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Bitcoin as a Game
- obilgic 7y agoThen I would say gold is exactly the same. In fact, gold would be a riskier betting game as information is less transparent (estimating supply, how fast It's mined etc) compared to bitcoin.
- JumpCrisscross 7y ago> gold is exactly the same Gold is similar. It's got more history. But it's more difficult to transact with. Bitcoin appears to be this generation's (late-boomer to early-millennial) gold or trading cards or what-have-you.
- luxuryballs 7y agoIs it more difficult to transact with? I can hand you a gold coin. But with bitcoin we need the internet and a whole network of miners.
- wmf 7y agoOTOH Bitcoin is easier to transact at a distance than gold.
- grubles 7y agoHow do you know that gold coin isn't filled with tungsten? With Bitcoin, it takes a handful of milliseconds to verify a transaction.
- luxuryballs 7y agoI guess it comes down to what we mean by easier. If we don’t count the entire mining network, developers and source code, all the maintenance and electricity costs, block chain explorers and wallet software...
- deleted 7y ago[deleted]
- layoric 7y agoGold has a actual use as a commodity, eg in electronics and other equipment, and derives a minimum value as such. So whilst how gold is used in trading circles might have similarities to BTC, this difference IMO makes them nothing alike.
- JohnJamesRambo 7y agoBitcoin has a just as relevant, or more so, actual use in buying drugs and frowned upon things on the internet, escaping government restrictions on money, etc.
- LanceH 7y agoGold has those same uses but at an international level and is generally approved of. The gold may never actually move, but ownership will transfer between countries.
- JohnJamesRambo 7y agoBut you have to use a middleman or intermediary. The genius of bitcoin was when Satoshi removed that and solved the double-spending problem in a decentralized way. >Bitcoin: A Peer-to-Peer Electronic Cash System
- ickelbawd 7y agoExcept that bitcoin relies on a whole network of middlemen to prove the validity of that transaction. Without miners you have no transaction.
- mc3 7y agoThe quantities used are usually very small though. Gold plated not made of gold. I don't think the use as a commodity drives or explains the price.
- jcranmer 7y agoThe primary use of gold, AIUI, is jewelry in India.
- all_blue_chucks 7y agoThere are practical limits to the supply of gold. There is no limit to the supply of crypto currency. That can be created out of thin air by anyone at any time.
- krrishd 7y ago> There is no limit to the supply of crypto currency the whole point of bitcoin — whether or not you believe it has a future —is that it allows for (and has) scarcity in a digital environment in which double-spending/scarcity were previously hard to enforce without an intermediary. there are only ever going to be 21 million bitcoin. there is a limit :)
- all_blue_chucks 7y agoExcept it isn't. There's BTC, BCH, BSV, etc. that are all forked from bitcoin, and there is an ever-growing number of tokens started from scratch (ETH, LTC, etc.). There is an infinite supply of crypto tokens.
- Thorentis 7y agoWell, you could apply this to almost any of the highly abstracted financial instruments currently traded. Derivatives, options, etc. People claim they're "investing in real companies" (which at a very low level they are), but most of the time what is actually happening, is you are betting on whether other people will invest in the company, or what investor sentiment will be x months down the track. You aren't directly investing in the success of the company, you're investing in the investor confidence in the company. Buying stocks directly is of course, at least a bit different. I see Bitcoin as much the same. Sure, it could be used as a real currency, in the same way that I could use options or bonds as real currency. I could ask you if you'd be willing to sell your car to me for x number of options I currently hold. But I haven't created a new currency, and the value behind that "currency" is just the investor opinion of it at any given time.
- Igelau 7y agoFantasy Baseball : MLB :: Cryptocurrencies : Wall Street
- dpc_pw 7y agoThe author just described how bitcoin has property of money (being a speculative bet that a given asset will carry value in the future), and deduced that bitcoin is not money.
- astrodust 7y agoThat's not what money is. You're describing futures.
- pg_is_a_butt 7y agoThat's not what futures are. You're describing money.
- Acrobatic_Road 7y agoBernard Lietar identified one of the modern properties of money as indeed speculation. 99% of forex is just that.
- astrodust 7y agoIn banking and finance everything is speculation. Pork bellies are speculation. Gold is speculation. That they consider money to be speculation as well is just a matter of perspective. Outside of that world it's not speculation.
- Zimahl 7y agoThe problem with the Bitcoin game is there is no longer the 'millionaire overnight' scenario as a possibility. Sure, you could buy 1 coin and it could go up 10x, yet you'd still only be (at this time) $90k richer. Which isn't bad but the big climb from decimal places up to full dollars is where there was more possibility. Common folks can take a gamble on 100 coins for $1 a piece, they really can't take a gamble at $3k+ per coin. Thus, that's why we sit in the $3k to $9k range. Too few people to join, too many people holding on because they bought at a higher price. I also don't think psychologically people want to own a decimal place of something but that's a different issue. If people could still buy 100 bitcoins, they'd probably do so.
- JohnJamesRambo 7y agoA 10x is actually fine by me.
- Zimahl 7y agoLike I implied, yeah, it would be fine with a lot of people. But that's not the same as buying 100 coins for $100 and then those coins are worth $10k each and you're a millionaire. That big multiplier is what got people interested in the first place, but it's gone. The equivalent of that now (with coins at $9.3k) is 100 coins at $933k. Sure, to make a million you just need to just over double the bitcoin price but you need almost a million dollars to make that happen.
- r32a_ 7y agoLightning network payments are denominated in sats. So you can buy 1 Sat for $0.0000945 USD
- alwillis 7y agoIf you had bought $10 worth of bitcoin starting on Oct 21, 2015, and continued to do so every month for the next four years, your total investment of $480 would be worth around $3,337 today — a gain of 595% (as of 10/21/19). Coinbase: https://blog.coinbase.com/charting-the-course-of-bitcoin-11-years-and-counting-b4e17969d4e1 https://blog.coinbase.com/charting-the-course-of-bitcoin-11-...
- aazaa 7y ago> The premise behind bitcoin-the-game is that the current wave of buyers must guess when (or if) a subsequent wave of buyers will emerge, this second next wave's participation being contingent on when (or if) they believe a third wave of buyers to emerge. If they guess right, the early birds win at the expense of the late ones. ... This is a truly tired analysis. It goes by various names, including "greater fool theory." Notice how it applies to almost every asset being traded today? Stocks? Remember dividends? Not so much these days. Poster child is Amazon, but there's a slew of others that offer virtually nothing to investors other than price appreciation. Government bonds? Do do negative interest rates sound? You buy one of these because either you have to or you think others will have to. Real estate? Please. Take away price appreciation driven by easy money and few would bother "owning." What this piece ignores is the world's ever-encroaching governments and the ongoing assault on privacy - with money as the fulcrum.
- JimboOmega 7y agoAt least with stock, even if they aren't paying a dividend in theory you own a portion of the earnings stream; it is instead reinvested in the company. But still a lot of companies do pay them (e.g. AAPL). If you owned all the shares of these companies you'd own something quite valuable that could return to you a lot of money, I think we all agree on that. (The ones with no dividend and you don't vote or control anything is worse).
- XorNot 7y agoStocks represent actual ownership in the company, potentially voting control of the boards decisions. Government bonds are backed by the full force and trust of the government they represent, and repay the face value plus yield promised at the time they were bought. They represent the most reliable yield you can get. Real estate? You mean that thing you live in? This is all a bunch of a false equivocation with one goal: "please buy my Bitcoins and give me USD for them"
- askmike 7y ago> Stocks represent actual ownership in the company, potentially voting control of the boards decisions. A company is an abstract concept around a group of people, framed inside a legal entity. But yes, if you own many stocks you can sit at the table with some big boys. Most companies come with less risk than Bitcoin. But I rather buy Bitcoin than WeWork shares (assuming they list). > Government bonds are backed by the full force and trust of the government they represent, and repay the face value plus yield promised at the time they were bought. They represent the most reliable yield you can get. Until a government defaults. This doesn't happy every week, but ruling out that it doesn't is not the best investment strategy. --- I'm not denying Bitcoin is speculation, but so is everything else. Sure Bitcoin might be more speculative under your frame of reference. But it's not black and white.
- retpirato 7y agoTo me it's like any other stock, except more volatile. When you use it for payments it's like selling some of your shares in a stock.
- alwillis 7y agoThis is one of the worst anti-bitcoin articles I’ve ever read. Bitcoin is no game; over $7 trillion has been transferred since 2009: https://blog.coinbase.com/charting-the-course-of-bitcoin-11-years-and-counting-b4e17969d4e1 https://blog.coinbase.com/charting-the-course-of-bitcoin-11-.... We’re seeing the beginning of a new economic good being created right in front of our eyes and many of us won’t realize this until many years later.
- seibelj 7y agoSo many articles about Bitcoin and cryptocurrencies today! I've devoted a lot of my career to blockchain, and here is my brief summary: - Blockchain typically means a tamper-proof, distributed database. - Smart contracts are like stored database procedures. - Blockchains allow you to transact valuable assets - even billions! - without needing to trust your counter-party. - However, you must trust the underlying software! This is a fundamentally different risk from usual financial transactions where you trust the institutions servicing the exchange, but not necessarily the counter-party. This turns finance upside-down! - People can create financial products and services - even extremely complex ones - without any governmental permission, or if they need a real-world presence, permission from a regulatory body that is very amenable. And once granted, it's very easily to transact globally! - If your curiosity is piqued, check out my blog post I wrote a while ago on MakerDAO and their decentalized stablecoin. It's fascinating! https://medium.com/@james_3093/the-dai-stablecoin-is-a-game-changer-for-ethereum-and-the-entire-cryptocurrency-ecosystem-13fb412d1e75 https://medium.com/@james_3093/the-dai-stablecoin-is-a-game-... - Cryptocurrency and blockchain are some of the most debated, and IMO misunderstood technologies of 2019. They are interesting from not just a pure computer science perspective but also economics, philosophy, and psychology.
- dragonwriter 7y ago> However, you must trust the underlying software! This is a fundamentally different risk from usual financial transactions where you trust the institutions servicing the exchange, but not necessarily the counter-party. This turns finance upside-down! No, this is just normal finance: most of the financial service industry is providing exactly what blockchain provides—a way to have a trusted set of institutions and processes in places of trusting counterparties. It's different that the crypto world likes to pretend it's just the automated processes embedded in software that need to be trusted—until those processes produce unacceptable results which requires social intervention, revealing that, yes, ultimately it's still trusting people—whereas traditional finance is overt about social constraints backstopping blind process.
- seibelj 7y agoIt's not the same. If the bank messes up a multi-million dollar wire transfer, you have recourse. If you mess up your multi-million dollar Bitcoin transfer, you have no recourse! Period!
- p1necone 7y agoI think this article is kind of missing the point. Literally any tradeable thing can be used for speculation like this. The problem with bitcoin is that it seems to be primarily used for speculation.
- solotronics 7y agoSomebody probably made the same arguments when the first paper money was printed and when the first government fiat came about. This is the next money and it's important because corrupt governments can not steal it or devalue it by printing.
- cryptica 7y agoBitcoin is gambling but the entire economy is also gambling. Luck is the only significant differentiator between winners and losers. The reason why capitalism kind of works is not because it rewards productive people but because most people believe that it rewards productive people. The economic incentive to work or invest is rooted in deception. Not so different from Bitcoin or anything else.
- jl2718 7y agoHe’s looking at Bitcoin in terms of dollars, but dollars also have zero utility, so they have to be traded for something, and there are an awful lot of them created every day. We’re way overcaptilalized, so most of this is going into speculative investment rather than consumable utility. In that regard, it hardly matters what form that speculation takes, the prices are mostly determined by capital flows rather than internal returns.