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Crypto currency are the new tulip bulbs[1]. Only some are going to make money. Current buyers are relying on greater fools to take these off their hands. A cra

Crypto currency are the new tulip bulbs[1]. Only some are going to make money. Current buyers are relying on greater fools to take these off their hands. A crash is eminent so hold tight and wait for it. You will have plenty of opportunity. History will repeat itself as new fools arrive on the scene[2]. [1] https://en.wikipedia.org/wiki/Tulip_mania https://en.wikipedia.org/wiki/Tulip_mania [2] https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets https://en.wikipedia.org/wiki/List_of_stock_market_crashes_a...

kdelok 9y ago
I'm actually worried that one of the main things in favour of cryptocurrencies is that they can act as an effective currency for illegal activities, i.e. they'll stay profitable for as long as regulations struggle to keep up with them.
- saiya-jin 9y ago
  this is already a case for quite a few years in dark web (mostly bitcoin for now). or you think that illegal drugs and weapons and whatnot are being paid by money account transfers over SEPA?
- soneca 9y ago
  I believe that cryptocurrencies only reached a critical mass to be relevant att all because of the value it delivers to criminals. All that is ever discussed about cryptocurrencies at HN is marginal in comparison.
  - matthewbauer 9y ago
    I think enthusiasts and speculators are actually a significant driver of the high prices. Criminals would much rather have a stable, quick Bitcoin than what we're seeing right now.
empath75 9y ago
I am starting to worry that this bubble is going to grow until it threatens the world economy.
- kristopolous 9y ago
  Depends on whether assets or debt will be leveraged for speculation and whether futures contracts will be used as some kind of meta-currency. Then you have contagions because it will erode trust in other sectors. Economies kinda freeze up without trust or reliable value propositions.
  - jliptzin 9y ago
    Speculation sure but I don't see how leverage can get too high with a hard limit to the number of bitcoins floating around. Not like option contracts for example where you create as many as you want out of thin air.
    - matthewbauer 9y ago
      Well the leverage would be in option contracts on Bitcoin. These are already available on some exchanges.
- hendzen 9y ago
  See this prescient article, written in 2013: http://blog.gardeviance.org/2013/11/a-spoiler-for-future-bitcoin.html http://blog.gardeviance.org/2013/11/a-spoiler-for-future-bit...
  - duckingtest 9y ago
    POW can't work at these scales. At $250k/btc mining would burn something close to the equivalent of New Zealand's GDP. As this would be purely electrical energy, energy use alone would be equivalent to that of Spain or similarly sized country.
- deleted 9y ago
  [deleted]
saosebastiao 9y ago
I feel like it is a lot less like Tulip mania and a lot more like the dotcom boom/crash. I say that in the sense that there is significant utility in some cryptocurrency concepts, but not all of them...however there is widespread overheating due to speculation. That is also to imply that some may emerge after a crash in the same way that Amazon, Google, eBay/Paypal, etc., emerged and thrived after the crash.
- drieddust 9y ago
  I do not deny the utility of crypocurrencies there will be winners out of this. But current breed of investors will trigger another bout of golbal meltdown. Even Amazon lost its value during the crash so chances are that most investors sold out everything in panic. Only those who had nerves of iron actually came out alive.
  - matthewbauer 9y ago
    I don't think there's enough money in cryptocurrencies to trigger a global meltdown. It will no doubt have an effect of the economy, but it's still fringe enough that a crash in the near future would be mostly harmless.
    - drieddust 9y ago
      At the moment it's not but of this mania continued for some more time it will snowball as more and more folks get in just because they don't want to miss out. I hope you are right and crash comes early on.
loceng 9y ago
I'm not sure a crash will look as expected. People currently holding the crypto-assets aren't in any rush to liquidate to pennies on the dollars they spent, and there can and has been a long delay before the rallying drums get new money and excitement pumped into it to make the "$100" cost something someone is willing to pay. They buy, the value goes up some, perhaps they sell some to realize they can make a return - it wets their appetite, and they pump more money into it - whether $1000 or $100mm. It's very dangerous for society because it could actually work

kdelok 9y ago

I'm actually worried that one of the main things in favour of cryptocurrencies is that they can act as an effective currency for illegal activities, i.e. they'll stay profitable for as long as regulations struggle to keep up with them.

saiya-jin 9y ago
this is already a case for quite a few years in dark web (mostly bitcoin for now). or you think that illegal drugs and weapons and whatnot are being paid by money account transfers over SEPA?
soneca 9y ago
I believe that cryptocurrencies only reached a critical mass to be relevant att all because of the value it delivers to criminals. All that is ever discussed about cryptocurrencies at HN is marginal in comparison.
- matthewbauer 9y ago
  I think enthusiasts and speculators are actually a significant driver of the high prices. Criminals would much rather have a stable, quick Bitcoin than what we're seeing right now.

empath75 9y ago

I am starting to worry that this bubble is going to grow until it threatens the world economy.

kristopolous 9y ago
Depends on whether assets or debt will be leveraged for speculation and whether futures contracts will be used as some kind of meta-currency. Then you have contagions because it will erode trust in other sectors. Economies kinda freeze up without trust or reliable value propositions.
- jliptzin 9y ago
  Speculation sure but I don't see how leverage can get too high with a hard limit to the number of bitcoins floating around. Not like option contracts for example where you create as many as you want out of thin air.
  - matthewbauer 9y ago
    Well the leverage would be in option contracts on Bitcoin. These are already available on some exchanges.
hendzen 9y ago
See this prescient article, written in 2013: http://blog.gardeviance.org/2013/11/a-spoiler-for-future-bitcoin.html http://blog.gardeviance.org/2013/11/a-spoiler-for-future-bit...
- duckingtest 9y ago
  POW can't work at these scales. At $250k/btc mining would burn something close to the equivalent of New Zealand's GDP. As this would be purely electrical energy, energy use alone would be equivalent to that of Spain or similarly sized country.
deleted 9y ago
[deleted]

saosebastiao 9y ago

I feel like it is a lot less like Tulip mania and a lot more like the dotcom boom/crash. I say that in the sense that there is significant utility in some cryptocurrency concepts, but not all of them...however there is widespread overheating due to speculation. That is also to imply that some may emerge after a crash in the same way that Amazon, Google, eBay/Paypal, etc., emerged and thrived after the crash.

drieddust 9y ago
I do not deny the utility of crypocurrencies there will be winners out of this. But current breed of investors will trigger another bout of golbal meltdown. Even Amazon lost its value during the crash so chances are that most investors sold out everything in panic. Only those who had nerves of iron actually came out alive.
- matthewbauer 9y ago
  I don't think there's enough money in cryptocurrencies to trigger a global meltdown. It will no doubt have an effect of the economy, but it's still fringe enough that a crash in the near future would be mostly harmless.
  - drieddust 9y ago
    At the moment it's not but of this mania continued for some more time it will snowball as more and more folks get in just because they don't want to miss out. I hope you are right and crash comes early on.

loceng 9y ago

I'm not sure a crash will look as expected. People currently holding the crypto-assets aren't in any rush to liquidate to pennies on the dollars they spent, and there can and has been a long delay before the rallying drums get new money and excitement pumped into it to make the "$100" cost something someone is willing to pay. They buy, the value goes up some, perhaps they sell some to realize they can make a return - it wets their appetite, and they pump more money into it - whether $1000 or $100mm. It's very dangerous for society because it could actually work