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that crypto currencies are really just starting and there is a very high ceiling Starting at what? What is the value proposition that is actually in play here

that crypto currencies are really just starting and there is a very high ceiling Starting at what? What is the value proposition that is actually in play here, for which there is some hard evidence of it's existence, other than a speculative frenzy? It's a bit galling how many people this go 'round are just outright saying "yeah, it's a ponzi, come on guys hop on! there's a high ceiling! hope you get your chair when the music stops!"

barrkel 9y ago
If you think that some future economy will run on cryptocurrency (not totally far fetched IMO) and that currency will have network effects (I don't really see this yet, apart from deflation via speculation, which will stop eventually, it's not stable) then there's a possibility of a winner takes all outcome. But it's very easy to doubt any specific currency will be the final winner.
- canoebuilder 9y ago
  This is what I've always thought, to find a real footing there has to be some economy to which bitcoin/some cryptocurrency is the lingua franca, the closest we've seen in that regard is silk road, et al. and ransomware, if you want to call those economies. But here's the problem with this idea as being some buoy for bitcoin/cryptocurrencies, once an economy of this sort develops with some semblance of structure, that market is going to seek out inefficiencies. First on the chopping block? A massively inefficient distributed currency system. For this reason I think any sustainable use case of a bitcoin like system is necessarily rather niche, and rather 'seedy' or worse, ransomware, etc. But if all the bitcoin dreamers fade away, it becomes much easier to counteract the use of btc-like systems for ransomware extortions and the like.
- saalweachter 9y ago
  Even in that case the price/market cap is getting absurd. The nominal market cap of Bitcoin is like 1/10th the US money supply (M1) and 1/20th the total gold supply. And people on these threads are still saying they think it has another 100x or more in it!
Frogolocalypse 9y ago
> What is the value proposition that is actually in play here, Debt-fueled inflation resistant money. It is right in the statement in the genesis block detailing a bank bailout. https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block
- canoebuilder 9y ago
  for which there is some hard evidence of it's existence Who is transacting monetarily in bitcoin? Why do they find it superior to other options? Is this a growing cohort?
  - Frogolocalypse 9y ago
    It isn't momentary. It is decentralized savings.
    - PeterisP 9y ago
      The total long-term value of bitcoin ecosystem is the value of bitcoin as a transactional instrument. There's a plausible justification to invest in bitcoin now if you believe that in future it'll have a large total capitalization because be used as valuable information of e.g. uncensorable pseudonymous transactions, and you'll be able to sell your bitcoins with profit to those people who'll want to use them for transacting. However, it's not reasonable to state that the valuation is justified by it being used solely as a savings/investment vehicle; because what is the future exit for that investment? When a number savers in aggregate decide to withdraw their savings from the ecosystem at some point (which is inevitable, the global economy has cycles and at some point people will want that), to whom do they sell bitcoin? If there's a different use (as the one described above), then that's an exit that will set the total value of bitcoin at such an event; but if the only use case is "decentralized savings" then it's comparable to the "greater fool" motivation, you can sell/withdraw while there's someone else who wants to enter the product, but when the aggregate motion switches from saving to withdrawing, the value suddenly drops to zero - exactly the behavior that should be impossible in a good savings (as opposed to speculation) vehicle.

barrkel 9y ago

If you think that some future economy will run on cryptocurrency (not totally far fetched IMO) and that currency will have network effects (I don't really see this yet, apart from deflation via speculation, which will stop eventually, it's not stable) then there's a possibility of a winner takes all outcome. But it's very easy to doubt any specific currency will be the final winner.

canoebuilder 9y ago
This is what I've always thought, to find a real footing there has to be some economy to which bitcoin/some cryptocurrency is the lingua franca, the closest we've seen in that regard is silk road, et al. and ransomware, if you want to call those economies. But here's the problem with this idea as being some buoy for bitcoin/cryptocurrencies, once an economy of this sort develops with some semblance of structure, that market is going to seek out inefficiencies. First on the chopping block? A massively inefficient distributed currency system. For this reason I think any sustainable use case of a bitcoin like system is necessarily rather niche, and rather 'seedy' or worse, ransomware, etc. But if all the bitcoin dreamers fade away, it becomes much easier to counteract the use of btc-like systems for ransomware extortions and the like.
saalweachter 9y ago
Even in that case the price/market cap is getting absurd. The nominal market cap of Bitcoin is like 1/10th the US money supply (M1) and 1/20th the total gold supply. And people on these threads are still saying they think it has another 100x or more in it!

Frogolocalypse 9y ago

> What is the value proposition that is actually in play here, Debt-fueled inflation resistant money. It is right in the statement in the genesis block detailing a bank bailout. https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block

canoebuilder 9y ago
for which there is some hard evidence of it's existence Who is transacting monetarily in bitcoin? Why do they find it superior to other options? Is this a growing cohort?
- Frogolocalypse 9y ago
  It isn't momentary. It is decentralized savings.
  - PeterisP 9y ago
    The total long-term value of bitcoin ecosystem is the value of bitcoin as a transactional instrument. There's a plausible justification to invest in bitcoin now if you believe that in future it'll have a large total capitalization because be used as valuable information of e.g. uncensorable pseudonymous transactions, and you'll be able to sell your bitcoins with profit to those people who'll want to use them for transacting. However, it's not reasonable to state that the valuation is justified by it being used solely as a savings/investment vehicle; because what is the future exit for that investment? When a number savers in aggregate decide to withdraw their savings from the ecosystem at some point (which is inevitable, the global economy has cycles and at some point people will want that), to whom do they sell bitcoin? If there's a different use (as the one described above), then that's an exit that will set the total value of bitcoin at such an event; but if the only use case is "decentralized savings" then it's comparable to the "greater fool" motivation, you can sell/withdraw while there's someone else who wants to enter the product, but when the aggregate motion switches from saving to withdrawing, the value suddenly drops to zero - exactly the behavior that should be impossible in a good savings (as opposed to speculation) vehicle.