20 ms·

As Bitcoin Sinks, Industry Startups Are Forced to Cut Back

219 points by toufiqbarhamov 8y ago

jron 8y ago
When you flip the chart upside down, it sunk 300% over 2 years!
aphextron 8y ago
BTC/USD is doing just fine. Nobody who knows anything about anything made any kinds of plans involving $20,000 Bitcoin. At ~$4k, it's still 10x where it was 2 years ago. Anybody remotely involved in BTC from it's actual inception (not the bandwagon shirt-losers of 2017) is filthy stinking rich now.
- smacktoward 8y ago
  > Nobody who knows anything about anything made any kinds of plans involving $20,000 Bitcoin. Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-street-quietly-shelves-its-bitcoin-dreams https://www.bloomberg.com/news/articles/2018-12-23/wall-stre...)...
  - pesmhey 8y ago
    What stops GS from replacing their fee-based offerings with a blockchain solution? Could this really be as obvious in hindsight as looking at Sears in the 90s not developing an online catalog?
    - fucking_tragedy 8y ago
      How does a blockchain solution solve Goldman Sachs' business problems better, or with less resources, than existing solutions?
    - raverbashing 8y ago
      You mean a solution that has solved exactly 0% of the problems where it was applied to? https://bitcoinist.com/blockchain-study-zero-percent-success/ https://bitcoinist.com/blockchain-study-zero-percent-success...
    - hn_throwaway_99 8y ago
      > What stops GS from replacing their fee-based offerings with a blockchain solution? What does that sentence even mean? To me this is right up there with "I'll create a GUI interface with Visual Basic and see if I can track an IP address."
      - pesmhey 8y ago
        It literally means what the words say. What stops Goldman Sachs from replacing whatever mechanism they use to process payments with some coin. I would gladly accept the answer ‘because it doesn’t make sense’. Didn’t realize I’d get so much heat for this though.
    - hannasanarion 8y ago
      What would block chain do for Goldman that a SQL database couldn't?
      - pesmhey 8y ago
        I’m literally not sure, hence the question. I don’t know much about blockchain other than its sort of an answer to the Byzantine generals problem? It was a legit question.
        hannasanarion 8y ago
        My belief is: nothing. For one thing, there is no solution to the Byzantine generals problem, this has been proven mathematically. Cryptocurrencies sidestep it by saying "whoever is the luckiest (aka 'owns more GPUs') gets to decide the truth". Traditional banks handle the problem by not having Byzantine generals: there is one and only one trusted authority who is compelled by law to keep clean and clear books. If a bank has a Byzantine problem that needs solving, they've already done something illegal.
  - nck4222 8y ago
    That article really does not support your point at all... >Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania. So they were slow from the start, and are slowing their already slow efforts. >“The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business,” said Daniel H. Gallancy, chief executive officer of New York-based SolidX Partners, which hopes to launch a Bitcoin ETF in the U.S. "That was top-of-the-market-hype thinking." So the market (not banks or other insiders) had unrealistic expectations of traditional institutions. >With regulators offering little clear guidance on how they will classify the broad universe of tokens—as commodities, securities or something else—banks and investment firms are treading cautiously. Banks continue to wait for regulations and guidance before committing fully.
  - Cobord 8y ago
    I think OP is saying they don't know anything about anything. Which has a point, they claim to know what they are doing, but just have such large capital that there is no way for them to fail even if they did everything wrong. So you can't use success as a barometer for knowing anything.
  - wolco 8y ago
    They are part of the getting in late group and the lower valuations are most probably signs they are leaving the market. I remember when the price started to increase I didn't think 4,000 would hold. 2500 seemed like the correct price. The fact that it hasn't fallen below that amount means there are more investors. Personally I was using it to purchase goods before the runup and the slowness and increased fees made me move to another form of payment. I'm considering going back now that the price[is dropping
    - DenisM 8y ago
      > I didn't think 4,000 would hold. 2500 seemed like the correct price How did you arrive at the 2500 figure? Is there some sort of fundamental analysis that could be done, or was it all technical?
      - tim333 8y ago
        Not sure how he got 2500 but there's a long term log graph here and if history repeats you might expect the low to be about 2500 to 1500 and occur about 6 months to a year from now https://cryptoslate.com/wp-content/uploads/2018/10/chart.png https://cryptoslate.com/wp-content/uploads/2018/10/chart.png
    - deleted 8y ago
      [deleted]
  - aphextron 8y ago
    >Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-stre... https://www.bloomberg.com/news/articles/2018-12-23/wall-stre...)... See: bandwagon shirt-losers of 2017 Bitcoin was the largest, fastest, most successful transfer of institutional wealth into private hands we've ever seen.
- harryh 8y ago
  Of course if you are filthy stinking rich, it's because you participated in a distributed scam in order to defraud money from those "bandwagon shirt-losers."
  - sneak 8y ago
    What precisely was the scam? Who and how was I scamming by mining coins with my GPU and some open source software I saw on slashdot that are now worth several thousand dollars each?
    - ForHackernews 8y ago
      You sold something of no value to Greater Fools.
      - rjakobsson 8y ago
        ”of no value” :) ?
    - cjhanks 8y ago
      The scam was not by all btc pioneers. In the last year, there were a lot of holders creating marketing networks filled with misinformation and half-truths. That convinced a lot of people with little financial education and little understanding of the technology, that growth was imminent. All the while, the marketeers screaming "buy buy buy" were selling their btc on exchanges at insane rates. If you're just some guy mining, nobody thinks you're the problem.
      - wpietri 8y ago
        Were they any BTC pioneers who objected strongly to the hype? If not, then I'd say they were at best complicit.
    - deleted 8y ago
      [deleted]
    - wpietri 8y ago
minimaxir 8y ago
At what price will the Bitcoin death spiral occur? (i.e. when it costs more to produce/handle Bitcoin than the revenue generated, so best move is to just exit the crypto industry).
- InGodsName 8y ago
  Bitcoin will rise again. Bitcoin removes the need to trust a bookie/agent to move money offshore. Whenever flow of money is possible between a safe haven and a corrupt/socialist big country with high tax rate/more population burden. Money flows to the safe heaven. Bitcoin is one such way to move money from african nations/india/china to safe haven like Switzerland, Singapore, UK etc... I am talking about illict gains/unreported assets which can't be moved through official channels. Moving your unreported assets to a different country might not be illegal in that country if a deal is structured correctly. That's where lawyers/accounts/consultants come into play. Bitcoin will rise again once a need to move money to save heaven rises again. It's an efficient medium to move large sums of money without trusting a bookie. I can buy coffee loaded in container from an african country where inflation has killed the local currency and banks do not have infra for international settlement or take much bigger cut or simply aren't trusted by local people. For this i make simple bitcoin transfer from Hong Kong and get my coffee contain undocked in Hong Kong. Edit: it's haven not heaven.
  - carlob 8y ago
    First of all the word you're looking for is haven (as in a harbor), not heaven. Secondly, are you saying that bitcoin exists solely for the purpose of money laundering and tax evasion?
    - InGodsName 8y ago
      No, but it certainly can be used for money laundering and tax evasion. It removes the need to trust a bookie or agent to move money offshore. There are lawyers/accountants in Switzerland and Hong Kong who will help you launder money from third world countries. Moving your assets offshore without local government knowing is not a crime in other country! Edit: why downvotes? What's wrong?
walrus01 8y ago
I've seen so many local startups that are essentially scams: March 2018: https://www.politico.com/magazine/story/2018/03/09/bitcoin-mining-energy-prices-smalltown-feature-217230 https://www.politico.com/magazine/story/2018/03/09/bitcoin-m... November 2018: https://www.seattletimes.com/business/washington-bitcoin-pioneer-seeks-chapter-11-protection/ https://www.seattletimes.com/business/washington-bitcoin-pio...
JohnJamesRambo 8y ago
Ah, the Bloomberg and TechCrunch bottom signals I’m looking for.
- KasianFranks 8y ago
  Precisely
- verdverm 8y ago
  A year ago, I was explaining to family why crypto was a thing. This year I'm explaining why it crashed and why it's to be avoided. Also, why blockchain and crypto are not the same thing. There are many who participated in the 2017 speculation that will actively avoid and advise against participation this go around. The bubble popped and it will be many years before we see worthy investments take shape.
  - wpietri 8y ago
    I think another factor is that we've passed peak uncritical press coverage. Never again will there be as large an influx of media-driven naive optimists who think that the price will only go up.
    - xenihn 8y ago
      That isn't true, it depends on the whims of the people who determine what those optimists say and write.
      - wpietri 8y ago
        I am pretty clearly offering an opinion here, so I'm not asserting that it's true. But the naive optimists I'm speaking of here were the greater fools [1] who bought Bitcoin as it was rising. Journalists are generally cynics. [1] https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
    - mancerayder 8y ago
arisAlexis 8y ago
long time since the last Bitcoin is dead article
- minimaxir 8y ago
  The lack of attention to crypto as a serious financial instrument is more damning to crypto than an indicator of its success.
  - KasianFranks 8y ago
    We'll just file this under "comments that won't age well"
ziont 8y ago
is anybody really surprised other than people still involved with this blockchain/cryptocurrency nonsense? The entire bitcoin pump and dump was orchestrated.
- wpietri 8y ago
  I think this is a fine case to apply Hanlon's Razor: https://en.wikipedia.org/wiki/Hanlon%27s_razor https://en.wikipedia.org/wiki/Hanlon%27s_razor Conspiracy was unnecessary.
  - ziont 8y ago
    ITS NOT A CONSPIRACY https://www.bloomberg.com/news/articles/2018-06-13/professor-who-rang-vix-alarm-says-tether-used-to-boost-bitcoin https://www.bloomberg.com/news/articles/2018-06-13/professor... DOJ is investigating. If you ran an ICO, and you still haven't lawyered up, you are at risk.
roguecoder 8y ago
At least this might provide pressure to reduce the environmental impact of mining, if only to reduce costs.
- baby 8y ago
  I see this arguments being thrown all the time, but I also like the argument that current infrastructures needed to run "previous-gen" currencies are actually burning way more[1]. While I wait for concrete research to estimate how much energy was wasted in the creation and maintenance process of these, I will abstain from spreading the FUD. [1]: https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_of_energy_and_harmful_for_ecology https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_o...
  - duskwuff 8y ago
    That argument looks like it was written 5 or 6 years ago, long before the modern cryptocurrency boom (and the associated rise in large-scale mining, e.g. in China). It hasn't aged well.
arisAlexis 8y ago
by the way, Techcrunch CEO was all in crypto last year
- minimaxir 8y ago
  Michael Arrington left TechCrunch a long, long time ago.
  - arisAlexis 8y ago
    not sooo long ago and why is it relevant? he is still the founder and his actions bear some significance.
jMyles 8y ago
The discussion of blockchain tech on HN is puzzling to me. On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value. I suspect that if we describe the details of the lightning network in this message and report that transactions are radically faster and cheaper for retail-scale use, that we'll hear cheers about blockchain utility as a currency. If we describe LivePeer and Fluence and the Origin protocol, if we stream talks from this year's DevCon about the incredible Python tooling that is coming of age and the progress on sharding, proof-of-stake, ring signatures, and zero-knowledge proofs, I'm certain that we'll hear nothing but confidence about the ecosystem and the extensibility of blockchain tech. If I am permitted to send one of my recent talks[0] back with this message about our progress at NuCypher on developing new cryptographic primitives and cryptological narratives to accompany them, I have no doubt whatsoever that we'll receive back both excitement and gratitude, not on account of our work but because everybody in December of 2017 will be so grateful to know that they're about to be alive during a time when organizations like ours actually have the funding and mission to dust off tech that has sat largely stagnant for the preceding 10-15 years and move it substantially forward. Yet, look at us HN. Instead of these reactions we're sitting here filled with cynicism and darkness. Why? Where have we misplaced our joy at these developments? I'll tell you what: let's just pretend that somebody from December of 2021 has posted a message here with similar signs of encouragement. Let's imagine that they've told us about Ethereum 2.0 and Monero coming online. That new turnkey technologies include decentralized access management via NuCypher, buttery transcoding via LivePeer, and fast and flexible decentralized queries via Fluence. Let's hear in our mind's voice about the next cohort of decentralized tech following these, including fully-homomorphic encryption (perhaps via NuFHE), solutions to several of the open oracle problems, and blockchain use in all sorts of gaming scenarios to ensure fairness of loot boxes and other intra-game economics. Let's celebrate all the adoption they report to us: medical devices that work without the need for trust in insurance companies, communications infrastructure with far greater robustness and in widespread use to thwart spy apparatuses of despotic governments, sharing frameworks to ensure that media is able to spread throughout the world despite attempts at censorship or outdated notions of "intellectual property." Please, let's let 2019 be a year when optimism and childlike curiosity are not only permitted in these parts but celebrated like they (largely) were just two years ago when the BTC price was less than 30% what it is today. [0]: https://www.youtube.com/watch?v=OuY9WXK61gY https://www.youtube.com/watch?v=OuY9WXK61gY
DenisM 8y ago
The most remarkable thing about BTC is diffusion of responsibility. If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws. However here we had one non-affiliated group of bigger miners issuing the coins and another group of volunteer enthusiasts hyping them up. Since the second group was not hired by the first, the first group cannot be held accountable, while the second group has agents too numerous and too small to go after. This is similar to the housing bubble, where the industry collectively hyped up the "investment" promising huge returns, yet no one was to blame when the music stopped. Watch out for mo ways to diffuse responsibility, that's where "action" will be. Maybe we can nip it in the bud sooner if all keep an eye out.
- jMyles 8y ago
  I assert that the diffusion of responsibility is a key feature of decentralized technology precisely because it renders us unable to "nip it in the bud".
  - wpietri 8y ago
    Unfortunately, it does so for everybody. Including people who have a strong interest in the world not seeing Bitcoin as scam central. It all strikes me as a classic tragedy of the commons.
  - hudon 8y ago
    Not really. When the MPAA wanted action taken on torrented movies, they didn’t just throw their hands up in the air and go “whelp, it’s decentralized!“, they went after the authors of the protocol, the ISPs, hell even domain name registrars (that listed torrent websites). You can still torrent films, but you could get prosecuted or fined. Furthermore, some content is completely censored from torrent sites. All that to say, it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable. It does slow down that process for now, since the software obfuscates what’s going on (who’s doing what), but regulators will understand how the tech works eventually...
jklepatch 8y ago
What puzzled me is how comes blockchain startups did not sell their crypto for fiat just after their ICOs. I recommended this to several of my blockchain customers but none of them listened. I dont know if that was motivated by greed or something else. According to Game theory there is no benefit in not selling the crypto for fiat: if you raise lets say 10million during an ico (typical amount raised 6m ago), there isnt much you can do with 20M (i.e you keep the crypto and it doubles) that you cant do with “just” 10M. However, if the crypto crashes, and become 5M, you are going to have a hard time explaining to stake holders that 5M just disappeared... At worst you keep 10pct in crypto if really you want to keep some upside to crypto but thats it
- plantain 8y ago
  It took me a long time to realise, but these people really do believe in bitcoin/blockchains.
  - tonyedgecombe 8y ago
    The easiest person to fool is yourself.
    - superkuh 8y ago
      If you haven't seen the need for an apolitical currency yet you probably never will. But maybe you're just all viewing this from the perspective of traditional speculators and haven't even considered it?
      - mdpopescu 8y ago
        It's fascinating how strongly we believe that now == how things should be. Humans have been using gold as a currency for thousands of years, and yet nowadays everyone seems to believe that nothing but state-backed paper can work as such - and anyone who wants (as you said) an apolitical currency is just weird.
        8y ago
tanilama 8y ago
Funny that crypto is being called industry.
jchannon 8y ago
Wonder how this effects Lykke.com
dikaio 8y ago
Long
Proven 8y ago
I am still amazed these useless startups employ that many people (after layoffs), considering they have no useful product or service. At least in theory, through Bitcoin and other cryptocurrencies, they would enable permissionless trade and payments but that's explicitly impossible as all customers are KYC'd to death. There's literally nothing useful being done, no value being addded.
spir 8y ago
From a fundamentals perspective, blockchain has a bright future: lending - https://dharma.io https://dharma.io derivatives - https://dydx.exchange https://dydx.exchange forecasting/gambling - https://www.augur.net https://www.augur.net on-chain "US dollars" - https://mkr.tools https://mkr.tools
atiffany 8y ago
When I first invested in Bitcoin several years back, I tried to imagine ways that it could one day be deterred from becoming increasingly adopted and valuable. Government regulation and hacking were obvious possibilities, but I never considered “death by fragmentation” at the time. I think Bitcoin would be a lot more valuable today if it had not been for the explosion of largely greed-motivated shitcoins (and later ICOs) entering the market.
- black-tea 8y ago
  It was the scalability problem that killed Bitcoin and it probably would have happened a lot sooner without the fragmentation.
cageface 8y ago
2018 is the year that we learned that complex social problems can not be solved by technology. From the political weaponization of social media to the collapse of the ICO market we've seen that the techno-utopian dream is largely just that, a dream. Social change takes hard work and the slow building of consensus, not just clever code. We have seen, however, that we can do a lot of damage to the social fabric with poorly thought out technology so I think the era of the unregulated internet is sadly coming to a close. We really have nobody to blame but ourselves. The next generation of internet startups is going to have to be a lot more savvy about how technology interacts with society.
- Nasrudith 8y ago
  I think that the biggest issue is frankly bullshit. Bullshit in the sense of complete lack of sensitivity to the truth so long as it leads to the outcome they want. Technology isn't at fault here but bullshit is on so many levels it isn't funny. The stupid internet rumors and social media manipulation? Bullshit because they want to influence people - they don't care if it is true or not. Company valuations? They don't care if it is productive or useful - they just want it to make money which leads to the new Tulip craze. Security theater and claims that they need to spy on everything? Bullshit to justify their positions and cover their asses. It isn't a technology - it is the social black art old as dirt that keeps being used. It causes problems everywhere because it exists on a nearly fractal level. We see plenty of people blaming tech companies for their problems and calling for regulations? Do they care if it is true or have any idea for specific regulations in mind? And the few that are trotted out turn out to be trivially unworkable or contrary to the given purpose on so many levels like encryption bans. Because it is all bullshit - what they want is to protect their own vested interests and they don't want the truth in the same building of a skyscrapper, much less the same room because they will lose in a discussion of facts. I would be very skeptical of anyone who claims that we need regulation on the internet - because so far all of the pushers are shoveling more bullshit.
  - cageface 8y ago
    We're going to see a lot of bullshit regulation on the internet and a lot of opportunists taking advantage of the current chaos to push their own agenda. Unfortunately we handed them the weapons they need to push these arguments by building toxic (or at least very naive) platforms like Facebook and Bitcoin. It's a shame really but the tech community has itself to blame for a lot of this. The power struggles that have gone on in human societies for our entire existence are now starting to play out online. We should have seen this coming.
arithma 8y ago
Bitcoin seems to be getting real hurt from the lack of hype and bans from big adtech companies (along with all the cryptocurrency stuff as well.) https://trends.google.com/trends/explore?q=bitcoin&geo=US https://trends.google.com/trends/explore?q=bitcoin&geo=US

jron 8y ago

When you flip the chart upside down, it sunk 300% over 2 years!

BTC/USD is doing just fine. Nobody who knows anything about anything made any kinds of plans involving $20,000 Bitcoin. At ~$4k, it's still 10x where it was 2 years ago. Anybody remotely involved in BTC from it's actual inception (not the bandwagon shirt-losers of 2017) is filthy stinking rich now.

smacktoward 8y ago
> Nobody who knows anything about anything made any kinds of plans involving $20,000 Bitcoin. Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-street-quietly-shelves-its-bitcoin-dreams https://www.bloomberg.com/news/articles/2018-12-23/wall-stre...)...
- pesmhey 8y ago
  What stops GS from replacing their fee-based offerings with a blockchain solution? Could this really be as obvious in hindsight as looking at Sears in the 90s not developing an online catalog?
  - fucking_tragedy 8y ago
    How does a blockchain solution solve Goldman Sachs' business problems better, or with less resources, than existing solutions?
  - raverbashing 8y ago
    You mean a solution that has solved exactly 0% of the problems where it was applied to? https://bitcoinist.com/blockchain-study-zero-percent-success/ https://bitcoinist.com/blockchain-study-zero-percent-success...
  - hn_throwaway_99 8y ago
    > What stops GS from replacing their fee-based offerings with a blockchain solution? What does that sentence even mean? To me this is right up there with "I'll create a GUI interface with Visual Basic and see if I can track an IP address."
    - pesmhey 8y ago
      It literally means what the words say. What stops Goldman Sachs from replacing whatever mechanism they use to process payments with some coin. I would gladly accept the answer ‘because it doesn’t make sense’. Didn’t realize I’d get so much heat for this though.
  - hannasanarion 8y ago
    What would block chain do for Goldman that a SQL database couldn't?
    - pesmhey 8y ago
      I’m literally not sure, hence the question. I don’t know much about blockchain other than its sort of an answer to the Byzantine generals problem? It was a legit question.
      - hannasanarion 8y ago
        My belief is: nothing. For one thing, there is no solution to the Byzantine generals problem, this has been proven mathematically. Cryptocurrencies sidestep it by saying "whoever is the luckiest (aka 'owns more GPUs') gets to decide the truth". Traditional banks handle the problem by not having Byzantine generals: there is one and only one trusted authority who is compelled by law to keep clean and clear books. If a bank has a Byzantine problem that needs solving, they've already done something illegal.
- nck4222 8y ago
  That article really does not support your point at all... >Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania. So they were slow from the start, and are slowing their already slow efforts. >“The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business,” said Daniel H. Gallancy, chief executive officer of New York-based SolidX Partners, which hopes to launch a Bitcoin ETF in the U.S. "That was top-of-the-market-hype thinking." So the market (not banks or other insiders) had unrealistic expectations of traditional institutions. >With regulators offering little clear guidance on how they will classify the broad universe of tokens—as commodities, securities or something else—banks and investment firms are treading cautiously. Banks continue to wait for regulations and guidance before committing fully.
- Cobord 8y ago
  I think OP is saying they don't know anything about anything. Which has a point, they claim to know what they are doing, but just have such large capital that there is no way for them to fail even if they did everything wrong. So you can't use success as a barometer for knowing anything.
- wolco 8y ago
  They are part of the getting in late group and the lower valuations are most probably signs they are leaving the market. I remember when the price started to increase I didn't think 4,000 would hold. 2500 seemed like the correct price. The fact that it hasn't fallen below that amount means there are more investors. Personally I was using it to purchase goods before the runup and the slowness and increased fees made me move to another form of payment. I'm considering going back now that the price[is dropping
  - DenisM 8y ago
    > I didn't think 4,000 would hold. 2500 seemed like the correct price How did you arrive at the 2500 figure? Is there some sort of fundamental analysis that could be done, or was it all technical?
    - tim333 8y ago
      Not sure how he got 2500 but there's a long term log graph here and if history repeats you might expect the low to be about 2500 to 1500 and occur about 6 months to a year from now https://cryptoslate.com/wp-content/uploads/2018/10/chart.png https://cryptoslate.com/wp-content/uploads/2018/10/chart.png
  - deleted 8y ago
    [deleted]
- aphextron 8y ago
  >Except for Goldman, Morgan Stanley, Citigroup and Barclays (see https://www.bloomberg.com/news/articles/2018-12-23/wall-stre... https://www.bloomberg.com/news/articles/2018-12-23/wall-stre...)... See: bandwagon shirt-losers of 2017 Bitcoin was the largest, fastest, most successful transfer of institutional wealth into private hands we've ever seen.
harryh 8y ago
Of course if you are filthy stinking rich, it's because you participated in a distributed scam in order to defraud money from those "bandwagon shirt-losers."
- sneak 8y ago
  What precisely was the scam? Who and how was I scamming by mining coins with my GPU and some open source software I saw on slashdot that are now worth several thousand dollars each?
  - ForHackernews 8y ago
    You sold something of no value to Greater Fools.
    - rjakobsson 8y ago
      ”of no value” :) ?
  - cjhanks 8y ago
    The scam was not by all btc pioneers. In the last year, there were a lot of holders creating marketing networks filled with misinformation and half-truths. That convinced a lot of people with little financial education and little understanding of the technology, that growth was imminent. All the while, the marketeers screaming "buy buy buy" were selling their btc on exchanges at insane rates. If you're just some guy mining, nobody thinks you're the problem.
    - wpietri 8y ago
      Were they any BTC pioneers who objected strongly to the hype? If not, then I'd say they were at best complicit.
  - deleted 8y ago
    [deleted]
  - wpietri 8y ago

minimaxir 8y ago

At what price will the Bitcoin death spiral occur? (i.e. when it costs more to produce/handle Bitcoin than the revenue generated, so best move is to just exit the crypto industry).

InGodsName 8y ago
Bitcoin will rise again. Bitcoin removes the need to trust a bookie/agent to move money offshore. Whenever flow of money is possible between a safe haven and a corrupt/socialist big country with high tax rate/more population burden. Money flows to the safe heaven. Bitcoin is one such way to move money from african nations/india/china to safe haven like Switzerland, Singapore, UK etc... I am talking about illict gains/unreported assets which can't be moved through official channels. Moving your unreported assets to a different country might not be illegal in that country if a deal is structured correctly. That's where lawyers/accounts/consultants come into play. Bitcoin will rise again once a need to move money to save heaven rises again. It's an efficient medium to move large sums of money without trusting a bookie. I can buy coffee loaded in container from an african country where inflation has killed the local currency and banks do not have infra for international settlement or take much bigger cut or simply aren't trusted by local people. For this i make simple bitcoin transfer from Hong Kong and get my coffee contain undocked in Hong Kong. Edit: it's haven not heaven.
- carlob 8y ago
  First of all the word you're looking for is haven (as in a harbor), not heaven. Secondly, are you saying that bitcoin exists solely for the purpose of money laundering and tax evasion?
  - InGodsName 8y ago
    No, but it certainly can be used for money laundering and tax evasion. It removes the need to trust a bookie or agent to move money offshore. There are lawyers/accountants in Switzerland and Hong Kong who will help you launder money from third world countries. Moving your assets offshore without local government knowing is not a crime in other country! Edit: why downvotes? What's wrong?

walrus01 8y ago

I've seen so many local startups that are essentially scams: March 2018: https://www.politico.com/magazine/story/2018/03/09/bitcoin-mining-energy-prices-smalltown-feature-217230 https://www.politico.com/magazine/story/2018/03/09/bitcoin-m... November 2018: https://www.seattletimes.com/business/washington-bitcoin-pioneer-seeks-chapter-11-protection/ https://www.seattletimes.com/business/washington-bitcoin-pio...

JohnJamesRambo 8y ago

Ah, the Bloomberg and TechCrunch bottom signals I’m looking for.

KasianFranks 8y ago
Precisely
verdverm 8y ago
A year ago, I was explaining to family why crypto was a thing. This year I'm explaining why it crashed and why it's to be avoided. Also, why blockchain and crypto are not the same thing. There are many who participated in the 2017 speculation that will actively avoid and advise against participation this go around. The bubble popped and it will be many years before we see worthy investments take shape.
- wpietri 8y ago
  I think another factor is that we've passed peak uncritical press coverage. Never again will there be as large an influx of media-driven naive optimists who think that the price will only go up.
  - xenihn 8y ago
    That isn't true, it depends on the whims of the people who determine what those optimists say and write.
    - wpietri 8y ago
      I am pretty clearly offering an opinion here, so I'm not asserting that it's true. But the naive optimists I'm speaking of here were the greater fools [1] who bought Bitcoin as it was rising. Journalists are generally cynics. [1] https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
  - mancerayder 8y ago

arisAlexis 8y ago

long time since the last Bitcoin is dead article

minimaxir 8y ago
The lack of attention to crypto as a serious financial instrument is more damning to crypto than an indicator of its success.
- KasianFranks 8y ago
  We'll just file this under "comments that won't age well"

ziont 8y ago

is anybody really surprised other than people still involved with this blockchain/cryptocurrency nonsense? The entire bitcoin pump and dump was orchestrated.

wpietri 8y ago
I think this is a fine case to apply Hanlon's Razor: https://en.wikipedia.org/wiki/Hanlon%27s_razor https://en.wikipedia.org/wiki/Hanlon%27s_razor Conspiracy was unnecessary.
- ziont 8y ago
  ITS NOT A CONSPIRACY https://www.bloomberg.com/news/articles/2018-06-13/professor-who-rang-vix-alarm-says-tether-used-to-boost-bitcoin https://www.bloomberg.com/news/articles/2018-06-13/professor... DOJ is investigating. If you ran an ICO, and you still haven't lawyered up, you are at risk.

roguecoder 8y ago

At least this might provide pressure to reduce the environmental impact of mining, if only to reduce costs.

baby 8y ago
I see this arguments being thrown all the time, but I also like the argument that current infrastructures needed to run "previous-gen" currencies are actually burning way more[1]. While I wait for concrete research to estimate how much energy was wasted in the creation and maintenance process of these, I will abstain from spreading the FUD. [1]: https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_of_energy_and_harmful_for_ecology https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_o...
- duskwuff 8y ago
  That argument looks like it was written 5 or 6 years ago, long before the modern cryptocurrency boom (and the associated rise in large-scale mining, e.g. in China). It hasn't aged well.

arisAlexis 8y ago

by the way, Techcrunch CEO was all in crypto last year

minimaxir 8y ago
Michael Arrington left TechCrunch a long, long time ago.
- arisAlexis 8y ago
  not sooo long ago and why is it relevant? he is still the founder and his actions bear some significance.

jMyles 8y ago

The discussion of blockchain tech on HN is puzzling to me. On the matter of value: I suspect that if we find ourselves able to send a message back in time two years (when BTC was less than $1,000 USD) and report that the price is now over $3,700, that we'll find this message to be met with an understanding that this is, at least, a validation of the use of blockchain tech as a store of value. I suspect that if we describe the details of the lightning network in this message and report that transactions are radically faster and cheaper for retail-scale use, that we'll hear cheers about blockchain utility as a currency. If we describe LivePeer and Fluence and the Origin protocol, if we stream talks from this year's DevCon about the incredible Python tooling that is coming of age and the progress on sharding, proof-of-stake, ring signatures, and zero-knowledge proofs, I'm certain that we'll hear nothing but confidence about the ecosystem and the extensibility of blockchain tech. If I am permitted to send one of my recent talks[0] back with this message about our progress at NuCypher on developing new cryptographic primitives and cryptological narratives to accompany them, I have no doubt whatsoever that we'll receive back both excitement and gratitude, not on account of our work but because everybody in December of 2017 will be so grateful to know that they're about to be alive during a time when organizations like ours actually have the funding and mission to dust off tech that has sat largely stagnant for the preceding 10-15 years and move it substantially forward. Yet, look at us HN. Instead of these reactions we're sitting here filled with cynicism and darkness. Why? Where have we misplaced our joy at these developments? I'll tell you what: let's just pretend that somebody from December of 2021 has posted a message here with similar signs of encouragement. Let's imagine that they've told us about Ethereum 2.0 and Monero coming online. That new turnkey technologies include decentralized access management via NuCypher, buttery transcoding via LivePeer, and fast and flexible decentralized queries via Fluence. Let's hear in our mind's voice about the next cohort of decentralized tech following these, including fully-homomorphic encryption (perhaps via NuFHE), solutions to several of the open oracle problems, and blockchain use in all sorts of gaming scenarios to ensure fairness of loot boxes and other intra-game economics. Let's celebrate all the adoption they report to us: medical devices that work without the need for trust in insurance companies, communications infrastructure with far greater robustness and in widespread use to thwart spy apparatuses of despotic governments, sharing frameworks to ensure that media is able to spread throughout the world despite attempts at censorship or outdated notions of "intellectual property." Please, let's let 2019 be a year when optimism and childlike curiosity are not only permitted in these parts but celebrated like they (largely) were just two years ago when the BTC price was less than 30% what it is today. [0]: https://www.youtube.com/watch?v=OuY9WXK61gY https://www.youtube.com/watch?v=OuY9WXK61gY

DenisM 8y ago

The most remarkable thing about BTC is diffusion of responsibility. If it was issued and marketed by a single entity the participants would be in hot water by now for violating the Securities and Exchange laws. However here we had one non-affiliated group of bigger miners issuing the coins and another group of volunteer enthusiasts hyping them up. Since the second group was not hired by the first, the first group cannot be held accountable, while the second group has agents too numerous and too small to go after. This is similar to the housing bubble, where the industry collectively hyped up the "investment" promising huge returns, yet no one was to blame when the music stopped. Watch out for mo ways to diffuse responsibility, that's where "action" will be. Maybe we can nip it in the bud sooner if all keep an eye out.

jMyles 8y ago
I assert that the diffusion of responsibility is a key feature of decentralized technology precisely because it renders us unable to "nip it in the bud".
- wpietri 8y ago
  Unfortunately, it does so for everybody. Including people who have a strong interest in the world not seeing Bitcoin as scam central. It all strikes me as a classic tragedy of the commons.
- hudon 8y ago
  Not really. When the MPAA wanted action taken on torrented movies, they didn’t just throw their hands up in the air and go “whelp, it’s decentralized!“, they went after the authors of the protocol, the ISPs, hell even domain name registrars (that listed torrent websites). You can still torrent films, but you could get prosecuted or fined. Furthermore, some content is completely censored from torrent sites. All that to say, it’s not clear to me that “decentralized technology” can prevent the very human process of holding others accountable. It does slow down that process for now, since the software obfuscates what’s going on (who’s doing what), but regulators will understand how the tech works eventually...

jklepatch 8y ago

What puzzled me is how comes blockchain startups did not sell their crypto for fiat just after their ICOs. I recommended this to several of my blockchain customers but none of them listened. I dont know if that was motivated by greed or something else. According to Game theory there is no benefit in not selling the crypto for fiat: if you raise lets say 10million during an ico (typical amount raised 6m ago), there isnt much you can do with 20M (i.e you keep the crypto and it doubles) that you cant do with “just” 10M. However, if the crypto crashes, and become 5M, you are going to have a hard time explaining to stake holders that 5M just disappeared... At worst you keep 10pct in crypto if really you want to keep some upside to crypto but thats it

plantain 8y ago
It took me a long time to realise, but these people really do believe in bitcoin/blockchains.
- tonyedgecombe 8y ago
  The easiest person to fool is yourself.
  - superkuh 8y ago
    If you haven't seen the need for an apolitical currency yet you probably never will. But maybe you're just all viewing this from the perspective of traditional speculators and haven't even considered it?
    - mdpopescu 8y ago
      It's fascinating how strongly we believe that now == how things should be. Humans have been using gold as a currency for thousands of years, and yet nowadays everyone seems to believe that nothing but state-backed paper can work as such - and anyone who wants (as you said) an apolitical currency is just weird.
      - 8y ago

tanilama 8y ago

Funny that crypto is being called industry.

jchannon 8y ago

Wonder how this effects Lykke.com

dikaio 8y ago

Long

Proven 8y ago

I am still amazed these useless startups employ that many people (after layoffs), considering they have no useful product or service. At least in theory, through Bitcoin and other cryptocurrencies, they would enable permissionless trade and payments but that's explicitly impossible as all customers are KYC'd to death. There's literally nothing useful being done, no value being addded.

spir 8y ago

From a fundamentals perspective, blockchain has a bright future: lending - https://dharma.io https://dharma.io derivatives - https://dydx.exchange https://dydx.exchange forecasting/gambling - https://www.augur.net https://www.augur.net on-chain "US dollars" - https://mkr.tools https://mkr.tools

atiffany 8y ago

When I first invested in Bitcoin several years back, I tried to imagine ways that it could one day be deterred from becoming increasingly adopted and valuable. Government regulation and hacking were obvious possibilities, but I never considered “death by fragmentation” at the time. I think Bitcoin would be a lot more valuable today if it had not been for the explosion of largely greed-motivated shitcoins (and later ICOs) entering the market.

black-tea 8y ago
It was the scalability problem that killed Bitcoin and it probably would have happened a lot sooner without the fragmentation.

cageface 8y ago

2018 is the year that we learned that complex social problems can not be solved by technology. From the political weaponization of social media to the collapse of the ICO market we've seen that the techno-utopian dream is largely just that, a dream. Social change takes hard work and the slow building of consensus, not just clever code. We have seen, however, that we can do a lot of damage to the social fabric with poorly thought out technology so I think the era of the unregulated internet is sadly coming to a close. We really have nobody to blame but ourselves. The next generation of internet startups is going to have to be a lot more savvy about how technology interacts with society.

Nasrudith 8y ago
I think that the biggest issue is frankly bullshit. Bullshit in the sense of complete lack of sensitivity to the truth so long as it leads to the outcome they want. Technology isn't at fault here but bullshit is on so many levels it isn't funny. The stupid internet rumors and social media manipulation? Bullshit because they want to influence people - they don't care if it is true or not. Company valuations? They don't care if it is productive or useful - they just want it to make money which leads to the new Tulip craze. Security theater and claims that they need to spy on everything? Bullshit to justify their positions and cover their asses. It isn't a technology - it is the social black art old as dirt that keeps being used. It causes problems everywhere because it exists on a nearly fractal level. We see plenty of people blaming tech companies for their problems and calling for regulations? Do they care if it is true or have any idea for specific regulations in mind? And the few that are trotted out turn out to be trivially unworkable or contrary to the given purpose on so many levels like encryption bans. Because it is all bullshit - what they want is to protect their own vested interests and they don't want the truth in the same building of a skyscrapper, much less the same room because they will lose in a discussion of facts. I would be very skeptical of anyone who claims that we need regulation on the internet - because so far all of the pushers are shoveling more bullshit.
- cageface 8y ago
  We're going to see a lot of bullshit regulation on the internet and a lot of opportunists taking advantage of the current chaos to push their own agenda. Unfortunately we handed them the weapons they need to push these arguments by building toxic (or at least very naive) platforms like Facebook and Bitcoin. It's a shame really but the tech community has itself to blame for a lot of this. The power struggles that have gone on in human societies for our entire existence are now starting to play out online. We should have seen this coming.

arithma 8y ago

Bitcoin seems to be getting real hurt from the lack of hype and bans from big adtech companies (along with all the cryptocurrency stuff as well.) https://trends.google.com/trends/explore?q=bitcoin&geo=US https://trends.google.com/trends/explore?q=bitcoin&geo=US