4 ms·

A lot of the hype around "blockchain", payment network etc. is just hype. Think of bitcoin as a digital competitor to gold, and it will make a lot more sense. W

by marcell 10y ago

A lot of the hype around "blockchain", payment network etc. is just hype. Think of bitcoin as a digital competitor to gold, and it will make a lot more sense. Why is gold worth $1200/oz? Same logic will apply to bitcoin. Incidentally, if you don't think gold should be worth $1200/oz, you probably don't think 1 BTC should be worth anything.

r00fus 10y ago
You know "cryptoasset" doesn't have the same cachet as "cryptocurrency".
ch4ch4 10y ago
BTC does actually have a baseline value: the cost of the electricity spent to mine it. Of course, whether that value is $1 or $1000 depends on the number of people who believe in the currency enough to pay for the power to mine it.
- marcell 10y ago
  That's not a baseline value, that's a baseline cost. It costs money to mine a bitcoin, but that doesn't mean anyone will want to buy it. Gold is a bit different since it has some baseline value from practical uses, but the store of value use case dominates those.
  - eru 10y ago
    And the baseline cost of bitcoin even goes down, when nobody's mining.
eru 10y ago
Oh, some of the hypes for traditional finance might be justified in a roundabout way: Lots of traditional banks are incompetent and set in their ways. Shaking anything up internally requires lots of (office-) political capital. Having an internal 'blockchain' project might give people just enough leeway and direct backing from above to push through lots of needed but unsettling improvements. Even though those improvements might not have anything to do with blockchains, and might even be better done without.
saalweachter 10y ago
Eh, to a certain extent that's the Bubble Fallacy: just because an asset price is inflating in a bubble does not make it a bad (short-term) investment. As long as you sell before the bubble pops, you can make a lot of money buying and asset at 10x or 100x its "inherent" value. (Of course, you can also lose a helluva lot of money, but then, to the person making millions off of bubbles, both the people who sell too late and the people who never buy are idiots.)
- ericb 10y ago
  It's hard to predict when these bubbles will end. For example, the massive bubble in green pieces of paper with pictures of presidents (people are trading houses for these things!) will end some day, but you never know when.
  - globuous 10y ago
    That being said, you can probably predict for how long the bubble will most definitely not burst. For these green pieces of paper, as long as its easiest to buy oil with them and that people depend on oil for energy, there will be people willing to buy these green papers. Because they trust they can exchange these papers for something valuable. So everyone that needs oil needs usd as of today (I think iran still sells thiers in euro and russia might start selling in rubbles. I haven't checked oil currencies in a while though, so if you're reading this, you should probably double check ;) ) I honnestly think that's why the us spends billions every year to secure the middle east. They have oil at home and they could easily massively move to renewable with the size of their territory and then export the tech. But then people wouldn't be relying on oil for energy, and the dollar would lose it guarantee of value. And therefore its value.

by marcell 10y ago

r00fus 10y ago

You know "cryptoasset" doesn't have the same cachet as "cryptocurrency".

ch4ch4 10y ago

BTC does actually have a baseline value: the cost of the electricity spent to mine it. Of course, whether that value is $1 or $1000 depends on the number of people who believe in the currency enough to pay for the power to mine it.

marcell 10y ago
That's not a baseline value, that's a baseline cost. It costs money to mine a bitcoin, but that doesn't mean anyone will want to buy it. Gold is a bit different since it has some baseline value from practical uses, but the store of value use case dominates those.
- eru 10y ago
  And the baseline cost of bitcoin even goes down, when nobody's mining.

eru 10y ago

Oh, some of the hypes for traditional finance might be justified in a roundabout way: Lots of traditional banks are incompetent and set in their ways. Shaking anything up internally requires lots of (office-) political capital. Having an internal 'blockchain' project might give people just enough leeway and direct backing from above to push through lots of needed but unsettling improvements. Even though those improvements might not have anything to do with blockchains, and might even be better done without.

saalweachter 10y ago

Eh, to a certain extent that's the Bubble Fallacy: just because an asset price is inflating in a bubble does not make it a bad (short-term) investment. As long as you sell before the bubble pops, you can make a lot of money buying and asset at 10x or 100x its "inherent" value. (Of course, you can also lose a helluva lot of money, but then, to the person making millions off of bubbles, both the people who sell too late and the people who never buy are idiots.)

ericb 10y ago
It's hard to predict when these bubbles will end. For example, the massive bubble in green pieces of paper with pictures of presidents (people are trading houses for these things!) will end some day, but you never know when.
- globuous 10y ago
  That being said, you can probably predict for how long the bubble will most definitely not burst. For these green pieces of paper, as long as its easiest to buy oil with them and that people depend on oil for energy, there will be people willing to buy these green papers. Because they trust they can exchange these papers for something valuable. So everyone that needs oil needs usd as of today (I think iran still sells thiers in euro and russia might start selling in rubbles. I haven't checked oil currencies in a while though, so if you're reading this, you should probably double check ;) ) I honnestly think that's why the us spends billions every year to secure the middle east. They have oil at home and they could easily massively move to renewable with the size of their territory and then export the tech. But then people wouldn't be relying on oil for energy, and the dollar would lose it guarantee of value. And therefore its value.