I'm ready for Bitcoin, and crypto-currency mania in genral, to either crash and burn or take off to the next level and produce something of value.
I can't be the only one who is growing tired of seeing the same circular discussions rehased on every click-bait article posted by Bloomberg/forbes.
There's nothing exciting or newsworthy about the price fluctuations that have been present since day 1. Sure, the dollar value swings are larger - but nothing new is happening.
I put together a new computer this week. Everything new but I still have my 760TI in it because I'm not paying $1000 for a graphics card. You can get a 1050 reasonably priced still, but that's more of a lateral move than an upgrade for me. Here's to hoping the market returns to normal soon.
Can anyone find another investible thing that gets so much shit thrown on it by talking heads on mainstream media? Serious question. It feels so artificial. The response to what an idiot on the news thinks about bitcoin is so often like "I don't know anything about bitcoin, AND I hate it and it will crash and I hope it crashes."
I agree, let's all stop fighting about what is and what isn't bubble and just look at the tech and potential.
Here are a few use cases I'm excited for:
* SONM / Golem as an entryway to fog computing.
* IOTA / WTC / VEN as entryways for exchanging value and information in an IOT infrastructure.
* NANO for exchanging value without deteriorating the original principal through fees.
* ETH / NULS / ECC - Tokenization to represent distributions of hard to divide securities. The doors are open to invest in startups, offices, applications and ideas without having to get approval on what you want to support.
* BTC / ETH as trading pairs. This acts as a new stock market that doesn't close. One where trades can even be private (on a DEX such as cryptobridge or barterdex).
Yes there are massive scams and there is questionable value in the 'store of value' use case BTC is currently defending. Every new idea is bound to have growing pains.
The larger implications is that software engineers now have the power and tools to create distributed shared systems that interact with the population at large in new and yet unforeseen ways.
It won't happen overnight but saying there is no value in what is currently there is purposefully misleading.
Lightning network has just been released on main net, and while it's still the early days, this is darn new and exciting.
It's actually a solution to the micropayment problem that has dogged the internet for decades, and resulted in the ad based internet content sites (and pathologies) we see today.
In terms of "something of value" there are many levels of this, and one of them is that bitcoin as a currency is something of value, for people in venezuela and other countries with highly debased currencies its a lifeline. It also is revolutionizing the remittances business. Just a few of the use cases.
Internet is turning into giant algorithmic propaganda and dopamine dripping machine.
Small online communities are thriving in quality but all the business models are gearing on communities becoming huge and exploitable with a content for the average. I.e small communities on reddit have high quality content when they are small and they start looking all the same as they grow, attracting trolls, propaganda and disguised advertising by power users.
-so we have content quality issues due to misalignment of incentives of consumers, creators and gatekeepers.
Here is the thing: Other countries will follow China's model and the current internet giants like Facebook and Google will lose their status of global giants. Even USA has strong anti-globalist movement and a president who is preaching it.
-so we have political landslide towards geographic compartmentalisation.
Bitcoin and other blockchain projects are reaction to the current direction of the internet. Transfer of value, distribution of value and guaranteeing identity are the pillars of the movement.
In my opinion, investing in bitcoin or altcoins with reasonable projects is a better long-term investment than investing in Facebook or Google.
Anytime you buy a crypto-asset, it's someone else cashing out.
Consider where and how these assets are created, as it's more than likely a system designed to extract wealth from greater fools.
If the system does not let you produce the asset for the same amount of work that someone else put in (cryptocoins generate the bulk of the supply very early, and then cut off produciton to new users forcing low liquidity markets to exploit new users), why would you want to contribute to that cryptosystem?
> If the system does not let you produce the asset for the same amount of work that someone else put in
This. I also can't wrap my head around certain quirks, like for example Stellar Lumens ( XLM ) was/is giving away (for FREE), 16 BILLION of its coins to former Bitcoin Holders.
I just can't wrap my head around paying to buy a coin that the creators have themselves given out BILLIONs of, for FREE.. How do you justify buying into a coin like that?
That like Burger King saying that we'll give FREE Burgers for a YEAR to anyone who has been a former customer of McDonalds (receipt required), but all others have to pay.
Even though I believe in their ( Lumens' ) use case, and they currently have live rollouts of their payment system in partnership with IBM in Asia, I just can't bring myself to buy something knowing they have millions of the same thing to many people for free.
I can argue that Facebook's incentive to help politicians manipulate my community has far greater impact on me. Thanks to Facebook and Twitter enabling algorithmic propaganda, I will lose my right to live and work in the UK.
I wonder how organic were all these uprisings that were organised on Facebook and Twitter. These things changed the middle east and Europe.
In my opinion, Facebook and Twitter will be harnessed by local governments to control the conversation OR countries will replace them with local alternatives like in China, effectively ending the democratic processes.
Decentralised networks with incentives of profiting directly from the users by providing services directly to the users have great potential to become the thing that internet was promised to be.
Yes these systems where the wealth is unfairly distributed and then horded by whales do exist. They are not constrained to crypto and not all crypto follows this distribution mechanism.
Trades also do not have to be zero sum, winner and loser, games.
An easy example is this:
I sell my bitcoin to you for your eth. You sell your BTC to rent a vacation home for a weekend. I use the eth to generate a crypto kitty.
The crypto kitty has personal value for me, the vacation has value to you and the owner of the vacation home gets some BTC they can use to find value at a later time.
I'm not bullish on bitcoin, but that guy literally said that blockchain has no value and bitcoin is a scam. I get that finance guys don't really know what computers are but there are some really neat things happening with blockchain. I personally really like blockchain/ipfs. It's neat and there's a lot happening in that space.
"As a currency, Bitcoin should be a serviceable unit of account, means of payments, and a stable store of value. It is none of those things. No one prices anything in Bitcoin. Few retailers accept it. And it is a poor store of value, because its price can fluctuate by 20-30% in a single day." - https://www.project-syndicate.org/commentary/why-bitcoin-is-...
I actually recommend reading some of Nouriel's thoughts on the matter. I don't recommend taking investment advice from him, or anyone else for that matter. Do your own research and your own critical thinking.
I believe there is immense value in a global currency that doesn't have uninvited middlemen. I also think the immense volatility will slow as people come to understand what cryptocurrencies can represent and better solutions arise.
As investments go I hold some coins and a few other things. I ran a 13TH mine of KNC Neptunes during the first big spike. I lost a ton of money in Mt. Gox. I sourced Avalon chips and designed boards for mass production only to have my chips stolen by the chinese government. After my run at all of it it paid for my business partners divorce, a bunch of my medical bills and we had some cash to sit on. At no point did I bet the farm or really ever see it as anything but a VERY interesting experiment.
I've basically been out since then, but might be jumping back in to running a multi currency mine if the stars align right. Again, I don't really care about it as an investment vehicle, I think the technology is interesting and I'm good at the ops around it.
No one really knows what the whole thing is going to be, I think bitcoin, with all it's flaws is here to stay but I think persistent information and decentralized network address resolution is WAY more interesting than money laundering, day trading, buying pizza, futures, ICOs, or buying drugs.
The day I turn on TV news to tell me about my budding technologies is the day you can just dump me in the river. Seriously though that guys yowling doom and gloom is either just ignorance or he's got a bridge to sell. I don't need to google him to find out which.
I'm just giving that guy the benefit of the doubt because his hyperbolic statement was BS. I've worked in fintech and know some pretty sharp people in the space. This dude commenting is just sort of a dickwheel.
Luckily, this is a globally distributed, unregulated speculative instrument that can't be sued or brought into bankruptcy, so the likelihood of another bubble at some point in the future is high.
Why do you think the bubble will happen in BTC and not litecoin or dogecoin or BCH, or VKOUCOIN (I have a whitepaper, and I'm giving sweetheart pricing to early adopters)?
An FX trader saying Bitcoin is gonna die? right, he's not biased at all. Isn't it very obvious that anyone in the current financial world(Traders/FX brokers) doesn't like cryptocurrencies? Why does Bloomberg even have to take their opinion.
On the other hand, yes, there's some bad news across the board. China, India, and Bitfinex/Tether. Despite that, we only see the price going to a 3 mon old price. Once Tether is sorted out and the regulations are clear in China & India, you could see the recovery.
An FX trader saying Bitcoin is gonna die? right, he's not biased at all.
Yeah, currency traders, what do they know?
Isn't it very obvious that anyone in the current financial world(Traders/FX brokers) doesn't like cryptocurrencies?
Oh, it's obvious. Ever wonder why? Bias? Conspiracy? Ya know, traders would trade cockroach shit if there was a market. It could be bias, could be that these professionals ask themselves, "how can I value this?" and come up empty.
Pretty much. They’ll take money wherever they can predictably get it. They’re not deep into crypto for the same reason they’re not deep into horse racing.
Thought, I could answer both of you here. I'm an engineer and reasonably well read, but I didn't bother to read the bitcoin white paper or understand ethereum smart contracts until recently and it took me some time.
So a finance person not understanding technology without any asset backing it is understandable and so they are not bullish about Cryptocurrencies. Everyone knows the crypto market is crazy, it's difficult to comprehend. But few of the top coins will survive in some or the other form.
Also, everyone in finance not agree on the idea it's a bubble. Goldman is starting a trading desk[1] in 2018 for cryptocurrencies, I will just wait until more traditional financial institutions join.
Our comments do have an uncanny restating of the same thing, all within 60 seconds of each other. I'm not terribly surprised, as parent has an uncomfortable "chem-trails" vibe to it. What ELSE is the currency market hiding from us?
I hear all the time from the crypto-people the reasoning
> Isn't it very obvious that anyone in the current financial world(Traders/FX brokers) doesn't like cryptocurrencies?
"Oh finance people just don't _like_ cryptocurrencies!"
Well, finance people make their living either trading or selling anything at all they can get their hands on. Have you asked yourself why it is that they don't have the same attitude towards cryptocurrencies? Why is it that they don't apply the same knowledge and experience that they have from years of trading other financial instruments, to cryptocurrencies? Nothing strikes you as strange here?
What's to say they aren't? If you are trying to accumulate, would you bump up the price publicly and buy privately or suppress the price publicly and buy privately? I know what I'd do, especially if there were no laws around any of it.
Personally I trust the future of finance, governance, security representation, IOT, fog computing and other yet to be developed applictations to software engineers rather than wall street and lawyers.
I'm saying that all crypto teams contain software engineers, not that all software engineers are cryptocurrency maniacs.
You also may want to reevaluate your initial thoughts on what representations of value can do for each of these use cases.
A quick example: A secure means of sharing information and value across devices is a building block for the internet of things. How would such a standard exist and how would the value distribution become agreed upon?
There are many crypto currencies in the space
edit: removed coin reference, really not trying to convince anyone to buy anything, just re-evaluate prejudices
> A secure means of sharing information and value across devices is a building block for the internet of things. How would such a standard exist and how would the value distribution become agreed upon?
Using centralized systems. Why would a more expensive distributed not-quite-trustless system be better than a far simpler and cheaper system built on centralized trusted authorities?
I'm confused, doesn't parent fit the narrative of "get rich on bitcoin"? Anyway, my guess for why the downvotes is because it's a reverse of "appeal to authority". The classic appeal to authority is, "he/she is a $MUCKITY_MUCK in this field, and therefore should be listened to." with no real reason to listen other than that they hold a title of authority on the subject. Parent is the reverse: "Authorities on the subject are, of course, biased and should not be listened to."
Please don't post unsubstantive comments, especially not flamebait, extra-especially not flamebait on a divisive topic, and extra-extra-especially not flamebait on a divisive topic that has been done to death and then some. Your underlying view may be correct, but this is still being a careless camper.
Your comment is pithy and likely to get downvoted, but anyone who thinks cryptocurrency is an "investment" is a fool. I have heard no reasonable explanation from crypto enthusiasts when I ask them how they arrive at a fair valuation.
Even as a "store of value," anything this volatile is useless. Call a spade a spade: this is nothing short of pure mania and speculation. It will end poorly for the majority of people getting swept up in the hype.
That's a big blanket statement that it will end badly. Sure people will realize that most of the altcoins are a scam, but Bitcoin, Ethereum & few others will survive.
I think a definition of investing which sees, for example, picking penny stocks as gambling and not investing is more useful. Really it's a gradient and I can't tell you where exactly to draw the line but there's a difference.
But here you're just pushing a bad definition of investment off onto a bad definition of 'financial scheme.' Now we have to figure out what entails a 'financial scheme.' It seems to me that taking my money and putting it on black could be called a financial scheme so we still haven't gotten anywhere in what is and isn't an investment, unless you don't believe in a distinction between gambling and investment.
Bitcoin is not just casino though there is actual known and potential uses of bitcoin one is as a currency. Now you might not believe that it will succeed(i don't) but that still makes it wildly different than just putting money on red.
I have no doubt that bitcoin is a good investment in the long run.
>Bitcoin is not just casino though there is actual known and potential uses of bitcoin one is as a currency.
Except several vendors have recently started dropping it as a currency primarily because a currency which is deflationary makes a good investment and a terrible currency. Bitcoin has no use-case, or maybe you can disillusion me and tell me what you've done other than hold it?
Besides, what this thread has illustrated to me is that bitcoin is a gamble, same as a penny stock.
You said Bitcoin is valuable because it has use cases. I said it doesn't have use cases. That's an argument. As well, you're drawing a distinction between walking up to a craps table and putting money on red and logging on to a brokerage account and putting money on penny stock XXX. I see those as the same things. You've also used a post hoc definition of investment, one where if the bet is good it's an investment. You've also deferred investment to mean any 'financial scheme' but never defined financial scheme. I take issue with all these things.
Speculating on a commodity is making an estimate of future demand, and buying now, which has multiple perfectly reasonable benefits:
1. Takes some of the commodity off the market, saving it for the later spike in demand.
2. Promotes more aggressive investment now to hopefully provide more supply later.
Those benefits offer grounding for the speculation. You can do some calculations to see how well those things might pay off, and make a bid based on that imperfect information.
I don't see how that applies very well to any pure "store of value" like a cryptocurrency. How big the spike in demand will be has no bound on the error.
Maybe when cryptocurrencies become a medium of exchange it would make more sense.
A reasonable definition of 'investment' involves the allocation of capital for the purpose of long-term creation of wealth in the instrument being invested in.
This should be contrasted with 'speculation', which best applies to short-term strategy that merely seeks to skim alpha off the top of fluctuations in value, without regard to long-term health of the instrument.
Note that this only establishes an no-arbitrage ceiling on BTC valuation, not a target or a floor.
Hand-knitting a sweater takes about 30 hours. So if you can readily hire people to knit at $20/hour and sell the sweater for over $600, an arbitrage opportunity exists and we should expect prices to fall as new knitter-hirers appear to reap the free money.
But this does not imply that the price of hand-knit sweaters must always be at, or even near, $600. In fact, with a readily-available cheaper substitute that most people find acceptable, the price can be arbitrarily low. If the demand for hand-knit sweaters at $600 doesn't exist, then the market can simply evaporate.
How does this value Bitcoin? It only says that if BTC price is above a certain value, a riskless opportunity for profit exists by doing "energy arbitrage". You can not use this reasoning to set the BTC price. Or am I missing the point?
"Using the “what goes into it” valuing method, the value captured by each Bitcoin would be the cost of the mining hardware and the energy used before the number is guessed correctly."
the biggest factor is energy cost and because of this it's a big energy arbitrage.
> the value captured by each Bitcoin would be the cost of the mining hardware and the energy used before the number is guessed correctly."
Sorry, the laws of physics say No. The electricity that you spend has been dissipated into the universe in the form of heat. It will quickly thermalize with its surrounding and be out of reach for useful work. Gone. You just proved your argument is a load of BS. Nothing is "captured" by each Bitcoin.
> "Using the “what goes into it” valuing method
Stop spewing BS please. There is no "what goes into it" method. No one cares how much something cost you.
Also the energy spent on gold mining is dissipated into the universe.
If the spot price of a Bitcoin fall's bellow the production price in electricity, the logic thing for the miners to do is to stop mining, if they do this, the blocks will start to take more than 10 minutes and supply will decrease, moving the market price until it reaches equilibrium.
No one cares what it costs you to produce the product.
Most of the coins in circulation already exist, and sellers can easily sell for less than it cost to produce today because most of the coins were produced for far far less than today's cost.
CAPEX and OPEX production cost have nothing to do with the market spot price, especially because most of the coins in circulation have been produced or acquired for far far far less than the rate it costs today.
Over time, the price of gold is based on how much people spend on picks and hammers. More generally, it's based on the cost of extraction. That sets the price for the (new) supply curve. (There is also a supply curve from people who hold it being willing to sell it at the right price.)
An asset cannot be an investment. You make investments in things through an action. And speculating on something, by itself, does not qualify as an investment.
Do venture capitalists invest in something based upon a Facebook ad? Probably not. The cryptocurrency hype targeted the unknowledgeable with a blatant 'get rich scheme' worse than state sponsored lottery.
I don't disagree with you, I just dislike when the term "investment" is narrowed so as to preclude high risk speculation. Even university endowments and pension funds have speculative investments.
Aesthetically I agree that I don't like the word "invest" applied to crypto-currencies but I think it's a subjective judgement. People can invest in the work of a young artist, and I don't have a problem with the word "invest" in that case, so where can we draw the line?
my guess, hodlers aren't new purchasers ... they already bought, and have just watched the value skyrocket. even after this recent depreciation... we're still considerably above where we were 12 months ago.
I think there might be some deals in the ICO market when this bottoms out, at least the ones that had some sort of legitimacy. I went and read some whitepapers for a few of the more legit ones and it seemed like they might support a profitable niche business, but they were astronomically absurdly overvalued for what you might get buying their ICO tokens. It's a bit like the dot.com bubble. A good analogy would be waiting until 2002 before buying PCLN.
Just a little edit here that didn't come in under the wire... I don't think this is going to bottom out for a year or two and ETH will probably be under $100 when it does. Thus these ICOs that are now trading for 20 cents a token will be trading for 2 cents a token or less. Now, assuming they actually developed a product and are operating and ICO investors are getting some sort of profitable use out of those tokens... I might consider buying a few.
I can't be the only one who is growing tired of seeing the same circular discussions rehased on every click-bait article posted by Bloomberg/forbes.
There's nothing exciting or newsworthy about the price fluctuations that have been present since day 1. Sure, the dollar value swings are larger - but nothing new is happening.
edit: found the wannabe over-night millionaires.