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I think the bigger danger is from groupthink expectation that the coin markets follow a boom-bust on an annual basis due to the Chinese New Year. They see now a

I think the bigger danger is from groupthink expectation that the coin markets follow a boom-bust on an annual basis due to the Chinese New Year. They see now as a good time to pick up cheap coin from Asia. They expect to be 3x up in the Autumn and to ride a wild ride up next Christmas to come crashing down in the Chinese New Year. These people believe there are only so many coins and that it is these coins that have value, regardless of how much they are worth in USD. For them it is how well their coin compares to bitcoin that matters. They think they can ride out any crash as they are 'bound' to be 10x up next year as more people start using crypto to store their wealth. I do not believe that most people giving bad advice on coin are deliberately giving bad advice or aware that their advice is founded on poor information, fear and greed. In this environment there is a frenzy to get in on the next ICO so scammers don't have to try very hard to scam. I can see that a bitcoin miner has put together a business model and with that some risk management. They calculate the ROI and hopefully they get the numbers right and profit after paying off the kit. However, I do not believe most coin 'investors' are doing risk management properly, they are like a herd of naive day traders from the 1990's losing their savings but getting ever more coin, thinking they are up because one of their coins is up against bitcoin. It is not so much the scammers but the echo chamber and the FOMO that is the problem here.

justaman 9y ago
There are hundreds of coins out there. 99% of them will fail. Even the 1% is a silly investment when compared to physical gold.
- cendana 9y ago
  coins, so many coins here https://www.coingecko.com/en https://www.coingecko.com/en What 1% are compared to physical gold? I think only Bitcoin is usually compared to gold, Ethereum has a large supply and soft cap
- rdlecler1 9y ago
  Can you justify that? Other than jewelery and some industrial purposes what makes gold so valuable?
  - ggg9990 9y ago
    Gold is more valuable than cryptocurrency because 1) for a “by acclamation” store of value, the thousands of years and billions of people who recognize gold as an asset is a big advantage, and 2) you can’t make “forks” of gold unlike Bitcoin Cash, Dogecoin, etc.
    - kylell 9y ago
      if you fork bitcoin you don't make more bitcoin, a forked bitcoin coin isn't exchangeable with the original, bitcoin value is in the community who reconize it as an asset, how you say, people recognize gold as an asset. Except history bitcoin has many other advantages to gold, and history is not that huge argument, times change.
    - andrewla 9y ago
      What's funny about this comment is that literally every extent currency in the world is a fork of gold.
      - vkou 9y ago
        Yes, but unlike Dogecoin, those currencies have an army, a navy, and a tax collection office to give them value.
        Casseres 9y ago
        I read a comment on Reddit where some people were speculating about the future of their coin. (This is a coin with "masternodes" that vote on how to spend a discretionary mining tax.) They speculated that one day they might vote to hire mercenaries to protect the coin's value.
        vkou 9y ago
        At the point that you need to hire mercenaries to protect your coin's value, why not just use them to rob people, or extort protection payments?
- dullgiulio 9y ago
  Yes. As I keep on saying, the fact that there are so many coins is the demonstration that cryptocurrencies are not scarce and thus are not an alternative to gold.
  - jaawn 9y ago
    This is a really good point, I hadn't thought of this before. Because of how many other options there are, the "scarcity" of Bitcoin is only real if there is something that is going to prevent other cryptocurrencies from being used, or promote Bitcoin above all others. Given that Bitcoin has been demonstrated to be inferior at scale vs. some of the other options, I don't see a reason to expect that it will continue to be the most prolific in the long term. By extension, there doesn't seem to be an obvious indication that any of them will see a lot of use in the long term.
    - acdha 9y ago
      It’s especially important when you think about mainstream adoption: the assumption is that the whole world will pile on board and make the early adopters fabulously rich but it seems at least as likely that some major companies would create their own alternative – possibly using the same software — and heavily promote it through their existing merchant accounts, cards, etc. rather be than letting someone else capture that profit. Right now, the lack of consumer demand means there’s no reason to bother but if that changes I’d be surprised if nobody tried and there’s little lock-in to prevent people from bailing to whoever gives better terms.
jaawn 9y ago
To piggy back on something you said: a big issue I noticed recently is that it seems a lot of the websites people use to track this stuff have charts in <other coin> vs. BTC rather than <other coin> vs. USD (or some other established currency). As BTC goes up and down, these charts are extremely misleading due to the volatility. This dramatically pushes things into fantasy speculation land since people are valuating their speculative investments based on another very speculative investment. If BTC drops in USD price, and your altcoin of choice gains slightly vs BTC, these charts would show a "gain" when I think in reality it is still a loss.
netsharc 9y ago
This blog post made everything a lot clearer to me: https://davidgerard.co.uk/blockchain/2018/01/04/why-you-cant-cash-out-pt-3-bitcoin-is-not-a-ponzi-scheme-it-just-works-like-one/ https://davidgerard.co.uk/blockchain/2018/01/04/why-you-cant... > [...] “market cap” is a misleading and useless number. If someone bought a fraction of a bitcoin at $19,000 per BTC, that doesn’t make anyone else a “Bitcoin billionaire” whose bitcoins could be sold at $19,000 each — the total actual money recoverable from the system hasn’t gone up. > Try realising any substantial fraction of those paper billions and watch the price crash — the actual money doesn’t exist for everyone to cash out. At some point, there will be a rush for the exits, and most can’t possibly make it out with their “gains.” If bitcoins were tulips, and some cosmic event made them deathly radioactive tomorrow, you wouldn't find any buyer, however steep your discount. But I suppose there'll still be open "buy" orders that will buy at $5000, or $1000, etc...

justaman 9y ago

There are hundreds of coins out there. 99% of them will fail. Even the 1% is a silly investment when compared to physical gold.

cendana 9y ago
coins, so many coins here https://www.coingecko.com/en https://www.coingecko.com/en What 1% are compared to physical gold? I think only Bitcoin is usually compared to gold, Ethereum has a large supply and soft cap
rdlecler1 9y ago
Can you justify that? Other than jewelery and some industrial purposes what makes gold so valuable?
- ggg9990 9y ago
  Gold is more valuable than cryptocurrency because 1) for a “by acclamation” store of value, the thousands of years and billions of people who recognize gold as an asset is a big advantage, and 2) you can’t make “forks” of gold unlike Bitcoin Cash, Dogecoin, etc.
  - kylell 9y ago
    if you fork bitcoin you don't make more bitcoin, a forked bitcoin coin isn't exchangeable with the original, bitcoin value is in the community who reconize it as an asset, how you say, people recognize gold as an asset. Except history bitcoin has many other advantages to gold, and history is not that huge argument, times change.
  - andrewla 9y ago
    What's funny about this comment is that literally every extent currency in the world is a fork of gold.
    - vkou 9y ago
      Yes, but unlike Dogecoin, those currencies have an army, a navy, and a tax collection office to give them value.
      - Casseres 9y ago
        I read a comment on Reddit where some people were speculating about the future of their coin. (This is a coin with "masternodes" that vote on how to spend a discretionary mining tax.) They speculated that one day they might vote to hire mercenaries to protect the coin's value.
        vkou 9y ago
        At the point that you need to hire mercenaries to protect your coin's value, why not just use them to rob people, or extort protection payments?
dullgiulio 9y ago
Yes. As I keep on saying, the fact that there are so many coins is the demonstration that cryptocurrencies are not scarce and thus are not an alternative to gold.
- jaawn 9y ago
  This is a really good point, I hadn't thought of this before. Because of how many other options there are, the "scarcity" of Bitcoin is only real if there is something that is going to prevent other cryptocurrencies from being used, or promote Bitcoin above all others. Given that Bitcoin has been demonstrated to be inferior at scale vs. some of the other options, I don't see a reason to expect that it will continue to be the most prolific in the long term. By extension, there doesn't seem to be an obvious indication that any of them will see a lot of use in the long term.
  - acdha 9y ago
    It’s especially important when you think about mainstream adoption: the assumption is that the whole world will pile on board and make the early adopters fabulously rich but it seems at least as likely that some major companies would create their own alternative – possibly using the same software — and heavily promote it through their existing merchant accounts, cards, etc. rather be than letting someone else capture that profit. Right now, the lack of consumer demand means there’s no reason to bother but if that changes I’d be surprised if nobody tried and there’s little lock-in to prevent people from bailing to whoever gives better terms.

jaawn 9y ago

To piggy back on something you said: a big issue I noticed recently is that it seems a lot of the websites people use to track this stuff have charts in <other coin> vs. BTC rather than <other coin> vs. USD (or some other established currency). As BTC goes up and down, these charts are extremely misleading due to the volatility. This dramatically pushes things into fantasy speculation land since people are valuating their speculative investments based on another very speculative investment. If BTC drops in USD price, and your altcoin of choice gains slightly vs BTC, these charts would show a "gain" when I think in reality it is still a loss.

netsharc 9y ago

This blog post made everything a lot clearer to me: https://davidgerard.co.uk/blockchain/2018/01/04/why-you-cant-cash-out-pt-3-bitcoin-is-not-a-ponzi-scheme-it-just-works-like-one/ https://davidgerard.co.uk/blockchain/2018/01/04/why-you-cant... > [...] “market cap” is a misleading and useless number. If someone bought a fraction of a bitcoin at $19,000 per BTC, that doesn’t make anyone else a “Bitcoin billionaire” whose bitcoins could be sold at $19,000 each — the total actual money recoverable from the system hasn’t gone up. > Try realising any substantial fraction of those paper billions and watch the price crash — the actual money doesn’t exist for everyone to cash out. At some point, there will be a rush for the exits, and most can’t possibly make it out with their “gains.” If bitcoins were tulips, and some cosmic event made them deathly radioactive tomorrow, you wouldn't find any buyer, however steep your discount. But I suppose there'll still be open "buy" orders that will buy at $5000, or $1000, etc...