
Ethereum founder warns cryptocurrencies 'could drop to near zero at any time' - ivanche
http://www.businessinsider.com/ethereum-founder-warns-cryptocurrencies-could-drop-to-near-zero-at-any-time-2018-2
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saurik
The headline makes it sound like Vitalik is warning that the entire industry
could collapse soon, when the actual thing he said was just that if you invest
all your money in a cryptocurrency you need to realize that it is possible for
it to drop all the way to 0, so don't do that and instead invest
responsibility with money you can afford to lose, which is a statement that I
think everyone would agree with without thinking it is going to induce panic.
(Essentially: this article is horrible clickbait.)

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mathgenius
Check out the scams going on in the twitter thread below. I am quite impressed
by how convincing it looks; it's very likely that people are falling for it.

[https://twitter.com/vitalikbuterin/status/964838207215955969](https://twitter.com/vitalikbuterin/status/964838207215955969)

~~~
lcusack
You can see how many people are falling for it by looking at the wallet
address:
[https://etherscan.io/address/0x358EF89B4D37f16002cc4A853B321...](https://etherscan.io/address/0x358EF89B4D37f16002cc4A853B321dAEeE423519)

~~~
mathgenius
Well, someone is educating the crypto-masses, and charging a reasonable fee
for it.

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granaldo
Think he's trying to give a cautious warning but end up going binary 1 or
zero. infinity or zero. Most people who got into the market at good times in
2017 have not seen how insane the market has behaved in percentage term.
Bitcoin went from $30 to zero before back then.

Another note, it looks like these days currencies rarely go to zero. last i
checked the infamous bitconnect that has collapsed
[https://www.coingecko.com/en/price_charts/bitconnect/usd](https://www.coingecko.com/en/price_charts/bitconnect/usd)
is still trading and has value

i starting to think of it like physical coins that goes out of circulation.
wanna buy an old franc or roman coin, its worthless but people are trading it
for its rarity; or it becomes cheap enough to be speculated again.

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gexla
This isn't newsworthy enough to get posted on HN. If you follow smart people
on crypto Twitter, this is a routine reminder.

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x775
Whilst the reminder of not investing more than you are willing and able to
lose cannot be repeated enough times, I do reckon it is important to put
things into perspective: A very significant majority of traditional start-ups
eventually fail, e.g. these articles from Forbes listing 90%
([https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-
star...](https://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-
will-fail-heres-what-you-need-to-know-about-the-10/)) and 80%
([https://www.forbes.com/sites/ericwagner/2013/09/12/five-
reas...](https://www.forbes.com/sites/ericwagner/2013/09/12/five-
reasons-8-out-of-10-businesses-fail/)), respectively. I consequently do not
think a statement like this should be viewed as anything other than a simple
and healthy reminder of how failure is inherent to entrepreneurship -
something which naturally carries a risk for any investor. It is, however,
also worth stressing how this, still largely unregulated, world attracts
fraudsters. It is therefore not entirely unreasonable to assume an even
greater percentage of projects will eventually hit 0 compared to traditional
start-ups, and that investors thus ought to pay even closer attention to what
they buy.

EDIT: Downvotes, why?

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blueprint
That usually only happens to scamcoins, especially when there's some sort of
exit scam (see Monero Gold). So let's hope he's not talking about Ethereum..

~~~
bdcravens
He draws no distinction, and I believe that's his point.

"Reminder: cryptocurrencies are still a new and hyper-volatile asset class,
and could drop to near-zero at any time. Don't put in more money than you can
afford to lose. If you're trying to figure out where to store your life
savings, traditional assets are still your safest bet."

He's not saying everything but the "real" cryptocurrencies. He's speaking to
the industry, not just scams. Pretty clear he's including BTC, ETH, etc in his
statement.

~~~
blueprint
That's unfortunate. Because the people behind Bitcoin and Monero most
definitely do not consider them comparable to or tantamount to shitcoins.
Quite the opposite. They recognize that they are securing people's actual
livelihoods and in some cases their very lives (privacy->safety).

To be honest, I actually already knew Vitalik was of that opinion. The fact
people do not perceive what he (and other hypocrites) said as it is, is
something I have also witnessed repeatedly. I wonder if that's why some of the
greater philosophers in history mentioned that people see things exactly
backwards.

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iamdave
What's he playing at here? The founder of a cryptocurrency should now full
well the power they have saying words like this; I know he's young, and I know
there's validity to the "don't invest more than you can afford to lose" but a
statement like 'could drop to near zero' is almost BEGGING the market to go
bearish when you're the founder of a currency.

Buy the rumor, sell the news has never been more apt than it is right now.

~~~
Alex3917
> What's he playing at here?

Right now there are two major known risks overhanging the market:

\- The Tether situation
([https://www.reddit.com/r/CryptoCurrency/comments/7xae98/unde...](https://www.reddit.com/r/CryptoCurrency/comments/7xae98/understanding_tether_why_it_accounts_for_a/))

\- SEC / CFTC action against ICOs

Either of those scenarios could send the markets down 85% within minutes or
hours. In addition there are the usual systemic risks of 51% attacks, core
infrastructure getting pwned, etc.

~~~
cobookman
and 51% attacks do not require you to have 51% of all nodes on the network.
Just 51% of all Active nodes on the network.

If someone finds a zero day exploit and manages to crash a large number of
ethereum nodes they could do a 51% attack with a relatively small number of
nodes.

~~~
CryptoPunk
That's incorrect. A 51% attack means an adversary having 51% or more of the
hashing power (calculated as hashes generated per second) and using it to
disrupt the normal operation of the blockchain.

A party with 51% of hashing power can single handedly create a blockchain that
other nodes will accept over any competing chain, meaning they can rewrite
history, or prevent any new transactions from being confirmed.

If consensus were based on number of nodes, the network could be easily Sybil
attacked, given the cost of running what appears to be a node is next to
nothing. It would also be difficult to make such a consensus protocol usable,
as there's no efficient way to poll a large number of network nodes.

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mdotk
In other news the sky is blue

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WheelsAtLarge
At this point, saying crypto will go to zero is like saying the internet will
go to zero, meaning no one will use it. Yes, crypto can drop wildly but the
only way they go to zero is if the energy they use for mining stops.
Government intervention is not a threat since there are countries that are
actively supporting it. The network effect is hard to overcome. Bitcoin and
Ethereum are two that will weather just about everything. Also, both bitcoin
and ethereum are development platforms which gives them staying power. The
price might collapse but they will be around as long as people are willing to
join the network to mine it and use it.

~~~
adadad3442
No- crypto has no intrinsic value. Energy used for mining doesn't give it
value. It only has perceived value. If the crypto hype dies, it will drop to
0, even if plenty of people are mining still.

~~~
ghayes
How do you determine value? Ethereum has smart contracts and a large volume of
real-life transactions. How do you justify “no intrinsic value”?

~~~
meri_dian
No one is using it to do anything other than hoard it hoping that the price
goes higher than what they bought it at. That means it has no value outside of
generating some hope that the price rises, which is very shallow and hardly
valuable.

~~~
bfuller
But that is not true. I end up using crypto to buy things online because some
vendors I use give 25%+ discounts for buying using crypto. Saying "no one"
uses it for commerce is just wrong.

