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What you have to know is that there are thousands of people out there who made windfall gains during the rise of bitcoin and the others. Say you bought or mined

by sho 7y ago

What you have to know is that there are thousands of people out there who made windfall gains during the rise of bitcoin and the others. Say you bought or mined 100 bitcoins back when they were a dollar, and somehow didn't sell - they're worth a million today, on paper. If you can talk up BTC/blockchain in some public place such that someone notable agrees it's useful - Wales qualifies - the crypto press would go nuts. "Wikipedia founder looking into blockchain!!" - anything to get it back in the press/public consciousness. If you can get it up just 10%, that's on paper $100k. For thousands of people, this is their motivation. Talking up bitcoin is literally their full time job.

netsharc 7y ago
I remember reading an article about Bitcoin where the author pointed out: when you buy some bitcoins, you're buying because you're hoping it will go up and you can sell and make profit in the future. So automatically, you're going to be cheerleading and promoting it, in hopes it rises in value...
- jraedisch 7y ago
  Same with every asset, I would think.
  - eru 7y ago
    Yes. And that's why short-selling is so important.
    - lr4444lr 7y ago
      Wow, never thought I'd hear such a good defense of short-selling, but you're right.
      - eru 7y ago
        Thanks for the compliment. It's pretty much the orthodox standard argument, so no stroke of genius from me. Orthodox economics is severely underrated. Oh, and bitcoin got a decent short-selling facility with the futures trading a while back. (No clue why you are getting downvoted.)
  - throw0101a 7y ago
    > Same with every asset, I would think. When you buy (e.g.) real estate you can get value out of it without thinking about selling it for a profit later. Especially if it's your primary residence. Same with most vehicles: they depreciate over time, but there is utilitarian value in the asset. Unless it's Steve McQueen's Mustang or something. Not every "asset" is about ROI.
    - philipov 7y ago
      That's the difference between assets in general, and investment vehicles, which are a very particular kind of asset regulated by the SEC.
      - ncallaway 7y ago
        Yes, but most investment vehicles are assets (or are eventually backed by assets). Real estate, and the various loans and derivatives, all eventually end up at real, productive assets that you might want to own. Stocks and the various index funds and derivatives, all eventually end up with ownership of a company. A company which, if profitable, can pay dividends back to the owners. I'd argue that it's a much rarer class of investment vehicle which is purely speculative.
        philipov 7y ago
        If you have a house you ever intend to sell, you will also try to make the neighborhood it is in sound more attractive, to increase its sale value, regardless of whether you can extract utility from it.
  - maest 7y ago
    aka "talking one's book"
  - nkrisc 7y ago
    Many other assets have at least some intrinsic value.
  - swalsh 7y ago
    I bought my house to live in, but it has gone up. Many of the stocks I've invested in I purchased because they pay dividends, and I expect they will continue to in the future. As long as that is true, I don't care if the price of the stock increases much. I have a case of fine wine in my basement, most wine doesn't age well, but some do. I expect these will increase in price... But I'm planning to drink more than a few bottles.
  - graeme 7y ago
    Nope. Assets have a sale value and an ownership value. Suppose a company makes $100,000 per year and this is expected to continue. How much would you pay for it? Now, suppose it makes $100,000 per year, but for some reason once you have it, no one will buy it off you. How much would you pay for it? You'd pay less in the second case, but not that much less. The company has a value which it gives to you for having ownership of it. Meanwhile, bitcoin produces....$0 per year for owning it. The only value is in sale at a higher price. You have to bet on appreciation. This is something fundamental people often misunderstand about, say, stocks. The price is set by supply and demand for the stock, but the value is determined by the cashflows. Usually price and value move at least somewhat in sync. But if stock markets went insane and valued everything at $0 for some reason, you'd still want to own companies.
    - itsumoiru 7y ago
      If you still put your money down for the stock, the value isn't $0 anymore. It's whatever you value it.
      - graeme 7y ago
        It’s a hypothetical, where the whole world has gone mad except you. Nobody buys. So it has a price you would purchase at, but $0 sale value to you as there are no other buyers. The true value of an asset is separate from the price (which is $0 in this case as you can’t sell it) A thought experiment to show the difference between price and value. Bitcoin currently has a price. No actual intrinsic value other than the hope of value in the future.
        orisho 7y ago
        I think it does have intrinsic value - that value lies in allowing some people, in some areas, to circumvent tracking or avoid authorities. To those people, BTC brings value which cannot be had elsewhere. My personal belief is that this is what fuels BTC's value, and the rest is speculation (but then it's similar to stocks). I don't think that whether it has this property (and value) is in question - the question is how much of BTC's price is fueled by that value.
  - 2zcon 7y ago
    Not currency, unless you're a forex trader. And not if you're aiming to collect a dividend* or to exert control over a company. *In the tech hysteria, it's easy to forget that this is where the fundamental value comes from.
- murdocc07 7y ago
  So, It is a PYRAMID scheme?
  - andreigheorghe 7y ago
    No, it's a reverse funnel system.
  - deleted 7y ago
    [deleted]
- blaser-waffle 7y ago
  Only if you're speculating on currency. Some people use BTC to pay for VPNs, drugs, or simply to get cash out of their country. There was a lot of speculation that the big spike in BTC a few years back was the Saudi royalty trying to move cash out before MBS cracked down on them.
  - spookthesunset 7y ago
    99% of Crypto is speculation. 0.5% is darknet markets, 0.25% is crypto ransomware, 0.1% is Saudi princes and rich people moving money out of a country. Somewhere in the remaining fraction of a percentage is legit legal usage.
  - arcticbull 7y ago
    There are much better ways to move money out of a country than one with locked-down fiat gateways in every first-world country with a fully public ledger. It may for a few thousand dollars but when you're talking Saudi prince money there's much better ways. It's not even good for that lol.
- gunshai 7y ago
  This is fundamental to trading/speculating on anything. Buying a stock/bond/asset comes with the intrinsic belief the value will increase. Being more specific, purchasing any speculative asset comes with the belief that the thing I am buying will increase in value relative to the thing I'm buying it. The reverse is also true for selling a speculative asset. Now that that is out of the way. Let's continue cherry picking as you've done and consider traders that specialize in short selling companies they deem as bad market actors. What do high profile short sellers do? They go on all sorts of media rants warning about companies/assets ect TO WARN PEOPLE AND INFORM THEM (legitimate or otherwise) for their own gain. Cherry picking these ideas with respect to crypto is totally naive.
SuperFerret 7y ago
Good luck trying to sell a million dollars worth of bitcoin.
RabbiPires 7y ago
Now that's bloody genius. Trick owners/founders of large foundations/corporations into checking out your blockchain, drive hype, ???, profit.
- gcpwnd 7y ago
  It's called product marketing.
Waterluvian 7y ago
Got me wondering. What's the largest amount of bitcoin that you can trivially convert into USD in a very short timeframe? Ie. Can "on paper" millionaires realise that wealth if they choose to?
- dharmab 7y ago
  Most online wallets will convert your balance to USD instantly, but limit the rate at which you can transfer the money to your normal bank.
  - Waterluvian 7y ago
    Yes? Even a billion dollars? I'm not sure you're actually answering my question.
    - bitcoinbutter 7y ago
      Big amounts, like 25M+ are usually done OTC. Several big companies in the space offer this service and are able to link you with one or multiple buyers to offload 9 digits. You can easily offload 10M USD worth over 10-20 minutes without having a big effect on the overall market.
      - kasey_junk 7y ago
        Can you link to an exchange that a) has the book depth to handle 10M USD currently and b) has a straightforward way to then move the cash position into a US bank in the same timeframe as an ACH? It has been years since I looked but that wasn’t available when I did. It would be a positive sign for the maturity of the market.
        kanwisher 7y ago
        google bitcoin otc like gemini, even coinbase pro can handle millions in a day. market is pretty large. have you tried?
        7y ago
deleted 7y ago
[deleted]
csomar 7y ago
While I agree about the concept, I think Bitcoin has jumped the shark on this one. It's hopeless to get it to bounce 10% with just that. It still works with alts that their market cap is small and are fairly non-liquid.
deleted 7y ago
[deleted]
fortran77 7y ago
> Talking up bitcoin is literally their full time job. Agreed. But sometimes true believers don't need a lot of motivation. What motivates Rust or Arch Linux people to talk up their favorite technology 24/7?
iameli 7y ago
And all of that made logical sense to me, but it wasn't until I took a job in the crypto space that I appreciated, viscerally, the extent to which it was happening. Dozens of Twitter accounts deriding other projects in the space as shitcoins 24/7. "Bitcoin is 100% not a scam and every other crypto project is 100% a scam" is somehow a position that's taken seriously by sheer memetic force of will. It's wild.
- xf00 7y ago
  What I fail to understand is what the difference between a currency and a ponzi is. It seems to me that Bitcoin is a transparent ponzi with some network effect. How transparent is central banking in comparison?
tomphoolery 7y ago
> For thousands of people, this is their motivation. Talking up bitcoin is literally their full time job. This is why it's a scam.
- OnuRC 7y ago
  Such a scam that more than %90 of it's entire price history made profit for anyone that bought it. Such a scam that you don't need any permission to sell or buy and gives you a returns that are not possible in any asset for public. It might not be the best store of value all the time or similar but in certain time frames, it's risk/reward ratio is beyond anything that's exist in investment world. Especially for public.

by sho 7y ago

netsharc 7y ago

I remember reading an article about Bitcoin where the author pointed out: when you buy some bitcoins, you're buying because you're hoping it will go up and you can sell and make profit in the future. So automatically, you're going to be cheerleading and promoting it, in hopes it rises in value...

jraedisch 7y ago
Same with every asset, I would think.
- eru 7y ago
  Yes. And that's why short-selling is so important.
  - lr4444lr 7y ago
    Wow, never thought I'd hear such a good defense of short-selling, but you're right.
    - eru 7y ago
      Thanks for the compliment. It's pretty much the orthodox standard argument, so no stroke of genius from me. Orthodox economics is severely underrated. Oh, and bitcoin got a decent short-selling facility with the futures trading a while back. (No clue why you are getting downvoted.)
- throw0101a 7y ago
  > Same with every asset, I would think. When you buy (e.g.) real estate you can get value out of it without thinking about selling it for a profit later. Especially if it's your primary residence. Same with most vehicles: they depreciate over time, but there is utilitarian value in the asset. Unless it's Steve McQueen's Mustang or something. Not every "asset" is about ROI.
  - philipov 7y ago
    That's the difference between assets in general, and investment vehicles, which are a very particular kind of asset regulated by the SEC.
    - ncallaway 7y ago
      Yes, but most investment vehicles are assets (or are eventually backed by assets). Real estate, and the various loans and derivatives, all eventually end up at real, productive assets that you might want to own. Stocks and the various index funds and derivatives, all eventually end up with ownership of a company. A company which, if profitable, can pay dividends back to the owners. I'd argue that it's a much rarer class of investment vehicle which is purely speculative.
      - philipov 7y ago
        If you have a house you ever intend to sell, you will also try to make the neighborhood it is in sound more attractive, to increase its sale value, regardless of whether you can extract utility from it.
- maest 7y ago
  aka "talking one's book"
- nkrisc 7y ago
  Many other assets have at least some intrinsic value.
- swalsh 7y ago
  I bought my house to live in, but it has gone up. Many of the stocks I've invested in I purchased because they pay dividends, and I expect they will continue to in the future. As long as that is true, I don't care if the price of the stock increases much. I have a case of fine wine in my basement, most wine doesn't age well, but some do. I expect these will increase in price... But I'm planning to drink more than a few bottles.
- graeme 7y ago
  Nope. Assets have a sale value and an ownership value. Suppose a company makes $100,000 per year and this is expected to continue. How much would you pay for it? Now, suppose it makes $100,000 per year, but for some reason once you have it, no one will buy it off you. How much would you pay for it? You'd pay less in the second case, but not that much less. The company has a value which it gives to you for having ownership of it. Meanwhile, bitcoin produces....$0 per year for owning it. The only value is in sale at a higher price. You have to bet on appreciation. This is something fundamental people often misunderstand about, say, stocks. The price is set by supply and demand for the stock, but the value is determined by the cashflows. Usually price and value move at least somewhat in sync. But if stock markets went insane and valued everything at $0 for some reason, you'd still want to own companies.
  - itsumoiru 7y ago
    If you still put your money down for the stock, the value isn't $0 anymore. It's whatever you value it.
    - graeme 7y ago
      It’s a hypothetical, where the whole world has gone mad except you. Nobody buys. So it has a price you would purchase at, but $0 sale value to you as there are no other buyers. The true value of an asset is separate from the price (which is $0 in this case as you can’t sell it) A thought experiment to show the difference between price and value. Bitcoin currently has a price. No actual intrinsic value other than the hope of value in the future.
      - orisho 7y ago
        I think it does have intrinsic value - that value lies in allowing some people, in some areas, to circumvent tracking or avoid authorities. To those people, BTC brings value which cannot be had elsewhere. My personal belief is that this is what fuels BTC's value, and the rest is speculation (but then it's similar to stocks). I don't think that whether it has this property (and value) is in question - the question is how much of BTC's price is fueled by that value.
- 2zcon 7y ago
  Not currency, unless you're a forex trader. And not if you're aiming to collect a dividend* or to exert control over a company. *In the tech hysteria, it's easy to forget that this is where the fundamental value comes from.
murdocc07 7y ago
So, It is a PYRAMID scheme?
- andreigheorghe 7y ago
  No, it's a reverse funnel system.
- deleted 7y ago
  [deleted]
blaser-waffle 7y ago
Only if you're speculating on currency. Some people use BTC to pay for VPNs, drugs, or simply to get cash out of their country. There was a lot of speculation that the big spike in BTC a few years back was the Saudi royalty trying to move cash out before MBS cracked down on them.
- spookthesunset 7y ago
  99% of Crypto is speculation. 0.5% is darknet markets, 0.25% is crypto ransomware, 0.1% is Saudi princes and rich people moving money out of a country. Somewhere in the remaining fraction of a percentage is legit legal usage.
- arcticbull 7y ago
  There are much better ways to move money out of a country than one with locked-down fiat gateways in every first-world country with a fully public ledger. It may for a few thousand dollars but when you're talking Saudi prince money there's much better ways. It's not even good for that lol.
gunshai 7y ago
This is fundamental to trading/speculating on anything. Buying a stock/bond/asset comes with the intrinsic belief the value will increase. Being more specific, purchasing any speculative asset comes with the belief that the thing I am buying will increase in value relative to the thing I'm buying it. The reverse is also true for selling a speculative asset. Now that that is out of the way. Let's continue cherry picking as you've done and consider traders that specialize in short selling companies they deem as bad market actors. What do high profile short sellers do? They go on all sorts of media rants warning about companies/assets ect TO WARN PEOPLE AND INFORM THEM (legitimate or otherwise) for their own gain. Cherry picking these ideas with respect to crypto is totally naive.

SuperFerret 7y ago

Good luck trying to sell a million dollars worth of bitcoin.

RabbiPires 7y ago

Now that's bloody genius. Trick owners/founders of large foundations/corporations into checking out your blockchain, drive hype, ???, profit.

gcpwnd 7y ago
It's called product marketing.

Waterluvian 7y ago

Got me wondering. What's the largest amount of bitcoin that you can trivially convert into USD in a very short timeframe? Ie. Can "on paper" millionaires realise that wealth if they choose to?

dharmab 7y ago
Most online wallets will convert your balance to USD instantly, but limit the rate at which you can transfer the money to your normal bank.
- Waterluvian 7y ago
  Yes? Even a billion dollars? I'm not sure you're actually answering my question.
  - bitcoinbutter 7y ago
    Big amounts, like 25M+ are usually done OTC. Several big companies in the space offer this service and are able to link you with one or multiple buyers to offload 9 digits. You can easily offload 10M USD worth over 10-20 minutes without having a big effect on the overall market.
    - kasey_junk 7y ago
      Can you link to an exchange that a) has the book depth to handle 10M USD currently and b) has a straightforward way to then move the cash position into a US bank in the same timeframe as an ACH? It has been years since I looked but that wasn’t available when I did. It would be a positive sign for the maturity of the market.
      - kanwisher 7y ago
        google bitcoin otc like gemini, even coinbase pro can handle millions in a day. market is pretty large. have you tried?
      - 7y ago

deleted 7y ago

[deleted]

csomar 7y ago

While I agree about the concept, I think Bitcoin has jumped the shark on this one. It's hopeless to get it to bounce 10% with just that. It still works with alts that their market cap is small and are fairly non-liquid.

deleted 7y ago

[deleted]

fortran77 7y ago

> Talking up bitcoin is literally their full time job. Agreed. But sometimes true believers don't need a lot of motivation. What motivates Rust or Arch Linux people to talk up their favorite technology 24/7?

iameli 7y ago

And all of that made logical sense to me, but it wasn't until I took a job in the crypto space that I appreciated, viscerally, the extent to which it was happening. Dozens of Twitter accounts deriding other projects in the space as shitcoins 24/7. "Bitcoin is 100% not a scam and every other crypto project is 100% a scam" is somehow a position that's taken seriously by sheer memetic force of will. It's wild.

xf00 7y ago
What I fail to understand is what the difference between a currency and a ponzi is. It seems to me that Bitcoin is a transparent ponzi with some network effect. How transparent is central banking in comparison?

tomphoolery 7y ago

> For thousands of people, this is their motivation. Talking up bitcoin is literally their full time job. This is why it's a scam.

OnuRC 7y ago
Such a scam that more than %90 of it's entire price history made profit for anyone that bought it. Such a scam that you don't need any permission to sell or buy and gives you a returns that are not possible in any asset for public. It might not be the best store of value all the time or similar but in certain time frames, it's risk/reward ratio is beyond anything that's exist in investment world. Especially for public.