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>and yet still to be reacting more logically than older investors Bitcoin to me is like a stock for a company that has zero revenue, no product, no service...r

>and yet still to be reacting more logically than older investors Bitcoin to me is like a stock for a company that has zero revenue, no product, no service...really the only thing it has going for it is that the stock is easily transferable, but otherwise the stock seems to be hyped because it is limited (which is true of every every stock/corporate capitalization certainly that doesn’t make them The new gold). The mere fact it is coveted at all for being finite or “digital gold” is completely illogical.

kneel 9y ago
Cryptocurrencies are a new asset class, it doesn't really make sense to compare them to other assets. Right now it's mostly used for drugs and money laundering, things which most people aren't interested in. Eventually there will be a use case for bitcoin that will make a lot more sense than fiat, until then people will continue to be puzzled with cryptocurrencies.
- will_brown 9y ago
  >Cryptocurrencies are a new asset class, it doesn't really make sense to compare them to other assets. Tell that to the IRS who treats them as property for purposes of taxation, that’s right all these college students will owe up to 40% on their trades and will owe regular income tax for coins earned mining. I wonder how many college kids know this, or will actually pay taxes...will bitcoin still be cool when the IRS audits them? Also the SEC has their own opinion of cryptocurrencies being securities.
  - kneel 9y ago
    You're acting as if it's trivial to track how this money is moving around. They're called cryptocurrencies for a reason.
    - will_brown 9y ago
      “Cryptocurrency” is a marketing term for what is really just a time stamp on a distributed ledger. Not only is it easy to track movement on these distributed ledgers, the vast majority of wallets are on exchanges like Coinbase that comply with KYC laws and directly hand over account information to the IRS.
      - kneel 9y ago
        You can track movement on the ledger but you don't really know who is who once you get two hops from an exchange. It's pretty simple to hide your tracks, especially if you're not concerned with moving back into fiat. As adoption continues tracking will become murkier.
zanny 9y ago
Its valuable because of how much money people have put into it. All the ASICs, from the development to patterning to everyone who bought them and all those who pay money to keep them running to mine blocks all constitute an immense amount of capital and time investment in bitcoin that gives others confidence nobody is going to abandon it overnight. In many ways its more reliable than regular stocks - governments can break businesses up, change the law to make the business less favorable, the company can be bought out, the behavior of a few specific individuals involved can usually wildly swing the consensus valuation, etc. What I've learned through these years of cryptohype is that it doesn't matter what I think, because I'm not the one throwing billions of dollars at it. People believe bitcoin will make them rich, and thus bitcoins price has gone up absurdly high considering its adoption and usage for its originally stated purpose. Of course, stated and intended purposes can be quite different - I honestly think bitcoin is working out exactly as it was designed and has been architected to do. Its not supposed to change the world and usher in an era of transparent and seamless exchange between all humans anywhere, its just meant to be a pyramid scheme. It has succeeded wildly at that. Now I don't want to leave bitcoin off in isolation - in practice its just like almost any tech company. You rapidly gain market without a business model or revenue stream, accrue an insanely large userbase, IPO or get bought out, and then either the shareholders or buyer realize there is no way to actually profit off what you did. But it doesn't matter, you ran off wealthy - the same can be said of the bitcoin whales of today. It doesn't matter if bitcoin itself ever actually functions as a currency because everyone in the insider club is already rich.
- Retric 9y ago
  Sunk cost is completely unrelated to current value. https://en.m.wikipedia.org/wiki/Sunk_cost https://en.m.wikipedia.org/wiki/Sunk_cost Bitcoin is down what 70%? That's hardly a great track record even if it made someone rich, it's running out of greater fools while burning though insane amounts of capital for Mining. Remember, negative sum game means the average person loses. Aka Pointing at lottery winners does not make the lottery a good investment.
  - dharma1 9y ago
    Agreed. If it doesn't generate new value beyond speculation, it will eventually run out of steam. To those who say digital gold, I think the recent price swings in response to regulation show that bitcoin is not a safe store of value. Ethereum or others after it could prove to provide enough value to justify the valuation, and I am positive something will, but we are still some time away from that being real and not super speculative. Still, I can easily see how crypto currencies appeal to a young crowd who perhaps have anecdotal evidence of someone in their circle who made a significant return in a short space of time. I think the interest is primarily driven by this narrative rather ideals of decentralisation or actual usefulness of crypto currencies - for now anyway

kneel 9y ago

Cryptocurrencies are a new asset class, it doesn't really make sense to compare them to other assets. Right now it's mostly used for drugs and money laundering, things which most people aren't interested in. Eventually there will be a use case for bitcoin that will make a lot more sense than fiat, until then people will continue to be puzzled with cryptocurrencies.

will_brown 9y ago
>Cryptocurrencies are a new asset class, it doesn't really make sense to compare them to other assets. Tell that to the IRS who treats them as property for purposes of taxation, that’s right all these college students will owe up to 40% on their trades and will owe regular income tax for coins earned mining. I wonder how many college kids know this, or will actually pay taxes...will bitcoin still be cool when the IRS audits them? Also the SEC has their own opinion of cryptocurrencies being securities.
- kneel 9y ago
  You're acting as if it's trivial to track how this money is moving around. They're called cryptocurrencies for a reason.
  - will_brown 9y ago
    “Cryptocurrency” is a marketing term for what is really just a time stamp on a distributed ledger. Not only is it easy to track movement on these distributed ledgers, the vast majority of wallets are on exchanges like Coinbase that comply with KYC laws and directly hand over account information to the IRS.
    - kneel 9y ago
      You can track movement on the ledger but you don't really know who is who once you get two hops from an exchange. It's pretty simple to hide your tracks, especially if you're not concerned with moving back into fiat. As adoption continues tracking will become murkier.

zanny 9y ago

Its valuable because of how much money people have put into it. All the ASICs, from the development to patterning to everyone who bought them and all those who pay money to keep them running to mine blocks all constitute an immense amount of capital and time investment in bitcoin that gives others confidence nobody is going to abandon it overnight. In many ways its more reliable than regular stocks - governments can break businesses up, change the law to make the business less favorable, the company can be bought out, the behavior of a few specific individuals involved can usually wildly swing the consensus valuation, etc. What I've learned through these years of cryptohype is that it doesn't matter what I think, because I'm not the one throwing billions of dollars at it. People believe bitcoin will make them rich, and thus bitcoins price has gone up absurdly high considering its adoption and usage for its originally stated purpose. Of course, stated and intended purposes can be quite different - I honestly think bitcoin is working out exactly as it was designed and has been architected to do. Its not supposed to change the world and usher in an era of transparent and seamless exchange between all humans anywhere, its just meant to be a pyramid scheme. It has succeeded wildly at that. Now I don't want to leave bitcoin off in isolation - in practice its just like almost any tech company. You rapidly gain market without a business model or revenue stream, accrue an insanely large userbase, IPO or get bought out, and then either the shareholders or buyer realize there is no way to actually profit off what you did. But it doesn't matter, you ran off wealthy - the same can be said of the bitcoin whales of today. It doesn't matter if bitcoin itself ever actually functions as a currency because everyone in the insider club is already rich.

Retric 9y ago
Sunk cost is completely unrelated to current value. https://en.m.wikipedia.org/wiki/Sunk_cost https://en.m.wikipedia.org/wiki/Sunk_cost Bitcoin is down what 70%? That's hardly a great track record even if it made someone rich, it's running out of greater fools while burning though insane amounts of capital for Mining. Remember, negative sum game means the average person loses. Aka Pointing at lottery winners does not make the lottery a good investment.
- dharma1 9y ago
  Agreed. If it doesn't generate new value beyond speculation, it will eventually run out of steam. To those who say digital gold, I think the recent price swings in response to regulation show that bitcoin is not a safe store of value. Ethereum or others after it could prove to provide enough value to justify the valuation, and I am positive something will, but we are still some time away from that being real and not super speculative. Still, I can easily see how crypto currencies appeal to a young crowd who perhaps have anecdotal evidence of someone in their circle who made a significant return in a short space of time. I think the interest is primarily driven by this narrative rather ideals of decentralisation or actual usefulness of crypto currencies - for now anyway