8 ms·

Historically, we've had major bubbles and crashes in all kinds of financial markets, from stocks and bonds, to property and dotcom stocks. Is there any reason t

Historically, we've had major bubbles and crashes in all kinds of financial markets, from stocks and bonds, to property and dotcom stocks. Is there any reason to believe that cryptocurrency is more stable and we won't have a catastrophic crash?

mailbag 5y ago
Arguably, we've already seen multiple catastrophic crashes in cryptocurrencies.
- WhisperingShiba 5y ago
  Brother, you simply don't understand. A 50% swing in a day is just volatility.
- epinephrinios 5y ago
  And the market rebounded without a government bailout.
  - seoaeu 5y ago
    Which is pretty clear evidence that those crashes weren't "catastrophic". That doesn't provide any proof that a future crash won't be substantially worse
    - epinephrinios 5y ago
      Similar crashes in the TradFi space would be considered worse than "catastrophic". Media would struggle to find words to describe them.
  - TrackerFF 5y ago
    ...and that's the dilemma. Did the market rebound because there's a organic growth of buyers, or did printing tethers out of thin air help this?
    - epinephrinios 5y ago
      Tether maybe used to be a huge risk for the Bitcoin price a few years back. Notice that we are only talking about the $ price here and not the tech. The market is way more robust now, especially now that Ethereum is so huge and provides way cleaner alternatives like DAI and USDC.
chizhik-pyzhik 5y ago
In theory, cryptocurrency should be more resilient through greater transparency; anyone can inspect a smart contract and see how it works, what collateral it holds. In practice, non-algorithmic stablecoins like Tether have very little transparency. I hope in the long run the market will gravitate towards algorithmic stablecoins like DAI.
spir 5y ago
Crypto "expert" here. We will have a catastrophic crash, it's normal and natural. But, the tech is here to stay and is 100x better than existing solutions. Crypto is changing the world, one crash at a time :)
- TomSwirly 5y ago
  > 100x better than existing solutions. And after ten years, there isn't one actual application of cryptocurrencies except for speculation and crime.
  - spir 5y ago
    I'm with you, where are the actual applications? I'd say this criticism was mostly fair up until about two years ago. Within the last two years, the actual applications have flourished. For example, have a look through this list https://defipulse.com/ https://defipulse.com/ If you remain skeptical, that's fair. The good news is, Ethereum is reaching adulthood this year by switching to proof of stake and launching the web of layer-2 networks. Within another three years or so, the "actual applications" will become so ubiquitous as to be impossible to ignore.
    - lvl100 5y ago
      This is just pathetic.
      - spir 5y ago
        There's a large subset of the talented people on HN that were wrong about crypto years ago-- they couldn't see that the casino and the innovation are, unfortunately, inseparable-- and many now cling to their original incorrect points of view, even as crypto is clearly changing the world like the internet did in the 90s and mobile in the 00s. I have been full-time in crypto for years. I could write you a 10,000-word essay on crypto's promising use cases. But, I believe that you, and many others on HN, don't want to hear it. That's too bad, because you guys grew up on sci-fi and rigor, and now you're ignoring that crypto is both rigorously successful and cypherpunk sci-fi come to life.
X6S1x6Okd1st 5y ago
this is practically what cryptocurrency is known for

mailbag 5y ago

Arguably, we've already seen multiple catastrophic crashes in cryptocurrencies.

WhisperingShiba 5y ago
Brother, you simply don't understand. A 50% swing in a day is just volatility.
epinephrinios 5y ago
And the market rebounded without a government bailout.
- seoaeu 5y ago
  Which is pretty clear evidence that those crashes weren't "catastrophic". That doesn't provide any proof that a future crash won't be substantially worse
  - epinephrinios 5y ago
    Similar crashes in the TradFi space would be considered worse than "catastrophic". Media would struggle to find words to describe them.
- TrackerFF 5y ago
  ...and that's the dilemma. Did the market rebound because there's a organic growth of buyers, or did printing tethers out of thin air help this?
  - epinephrinios 5y ago
    Tether maybe used to be a huge risk for the Bitcoin price a few years back. Notice that we are only talking about the $ price here and not the tech. The market is way more robust now, especially now that Ethereum is so huge and provides way cleaner alternatives like DAI and USDC.

chizhik-pyzhik 5y ago

In theory, cryptocurrency should be more resilient through greater transparency; anyone can inspect a smart contract and see how it works, what collateral it holds. In practice, non-algorithmic stablecoins like Tether have very little transparency. I hope in the long run the market will gravitate towards algorithmic stablecoins like DAI.

spir 5y ago

Crypto "expert" here. We will have a catastrophic crash, it's normal and natural. But, the tech is here to stay and is 100x better than existing solutions. Crypto is changing the world, one crash at a time :)

TomSwirly 5y ago
> 100x better than existing solutions. And after ten years, there isn't one actual application of cryptocurrencies except for speculation and crime.
- spir 5y ago
  I'm with you, where are the actual applications? I'd say this criticism was mostly fair up until about two years ago. Within the last two years, the actual applications have flourished. For example, have a look through this list https://defipulse.com/ https://defipulse.com/ If you remain skeptical, that's fair. The good news is, Ethereum is reaching adulthood this year by switching to proof of stake and launching the web of layer-2 networks. Within another three years or so, the "actual applications" will become so ubiquitous as to be impossible to ignore.
  - lvl100 5y ago
    This is just pathetic.
    - spir 5y ago
      There's a large subset of the talented people on HN that were wrong about crypto years ago-- they couldn't see that the casino and the innovation are, unfortunately, inseparable-- and many now cling to their original incorrect points of view, even as crypto is clearly changing the world like the internet did in the 90s and mobile in the 00s. I have been full-time in crypto for years. I could write you a 10,000-word essay on crypto's promising use cases. But, I believe that you, and many others on HN, don't want to hear it. That's too bad, because you guys grew up on sci-fi and rigor, and now you're ignoring that crypto is both rigorously successful and cypherpunk sci-fi come to life.

X6S1x6Okd1st 5y ago

this is practically what cryptocurrency is known for