's important to note as a business that most "instant" verification provided
by traditional payment networks are far from being "fully" verified. Instead,
it's more like a preliminary verification. Most merchants who sell for credit
cards, Paypal, or even ACH know that their payments can be reversed weeks to
even months afterwards.

Bitcoin compresses this drawn-out risk of reversal into a ~1 hour window (0 to
6+ confirmations). So if you're OK with a very small risk of reversal, you can
accept payments instantly (i.e., after 0 confirmations). This is perfectly
fine if you're selling meals, or domain names, or alpaca socks. If you're
selling a car, and you want near absolute certainty that your payment will
never be reversed, wait an hour or so for 6 confirmations. After 6
confirmations, payment has been reversed only one known instance in Bitcoin's
history, and that payment was eventually returned to the merchant in question
(so no merchant has ever lost money after accepting a 6 confirmation
transaction).

Now, for consumers, it's a different matter -- there are advantages and
disadvantages to Bitcoin. But for merchants, Bitcoin is a very clear winner.
And many of us consumers are very happy to buy with Bitcoin.

Not to mention all the non-commercial uses for money transfers Bitcoin
fulfills, most notably remittances.

By the way, if you have an idea for a decentralized digital currency with the
protection against the Byzantine Generals problem [0] needed to protect
against transaction reversals that also provides "full" verification
instantly, I encourage you to develop your project. It has the potential to be
a Bitcoin killer (then again, the network effect may be too strong...).

And finally, to correct a misconception, the time needed for 6 confirmations
on the Bitcoin network will always take an average of an hour, regardless of
network size. That's what the self-adjusting Bitcoin difficulty is all about.

0\.
[http://en.wikipedia.org/wiki/Byzantine_fault_tolerance](http://en.wikipedia.org/wiki/Byzantine_fault_tolerance)

~~~
zch
I'm not informed as much as I could be about bitcoins, but it's comments like
these that make it even more daunting. Slow learning curve I guess.

What happens when the number of bitcoin transactions becomes too great for the
network to handle? There is a finite number of computers, they can only
process so many transactions at a time. If bitcoin became as popular as the US
dollar, would there be enough nodes out there to handle a load of that
magnitude? Or, for a more specific example: tomorrow every monetary
transaction in the US is done using bitcoin, what happens?

I did appreciate your subtle sarcasm though. A++

------
malloreon
It will either cost them billions or be worth single digit millions to do so,
depending on the time of day!

------
kolev
The end of Bitcoin as we knew it (a rebellion against Wall Street and the
governments)!

------
michaelochurch
[http://en.wikipedia.org/wiki/Greater_fool_theory](http://en.wikipedia.org/wiki/Greater_fool_theory)

~~~
awt
Doesn't this theory also apply to a stock traded on a stock market?

edit: reading the wiki article, I see that it indeed can. The assumption being
that there is no rational justification for the price paid.

However, this assumption is wrong. Simple calculations give a price much
higher than the current value if Bitcoin comes into widespread use as a
currency. In more detail, given the limited supply and any arbitrary
transaction volume, you can come up with a price for Bitcoin. The current
valuation is not supported by the transaction volume. However, low estimates
of transaction volume if Bitcoin comes into widespread use imply a much higher
price.

