18 ms·

Bitcoin Surges Past $7,000 to Extend Record Rally

299 points by rayuela 9y ago

Andrenid 9y ago
I consider myself pretty tech-savvy, but I'm still completely lost as to whether Bitcoin is basically a pyramid scheme set to crash massively, or something huge that will continue climbing. I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. (Queue heated comments from both sides. Discussing bitcoin is like bringing up religion AND politics at the dinner table at the same time)
- hikarudo 9y ago
  "This time it's different!"
- growt 9y ago
  You'll probably do better with an understanding of economics than tech in predicting a crash.
- viach 9y ago
  For me Bitcoin is neither pyramid nor something which will last forever. I think it is a great experiment in human psychology/nature and in this sense, it's outcome is not destroyable and the facts about people it brought up will be known and usable (for various applications) forever.
- AznHisoka 9y ago
  My view is that its egotistic to pretend to know whats going to happen. even the financial experts dont know. So i just put 1% of my net worth into it, set a price alert for $20,000 and try not to check the price (or read any stories on it) If i ever get the alert, great. if not, no big deal.
  - ideonexus 9y ago
    This is my strategy. It's a very volatile, high-risk investment, but one I'll hate myself for missing out on should it take off. So I've bet what I'm willing to lose on it (<1% for me) and told myself I won't read any news on it so I won't invest more or get scared into selling. And yet here I am. :)
- vazamb 9y ago
  (i am somewhat familiar with the tech but don't follow the business side of bitcoin) what I find weird is the forks. A major selling point of bitcoin is that there will ever be only 21 Mio coins. You know, unless there is a hard fork and now there are suddenly twice as many coins. Presumably one of the resulting coins' value will drop but you are still creating value out of thin air, something that the crypto people hate about fist currency run by a central bank. I also don't really know what to think about it. I am sure blockchain tech will be hugely successful in the banking and government sector and maybe (a comment I read yesterday) once it is proven to work the central banks will issue blockchain based currency. But bitcoin as a store of value? I don't know...
  - ForHackernews 9y ago
    > I am sure blockchain tech will be hugely successful in the banking and government sector Are you? Why? So far, no bitcoin/blockchain advocates have been able to explain to me a single non-illegal use case that isn't better served by a traditional, centralized database. A single large Postgres instance could handle all the global transaction volume of bitcoin, and it would be faster and orders of magnitude more energy efficient, too. (Cue bitcoin people telling me about how it's 'trustless', and I should just trust the miners, devs and exchanges and hurry up and buy some)
    - jypepin 9y ago
      I think with some sort of blockchain technologies, it would be harder for central banks to do things like what happened in Argentina, Greece or Zimbabwe.
      - simias 9y ago
        That's a very broad claim. What "things" are you referring to and how would blockchain technology have prevented them? Very simply put the Greek financial crisis was mainly due to poor bookkeeping by the Greek institutions (that's being kind), rampant tax evasion and foreign governments (especially within the EU) not wanting to keep footing the bill. I'm not sure how a clever use of SHA-256 would solve these systemic, cultural and diplomatic issues. Especially since tax evasion would be significantly easier in a bitcoin world where you can launder and hide money extremely easily. No need for a hidden account in some tax heaven, just generate a new RX address and you're good to go, receive all the bribes and "off the record" payments you want.
- tluyben2 9y ago
  > set to crash massively It crashed multiple times this year with a lot of people crying 'told you so' and 'it's all over'. But that didn't happen. There might be a big, longer period, crash coming, but since China dropped out, it seems to be pretty stable (including altcoins). I still wouldn't call it investment, but it's safer than most gambles. But sure, never put money you cannot miss as it is a gamble.
- simias 9y ago
  Cryptocurrencies have a niche use, mainly to buy things on the black market but also for small peer-to-peer international payments when other options are not practical. For this reason I don't expect that cryptocurrencies will completely disappear any time soon. However the value of bitcoin is mainly driven by speculation at this point, a currency that's so volatile is very difficult to use if you're a business. At best you accept it at the current exchange rate and you immediately convert it to fiat. Anything else is very risky. But that might be temporary, eventually the exchange rate might stabilize, at which point speculation could be vastly reduced and it would work better as a currency. That's kind of a chicken-and-egg problem though, in order for the exchange rate to stabilize you must attach a real world value to the currency by buying and selling things, paying taxes etc... But that won't happen as long as the exchange rate is so volatile. I'm also very much unconvinced that a deflationary currency can work at all in the long run or that bitcoin will end up fixing the problems its proponents say it will, but that's up for debate.
  - Jommi 9y ago
    Your first sentence mostly fits Bitcoin, but misses the point on most of the other cryptocurrencies.
    - simias 9y ago
      Please do enlighten me then, what do other cryptocurrencies offer? I also think my first sentence applies to bitcoin and ethereum which together have a bigger market cap than all the other cryptocurrencies added together.
      - Jommi 9y ago
        >Please do enlighten me then, what do other cryptocurrencies offer? Other cryptocurrencies can provide: - Private, near untracable ways of doing payments - Efficient, near 0-cost ways of transfering funds. >I also think my first sentence applies to bitcoin and ethereum which together have a bigger market cap than all the other cryptocurrencies added together. "Cryptocurrencies have a niche use, mainly to buy things on the black market but also for small peer-to-peer international payments when other options are not practical. For this reason, I don't expect that cryptocurrencies will completely disappear anytime soon." If you want to talk about Bitcoin and Ethereum, say Bitcoin and Ethereum, and not "Cryptocurrencies". Bitcoin is not anonymous. Bitcoin has high transaction cost. Ethereum is not anonymous. Ethereum has a comparable high transaction cost. These facts mean buying on the black market, and small international payments are not ideal to do with these cryptocurrencies.
- AnonToday 9y ago
  Bitcoin isn't a pyramid scheme. It just does not have any value. Fools and their money are easily parted. (The comments on this site have as much or more value.) The Fractional reserve system is(), (Dollar, Pound, Euro, etc.) They require a constant recreation of debt to keep going. (less a pyramid more just Ponzi)
- Jommi 9y ago
  It's a virtual currency with a limited supply, but with a constantly growing interest(demand). This interest is not primarily driven by bitcoin's inherent qualities but more through: 1. Using bitcoin to acquire other cryptocurrencies 2. Promises of future profits 3. Getting "free money" by having bitcoin (Bitcoin cash, bitcoin gold) The first one might actually be healthy, while 2 and 3 are most close to a pyramid scheme / "tulip mania" style scenario. One thing is for sure. No one knows what exactly is going to happen.
- weddpros 9y ago
  There's no pyramid scheme. It's a hyped asset, to say the least, but there's no pyramid. Like a hyped startup, it doesn't do much yet, but it is promising, so people buy it. It may be "worth" much or zero in the end, it all depends on the final outcomes. It's also the easiest/cheapest/most open asset to trade (depending on where you trade). In the long term, Bitcoin can be seen as a safe heaven in case of economic chaos, like gold, but way easier to buy and hold. It can also be seen as an interesting economic experiment: what if currency wasn't managed by a government? Or you can give trading a try for a few $$ as a gamble (with more chances of success than in a casino). It's also a useful currency in some cases: I'm a "digital nomad" which my bank can't seem to understand. Getting my Debit Card to work online from a foreign country, with an ever changing phone number (they insist on using SMS as a 2FA), sounds like an obstacle to them, but not to BTC.
  - 0bsidian 9y ago
    I think most of the people putting larger checks into Bitcoin are betting that it will become a store of value asset. Going from memory, a recent Bloomberg article called Bitcoin: "Gold for millennials". Or, similarly, Peter Thiel said recently [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments." [1] https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter-thiel-says.html https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...
    - romanovcode 9y ago
      All people who are owning Bitcoin are betting.
      - 0bsidian 9y ago
        Agreed, I was just trying to say that currently, one of the most popular investment theses for Bitcoin is "Gold for millennials", not "anonymous paypal" or "decentralised stripe".
        9y ago
- Delmania 9y ago
  Best advice I have heard is to learn about the blockchain and look at something like Ethereum. If buying Bitcoins feels to risky, don't invest, but blockchain technologies will certainly have a role to play in the future.
- wyager 9y ago
  You can’t expect to reason about this without some background in economics. Instead of telling you what I think (because to you I’m indistinguishable from all the other people responding with random guesses), I’m going to suggest that you read some introductory texts about economics and finance and you can probably form some reasonable opinions yourself.
- kibrad 9y ago
  "whether Bitcoin is basically a pyramid scheme set to crash massively, or something huge that will continue climbing" --- you can say the same thing about regular money
  - kgwgk 9y ago
    Regular money doesn’t climb.
    - mywittyname 9y ago
      Sure it does. The USD has surged in value in the past few years. It's gone up like 20% against most other major world currencies in the past five years.
      - kgwgk 9y ago
        4% p.a. doesn’t look like climbing to me...
        mywittyname 9y ago
        Well, it is in the up direction, at least.
- loceng 9y ago
  It is very much like a decentralized global pyramid scheme, unfortunately there's no concise resource to explain it all clearly - primarily because there's no VC money pumped into anti-crypto assets that are structured and incentivized like a pyramid scheme, e.g. the most popular blockchains such as Bitcoin and Ethereum's Ether. The issue is the unreasonable amount of wealth transfer that would occur if and as society adopts the crypto-assets more and more, and as bad actors manipulate society to take part - whether through lobbying or bribing politicians or worse; there essentially can be a wealth transfer of 40% plus for people having done nothing except trying to perpetuate this system.
  - ataturk 9y ago
    And when is the last time you got something for nothing?
- deleted 9y ago
  [deleted]
- petercooper 9y ago
  I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. The thing I keep telling myself is if I'd mined even 1000 bitcoins (which was viable at the time I first learnt about it) I'd have totally sold out at $10.. there is zero chance I would have made it to $1000 :-D
  - bbarn 9y ago
    I sold my 200 at 40. Something for nothing, right? /facepalm
    - deleted 9y ago
      [deleted]
    - abledon 9y ago
      not sure if not ever mining/buying, or doing the above would be more frustrating haha
  - coryfklein 9y ago
    It doesn't have to be all or nothing. The proper strategy would be to sell a percentage at $10. In fact, if you started in 2011 with 1000 BTC and every year you sold 50% then today you'd have (by my rough calculations): 8 BTC (worth about $50k) $160k USD Of course it's not the millions you'd have if you just held each time, but for many that is a life changing amount of money and you would have obtained it in a responsible manner that doesn't just rely on the value of Bitcoin shooting to the moon.
- mo87 9y ago
  Back in 2002-2005, I knew a whole lot of "tech-savvy" people with top-notch pedigree, who never believed FB/Youtube/Twitter etc would scale as no one had ever built a "many-to-many", pseudo real-time network at that kind of scale before (both technically/financially). Let alone a bunch of 20 year olds. I was quite convinced by their arguments. Where I was wrong was believing technical arguments mattered. What matters is the psychology of the herd.
  - wolco 9y ago
    The worst group to validate new ideas against are developers.
    - cableshaft 9y ago
      Pretty much. They'll tell you a hundred reasons why any single idea you have could never work, for technical or other reasons. I say this as a developer, and I've been guilty of this before.
- jboggan 9y ago
  I would say that the current bull run in Bitcoin is mainly due to folks with early stakes in ICOs taking their money and running from Ethereum.
- oldboyFX 9y ago
  It's a pyramid scheme in a sense that you depend on others to keep buying the bitcoin. If everyone suddenly lost trust in bitcoin you would lose everything, because technically, it has zero real value. That's why all the "bitcoin enthusiasts" keep hyping it up. They know that once the mania stops, people who didn't cash out will be left holding the bag. Currently, it's nothing more than a speculative asset. You might as well invest in high-yield risky stocks. The blockchain itself is pretty great though.
  - googletazer 9y ago
    Another "blockchain without bitcoin" post. You can't have one without the other.
  - jon_smark 9y ago
    > It's a pyramid scheme in a sense that you depend on others to keep buying the bitcoin. Please don't use the expression "pyramid scheme" lightly, because there are actual pyramid schemes out there, and we want the expression to keep its power so we can warn people against them. Bitcoin may be in a bubble, but it's definitely not a pyramid scheme.
  - coryfklein 9y ago
    It does not have "zero real value" - it definitely competes well against established money transfer services like Western Union. You can send $1000 to your mom in Japan for a $5. That is a good enough value for money transfers that Bitcoin won't ever go completely to $0 value while Western Union can charge $20 for the same service. And that is at current bitcoin price. Since the fee is paid in bitcoin, if the price drops down to $100/bitcoin then you can send $1000 for pennies.
- ryanmarsh 9y ago
  If you're pretty tech-savvy then the Satoshi's white paper should help. Have you read it?
dandare 9y ago
I keep seeing my non-it friends boasting on FB how much they profited with Bitcoin this week. I am afraid this bubble will get way much bigger before it bursts.
- tluyben2 9y ago
  Well, depending on when you buy/bought, you should've taken out what you put in. I never bought over the $3k pricepoint and we had multiple drops < 3k < 2k this year at which times I bought and then sold my input after it doubled. I lost nothing. It will drop again now to < 3k probably this year, just buy then.
- ainiriand 9y ago
  I have the feeling that it will go up to something close to 10k and then after a period of horizontal value, the money is going to go to something useful, like Ethereum. So better to wait and sell after that.
- eterm 9y ago
  I'm afraid that like the housing bubble, it'll get "too big to burst" and require intervention to keep those who have previously invested afloat while keeping down those outside the bubble.
  - seanmcdirmid 9y ago
    Who would bail it out? It isn’t backed by any government with big pockets.
  - krapp 9y ago
    Isn't "intervention" the problem Bitcoin was designed to solve? Maybe if people are looking for long term security and insurance against risk they shouldn't buy into anarcho-capitalist fun bucks... or at least not more than they can afford to lose.
  - alangou 9y ago
    I'd certainly be very impressed if cryptocurrencies reached the point where they could affect the economy that much in the near future. The current market capitalization of all cryptos comes out to under $200 billion [1], while the US housing market was nearly $30 trillion as of last December [2]. So it would have to grow 150x somehow. [1] https://coinmarketcap.com/ https://coinmarketcap.com/ [2] http://zillow.mediaroom.com/2016-12-30-U-S-Housing-Worth-Record-High-29-6-Trillion-in-2016 http://zillow.mediaroom.com/2016-12-30-U-S-Housing-Worth-Rec...
artur_makly 9y ago
whats baffling to me is its lack of utlitity, application, and overall adoption when compared to ETH. So at this point (to me) BTC is a pure pyramid scheme — a digital casino
- eterm 9y ago
  It has utility for ransomware. Even a niche utility can bootstrap an ecosystem. Add layers and layers of speculation above that kernel and it is a feedback loop. As long as speculators refuse to sell, people need to spend more and more for ransoms (or equivalently ransomware writers have to demand less denominated by bitcoin), driving up the price as long as those destroyed through ransomware outstrips those created by mining.
- VMG 9y ago
  Somebody sounds bitter https://www.tradingview.com/symbols/ETHBTC/ https://www.tradingview.com/symbols/ETHBTC/
jdhn 9y ago
I'm willing to bet that this is happening because people are trying to get coins before the fork happens on November 16th.
- sheeshkebab 9y ago
  Double the coins, double the profits! Right?
  - jdhn 9y ago
    Of course! More seriously, I'm moving coins to Coinbase very soon as they're going to allow users to sell the new B2X coins the day after the split. I expect to make a 4 figure profit, but I'm not sure whether it'll be low 4 figures or high 4 figures.
    - sodafountan 9y ago
      You do realize that if you have a market entirely filled with sellers and no buyers the price is zero right? Who do you predict is going to be buying 2X
      - sheeshkebab 9y ago
        It would be good for btc to slow down for a while too. Otherwise the thing looks like a totally bogus Ponzi scheme.
- slindz 9y ago
  There are many factors. November stands to be the most eventful month in Bitcoin's history. Educate yourself on the moving parts before making any big decisions. The biggest factor for me is that the miners are pissed off that both SegWit chains are meant to cannibalize the core tenets of Bitcoin with the goal of privatizing fees. This post explains it way better than I ever could: https://theflippening.github.io/open-letter-to-bitcoin-miners-from-another-miner/ https://theflippening.github.io/open-letter-to-bitcoin-miner... I've moved 92% of my BTC -> BCH, and I've grabbed my popcorn. It's going to be an interesting month.
deleted 9y ago
[deleted]
d__k 9y ago
I think the behaviour of Bitcoin price (not the technology) reflects some social phenomenon rather than the real economy. And it is precisely why it is interesting.
- nickjj 9y ago
  Yeah, it's pretty much what happened 500 years ago when people were selling everything they owned (including houses) to buy tulip bulbs[0]. Maybe it's not that bad yet, but it's looking to get that way. Spoiler alert: It ended really badly, but the people who got out early enough did make a lot of money. Plot twist: I did invest in bitcoins back when they were hovering around 2k and sold them for a small profit (~10%). Yep, I wish I invested more and held on, but it's so easy to think this way after the fact. [0]: https://en.wikipedia.org/wiki/Tulip_mania https://en.wikipedia.org/wiki/Tulip_mania.
  - SippinLean 9y ago
    Someone HAD to get the Tulip comment out of the way, I saw pyramid schemes mentioned above, but did anyone call it a Ponzi in this thread yet?
  - jesusthatsgreat 9y ago
    Tulips aren't finite in number nor can they be transferred on a decentralised ledger. Anyone can grow tulips and grow fake tulips that may look like tulips but are cheaper quicker to buy / make. You can't fake Bitcoin nor can you grow it indefinitely in your garden. People who make the tulip comparison simply don't understand the revolutionary aspect of the technology. It's like calling the internet tulip mania back in the mid 90's. Blockchain technology will change the world. Bitcoin's value will boom and bust for many years to come. Where will it end up in USD terms? Nobody knows... but the technology itself will become as indispensable as the internet.
    - nickjj 9y ago
      I was replying to someone who was talking about the social phenomenon of bitcoin trading. I wasn't comparing them literally.
napolux 9y ago
What scares me is the amount of people investing all their life savings in this. Somebody will get hurt, sooner or later.
- romanovcode 9y ago
  Still not as stupid as buying fidget spinners in bulk.
  - ddorian43 9y ago
    Was there a HN post for this ? Only saw it on reddit.
  - matthuggins 9y ago
    Context?
    - Hates_ 9y ago
      Someone bought fidget spinners with their life savings and was looking to sell them quick: https://i.imgur.com/V0u1KHG.jpg https://i.imgur.com/V0u1KHG.jpg
      - thieving_magpie 9y ago
        Oh. That makes me just feel very sad.
    - deleted 9y ago
      [deleted]
- eksemplar 9y ago
  Well, if they invested their life savings in January they could've had 1 lifesaving back and still had 6 more in bitcoin. Obviously it's stupid to invest anything in something as volatile as bitcoin unless you can afford to lose it.
lin_lin 9y ago
A few years back I had 10 bitcoins and bought weed on the Silk Road with them. Hmm, imagine I held onto it :)
- Synaesthesia 9y ago
  Yeah that happened to a lot of people, myself included.
  - dotluis 9y ago
    And it's going to happen to everybody, since the Bitcoin is deflationary.
    - ghostbrainalpha 9y ago
      I sold my Bitcoin a couple weeks before Floyd Mayweather's fight with Conner McGregor. I used all the money to bet on Floyd to win the fight, which he did. When I went to put the money back into BTC, I found out that I would have made the same amount just by leaving in BTC for the 3 weeks I was out of the market.
- sgspace 9y ago
  ya done smoked $70,000 worth of pot son
- lawlessone 9y ago
  at least you're actually using it for something other than speculation.
brndnmtthws 9y ago
To all the naysayers in this thread, I suggest you watch "Banking on Bitcoin" on Netflix, which is a great introduction to Bitcoin. It might change your thinking. Also check out Andreas Antonopoulos' videos on YouTube, which are easy to digest and very informative. Here's the place to start: https://www.youtube.com/watch?v=l1si5ZWLgy0 https://www.youtube.com/watch?v=l1si5ZWLgy0
- goldenkey 9y ago
  Naysayers? Does that mean you are a yes sayer? Bitcoin is a question? Seems more like an overpriced valueless commodity controlled in majority by Chinese miners who have ASIC rigs only a couple companies in the world can produce. So its basically centralized even if the protocol isn't. How much stake do you have in Bitcoin? (Technical people can understand what Bitcoin is and yet despise the blatant canvasing by owners of Bitcoin.) I find the blatant tarlipping to be offensive. Just admit when you have the asset if you are going to try to get people to part with their hard earned money for what amounts to a global ponzi scheme.
  - virtuexru 9y ago
    Yikes, someone sounds bitter.
    - goldenkey 9y ago
      Please refrain from personal attacks that don't add to the conversation (even if you would like to shill for Bitcoin.) It is in bad taste and against HN rules.
    - brndnmtthws 9y ago
      There's a lot of unfounded Bitcoin hate on HN, which I've never understood. Just have to brush it off I guess :)
- oldboyFX 9y ago
  I've watched "Banking on Bitcoin", it's quite propagandist and mostly about crypto-activism. A bit like "Cowspiracy".
joefourier 9y ago
Notice how almost all news of Bitcoin now are about its price. Bitcoin used to be exciting in both technical and economical aspects, but has now become just a store of value entirely driven by speculation. Other technically superior cryptocurrencies (e.g. Monero, Ethereum) have replaced most of its usecases, boasting much faster and cheaper transactions and real anonymity in the case of Monero. Bitcoin takes more than an hour even at absurd transaction fees of multiple dollars, and is actually pseudonymous, meaning if you can associate an address with a real person, it becomes relatively easy to trace all their transactions unless they were careful to cover their tracks. It may or may not continue to increase in value long-term, but it has little uses outside of being worth a lot of money.
- deleted 9y ago
  [deleted]
- dcdanko 9y ago
  It's shopworn but good tech doesn't always win. Bitcoin has a big(ish) network of users and a proven codebase. The decentralized nature of blockchains means that they're hard for individual corporations to control and profit from. That hampers adoption of new closed cryptocurrencies (not Monero or Ethereum though) but can serve as a powerful public utility.
  - wallace_f 9y ago
    This is an interesting line of thought: bitcoin has no intrinsic value--its price represents a supply and demand equillibrium for a (1) money, that is (2) pseudonymous, and (3) not a government currency. If other CCs can offer 2, 3 equally well, the price premium must be due to something different about 1--how well it performs the functions of money. Is it a better Store of Value? How much better of a Medium of Exchange is it, and is it worth the premium? As far as I can tell from my napkin analysis, I would guess that bitcoin appears to be in a pretty speculative bubble. This is assuming Ethereum, and other CCs, are equally capable of fulfilling the functions of bitcoin.
    - 9y ago
markatkinson 9y ago
The technology that spawned Bitcoin, and the technology that is being developed in its wake is the really exciting part of all of this. So long as some catastrophic event doesn't completely tarnish the masses opinion on crypto's I think we are in for a wild ride (wild ride either way I suppose). Traditional banks, asset managers and transaction facilitators need to watch themselves. I get the feeling that younger generations (<35-40) are hungry to separate themselves from traditional banking systems, and the group that pulls off (almost) instant free transactions in a distributed ledger are going to cause a real financial revolution. Cant wait and fingers crossed.
marcosscriven 9y ago
There’s no way I’d take this level of risk for a significant sum, but just to play with Bitcoin, and see my own transaction in the blockchain, I bought £100 in September that’s now worth £200. It’s of course tempting to imagine doubling my entire savings in just two months, but so too could they have halved, or worse.
duiker101 9y ago
I don't know much about bitcoin i'll admit. And I was surpised the other day to read some comments where the poster was saying that the transaction price is somewhere in between 5$ - 20$. Isn't that like... a LOT? I thought the idea of Bitcoins was how easy it would be to make transactions but with a price like that I can image most smaller transactions are discouraged. Also, after the initial hype I haven't really seen much of an implementation of payments in Bitcoins. So... other than the hype, what's driving the price up if I guess the price is going up way faster than the implementation?
- Qub3d 9y ago
  The high transaction fees are symptomatic a large problem that not only has divided the community, its literally forked the currency. There are several proposed solutions, but unless a majority of all bitcoin users agree to implement it, it won't happen. Here's a rundown of what's happened: https://blog.plan99.net/the-resolution-of-the-bitcoin-experiment-dabb30201f7 https://blog.plan99.net/the-resolution-of-the-bitcoin-experi...
- VMG 9y ago
  The fee and scaling issues are being addressed in a second-layer solution: http://lightning.network/ http://lightning.network/
- 3pt14159 9y ago
  Here is what will happen in the long run: Lightning networks will allow common people to transact and will semi-centralize the blockchain across a couple partners, kinda like banks. Over time and for the people that don't really need to be on chain, these banks will start taking over the transactions between each other and just broadcasting signatures from their bitcoin keys to match deposits vs obligations so that people can be assured that they have what they say they have. If you need to move $100k, you can always do it on the real blockchain, or from your bank to the real blockchain, but the chain is going to turn into the banking system. Originally I thought there could only be one cryptocurrency, and that is at least for now looking to be incorrect. But I don't really know how all this plays out. There is a huge market incentive to get in on a coin early, but if there are infinite crytpocurrencies then they all get devalued. Probably the winners of the current system will use their money to push for regulations to stop new currencies from coming out. So Bitcoin, Etherium, etc will get entrenched. Then I'd guess maybe 3 to 10 currencies survive in the long run, provided they don't get regulated out of existence in the first place.
leemike 9y ago
Understaning the bitter concept of Bitcoin is really daunting.
- ataturk 9y ago
  It's not entirely the fault of its adherents--that generation has never known any kind of political stability. They can't understand ethical government if they have never experienced it. They can't understand ethical institutions if all the institutions they have ever dealt with have stabbed them in the back or scammed them one way or another. The problem isn't Bitcoin, it is the human condition itself. People weren't always bad actors, or the majority of people weren't, at least. But we have allowed the bad actors to gain control of everything that matters and that's where we keep screwing up. How do we fix this? Let "too big to fail" fail!
nepotism2018 9y ago
it will easily reach $10k...don't ask why
- jeffhuys 9y ago
  ok
- ddorian43 9y ago
  I'll sell when it goes $50K.
deleted 9y ago
[deleted]
davidmanescu 9y ago
To me an asset that moves 15% in a day, and which no-one knows what it's truly worth, isn't great as a store of value. I'm not going to speculate about where bitcoin will be trading when it becomes a stable, useful asset, but in order to justify a market cap anywhere near this high it will eventually need to generate actual utility for its users. Can someone explain where that will come from? Cheap currency conversion and easy money transfer?
- ihsw2 9y ago
  It may be some time until $100M of daily churn doesn't result in a 15% price swing. The market capitalization of BTC would need to increase considerably to accommodate such a scenario. And it looks like we are quickly approaching such a scenario. The rich (and super-rich) have a lot of resources to move markets and BTC is currently especially susceptible to this.
  - davidmanescu 9y ago
    Indeed. I guess volatility like this isn't a dealbreaker for other asset types so it shouldn't be here. Just seems odd that we call it a "currency" when these things happen routinely.
- tinco 9y ago
  Gold, art and wine all have a utility value that's way below their "store of value" value. Bitcoin is just a more convenient store with an equally insignificant utility value. Whether Bitcoin can persist while offering so little value I don't know, just saying these valuations are not unheard of in the asset world. Just look at what people pay for mediocre Van Gogh paintings I wouldn't hang in my toilet..
  - noitsnot 9y ago
    I'm so tired of people trying to validate and prop up cryptocurrency with horrible comments and logic. Hanging a mediocre Van Gogh above your toilet? Unbelievable.
baldfat 9y ago
I know know what I would do with a time machine. 1) Go back to when I start to put bitcoin mining on my server for fun and than decided it would cost to much in electricity 2) Second time around I wouldn't sell it when it hit $1000 for the first time 3) I would go to the future to see when to see :)
danbruc 9y ago
Is any reasonable good and current analysis available showing what Bitcoins and other cryptocurrencies are actually used for and in what volume?
- decentralised 9y ago
  The volumes you can check using any of the block explorers freely available as for what they are used for, it's a transactional system so all records are transactions. The myth that cryptos are used for illegal and criminal activity is dying down in Europe with Europol and BoE both releasing studies showing criminals prefer to use fiat rather than cryptocurrencies.
  - danbruc 9y ago
    Just randomly clicking through blocks won't give you that much insights. You'll need at least a rather comprehensive list of address together with information what they are used for. Some of the block explorers provide such information to some extend, but I don't think any of them is comprehensive enough to be able to answer something like how many coins were spend in April 2017 to pay for food delivery services.
    - decentralised 9y ago
      Perhaps you are thinking of some other block explorer. Here's the one I use regularly to get all the insights I can think of: https://etherscan.io https://etherscan.io
BLanen 9y ago
Again, nobody in the comments mentioning Tether or Bitfinex shows how little hackernews knows why the price is rising.
- thedjinn 9y ago
  Well, please enlighten us then!
  - BLanen 9y ago
    https://medium.com/@bitfinexed https://medium.com/@bitfinexed
- tomglynch 9y ago
  The tether link was proved wrong.
  - BLanen 9y ago
    "Proven" by the "audit" I presume?
lsmarigo 9y ago
the engagement on these posts is insane relative to everything else on here. Seems without heavy moderation Hn would be Crypto-News. Everyone is afraid to say what they think. The core concept of BTC is fundamentally flawed and unbelievably naive. The value is rising based on hype and speculation alone, no value is being generated in-fact it's being consumed to 'mine' and transact the coins. Those claiming they're spending their BTC on regular purchases are either not being honest or beyond stupid.
- psyc 9y ago
  Considering that 2017 has been an unprecedented, huge year for all things crypto (whether for very good innovation reasons, or for frothy fraudulent ones), Hacker News barely talks about it at all. Conspicuously avoids it, in fact.
- ringaroundthetx 9y ago
  your false dilemma is hype OR regular purchases are you intentionally leaving out additional uses or are you unaware? Also do you know how commodities work? Commodities don't decrease in price when something is not functioning well and easily accessible, and right now there are $205,000,000 worth of the was-trading bitcoin supply that are stuck off the market.
nadam 9y ago
What I don't like about the current cryptocurrency climate is that Bitcoin, garbage ICO-s, and BitConnet-like piramid schemes completely distract people's attention from the serious cryptocurrencies that genuinely try to develop a decentralized trustless and efficient payment network, like DASH. I am betting against the current trend, and holding mostly DASH (and BAT, POWR, RLC and some similar currencies) with practical potential to be used for more than just a store of value like Bitcoin. Bitcoin has its place and strength, it is the digital gold, but too much bitcoin dominance in the cryptocurrency industry is against innovation and progress.
S410520 9y ago
Imagine a world where you can buy without a merchant, bet without a bookie, get insurance without an underwriter, access finance and loans without a bank, trade without an exchange, purchase commodities without a broker, have law without lawyers, courts and judges, create assets without an issuer, secure escrow without an agent, have internet without an ISP, verify records without a notary, establish reputation and credit without a credit agency, and create identity without a government. Imagine a Bitcoin world.
- acjohnson55 9y ago
  Sounds kind of like the wild west
mrfusion 9y ago
Dumb question. If I buy a bitcoin today would it be assumed the associated bitcoin cash coin had already been spent or is there a chance I ended up with both? Or am I completely misunderstanding? When it formed each coin holder got a new coin in the fork?
- thisisit 9y ago
  Today you get only 1 bitcoin. No bitcoin cash or gold or whatever forks that may exist. Think of this way, there is a ledger - bitcoin which shows I own 1 bitcoin on 1st August 2017. Someone copied the ledger. Now there are two ledgers both with name bitcoin. It is confusing - so one is called bitcoin cash. Going forward, the transactions for bitcoin is recorded in the bitcoin ledger while for bitcoin cash in that ledger. I can spend both bitcoin and cash as my ownership is reflected in both the ledgers. But if you buy from me today, your ownership reflection will start now. So only on one of the ledgers. In November someone will create a new copy - the Segwit 2x. So if you own the bitcoin till then you get 1 bitcoin Segwit 2x too, while retaining the ownership from original bitcoin ledger.
patrickg_zill 9y ago
The purpose of talking about the price, is that it is being used as a proxy mechanism to determine if Bitcoin is "crossing the chasm" from the technology oriented early adopters, to the much wider, non tech, early majority. Then the bandwagon effect will (presumably) kick in and Bitcoin will become truly entrenched.
pinchharmonic 9y ago
Do these people that hold bitcoin or say that they've "made amazing returns" actual cash out at any point? Or are they holding a few bitcoins like everyone else? Isn't that how a bubble forms? If I got into it, I would get a return I thought was nice (100-200%) and then cash out.
- votingprawn 9y ago
  I cashed out 20 bitcoins many years ago...and brought myself a nice graphics card with the proceeds. (i.e. $300) If I'd waited a few years longer I'd have been able to buy a house (nearly), but I suppose I could also have ended up with enough to buy a sandwich.
- coryfklein 9y ago
  I didn't buy long enough ago to be rich from my investment, but I just choose a percentage of my portfolio that I'm comfortable holding in Bitcoin. If that's 10% and Bitcoin increases in value, then I sell until I'm down to 10% again. This means that over time I've sold a lot of my bitcoin and moved it to lower risk investments, but the dollar value of my bitcoin holdings has increased over time as well.
jeff_sig 9y ago
For anyone interested there is service where you can get free price alerts https://www.signality.io https://www.signality.io
110011 9y ago
It's scary to see so much faith in bitcoin given it's horrendously wasteful proof-of-work scheme to avoid double spending. There are better alternatives that minimize latency nearly a hundred-fold and avoid proof-of-work altogether. Example: Algorand (https://people.csail.mit.edu/nickolai/papers/gilad-algorand-eprint.pdf https://people.csail.mit.edu/nickolai/papers/gilad-algorand-...) Even if this new cryptocurrency is "just" a proof of concept there are many others like it that are much less wasteful than bitocin, and this should make people think twice before piling their faith on an important but ultimately flawed first attempt at a usable cryptocurrency.
- abetusk 9y ago
  Thanks for the link, I hadn't heard about Algorand. I don't claim to be really knowledgeable but I found an article on Coinbase that raises the question of whether Algorand needs (or should have?) incentives, so it looks like there's some debate as to whether Algorand is really viable? [1] https://www.coindesk.com/no-incentive-algorand-blockchain-sparks-debate-cryptography-event/ https://www.coindesk.com/no-incentive-algorand-blockchain-sp...
- acjohnson55 9y ago
  I keep being told that Bitcoin will eventually adopt something less wasteful, but given how rocky recent evolutions of the protocol have been, I don't see why I should believe that, versus an altcoin supplanting it. People seem to like Bitcoin as a gold alternative precisely because it doesn't evolve. But I don't see how that jives with the fact that its energy consumption is completely unsustainable.
- RoboTeddy 9y ago
  Wasteful by what standard? Right now each day it consumes ~$1m worth of electricity in order to protect ~$1.5 billion of new payments. Economically, this "electricity safety fee" works out to less than a tenth of a percent.
  - 110011 9y ago
    Wasteful as in we can do better. Did you see the link in my comment? One of the authors of that paper is actually a Turing award winner. Ultimately we've reached a point where there are more efficient alternatives to having hundreds of people computing billions of hashes to reach consensus. To put this in perspective imagine a group of people sorting by randomly permuting and checking if it works, while stubbornly refusing to adopt near linear algorithms.
senatorobama 9y ago
Who is bitter about not buying? I am.
- coryfklein 9y ago
  It's not too late. I wouldn't place a huge buy at $7000 right now, but it doesn't hurt to set up a monthly buy of $50-200 on Coinbase and take advantage of some dollar cost averaging.
loki0505 9y ago
I believe once you can start using your cryptocurrency as collateral for a loan, this space is going to go into the trillion(s). check out Salt Lending. I know many waiting for it to open so they can get a 100k loan and put it back into crypto. This project has been fully licensed and regulated, and owned by the founder of shapeshift (erik vorhees)
- aakilfernandes 9y ago
  Any idea on the tax implications of this? Do you have to pay cap gains when using crypto as collateral? If not, seems like it'd be massively useful for whales to cash out without paying taxes.
  - loki0505 9y ago
    honestly, this seems like a grey area and I have no idea! but the concept of this platform is amazing, and has already been approved. They are taking SALT deposits currently (just opened a few days ago) so they are ramping up for full operation soon. I would suggest to hit up their reddit...i'm gonna do the same :-)
    - dajohnson89 9y ago
      How do they asses creditworthiness?
      - loki0505 9y ago
        by you using your current crypto stack as collateral. you put up your stack, add SALT tokens: 1 salt token + collateral = 10,000 loan 10 salt token + collateral = 100,000 loan 100 salt token + collateral = 1,000,000 loan no credit check.
decentralised 9y ago
It's the normalisation effect kicking in now that more traditional financial instruments are tacking advantage of Bitcoin and the growing acceptance with regulators and government officials (see UK's report on cyber crime and cryptocurrencies as well as Europol's, see CTFs announced, etc).
tqi 9y ago
Is this good or bad for BTC as a currency? On one hand, I can see how being more valuable makes it more likely to be supported by retailers / banks / etc, but on the other hand I can't imagine spending BTC on anything when prices keep skyrocketing... at which point I feel like it ceases to be a currency (BTC in particular, not crypto in general).
- tome 9y ago
  > On one hand, I can see how being more valuable makes it more likely to be supported by retailers / banks / etc I doubt it. If anything it's being more stable that will make it more attractive to use in commerce.
- coryfklein 9y ago
  If BTC ever reaches a period of stability in price, I say that getting there the faster the better. Then people can actually start using it as a currency. So I vote this is good for BTC.
gallerdude 9y ago
The other day my Grandma, who cannot print things without getting help, asked me how she could get into BTC.
subterfudge44 9y ago
Anyone not investing in Bitcoin is going to deeply regret it. Is is like buying landing 1920s in downtown SF.
subterfudge44 9y ago
People are ignoring scale effects of Bitcoin. Bitcoin currently like wild west. Only crazy, brave, adveturers or stupid are entering this land. $7000 is bloody nothing. Bitcoin will reach $100K sooner or later and very tightly integrated with our life. Buy it now or regret it later.
bitmapbrother 9y ago
I recall being downvoted when I replied to someone asking if it was too late to invest in Bitcoin when it was at $4000. In my reply I quoted Roger Ver by saying that it was never too late to invest in Bitcoin. I also decided to walk the talk and buy some at $4000 with money I could afford to lose. Glad I did.
- acjohnson55 9y ago
  That's crazy thinking though. It's only "never too late" if it never stops going up. Just because it went up from $4k doesn't mean that you won. Unless you sell now and walk away. Point is, it's impossible to know if you're leaving money on the table.
  - bitmapbrother 9y ago
    This is a long term investment for me so I don't plan on trying to time the market or cash out early. I fully expect to see Bitcoin rise above $10,000 in 1 year.
  - coryfklein 9y ago
    Bitcoin is a high risk investment. If you buy some today it could go to $1 next month (although as it's years of track record continues to grow this becomes less and less likely). Make bitcoin 1% of your portfolio. If you lose all of it, it's not really a big deal. If one year from now it has grown to 10% of your portfolio, you'll be more comfortable with it and you can sell half and maintain it as 5% knowing that if you ever lose that you are still ahead.
mrhappyunhappy 9y ago
HN is like a huge echo chamber and a bitcoin basher. Every single time the same arguments (bitcoin is a currency or store of value), the same questions (should I invest?) and the same reasons for talking oneself out of going into it. Even when bitcoin gets to a half a million value people will still be saying oh it’ll crash any time now, bitcoin is useless, can’t trust bitcoin because it’s not backed by US economy or the government. And you know what, keep living in your bubble because those that capitalize on the shift won’t have to say I told you so. I wholeheartedly agree on many arguments against bitcoin but we have to agree that we are seeing something unprecedented happen and nobody really knows what they are talking about 100%.
mads 9y ago
I just got a call from someone trying to peddle a Bitcoin trading site. Didn't catch the name of the site, but he was very persistent, was reading from a manuscript and didn't know that the maximum supply of Bitcoin would be 21M, when I asked him. I think it's time to get out, if you own any coin, to be honest. While we were talking (for maybe 30 minutes - normally I wouldn't do that, but this was interesting like a train wreck kind of interesting), I could hear cheering in the background, when the price reached an all time high. This is super weird, man...

299 points by rayuela 9y ago

I consider myself pretty tech-savvy, but I'm still completely lost as to whether Bitcoin is basically a pyramid scheme set to crash massively, or something huge that will continue climbing. I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. (Queue heated comments from both sides. Discussing bitcoin is like bringing up religion AND politics at the dinner table at the same time)

hikarudo 9y ago
"This time it's different!"
growt 9y ago
You'll probably do better with an understanding of economics than tech in predicting a crash.
viach 9y ago
For me Bitcoin is neither pyramid nor something which will last forever. I think it is a great experiment in human psychology/nature and in this sense, it's outcome is not destroyable and the facts about people it brought up will be known and usable (for various applications) forever.
AznHisoka 9y ago
My view is that its egotistic to pretend to know whats going to happen. even the financial experts dont know. So i just put 1% of my net worth into it, set a price alert for $20,000 and try not to check the price (or read any stories on it) If i ever get the alert, great. if not, no big deal.
- ideonexus 9y ago
  This is my strategy. It's a very volatile, high-risk investment, but one I'll hate myself for missing out on should it take off. So I've bet what I'm willing to lose on it (<1% for me) and told myself I won't read any news on it so I won't invest more or get scared into selling. And yet here I am. :)
vazamb 9y ago
(i am somewhat familiar with the tech but don't follow the business side of bitcoin) what I find weird is the forks. A major selling point of bitcoin is that there will ever be only 21 Mio coins. You know, unless there is a hard fork and now there are suddenly twice as many coins. Presumably one of the resulting coins' value will drop but you are still creating value out of thin air, something that the crypto people hate about fist currency run by a central bank. I also don't really know what to think about it. I am sure blockchain tech will be hugely successful in the banking and government sector and maybe (a comment I read yesterday) once it is proven to work the central banks will issue blockchain based currency. But bitcoin as a store of value? I don't know...
- ForHackernews 9y ago
  > I am sure blockchain tech will be hugely successful in the banking and government sector Are you? Why? So far, no bitcoin/blockchain advocates have been able to explain to me a single non-illegal use case that isn't better served by a traditional, centralized database. A single large Postgres instance could handle all the global transaction volume of bitcoin, and it would be faster and orders of magnitude more energy efficient, too. (Cue bitcoin people telling me about how it's 'trustless', and I should just trust the miners, devs and exchanges and hurry up and buy some)
  - jypepin 9y ago
    I think with some sort of blockchain technologies, it would be harder for central banks to do things like what happened in Argentina, Greece or Zimbabwe.
    - simias 9y ago
      That's a very broad claim. What "things" are you referring to and how would blockchain technology have prevented them? Very simply put the Greek financial crisis was mainly due to poor bookkeeping by the Greek institutions (that's being kind), rampant tax evasion and foreign governments (especially within the EU) not wanting to keep footing the bill. I'm not sure how a clever use of SHA-256 would solve these systemic, cultural and diplomatic issues. Especially since tax evasion would be significantly easier in a bitcoin world where you can launder and hide money extremely easily. No need for a hidden account in some tax heaven, just generate a new RX address and you're good to go, receive all the bribes and "off the record" payments you want.
tluyben2 9y ago
> set to crash massively It crashed multiple times this year with a lot of people crying 'told you so' and 'it's all over'. But that didn't happen. There might be a big, longer period, crash coming, but since China dropped out, it seems to be pretty stable (including altcoins). I still wouldn't call it investment, but it's safer than most gambles. But sure, never put money you cannot miss as it is a gamble.
simias 9y ago
Cryptocurrencies have a niche use, mainly to buy things on the black market but also for small peer-to-peer international payments when other options are not practical. For this reason I don't expect that cryptocurrencies will completely disappear any time soon. However the value of bitcoin is mainly driven by speculation at this point, a currency that's so volatile is very difficult to use if you're a business. At best you accept it at the current exchange rate and you immediately convert it to fiat. Anything else is very risky. But that might be temporary, eventually the exchange rate might stabilize, at which point speculation could be vastly reduced and it would work better as a currency. That's kind of a chicken-and-egg problem though, in order for the exchange rate to stabilize you must attach a real world value to the currency by buying and selling things, paying taxes etc... But that won't happen as long as the exchange rate is so volatile. I'm also very much unconvinced that a deflationary currency can work at all in the long run or that bitcoin will end up fixing the problems its proponents say it will, but that's up for debate.
- Jommi 9y ago
  Your first sentence mostly fits Bitcoin, but misses the point on most of the other cryptocurrencies.
  - simias 9y ago
    Please do enlighten me then, what do other cryptocurrencies offer? I also think my first sentence applies to bitcoin and ethereum which together have a bigger market cap than all the other cryptocurrencies added together.
    - Jommi 9y ago
      >Please do enlighten me then, what do other cryptocurrencies offer? Other cryptocurrencies can provide: - Private, near untracable ways of doing payments - Efficient, near 0-cost ways of transfering funds. >I also think my first sentence applies to bitcoin and ethereum which together have a bigger market cap than all the other cryptocurrencies added together. "Cryptocurrencies have a niche use, mainly to buy things on the black market but also for small peer-to-peer international payments when other options are not practical. For this reason, I don't expect that cryptocurrencies will completely disappear anytime soon." If you want to talk about Bitcoin and Ethereum, say Bitcoin and Ethereum, and not "Cryptocurrencies". Bitcoin is not anonymous. Bitcoin has high transaction cost. Ethereum is not anonymous. Ethereum has a comparable high transaction cost. These facts mean buying on the black market, and small international payments are not ideal to do with these cryptocurrencies.
AnonToday 9y ago
Bitcoin isn't a pyramid scheme. It just does not have any value. Fools and their money are easily parted. (The comments on this site have as much or more value.) The Fractional reserve system is(), (Dollar, Pound, Euro, etc.) They require a constant recreation of debt to keep going. (less a pyramid more just Ponzi)
Jommi 9y ago
It's a virtual currency with a limited supply, but with a constantly growing interest(demand). This interest is not primarily driven by bitcoin's inherent qualities but more through: 1. Using bitcoin to acquire other cryptocurrencies 2. Promises of future profits 3. Getting "free money" by having bitcoin (Bitcoin cash, bitcoin gold) The first one might actually be healthy, while 2 and 3 are most close to a pyramid scheme / "tulip mania" style scenario. One thing is for sure. No one knows what exactly is going to happen.
weddpros 9y ago
There's no pyramid scheme. It's a hyped asset, to say the least, but there's no pyramid. Like a hyped startup, it doesn't do much yet, but it is promising, so people buy it. It may be "worth" much or zero in the end, it all depends on the final outcomes. It's also the easiest/cheapest/most open asset to trade (depending on where you trade). In the long term, Bitcoin can be seen as a safe heaven in case of economic chaos, like gold, but way easier to buy and hold. It can also be seen as an interesting economic experiment: what if currency wasn't managed by a government? Or you can give trading a try for a few $$ as a gamble (with more chances of success than in a casino). It's also a useful currency in some cases: I'm a "digital nomad" which my bank can't seem to understand. Getting my Debit Card to work online from a foreign country, with an ever changing phone number (they insist on using SMS as a 2FA), sounds like an obstacle to them, but not to BTC.
- 0bsidian 9y ago
  I think most of the people putting larger checks into Bitcoin are betting that it will become a store of value asset. Going from memory, a recent Bloomberg article called Bitcoin: "Gold for millennials". Or, similarly, Peter Thiel said recently [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments." [1] https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter-thiel-says.html https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...
  - romanovcode 9y ago
    All people who are owning Bitcoin are betting.
    - 0bsidian 9y ago
      Agreed, I was just trying to say that currently, one of the most popular investment theses for Bitcoin is "Gold for millennials", not "anonymous paypal" or "decentralised stripe".
      - 9y ago
Delmania 9y ago
Best advice I have heard is to learn about the blockchain and look at something like Ethereum. If buying Bitcoins feels to risky, don't invest, but blockchain technologies will certainly have a role to play in the future.
wyager 9y ago
You can’t expect to reason about this without some background in economics. Instead of telling you what I think (because to you I’m indistinguishable from all the other people responding with random guesses), I’m going to suggest that you read some introductory texts about economics and finance and you can probably form some reasonable opinions yourself.
kibrad 9y ago
"whether Bitcoin is basically a pyramid scheme set to crash massively, or something huge that will continue climbing" --- you can say the same thing about regular money
- kgwgk 9y ago
  Regular money doesn’t climb.
  - mywittyname 9y ago
    Sure it does. The USD has surged in value in the past few years. It's gone up like 20% against most other major world currencies in the past five years.
    - kgwgk 9y ago
      4% p.a. doesn’t look like climbing to me...
      - mywittyname 9y ago
        Well, it is in the up direction, at least.
loceng 9y ago
It is very much like a decentralized global pyramid scheme, unfortunately there's no concise resource to explain it all clearly - primarily because there's no VC money pumped into anti-crypto assets that are structured and incentivized like a pyramid scheme, e.g. the most popular blockchains such as Bitcoin and Ethereum's Ether. The issue is the unreasonable amount of wealth transfer that would occur if and as society adopts the crypto-assets more and more, and as bad actors manipulate society to take part - whether through lobbying or bribing politicians or worse; there essentially can be a wealth transfer of 40% plus for people having done nothing except trying to perpetuate this system.
- ataturk 9y ago
  And when is the last time you got something for nothing?
deleted 9y ago
[deleted]
petercooper 9y ago
I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. The thing I keep telling myself is if I'd mined even 1000 bitcoins (which was viable at the time I first learnt about it) I'd have totally sold out at $10.. there is zero chance I would have made it to $1000 :-D
- bbarn 9y ago
  I sold my 200 at 40. Something for nothing, right? /facepalm
  - deleted 9y ago
    [deleted]
  - abledon 9y ago
    not sure if not ever mining/buying, or doing the above would be more frustrating haha
- coryfklein 9y ago
  It doesn't have to be all or nothing. The proper strategy would be to sell a percentage at $10. In fact, if you started in 2011 with 1000 BTC and every year you sold 50% then today you'd have (by my rough calculations): 8 BTC (worth about $50k) $160k USD Of course it's not the millions you'd have if you just held each time, but for many that is a life changing amount of money and you would have obtained it in a responsible manner that doesn't just rely on the value of Bitcoin shooting to the moon.
mo87 9y ago
Back in 2002-2005, I knew a whole lot of "tech-savvy" people with top-notch pedigree, who never believed FB/Youtube/Twitter etc would scale as no one had ever built a "many-to-many", pseudo real-time network at that kind of scale before (both technically/financially). Let alone a bunch of 20 year olds. I was quite convinced by their arguments. Where I was wrong was believing technical arguments mattered. What matters is the psychology of the herd.
- wolco 9y ago
  The worst group to validate new ideas against are developers.
  - cableshaft 9y ago
    Pretty much. They'll tell you a hundred reasons why any single idea you have could never work, for technical or other reasons. I say this as a developer, and I've been guilty of this before.
jboggan 9y ago
I would say that the current bull run in Bitcoin is mainly due to folks with early stakes in ICOs taking their money and running from Ethereum.
oldboyFX 9y ago
It's a pyramid scheme in a sense that you depend on others to keep buying the bitcoin. If everyone suddenly lost trust in bitcoin you would lose everything, because technically, it has zero real value. That's why all the "bitcoin enthusiasts" keep hyping it up. They know that once the mania stops, people who didn't cash out will be left holding the bag. Currently, it's nothing more than a speculative asset. You might as well invest in high-yield risky stocks. The blockchain itself is pretty great though.
- googletazer 9y ago
  Another "blockchain without bitcoin" post. You can't have one without the other.
- jon_smark 9y ago
  > It's a pyramid scheme in a sense that you depend on others to keep buying the bitcoin. Please don't use the expression "pyramid scheme" lightly, because there are actual pyramid schemes out there, and we want the expression to keep its power so we can warn people against them. Bitcoin may be in a bubble, but it's definitely not a pyramid scheme.
- coryfklein 9y ago
  It does not have "zero real value" - it definitely competes well against established money transfer services like Western Union. You can send $1000 to your mom in Japan for a $5. That is a good enough value for money transfers that Bitcoin won't ever go completely to $0 value while Western Union can charge $20 for the same service. And that is at current bitcoin price. Since the fee is paid in bitcoin, if the price drops down to $100/bitcoin then you can send $1000 for pennies.
ryanmarsh 9y ago
If you're pretty tech-savvy then the Satoshi's white paper should help. Have you read it?

dandare 9y ago

I keep seeing my non-it friends boasting on FB how much they profited with Bitcoin this week. I am afraid this bubble will get way much bigger before it bursts.

tluyben2 9y ago
Well, depending on when you buy/bought, you should've taken out what you put in. I never bought over the $3k pricepoint and we had multiple drops < 3k < 2k this year at which times I bought and then sold my input after it doubled. I lost nothing. It will drop again now to < 3k probably this year, just buy then.
ainiriand 9y ago
I have the feeling that it will go up to something close to 10k and then after a period of horizontal value, the money is going to go to something useful, like Ethereum. So better to wait and sell after that.
eterm 9y ago
I'm afraid that like the housing bubble, it'll get "too big to burst" and require intervention to keep those who have previously invested afloat while keeping down those outside the bubble.
- seanmcdirmid 9y ago
  Who would bail it out? It isn’t backed by any government with big pockets.
- krapp 9y ago
  Isn't "intervention" the problem Bitcoin was designed to solve? Maybe if people are looking for long term security and insurance against risk they shouldn't buy into anarcho-capitalist fun bucks... or at least not more than they can afford to lose.
- alangou 9y ago
  I'd certainly be very impressed if cryptocurrencies reached the point where they could affect the economy that much in the near future. The current market capitalization of all cryptos comes out to under $200 billion [1], while the US housing market was nearly $30 trillion as of last December [2]. So it would have to grow 150x somehow. [1] https://coinmarketcap.com/ https://coinmarketcap.com/ [2] http://zillow.mediaroom.com/2016-12-30-U-S-Housing-Worth-Record-High-29-6-Trillion-in-2016 http://zillow.mediaroom.com/2016-12-30-U-S-Housing-Worth-Rec...

artur_makly 9y ago

whats baffling to me is its lack of utlitity, application, and overall adoption when compared to ETH. So at this point (to me) BTC is a pure pyramid scheme — a digital casino

eterm 9y ago
It has utility for ransomware. Even a niche utility can bootstrap an ecosystem. Add layers and layers of speculation above that kernel and it is a feedback loop. As long as speculators refuse to sell, people need to spend more and more for ransoms (or equivalently ransomware writers have to demand less denominated by bitcoin), driving up the price as long as those destroyed through ransomware outstrips those created by mining.
VMG 9y ago
Somebody sounds bitter https://www.tradingview.com/symbols/ETHBTC/ https://www.tradingview.com/symbols/ETHBTC/

jdhn 9y ago

I'm willing to bet that this is happening because people are trying to get coins before the fork happens on November 16th.

sheeshkebab 9y ago
Double the coins, double the profits! Right?
- jdhn 9y ago
  Of course! More seriously, I'm moving coins to Coinbase very soon as they're going to allow users to sell the new B2X coins the day after the split. I expect to make a 4 figure profit, but I'm not sure whether it'll be low 4 figures or high 4 figures.
  - sodafountan 9y ago
    You do realize that if you have a market entirely filled with sellers and no buyers the price is zero right? Who do you predict is going to be buying 2X
    - sheeshkebab 9y ago
      It would be good for btc to slow down for a while too. Otherwise the thing looks like a totally bogus Ponzi scheme.
slindz 9y ago
There are many factors. November stands to be the most eventful month in Bitcoin's history. Educate yourself on the moving parts before making any big decisions. The biggest factor for me is that the miners are pissed off that both SegWit chains are meant to cannibalize the core tenets of Bitcoin with the goal of privatizing fees. This post explains it way better than I ever could: https://theflippening.github.io/open-letter-to-bitcoin-miners-from-another-miner/ https://theflippening.github.io/open-letter-to-bitcoin-miner... I've moved 92% of my BTC -> BCH, and I've grabbed my popcorn. It's going to be an interesting month.

deleted 9y ago

[deleted]

d__k 9y ago

I think the behaviour of Bitcoin price (not the technology) reflects some social phenomenon rather than the real economy. And it is precisely why it is interesting.

nickjj 9y ago
Yeah, it's pretty much what happened 500 years ago when people were selling everything they owned (including houses) to buy tulip bulbs[0]. Maybe it's not that bad yet, but it's looking to get that way. Spoiler alert: It ended really badly, but the people who got out early enough did make a lot of money. Plot twist: I did invest in bitcoins back when they were hovering around 2k and sold them for a small profit (~10%). Yep, I wish I invested more and held on, but it's so easy to think this way after the fact. [0]: https://en.wikipedia.org/wiki/Tulip_mania https://en.wikipedia.org/wiki/Tulip_mania.
- SippinLean 9y ago
  Someone HAD to get the Tulip comment out of the way, I saw pyramid schemes mentioned above, but did anyone call it a Ponzi in this thread yet?
- jesusthatsgreat 9y ago
  Tulips aren't finite in number nor can they be transferred on a decentralised ledger. Anyone can grow tulips and grow fake tulips that may look like tulips but are cheaper quicker to buy / make. You can't fake Bitcoin nor can you grow it indefinitely in your garden. People who make the tulip comparison simply don't understand the revolutionary aspect of the technology. It's like calling the internet tulip mania back in the mid 90's. Blockchain technology will change the world. Bitcoin's value will boom and bust for many years to come. Where will it end up in USD terms? Nobody knows... but the technology itself will become as indispensable as the internet.
  - nickjj 9y ago
    I was replying to someone who was talking about the social phenomenon of bitcoin trading. I wasn't comparing them literally.

napolux 9y ago

What scares me is the amount of people investing all their life savings in this. Somebody will get hurt, sooner or later.

romanovcode 9y ago
Still not as stupid as buying fidget spinners in bulk.
- ddorian43 9y ago
  Was there a HN post for this ? Only saw it on reddit.
- matthuggins 9y ago
  Context?
  - Hates_ 9y ago
    Someone bought fidget spinners with their life savings and was looking to sell them quick: https://i.imgur.com/V0u1KHG.jpg https://i.imgur.com/V0u1KHG.jpg
    - thieving_magpie 9y ago
      Oh. That makes me just feel very sad.
  - deleted 9y ago
    [deleted]
eksemplar 9y ago
Well, if they invested their life savings in January they could've had 1 lifesaving back and still had 6 more in bitcoin. Obviously it's stupid to invest anything in something as volatile as bitcoin unless you can afford to lose it.

lin_lin 9y ago

A few years back I had 10 bitcoins and bought weed on the Silk Road with them. Hmm, imagine I held onto it :)

Synaesthesia 9y ago
Yeah that happened to a lot of people, myself included.
- dotluis 9y ago
  And it's going to happen to everybody, since the Bitcoin is deflationary.
  - ghostbrainalpha 9y ago
    I sold my Bitcoin a couple weeks before Floyd Mayweather's fight with Conner McGregor. I used all the money to bet on Floyd to win the fight, which he did. When I went to put the money back into BTC, I found out that I would have made the same amount just by leaving in BTC for the 3 weeks I was out of the market.
sgspace 9y ago
ya done smoked $70,000 worth of pot son
lawlessone 9y ago
at least you're actually using it for something other than speculation.

brndnmtthws 9y ago

To all the naysayers in this thread, I suggest you watch "Banking on Bitcoin" on Netflix, which is a great introduction to Bitcoin. It might change your thinking. Also check out Andreas Antonopoulos' videos on YouTube, which are easy to digest and very informative. Here's the place to start: https://www.youtube.com/watch?v=l1si5ZWLgy0 https://www.youtube.com/watch?v=l1si5ZWLgy0

goldenkey 9y ago
Naysayers? Does that mean you are a yes sayer? Bitcoin is a question? Seems more like an overpriced valueless commodity controlled in majority by Chinese miners who have ASIC rigs only a couple companies in the world can produce. So its basically centralized even if the protocol isn't. How much stake do you have in Bitcoin? (Technical people can understand what Bitcoin is and yet despise the blatant canvasing by owners of Bitcoin.) I find the blatant tarlipping to be offensive. Just admit when you have the asset if you are going to try to get people to part with their hard earned money for what amounts to a global ponzi scheme.
- virtuexru 9y ago
  Yikes, someone sounds bitter.
  - goldenkey 9y ago
    Please refrain from personal attacks that don't add to the conversation (even if you would like to shill for Bitcoin.) It is in bad taste and against HN rules.
  - brndnmtthws 9y ago
    There's a lot of unfounded Bitcoin hate on HN, which I've never understood. Just have to brush it off I guess :)
oldboyFX 9y ago
I've watched "Banking on Bitcoin", it's quite propagandist and mostly about crypto-activism. A bit like "Cowspiracy".

joefourier 9y ago

Notice how almost all news of Bitcoin now are about its price. Bitcoin used to be exciting in both technical and economical aspects, but has now become just a store of value entirely driven by speculation. Other technically superior cryptocurrencies (e.g. Monero, Ethereum) have replaced most of its usecases, boasting much faster and cheaper transactions and real anonymity in the case of Monero. Bitcoin takes more than an hour even at absurd transaction fees of multiple dollars, and is actually pseudonymous, meaning if you can associate an address with a real person, it becomes relatively easy to trace all their transactions unless they were careful to cover their tracks. It may or may not continue to increase in value long-term, but it has little uses outside of being worth a lot of money.

deleted 9y ago
[deleted]
dcdanko 9y ago
It's shopworn but good tech doesn't always win. Bitcoin has a big(ish) network of users and a proven codebase. The decentralized nature of blockchains means that they're hard for individual corporations to control and profit from. That hampers adoption of new closed cryptocurrencies (not Monero or Ethereum though) but can serve as a powerful public utility.
- wallace_f 9y ago
  This is an interesting line of thought: bitcoin has no intrinsic value--its price represents a supply and demand equillibrium for a (1) money, that is (2) pseudonymous, and (3) not a government currency. If other CCs can offer 2, 3 equally well, the price premium must be due to something different about 1--how well it performs the functions of money. Is it a better Store of Value? How much better of a Medium of Exchange is it, and is it worth the premium? As far as I can tell from my napkin analysis, I would guess that bitcoin appears to be in a pretty speculative bubble. This is assuming Ethereum, and other CCs, are equally capable of fulfilling the functions of bitcoin.
  - 9y ago

markatkinson 9y ago

The technology that spawned Bitcoin, and the technology that is being developed in its wake is the really exciting part of all of this. So long as some catastrophic event doesn't completely tarnish the masses opinion on crypto's I think we are in for a wild ride (wild ride either way I suppose). Traditional banks, asset managers and transaction facilitators need to watch themselves. I get the feeling that younger generations (<35-40) are hungry to separate themselves from traditional banking systems, and the group that pulls off (almost) instant free transactions in a distributed ledger are going to cause a real financial revolution. Cant wait and fingers crossed.

marcosscriven 9y ago

There’s no way I’d take this level of risk for a significant sum, but just to play with Bitcoin, and see my own transaction in the blockchain, I bought £100 in September that’s now worth £200. It’s of course tempting to imagine doubling my entire savings in just two months, but so too could they have halved, or worse.

duiker101 9y ago

I don't know much about bitcoin i'll admit. And I was surpised the other day to read some comments where the poster was saying that the transaction price is somewhere in between 5$ - 20$. Isn't that like... a LOT? I thought the idea of Bitcoins was how easy it would be to make transactions but with a price like that I can image most smaller transactions are discouraged. Also, after the initial hype I haven't really seen much of an implementation of payments in Bitcoins. So... other than the hype, what's driving the price up if I guess the price is going up way faster than the implementation?

Qub3d 9y ago
The high transaction fees are symptomatic a large problem that not only has divided the community, its literally forked the currency. There are several proposed solutions, but unless a majority of all bitcoin users agree to implement it, it won't happen. Here's a rundown of what's happened: https://blog.plan99.net/the-resolution-of-the-bitcoin-experiment-dabb30201f7 https://blog.plan99.net/the-resolution-of-the-bitcoin-experi...
VMG 9y ago
The fee and scaling issues are being addressed in a second-layer solution: http://lightning.network/ http://lightning.network/
3pt14159 9y ago
Here is what will happen in the long run: Lightning networks will allow common people to transact and will semi-centralize the blockchain across a couple partners, kinda like banks. Over time and for the people that don't really need to be on chain, these banks will start taking over the transactions between each other and just broadcasting signatures from their bitcoin keys to match deposits vs obligations so that people can be assured that they have what they say they have. If you need to move $100k, you can always do it on the real blockchain, or from your bank to the real blockchain, but the chain is going to turn into the banking system. Originally I thought there could only be one cryptocurrency, and that is at least for now looking to be incorrect. But I don't really know how all this plays out. There is a huge market incentive to get in on a coin early, but if there are infinite crytpocurrencies then they all get devalued. Probably the winners of the current system will use their money to push for regulations to stop new currencies from coming out. So Bitcoin, Etherium, etc will get entrenched. Then I'd guess maybe 3 to 10 currencies survive in the long run, provided they don't get regulated out of existence in the first place.

leemike 9y ago

Understaning the bitter concept of Bitcoin is really daunting.

ataturk 9y ago
It's not entirely the fault of its adherents--that generation has never known any kind of political stability. They can't understand ethical government if they have never experienced it. They can't understand ethical institutions if all the institutions they have ever dealt with have stabbed them in the back or scammed them one way or another. The problem isn't Bitcoin, it is the human condition itself. People weren't always bad actors, or the majority of people weren't, at least. But we have allowed the bad actors to gain control of everything that matters and that's where we keep screwing up. How do we fix this? Let "too big to fail" fail!

nepotism2018 9y ago

it will easily reach $10k...don't ask why

jeffhuys 9y ago
ok
ddorian43 9y ago
I'll sell when it goes $50K.

deleted 9y ago

[deleted]

davidmanescu 9y ago

To me an asset that moves 15% in a day, and which no-one knows what it's truly worth, isn't great as a store of value. I'm not going to speculate about where bitcoin will be trading when it becomes a stable, useful asset, but in order to justify a market cap anywhere near this high it will eventually need to generate actual utility for its users. Can someone explain where that will come from? Cheap currency conversion and easy money transfer?

ihsw2 9y ago
It may be some time until $100M of daily churn doesn't result in a 15% price swing. The market capitalization of BTC would need to increase considerably to accommodate such a scenario. And it looks like we are quickly approaching such a scenario. The rich (and super-rich) have a lot of resources to move markets and BTC is currently especially susceptible to this.
- davidmanescu 9y ago
  Indeed. I guess volatility like this isn't a dealbreaker for other asset types so it shouldn't be here. Just seems odd that we call it a "currency" when these things happen routinely.
tinco 9y ago
Gold, art and wine all have a utility value that's way below their "store of value" value. Bitcoin is just a more convenient store with an equally insignificant utility value. Whether Bitcoin can persist while offering so little value I don't know, just saying these valuations are not unheard of in the asset world. Just look at what people pay for mediocre Van Gogh paintings I wouldn't hang in my toilet..
- noitsnot 9y ago
  I'm so tired of people trying to validate and prop up cryptocurrency with horrible comments and logic. Hanging a mediocre Van Gogh above your toilet? Unbelievable.

baldfat 9y ago

I know know what I would do with a time machine. 1) Go back to when I start to put bitcoin mining on my server for fun and than decided it would cost to much in electricity 2) Second time around I wouldn't sell it when it hit $1000 for the first time 3) I would go to the future to see when to see :)

danbruc 9y ago

Is any reasonable good and current analysis available showing what Bitcoins and other cryptocurrencies are actually used for and in what volume?

decentralised 9y ago
The volumes you can check using any of the block explorers freely available as for what they are used for, it's a transactional system so all records are transactions. The myth that cryptos are used for illegal and criminal activity is dying down in Europe with Europol and BoE both releasing studies showing criminals prefer to use fiat rather than cryptocurrencies.
- danbruc 9y ago
  Just randomly clicking through blocks won't give you that much insights. You'll need at least a rather comprehensive list of address together with information what they are used for. Some of the block explorers provide such information to some extend, but I don't think any of them is comprehensive enough to be able to answer something like how many coins were spend in April 2017 to pay for food delivery services.
  - decentralised 9y ago
    Perhaps you are thinking of some other block explorer. Here's the one I use regularly to get all the insights I can think of: https://etherscan.io https://etherscan.io

BLanen 9y ago

Again, nobody in the comments mentioning Tether or Bitfinex shows how little hackernews knows why the price is rising.

thedjinn 9y ago
Well, please enlighten us then!
- BLanen 9y ago
  https://medium.com/@bitfinexed https://medium.com/@bitfinexed
tomglynch 9y ago
The tether link was proved wrong.
- BLanen 9y ago
  "Proven" by the "audit" I presume?

lsmarigo 9y ago

the engagement on these posts is insane relative to everything else on here. Seems without heavy moderation Hn would be Crypto-News. Everyone is afraid to say what they think. The core concept of BTC is fundamentally flawed and unbelievably naive. The value is rising based on hype and speculation alone, no value is being generated in-fact it's being consumed to 'mine' and transact the coins. Those claiming they're spending their BTC on regular purchases are either not being honest or beyond stupid.

psyc 9y ago
Considering that 2017 has been an unprecedented, huge year for all things crypto (whether for very good innovation reasons, or for frothy fraudulent ones), Hacker News barely talks about it at all. Conspicuously avoids it, in fact.
ringaroundthetx 9y ago
your false dilemma is hype OR regular purchases are you intentionally leaving out additional uses or are you unaware? Also do you know how commodities work? Commodities don't decrease in price when something is not functioning well and easily accessible, and right now there are $205,000,000 worth of the was-trading bitcoin supply that are stuck off the market.

nadam 9y ago

What I don't like about the current cryptocurrency climate is that Bitcoin, garbage ICO-s, and BitConnet-like piramid schemes completely distract people's attention from the serious cryptocurrencies that genuinely try to develop a decentralized trustless and efficient payment network, like DASH. I am betting against the current trend, and holding mostly DASH (and BAT, POWR, RLC and some similar currencies) with practical potential to be used for more than just a store of value like Bitcoin. Bitcoin has its place and strength, it is the digital gold, but too much bitcoin dominance in the cryptocurrency industry is against innovation and progress.

S410520 9y ago

Imagine a world where you can buy without a merchant, bet without a bookie, get insurance without an underwriter, access finance and loans without a bank, trade without an exchange, purchase commodities without a broker, have law without lawyers, courts and judges, create assets without an issuer, secure escrow without an agent, have internet without an ISP, verify records without a notary, establish reputation and credit without a credit agency, and create identity without a government. Imagine a Bitcoin world.

acjohnson55 9y ago
Sounds kind of like the wild west

mrfusion 9y ago

Dumb question. If I buy a bitcoin today would it be assumed the associated bitcoin cash coin had already been spent or is there a chance I ended up with both? Or am I completely misunderstanding? When it formed each coin holder got a new coin in the fork?

thisisit 9y ago
Today you get only 1 bitcoin. No bitcoin cash or gold or whatever forks that may exist. Think of this way, there is a ledger - bitcoin which shows I own 1 bitcoin on 1st August 2017. Someone copied the ledger. Now there are two ledgers both with name bitcoin. It is confusing - so one is called bitcoin cash. Going forward, the transactions for bitcoin is recorded in the bitcoin ledger while for bitcoin cash in that ledger. I can spend both bitcoin and cash as my ownership is reflected in both the ledgers. But if you buy from me today, your ownership reflection will start now. So only on one of the ledgers. In November someone will create a new copy - the Segwit 2x. So if you own the bitcoin till then you get 1 bitcoin Segwit 2x too, while retaining the ownership from original bitcoin ledger.

patrickg_zill 9y ago

The purpose of talking about the price, is that it is being used as a proxy mechanism to determine if Bitcoin is "crossing the chasm" from the technology oriented early adopters, to the much wider, non tech, early majority. Then the bandwagon effect will (presumably) kick in and Bitcoin will become truly entrenched.

pinchharmonic 9y ago

Do these people that hold bitcoin or say that they've "made amazing returns" actual cash out at any point? Or are they holding a few bitcoins like everyone else? Isn't that how a bubble forms? If I got into it, I would get a return I thought was nice (100-200%) and then cash out.

votingprawn 9y ago
I cashed out 20 bitcoins many years ago...and brought myself a nice graphics card with the proceeds. (i.e. $300) If I'd waited a few years longer I'd have been able to buy a house (nearly), but I suppose I could also have ended up with enough to buy a sandwich.
coryfklein 9y ago
I didn't buy long enough ago to be rich from my investment, but I just choose a percentage of my portfolio that I'm comfortable holding in Bitcoin. If that's 10% and Bitcoin increases in value, then I sell until I'm down to 10% again. This means that over time I've sold a lot of my bitcoin and moved it to lower risk investments, but the dollar value of my bitcoin holdings has increased over time as well.

jeff_sig 9y ago

For anyone interested there is service where you can get free price alerts https://www.signality.io https://www.signality.io

110011 9y ago

It's scary to see so much faith in bitcoin given it's horrendously wasteful proof-of-work scheme to avoid double spending. There are better alternatives that minimize latency nearly a hundred-fold and avoid proof-of-work altogether. Example: Algorand (https://people.csail.mit.edu/nickolai/papers/gilad-algorand-eprint.pdf https://people.csail.mit.edu/nickolai/papers/gilad-algorand-...) Even if this new cryptocurrency is "just" a proof of concept there are many others like it that are much less wasteful than bitocin, and this should make people think twice before piling their faith on an important but ultimately flawed first attempt at a usable cryptocurrency.

abetusk 9y ago
Thanks for the link, I hadn't heard about Algorand. I don't claim to be really knowledgeable but I found an article on Coinbase that raises the question of whether Algorand needs (or should have?) incentives, so it looks like there's some debate as to whether Algorand is really viable? [1] https://www.coindesk.com/no-incentive-algorand-blockchain-sparks-debate-cryptography-event/ https://www.coindesk.com/no-incentive-algorand-blockchain-sp...
acjohnson55 9y ago
I keep being told that Bitcoin will eventually adopt something less wasteful, but given how rocky recent evolutions of the protocol have been, I don't see why I should believe that, versus an altcoin supplanting it. People seem to like Bitcoin as a gold alternative precisely because it doesn't evolve. But I don't see how that jives with the fact that its energy consumption is completely unsustainable.
RoboTeddy 9y ago
Wasteful by what standard? Right now each day it consumes ~$1m worth of electricity in order to protect ~$1.5 billion of new payments. Economically, this "electricity safety fee" works out to less than a tenth of a percent.
- 110011 9y ago
  Wasteful as in we can do better. Did you see the link in my comment? One of the authors of that paper is actually a Turing award winner. Ultimately we've reached a point where there are more efficient alternatives to having hundreds of people computing billions of hashes to reach consensus. To put this in perspective imagine a group of people sorting by randomly permuting and checking if it works, while stubbornly refusing to adopt near linear algorithms.

senatorobama 9y ago

Who is bitter about not buying? I am.

coryfklein 9y ago
It's not too late. I wouldn't place a huge buy at $7000 right now, but it doesn't hurt to set up a monthly buy of $50-200 on Coinbase and take advantage of some dollar cost averaging.

loki0505 9y ago

I believe once you can start using your cryptocurrency as collateral for a loan, this space is going to go into the trillion(s). check out Salt Lending. I know many waiting for it to open so they can get a 100k loan and put it back into crypto. This project has been fully licensed and regulated, and owned by the founder of shapeshift (erik vorhees)

aakilfernandes 9y ago
Any idea on the tax implications of this? Do you have to pay cap gains when using crypto as collateral? If not, seems like it'd be massively useful for whales to cash out without paying taxes.
- loki0505 9y ago
  honestly, this seems like a grey area and I have no idea! but the concept of this platform is amazing, and has already been approved. They are taking SALT deposits currently (just opened a few days ago) so they are ramping up for full operation soon. I would suggest to hit up their reddit...i'm gonna do the same :-)
  - dajohnson89 9y ago
    How do they asses creditworthiness?
    - loki0505 9y ago
      by you using your current crypto stack as collateral. you put up your stack, add SALT tokens: 1 salt token + collateral = 10,000 loan 10 salt token + collateral = 100,000 loan 100 salt token + collateral = 1,000,000 loan no credit check.

decentralised 9y ago

It's the normalisation effect kicking in now that more traditional financial instruments are tacking advantage of Bitcoin and the growing acceptance with regulators and government officials (see UK's report on cyber crime and cryptocurrencies as well as Europol's, see CTFs announced, etc).

tqi 9y ago

Is this good or bad for BTC as a currency? On one hand, I can see how being more valuable makes it more likely to be supported by retailers / banks / etc, but on the other hand I can't imagine spending BTC on anything when prices keep skyrocketing... at which point I feel like it ceases to be a currency (BTC in particular, not crypto in general).

tome 9y ago
> On one hand, I can see how being more valuable makes it more likely to be supported by retailers / banks / etc I doubt it. If anything it's being more stable that will make it more attractive to use in commerce.
coryfklein 9y ago
If BTC ever reaches a period of stability in price, I say that getting there the faster the better. Then people can actually start using it as a currency. So I vote this is good for BTC.

gallerdude 9y ago

The other day my Grandma, who cannot print things without getting help, asked me how she could get into BTC.

subterfudge44 9y ago

Anyone not investing in Bitcoin is going to deeply regret it. Is is like buying landing 1920s in downtown SF.

subterfudge44 9y ago

People are ignoring scale effects of Bitcoin. Bitcoin currently like wild west. Only crazy, brave, adveturers or stupid are entering this land. $7000 is bloody nothing. Bitcoin will reach $100K sooner or later and very tightly integrated with our life. Buy it now or regret it later.

bitmapbrother 9y ago

I recall being downvoted when I replied to someone asking if it was too late to invest in Bitcoin when it was at $4000. In my reply I quoted Roger Ver by saying that it was never too late to invest in Bitcoin. I also decided to walk the talk and buy some at $4000 with money I could afford to lose. Glad I did.

acjohnson55 9y ago
That's crazy thinking though. It's only "never too late" if it never stops going up. Just because it went up from $4k doesn't mean that you won. Unless you sell now and walk away. Point is, it's impossible to know if you're leaving money on the table.
- bitmapbrother 9y ago
  This is a long term investment for me so I don't plan on trying to time the market or cash out early. I fully expect to see Bitcoin rise above $10,000 in 1 year.
- coryfklein 9y ago
  Bitcoin is a high risk investment. If you buy some today it could go to $1 next month (although as it's years of track record continues to grow this becomes less and less likely). Make bitcoin 1% of your portfolio. If you lose all of it, it's not really a big deal. If one year from now it has grown to 10% of your portfolio, you'll be more comfortable with it and you can sell half and maintain it as 5% knowing that if you ever lose that you are still ahead.

mrhappyunhappy 9y ago

HN is like a huge echo chamber and a bitcoin basher. Every single time the same arguments (bitcoin is a currency or store of value), the same questions (should I invest?) and the same reasons for talking oneself out of going into it. Even when bitcoin gets to a half a million value people will still be saying oh it’ll crash any time now, bitcoin is useless, can’t trust bitcoin because it’s not backed by US economy or the government. And you know what, keep living in your bubble because those that capitalize on the shift won’t have to say I told you so. I wholeheartedly agree on many arguments against bitcoin but we have to agree that we are seeing something unprecedented happen and nobody really knows what they are talking about 100%.

mads 9y ago

I just got a call from someone trying to peddle a Bitcoin trading site. Didn't catch the name of the site, but he was very persistent, was reading from a manuscript and didn't know that the maximum supply of Bitcoin would be 21M, when I asked him. I think it's time to get out, if you own any coin, to be honest. While we were talking (for maybe 30 minutes - normally I wouldn't do that, but this was interesting like a train wreck kind of interesting), I could hear cheering in the background, when the price reached an all time high. This is super weird, man...