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Bitcoin Gets Close to $5,000
- grizzles 9y agoIt's kinda cool to be living in a tulip era like this. I wish there was some way I could make a long term bet against the the price of bitcoin, say it's price 10 years from now. Of course, this is impossible. If there is anything we have learned, and I can demonstrate that I predicted 5 years ago, it's that the definition of bitcoin is infinitely divisible. I could claim a bitcoin fork in 2027 is the true bitcoin, and price it at $1M a coin.
- Meekro 9y agoI've been into Bitcoin since 2011, and it's interesting that people are still making tulip comparisons 6 years later. Tulip mania itself only lasted about 9 months. I wonder how long Bitcoin will have to hold out before the tulip argument could no longer be made.
- tunetine 9y agoProbably when it is used mainly as actual currency, not for speculation or black market exchanges and laundering.
- booleandilemma 9y agoI was skeptical of Bitcoin for a long time, but the other day I was on a (legal) website and they had it listed as a payment method, right next to Visa. Seeing it there really showed me how far it's come.
- MBCook 9y agoIt's not that hard to add to a real website, but what percentage of transactions are conducted in it? I mean if some big retailer like Amazon or BestBuy or Walmart to accept it, but only 0.02% of their daily transactions involved bitcoin would that be a success? It's a lot of money in absolute numbers, but it's minuscule as a percentage. If it were 5% that would certainly be something to look at.
- tunetine 9y agoAre you for real? I feel like we're being trolled by Bitcoin holders who want to keep the value propped up.
- tehlike 9y agothey probably couldn't hear you over the price of their coins.
- notsofastbuddy 9y agoHow is DNM usage not an actual currency?
- tunetine 9y agoDNM is something I had to look up. I don't have to explain why going to the store and being able to purchase something with Bitcoin is not the same as buying drugs on the black market.
- throwaway0255 9y agoTo what extent do you think the value of bitcoin is driven by its use as a black market exchange / laundering tool? I suspect virtually all of it. People dismiss this viewpoint because they attribute it to Silk Road type activities, which can't explain the scale, but what I'm talking about is millionaires and billionaires funneling wealth out of China etc. One thing that's certain is that bitcoin isn't really a currency. When you pay with bitcoin, the value is tied to and converted to USD, and the price paid is tied to USD. Bitcoin isn't the currency in those transactions, USD is. Bitcoin is more like a decentralized anonymous Western Union than it is a currency. I also don't understand what proponents think the endgame is for bitcoin as an investment-grade asset. Everyone who buys some just becomes the world's first trillionaires, and we become a 2-tiered society of people who bought bitcoin and people who didn't? Bitcoin might have some serious world-changing implications, but I seriously doubt it being an investable asset is one of them.
- Alex3917 9y ago> I wonder how long Bitcoin will have to hold out before the tulip argument could no longer be made. Until the end of the infrastructure phase at least. A lot of folks are going to get hauled off the prison, which will create new opportunities to challenge the dominant existing players. At this point the value being ascribed to the different blockchain assets is pretty arbitrary.
- kwelstr 9y agoTo me the true crypto tulip mania is the proliferation of worthless altcoins and tokens that all of a sudden get millions of dollars in marketcap.
- matt-attack 9y agoAre you saying I should sell?
- Temasik 9y agoyes while it's high
- jah6q 9y agoAnd no one would buy that theoretical forked $1M bitcoin, so it would have no real impact on the price of the dominant coin. But to your other questions, check out: http://longbets.org/ http://longbets.org/
- deleted 9y ago[deleted]
- sillysaurus3 9y agoBTC's graph is hilarious: http://i.imgur.com/IWwOgm9.png http://i.imgur.com/IWwOgm9.png
- c0nducktr 9y agoIt looks a little less ridiculous a log scale but still pretty odd. https://i.imgur.com/tIyvGFs.png https://i.imgur.com/tIyvGFs.png
- lojack 9y agoIndeed it looks like a bubble, but at this point I've seen it happen so many times and not actually been a bubble. Every time is settles down to a point significantly higher than it started. At this point I've accepted these are all price corrections that over compensate and then drop back down to it's true value. Maybe this time it's truly a bubble this time, but I tend to think just repeating history.
- solotronics 9y agoMr Satoshis wild ride
- drizzzler 9y agocan we please have a bitcoin thread that doesn't mention the stupid tulips
- farnsworth 9y agoI'm kind of glad I didn't buy a lot of btc earlier - I would be a lot more stressed out about the right time to sell. Then I'd sell at just the wrong time and beat myself up for it. Then I'd probably get audited...
- Temasik 9y agoBitcoin have no real world use case
- noir_lord 9y agoSeems to be really effective at separating people from their money (though not all of them, when the music stops someone will be left without a chair).
- ThomPete 9y agoThat depends om where in the world you live.
- mrep 9y agoBitcoin does seem to be the best payment technology for online illegal transactions. Albeit, one could argue those shouldn't be 'real' in the first place.
- chenster 9y agoMonero could be a better choice as it is completely untraceable.
- tehlike 9y agoyeah, i am planning to invest/speculate in it. along with zcash/dash/etc.
- andy_ppp 9y agoNo, it’s a store of value like a rolex or a pot of gold. Except much more fungible. And it increases in value relatively every time new “real” money is created. I don’t agree that it’s just for illegal transactions.
- MBCook 9y agoIt's not just for illegal activity, it just seems like that's a huge percentage of its current use. Not unlike Tor, sadly. It may be more fungible at the moment, but is it anywhere near as safe? Gold goes up and down but nowhere near to the degree we've seen with bitcoin. Add a minimum it's useful in manufacturing so even if the price crash there would still be people to buy it. Rolexes are useful, they have an intrinsic value/use. Bitcoin is only valuable as a medium of exchange. Bitcoin could effectively disappear. I'm not saying it looks likely at the moment but even if your holdings are very large all it takes is the market to decide to stop accepting/exchanging it. I think that's FAR more likely than gold or Rolexes.
- theklub 9y agoWhat will stop bitcoin's price from going up? I just keep thinking that other than new laws or something getting hacked there is no reason for the price to not just keep creeping up.
- sillysaurus3 9y agoThis kind of thinking is what leads to tulip bubbles. BTC has real value, but either BTC is the one asset in history which has no ceiling, or it will reach it eventually. The question is, when?
- ericflo 9y agoBitcoin's main product is trust, so if trust in the system decreases, the price will drop. If someone demonstrated a security flaw and began to exploit it, that would likely do it.
- deleted 9y ago[deleted]
- BenoitEssiambre 9y agoIt can't go up forever because the knowledge of that trend would make more and more people invest in them. At some point this would cause people to build stashes of tokens instead of investing in real businesses with real production capacity. When this trend would become widespread enough, it would eventually cause global production capacity to drop. That's right, when enough people do it, token hoarding displaces investment in businesses and factories and lowers global production capacity. This means token hoarding causes a future drop in things available to buy with these very tokens. Eventually there will be people who want to buy real things with their stock of tokens. The tokens will be chasing fewer goods which would mean prices for stuff would rise (tokens would lose value). This could happen suddenly when people with large stockpiles of tokens notice that value is dropping and that there are tons of other tokens waiting on the sideline ready to make it drop even further. Hoarders might rush to get rid of their stockpile all at the same time before they're worthless which would cause their fall to worthlessness. This drop would bring the tokens closer to their natural intrinsic value of zero. The cycle can then start again, such is aggregate economics. The 1920s and 1930s suffered from this type of production drop but with gold tied currencies instead of cryptocoins. It happened to a lesser extent in 2007 when western world central banks failed to keep inflation rates high enough. It's important for the world's sake to not let deflationary currencies become too popular. When savings or financial promises are insufficiently tied to future production or to accumulation of real goods, there will be disappointment when many people try to exchange them for real stuff. That is true for crypto currencies as well as government currencies (that is why the system is designed to make banks invest people's money in real businesses and minimize the proportion of money that is stockpiled idly). It's true that crypto currencies are currently not widely held enough to significantly affect the aggregate economy but speculation already keeps them volatile and the knowledge that as they get more popular, there will be more macroeconomic pressures towards volatility keeps the speculation wild and cryptocoins unstable. Currencies that are not designed to lose value over time can not be stable. Intrinsically worthless tokens engineered to have better than market risk adjusted, liquidity adjusted, real returns compared to real productive investment will always fluctuate increasingly wildly as they get more popular.
- andy_ppp 9y agoThe growth curve looks like a hockey stick... can’t be trusted of course, certainly not any more than cash.
- gigatexal 9y agoI think I had a coin once in a wallet long since deleted. What I could do with 5k now.
- tgtweak 9y agoI got one better... I traded 30 bitcoins for Diablo 3 gold when Diablo 3 launched, 1m gold was about $5 and bitcoins were about $7. Was just after linode wallets got hacked. I'll let you do the over/under on that one.
- deleted 9y ago[deleted]
- solotronics 9y agoI threw away hundreds of Bitcoin on formatting a drive many years ago. never thought they would be worth more than a few cents. I revisited in 2014 and have been accumulating ever since.
- gigatexal 9y agoYikes. 150k is a lot of cash
- joezydeco 9y agoI'll trade you my $150,000 iPod Touch.
- rampage101 9y agoPeople have been saying since it was valued at $1 that it was overvalued, or nobody should pay $1 for a virtual coin. Same people are still arguing the same thing 5 years later...
- theklub 9y agoAnd now fewer and fewer can afford a whole coin.
- fish_fan 9y agoSure, but thankfully you don't need a whole coin for most transactions. It's not an inherently meaningful thing.
- CamelCaseName 9y agoBut it is a psychologically important thing, and Bitcoin price has always been psychologically driven.
- dwaltrip 9y agoEach bitcoin can be divided into 100 million atomic units called "satoshis". 1 BTC is just a particular denomination, in the same way that $20 and $100 bills are denominations in use for USD. 1 BTC is a historically common denomination that will likely receive less usage if the price continues to rise.
- MBCook 9y agoDoesn't make them wrong. I find the idea of crypto currency, especially bitcoin, very interesting. I just have a very hard time seeing how it's actually useful. It can't handle very many transactions per minute. And the thing that supposed to make it so great is that no one controls it. But if bitcoin becomes really important then people will want to control a lot of the mining power. Pretty soon you end up with a group of miners (or even a single miner) having enough power to influence things leaving you pretty close to someone being in charge of the thing. It's such a fascinating idea. But in less there was someway to limit mining so people couldn't throw additional power at it I'm not sure it's useful. As an example, you could use a block chain to enforce a ledger between a couple of different companies but you'd have to have some sort of contract it said everyone was only allowed to use one of device X for mining. That way everyone would be equal and you could easily check it because the blocks should be minded roughly evenly. But when miners can buy additional mining capacity, and they get rewarded for doing that with more money, how does this not end up with a winner takes all situation?
- cabaalis 9y agoWould it be correct to say that there is a threshold where the value of a bitcoin makes it reasonable for retailers/small business/etc to invest in using them as an actual currency at the register? If that's the case, then it would make good business sense for someone nefarious to pump up the price as much as possible to reach that threshold, wait for the use to become common, then cash out. Effectively manipulating the market into something it didn't need in the first place.
- matthewmacleod 9y agoI don’t see why this would be the case. The utility in currency is not value, but stability; there’s little incentive to use Bitcoin if the value is not stable.
- MBCook 9y agoAlso in how liquid it is. If a very large retailer decided to do this with the block chain be able to keep up? I know the block size was recently raised but would it be enough?
- solotronics 9y agoyeah who would ever want something that appreciated in value /s
- matthewmacleod 9y agoCertainly not retailers in the context of a currency! Things that rapidly appreciate in value also carry the risk of rapidly depreciating in value. That’s fine as an investment vehicle, but a much less attractive prospect in a currency.
- solotronics 9y agoif they don't want to hold there are payment processors that convert instantly to fiat, that argument is invalid.
- simplify 9y agoIs anyone worried about that unsustainable bitcoin energy usage article on HN a few days ago? Would Litecoin have those same problems?
- MBCook 9y agoWouldn't that happen to any general crypto currency that got popular?
- brownbat 9y agoThe different hashing algorithms have different power requirements. Scrypt (LTC) and KECCAK-256 (ETH) are less power intensive than SHA-256 (BTC). Those are just proof-of-work. Proof-of-stake or proof-of-importance would have barely any power footprint, but there are still debates about whether they could replace PoW and offer similar security guarantees.
- MBCook 9y agoProof of steak is basically the kind of system I was thinking of. Proof of work seems like a very good solution as long as people are relatively equal, but you could use proof of steak to ensure that. Of course that means that you need some way to set up the initial steaks and decide who gets them. And that means it isn't as democratic like bitcoin is, which I know is a big plus for many people.
- 9y ago
- xutopia 9y agoI see so many people dissing the technology and rehashing old arguments. You shouldn't consider Bitcoin as a currency but as a better form of Gold. Like gold it has a limited amount available: ~180k tons of gold and eventually 21 million bitcoins. Like gold it is a good store of value (especially as more people are dropping their gold to purchase BTC). Unlike Gold you can send it to someone else online and that means it can also be used like a currency (even thought it is not its strength).
- programmarchy 9y agoIt's also harder to confiscate than gold, given one takes reasonable security measures.
- an_account 9y agoMany people buy gold for “post apocalypse” scenarios. How well is the bitcoin network going to work in the post apocalypse?
- CapitalistCartr 9y agoMany people buy shovels to clear snow. How well will general purpose shovels work after a blizzard? Product 1 has use A (in this case Apocalypse Insurance), and product 2 doesn't because its meant for another scenario.
- mixedCase 9y agoIn a true, real post apocalyptic world, you can't eat gold, you can't have sex with it, it will not cure your sickness nor will it feed your vices; therefore, it has little to no value.
- omarchowdhury 9y agoBut someone might exchange that gold with you for food, for sex, for medicine, and for what feeds your vices, as they have for millennia.
- aresant 9y agoThe graph in the article (1), showing a much steeper slope than other bubbles is fascinating for a couple of reasons: 1) The total SCALE of the bubble is much much smaller than say the tech bubble - the 280 stocks representative of the tech bubble fell almost $1.7 TRILLION in 52 weeks (2) vs the total crypto market cap @ the moment of ~180 billion. 2) The total scale of the Crypto bubble has MORE potential than stocks - why? The opportunity for casual global participation and almost complete lack of regulation / sophistication. If the single use case for Crypto is nothing more than the world's greatest tulip mania / pyramid scheme it has the potential to be a multi trillion dollar asset class / wealth transfer. (1) https://pbs.twimg.com/media/DIaa9KcVoAAcs3m.jpg:large https://pbs.twimg.com/media/DIaa9KcVoAAcs3m.jpg:large (2) http://cnnfn.cnn.com/2000/11/09/technology/overview/ http://cnnfn.cnn.com/2000/11/09/technology/overview/
- mrb 9y agoBitcoin has indeed appreciated more than any other investment in human history. In 7.5 years it went from $0.003 to $4900: a growth 1,600,000×. Imagine investing ten bucks and a few years later it is worth $16 million! For comparison: the founders seed round of Uber grew their investment 65,000×, tulip prices increased by at most 5,000× during tulip mania, some "best performing stocks" over the last century are reported as growing 1,000×.
- omarchowdhury 9y agoIt's contemplating these returns and seeing the price still going up that leads people to continue jumping in to buy at any price level. Is there an upper limit to this?
- xiphias 9y agoAbout 1000x value from now. That's when all fiat currencies hyperinflate. It's scary to think that it's not that far away, about 10-20 years from now if the crypto adoption trend continues.
- SAI_Peregrinus 9y ago
- joelrunyon 9y agoI'm curious what the naming conventions are going to be to transact bitcoin on a regular (offline) basis. Are you going to say 1/10 bitcoin or will that have a name? One thing I haven't seen anyone talk about is the language to make bitcoin more accessible. No other currency (that I know of) has 1 unit as the MAX unit to transact (at such a high value) with no smaller denominations. If Bitcoin really DOES end up at 100k/coin - and you want to buy something that's $10, are you really going to say .0001 bitcoin? There has to be a cleaner way. Even that, you could easily screw up decimal spots very easily.
- moronicalox 9y agoIt does have a name. You're talking about mBTC and bits https://en.bitcoin.it/wiki/Units https://en.bitcoin.it/wiki/Units
- joelrunyon 9y agoThis all seems way more complicated than "buck", "quarter", "dime", etc? Maybe I'm just not used to it yet - maybe they're just use the first part? "san", "deca", "mil"
- johnwheeler 9y agoIt's 100% bubble. It could go up to $6,000, $50,000, or even $1M. It's not localized like tulips, and it's connected to the internet, so the universe of people available to fuel the speculation is enormous. That the Chinese are highly speculative is what's mainly driving the current price. It has no intrinsic value. It's like gold in that it's not a productive asset. It doesn't yield anything like stocks or bonds. The only thing a bitcoin holder can hope for is that someone will buy their coins in the future at a higher price. The interesting part is watching human nature unfold. People who hold bitcoin mistakenly believing they're investors because the price action is reinforcing that belief. They're 100% speculators by definition. It's OK to speculate. It's neither illegal or immoral, but you should know when you're speculating and when you're investing. You can't make this stuff up. Look at the people coming out of the woodwork: The Winklevoss Twins, Dan Bilzerian, professional wrestlers, and such. All the community leaders are either fighting with each other or in jail.
- tunetine 9y agoI don't see any arguments from the commenters here that convince me in the slightest. It's like magic to them. As long as they believe, it has value.
- tradersam 9y ago> As long as they believe, it has value. Yup, just like every other currency ever to exist.
- billions 9y agoThis. Gold has value like Nike has value. It's a brand. Like the word 'Mom', it's about the strength of the wirings in people's heads. If Bitcoin was around for 1000 years, with less than 1% fluctuations, and accepted everywhere, who wouldn't "believe" in it? So the question is how far down that path are we? Will there be volatility early on? Did the guy that founded the first bank ever get robbed?
- tunetine 9y ago
- drizzzler 9y agoIt's funny how thick HNers are about Bitcoin. I believe it's evidence of the sort of passive conservatism of the tech community. Bitcoin is some utopian shit, the decentralized technology dream that has a ton of traction, yet many of you just can't seem to get behind it. Is it because YC is an ultra capitalistic investment fund and Bitcoin is just too anarchist for its fanboys? For all the people out there saying, "I cant find a use case", my question to you is, have you ever used it?! If you have, did you notice that there wasn't a middleman taking a cut when you sent the money? I mean, do you have any fucking idea how much money businesses pay to the credit card companies? Get on board guys.
- cyphunk 9y agoheh, anarchist? In the course of perhaps 2 or 3 years Bitcoin has turned more anarchists I know into greedy capitalists than anything else over my entire lifetime. HN is certainly "on board" as ycombinator and affiliates invests in various blockchain retailed companies
- ikeboy 9y agoI've used it and noticed how miners will only include your transaction in a reasonable length of time if you pay a fee, and even that is artificially low due to the subsidy.
- cheez 9y agoExcept anyone can figure out where my money comes from and where it goes. No thanks!
- cyphunk 9y agoIt still blows my mind that this isn't a bigger issue. Trying to retain any privacy with Bitcoin is an arduous process.
- omarchowdhury 9y agoOkay. So I'm anyone. How am I going to know what your addresses are? Starting from where I am right now all the way over here. You did say anyone.
- mej10 9y agoIt is going to be really interesting to see what happens to cryptocurrencies during the next economic downturn. If their "market caps" aren't decimated then I will be a true believer. I say this as someone who has owns some of a few different ones.
- yuhong 9y agoWhat is funny is how every time the difficulty bomb for Ethereum hits so far, the price also increased soon after.
- anonu 9y agoThe real story is ETH. It's appreciating at a faster pace over the last two months than BTC has. There's a lot of reasons why prices move. There's obviously speculation. But there's also utility. And the way ETH is designed is far more useful to me than BTC. My prediction is that both currencies will reach 10k USD in the next few years. But ETH will get there faster