
Bitcoin stays crazy until traders learn it is not a currency - rfreytag
https://www.cringely.com/2018/01/24/prediction-4-bitcoin-crashes-booms-crashes-booms-2018-traders-figure-not-currency/
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ufo
I think that a discussion of bitcoin's price today is incomplete if it doesn't
talk about market manipulation, Bitfinex and Tethers.

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eximius
I simultaneously hate them and am mildly impressed they have managed to print
over a billion dollars.

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cstejerean
It’s over 2 billion now, and growing.

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lawlessone
why are people accepting them?

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infinity0
> [..] almost exactly like a market that uses only U.S. one dollar bills and
> doesn’t allow exchanging those bills… ever. [..] And they aren’t just any
> one dollar bills: they are specific bills, each with its own unique serial
> number that can be checked against a U.S. Treasury database to make sure the
> money is real

This guy is talking complete bullshit, it sounds like he heard "bitcoin is
trackable" and extrapolated from there (i.e. totally made shit up) without
actually researching the specifics.

Bitcoin and all these other cryptocurrencies are fully-fungible, one bitcoin
is the same as any other bitcoin and you can split and combine them up and
down to whatever decimal places the protocol defines. There are no serial
numbers.

What is trackable is the account number (public key) that the money is
associated with.

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kev009
Yawn, bold opinion piece "Robert". This guy is a hack, he predicted IBM would
be reduced to a 20B sales company (I laughed out loud), and apparently scammed
a bunch of kids with a "Mineserver" crowd fund that never shipped which was
just an extant Minecraft server installed on an ARM device.

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fwdpropaganda
What exactly is wrong with what he said?

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kev009
The part on bitcoin is a trivial and common opinion; not newsworthy. The part
on ripple is comically stupid. And then the fact that he himself is a con
artist is too much.

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fwdpropaganda
Again, you're not really addressing what he said. You're just saying it's
common opinion. Doesn't make it right or wrong.

(I'm talking specifically about the bitcoin part, don't care about the rest)

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kev009
Because my opinion on that doesn't matter either. Not newsworthy.

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Iv
Right now your grandmother is considering to buy bitcoins.

This is the last stage of the Ponzi pyramid. By the end of 2018, people will
have learned the lesson the hard way. No need to shout it, just wait.

This is actually a very smart part of the bitcoin design: make a lot of people
get coins by expecting returns, then have them discover that it can only be
used as a currency and watch them spend the one they have.

We need to have the lightning network working and easy to use by the time the
crash happens.

~~~
andirk
Is USD a ponzi scheme or any sort of manipulative 2008 scheme in general? Or
is USD great?

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Iv
People who get USD do not expect it to gain value on the long term. They do
not see that as a speculative investment. Some will use it as a reserve
currency, most simply as a currency.

I guess you can argue some way or another that this is a scam, but certainly
not of the Ponzi form, where the returns are funded through the new entrants.

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nailer
> Cryptocurrencies like Bitcoin, Ethereum and a ton of others operate almost
> exactly like a market that uses only U.S. one dollar bills ... if you need
> less than a dollar then you and your counter-party have to agree how much of
> a one dollar bill you each own.

I'm not sure I follow - can't I just send 700 Satoshis to someone's wallet?

(I don't use Bitcoin so may be missing something)

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Cthulhu_
You can, I think the article alludes to the psychological issue of using whole
numbers.

Also again, you can, but it'll take a while and/or you'll end up coughing up a
big fee.

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nailer
Yeah, but other currencies have minor units too, like pence and cents. If the
issue is transaction times, then this is a really odd way of putting it.

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wyldfire
I think bitcoin's explosive change in exchange rate triggered a lot of
backlash. Fees became astronomical as a result of greater traffic and higher
exchange rate.

Lots of articles underscored just how poorly suited bitcoin was for lots of
regular purchases. Instead of focusing on the volatility, now they could also
point to the enormous fees. Altcoins with faster blocks and lower fees became
much more interesting.

But today transactions in the pennies (~$0.02 USD) will get cleared within a
few blocks. We can benefit from the reduced congestion even if our wallets
aren't using segwit or LN yet. It seems to me that this is probably not a
coincidence -- that many players accelerated their plans to evaluate segwit
and LN as a result of the last 8-10 weeks of activity.

Unfortunately major players like Bitpay, Coinbase, and blockchain.info aren't
there yet.

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mtgx
Not sure I follow the logic. I think most crypto "investors" already consider
it an asset/a store of value that goes up over time, not a "currency". So if
that is true, then I would expect Bitcoin to "remain crazy" for a long time
(with the minor and major crashes in between, of course).

As for the currency aspect, there are some improvements coming to lower
transaction fees and speed by orders of magnitude, but it may take a couple of
years to fully realize that transition. It's still not clear if Bitcoin
_should_ be the de-facto _cryptocurrency_ , though, even with those
improvements coming. There may be better coins for that out there. It's still
a wild wild west in that regards, with all sorts of new innovations appearing
every year.

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mrb
Any article about volatility that fails to mention it is decreasing is an
insufficiently researched article. Cringely didn't research his topic.
Bitcoin's volatility has been slowly, but definitely, trending down for many
years. And squinting at a price graph is not how you determine volatility. It
can be and should be _objectively_ calculated like so:

[https://mobile.twitter.com/lsukernik/status/8649208737189519...](https://mobile.twitter.com/lsukernik/status/864920873718951937)

[https://news.bitcoin.com/volatility-
decreasing/](https://news.bitcoin.com/volatility-decreasing/)

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sharemywin
I think alot of ICOs should be looked at as prepaid gift cards. If a new
target store was about to open up in my area I might buy a few dollars worth
of gift cards at X% off to help the store open, but I wouldn't invest my life
savings in it.

~~~
sharemywin
I kind of feel the US/SEC should let people invest up to 1% of their annual
income in what ever scheme they want to. gambling, lotto, other
schemes/"investments". maybe even let it be tax deductible.

a lot would get flushed down the toilet, but I can dump unlimited amounts of
money into being a bad consumer.

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robk
Good luck ever closing the floodgates if you allow 1%. People will then
consider it a free for all and if they invest their whole account how are you
even going to punish them?

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sharemywin
maybe set up a special account similar to an IRA.

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RosanaAnaDana
" It’s not backed by “the full faith and credit of the United States of
America.” It’s not backed by, well, anything. In that sense of innate value
cryptocurrencies are worthless. "

I take issue with this statement in this article. I would argue that in the
same way that 'dollars' are considered to be irreproducible, and this is
central to the 'full faith and credit' part of why people consider them
valuable, the irreproducibility of crypto is their innate value.

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lmkg
I disagree that irreproducability is the key. The central part of "full faith
and credit" is the fact that the US accepts US dollars as payment. Which is
important, because it can place debt obligations on people. In short, the US
guarantees that there will always be a buyer for dollars. Bitcoin does not
structurally guarantee that there will always be someone else who wants to buy
Bitcoin, you have to take that on faith.

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sharemywin
I used litecoin when I transferred money from biterex to coinbase because of
the transaction speed versus bitcoin.

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aklemm
Simplifying in order to gain some clarity about bitcoin is good--and this is a
good piece--but you can't make the bitcoin bros listen no matter how simple.
They still need to chose to understand.

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FilterSweep
The other thing is enough bitcoin bros have made substantial coin from earlier
investments, have sold off most of their holdings, and continue to evangelize
BTC while they foray into altcoins.

And, I can't blame the people who fall for it. Its hard to argue with someone
who cashed out $130,000 off a speculative investment.

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eximius
Just let me buy some put options with low enough counterparty risk and I won't
mind.

