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Don't worry it IS defensively self correcting no matter who joins and for what reason. To keep it going forever it would need endless quadratic grows which is n

by noxer 6y ago

Don't worry it IS defensively self correcting no matter who joins and for what reason. To keep it going forever it would need endless quadratic grows which is not possible. Also there are solutions without PoW/PoS, they use FBA instead. As soon as they take over for any actual use, the energy wasting will come to an end.

BenoitEssiambre 6y ago
I mean, it _is_ going to eventually self correct. The question is, could it go on until causing another great depression and wwIII before it does?
- noxer 6y ago
  If it would have anywhere near a direct effect on our daily life that alone would have such a negative effect on the price that it would instantly crash. The price and more so the ever increasing price is the only thing that keeps it alive and it directly correlates with the price expectation people have. There is no way enough people would think the price goes up if negative effects would become so real.
  - BenoitEssiambre 6y ago
    What if the effects of cryptocoins are expected to affect other assets more negatively (people reduce buying from businesses because they want to hoard tokens instead so all assets but cryptocoins lose value while tokens are gaining). Then cryptocoins increasingly seems like the only asset worth buying. This is what makes this a bad Nash equilibrium and vicious circle. Now I think central banks can prevent this from affecting the greater economy by sufficiently stimulating investment (which would quickly push crypto coins prices up to a level where they can go down again). I think...
    - noxer 6y ago
      There where hugely popular deflationary assets in the past. Gold and Silver would also only go up in value over time if people would see it as more profitable than anything else. But reality kicks in at some point. PMs still goes up in value making new ATH every few year but they cant outperform stock. The people who still bet everything on gold or other PMs are the same who do so with bitcoin. They are attached to it. Its not a big problem because only a fraction of all people will get this kind of gold fever for a long period of time. The rest will move money to other assets and even short it. All of that leaves out any "authoritarian" intervention which at some point would be guaranteed if bitcoin would come close to a global risk. An yes, I know they cant shut down the network but like I said in my last post its all about the price tag. They can crash the price without attacking the network at all. Merely stating the goal to suppress it should be enough. No institution would bet against the gov so they would sell instantly.
      - BenoitEssiambre 6y ago
        While I won't argue with most of that and in reality it's the most likely scenario. > Its not a big problem because only a fraction of all people will get this kind of gold fever for a long period of time. When I see Tesla, one of the largest company in the US, buying 1.5B in Bitcoins. It goes a bit beyond a normal "fever". Now if this is just an isolated incident we should be in the clear. If this is the start of a trend for businesses, I can imagine a scenario where businesses add more and more Bitcoins to their balance sheet over some years which makes the price gradually go up, after years of prices going up, businesses start believing it's an always growing asset and over-weight their portfolio with it. Banks and financial institutions get in on the fun and eventually load up too. Now it's 2029 and we have lots of organisations with political power having incentives to keep this going and they also now have arguments that it's a new fundamental technological part of the financial system and it's systemically dangerous to let it become unstable. So instead of fixing the problem, the government caves, and against expert advice, tries to stabilize and prop up cryptocoins when corrections seem imminent. In doing so they severely destabilize the rest of the economy. I mean it's low probability, but there were experts who knew better in 1929 too and politics meant they did the wrong things anyways.

by noxer 6y ago

BenoitEssiambre 6y ago

I mean, it _is_ going to eventually self correct. The question is, could it go on until causing another great depression and wwIII before it does?

noxer 6y ago
If it would have anywhere near a direct effect on our daily life that alone would have such a negative effect on the price that it would instantly crash. The price and more so the ever increasing price is the only thing that keeps it alive and it directly correlates with the price expectation people have. There is no way enough people would think the price goes up if negative effects would become so real.
- BenoitEssiambre 6y ago
  What if the effects of cryptocoins are expected to affect other assets more negatively (people reduce buying from businesses because they want to hoard tokens instead so all assets but cryptocoins lose value while tokens are gaining). Then cryptocoins increasingly seems like the only asset worth buying. This is what makes this a bad Nash equilibrium and vicious circle. Now I think central banks can prevent this from affecting the greater economy by sufficiently stimulating investment (which would quickly push crypto coins prices up to a level where they can go down again). I think...
  - noxer 6y ago
    There where hugely popular deflationary assets in the past. Gold and Silver would also only go up in value over time if people would see it as more profitable than anything else. But reality kicks in at some point. PMs still goes up in value making new ATH every few year but they cant outperform stock. The people who still bet everything on gold or other PMs are the same who do so with bitcoin. They are attached to it. Its not a big problem because only a fraction of all people will get this kind of gold fever for a long period of time. The rest will move money to other assets and even short it. All of that leaves out any "authoritarian" intervention which at some point would be guaranteed if bitcoin would come close to a global risk. An yes, I know they cant shut down the network but like I said in my last post its all about the price tag. They can crash the price without attacking the network at all. Merely stating the goal to suppress it should be enough. No institution would bet against the gov so they would sell instantly.
    - BenoitEssiambre 6y ago
      While I won't argue with most of that and in reality it's the most likely scenario. > Its not a big problem because only a fraction of all people will get this kind of gold fever for a long period of time. When I see Tesla, one of the largest company in the US, buying 1.5B in Bitcoins. It goes a bit beyond a normal "fever". Now if this is just an isolated incident we should be in the clear. If this is the start of a trend for businesses, I can imagine a scenario where businesses add more and more Bitcoins to their balance sheet over some years which makes the price gradually go up, after years of prices going up, businesses start believing it's an always growing asset and over-weight their portfolio with it. Banks and financial institutions get in on the fun and eventually load up too. Now it's 2029 and we have lots of organisations with political power having incentives to keep this going and they also now have arguments that it's a new fundamental technological part of the financial system and it's systemically dangerous to let it become unstable. So instead of fixing the problem, the government caves, and against expert advice, tries to stabilize and prop up cryptocoins when corrections seem imminent. In doing so they severely destabilize the rest of the economy. I mean it's low probability, but there were experts who knew better in 1929 too and politics meant they did the wrong things anyways.