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Bitcoin absolutely could go full bust. It is not a physical commodity, there is no utility outside of its perceived value. It is not a company, so it doesn't

by bcg1 9y ago

Bitcoin absolutely could go full bust. It is not a physical commodity, there is no utility outside of its perceived value. It is not a company, so it doesn't even have book value as its floor. And the technology is open source and well known, so there is nothing special or scarce about Bitcoin technology at this point. Even the companies that have capital investments in Bitcoin hardware could just repurpose that for a forked coin or possibly some other purpose altogether

hesdeadjim 9y ago
The best thing for Bitcoin as a technology would be to stabilize in price and have lightning networks solve the scalability problem. The moment we can actually use it for it's original intended purpose and not a speculative asset, the sooner we can see innovation take hold. Of course this ignores how hamstrung the technology is by the IRS treating it as property subject to capital gains tax. If I have to worry about paying tax anytime it is converted to fiat or exchanged for goods and services of real value, the less motivated I am to do so.
mrtksn 9y ago
I'm not sure about this argument. You can also make a perfect copy of Facebook and you wont have a facebook. The brand is what makes Bitcoin, just like most of the companies that have perfectly good competitors with the same or better product utility but nowhere the market or profits. For Bitcoin to die out, every single person needs to decide that doesn't want it.
- kybernetikos 9y ago
  There is a social network using facebook. If that network moved, it wouldn't matter how respected the facebook brand was. The brand primarily has value only in the effect it has on growing the network. The same is true for Bitcoin. Since people want bitcoin primarily because they believe other people want bitcoin, if 90% of the userbase shift to monero or ether or some other coin, there's really no reason for the 10% to hang around. Zero is a very plausible price for bitcoin.
  - mrtksn 9y ago
    Definitely, it's just that moving away from Bitcoin is not much more easier than moving away from Facebook. I agree that it can happen, like the exodus from Digg to reddit, but the brand is strong and it will have serious financial implications making it significantly harder than creating an account on the competitors product and continue as is.
aphextron 9y ago
>Bitcoin absolutely could go full bust. It is not a physical commodity, there is no utility outside of its perceived value. It is not a company, so it doesn't even have book value as its floor. And the technology is open source and well known, so there is nothing special or scarce about Bitcoin technology at this point. Even the companies that have capital investments in Bitcoin hardware could just repurpose that for a forked coin or possibly some other purpose altogether Disclaimer: I own zero cryptocurrencies, but have a decent knowledge of the space Here's why I think Bitcoin will never go bust entirely, regardless of the day to day price: it's the area under the curve of POW energy expenditure. At this point, so much energy has been expended mining bitcoin that that in itself creates value. Even if the price crashes 100x it will always be worth something. And whatever that "something" is, no one can say yet. But I would wager that it's much higher than whatever the initial players bought in for (in terms of cash or energy spent mining). Sure plenty of other altcoins can come along in the future, but catching up with the level of work that has been done on the Bitcoin blockchain at this point seems impossible to ever do. It's simply a matter of compute power that is physically available.
- bcg1 9y ago
  Fair enough, maybe it depends on your definition of "full bust". But consider this... if the price were to go back to where it was just a year ago before the current mania (which is a common thing to happen when a financial bubble pops, after overcompensating to the downside) then it would be a 95% retracement from the highs (where, almost self-evidently, many people were buyers). And BTW a 95% retracement requires 20,000% gains to break even. If you gave me a $1000 and I gave you $50 back, I think most people would say that I took all their money, even though technically they could still buy a couple pizzas or something. So, again, it just depends on your definition of "full bust"
- imtringued 9y ago
  >At this point, so much energy has been expended mining bitcoin that that in itself creates value. Bitcoins security relies on current hashing power and is completely indepent from past computations. If bitcoin falls to let's say $100 then major mining pools can do a 51% attack and make all the expended energy worthless.

by bcg1 9y ago

hesdeadjim 9y ago

The best thing for Bitcoin as a technology would be to stabilize in price and have lightning networks solve the scalability problem. The moment we can actually use it for it's original intended purpose and not a speculative asset, the sooner we can see innovation take hold. Of course this ignores how hamstrung the technology is by the IRS treating it as property subject to capital gains tax. If I have to worry about paying tax anytime it is converted to fiat or exchanged for goods and services of real value, the less motivated I am to do so.

mrtksn 9y ago

I'm not sure about this argument. You can also make a perfect copy of Facebook and you wont have a facebook. The brand is what makes Bitcoin, just like most of the companies that have perfectly good competitors with the same or better product utility but nowhere the market or profits. For Bitcoin to die out, every single person needs to decide that doesn't want it.

kybernetikos 9y ago
There is a social network using facebook. If that network moved, it wouldn't matter how respected the facebook brand was. The brand primarily has value only in the effect it has on growing the network. The same is true for Bitcoin. Since people want bitcoin primarily because they believe other people want bitcoin, if 90% of the userbase shift to monero or ether or some other coin, there's really no reason for the 10% to hang around. Zero is a very plausible price for bitcoin.
- mrtksn 9y ago
  Definitely, it's just that moving away from Bitcoin is not much more easier than moving away from Facebook. I agree that it can happen, like the exodus from Digg to reddit, but the brand is strong and it will have serious financial implications making it significantly harder than creating an account on the competitors product and continue as is.

aphextron 9y ago

>Bitcoin absolutely could go full bust. It is not a physical commodity, there is no utility outside of its perceived value. It is not a company, so it doesn't even have book value as its floor. And the technology is open source and well known, so there is nothing special or scarce about Bitcoin technology at this point. Even the companies that have capital investments in Bitcoin hardware could just repurpose that for a forked coin or possibly some other purpose altogether Disclaimer: I own zero cryptocurrencies, but have a decent knowledge of the space Here's why I think Bitcoin will never go bust entirely, regardless of the day to day price: it's the area under the curve of POW energy expenditure. At this point, so much energy has been expended mining bitcoin that that in itself creates value. Even if the price crashes 100x it will always be worth something. And whatever that "something" is, no one can say yet. But I would wager that it's much higher than whatever the initial players bought in for (in terms of cash or energy spent mining). Sure plenty of other altcoins can come along in the future, but catching up with the level of work that has been done on the Bitcoin blockchain at this point seems impossible to ever do. It's simply a matter of compute power that is physically available.

bcg1 9y ago
Fair enough, maybe it depends on your definition of "full bust". But consider this... if the price were to go back to where it was just a year ago before the current mania (which is a common thing to happen when a financial bubble pops, after overcompensating to the downside) then it would be a 95% retracement from the highs (where, almost self-evidently, many people were buyers). And BTW a 95% retracement requires 20,000% gains to break even. If you gave me a $1000 and I gave you $50 back, I think most people would say that I took all their money, even though technically they could still buy a couple pizzas or something. So, again, it just depends on your definition of "full bust"
imtringued 9y ago
>At this point, so much energy has been expended mining bitcoin that that in itself creates value. Bitcoins security relies on current hashing power and is completely indepent from past computations. If bitcoin falls to let's say $100 then major mining pools can do a 51% attack and make all the expended energy worthless.