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This is written from the perspective of a person who believes in blockchain-based currencies but thinks Bitcoin as an implementation of said currency is a failu
by louwrentius 6y ago
This is written from the perspective of a person who believes in blockchain-based currencies but thinks Bitcoin as an implementation of said currency is a failure. He thinks the concept of mining is a fundamental flaw.
But he keeps the door open for different implementations. Personally, I think the whole concept of blockchain-based currencies is flawed. But let’s not go there right now.
The value of Bitcoin is very high and that’s very scary. Who is buying? All those investors who have no place else to go? Gambling on Bitcoin to find ‘growth’?
Bitcoin is quickly becoming too big to fail. But it will fail at some point, because I believe it isn’t anything. (You may disagree, but hear me out). So when the music stops, I think it could be the event that triggers another 2007/2008. Bot big enough by itself. But it triggers the same avalanche of bankruptcies, the dominos will fall.
This time though, all financial instruments to save us are exhausted. Interest is zero. The worst may yet to come.
- baby 6y agoWhy would you put your money in gold rather than bitcoin? Also why is the concept of blockchain as currency is flawed? What construction would you use instead for a currency that is trusted throughout the world?
- louwrentius 6y agoI think the problems we face are not solved by technology but through policy. It may never be solved, but I believe no crypto currency will ever solve an inate human trust problem.
- MBCook 6y agoI agree that it’s inherently flawed, however I don’t see how it would be big enough to trigger another 2008. That seems way out of proportion to me. I think bitcoins affect on the real economy is just too small.
- carlineng 6y agoBitcoin total market cap is ~$500 billion, so it's still a pretty small niche, and I think there's quite a ways to go before it becomes "too big to fail". For comparison, the market cap of gold is ~$10 trillion. The majority of the US economy is not hooked into Bitcoin, and very few institutional investors have any significant exposure to Bitcoin. Contrast that with the '08 financial crisis that was based in real estate -- the US real estate market at the peak of the crisis was ~$23 trillion [1], with nearly every major financial institution heavily exposed. [1]: https://www.federalreserve.gov/releases/z1/dataviz/z1/balance_sheet/chart/#series:nonfinancial-assets https://www.federalreserve.gov/releases/z1/dataviz/z1/balanc...
- louwrentius 6y agoI hope you are right and only a few people will get hurt. That people will seriously get hurt, that’s not a question.
- thekyle 6y agoIf there is going to be a debt fueled bubble I would prefer it to be in Bitcoin over something that actually matters like housing or education. If Bitcoin prices go up 10x nobody really cares. If housing prices go up 10x then people can't afford shelter and become homeless.