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Is Bitcoin Becoming More Stable Than Gold?
- mdorazio 11y agoI'll invoke Betteridge's law on this one (the answer is no). With all the recent drama around the blockchain direction and power struggles among the developers, it's rather difficult to make a serious claim that bitcoin is going to be stable at all. I think this is more a commentary on the volatility of gold than on the stability of bitcoin.
- jmcomets 11y agoAs usual on HN: "Hacker News law of Betteridge's law of headlines: If the headline is applicable Betteridge's Law will always be mentioned. " [1] [1]: https://news.ycombinator.com/item?id=4842803 https://news.ycombinator.com/item?id=4842803
- exolymph 11y agoNo idea why you got downvoted, since this is hilarious.
- JamilD 11y ago> "The last 24 days mark the longest period in which bitcoin prices have been less volatile than gold prices, going back to 2010." Twenty-four days is not enough time to extrapolate any real meaning. It could be just chance, it could be indicative of a long-term trend, but I'd file this headline under the category of "questions to which the answer is no".
- cloudjacker 11y agoTwenty four days is pretty arbitrary, but the main takeaway is that it is a very non-volatile period in bitcoin's price history Unfortunately extremely boring
- Caprinicus 11y agoBeing stable for 24 days is probably the craziest thing bitcoin has ever done
- Phlarp 11y agoYea, but bitcoin used to be fun! You can't have any fun with a stable commodity! Apologies to sillysarus.
- clamprecht 11y agoSell options, if you're brave.
- cloudjacker 11y agowhere? the options market for bitcoin hasn't changed since 2014, high premiums, spreads 100 points wide, non-standard contracts with hard to decipher conditions.... If it were high premiums and spreads 5-15 points wide, I'd play.
- zappo2938 11y agoCan I talk to you about Dogecoin?
- cloudjacker 11y agosuch Lord such Savior
- deleted 11y ago[deleted]
- tedks 11y ago>I'd file this headline under the category of "questions to which the answer is no". Obviously if Bitcoin goes tits-up it will not be more stable than gold. There seems to be a non-trivial probability Bitcoin will go tits-up from shitty governance alone, but barring that it seems to me that Bitcoin has the potential to be far more stable than gold. Access to gold is dependent on a large amount of geopolitical factors that could all change at any time, as well as mineral extraction technology that is getting better all the time. Extrapolating far enough, we'll never find an asteroid that's miraculously made almost entirely out of Bitcoin. I'm curious as to whether your viewpoint is the same for all cryptocurrency or just Bitcoin.
- cbr 11y agowe'll never find an asteroid that's miraculously made almost entirely out of Bitcoin I think we're more likely to find a very fast way to compute sha256 hashes than a 10T+ gold asteroid.
- ikeboy 11y agoAs long as we can't preimage arbitrary hashes, the difficulty will adjust. There are contingency plans for if a preimage becomes possible, and I suspect they'll move to a stronger hash before it's needed.
- cbr 11y agoIf you figure out how to hash 1000x more efficiently than other people and put that into practice without sharing your knowledge then you can cheaply get and maintain a hashpower supermajority. (I'm not saying this is likely, just more likely than finding a large gold asteroid.)
- ikeboy 11y agoPeople will notice soon enough, and they'll switch to a different algorithm. It takes time for the difficulty to go up, it only resets every 2016 blocks and is limited.
- cb18 11y agoNot only is it not enough time to extrapolate any real meaning, but to choose a period of 24 days that correspond to a period of diminishing interest in bitcoin and heightened interest in gold because of roiling in the broader markets and then to suggest bitcoin is now more stable than gold is reaching the heights of absurdity. Which is more 'stable'? A commodity on which economies have rested for millennia along with many other established uses, or a commodity less than a decade old that has yet to establish any sustainable use? hmmm..
- pyrophane 11y agoYea, there are now many crypto currencies that are very similar in design to Bitcoin, but gold has unique properties that cannot truly be copied.
- ptrincr 11y agoTo be fair, Bitcoin is also unique within the crypto currency world, just like gold is unique within the elements. Nothing will ever change the fact that Bitcoin was first, it has first-mover advantage over other implementations. You could also argue it currently has the most investment, both in monitory terms and development effort.
- cb18 11y agoIt's not quite so easy to create iterative improvements on the basic elements of the universe, as it is to iteratively improve crypto currency software. It could be just as easily argued, probably more persuasively, that bitcoin's first mover status is more of a negative to its future prospects than a positive. This owing in large part to the hugely concentrated nature of the bitcoin currency. It's hard to see how a bitcoin economy gets off the ground in any meaningful sense when the distribution is arranged like that. It's unlikely to get any enthusiastic buy in when people doing so understand that the value of their currency would be subject to the whims of just a few major players in the bitcoin game. And any rich person capable of make a large bitcoin buy in would be hesitant to do so because their essentially making themselves relatively poorer than the bitcoin barons in doing so. Figuring out a distribution model that works in concert with a growing digital economy is an open question in crypto currencies.
- aab0 11y agoIf you look at the historical graphs, it's hard to escape the conclusion that the past year has in fact been the stablest period in Bitcoin history: https://btcvol.info/ https://btcvol.info/
- deleted 11y ago[deleted]
- JPBetteride 11y agoAny headline that ends with a question mark imho. News orgs, if something is actually news and actually true, would just write "BITCOIN MORE STABLE THAN GOLD" or what have you. Any headline that ends with ? is the news org being like, "Welp, this isn't true but we still want to write about it."
- joshschreuder 11y agoJust in case you didn't know, there is an actual name for it! https://www.wikiwand.com/en/Betteridge's_law_of_headlines https://www.wikiwand.com/en/Betteridge's_law_of_headlines
- brador 11y agoGold is based on something tangible and useful. This minimizes it's maximum drop. A safety net if you like. Bitcoin does not have this, so when/if it crashes it can hit 0.
- pdq 11y agoThe long term value of gold is based on the price of mining new ounces of gold. Likewise, the long term value of Bitcoin is based on the price of mining new coins, which is based on the mining network. The only way Bitcoin would go to zero is if a fatal architecture fault is found, which is quite unlikely.
- pavel_lishin 11y agoBut isn't there a maximum number of bitcoins to be mined? Eventually the price of mining new coins becomes infinite.
- llamataboot 11y agoyes, this is an oft-reversed causation. The price of bitcoin is determined by the same thing the price of everything is determined by in a market system. What the current supply of bitcoins is and what the current demand for those bitcoins is. The "cost" of mining doesn't even enter into the picture. How mining does enter into the picture is the ingenious way that difficulty auto-corrects. If bitcoin prices plummet and the cost to mine them is more than they are worth, many miners will drop out, and the difficulty to mine them will get easier, until the difficulty stabilizes around a place where it is slightly profitable to mine them -- this is why mining has always been a race to the bottom and why eventually economies of mining scale (server farms, etc) would beat the person with 4 GPUs running in their basement.
- TheOtherHobbes 11y agoThe long term value of gold is based on price fixing. Crazy conspiracy talk? Not according to Reuters: http://www.reuters.com/article/deutsche-bank-lawsuit-metals-idUSL2N17H1OS http://www.reuters.com/article/deutsche-bank-lawsuit-metals-...
- deleted 11y ago[deleted]
- swalsh 11y agoI've always wondered how much of the wild fluctuations in the early days were due to Mt Gox manipulating the economy.
- nxzero 11y agoHow would Mt Gox been able to do this?
- chejazi 11y agohttps://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/ https://willyreport.wordpress.com/2014/05/25/the-willy-repor...
- cb18 11y agoIf by wild fluctuations you mean the out of nowhere exponential price growth, I think gox shenanigans are understood by many(without the bias of millions of dollars invested) to be among the main causative factors there. It certainly can't be easily dismissed as a probable cause.
- kyledrake 11y agoI think Mt Gox may have largely contributed to it and perhaps was even the main instigator, absolutely, but we need more evidence. I'm very interested to see what comes out of the Japanese criminal court case against Mark Karpeles, it may reveal a lot of important historical information here. There's been some speculation that the Bitcoin Halvening may affect the price soon: http://www.thehalvening.com http://www.thehalvening.com Personally though, I'm perfectly fine with Bitcoin prices being stable. The gold rush craziness was really toxic for Bitcoin in the end.
- firethief 11y ago> http://www.thehalvening.com http://www.thehalvening.com Lol. "Real time data: total number of bitcoins: <number that isn't even an integer, let alone a multiple of 25>"
- nxzero 11y agoAnalysis is obviously flawed, question to me is what might motivate the WSJ to run a story like this. Any ideas? Are papers/journalists legally required to disclose any holdings that relate to stories they cover?
- jonknee 11y agoThis seems right in the wheelhouse of a financial newspaper like the WSJ.
- dragontamer 11y agoIts a "blog" on the WSJ. I wouldn't call a story truly "from" the WSJ unless it was explicitly called out from its editorial board. Even things on the opinions page are typically from the opinion of a specific writer as opposed to the whole newspaper. This article for example has no author, and is on the official "www" web page. We can presume its a full statement on behalf of the WSJ's editorial board: http://www.wsj.com/articles/trump-and-his-apologists-1437345060 http://www.wsj.com/articles/trump-and-his-apologists-1437345... Unfortunately, newspapers don't seem to "get" the online community. Newspapers need to better brand their "blog" pages, which are typically full of crap (but are typically written by average Joes, as opposed to professional journalists). If online newspapers better branded their "Editorial Board" stories, maybe this confusion wouldn't happen as much.
- exolymph 11y agoSo, I'm not a lawyer, but IIRC journalists are not legally required to disclose holdings. However, professional ethics definitely does require that they be transparent. For what it's worth ¯\_(ツ)_/¯ My guess is that WSJ just wanted to run a clicky story about bitcoin.
- Animats 11y agoThat's the real question. 24 days in which Bitcoin was more stable than gold is cherry-picking from noise. A year would be significant. Bitcoin is mostly driven by people getting money out of China. All the major mining operations are now in China. Bitcoin mining is "manufacturing" and "exporting" as seen by China law, so running a Bitcoin mining operation is a legitimate way to get foreign currency. Bitcoin mines even get the electricity discount and tax breaks of an exporter.
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- gphil 11y agoInterestingly, the all-time Bitcoin price graph looks a lot like the Gartner Hype Cycle: https://en.wikipedia.org/wiki/Hype_cycle https://en.wikipedia.org/wiki/Hype_cycle Whether or not this really is a "plateau of productivity" remains to be seen however.
- bduerst 11y agoPure coincidence.
- anonymfus 11y agohttps://en.wikipedia.org/wiki/Transient_response https://en.wikipedia.org/wiki/Transient_response
- nosuchthing 11y agoAnalysis of recent trends dictate the future: http://i.imgur.com/nmQEY.jpg http://i.imgur.com/nmQEY.jpg
- riprowan 11y agoIt looks to me more like the Hunt Brothers' attempts to corner the silver market from 1970-1980, and the fallout thereafter. https://en.wikipedia.org/wiki/Silver_Thursday#/media/File:Silver_price_in_USD.png https://en.wikipedia.org/wiki/Silver_Thursday#/media/File:Si...
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- fiatmoney 11y agoCurrencies aren't really "stable" in and of themselves, relationships between currencies are stable.
- explorer666 11y agoWrong. If you can buy the same amount of most things with the same amount of currency over a period of time, then we say that currency is stable.
- fergu 11y agoWe rather say the economy is stable, then. If most things go awry after a war, that's not because of the currency and nobody will care about the currency either ... except for traders crossing borders and exchanging currency. In the world market, if currency is treated as a commodity, other currencies count as most things, I guess. So, you may be right and your parent will also.
- explorer666 11y ago> If most things go awry after a war, that's not because of the currency and nobody will care about the currency either Then why are you bringing this up? You said it yourself: "that's not because of the currency". It's because the things you buy became too expensive or too cheap. If the currency remains stable, you could still buy the same amount of most things in other countries not affected by the war.
- fergu 11y ago> things you buy became too expensive or too cheap. > if the currency remains stable > you could still buy the same amount of most things in other countries not affected by the war Sure I can, sure, but whether or not the currency remains stable is the very question, not a hypothesis. This is circular reasoning. If most things are still sold in exchange for the currency in question, then that currency is still only as stable as the economy that is selling most of the things, by your own definition of an economy of most things. I'm just saying you have a dysfunctional definition.
- tkiley 11y agoBettridge's law of headlines is out in full force today.
- explorer666 11y agoHacker News law of Betteridge's law of headlines in full force today: If the headline is applicable Betteridge's Law will always be mentioned.
- krschultz 11y agoMaybe if Betteridge's Law wasn't so often true we wouldn't see it brought up every time.
- explorer666 11y agoOr maybe if so many people didn't want to sound smart with little effort...
- ebbv 11y agoOne might as well ask "Can Bitcoin prevent cancer?" based on "In the last 24 days people who own a lot of Bitcoins had fewer cases of cancer than the general population!" (Which I'd wager is probably true, but for reasons having nothing to with Bitcoin itself.)
- seizethecheese 11y agoOther posters have pointed out that Bitcoin has only been more stable than gold for a 24 day period. To me, this means that the floor of bitcoin volatility is now within the ceiling of gold volatility. While this says nothing about which is more volatile, it is notable nonetheless.
- joering2 11y agoThat's a good question. Assume that most civilization has been wiped out by a meteor or atomic weapon and we find ourselves covered with dust cloud back in stone age. What would be more stable? A network of computers connected to the net and exchanging a database of numbers in the size of few gigabytes, or some commodity produced naturally by our mother earth.
- jackcosgrove 11y agoI am skeptical of bitcoin, mainly because it has limited convertability to sovereign currencies backed by military power. I surely see the value of digital currencies, however sovereign backing and convertability is necessary to expand beyond a niche.
- ufo 11y agoDoes anyone when the next blockchain reward halvening will happen? Its pretty close and it will surely shake up the bitcoin price.
- explorer666 11y agohttp://bitcoinclock.com/ http://bitcoinclock.com/
- radarsat1 11y agoWeird that they chose the last 24 days, when I've been noticing for quite a long time that it's been stable just below 400. I've been watching bitcoin since it was around 12$, and it's been amazing to me to see how stable it's been in the last 2 years despite a lot of recent drama, including the mtgox scandal, the story surrounding changes to the block size, etc.. If you look at the log-scale graph, it's been incredibly stable since 2014, roughly half of its history, as compared to the first half: http://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25zvzl http://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25z... Edit: To be clear, I'm not saying that varying from between 200 and 400 is by any means "stable", but compared to its growth in previous years it's incredible to me that it hasn't dropped back below 200 after the initial upswing to 1000, but rather has hit about half way (~400) and stayed there. To me this means people must be actually using it, not just randomly throwing it around, but I don't know. Someone thinks a single bitcoin is still worth about 430$ right now, and after all the ups and downs surrounding it over the years, I think that's kind of amazing. -- (personally I just wish I had never played around with buying and selling and had just held onto the 12 or so bitcoins I bought at 20$ in 2012... :( but, well, I'll count myself lucky, they probably would have gotten lost along with the 2 that I had in mtgox..)
- fergu 11y agoNo, it isn't.
- acveilleux 11y agoHas BitCoin finally reached equilibrium between malware ransomers selling BitCoins to malware Victims (exchanges mediated) for recycling?
- cb18 11y agoI forgot about that. I was thinking the only (ultimately unsustainable) uses bitcoin had happened upon were buying contraband, and exit scam type swindles, I forgot about extortion. I was thinking these were unsustainable because authorities have made clear their intent to go after the contraband use, and the tendency for the markets themselves to be exit scams. And the swindles seem unsustainable because after awhile all the bitcoins would be concentrated with the swindlers with no one left to swindle. With the extortion though, theoretically the extorters could sell to the extorted. (At least until someone can figure out a better way to dole out system permissions to reduce the feasibility of that cryptolocker bullshit.) For that to be sustainable though, there would have to be some veneer of other legit activity going on in bitcoin, if was just extorters selling directing to the extorted, the extorters would be pretty easy to track down.
- jcslzr 11y agoThey are different things, Gold is Money.... bitcoin and the dollar are currencies. One will always have value, the other represent value and if people lose faith in them their value will become zero which already has happened in the history of humankind hundreds of times. The only difference with bitcoin is that as far as I know its not corruptible unlike other currencies which the maker of the currency always end up creating more than they are supposed to.
- ArkyBeagle 11y agoGold isn't stable. it never has been.