5 ms·

Why? How does this make sense?

nosuchthing 9y ago
It doesn't. Especially considering all the other cryptocoin networks which facilitate the same service the bitcoin network does. The very limited number of exchanges essentially have an oligopoly, and as price climbs slowly the fall in price and 'runs on the banks' can happen extremely rapidly as the exchanges have no obligation to buy your coins for anything other then 'market rate' which assumes there's a buyer. Oh, and market demand is largely driven by bots and speculators - not the actual functionality of the BTC network. https://www.theguardian.com/technology/2014/may/29/bitcoin-bots-bought-millions-in-the-last-days-of-mt-gox https://www.theguardian.com/technology/2014/may/29/bitcoin-b... http://parasec.net/transmission/order-book-visualisation/ http://parasec.net/transmission/order-book-visualisation/
- phaed 9y ago
  BTC is a store of value. How does the functionality of gold figure into its value?
  - fweespeech 9y ago
    And yet you are ignorant of a decade long gold bubble and insist these things don't happen.
  - nosuchthing 9y ago
    BTC doesn't store value. What value is it? Why is it good that bitcoin is so inefficient? What are the alternatives and is it possible to improve any of the failures of bitcoin? Are you speaking with a bias because you have invested in bitcoin and you want to cash out some day? The Bitcoin network stores numbers in a distributed database. Why is that valuable? Take a look at http://coinmarketcap.com/ http://coinmarketcap.com/ What makes BTC rare or valuable?
    - product50 9y ago
      Either you can keep on asking those questions or you can buy it. The value of BTC is what the world makes it to be.
      - emerged 9y ago
        Sort of like Beanie Babies
      - synicalx 9y ago
        Is there an incentive to buy it though, beyond pure speculation? Maybe as a buy and hold investment I suppose? At the moment it has very limited use as a practical currency - I can't buy my groceries with Bitcoin, I can't put fuel in my car with Bitcoin, I can't pay my rent or bills with it, and I can't use it at my local pub or any pub for that matter.
    - hackinthebochs 9y ago
      Bitcoin is capable of storing value because its features allow value to be exchanged. Of course that doesn't endow it with value. But we endow it with value because we inherently value a decentralized method for the exchange of value. Bitcoin's existence bootstraps its value. >Why is it good that bitcoin is so inefficient? It helps increase the confidence in bitcoin. We value the energy used to create bitcoins so that helps us recognize the value of the coins. It's no different than rare stones being valuable because of the work expended to find them.
      - deleted 9y ago
        [deleted]
      - nosuchthing 9y ago
        Bitcoins are not valuable because it requires extreme amounts of electricity to sustain each transaction. Most people are unaware of that detail. at the time of Malmo's piece, he calculated that a single bitcoin transaction requires as much electricity as the daily consumption of 1.6 American households, and that number has increased since then. "Adopting Bitcoin as a major currency anytime in the next few decades," he wrote, "would just exacerbate anthropogenic climate change by needlessly increasing electricity consumption until it's too late." Other distributed ledger networks have designs which offer the same service to users, and in many cases are vastly more efficient in terms of electrical usage and actual speed of transactions. Kidney stones are rare and require lots of work expended to find them. Don't confuse those precursors with establishing value. https://motherboard.vice.com/en_us/article/aek3za/bitcoin-could-consume-as-much-electricity-as-denmark-by-2020 https://motherboard.vice.com/en_us/article/aek3za/bitcoin-co...
deleted 9y ago
[deleted]
phaed 9y ago
$67,285,852,182 market cap. That's how the sense is made.
- nosuchthing 9y ago
  Those "market cap" numbers are utter garbage and completely inaccurate. How is that number calculated? The actual market rate is only determined by active users who send a buy order though an exchange. If there's no demand, the price instantly tanks to 0 in a few seconds - the exchanges guarantee nothing. What's the demand behind BTC? Speculators? What happens when the speculators cash out because something better comes along?
  - mrep 9y ago
    Not that I think it is worth near that much cause it is 99% speculators, but I would assume it is based on current market price * current BTC withstanding just like how stocks market cap is based (subbing BTC with shares). > What happens when the speculators cash out because something better comes along? It'll crash super hard but I still think this is fine metric.
  - Buge 9y ago
    The number is calculated by number of bitcoins in existence * price of bitcoin. Same as the stock market.
  - zdkl 9y ago
    The demand seems to be "institutionalised" since a couple of years. VC-like money coming in through cryptocoin service startups and disposable income from rich nerds and richer finance types looking to beat the market. It'll pass and/or stabilise. It's the notion of what is stable here that's novel and interesting
frik 9y ago
Why do a TechCrunch article get flagged? Somehow there are a lot of flagged news on HN lately. What's wrong? I don't think the direction is good
- deleted 9y ago
  [deleted]
Jugurtha 9y ago
The way I think about it is by dividing folks into populations to make sense of the surge: - There are the people who get it. They get the technology and the implications of this. They've been wanting something like this (not specifically this and not a clear idea maybe) for a long, long time and sort of know what to do with it.. The idea has had time to mature and they were mentally ready. They may have problems deciding on which flavor or "crypto currency company" to bet, but they're 100% backing the concept. - There are the astrologers/traders who have no grasp of the concept but have no trouble explaining it in expert interviews on CNBC/Bloomberg/CNN Money. Traders are expert at trading: selfie sticks or the greatest "money thing" since Fibonacci's injection of Hindu-Arabic numerals into Roman banking, it's the same different thing. More crudely: if there were a market for excrement, they'd sell the shit out of it. [there actually is] - Then there's the rest of us. A sucker is born every day. We see all these tulip bulbs and want in on the action.. Oh my, I remember when it was less than $250, if only I had bought then. What? I remember when it was like $40, imagine if I had bought then.. I didn't buy at $300 because it seemed excessive and no profit was to be made, but now, I see it's $4000! So if it went from 300 to 4000, surely it can go up [this reasoning here].. And bam... So I think these are some of the populations driving the surge.
continuations 9y ago
The same reason Lycos was worth $12B and Global Crossing was worth $50B. Bubbles don't have to make sense.
synicalx 9y ago
Nothing with BTC ever makes sense. If you've ever seen American Beauty, just think of BTC like that plastic bag caught in the wind - of little real value, and flying around all over the place in an uncontrolled and unpredictable manner.

It doesn't. Especially considering all the other cryptocoin networks which facilitate the same service the bitcoin network does. The very limited number of exchanges essentially have an oligopoly, and as price climbs slowly the fall in price and 'runs on the banks' can happen extremely rapidly as the exchanges have no obligation to buy your coins for anything other then 'market rate' which assumes there's a buyer. Oh, and market demand is largely driven by bots and speculators - not the actual functionality of the BTC network. https://www.theguardian.com/technology/2014/may/29/bitcoin-bots-bought-millions-in-the-last-days-of-mt-gox https://www.theguardian.com/technology/2014/may/29/bitcoin-b... http://parasec.net/transmission/order-book-visualisation/ http://parasec.net/transmission/order-book-visualisation/

phaed 9y ago
BTC is a store of value. How does the functionality of gold figure into its value?
- fweespeech 9y ago
  And yet you are ignorant of a decade long gold bubble and insist these things don't happen.
- nosuchthing 9y ago
  BTC doesn't store value. What value is it? Why is it good that bitcoin is so inefficient? What are the alternatives and is it possible to improve any of the failures of bitcoin? Are you speaking with a bias because you have invested in bitcoin and you want to cash out some day? The Bitcoin network stores numbers in a distributed database. Why is that valuable? Take a look at http://coinmarketcap.com/ http://coinmarketcap.com/ What makes BTC rare or valuable?
  - product50 9y ago
    Either you can keep on asking those questions or you can buy it. The value of BTC is what the world makes it to be.
    - emerged 9y ago
      Sort of like Beanie Babies
    - synicalx 9y ago
      Is there an incentive to buy it though, beyond pure speculation? Maybe as a buy and hold investment I suppose? At the moment it has very limited use as a practical currency - I can't buy my groceries with Bitcoin, I can't put fuel in my car with Bitcoin, I can't pay my rent or bills with it, and I can't use it at my local pub or any pub for that matter.
  - hackinthebochs 9y ago
    Bitcoin is capable of storing value because its features allow value to be exchanged. Of course that doesn't endow it with value. But we endow it with value because we inherently value a decentralized method for the exchange of value. Bitcoin's existence bootstraps its value. >Why is it good that bitcoin is so inefficient? It helps increase the confidence in bitcoin. We value the energy used to create bitcoins so that helps us recognize the value of the coins. It's no different than rare stones being valuable because of the work expended to find them.
    - deleted 9y ago
      [deleted]
    - nosuchthing 9y ago
      Bitcoins are not valuable because it requires extreme amounts of electricity to sustain each transaction. Most people are unaware of that detail. at the time of Malmo's piece, he calculated that a single bitcoin transaction requires as much electricity as the daily consumption of 1.6 American households, and that number has increased since then. "Adopting Bitcoin as a major currency anytime in the next few decades," he wrote, "would just exacerbate anthropogenic climate change by needlessly increasing electricity consumption until it's too late." Other distributed ledger networks have designs which offer the same service to users, and in many cases are vastly more efficient in terms of electrical usage and actual speed of transactions. Kidney stones are rare and require lots of work expended to find them. Don't confuse those precursors with establishing value. https://motherboard.vice.com/en_us/article/aek3za/bitcoin-could-consume-as-much-electricity-as-denmark-by-2020 https://motherboard.vice.com/en_us/article/aek3za/bitcoin-co...

deleted 9y ago

[deleted]

phaed 9y ago

$67,285,852,182 market cap. That's how the sense is made.

nosuchthing 9y ago
Those "market cap" numbers are utter garbage and completely inaccurate. How is that number calculated? The actual market rate is only determined by active users who send a buy order though an exchange. If there's no demand, the price instantly tanks to 0 in a few seconds - the exchanges guarantee nothing. What's the demand behind BTC? Speculators? What happens when the speculators cash out because something better comes along?
- mrep 9y ago
  Not that I think it is worth near that much cause it is 99% speculators, but I would assume it is based on current market price * current BTC withstanding just like how stocks market cap is based (subbing BTC with shares). > What happens when the speculators cash out because something better comes along? It'll crash super hard but I still think this is fine metric.
- Buge 9y ago
  The number is calculated by number of bitcoins in existence * price of bitcoin. Same as the stock market.
- zdkl 9y ago
  The demand seems to be "institutionalised" since a couple of years. VC-like money coming in through cryptocoin service startups and disposable income from rich nerds and richer finance types looking to beat the market. It'll pass and/or stabilise. It's the notion of what is stable here that's novel and interesting

frik 9y ago

Why do a TechCrunch article get flagged? Somehow there are a lot of flagged news on HN lately. What's wrong? I don't think the direction is good

deleted 9y ago
[deleted]

Jugurtha 9y ago

The way I think about it is by dividing folks into populations to make sense of the surge: - There are the people who get it. They get the technology and the implications of this. They've been wanting something like this (not specifically this and not a clear idea maybe) for a long, long time and sort of know what to do with it.. The idea has had time to mature and they were mentally ready. They may have problems deciding on which flavor or "crypto currency company" to bet, but they're 100% backing the concept. - There are the astrologers/traders who have no grasp of the concept but have no trouble explaining it in expert interviews on CNBC/Bloomberg/CNN Money. Traders are expert at trading: selfie sticks or the greatest "money thing" since Fibonacci's injection of Hindu-Arabic numerals into Roman banking, it's the same different thing. More crudely: if there were a market for excrement, they'd sell the shit out of it. [there actually is] - Then there's the rest of us. A sucker is born every day. We see all these tulip bulbs and want in on the action.. Oh my, I remember when it was less than $250, if only I had bought then. What? I remember when it was like $40, imagine if I had bought then.. I didn't buy at $300 because it seemed excessive and no profit was to be made, but now, I see it's $4000! So if it went from 300 to 4000, surely it can go up [this reasoning here].. And bam... So I think these are some of the populations driving the surge.

continuations 9y ago

The same reason Lycos was worth $12B and Global Crossing was worth $50B. Bubbles don't have to make sense.

synicalx 9y ago

Nothing with BTC ever makes sense. If you've ever seen American Beauty, just think of BTC like that plastic bag caught in the wind - of little real value, and flying around all over the place in an uncontrolled and unpredictable manner.