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I've been expecting a huge crash in crypto. It doesn't seem to happen. I'll never invest as I see no reason for the high value and no reason for the value to in

by xupybd 5y ago

I've been expecting a huge crash in crypto. It doesn't seem to happen. I'll never invest as I see no reason for the high value and no reason for the value to increase. Other than it being something close to a Ponzi scheme that people love to invest in as they assume there is some underlying value.

taberiand 5y ago
It seems to me many people assume they'll find their greater fool to sell to and not be left holding the bag - everything else is just rationalising that greed.
- nivenkos 5y ago
  To be fair, it has grown a lot. From Usenet groups, to some little-known thing used with Tor to buy drugs, to now having adverts for various companies in Snapchat, at the Superbowl, etc. That's a lot more potential bagholders injecting capital.
  - colechristensen 5y ago
    It has grown as a speculation vehicle, but how much has it grown as an actually used means of exchanging value? (How much outside of toy usages? How much outside of immoral usage?)
    - xupybd 5y ago
      Bitcoin is too slow for a transactional currency
      - lowkey 5y ago
        You are conveniently ignoring Lightning which currently power payments for an entire nation (El Salvador) and has plenty of capacity for more. Lightning scales fast and cheap, offering instant final settlement powered by the largest security hashpower wall ever invented. Try that with Fiat.
        vgeek 5y ago
        "Blockchain is so great, it had to invent off chain transactions to be practical" isn't the best argument for real world feasibility. LN has lots of centralization with popular nodes, if you're still paying for an on chain transaction to open/close a channel, you have to start the channel with enough reserves to make it worthwhile.
        lowkey 5y ago
        Tell me you don't understand the fundamental blockchain tradeoff between scalability, decentralization, and security, without telling me you don't understand. Blockchain technology has unique advantages and constraints, like any novel technology. Bitcoin chose a set of parameters designed to ensure sufficient security budget to protect the network, while optimizing for decentralization thereby limiting transaction throughput on layer 1 as the tradeoff. Lightning and other layer-2 provide the scalability by leveraging the security of layer-1. Bitcoin layer-1 is ideal for sending large payments (say >$1000USD today): It currently costs ~$1USD to post a transaction on the Bitcoin layer-1 blockchain. For that I can send an arbitrary amount with no upper limit of value, enjoy payment finality in about 6 blocks (~1hr) and I never have to pay any more to store the value associated with my Bitcoin address. Security for the life of the network is included in my $1 transaction fee. Bitcoin layer-2 (Lightning) is ideal for small payments (<$1000USD today): It currently costs a small fraction of a penny to send funds across the Lightning network with near instant finality (seconds) and very good anonymity. The two technologies complement one another to provide an example to the world of what a sound-money system could mean if it was truly decentralized and immune from manipulation by centralized actors (central banks, governments, etc). Prove me wrong. Is there another form of money that: - is virtually guaranteed to be immune to manipulation by central actors? - allows you to transmit any amount of value to anyone (censorship resistance) anywhere in the world within about an hour for about $1USD and know with confidence that the payment will go through with finality? - allows you to send smaller amounts for fractions of a penny in seconds to anyone anywhere?
        vgeek 5y ago
        Solutions to non problems that introduce larger problems are inherently bad solutions. Point 1) there are more bad actors wash trading, manipulating markets and pump & dump scams involved in crypto than any other markets. (Even ignoring Tether, the common DAO exploits involving $xx,xxx,xxx+ of losses) Point 2/3 are the same. There isn't an easy, well known way to do this for no fee to any country. WU is expensive and PayPal will block your account. Egold tried to solve this in the past, until fraud caused it to shutter. There are niche Fintech startups that likely address this for sub 0.5% fees, without the learning curve and exposure to currency exchange volatility. Gas and BTC fees show that they weren't really built with this consideration in mind, they just added hacky pseudo-solutions at a later date. I'm lost as to the "anonymous" part, since I had to do all types of AML/KYC stuff when I've opened accounts with popular exchanges, so there is likely an element of discoverability.
    - throwaway248329 5y ago
      There is over $10 billion settled on Bitcoin network per day.
      - newsbinator 5y ago
        How much of that is exchanging value though? E.g. paying for goods or for work, or giving a loan. Even 1%
        throwaway248329 5y ago
        We can't know, but that percent is likely growing. Year ago it was unthinkable that Bitcoin will be declared a legal tender in any country.
        AstroDogCatcher 5y ago
        Bitcoin being legal tender in certain places seems like more of a negative indicator on those countries, rather than a positive indicator for bitcoin.
        lowkey 5y ago
        That's your opinion based on your disapproval of Bitcoin. Care to share why you are negative on Bitcoin? I believe most people confuse Bitcoin as an alternate means of payment instead of what it really is which is an honest sound digital money system, with a transparent monetary policy from now to infinity AND a censorship-resistant payment network built on the most secure distributed computer network ever created by humans. Bitcoin is not competing with Visa or Mastercard. It is competing with all fiat currencies, as well as any other security or property that is used as a store of value (stocks, bonds, real estate, etc).
        AstroDogCatcher 5y ago
        I am mostly indifferent to bitcoin and cryptocurrencies in general, but strongly opposed to people shilling for them. I see no evidence thus far for bitcoin being anything other than a vehicle for speculation; just one more form of gambling with the froth on top of our financial system, distracting people and diverting resources from actual useful activity.
    - bko 5y ago
      Why does every thread on HN about crypto turn into a circle jerk about how it's a ponzi, used for nefarious purposes and is bad for the environment? HN used to be (and for the most part is) a place for people excited about new ideas that could transform the world not blind derision and mockery. But every time this topic comes up you see the same predictable responses with nothing interesting or unique to add.
      - NicoJuicy 5y ago
        You could look for arguments against it, if you see it so much. Ps. He wasn't saying anything about the environment and it's also what I'm thinking :)
        md2020 5y ago
        There are arguments against it within 5 minutes of Google search, it’s the people repeating this stuff that should do their research.
        NicoJuicy 5y ago
        That's mostly how they/we conclude those things... Obviously. Eg. You call it Ponzi, i call it money printing with tether.. And courts actually seem to agree on a lot of those things. We'll see how coinbase fares, but it's already obvious they can't do some things that others do. Because they care more about regulations. Eg. Even the first Bitcoin discussion on the original board mentioned it would be a bad currency. Let's not pretend it's a good one and throw 100 of years of economic lessons out of the window. I mostly see proponents don't do their research and see them influenced by plain greed. Eg. Here, you didn't even reply on topic on the original comment and added a lot of other things out of thin air here. Lol No one was even talking about Ponzi or environmental issues. They wanted to see actual applications for it, selling avatars isn't one fyi.
        deleted 5y ago
        [deleted]
      - 5y ago
    - DelightOne 5y ago
      As long as there's a need for money laundering, Bitcoin will thrive if it is not shut down.
SixDouble5321 5y ago
The classic argument that will never die. It only has value as long as people put value on it. Green paper also has no value, but there seems to be nothing that people won't do to get more...
- AnIdiotOnTheNet 5y ago
  This is a disingenuous take. The green paper is a certificate of debt backed by the US government's full faith and credit. The dollar has value as long as the US government accepts it as payment. Similarly, the number in the bitcoin wallet has no value itself and is backed by greater fools. If you believe greater fools will continue to increase in number over time then bitcoin is a good bet I suppose, but there's a reason the price is so ridiculously unstable.
  - md2020 5y ago
    > the US government’s full faith and credit Increasingly doesn’t mean as much to people as it used to when it comes to debasing their own currency. See the recent lie about inflation being transitory, which Powell literally just admitted isn’t true. > the number in the bitcoin wallet has no value itself This is a weird take and I don’t see what your point is. The number in your fiat bank account means just as much as the number in a BTC wallet. The number there is how much you’re entitled to withdraw or spend.
    - AnIdiotOnTheNet 5y ago
      Right, it isn't the number that has value, it's what the number represents. The number of dollars in my bank account represents (in a roundabout way) debt the US government owes me. What does BTC represent? Most generously one could say it represents debts owed by the community, but since each member of the community can choose whether or not to honor that or to what extent it doesn't have any stability.
      - danuker 5y ago
        And the US government does not choose to what extent to honor you? What is inflation targeting then, and why is inflation targeted instead of deflation? The answer: so its debt is inflated away.

by xupybd 5y ago

taberiand 5y ago

It seems to me many people assume they'll find their greater fool to sell to and not be left holding the bag - everything else is just rationalising that greed.

nivenkos 5y ago
To be fair, it has grown a lot. From Usenet groups, to some little-known thing used with Tor to buy drugs, to now having adverts for various companies in Snapchat, at the Superbowl, etc. That's a lot more potential bagholders injecting capital.
- colechristensen 5y ago
  It has grown as a speculation vehicle, but how much has it grown as an actually used means of exchanging value? (How much outside of toy usages? How much outside of immoral usage?)
  - xupybd 5y ago
    Bitcoin is too slow for a transactional currency
    - lowkey 5y ago
      You are conveniently ignoring Lightning which currently power payments for an entire nation (El Salvador) and has plenty of capacity for more. Lightning scales fast and cheap, offering instant final settlement powered by the largest security hashpower wall ever invented. Try that with Fiat.
      - vgeek 5y ago
        "Blockchain is so great, it had to invent off chain transactions to be practical" isn't the best argument for real world feasibility. LN has lots of centralization with popular nodes, if you're still paying for an on chain transaction to open/close a channel, you have to start the channel with enough reserves to make it worthwhile.
        lowkey 5y ago
        Tell me you don't understand the fundamental blockchain tradeoff between scalability, decentralization, and security, without telling me you don't understand. Blockchain technology has unique advantages and constraints, like any novel technology. Bitcoin chose a set of parameters designed to ensure sufficient security budget to protect the network, while optimizing for decentralization thereby limiting transaction throughput on layer 1 as the tradeoff. Lightning and other layer-2 provide the scalability by leveraging the security of layer-1. Bitcoin layer-1 is ideal for sending large payments (say >$1000USD today): It currently costs ~$1USD to post a transaction on the Bitcoin layer-1 blockchain. For that I can send an arbitrary amount with no upper limit of value, enjoy payment finality in about 6 blocks (~1hr) and I never have to pay any more to store the value associated with my Bitcoin address. Security for the life of the network is included in my $1 transaction fee. Bitcoin layer-2 (Lightning) is ideal for small payments (<$1000USD today): It currently costs a small fraction of a penny to send funds across the Lightning network with near instant finality (seconds) and very good anonymity. The two technologies complement one another to provide an example to the world of what a sound-money system could mean if it was truly decentralized and immune from manipulation by centralized actors (central banks, governments, etc). Prove me wrong. Is there another form of money that: - is virtually guaranteed to be immune to manipulation by central actors? - allows you to transmit any amount of value to anyone (censorship resistance) anywhere in the world within about an hour for about $1USD and know with confidence that the payment will go through with finality? - allows you to send smaller amounts for fractions of a penny in seconds to anyone anywhere?
        vgeek 5y ago
        Solutions to non problems that introduce larger problems are inherently bad solutions. Point 1) there are more bad actors wash trading, manipulating markets and pump & dump scams involved in crypto than any other markets. (Even ignoring Tether, the common DAO exploits involving $xx,xxx,xxx+ of losses) Point 2/3 are the same. There isn't an easy, well known way to do this for no fee to any country. WU is expensive and PayPal will block your account. Egold tried to solve this in the past, until fraud caused it to shutter. There are niche Fintech startups that likely address this for sub 0.5% fees, without the learning curve and exposure to currency exchange volatility. Gas and BTC fees show that they weren't really built with this consideration in mind, they just added hacky pseudo-solutions at a later date. I'm lost as to the "anonymous" part, since I had to do all types of AML/KYC stuff when I've opened accounts with popular exchanges, so there is likely an element of discoverability.
  - throwaway248329 5y ago
    There is over $10 billion settled on Bitcoin network per day.
    - newsbinator 5y ago
      How much of that is exchanging value though? E.g. paying for goods or for work, or giving a loan. Even 1%
      - throwaway248329 5y ago
        We can't know, but that percent is likely growing. Year ago it was unthinkable that Bitcoin will be declared a legal tender in any country.
        AstroDogCatcher 5y ago
        Bitcoin being legal tender in certain places seems like more of a negative indicator on those countries, rather than a positive indicator for bitcoin.
        lowkey 5y ago
        That's your opinion based on your disapproval of Bitcoin. Care to share why you are negative on Bitcoin? I believe most people confuse Bitcoin as an alternate means of payment instead of what it really is which is an honest sound digital money system, with a transparent monetary policy from now to infinity AND a censorship-resistant payment network built on the most secure distributed computer network ever created by humans. Bitcoin is not competing with Visa or Mastercard. It is competing with all fiat currencies, as well as any other security or property that is used as a store of value (stocks, bonds, real estate, etc).
        AstroDogCatcher 5y ago
        I am mostly indifferent to bitcoin and cryptocurrencies in general, but strongly opposed to people shilling for them. I see no evidence thus far for bitcoin being anything other than a vehicle for speculation; just one more form of gambling with the froth on top of our financial system, distracting people and diverting resources from actual useful activity.
  - bko 5y ago
    Why does every thread on HN about crypto turn into a circle jerk about how it's a ponzi, used for nefarious purposes and is bad for the environment? HN used to be (and for the most part is) a place for people excited about new ideas that could transform the world not blind derision and mockery. But every time this topic comes up you see the same predictable responses with nothing interesting or unique to add.
    - NicoJuicy 5y ago
      You could look for arguments against it, if you see it so much. Ps. He wasn't saying anything about the environment and it's also what I'm thinking :)
      - md2020 5y ago
        There are arguments against it within 5 minutes of Google search, it’s the people repeating this stuff that should do their research.
        NicoJuicy 5y ago
        That's mostly how they/we conclude those things... Obviously. Eg. You call it Ponzi, i call it money printing with tether.. And courts actually seem to agree on a lot of those things. We'll see how coinbase fares, but it's already obvious they can't do some things that others do. Because they care more about regulations. Eg. Even the first Bitcoin discussion on the original board mentioned it would be a bad currency. Let's not pretend it's a good one and throw 100 of years of economic lessons out of the window. I mostly see proponents don't do their research and see them influenced by plain greed. Eg. Here, you didn't even reply on topic on the original comment and added a lot of other things out of thin air here. Lol No one was even talking about Ponzi or environmental issues. They wanted to see actual applications for it, selling avatars isn't one fyi.
        deleted 5y ago
        [deleted]
    - 5y ago
  - DelightOne 5y ago
    As long as there's a need for money laundering, Bitcoin will thrive if it is not shut down.

SixDouble5321 5y ago

The classic argument that will never die. It only has value as long as people put value on it. Green paper also has no value, but there seems to be nothing that people won't do to get more...

AnIdiotOnTheNet 5y ago
This is a disingenuous take. The green paper is a certificate of debt backed by the US government's full faith and credit. The dollar has value as long as the US government accepts it as payment. Similarly, the number in the bitcoin wallet has no value itself and is backed by greater fools. If you believe greater fools will continue to increase in number over time then bitcoin is a good bet I suppose, but there's a reason the price is so ridiculously unstable.
- md2020 5y ago
  > the US government’s full faith and credit Increasingly doesn’t mean as much to people as it used to when it comes to debasing their own currency. See the recent lie about inflation being transitory, which Powell literally just admitted isn’t true. > the number in the bitcoin wallet has no value itself This is a weird take and I don’t see what your point is. The number in your fiat bank account means just as much as the number in a BTC wallet. The number there is how much you’re entitled to withdraw or spend.
  - AnIdiotOnTheNet 5y ago
    Right, it isn't the number that has value, it's what the number represents. The number of dollars in my bank account represents (in a roundabout way) debt the US government owes me. What does BTC represent? Most generously one could say it represents debts owed by the community, but since each member of the community can choose whether or not to honor that or to what extent it doesn't have any stability.
    - danuker 5y ago
      And the US government does not choose to what extent to honor you? What is inflation targeting then, and why is inflation targeted instead of deflation? The answer: so its debt is inflated away.