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I think the point he’s making is that everybody could not cash out at the listed price at once if something were to happen that made holding bitcoin undesirable

I think the point he’s making is that everybody could not cash out at the listed price at once if something were to happen that made holding bitcoin undesirable (such as say, a possible crack for their elliptic curve crypto implementation). However, the same is true for banks which only keep 10% of deposits. Bank deposits are FDIC insured up to $250,000 though.

krrrh 9y ago
Banks are also backed by the fed which is there to prevent failures, and the government through too big to fail. Even in the case of the Bank of the United States (which despite its name was just an ordinary bank) whose failure in 1930 kicked off the bank panics of the 1930s, when it was liquidated the depositors received 92.5% of their deposits. Most failures of crypto exchanges have resulted in a total or near-total loss for depositors, and triggered rushes to the exit on other exchanges.
g09980 9y ago
But the same would happen for any similar-functioning market. If every AAPL shareholder tried to simultaneously sell for $173.97 (current price), many would end up disappointed. Instead, the article seems like FUD that would confuse non-tech users into thinking they couldn't cash out their 0.5 BTC at the price they're seeing on their exchange (they can.)
- coldtea 9y ago
  >But the same would happen for any similar-functioning market. If every AAPL shareholder tried to simultaneously sell for $173.97 (current price), many would end up disappointed. Yes. But if one thinks Bitcoin, with its distribution of holders, price volatility, and "quality" of trading implementations etc has the same tolerances as the regular stock market (which indeed can crash too), one is beyond deluded. It's like saying "sure, I can crash on my custom built hot-rod made from a modified jet ski if I go into a wall, but so can someone in their Hammer". The impact, and the implications are not going to be the same... (Heck, when the market tried to go trashing, it got a 1 trillion bailout to help it out. Who is gonna do that for bitcoin?)
  - paulryanrogers 9y ago
    Did you mean Hummer?
    - coldtea 9y ago
      Yes, I did.
- Retric 9y ago
  They would however end up with more than 0$ because Apple has cash on hand representing real value. Bitcoin on the other hand is only worth bitcoins so it can crash to zero. Historically, stock market corrections may be ~50% but they don't hit 95% because of underlying value. Other bubbles can be much harsher.
sah2ed 9y ago
> if something were to happen that made holding bitcoin undesirable (such as say, a possible crack for their elliptic curve crypto implementation). A much more realistic scenario that could make bitcoin undesirable to hold would be something like all major central banks collectively viewing bitcoin as a threat then working in concert to target the weakest link of the cryptocurrency: exchanges that facilitate conversions to fiat.
- omarforgotpwd 9y ago
  Sure, definitely. There are many possible scenarios, like a major exchange like Coinbase, Bitfinex, or some chinese exchange going down / getting hacked. Wouldn’t even have to be all the worlds central banks: could just be one new regulation or rule in China.
  - sah2ed 9y ago
    MtGox was a major exchange and it went down but it didn't deter people from investing in bitcoins, they merely moved their business to other exchanges. Your original comment talked about a scenario where people decide against bitcoin and such a scenario can only play out if there is too much uncertainty to make them a viable investment. Because bitcoin is decentralized, the only way major governments can try to influence it and related activities like exchanges is by acting in concert. Anything short of this will not work against it as has happened repeatedly with past attempts by individual governments like China.
    - omarforgotpwd 9y ago
      "They merely moved their business to other exchanges" The price crashed from like $1200 to $200 and it took years for it to recover. All those Moms and Dads and Grandmas who bought $10,000 of Bitcoin after Thanksgiving dinner hoping it would turn into $100,000 within a month will certainly get hit if the price falls to $1600 and doesn't recover for 3 years. All it takes is a change in the media narrative that scares away a sizable chunk of the market (say, institutional investors or mom and pops, or Chinese people)
celticninja 9y ago
That's the same for every asset ever.

krrrh 9y ago

Banks are also backed by the fed which is there to prevent failures, and the government through too big to fail. Even in the case of the Bank of the United States (which despite its name was just an ordinary bank) whose failure in 1930 kicked off the bank panics of the 1930s, when it was liquidated the depositors received 92.5% of their deposits. Most failures of crypto exchanges have resulted in a total or near-total loss for depositors, and triggered rushes to the exit on other exchanges.

g09980 9y ago

But the same would happen for any similar-functioning market. If every AAPL shareholder tried to simultaneously sell for $173.97 (current price), many would end up disappointed. Instead, the article seems like FUD that would confuse non-tech users into thinking they couldn't cash out their 0.5 BTC at the price they're seeing on their exchange (they can.)

coldtea 9y ago
>But the same would happen for any similar-functioning market. If every AAPL shareholder tried to simultaneously sell for $173.97 (current price), many would end up disappointed. Yes. But if one thinks Bitcoin, with its distribution of holders, price volatility, and "quality" of trading implementations etc has the same tolerances as the regular stock market (which indeed can crash too), one is beyond deluded. It's like saying "sure, I can crash on my custom built hot-rod made from a modified jet ski if I go into a wall, but so can someone in their Hammer". The impact, and the implications are not going to be the same... (Heck, when the market tried to go trashing, it got a 1 trillion bailout to help it out. Who is gonna do that for bitcoin?)
- paulryanrogers 9y ago
  Did you mean Hummer?
  - coldtea 9y ago
    Yes, I did.
Retric 9y ago
They would however end up with more than 0$ because Apple has cash on hand representing real value. Bitcoin on the other hand is only worth bitcoins so it can crash to zero. Historically, stock market corrections may be ~50% but they don't hit 95% because of underlying value. Other bubbles can be much harsher.

sah2ed 9y ago

> if something were to happen that made holding bitcoin undesirable (such as say, a possible crack for their elliptic curve crypto implementation). A much more realistic scenario that could make bitcoin undesirable to hold would be something like all major central banks collectively viewing bitcoin as a threat then working in concert to target the weakest link of the cryptocurrency: exchanges that facilitate conversions to fiat.

omarforgotpwd 9y ago
Sure, definitely. There are many possible scenarios, like a major exchange like Coinbase, Bitfinex, or some chinese exchange going down / getting hacked. Wouldn’t even have to be all the worlds central banks: could just be one new regulation or rule in China.
- sah2ed 9y ago
  MtGox was a major exchange and it went down but it didn't deter people from investing in bitcoins, they merely moved their business to other exchanges. Your original comment talked about a scenario where people decide against bitcoin and such a scenario can only play out if there is too much uncertainty to make them a viable investment. Because bitcoin is decentralized, the only way major governments can try to influence it and related activities like exchanges is by acting in concert. Anything short of this will not work against it as has happened repeatedly with past attempts by individual governments like China.
  - omarforgotpwd 9y ago
    "They merely moved their business to other exchanges" The price crashed from like $1200 to $200 and it took years for it to recover. All those Moms and Dads and Grandmas who bought $10,000 of Bitcoin after Thanksgiving dinner hoping it would turn into $100,000 within a month will certainly get hit if the price falls to $1600 and doesn't recover for 3 years. All it takes is a change in the media narrative that scares away a sizable chunk of the market (say, institutional investors or mom and pops, or Chinese people)

celticninja 9y ago

That's the same for every asset ever.