12 ms·

Why are all my friends buying an overhyped digital currency?

41 points by gk1 9y ago

nxsynonym 9y ago
I'm curious why so many people are so vehemently opposed to cryptocurrencies, and in particular ETH. If you believe it's a big scam/bubble and won't turn into anything, then don't purchase any. But what's with the influx of "ETH is the worst and you're stupid if you buy any" articles? They add 0 value to the blockchain culture and development, and only seem to be thinly veiled "I told you so/I'm smarter than you" think pieces.
- dageshi 9y ago
  People don't understand its appeal but are irritated that others do.
  - mpeg 9y ago
    I think lots of people completely understand the appeal of ETH but also realise it has so many issues the market cap is completely imaginary. Decentralised anything is an awful market strategy, it works for some things where regulation gets in the way (AKA issues that are hard to solve in a legal way). Ironically, p2p crowdfunding has been the killer application of cryptocurrency so far, since it's tricky to do that legally and it turns out if you ICO with crypto you can just take the money and run. I don't believe ETH will succeed to the extent people are hoping it to, long term, I think the real market cap should be a fraction of what it is today. But I'm not stupid; I still made a bunch of money trading it and riding the hype.
    - dageshi 9y ago
      I'm speaking on a broader more long term view. Crypto currencies have the possibility to expand into what is arguably the biggest market of them all, money. In the same sense that many previous distruptive technologies did (mp3, video codecs for music/entertainment). Many mp3 based startups failed, so did many streaming/content selling startups but the trend was ultimately sound. Nobody really knows what bets will pay off but people are placing bets none the less in the same way they placed bets on startups before.
- brianwawok 9y ago
  I think they are all a bit silly equally, nothing special to ETH. I believe it is a scam/bubble.. but I don't really care if people waste their money on it. I see it like I see getting your Tarot cards read for $500 a session or buying a lottery ticket. A pretty poor use of money there are many others ;)
- epicide 9y ago
  > But what's with the influx of "ETH is the worst and you're stupid if you buy any" articles? They get people on the page and counting towards their ad revenue. In a word: clickbait. On that note, I hadn't seen The Outline before and today I've already seen two articles on HN from that site. I noticed because they have one of the worst reading experiences for an article that I've seen in a while. Embedded ads, mobile un-friendly to the point that I had to quit my news app in order to back out of the article, and distracting animated horizontal rules.
- FussyZeus 9y ago
  > I'm curious why so many people are so vehemently opposed to cryptocurrencies, and in particular ETH. I wouldn't say I'm vehemently opposed, but I do kind of regard the whole thing as a bit of a joke. If you're curious for my two cents: * There are no regulatory bodies or any kind of oversight; little legal recourse or way to insure your investment * There is no predictability of any kind in relation to the value; it goes up and down as it likes, often by large amounts, for literally no reason * Mining the various coins consumes a massive amount of energy, essentially computer busywork and in most cases (not BTC or ETH) the result is utterly worthless Honestly these things feel more like a tech-bro exclusive version of the lottery than anything; sure your 10,000 redcoin is worthless today, but someday it might be worth millions! Granted you probably have much better odds with Redcoin than Powerball but it still feels like the same sort of thing.
  - coldpie 9y ago
    > There are no regulatory bodies or any kind of oversight; little legal recourse or way to insure your investment It is kind of fun watching a bunch of libertarians suddenly figure out why laws and regulatory bodies exist when every crash or major theft happens.
    - smokeyj 9y ago
      Ah yes, the narrative where libertarians finally see the value in politicians and crawl to them for help. Unfortunately for your fantasy, that's the opposite of what's happening. We're leaving the politicians at home and building technical solutions. What a world huh?
    - FussyZeus 9y ago
      Indeed. I lean towards Libertarianism for most things, i.e. deregulation, but many regulations were put in place for a very good reason. A lot of Libertarians that I talk to though usually argue for the ability to opt-out of whatever system, which IMHO is perfectly fine. If you don't pay for the firefighters though, you don't get to be angry when they don't put your house out type of thing.
- joncrocks 9y ago
  For me at least, it's because it smells like the dot-com bubble. Lots of people investing money in things they don't understand the fundamentals of, looking to get rich quick. It'll happen to some people, but many others will get bitten. Money that they could have reasonably spent elsewhere on things they need, or invested in things that are less risky. Sure, you might win it big, but you probably won't, you'll probably lose your money, it's a gamble. People are going around saying that playing blackjack is a way to make easy money, and I'm raising an eyebrow and saying "Hmm, are you sure?"
  - deleted 9y ago
    [deleted]
  - DennisP 9y ago
    Dot-com was a bubble but fifteen years later here we are, doing everything on the Web, with some of those dot-coms now the most successful companies in the world.
    - patrickk 9y ago
      I feel exactly the same about the crypto space. Yes, there's tons of hype, nonsense and even scams, but the cream will eventually rise to the top, and the best ideas will survive. I've listened recently to some podcasts with Olaf Carlson-Wee, someone who has thought long and deep about the implications of having funding at the protocol-level of the internet, and how it could swing the balance away from large, centralised web monopolies who capture most of the value, towards the users of the network[1]. Union Square ventures also have some interesting ideas as to where the future of the internet might be heading.[2] It's hard to see where we're heading with all the short term price boom and busts though, which I agree are unconnected with reality (currently). [1] Two podcasts + notes with Carlson-Wee- http://buynhodl.com/ethereum-investment/ether-investor-focus-olaf-carlson-wee-polychain-capital/ http://buynhodl.com/ethereum-investment/ether-investor-focus... [2] https://news.ycombinator.com/item?id=12247892 https://news.ycombinator.com/item?id=12247892
      - toastking 9y ago
- vkreso 9y ago
  Well we're most certainly in a bubble and it is not the first nor the last one in cryptospace. It often happens when there is such a big influx of new agents on the market. Seeing crypto hype/doom articles on your random facebook feeds from friends who recently weren't remotely interested in crypto is quite a big signal of an impending correction. Basic fear/greed. Disclaimer: I own cryptos
- Nursie 9y ago
  I'm opposed to BTC as it is evangelised - as a payment method better than credit card, as a currency better than fiat, and as an investment. I'm opposed to it for a variety of reasons. As a payment method it is wanting because of the long confirmation times, lack of reversibility and low volumes. As a currency to be used on a country scale it is wanting because of the fixed amount, necessitating deflation, which is bad in itself, and the idea of handing huge parts of the economy to a few early adopters. As an investment, well, it's not really an investment as "investing" in BTC doesn't put money into the economy like investing in a company would, it's more akin to sitting on gold. And all this is before we get into the "competing to burn the most energy" aspects of mining, which are only really necessary to support the decentralised nature of the system - not something most people give much of a crap about. How or if these criticisms apply to Ether I'm not sure.
  - swiley 9y ago
    Ether's block times are way shorter (17 seconds) I don't know if transaction times are shorter because of that though.
    - Nursie 9y ago
      I had heard similar, but I haven't read enough about it to know the full extent of the differences yet. I know they're also looking into "proof of stake" either as a replacement or an adjunct to "proof of work", which may cover some of the energy concerns, but again I don't understand PoS well enough yet.
- ghthor 9y ago
  I assume these articles are astroturfing by companies or governments that are legitimately terrified of losing the control they have over the economy.
  - TeMPOraL 9y ago
    That's wishful thinking. All evidence suggests that governments worldwide couldn't care less about cryptocurrencies. At this point, cryptocurrencies are just taxable Internet points with delusions of grandeur.
  - hood_syntax 9y ago
    I really doubt it. If you think there aren't plenty of people who view this stuff like tulips then I think you're too far down the rabbit hole.
  - Joeboy 9y ago
    I assume a lot of the pro-cryptocurrency comments and articles are crypto-holders trying to pump the market.
- jmull 9y ago
  If you see it as a bubble/scam, why wouldn't you warn people away from it? Especially your friends and people like them? Also, bubbles that grow large enough can have an impact on the larger economy when they burst. Probably the Ethereum bubble, assuming there is one, won't get anywhere near that large before it bursts. But if it's successful, it will be replicated on a larger scale. (By successful, I'm not talking about the value of ETH, I mean that financial players make lots of money without significant consequences.)
- jesusthatsgreat 9y ago
  The hackernews community in general is opposed to change which is ironic given that change is ultimately what has paid / is paying for their salaries. Some people feel very threatened by the idea of the disruption of money and all of it's controls to the extent they simply won't even entertain the idea of something new coming along. Take VC funding / angel investing - it's being blown to pieces by cryptocurrency as we speak and that's merely one example of what a cryptocurrency can do...
  - acdha 9y ago
    > The hackernews community in general is opposed to change which is ironic given that change is ultimately what has paid / is paying for their salaries. That would be ironic if it were true but it's simply not. If you read the threads here, the heat comes from two camps: people who are pushing The Future of Economics!!! Get Rich Quick!!! and people who actually understand economics, have enough life experience to recognize bubbles, and are asking questions which the sales guys would prefer not to answer. There are plenty of good technical discussions about distributed trust here but they don't start from the breathless boosterism. They especially do not start from someone responding to serious criticism with “you just don't like change” rather than addressing it.
- lmm 9y ago
  I believe in democracy and traditional government, for all its flaws. I think the ability of the human community to outlaw things, even when there's Pareto profit in those things, is a really important safety net. Cryptocurrency takes that away, and there is no way of getting it back. If cryptocurrency becomes widespread and socially acceptable, then you better hope all the things that people want to buy and other people want to sell are good for society, because there will no longer be anything society can do about the ones that aren't. It's not just a worthless bubble, it's a genuine threat to civilization.
  - EADGBE 9y ago
    How does cash not do the same thing? Is it only for its locality requirement?
    - lmm 9y ago
      Cash does the same thing, though to a lesser extent as it's less convenient. But yes, cash is antisocial and mainly benefits those who are undermining society (e.g. paying "cash in hand" to help tax-evading small businesses).
  - ahallock 9y ago
    What about cryptocurrency prevents things from being outlawed? And how has government eliminated illicit goods and services from being sold right now? As long as there's a market and the money is greater than the deterrent, people will buy and sell things that are bad for society. > a genuine threat to civilization Hyperbole.
    - lmm 9y ago
      > As long as there's a market and the money is greater than the deterrent, people will buy and sell things that are bad for society. As long as such transactions are inconvenient/costly, people will do less of them; if the inconvenience/cost is high enough to make the transaction unprofitable then it won't happen.
  - googletazer 9y ago
- marcosdumay 9y ago
  Well, from first principles, cryptocurrencies are either in a bubble, or there are enough transactions that make them worth keeping as payment medium. The answer seems somewhat clear to me, but the actual size of the bubble is hard to measure. On a second level, no cryptocurrency seems able to support a reasonable transaction volume, so it could replace money in large scale. All of the current algorithms have scalability issues that come from the kernel idea of a distributed single truth. Another level up, distributed cryptocurrencies are so inefficient that it's a wonder they even got so far. The only thing holding them up is the complete anachronism of every government on Earth that didn't create any viable centralized cryptocurrency. That can't last forever. At a minimum, some company must get it right at some point, and in all likelihood the UN will eventually settle on a shared protocol among everybody. That said, I don't often go out there writing stuff opposing cryptocurrencies. So, I'm probably not among that vehement opposition you cited.
ivanbakel 9y ago
Ignoring the opinionated part of the title for a moment: because there's money in it, pure and simple. That money comes from the buyers, in a kind of pseudo-Ponzi scheme, but it's still the basic motivator for getting involved in ETH.
- jonmb 9y ago
  That's what got me interested. The tech itself seems cool, but I bought in at $100 because I wanted to sell around $300, which is what I did. I wonder how many people who buy ETH are doing it because they believe in the future of the tech versus just gambling (which is basically what I did). All the hacks and scams involved have kept me away from keeping any money in it long-term.
- wakkaflokka 9y ago
  This is it. I took some disposable income and invested in ether during the initial EEA announcement. I know little of the fundamentals of ethereum. I bought in at $16, and it's now at $230. Talk about a ridiculous return. Pulled out my principle and some gains, and the rest is along for the roller coaster ride. I'll be the first to admit that I'm probably the type of investor whom people will point to as an example of an ethereum bubble (someone who knows little of the technicals behind ethereum, but is in it 'for a quick buck'). It truly scares me to hear about cases where somebody invests a large portion of their worth into something as volatile as crypto currency.
  - MSM 9y ago
    >I'm probably the type of investor whom people will point to as an example of an ethereum bubble (someone who knows little of the technicals behind ethereum, but is in it 'for a quick buck'). I always see "traditional" investors point to this and say "How could you possibly invest money into something you don't fully understand?" I'm personally not invested in crypto at the moment but I can understand the draw- my response is this: When you look through your 401k, how many of those companies are even recognizable? If I were to ask extremely basic questions about any of their financials, could that person speak to them? The answer is almost unanimously "No", but it's completely accepted (beyond accepted really, it's pushed on you) to invest into companies that people don't fully understand, yet shamed if someone takes a gamble on crypto.
brianbreslin 9y ago
My main beef with most crypto is that there are no sound logical factors driving price swings. That said, I am a sucker and have a disposable amount of money invested in them. However looking at fundamentals (low volume of transactions, niche utility, liquidity, high-hype levels, etc), there are tons of signs of bubble in crypto now (and have been for ages).
- toastking 9y ago
  It's also eventually they're going to hit a ceiling and be worthless once they're all mined. It seems like a huge bet, trying to guess when Bitcoin value will hit 0.
  - mysterypie 9y ago
    > It's also eventually they're going to hit a ceiling and be worthless once they're all mined. There may be huge bubble, but that comment is a complete misunderstanding. Suppose all the gold in the world had been mined. Would all the existing gold become worthless? If you think about it, you'll see that just the opposite will happen. The world supply of gold (or Bitcoin) will become more valuable. I repeat: I'm not saying that there is no bubble. An aside: Maybe you're thinking that if no more Bitcoin is being mined, then the market can't grow or that there won't be enough Bitcoin to support more transactions. However, there's a plan for that since the original Bitcoin paper. Bitcoin is finely divisible and the idea is that people will use smaller and smaller units for a certain value.
    - Cthulhu_ 9y ago
      Doesn't the Bitcoin network depend on miners to process transactions? Like, no miners = no transactions processed?
      - 0x4f3759df 9y ago
        Miners will be compensated with transaction fees when there is nothing left to mine.
sauronlord 9y ago
For this being a tech site, there are sure a lot of ignorant people commenting here. Have you tried to write a Solidity contract and what you can do with it? It's a breathe of fresh air. No more Stripe or BS credit card integrations needed. The money transfer is literally baked into your app. This is the future, whether or not the current price is in bubble territory or not.
throwaway29292 9y ago
I guess it depends on whether people believe cryptocurrencies have a future, and if they're confident Ethereum will still exist 10 years from now. I don't care if the price falls temporarily, it has the potential to make a major impact on the world and I think engineers will be able to surmount the challenges it faces today. It's as simple as that for me.
j_s 9y ago
Because right now it's on sale!
reckoner2 9y ago
People seem to believe that cryptocurrencies are either a scam/waste/bubble or that they are an amazing technology that the future of financial tech will be built upon. And there is this battle between the sides. I think that both are equally true! Prices are obviously driven by speculation, there is tonnes of fraud, and no regulation. It is a wild wild west goldrush situation right now. Maybe this is unfortunate but I'm also not surprised by it. Isn't this how all markets get started? I don't have great sources but I think the situation was similar for the securities markets for many years. I also think the blockchain is an incredibly remarkable piece of technology that it will be put to use in increasingly important and useful roles and that cryptocurrencies are here to stay. Both can be true.
- grey-area 9y ago
  Sure there's lots of fraud, excitement, and ignorance right now in cryotocurrencies, but there are also fundamental problems with the current attempts. Distributed consensus means eventual consistency and/or slow unreliable transactions, I'm not convinced that's a good idea for a payments network. The article makes the point that many people putting money into these schemes know nothing about the tech involved or the possible applications/drawbacks, they're gambling based on hearsay. As with most bubbles, what comes after probably won't resemble what got everyone excited, and early investors will lose their money. So it's understandable many are sceptical.
  - dlwdlw 9y ago
    I wonder if a sacrifice is always necessary for certain types of improvement. (e.g. the titantic had to crash for safer boats, WWII had to happen for less war, etc...)
  - hello_marmalade 9y ago
    There are designs for much better implementations that are completed or in the works. Cryptocurrency is here to stay, whether or not it will be Bitcoin specifically is another question.
branchless 9y ago
Because land prices have detached from land and people are desperate to get a lottery ticket as their only way to escape wage slavery. The casino economy where "investors" roll the dice to the muffled cry of "efficient allocation of resources".
imhoguy 9y ago
Shoeshine boy indicator is flashing red for me [1]. Some chaps are calling me at midnight to lure me into the last occasion to become awful rich by buying some one/das/last-coin mining licenses. After quick research it seems their "cryptocurrencies" are not even distributed but hosted at "secure datacenter". Speechless, I had a same feeling pre-2007 when overnight trained advisors tried to get me into some miracle funds. Cryptocurrencies have a future but euphoria period is usually followed by crash and purification phase - lots of money will be lost, but the proven solution will stay. [1] http://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm http://archive.fortune.com/magazines/fortune/fortune_archive...
djb_hackernews 9y ago
I was recently invited over a friends house to get together with a few others to discuss bitcoin and bitcoin opportunities. All mid 30s, non tech day jobs and people I would consider intelligent. They had no experience with equities, no experience with forex, and were heavily researching bitcoin mining systems. It seemed as if bitcoin just popped up on their radar and really had no understanding of bitcoin or other cryptocurrencies and I got the sense that they felt like they were getting in on the ground floor. Maybe? +1 to the shoeshine boy indicator reference in this thread.
AndrewKemendo 9y ago
I find the recent popularity of cryptocurrencies very interesting as I spent a lot of time in 2009^ studying and researching Bitcoin from the academic perspective of economics (My undergraduate degree). In 2009^ I downloaded a BTC miner and had everything set up but then never started the machine because I was running folding@home and thought that was a better use of my distributed compute. Doh! In my mind you can look at cryptocurrencies, and the idea of blockchain generally, in two ways. Either you evaluate it as how well it acts as Money or what it can do as a distributed ledgering system. In the former case you need a comprehensive understanding of: 1. The history of money, which comes down to war and politics, 2. A deep understanding of what makes money work in it's three uses (store of value, medium of exchange, unit of accounting) 3. How it forms a scaffold in a modern economy. The cryptocurrency-as-money perspective fundamentally has no legs, for numerous reasons, but primarily because it has no coercive power behind it enforcing it's use like all other currencies. A few people are trying it but it's no serious contender for legal tender anytime soon. All of the "coin" that is created in these markets is effectively derivatives trading and should be avoided at all costs in my opinion. From the digital ledger perspective there seems to be real value in that use case. ^Corrected year
- smaps 9y ago
  >I find the recent popularity of cryptocurrencies very interesting as I spent a lot of time in 2007-2008 studying and researching Bitcoin from the academic perspective of economics (My undergraduate degree). >In 2008 I downloaded a BTC miner and had everything set up but then never started the machine because I was running folding@home and thought that was a better use of my distributed compute. Doh! The first version of the bitcoin software was released in 2009, the white paper was published in October 2008.
  - AndrewKemendo 9y ago
    Ok, 2009 then, whenever it was first available. My memory fails me sometimes.
- hello_marmalade 9y ago
  It doesn't have to have a coercive power behind it enforcing it's use. It has a natural benefit, which is anonymity (when used the right way). People want to use Bitcoin as a currency. It doesn't need to supplant normal money, just be an addition to it.
Cozumel 9y ago
That author was me with bitcoin, I perhaps understood it on a technical level better than my friends, but I thought it was silly, they didn't and now they're bitcoin millionaires.
banderman 9y ago
Greed.
googletazer 9y ago
People are calling cryptocurrency vaporware, but its only partly true, and definitely not for Ethereum. Check out the hard problems worked on by the ethereum team - https://github.com/ethereum/research/wiki/Problems https://github.com/ethereum/research/wiki/Problems Each one of those would result in multiple patents if solved by a traditional corporation.

41 points by gk1 9y ago

I'm curious why so many people are so vehemently opposed to cryptocurrencies, and in particular ETH. If you believe it's a big scam/bubble and won't turn into anything, then don't purchase any. But what's with the influx of "ETH is the worst and you're stupid if you buy any" articles? They add 0 value to the blockchain culture and development, and only seem to be thinly veiled "I told you so/I'm smarter than you" think pieces.

dageshi 9y ago
People don't understand its appeal but are irritated that others do.
- mpeg 9y ago
  I think lots of people completely understand the appeal of ETH but also realise it has so many issues the market cap is completely imaginary. Decentralised anything is an awful market strategy, it works for some things where regulation gets in the way (AKA issues that are hard to solve in a legal way). Ironically, p2p crowdfunding has been the killer application of cryptocurrency so far, since it's tricky to do that legally and it turns out if you ICO with crypto you can just take the money and run. I don't believe ETH will succeed to the extent people are hoping it to, long term, I think the real market cap should be a fraction of what it is today. But I'm not stupid; I still made a bunch of money trading it and riding the hype.
  - dageshi 9y ago
    I'm speaking on a broader more long term view. Crypto currencies have the possibility to expand into what is arguably the biggest market of them all, money. In the same sense that many previous distruptive technologies did (mp3, video codecs for music/entertainment). Many mp3 based startups failed, so did many streaming/content selling startups but the trend was ultimately sound. Nobody really knows what bets will pay off but people are placing bets none the less in the same way they placed bets on startups before.
brianwawok 9y ago
I think they are all a bit silly equally, nothing special to ETH. I believe it is a scam/bubble.. but I don't really care if people waste their money on it. I see it like I see getting your Tarot cards read for $500 a session or buying a lottery ticket. A pretty poor use of money there are many others ;)
epicide 9y ago
> But what's with the influx of "ETH is the worst and you're stupid if you buy any" articles? They get people on the page and counting towards their ad revenue. In a word: clickbait. On that note, I hadn't seen The Outline before and today I've already seen two articles on HN from that site. I noticed because they have one of the worst reading experiences for an article that I've seen in a while. Embedded ads, mobile un-friendly to the point that I had to quit my news app in order to back out of the article, and distracting animated horizontal rules.
FussyZeus 9y ago
> I'm curious why so many people are so vehemently opposed to cryptocurrencies, and in particular ETH. I wouldn't say I'm vehemently opposed, but I do kind of regard the whole thing as a bit of a joke. If you're curious for my two cents: * There are no regulatory bodies or any kind of oversight; little legal recourse or way to insure your investment * There is no predictability of any kind in relation to the value; it goes up and down as it likes, often by large amounts, for literally no reason * Mining the various coins consumes a massive amount of energy, essentially computer busywork and in most cases (not BTC or ETH) the result is utterly worthless Honestly these things feel more like a tech-bro exclusive version of the lottery than anything; sure your 10,000 redcoin is worthless today, but someday it might be worth millions! Granted you probably have much better odds with Redcoin than Powerball but it still feels like the same sort of thing.
- coldpie 9y ago
  > There are no regulatory bodies or any kind of oversight; little legal recourse or way to insure your investment It is kind of fun watching a bunch of libertarians suddenly figure out why laws and regulatory bodies exist when every crash or major theft happens.
  - smokeyj 9y ago
    Ah yes, the narrative where libertarians finally see the value in politicians and crawl to them for help. Unfortunately for your fantasy, that's the opposite of what's happening. We're leaving the politicians at home and building technical solutions. What a world huh?
  - FussyZeus 9y ago
    Indeed. I lean towards Libertarianism for most things, i.e. deregulation, but many regulations were put in place for a very good reason. A lot of Libertarians that I talk to though usually argue for the ability to opt-out of whatever system, which IMHO is perfectly fine. If you don't pay for the firefighters though, you don't get to be angry when they don't put your house out type of thing.
joncrocks 9y ago
For me at least, it's because it smells like the dot-com bubble. Lots of people investing money in things they don't understand the fundamentals of, looking to get rich quick. It'll happen to some people, but many others will get bitten. Money that they could have reasonably spent elsewhere on things they need, or invested in things that are less risky. Sure, you might win it big, but you probably won't, you'll probably lose your money, it's a gamble. People are going around saying that playing blackjack is a way to make easy money, and I'm raising an eyebrow and saying "Hmm, are you sure?"
- deleted 9y ago
  [deleted]
- DennisP 9y ago
  Dot-com was a bubble but fifteen years later here we are, doing everything on the Web, with some of those dot-coms now the most successful companies in the world.
  - patrickk 9y ago
    I feel exactly the same about the crypto space. Yes, there's tons of hype, nonsense and even scams, but the cream will eventually rise to the top, and the best ideas will survive. I've listened recently to some podcasts with Olaf Carlson-Wee, someone who has thought long and deep about the implications of having funding at the protocol-level of the internet, and how it could swing the balance away from large, centralised web monopolies who capture most of the value, towards the users of the network[1]. Union Square ventures also have some interesting ideas as to where the future of the internet might be heading.[2] It's hard to see where we're heading with all the short term price boom and busts though, which I agree are unconnected with reality (currently). [1] Two podcasts + notes with Carlson-Wee- http://buynhodl.com/ethereum-investment/ether-investor-focus-olaf-carlson-wee-polychain-capital/ http://buynhodl.com/ethereum-investment/ether-investor-focus... [2] https://news.ycombinator.com/item?id=12247892 https://news.ycombinator.com/item?id=12247892
    - toastking 9y ago
vkreso 9y ago
Well we're most certainly in a bubble and it is not the first nor the last one in cryptospace. It often happens when there is such a big influx of new agents on the market. Seeing crypto hype/doom articles on your random facebook feeds from friends who recently weren't remotely interested in crypto is quite a big signal of an impending correction. Basic fear/greed. Disclaimer: I own cryptos
Nursie 9y ago
I'm opposed to BTC as it is evangelised - as a payment method better than credit card, as a currency better than fiat, and as an investment. I'm opposed to it for a variety of reasons. As a payment method it is wanting because of the long confirmation times, lack of reversibility and low volumes. As a currency to be used on a country scale it is wanting because of the fixed amount, necessitating deflation, which is bad in itself, and the idea of handing huge parts of the economy to a few early adopters. As an investment, well, it's not really an investment as "investing" in BTC doesn't put money into the economy like investing in a company would, it's more akin to sitting on gold. And all this is before we get into the "competing to burn the most energy" aspects of mining, which are only really necessary to support the decentralised nature of the system - not something most people give much of a crap about. How or if these criticisms apply to Ether I'm not sure.
- swiley 9y ago
  Ether's block times are way shorter (17 seconds) I don't know if transaction times are shorter because of that though.
  - Nursie 9y ago
    I had heard similar, but I haven't read enough about it to know the full extent of the differences yet. I know they're also looking into "proof of stake" either as a replacement or an adjunct to "proof of work", which may cover some of the energy concerns, but again I don't understand PoS well enough yet.
ghthor 9y ago
I assume these articles are astroturfing by companies or governments that are legitimately terrified of losing the control they have over the economy.
- TeMPOraL 9y ago
  That's wishful thinking. All evidence suggests that governments worldwide couldn't care less about cryptocurrencies. At this point, cryptocurrencies are just taxable Internet points with delusions of grandeur.
- hood_syntax 9y ago
  I really doubt it. If you think there aren't plenty of people who view this stuff like tulips then I think you're too far down the rabbit hole.
- Joeboy 9y ago
  I assume a lot of the pro-cryptocurrency comments and articles are crypto-holders trying to pump the market.
jmull 9y ago
If you see it as a bubble/scam, why wouldn't you warn people away from it? Especially your friends and people like them? Also, bubbles that grow large enough can have an impact on the larger economy when they burst. Probably the Ethereum bubble, assuming there is one, won't get anywhere near that large before it bursts. But if it's successful, it will be replicated on a larger scale. (By successful, I'm not talking about the value of ETH, I mean that financial players make lots of money without significant consequences.)
jesusthatsgreat 9y ago
The hackernews community in general is opposed to change which is ironic given that change is ultimately what has paid / is paying for their salaries. Some people feel very threatened by the idea of the disruption of money and all of it's controls to the extent they simply won't even entertain the idea of something new coming along. Take VC funding / angel investing - it's being blown to pieces by cryptocurrency as we speak and that's merely one example of what a cryptocurrency can do...
- acdha 9y ago
  > The hackernews community in general is opposed to change which is ironic given that change is ultimately what has paid / is paying for their salaries. That would be ironic if it were true but it's simply not. If you read the threads here, the heat comes from two camps: people who are pushing The Future of Economics!!! Get Rich Quick!!! and people who actually understand economics, have enough life experience to recognize bubbles, and are asking questions which the sales guys would prefer not to answer. There are plenty of good technical discussions about distributed trust here but they don't start from the breathless boosterism. They especially do not start from someone responding to serious criticism with “you just don't like change” rather than addressing it.
lmm 9y ago
I believe in democracy and traditional government, for all its flaws. I think the ability of the human community to outlaw things, even when there's Pareto profit in those things, is a really important safety net. Cryptocurrency takes that away, and there is no way of getting it back. If cryptocurrency becomes widespread and socially acceptable, then you better hope all the things that people want to buy and other people want to sell are good for society, because there will no longer be anything society can do about the ones that aren't. It's not just a worthless bubble, it's a genuine threat to civilization.
- EADGBE 9y ago
  How does cash not do the same thing? Is it only for its locality requirement?
  - lmm 9y ago
    Cash does the same thing, though to a lesser extent as it's less convenient. But yes, cash is antisocial and mainly benefits those who are undermining society (e.g. paying "cash in hand" to help tax-evading small businesses).
- ahallock 9y ago
  What about cryptocurrency prevents things from being outlawed? And how has government eliminated illicit goods and services from being sold right now? As long as there's a market and the money is greater than the deterrent, people will buy and sell things that are bad for society. > a genuine threat to civilization Hyperbole.
  - lmm 9y ago
    > As long as there's a market and the money is greater than the deterrent, people will buy and sell things that are bad for society. As long as such transactions are inconvenient/costly, people will do less of them; if the inconvenience/cost is high enough to make the transaction unprofitable then it won't happen.
- googletazer 9y ago
marcosdumay 9y ago
Well, from first principles, cryptocurrencies are either in a bubble, or there are enough transactions that make them worth keeping as payment medium. The answer seems somewhat clear to me, but the actual size of the bubble is hard to measure. On a second level, no cryptocurrency seems able to support a reasonable transaction volume, so it could replace money in large scale. All of the current algorithms have scalability issues that come from the kernel idea of a distributed single truth. Another level up, distributed cryptocurrencies are so inefficient that it's a wonder they even got so far. The only thing holding them up is the complete anachronism of every government on Earth that didn't create any viable centralized cryptocurrency. That can't last forever. At a minimum, some company must get it right at some point, and in all likelihood the UN will eventually settle on a shared protocol among everybody. That said, I don't often go out there writing stuff opposing cryptocurrencies. So, I'm probably not among that vehement opposition you cited.

ivanbakel 9y ago

Ignoring the opinionated part of the title for a moment: because there's money in it, pure and simple. That money comes from the buyers, in a kind of pseudo-Ponzi scheme, but it's still the basic motivator for getting involved in ETH.

jonmb 9y ago
That's what got me interested. The tech itself seems cool, but I bought in at $100 because I wanted to sell around $300, which is what I did. I wonder how many people who buy ETH are doing it because they believe in the future of the tech versus just gambling (which is basically what I did). All the hacks and scams involved have kept me away from keeping any money in it long-term.
wakkaflokka 9y ago
This is it. I took some disposable income and invested in ether during the initial EEA announcement. I know little of the fundamentals of ethereum. I bought in at $16, and it's now at $230. Talk about a ridiculous return. Pulled out my principle and some gains, and the rest is along for the roller coaster ride. I'll be the first to admit that I'm probably the type of investor whom people will point to as an example of an ethereum bubble (someone who knows little of the technicals behind ethereum, but is in it 'for a quick buck'). It truly scares me to hear about cases where somebody invests a large portion of their worth into something as volatile as crypto currency.
- MSM 9y ago
  >I'm probably the type of investor whom people will point to as an example of an ethereum bubble (someone who knows little of the technicals behind ethereum, but is in it 'for a quick buck'). I always see "traditional" investors point to this and say "How could you possibly invest money into something you don't fully understand?" I'm personally not invested in crypto at the moment but I can understand the draw- my response is this: When you look through your 401k, how many of those companies are even recognizable? If I were to ask extremely basic questions about any of their financials, could that person speak to them? The answer is almost unanimously "No", but it's completely accepted (beyond accepted really, it's pushed on you) to invest into companies that people don't fully understand, yet shamed if someone takes a gamble on crypto.

brianbreslin 9y ago

My main beef with most crypto is that there are no sound logical factors driving price swings. That said, I am a sucker and have a disposable amount of money invested in them. However looking at fundamentals (low volume of transactions, niche utility, liquidity, high-hype levels, etc), there are tons of signs of bubble in crypto now (and have been for ages).

toastking 9y ago
It's also eventually they're going to hit a ceiling and be worthless once they're all mined. It seems like a huge bet, trying to guess when Bitcoin value will hit 0.
- mysterypie 9y ago
  > It's also eventually they're going to hit a ceiling and be worthless once they're all mined. There may be huge bubble, but that comment is a complete misunderstanding. Suppose all the gold in the world had been mined. Would all the existing gold become worthless? If you think about it, you'll see that just the opposite will happen. The world supply of gold (or Bitcoin) will become more valuable. I repeat: I'm not saying that there is no bubble. An aside: Maybe you're thinking that if no more Bitcoin is being mined, then the market can't grow or that there won't be enough Bitcoin to support more transactions. However, there's a plan for that since the original Bitcoin paper. Bitcoin is finely divisible and the idea is that people will use smaller and smaller units for a certain value.
  - Cthulhu_ 9y ago
    Doesn't the Bitcoin network depend on miners to process transactions? Like, no miners = no transactions processed?
    - 0x4f3759df 9y ago
      Miners will be compensated with transaction fees when there is nothing left to mine.

sauronlord 9y ago

For this being a tech site, there are sure a lot of ignorant people commenting here. Have you tried to write a Solidity contract and what you can do with it? It's a breathe of fresh air. No more Stripe or BS credit card integrations needed. The money transfer is literally baked into your app. This is the future, whether or not the current price is in bubble territory or not.

throwaway29292 9y ago

I guess it depends on whether people believe cryptocurrencies have a future, and if they're confident Ethereum will still exist 10 years from now. I don't care if the price falls temporarily, it has the potential to make a major impact on the world and I think engineers will be able to surmount the challenges it faces today. It's as simple as that for me.

j_s 9y ago

Because right now it's on sale!

reckoner2 9y ago

People seem to believe that cryptocurrencies are either a scam/waste/bubble or that they are an amazing technology that the future of financial tech will be built upon. And there is this battle between the sides. I think that both are equally true! Prices are obviously driven by speculation, there is tonnes of fraud, and no regulation. It is a wild wild west goldrush situation right now. Maybe this is unfortunate but I'm also not surprised by it. Isn't this how all markets get started? I don't have great sources but I think the situation was similar for the securities markets for many years. I also think the blockchain is an incredibly remarkable piece of technology that it will be put to use in increasingly important and useful roles and that cryptocurrencies are here to stay. Both can be true.

grey-area 9y ago
Sure there's lots of fraud, excitement, and ignorance right now in cryotocurrencies, but there are also fundamental problems with the current attempts. Distributed consensus means eventual consistency and/or slow unreliable transactions, I'm not convinced that's a good idea for a payments network. The article makes the point that many people putting money into these schemes know nothing about the tech involved or the possible applications/drawbacks, they're gambling based on hearsay. As with most bubbles, what comes after probably won't resemble what got everyone excited, and early investors will lose their money. So it's understandable many are sceptical.
- dlwdlw 9y ago
  I wonder if a sacrifice is always necessary for certain types of improvement. (e.g. the titantic had to crash for safer boats, WWII had to happen for less war, etc...)
- hello_marmalade 9y ago
  There are designs for much better implementations that are completed or in the works. Cryptocurrency is here to stay, whether or not it will be Bitcoin specifically is another question.

branchless 9y ago

Because land prices have detached from land and people are desperate to get a lottery ticket as their only way to escape wage slavery. The casino economy where "investors" roll the dice to the muffled cry of "efficient allocation of resources".

imhoguy 9y ago

Shoeshine boy indicator is flashing red for me [1]. Some chaps are calling me at midnight to lure me into the last occasion to become awful rich by buying some one/das/last-coin mining licenses. After quick research it seems their "cryptocurrencies" are not even distributed but hosted at "secure datacenter". Speechless, I had a same feeling pre-2007 when overnight trained advisors tried to get me into some miracle funds. Cryptocurrencies have a future but euphoria period is usually followed by crash and purification phase - lots of money will be lost, but the proven solution will stay. [1] http://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm http://archive.fortune.com/magazines/fortune/fortune_archive...

djb_hackernews 9y ago

I was recently invited over a friends house to get together with a few others to discuss bitcoin and bitcoin opportunities. All mid 30s, non tech day jobs and people I would consider intelligent. They had no experience with equities, no experience with forex, and were heavily researching bitcoin mining systems. It seemed as if bitcoin just popped up on their radar and really had no understanding of bitcoin or other cryptocurrencies and I got the sense that they felt like they were getting in on the ground floor. Maybe? +1 to the shoeshine boy indicator reference in this thread.

AndrewKemendo 9y ago

I find the recent popularity of cryptocurrencies very interesting as I spent a lot of time in 2009^ studying and researching Bitcoin from the academic perspective of economics (My undergraduate degree). In 2009^ I downloaded a BTC miner and had everything set up but then never started the machine because I was running folding@home and thought that was a better use of my distributed compute. Doh! In my mind you can look at cryptocurrencies, and the idea of blockchain generally, in two ways. Either you evaluate it as how well it acts as Money or what it can do as a distributed ledgering system. In the former case you need a comprehensive understanding of: 1. The history of money, which comes down to war and politics, 2. A deep understanding of what makes money work in it's three uses (store of value, medium of exchange, unit of accounting) 3. How it forms a scaffold in a modern economy. The cryptocurrency-as-money perspective fundamentally has no legs, for numerous reasons, but primarily because it has no coercive power behind it enforcing it's use like all other currencies. A few people are trying it but it's no serious contender for legal tender anytime soon. All of the "coin" that is created in these markets is effectively derivatives trading and should be avoided at all costs in my opinion. From the digital ledger perspective there seems to be real value in that use case. ^Corrected year

smaps 9y ago
>I find the recent popularity of cryptocurrencies very interesting as I spent a lot of time in 2007-2008 studying and researching Bitcoin from the academic perspective of economics (My undergraduate degree). >In 2008 I downloaded a BTC miner and had everything set up but then never started the machine because I was running folding@home and thought that was a better use of my distributed compute. Doh! The first version of the bitcoin software was released in 2009, the white paper was published in October 2008.
- AndrewKemendo 9y ago
  Ok, 2009 then, whenever it was first available. My memory fails me sometimes.
hello_marmalade 9y ago
It doesn't have to have a coercive power behind it enforcing it's use. It has a natural benefit, which is anonymity (when used the right way). People want to use Bitcoin as a currency. It doesn't need to supplant normal money, just be an addition to it.

Cozumel 9y ago

That author was me with bitcoin, I perhaps understood it on a technical level better than my friends, but I thought it was silly, they didn't and now they're bitcoin millionaires.

banderman 9y ago

Greed.

googletazer 9y ago

People are calling cryptocurrency vaporware, but its only partly true, and definitely not for Ethereum. Check out the hard problems worked on by the ethereum team - https://github.com/ethereum/research/wiki/Problems https://github.com/ethereum/research/wiki/Problems Each one of those would result in multiple patents if solved by a traditional corporation.