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“Rosenstreich at online trading firm Swissquote said bitcoin’s surge harks to the surprises of the U.K. referendum on European Union membership and President Tr

by wintom 9y ago

“Rosenstreich at online trading firm Swissquote said bitcoin’s surge harks to the surprises of the U.K. referendum on European Union membership and President Trump’s election. “We have underestimated the populist movements,” he said. “There is growing unease on how central banks and governments are managing fiat currencies. Ordinary people globally understand why a decentralized asset is the ultimate safe haven.”” That’s the reason for 10k and it will be the reason for 100k. 100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that and other than looking good as jewelry it has no other real intrinsic value. No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do. Force trust in a world where you can’t trust anything.

ad_hominem 9y ago
I wish Bitcoin was as decentralized as everyone says it is. Unlike fiat cash or gold, you can't spend it without an internet connection (in order to sync up the public ledger and submit the transaction). You're subject to miners to approve your transactions, which in theory should be democratized, but isn't really since it's based on computing power, which in turn can be bought or centralized in mining pools. You're subject to a small cabal of developers' whims in having to use the reference client and hardforks to patch up bugs in the protocol. In theory that should also be democratized, with people free to use whatever forks they want, but in practice it's centralized with everyone fleeing to whichever fork all the mining pools go with.
- Joeboy 9y ago
  > I wish Bitcoin was as decentralized as everyone says it is. I'm trying to cash out some of mine and I've been downloading the blockchain for four days now. I had to buy a new hard drive before I could even start. I've read that it takes over an hour to do a transaction now, although I'm not yet in a position to verify that. If you look on the btc related subreddits nobody recommends using a proper client as Satoshi intended, it's all about accounts on websites offering a service that could reasonably be described as "banking".
  - uncoder0 9y ago
    Took me a few hours. Use `-dbcache=n` where n = bytes of memory... will make sync super fast if you have +8GB of RAM. I think default is pretty low.
    - Joeboy 9y ago
      Ah cool, I set it to 4000 and it looks to have sped it up a bit (currently saying 16 hours to go, down from "two days"). I'm still not convinced it's a very practical decentralized currency though.
      - vesak 9y ago
        Check out https://electrum.org/#home https://electrum.org/#home -- doesn't require clients to download the full blockchain.
      - Joeboy 9y ago
        (Actually it's back up to two days now, I think it might just be that the break in downloading made my ISP unthrottle my connection).
will_brown 9y ago
>No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do. Just playing devils advocate, but you can't replicate/duplicate gold. On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you? You say Bitcoin is $10k because ordinary people understand why a decentralized asset is the ultimate safe haven. If that is your premises it makes little sense to compare Bitcoin to gold, compare Bitcoin to other currencies. Why does Litecoin = $100 and Ether = $500? Bitcoin may do something gold could never do, obviously, but can it do anything any other cryptocoin/token can't? The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.
- RexetBlell 9y ago
  Why can't you replicate gold? What is gold? It's some elementary particles (like quarks) arranged in a certain way that we all agree are valuable. We could easily agree that some other arrangement is valuable (such as Aluminum).
  - bezieio 9y ago
    Here's an interesting presentation by the Winklevoss twins that steps through the elements and narrows down which could be used as currency and why: https://www.slideshare.net/winklevosscap/money-is-broken-its-future-is-not?ref=https://winklevosscapital.com/money-is-broken-but-its-future-is-not/ https://www.slideshare.net/winklevosscap/money-is-broken-its... (Slides 7-17)
  - BorisMelnik 9y ago
    good point...also what happens if we start digging on Mars, or some other planet and find 1000 tons of gold?
pishpash 9y ago
Gold is used in electronics. It's actually a good conductor. Bitcoin is not even good for transactions, its supposed primary purpose, right now.
- wintom 9y ago
  Lots of stuff is used in electronics but it is not worth as much as gold.
  - pishpash 9y ago
    You wrote and I quote "other than looking good as jewelry it has no other real intrinsic value."
    - RexetBlell 9y ago
      It's considered to be beautiful because it's expensive and valued. The causation is in the other direction than most people think when it comes to gold and beauty. It's the same with expensive paintings. A painting is considered to be beautiful (some are actually ugly) and have some deep meaning only after it's sold for a lot of money.
      - nasredin 9y ago
        This is an interesting topic. I too thought most of this "throw paint onto a canvas and charge rich suckers thousands of dollars" is bullshit. But after seeing some Picassos IIRC, I realized, yes there is a method to the madness. Even if the painting wasn't displayed in a fancy museum, I think I would still have thought it was "special". But those "artists" that pour paint onto the canvas - complete bullshit. If a five year old can do it - it's not art except to the parents of those "artists"
        RexetBlell 9y ago
        This painting sold for millions: https://nypost.com/2013/05/15/43-8-million-for-this/ https://nypost.com/2013/05/15/43-8-million-for-this/ Reason: it's complicated. But something that's DEFINITELY required for this to be possible is scarcity. The artist is not alive any more. It would never sell for that much if he were still alive. True digital scarcity is a hard problem to solve (because computers are good at copying things). Bitcoin was the first system that was able to solve this problem.
deleted 9y ago
[deleted]
mtgx 9y ago
I've seen comments saying "unlike bitcoin, gold has intrinsic value!" on HN for years. It never made sense to me. Like Bitcoin, gold is only valuable because we think it is and we want it to be (and because it's relatively scarce, too, just like Bitcoin is). Same with diamonds. Their functional value is relatively small in comparison to their "beauty" and scarcity values.
- wintom 9y ago
  I like your username, lol. You are right though and I am being a little sarcastic on purpose. People have argued that Gold has real intrinsic value which it does have its uses but no more or no less than any other important precious metal we use.
- RexetBlell 9y ago
  Totally. We can add things like million dollar paintings such as this one https://en.m.wikipedia.org/wiki/Barnett_Newman#/media/File%3ANewman-Onement_1.jpg https://en.m.wikipedia.org/wiki/Barnett_Newman#/media/File%3... and expensive old postal stamps to that list.
- sytelus 9y ago
  That is not correct. Gold actually has uses in manufacturing all kind of goods. In many manufacturing processes its irreplaceable. It has historical significance that is ingrained in virtually every culture (i.e. everyone grows up thinking gold as valuable thing due to stories you hear as kid). Jewelry made out of gold looks great, doesn't get rusty and you can keep it for centuries without needing any technology. Even if humankind is driven back to stone age, you can probably still count on gold to barter for other valuable goods. Most importantly, despite the humongous efforts over centuries, gold is still as rare as it was thousands of years ago. This inability to produce it out of thin air (unlike dollars or even bitcoins) what makes its usage as currency possible. None of these things you can say for bitcoin or any other currencies. They are just bits floating around in cyberspace.
  - RexetBlell 9y ago
    A long time ago, when Aluminium was more precious than gold, people made what was considered good looking jewelry out of it: http://www.todayifoundout.com/index.php/2014/05/aluminium-cost-gold/ http://www.todayifoundout.com/index.php/2014/05/aluminium-co... "Its shininess combined with its almost ghostly lightness compared to other metals made it an ideal metal for jewellery and it wasn’t long until the French elite were wearing broaches and buttons made of the aluminium." Aluminium also doesn't get rusty and can be kept for centuries, but nobody makes jewelry out of it any more. Reason: It's not scarce (any more). The only real thing that makes gold valuable is it's scarcity. If it stopped being scarce because an asteroid containing a lot of gold was brought back to Earth, people would stop valuing gold and stop making jewelry out of it. Bitcoin has the same important property of scarcity as gold.
acchow 9y ago
"Ordinary people globally understand why a decentralized asset is the ultimate safe haven." Ordinary people have never heard of bitcoin. I have relatives working in finance who don't understand bitcoin.
- heartbreak 9y ago
  Agreed. Just asked my wife, “What’s Bitcoin?” and she replied, “What? Sounds like a game. I’m trying to work.”
- freedomben 9y ago
  I'm not convinced this is true anymore. My only information source is anecdotal, but I've been amazed at how many non technical people I've talked to lately that know about Bitcoin. Many are even buying little bits on coinbase. Their knowledge doesn't run deep, but it certainly exceeds levels of "never heard of it."
  - 3pt14159 9y ago
    Are you in a major city in North America, Japan, South Korea, China, or Europe? If so, I don't think you have a truly representative sample. On the other hand, I still think governments are going to ban it once they understand it. But for now: :D
    - freedomben 9y ago
      Yes that's totally fair. I'm not in a major city but I do think my sample has poor representation. And I totally agree that they'll ban it once they understand it :-)
    - chrischen 9y ago
      You probably just covered > 50% of the population of the earth there. If that isn’t “ordinary people” than what is? People aren’t all rural farmers anymore.
      - 9y ago
kimjongman 9y ago
to the moon
fullshark 9y ago
This is nonsense. This is being driven by speculation / minuscule interest rates / greed. Very little of the demand for btc in the past year is due to lack of faith in institutions.
- 0bsidian 9y ago
  Let me try to make the case for why Bitcoin could be a useful beyond greed. I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked). Some use cases I can think off the top of my head: (1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key. (2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat. (3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad. (4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach. This reminds me of Peter Thiel's recent words about Bitcoin [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." Reference: [1] https://www.coindesk.com/peter-thiel-bitcoin-like-reserve-form-money/ https://www.coindesk.com/peter-thiel-bitcoin-like-reserve-fo...
  - kayhi 9y ago
    I've read this before ... oh wait, you keep posting these examples
cbau 9y ago
Is that the right way to value Bitcoin? What explains the difference in price between Bitcoin and other coins?
bluetwo 9y ago
Errrrr.... Bitcoin is a fiat currency, so be careful with your generalization. And whose job is it to investigate bitcoin fraud and theft? No one.
- wallace_f 9y ago
  Bitcoin might turn out to be one of the markets where free market dynamics work well. Whose job is it? Anyone who has a stake in trusting and maintaining bitcoin's value. So the rich are incentivized to safeguard the poor in some sense here.
  - bluetwo 9y ago
    Rubbish
    - wallace_f 9y ago
      Well so far it has none of the taxpayer-subsidized funding as the US currency and banks have--which are very expensive to fund. The 2008 crisis was estimated to cost around $9,000-35,000 per US citizen, even by the Fed itself! For just that one incident...
      - bluetwo 9y ago
        Exactly. Who is going to bail out the first big BTC crisis? No one.
        wallace_f 9y ago
        Think about what bailing out means. It was a transfer of wealth from taxpayers and money-balance holders to Wall St banks, the US gov't and a few select private corporations. Now I don't mean to be patronizing, but it is useful for us to ask ourselves, "how were we convinced that this was desirable?"
        9y ago
dpweb 9y ago
`100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that`. Similar things heard during every irrational bubble. I believe people often trot out the 'actual worthlessness' of fiat currency, to support a misguided idea that btc must be the democratic antidote which will free countless millions from the financial enslavement of the global financial machine. Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc? BTC hits 10k while US readies to pass tax overhauls to increase an already alarming wealth inequality. Freedom fighters should pick the right battles.
- aphextron 9y ago
  >Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc? I'm not sure that's true. What makes a currency is it's usage. If enough people agree to the value of something, it's irrelevant whether a government sponsors it. You see this all the time with small towns using local "currencies" for specific usages [0]. It's the same idea. [0] https://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States https://en.wikipedia.org/wiki/List_of_community_currencies_i...
  - kamaal 9y ago
    That's only the positive side of it. For all this talk of inequality, why don't poor all over the world just throw their national fiat currencies under the bus and start all over from scratch? Sure doing this every few decades should ideally reset the wealth counter to 0 for most of the top 1%. That is where fiat currencies come in. Because you don't want extreme situations in either case. Do you seriously want a certain large section of world population holding the entire global financial ecosystem at gunpoint and dictate its terms? Pay x% taxes as we demand or we fork the blockchain and reset it all to 0.
  - paulgb 9y ago
    I clicked a bunch of links from that list but couldn't find a single example that backs your point. Most of the local scrips seem to either be defunct/broken links or backed by a trusted institution who promises conversion back to the US dollar (BerkShares, Detroit Cheers).
guelo 9y ago
Everything you say can be true but if this is not just the new tulip mania there must be some number at which it stops. You predict 100k but why not a million? why not a billion?
- paulcole 9y ago
  I’m waiting to buy at a million and sell at a trillion.
thisisit 9y ago
I have theory regarding "underestimated the populist movement" - Anything which is highly publicized and talked about whole day gets stuck in people's mind. And if that something is portrayed as taboo people get more attracted to it. I think it is in everyone's favor to ignore and not give credence to things like these. There is an article on how Finland has been able to achieve this: http://foreignpolicy.com/2017/03/01/why-is-finland-able-to-fend-off-putins-information-war/ http://foreignpolicy.com/2017/03/01/why-is-finland-able-to-f... For people wanting to see a video: https://www.youtube.com/watch?v=wwAzU5ji-CM https://www.youtube.com/watch?v=wwAzU5ji-CM
cs702 9y ago
Gold's market cap in US dollars is currently $7.1 trillion; Bitcoin's is under $0.2 trillion: Current market capitalization in US dollars Global money supply (broad) over $90.0 trillion [a] US dollar money supply (M2) $13.8 trillion [b] Euro money supply (M2) $13.2 trillion [c] All coins and banknotes in circulation $7.6 trillion [d] All gold ever mined $7.1 trillion [e] Bitcoin under $0.2 trillion [f] Sources: [a] http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/ http://money.visualcapitalist.com/worlds-money-markets-one-v... [b] https://fred.stlouisfed.org/series/M2 https://fred.stlouisfed.org/series/M2 [c] http://sdw.ecb.europa.eu/reports.do?node=1000003501 http://sdw.ecb.europa.eu/reports.do?node=1000003501 [d] http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/ http://money.visualcapitalist.com/worlds-money-markets-one-v... [e] https://www.fool.com/investing/2017/08/17/how-does-bitcoins-market-cap-stack-up-next-to-gold.aspx https://www.fool.com/investing/2017/08/17/how-does-bitcoins-... [f] https://coinmarketcap.com/currencies/bitcoin/ https://coinmarketcap.com/currencies/bitcoin/
- deepsun 9y ago
  However, if you try to liquidate those assets, they fall in price. But some more than others. E.g. there's no even $100 billion in Bitcoin invested. If someone tries to sell, say, $1 billion worth (1%) of Bitcoin, the price falls down rapidly and they never going to get anything close to the billion $. Not so with gold. The price will fall down too, but not so much. One can easily sell 1% of the world gold reserves, for price close (lower, but close) to it's market value. Maybe one day Bitcoin will behave like gold, but certainly not today.
  - arglebarnacle 9y ago
    I'm inclined to agree that bitcoin markets are far less robust than gold markets on the whole because of the long history and entrenched social position of gold. I do think you underestimate the effect on gold markets if they were flooded with someone trying to offload $70b of gold. That's about 7 times more gold than the entire contents of the U.S. gold reserve of 8,134 metric tons of gold. I really don't understand why you think it would be easy to sell that much gold at the prevailing price. Some random googling turned up about $100b/day of all gold changing hands worldwide, so you would have to sell it over a long period of time to avoid moving the price. If you were to try to keep your trades under say 0.5% of daily volume, or $500M, this would be the equivalent of trying to sell 1/14,000 of the total market cap each day, which would work out to about $12.5M/day if applied to bitcoin's market cap. Selling 0.5% of the daily volume of bitcoin would be more like $36.7M/day. The reason for the difference in those numbers is that bitcoin turns over more of its market cap daily than gold, proportionally. So dollar for dollar, of course $1B affects bitcoin more than gold, but in terms of turning over 1% of the market cap the data suggests this might actually be easier in bitcoin.
hw 9y ago
The thing is, bitcoin in its current state isn't exactly decentralized - a small amount of miners control a fairly large % of bitcoin's hashrate. Not to mention most of those miners are located in China, which is also where most of the ASICs (mining equipment) are produced. These miners could easily support an alternate fork of bitcoin by moving their hashrate over, thus crippling the bitcoin chain. This was the whole drama with Segwit2x
crsmith 9y ago
10x return isn't worth the downside
MarkMc 9y ago
> they like to demonize bitcoin which actually does something gold could never do The practical utility of Bitcoin represents only a very small fraction of its price. The price of bitcoin has climbed more than tenfold in a year - so what is causing this huge increase in demand? Compared to a year ago, are there 10 times as many drugs being purchased on the darknet with bitcoin? No. Are there 10 times as many Chinese people trying to get their money out of China? No. If anything, the utility of bitcoin has diminished as the transaction cost has risen. The only reasonable explanation is that most people are buying bitcoin simply to sell at a higher price later. In that regard it's the same as gold, but also the same as every bubble asset in history.

by wintom 9y ago

ad_hominem 9y ago

I wish Bitcoin was as decentralized as everyone says it is. Unlike fiat cash or gold, you can't spend it without an internet connection (in order to sync up the public ledger and submit the transaction). You're subject to miners to approve your transactions, which in theory should be democratized, but isn't really since it's based on computing power, which in turn can be bought or centralized in mining pools. You're subject to a small cabal of developers' whims in having to use the reference client and hardforks to patch up bugs in the protocol. In theory that should also be democratized, with people free to use whatever forks they want, but in practice it's centralized with everyone fleeing to whichever fork all the mining pools go with.

Joeboy 9y ago
> I wish Bitcoin was as decentralized as everyone says it is. I'm trying to cash out some of mine and I've been downloading the blockchain for four days now. I had to buy a new hard drive before I could even start. I've read that it takes over an hour to do a transaction now, although I'm not yet in a position to verify that. If you look on the btc related subreddits nobody recommends using a proper client as Satoshi intended, it's all about accounts on websites offering a service that could reasonably be described as "banking".
- uncoder0 9y ago
  Took me a few hours. Use `-dbcache=n` where n = bytes of memory... will make sync super fast if you have +8GB of RAM. I think default is pretty low.
  - Joeboy 9y ago
    Ah cool, I set it to 4000 and it looks to have sped it up a bit (currently saying 16 hours to go, down from "two days"). I'm still not convinced it's a very practical decentralized currency though.
    - vesak 9y ago
      Check out https://electrum.org/#home https://electrum.org/#home -- doesn't require clients to download the full blockchain.
    - Joeboy 9y ago
      (Actually it's back up to two days now, I think it might just be that the break in downloading made my ISP unthrottle my connection).

will_brown 9y ago

>No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do. Just playing devils advocate, but you can't replicate/duplicate gold. On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you? You say Bitcoin is $10k because ordinary people understand why a decentralized asset is the ultimate safe haven. If that is your premises it makes little sense to compare Bitcoin to gold, compare Bitcoin to other currencies. Why does Litecoin = $100 and Ether = $500? Bitcoin may do something gold could never do, obviously, but can it do anything any other cryptocoin/token can't? The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.

RexetBlell 9y ago
Why can't you replicate gold? What is gold? It's some elementary particles (like quarks) arranged in a certain way that we all agree are valuable. We could easily agree that some other arrangement is valuable (such as Aluminum).
- bezieio 9y ago
  Here's an interesting presentation by the Winklevoss twins that steps through the elements and narrows down which could be used as currency and why: https://www.slideshare.net/winklevosscap/money-is-broken-its-future-is-not?ref=https://winklevosscapital.com/money-is-broken-but-its-future-is-not/ https://www.slideshare.net/winklevosscap/money-is-broken-its... (Slides 7-17)
- BorisMelnik 9y ago
  good point...also what happens if we start digging on Mars, or some other planet and find 1000 tons of gold?

pishpash 9y ago

Gold is used in electronics. It's actually a good conductor. Bitcoin is not even good for transactions, its supposed primary purpose, right now.

wintom 9y ago
Lots of stuff is used in electronics but it is not worth as much as gold.
- pishpash 9y ago
  You wrote and I quote "other than looking good as jewelry it has no other real intrinsic value."
  - RexetBlell 9y ago
    It's considered to be beautiful because it's expensive and valued. The causation is in the other direction than most people think when it comes to gold and beauty. It's the same with expensive paintings. A painting is considered to be beautiful (some are actually ugly) and have some deep meaning only after it's sold for a lot of money.
    - nasredin 9y ago
      This is an interesting topic. I too thought most of this "throw paint onto a canvas and charge rich suckers thousands of dollars" is bullshit. But after seeing some Picassos IIRC, I realized, yes there is a method to the madness. Even if the painting wasn't displayed in a fancy museum, I think I would still have thought it was "special". But those "artists" that pour paint onto the canvas - complete bullshit. If a five year old can do it - it's not art except to the parents of those "artists"
      - RexetBlell 9y ago
        This painting sold for millions: https://nypost.com/2013/05/15/43-8-million-for-this/ https://nypost.com/2013/05/15/43-8-million-for-this/ Reason: it's complicated. But something that's DEFINITELY required for this to be possible is scarcity. The artist is not alive any more. It would never sell for that much if he were still alive. True digital scarcity is a hard problem to solve (because computers are good at copying things). Bitcoin was the first system that was able to solve this problem.

deleted 9y ago

[deleted]

mtgx 9y ago

I've seen comments saying "unlike bitcoin, gold has intrinsic value!" on HN for years. It never made sense to me. Like Bitcoin, gold is only valuable because we think it is and we want it to be (and because it's relatively scarce, too, just like Bitcoin is). Same with diamonds. Their functional value is relatively small in comparison to their "beauty" and scarcity values.

wintom 9y ago
I like your username, lol. You are right though and I am being a little sarcastic on purpose. People have argued that Gold has real intrinsic value which it does have its uses but no more or no less than any other important precious metal we use.
RexetBlell 9y ago
Totally. We can add things like million dollar paintings such as this one https://en.m.wikipedia.org/wiki/Barnett_Newman#/media/File%3ANewman-Onement_1.jpg https://en.m.wikipedia.org/wiki/Barnett_Newman#/media/File%3... and expensive old postal stamps to that list.
sytelus 9y ago
That is not correct. Gold actually has uses in manufacturing all kind of goods. In many manufacturing processes its irreplaceable. It has historical significance that is ingrained in virtually every culture (i.e. everyone grows up thinking gold as valuable thing due to stories you hear as kid). Jewelry made out of gold looks great, doesn't get rusty and you can keep it for centuries without needing any technology. Even if humankind is driven back to stone age, you can probably still count on gold to barter for other valuable goods. Most importantly, despite the humongous efforts over centuries, gold is still as rare as it was thousands of years ago. This inability to produce it out of thin air (unlike dollars or even bitcoins) what makes its usage as currency possible. None of these things you can say for bitcoin or any other currencies. They are just bits floating around in cyberspace.
- RexetBlell 9y ago
  A long time ago, when Aluminium was more precious than gold, people made what was considered good looking jewelry out of it: http://www.todayifoundout.com/index.php/2014/05/aluminium-cost-gold/ http://www.todayifoundout.com/index.php/2014/05/aluminium-co... "Its shininess combined with its almost ghostly lightness compared to other metals made it an ideal metal for jewellery and it wasn’t long until the French elite were wearing broaches and buttons made of the aluminium." Aluminium also doesn't get rusty and can be kept for centuries, but nobody makes jewelry out of it any more. Reason: It's not scarce (any more). The only real thing that makes gold valuable is it's scarcity. If it stopped being scarce because an asteroid containing a lot of gold was brought back to Earth, people would stop valuing gold and stop making jewelry out of it. Bitcoin has the same important property of scarcity as gold.

acchow 9y ago

"Ordinary people globally understand why a decentralized asset is the ultimate safe haven." Ordinary people have never heard of bitcoin. I have relatives working in finance who don't understand bitcoin.

heartbreak 9y ago
Agreed. Just asked my wife, “What’s Bitcoin?” and she replied, “What? Sounds like a game. I’m trying to work.”
freedomben 9y ago
I'm not convinced this is true anymore. My only information source is anecdotal, but I've been amazed at how many non technical people I've talked to lately that know about Bitcoin. Many are even buying little bits on coinbase. Their knowledge doesn't run deep, but it certainly exceeds levels of "never heard of it."
- 3pt14159 9y ago
  Are you in a major city in North America, Japan, South Korea, China, or Europe? If so, I don't think you have a truly representative sample. On the other hand, I still think governments are going to ban it once they understand it. But for now: :D
  - freedomben 9y ago
    Yes that's totally fair. I'm not in a major city but I do think my sample has poor representation. And I totally agree that they'll ban it once they understand it :-)
  - chrischen 9y ago
    You probably just covered > 50% of the population of the earth there. If that isn’t “ordinary people” than what is? People aren’t all rural farmers anymore.
    - 9y ago

kimjongman 9y ago

to the moon

fullshark 9y ago

This is nonsense. This is being driven by speculation / minuscule interest rates / greed. Very little of the demand for btc in the past year is due to lack of faith in institutions.

0bsidian 9y ago
Let me try to make the case for why Bitcoin could be a useful beyond greed. I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked). Some use cases I can think off the top of my head: (1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key. (2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat. (3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad. (4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach. This reminds me of Peter Thiel's recent words about Bitcoin [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." Reference: [1] https://www.coindesk.com/peter-thiel-bitcoin-like-reserve-form-money/ https://www.coindesk.com/peter-thiel-bitcoin-like-reserve-fo...
- kayhi 9y ago
  I've read this before ... oh wait, you keep posting these examples

cbau 9y ago

Is that the right way to value Bitcoin? What explains the difference in price between Bitcoin and other coins?

bluetwo 9y ago

Errrrr.... Bitcoin is a fiat currency, so be careful with your generalization. And whose job is it to investigate bitcoin fraud and theft? No one.

wallace_f 9y ago
Bitcoin might turn out to be one of the markets where free market dynamics work well. Whose job is it? Anyone who has a stake in trusting and maintaining bitcoin's value. So the rich are incentivized to safeguard the poor in some sense here.
- bluetwo 9y ago
  Rubbish
  - wallace_f 9y ago
    Well so far it has none of the taxpayer-subsidized funding as the US currency and banks have--which are very expensive to fund. The 2008 crisis was estimated to cost around $9,000-35,000 per US citizen, even by the Fed itself! For just that one incident...
    - bluetwo 9y ago
      Exactly. Who is going to bail out the first big BTC crisis? No one.
      - wallace_f 9y ago
        Think about what bailing out means. It was a transfer of wealth from taxpayers and money-balance holders to Wall St banks, the US gov't and a few select private corporations. Now I don't mean to be patronizing, but it is useful for us to ask ourselves, "how were we convinced that this was desirable?"
        9y ago

dpweb 9y ago

`100k puts the market at cap at a trillion, it’s not that crazy if you remember that Gold is several times that`. Similar things heard during every irrational bubble. I believe people often trot out the 'actual worthlessness' of fiat currency, to support a misguided idea that btc must be the democratic antidote which will free countless millions from the financial enslavement of the global financial machine. Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc? BTC hits 10k while US readies to pass tax overhauls to increase an already alarming wealth inequality. Freedom fighters should pick the right battles.

aphextron 9y ago
>Currency is currency BECAUSE its sponsored by government. And the payments system only works because you are indemnified. By the FDIC. By Chase Credit Cards. That is, the evil banks. How so for btc? I'm not sure that's true. What makes a currency is it's usage. If enough people agree to the value of something, it's irrelevant whether a government sponsors it. You see this all the time with small towns using local "currencies" for specific usages [0]. It's the same idea. [0] https://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States https://en.wikipedia.org/wiki/List_of_community_currencies_i...
- kamaal 9y ago
  That's only the positive side of it. For all this talk of inequality, why don't poor all over the world just throw their national fiat currencies under the bus and start all over from scratch? Sure doing this every few decades should ideally reset the wealth counter to 0 for most of the top 1%. That is where fiat currencies come in. Because you don't want extreme situations in either case. Do you seriously want a certain large section of world population holding the entire global financial ecosystem at gunpoint and dictate its terms? Pay x% taxes as we demand or we fork the blockchain and reset it all to 0.
- paulgb 9y ago
  I clicked a bunch of links from that list but couldn't find a single example that backs your point. Most of the local scrips seem to either be defunct/broken links or backed by a trusted institution who promises conversion back to the US dollar (BerkShares, Detroit Cheers).

guelo 9y ago

Everything you say can be true but if this is not just the new tulip mania there must be some number at which it stops. You predict 100k but why not a million? why not a billion?

paulcole 9y ago
I’m waiting to buy at a million and sell at a trillion.

thisisit 9y ago

I have theory regarding "underestimated the populist movement" - Anything which is highly publicized and talked about whole day gets stuck in people's mind. And if that something is portrayed as taboo people get more attracted to it. I think it is in everyone's favor to ignore and not give credence to things like these. There is an article on how Finland has been able to achieve this: http://foreignpolicy.com/2017/03/01/why-is-finland-able-to-fend-off-putins-information-war/ http://foreignpolicy.com/2017/03/01/why-is-finland-able-to-f... For people wanting to see a video: https://www.youtube.com/watch?v=wwAzU5ji-CM https://www.youtube.com/watch?v=wwAzU5ji-CM

cs702 9y ago

Gold's market cap in US dollars is currently $7.1 trillion; Bitcoin's is under $0.2 trillion: Current market capitalization in US dollars Global money supply (broad) over $90.0 trillion [a] US dollar money supply (M2) $13.8 trillion [b] Euro money supply (M2) $13.2 trillion [c] All coins and banknotes in circulation $7.6 trillion [d] All gold ever mined $7.1 trillion [e] Bitcoin under $0.2 trillion [f] Sources: [a] http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/ http://money.visualcapitalist.com/worlds-money-markets-one-v... [b] https://fred.stlouisfed.org/series/M2 https://fred.stlouisfed.org/series/M2 [c] http://sdw.ecb.europa.eu/reports.do?node=1000003501 http://sdw.ecb.europa.eu/reports.do?node=1000003501 [d] http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/ http://money.visualcapitalist.com/worlds-money-markets-one-v... [e] https://www.fool.com/investing/2017/08/17/how-does-bitcoins-market-cap-stack-up-next-to-gold.aspx https://www.fool.com/investing/2017/08/17/how-does-bitcoins-... [f] https://coinmarketcap.com/currencies/bitcoin/ https://coinmarketcap.com/currencies/bitcoin/

deepsun 9y ago
However, if you try to liquidate those assets, they fall in price. But some more than others. E.g. there's no even $100 billion in Bitcoin invested. If someone tries to sell, say, $1 billion worth (1%) of Bitcoin, the price falls down rapidly and they never going to get anything close to the billion $. Not so with gold. The price will fall down too, but not so much. One can easily sell 1% of the world gold reserves, for price close (lower, but close) to it's market value. Maybe one day Bitcoin will behave like gold, but certainly not today.
- arglebarnacle 9y ago
  I'm inclined to agree that bitcoin markets are far less robust than gold markets on the whole because of the long history and entrenched social position of gold. I do think you underestimate the effect on gold markets if they were flooded with someone trying to offload $70b of gold. That's about 7 times more gold than the entire contents of the U.S. gold reserve of 8,134 metric tons of gold. I really don't understand why you think it would be easy to sell that much gold at the prevailing price. Some random googling turned up about $100b/day of all gold changing hands worldwide, so you would have to sell it over a long period of time to avoid moving the price. If you were to try to keep your trades under say 0.5% of daily volume, or $500M, this would be the equivalent of trying to sell 1/14,000 of the total market cap each day, which would work out to about $12.5M/day if applied to bitcoin's market cap. Selling 0.5% of the daily volume of bitcoin would be more like $36.7M/day. The reason for the difference in those numbers is that bitcoin turns over more of its market cap daily than gold, proportionally. So dollar for dollar, of course $1B affects bitcoin more than gold, but in terms of turning over 1% of the market cap the data suggests this might actually be easier in bitcoin.

hw 9y ago

The thing is, bitcoin in its current state isn't exactly decentralized - a small amount of miners control a fairly large % of bitcoin's hashrate. Not to mention most of those miners are located in China, which is also where most of the ASICs (mining equipment) are produced. These miners could easily support an alternate fork of bitcoin by moving their hashrate over, thus crippling the bitcoin chain. This was the whole drama with Segwit2x

crsmith 9y ago

10x return isn't worth the downside

MarkMc 9y ago

> they like to demonize bitcoin which actually does something gold could never do The practical utility of Bitcoin represents only a very small fraction of its price. The price of bitcoin has climbed more than tenfold in a year - so what is causing this huge increase in demand? Compared to a year ago, are there 10 times as many drugs being purchased on the darknet with bitcoin? No. Are there 10 times as many Chinese people trying to get their money out of China? No. If anything, the utility of bitcoin has diminished as the transaction cost has risen. The only reasonable explanation is that most people are buying bitcoin simply to sell at a higher price later. In that regard it's the same as gold, but also the same as every bubble asset in history.