6 ms·

> But I don't understand everyone's certainty that cryptocurrencies are a fraud-bubble-scam-Ponzi-mania. When it blows up, you won't understand why the SEC did

> But I don't understand everyone's certainty that cryptocurrencies are a fraud-bubble-scam-Ponzi-mania. When it blows up, you won't understand why the SEC didn't protect you. By then, you'll realize it was a mirage all along, and you'll want someone to blame for letting it get so out of hand. Every piece of news you interpret will tell you that losing money was not your fault, because that's what you'll want to believe. On the flip side, the current price action is causing the same sort of confirmation bias--just in the opposite direction.

etr-strike 9y ago
Unlike people who invest in the stock market, no one buying cryptocurrencies in under the delusion they'll be bailed out.
- narrator 9y ago
  That there are still so many haters shows that this cryptocurrency thing has a way to go.
- bushido 9y ago
  True. Only if they have zero leverage at play. No borrowed money, no loan to default on. If not then there is most definitely going to be some element of a bailout. Anecdotal: but in the last month I have come across 6-8 people who have taken or know someone who has taken 2nd mortgages, maxed out their lines of credits, and credit cards to "invest" in crypto. I'm generally a-ok with investment loans (not from credit cards), they are a good resource to reduce portfolio risk - if the loan remain tax deductible. But what is currently transpiring is insanity. Someone will definitely get bailed out (hint: it will likely be the banks that's unknowingly provided the leverage).
  - tehlike 9y ago
    The current leverage from mortgages are probably not that big. What i am worried is the combined effect of high housing prices & relaxed loan requirements, and upcoming stock market burst.
- AlexCoventry 9y ago
  It's not actually a delusion, in the case of the stockmarket. That's actually happened a couple of times, now.
bushido 9y ago
The classic case of cognitive dissonance, gets you on the way up and the way down.
panarky 9y ago
> By then, you'll realize it was a mirage all along This is exactly my point. Why are you so certain? How can you tell the difference between this and any other technology adoption logistic curve? People make statements like you do with 100% confidence, and you could very well be right! But where do you get your certainty? And were you equally certain about the inevitable demise of cryptocurrencies when the market was 1% or 10% of its current size?
- spookthesunset 9y ago
  > Why are you so certain? Because the fundamentals of Bitcoin and The Blockchain are complete garbage. Both are solutions in search of problems. Neither solve any real world problems outside of how to conduct shady, illegal business (murder for hire, crypto-ransomware, mail-order bath-salt delivery) and both do a pretty piss-poor job of even that. This is why bitcoin will ultimately fail. It is a useless product. Full stop.
- johnwheeler 9y ago
  > But where do you get your certainty? By way of an understanding of human nature. From the book Bull! A history of boom and bust: “...A bubble, Galbraith observed, is always supported by the belief that there is something new in the world. The history of past cycles is dismissed as irrelevant.“ That’s it in a nutshell. It is a time-tested part of who we are, and it’s almost like you’re either born with the ability to see that or you’re not. I don’t know why. I don’t know how much the price will go up, but it going up, even to a million dollars a coin, means little. It will eventually go down and violently so, and some people will be badly hurt. Just people being people. Assets need to be productive in order to be true investments. Like farmland or businesses. Otherwise, you’re speculating on price appreciation. Look at gold over the last 100 years and overlay its price graph over the Dow Jones during the same period. They’re not even close. http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart http://www.macrotrends.net/1333/historical-gold-prices-100-y... http://stockcharts.com/freecharts/historical/marketindexes.html http://stockcharts.com/freecharts/historical/marketindexes.h... That’s the difference between speculation and investment.
  - 9y ago

etr-strike 9y ago

Unlike people who invest in the stock market, no one buying cryptocurrencies in under the delusion they'll be bailed out.

narrator 9y ago
That there are still so many haters shows that this cryptocurrency thing has a way to go.
bushido 9y ago
True. Only if they have zero leverage at play. No borrowed money, no loan to default on. If not then there is most definitely going to be some element of a bailout. Anecdotal: but in the last month I have come across 6-8 people who have taken or know someone who has taken 2nd mortgages, maxed out their lines of credits, and credit cards to "invest" in crypto. I'm generally a-ok with investment loans (not from credit cards), they are a good resource to reduce portfolio risk - if the loan remain tax deductible. But what is currently transpiring is insanity. Someone will definitely get bailed out (hint: it will likely be the banks that's unknowingly provided the leverage).
- tehlike 9y ago
  The current leverage from mortgages are probably not that big. What i am worried is the combined effect of high housing prices & relaxed loan requirements, and upcoming stock market burst.
AlexCoventry 9y ago
It's not actually a delusion, in the case of the stockmarket. That's actually happened a couple of times, now.

bushido 9y ago

The classic case of cognitive dissonance, gets you on the way up and the way down.

panarky 9y ago

> By then, you'll realize it was a mirage all along This is exactly my point. Why are you so certain? How can you tell the difference between this and any other technology adoption logistic curve? People make statements like you do with 100% confidence, and you could very well be right! But where do you get your certainty? And were you equally certain about the inevitable demise of cryptocurrencies when the market was 1% or 10% of its current size?

spookthesunset 9y ago
> Why are you so certain? Because the fundamentals of Bitcoin and The Blockchain are complete garbage. Both are solutions in search of problems. Neither solve any real world problems outside of how to conduct shady, illegal business (murder for hire, crypto-ransomware, mail-order bath-salt delivery) and both do a pretty piss-poor job of even that. This is why bitcoin will ultimately fail. It is a useless product. Full stop.
johnwheeler 9y ago
> But where do you get your certainty? By way of an understanding of human nature. From the book Bull! A history of boom and bust: “...A bubble, Galbraith observed, is always supported by the belief that there is something new in the world. The history of past cycles is dismissed as irrelevant.“ That’s it in a nutshell. It is a time-tested part of who we are, and it’s almost like you’re either born with the ability to see that or you’re not. I don’t know why. I don’t know how much the price will go up, but it going up, even to a million dollars a coin, means little. It will eventually go down and violently so, and some people will be badly hurt. Just people being people. Assets need to be productive in order to be true investments. Like farmland or businesses. Otherwise, you’re speculating on price appreciation. Look at gold over the last 100 years and overlay its price graph over the Dow Jones during the same period. They’re not even close. http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart http://www.macrotrends.net/1333/historical-gold-prices-100-y... http://stockcharts.com/freecharts/historical/marketindexes.html http://stockcharts.com/freecharts/historical/marketindexes.h... That’s the difference between speculation and investment.
- 9y ago