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Understanding how Bitcoin and cryptocurrencies work in general doesn't make them suddenly have more value. I really wish supporters would stop parroting the "if

Understanding how Bitcoin and cryptocurrencies work in general doesn't make them suddenly have more value. I really wish supporters would stop parroting the "if you only understood you would see how good of an investment this is" argument. Just because you read the white paper and spend 20 hours a day refreshing news alerts for bitcoin doesn't make your investment a good one. I agree this article doesn't add anything to the discussion. If anything, Bloomberg is making out by selling the proverbial shovels around here by fueling the hype machine.

samsonradu 9y ago
This 100 times. Crypto currencies can be both successful (read widely-adopted) and have a sane, stable valuation. It is harder and harder to argue around bitcoin since a lot of people have taken sides already and have “skin-in-the-game”. Every time one says crypto is overvalued the reply looks like: “you don’t understand”, many times coming from somebody who barely understands what distributed and consensus mean. No pun intended.
teekert 9y ago
There is a difference between people understanding why Bitcoin is like gold and people that say it can't have value because it's "made out of thin air." Not saying Buffet is one of those but such people pop up every now and then.
- ameister14 9y ago
  I honestly don't think people understand why Bitcoin is like gold because Bitcoin shares almost no characteristics with gold.
  - teekert 9y ago
    It's more like gold than money because Gold is finite and it takes effort to mine it but anyone can do it, both things are not true for money.
    - ameister14 9y ago
      It's less like gold than money because it isn't associated with a history of sustained value and cannot be easily exchanged for currency on any grand scale. It's also unlike gold in virtually every other way - it has infinite and infinitely available substitutes, it doesn't have physical characteristics and it's very easy to steal.
      - teekert 9y ago
        There is quite some recent history of sustained value and perhaps the gold price also fluctuated wildly in the beginning until it settled. I can convert BTC to Euros from my lazy chair, try doing that with gold. Gold also has substitutes, almost any element of chemical substance has value but they differ in their practical use. Gold is shiny and chemically stable and not to abundant but Iridium can just as well function in the same way. As can oil, etc. I'll argue that gold you keep at home is easier to steal than my BTC, which are also at home but you need to break in and get my computer or you have to be a pretty good hacker.
rullelito 9y ago
Something I think is forgotten is that people who understand blockchain and Bitcoin don't necessarily understand investing. Bitcoin seems to be the first investment for a lot of people. Supply-and-demand, cash flow and market psychology is probably something you are not that used to thinking about. (hmm, seems like I said about the same thing as you did, read your comment too quickly)
- nxsynonym 9y ago
  Good point. There's a lot of emphasis in tech around "disrupting". While in general that leads to a ton of innovation and technological progress, I don't think disrupting fiat/the economy as we know it is as easy as a tech-driven payment alternative. And just to be clear - I support the development and experimenting around Bitcoin/Cryptocurrency. I really believe there are yet-to-be-seen uses for the blockchain technology that could have severe, lasting impacts (hopefully for good!). What I have a major problem with is the money-grubbers pushing the technology as a get-rich-quick scheme. It overshadows any discussion around progress or development and is just another way for the rich to get richer.
spookthesunset 9y ago
Exactly, cool tech doesn't make something valuable. Solving real world, widespread meatspace problems makes something valuable. I have yet to see any real-world, widespread problem in meatspace that Bitcoin or the blockchain solves.
icelancer 9y ago
Not understanding Bitcoin and cryptocurrency doesn't make you right just because you're one of the world's best value investors, either. (This coming from someone who holds quite a bit of Vanguard index funds and a small number of cryptocurrency in his portfolio.)

samsonradu 9y ago

This 100 times. Crypto currencies can be both successful (read widely-adopted) and have a sane, stable valuation. It is harder and harder to argue around bitcoin since a lot of people have taken sides already and have “skin-in-the-game”. Every time one says crypto is overvalued the reply looks like: “you don’t understand”, many times coming from somebody who barely understands what distributed and consensus mean. No pun intended.

teekert 9y ago

There is a difference between people understanding why Bitcoin is like gold and people that say it can't have value because it's "made out of thin air." Not saying Buffet is one of those but such people pop up every now and then.

ameister14 9y ago
I honestly don't think people understand why Bitcoin is like gold because Bitcoin shares almost no characteristics with gold.
- teekert 9y ago
  It's more like gold than money because Gold is finite and it takes effort to mine it but anyone can do it, both things are not true for money.
  - ameister14 9y ago
    It's less like gold than money because it isn't associated with a history of sustained value and cannot be easily exchanged for currency on any grand scale. It's also unlike gold in virtually every other way - it has infinite and infinitely available substitutes, it doesn't have physical characteristics and it's very easy to steal.
    - teekert 9y ago
      There is quite some recent history of sustained value and perhaps the gold price also fluctuated wildly in the beginning until it settled. I can convert BTC to Euros from my lazy chair, try doing that with gold. Gold also has substitutes, almost any element of chemical substance has value but they differ in their practical use. Gold is shiny and chemically stable and not to abundant but Iridium can just as well function in the same way. As can oil, etc. I'll argue that gold you keep at home is easier to steal than my BTC, which are also at home but you need to break in and get my computer or you have to be a pretty good hacker.

rullelito 9y ago

Something I think is forgotten is that people who understand blockchain and Bitcoin don't necessarily understand investing. Bitcoin seems to be the first investment for a lot of people. Supply-and-demand, cash flow and market psychology is probably something you are not that used to thinking about. (hmm, seems like I said about the same thing as you did, read your comment too quickly)

nxsynonym 9y ago
Good point. There's a lot of emphasis in tech around "disrupting". While in general that leads to a ton of innovation and technological progress, I don't think disrupting fiat/the economy as we know it is as easy as a tech-driven payment alternative. And just to be clear - I support the development and experimenting around Bitcoin/Cryptocurrency. I really believe there are yet-to-be-seen uses for the blockchain technology that could have severe, lasting impacts (hopefully for good!). What I have a major problem with is the money-grubbers pushing the technology as a get-rich-quick scheme. It overshadows any discussion around progress or development and is just another way for the rich to get richer.

spookthesunset 9y ago

Exactly, cool tech doesn't make something valuable. Solving real world, widespread meatspace problems makes something valuable. I have yet to see any real-world, widespread problem in meatspace that Bitcoin or the blockchain solves.

icelancer 9y ago

Not understanding Bitcoin and cryptocurrency doesn't make you right just because you're one of the world's best value investors, either. (This coming from someone who holds quite a bit of Vanguard index funds and a small number of cryptocurrency in his portfolio.)