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This is going to sound completely ridiculous but I'm going to posit this anyway. Avoiding the debate of whether there are any widespread real-world usage for c

This is going to sound completely ridiculous but I'm going to posit this anyway. Avoiding the debate of whether there are any widespread real-world usage for cryptocurrencies, is it possible that cryptocurrency is valuable (and has long-term staying power) simply because the ecosystem surrounding it is so much fun for a non-negligible swath of people? I know this sounds ridiculous. But hear me out. The entire process of setting up exchange accounts, reading about alternative coins, jumping into the drama, worrying about massive gains or losses, buying hardware wallets, chatting with others doing the same thing, thinking about complex systems and new coins, etc. is a lot of fun. Could it be that cryptocurrencies are somewhat of a 'simulation currency trading market' that just so happens to allow you to cash in and cash out with fiat currency? I have little doubt that the current value of BTC and other coins will blow up in the future, and if you've got anything more than disposable income invested in it, you'll probably get burnt really bad. I think it's almost a given. But I suspect that the idea of cryptocurrency is here to stay, at least for my lifetime. Solely because it's fun. But of course like anything, I could be wrong.

deleted 9y ago
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jessriedel 9y ago
Basically, online gambling.
- wakkaflokka 9y ago
  Yeah, that's not the prettiest way of describing it ;) But if it really is just online gambling, is that in and of itself enough to sustain over the long term? I don't mean the ~20k BTC price, but the ecosystem itself. After all, casinos/lottery/gambling have been around for a long, long time.
brepl 9y ago
> I have little doubt that the current value of BTC and other coins will probably blow up in the future Blow up bigger, or blow up smaller?
- wakkaflokka 9y ago
  I mean a big price drop. I feel like insane drops in price and cryptocurrency go together like peanut butter and jelly.
laichzeit0 9y ago
> and if you've got anything more than disposable income invested in it, you'll probably get burnt really bad. Maybe, if you’re stupid enough not to have a stop loss. In that case you probably _deserve_ to lose everything.
- AznHisoka 9y ago
  It's very unlikely a stop loss will help you in case of a bitcoin 'run'.
- DougN7 9y ago
  Stop losses don't protect you if the fall is rapid enough and there are no buyers. Your order simply won't get executed (at least not where you want it). That's what I think will happen if the Bitcoin bubble bursts. Being 'intelligent' doesn't protect you from reality. But I'm sure you knew all that, and don't _deserve_ to lose your money.
  - laichzeit0 9y ago
    I wonder how that would work in reality. There are so many exchanges. You’d have to do a massive coordinated effort. Any “massive” drop on a single exchange would be seen as a great arbitrage opportunity and get eaten up.
    - DougN7 9y ago
      There are a lot of exchanges. But YOU (or any person in particular) trying to cash out at any point in time will need to move your coins to that exchange (and create an account, etc), and then try to sell. There aren't a lot of buyers when a bubble is popping. And not much potential for arbitrage when everything is going down. And with Bitcoin's slow confirmation rates, I think it would be worse than a typical stock market. No, if the bubble pops, it's going to be bad for everyone involved.
    - sfritz 9y ago
      This has already happened in reality with ETH on GDAX: https://www.google.com/amp/s/www.cnbc.com/amp/2017/06/22/ethereum-price-crash-10-cents-gdax-exchange-after-multimillion-dollar-trade.html https://www.google.com/amp/s/www.cnbc.com/amp/2017/06/22/eth...
fullshark 9y ago
I don't see how that's going to have long term staying power. It certainly helped it initially as the first adopters were largely curious hobbyists.
wslh 9y ago
> Avoiding the debate of whether there are any widespread real-world usage for cryptocurrencies... That is not debatable. Some of our customers pay our company in Argentina in BTC and at the end we have more money that if we use wire transfer via banks and with all the legal support. This is because banks in many countries don't offer a fair exchange rate and via Bitcoin we can reduce the difference. Most people in HN don't see benefits because they live in well developed countries with highly developed financial services.
- alextheparrot 9y ago
  How do you account for Bitcoin’s volatility in your accounting? I think this is one of my biggest critiques about using bitcoin as a payment method - I am much less certain about how many dollars I am receiving (At scale people can and will abuse this).
  - wslh 9y ago
    We use a third party in this case so from the accounting point of view we are receiving fiat currency. Regarding volatility, yes, we are exposed to volatility which until this point is less than the spread between the real exchange rate and the bank one. But obviously there is a risk associated with unexpected events.
berberous 9y ago
Bubbles are fun. People are enjoying everything you mention because of the volatility (see, e.g., the rollercoaster meme), and because they are making money. The same reason people in the 90s enjoyed day-trading Internet stocks, people in the 1600s enjoyed talking about Tulips, or people in the 00s enjoyed talking about flipping houses. At some point it will pop. People will despair and move on, except for the true believers. They will build something lasting, and less volatile, but no, I don't think the speculators will continue to find fun in something that is no longer moving up so rapidly (even if it's steadily increasing and creating value).
jatsign 9y ago
It's a collectible market, like beanie babies or pokemon.
pixie_ 9y ago
It's not just fun, it's really practical. Every time I have to wait days to transfer money between Robinhood, my bank, exchanges, etc.. I'm reminded of the value of crypto currency. Wire transfers and moving money internationally has higher fees and is more complicated than sending crypto. Also I don't need a bank account to store it. I don't need to go through middle-men like paypal, venmo, visa, etc.. to send it. The biggest problem with crypto right now is not enough people/business are using it so we have to currently exchange it to/from USD, etc.. Also the crypto of choice (bitcoin)'s parameters aren't optimal so something like litecoin is more practical.
SadWebDeveloper 9y ago
Best cryptocurrencies anology you could make is if you think them as they were part of an a online trading card game. In any TGC you can buy cards with fiat currencies and can sell yours cards for more cards or fiat currencies, the exchange value is speculative based on how many people wants that card and increases his value while more people is playing the game. For me bitcoin is a beautiful experiment on how things would work if you let a capitalist's control the market without a government limiting their activities.
- yeahsure 9y ago
  But governments are limiting activities through legislation and taxes. Say the crypto of your choice dips by 15 percent, but if you want to cash out you'll have to pay capital gains tax + the exchange fees. You then may decide to just leave the money in the market in hopes that it reverses the trend. Thus the market is not really working freely in my opinion.
  - SadWebDeveloper 9y ago
    Governments can only limit exchanges, maybe fine or prosecute miners but they can't control the exchange market in other countries, they can't ban transactions between two peers, they can't takeover your funds and more importantly they can't issue more currency to paid their loans. Sounds like a libertarian paradise but these also comes with double edge since it leaves his citizens without consumer protections, makes value speculative to trading volume therefore subject to foreign control and limits the government enforcing power. The market is free, exchanges aren't.
    - yeahsure 9y ago
      I'm talking about taxes distorting the market. A taxed market is not a libertarian paradise.
      - SadWebDeveloper 9y ago
        you are talking about taxes after exchanging cryptocurrency for a fiat currency, cryptocurrencies doesn't have taxes (well transactions cost kinda work like a community tax but in the real world there are also transactions costs and taxes), exchanging from crytpocurrency to fiat has. What stops you from exchanging your crytpocurrency to a fiat currency that doesn't impose taxes?
notyourday 9y ago
Setup from yesterday: We are at a restaurant in Manhattan. Place is reasonably priced by Manhattan standards (i.e. overpriced for 99.9% eveywhere else) but it delivers value - a very decent brunch for 2 people with a 2 glasses of wine + tip $80. Behind us there's a table of 3 people. They are debating if they want to order another glass of wine and basically tip nearly nothing to the waiter or if they tip to the waiter the customary 20% and go home: they dont have the money to do another round and tip. Kicker: for last twenty minutes they were talking how all of them on Friday invested into bitcoin and how they are going to be rich. This is the current bitcoin investor.
- ForRealsies 9y ago
  These people sound a lot more like normies than the NEETs in /biz/.
FLUX-YOU 9y ago
>simply because the ecosystem surrounding it is so much fun for a non-negligible swath of people? Sure, and also: 1) You can probably get away without paying taxes on it for now 2) It probably inherited some enthusiasm from the 2008-2017 Silicon Valley investors being a technical product 3) it's a new financial product that's not wrapped in 37 layers of redirection or rebundled existing products (like synthetic CDOs as they were explained to me by The Big Short). If you're bored of spreadsheets, learning Bitcoin was probably a breath of fresh air
acjohnson55 9y ago
> Avoiding the debate of whether there are any widespread real-world usage for cryptocurrencies, is it possible that cryptocurrency is valuable (and has long-term staying power) simply because the ecosystem surrounding it is so much fun for a non-negligible swath of people? Yes, but that is the basis of a fad, not something with long-term value.
deleted 9y ago
[deleted]
fudged71 9y ago
Altcoins = fantasy football for nerds :)
- sanmon3186 9y ago
  Why would that not include bitcoin, given that there are technically better alt-coins than bitcoin? I am just curious because I have seen similar analogies elsewhere.

deleted 9y ago

[deleted]

jessriedel 9y ago

Basically, online gambling.

wakkaflokka 9y ago
Yeah, that's not the prettiest way of describing it ;) But if it really is just online gambling, is that in and of itself enough to sustain over the long term? I don't mean the ~20k BTC price, but the ecosystem itself. After all, casinos/lottery/gambling have been around for a long, long time.

brepl 9y ago

> I have little doubt that the current value of BTC and other coins will probably blow up in the future Blow up bigger, or blow up smaller?

wakkaflokka 9y ago
I mean a big price drop. I feel like insane drops in price and cryptocurrency go together like peanut butter and jelly.

laichzeit0 9y ago

> and if you've got anything more than disposable income invested in it, you'll probably get burnt really bad. Maybe, if you’re stupid enough not to have a stop loss. In that case you probably _deserve_ to lose everything.

AznHisoka 9y ago
It's very unlikely a stop loss will help you in case of a bitcoin 'run'.
DougN7 9y ago
Stop losses don't protect you if the fall is rapid enough and there are no buyers. Your order simply won't get executed (at least not where you want it). That's what I think will happen if the Bitcoin bubble bursts. Being 'intelligent' doesn't protect you from reality. But I'm sure you knew all that, and don't _deserve_ to lose your money.
- laichzeit0 9y ago
  I wonder how that would work in reality. There are so many exchanges. You’d have to do a massive coordinated effort. Any “massive” drop on a single exchange would be seen as a great arbitrage opportunity and get eaten up.
  - DougN7 9y ago
    There are a lot of exchanges. But YOU (or any person in particular) trying to cash out at any point in time will need to move your coins to that exchange (and create an account, etc), and then try to sell. There aren't a lot of buyers when a bubble is popping. And not much potential for arbitrage when everything is going down. And with Bitcoin's slow confirmation rates, I think it would be worse than a typical stock market. No, if the bubble pops, it's going to be bad for everyone involved.
  - sfritz 9y ago
    This has already happened in reality with ETH on GDAX: https://www.google.com/amp/s/www.cnbc.com/amp/2017/06/22/ethereum-price-crash-10-cents-gdax-exchange-after-multimillion-dollar-trade.html https://www.google.com/amp/s/www.cnbc.com/amp/2017/06/22/eth...

fullshark 9y ago

I don't see how that's going to have long term staying power. It certainly helped it initially as the first adopters were largely curious hobbyists.

wslh 9y ago

> Avoiding the debate of whether there are any widespread real-world usage for cryptocurrencies... That is not debatable. Some of our customers pay our company in Argentina in BTC and at the end we have more money that if we use wire transfer via banks and with all the legal support. This is because banks in many countries don't offer a fair exchange rate and via Bitcoin we can reduce the difference. Most people in HN don't see benefits because they live in well developed countries with highly developed financial services.

alextheparrot 9y ago
How do you account for Bitcoin’s volatility in your accounting? I think this is one of my biggest critiques about using bitcoin as a payment method - I am much less certain about how many dollars I am receiving (At scale people can and will abuse this).
- wslh 9y ago
  We use a third party in this case so from the accounting point of view we are receiving fiat currency. Regarding volatility, yes, we are exposed to volatility which until this point is less than the spread between the real exchange rate and the bank one. But obviously there is a risk associated with unexpected events.

berberous 9y ago

Bubbles are fun. People are enjoying everything you mention because of the volatility (see, e.g., the rollercoaster meme), and because they are making money. The same reason people in the 90s enjoyed day-trading Internet stocks, people in the 1600s enjoyed talking about Tulips, or people in the 00s enjoyed talking about flipping houses. At some point it will pop. People will despair and move on, except for the true believers. They will build something lasting, and less volatile, but no, I don't think the speculators will continue to find fun in something that is no longer moving up so rapidly (even if it's steadily increasing and creating value).

jatsign 9y ago

It's a collectible market, like beanie babies or pokemon.

pixie_ 9y ago

It's not just fun, it's really practical. Every time I have to wait days to transfer money between Robinhood, my bank, exchanges, etc.. I'm reminded of the value of crypto currency. Wire transfers and moving money internationally has higher fees and is more complicated than sending crypto. Also I don't need a bank account to store it. I don't need to go through middle-men like paypal, venmo, visa, etc.. to send it. The biggest problem with crypto right now is not enough people/business are using it so we have to currently exchange it to/from USD, etc.. Also the crypto of choice (bitcoin)'s parameters aren't optimal so something like litecoin is more practical.

SadWebDeveloper 9y ago

Best cryptocurrencies anology you could make is if you think them as they were part of an a online trading card game. In any TGC you can buy cards with fiat currencies and can sell yours cards for more cards or fiat currencies, the exchange value is speculative based on how many people wants that card and increases his value while more people is playing the game. For me bitcoin is a beautiful experiment on how things would work if you let a capitalist's control the market without a government limiting their activities.

yeahsure 9y ago
But governments are limiting activities through legislation and taxes. Say the crypto of your choice dips by 15 percent, but if you want to cash out you'll have to pay capital gains tax + the exchange fees. You then may decide to just leave the money in the market in hopes that it reverses the trend. Thus the market is not really working freely in my opinion.
- SadWebDeveloper 9y ago
  Governments can only limit exchanges, maybe fine or prosecute miners but they can't control the exchange market in other countries, they can't ban transactions between two peers, they can't takeover your funds and more importantly they can't issue more currency to paid their loans. Sounds like a libertarian paradise but these also comes with double edge since it leaves his citizens without consumer protections, makes value speculative to trading volume therefore subject to foreign control and limits the government enforcing power. The market is free, exchanges aren't.
  - yeahsure 9y ago
    I'm talking about taxes distorting the market. A taxed market is not a libertarian paradise.
    - SadWebDeveloper 9y ago
      you are talking about taxes after exchanging cryptocurrency for a fiat currency, cryptocurrencies doesn't have taxes (well transactions cost kinda work like a community tax but in the real world there are also transactions costs and taxes), exchanging from crytpocurrency to fiat has. What stops you from exchanging your crytpocurrency to a fiat currency that doesn't impose taxes?

notyourday 9y ago

Setup from yesterday: We are at a restaurant in Manhattan. Place is reasonably priced by Manhattan standards (i.e. overpriced for 99.9% eveywhere else) but it delivers value - a very decent brunch for 2 people with a 2 glasses of wine + tip $80. Behind us there's a table of 3 people. They are debating if they want to order another glass of wine and basically tip nearly nothing to the waiter or if they tip to the waiter the customary 20% and go home: they dont have the money to do another round and tip. Kicker: for last twenty minutes they were talking how all of them on Friday invested into bitcoin and how they are going to be rich. This is the current bitcoin investor.

ForRealsies 9y ago
These people sound a lot more like normies than the NEETs in /biz/.

FLUX-YOU 9y ago

>simply because the ecosystem surrounding it is so much fun for a non-negligible swath of people? Sure, and also: 1) You can probably get away without paying taxes on it for now 2) It probably inherited some enthusiasm from the 2008-2017 Silicon Valley investors being a technical product 3) it's a new financial product that's not wrapped in 37 layers of redirection or rebundled existing products (like synthetic CDOs as they were explained to me by The Big Short). If you're bored of spreadsheets, learning Bitcoin was probably a breath of fresh air

acjohnson55 9y ago

> Avoiding the debate of whether there are any widespread real-world usage for cryptocurrencies, is it possible that cryptocurrency is valuable (and has long-term staying power) simply because the ecosystem surrounding it is so much fun for a non-negligible swath of people? Yes, but that is the basis of a fad, not something with long-term value.

deleted 9y ago

[deleted]

fudged71 9y ago

Altcoins = fantasy football for nerds :)

sanmon3186 9y ago
Why would that not include bitcoin, given that there are technically better alt-coins than bitcoin? I am just curious because I have seen similar analogies elsewhere.