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I'm genuinely curious when the fat lady will stop singing in regards to Bitcoin. I sort-of understand the allure of ETH and its derivatives ("programmable money

• deleted 5y ago
  [deleted]
• vmception 5y ago
  All blockchains are just databases that anyone can write to by paying in the transferable database units. People are willing to do that. Don't worry about the sales pitches for why other people hoard the database units. It periodically fits their risk profile, or it doesnt. Who cares. I like using the database, I expect to continue being able to. Other platforms don’t have the same features regarding the tradability of the unit. Dealbreaker.
• stevehawk 5y ago
  Nope. I'm pretty sure you understand it perfectly.
• asperous 5y ago
  If you think about it like gambling it makes sense. It takes about $14 billion per year to maintain the current price given that new bitcoins are "mined", so that's the theoretical supply inflation right now not subtracting deflation from lost coins. The gambling industry worldwide revenue is $219 billion. That's just one theory of its value if its purely used for speculation. That said I still believe it could totally collapse at any time or perhaps hit an all time high and slowly decline from there, with several smaller rallies on its way down.
  • WalterGR 5y ago
    It takes about 14 billion per year to maintain the current price given that new bitcoins are "mined" 14 billion what to maintain the current price? How does that work?
    • hihihihi1234 5y ago
      I think what GP means is that X amount of new bitcoins are "mined" every year, which is to say that X new bitcoins spring into existence from nowhere, so if the current exchange rate is Y dollars per bitcoin then XY dollars needs to flow into bitcoin per year for bitcoin to retain its current market capitalisation. And I guess XY = $14 billion but I haven't bothered to look the numbers up.
      • Hjfrf 5y ago
        I got 17bn, but with constantly changing prices a rough figure is fine. Here's the previous day's block reward and current price. https://bitinfocharts.com/bitcoin/ https://bitinfocharts.com/bitcoin/ The other thing about mining is the their costs are in hard currency, so there's not much opportunity to "hodl". Those mined coins need to be sold once the electricity bill is due, so to maintain a stable price bitcoin needs an ongoing net dollar investment proportionate to the current price (taking halvings into account).
  • ur-whale 5y ago
    > It takes about $14 billion per year to maintain the current price I would put this in the "speculation" bucket. First: as surprising as it may seem, not all miners sell their coins (it's cheaper to mine coin than to buy them, therefore someone wanting to invest 10M in BTC is better off buying mining equipment and paying for the power to run it). Second: it's very likely that, the exact supply of Bitcoin there ever will be being a known quantity, the "cost" of as-of-yet-unmined coins is priced in.
• bleachedsleet 5y ago
  > …down 30% from November… And up over 300,000% over its lifetime…your point in measuring from November arbitrarily? This statement doesn’t seem like “genuine curiosity” to me and more like your mind has already been made up.
  • flipbrad 5y ago
    With figures like that, are you really disproving his point (that it's a speculative financial instrument, not a value store)?
    • bleachedsleet 5y ago
      I don’t recall trying to disprove the point at all
• ur-whale 5y ago
  >Maybe I'm just not smart enough to understand BTC. There is one aspect of BTC that IMO does not receive enough attention. Can you think of any other asset that: 1) strictly no one knows you own, yet you do own it absolutely, short of losing your mind or dying. 2) can't be seized by anyone, especially if 1) holds true 3) is highly likely (because of - among other things - finite, known-ahead-of-time supply) to preserve (or even increase) its value and therefore shields your wealth from erosion. Bitcoin is not a perfect match for these requirements: for 1, you have to be a little careful how you acquire it and spend it (direct mining is the best way) for 2, you also have to be careful how you manage your keys for 3, you have to average out volatility over sizable stretches of time (~2 years) Still, there isn't IMO anything around that fits the bill as close as BTC does. A lot of people have a lot of negative things to say about BTC, but the fact remains: theses 3 properties are highly desirable, hence IMO the reason why BTC in such high demand. All the negative arguments against BTC (power usage, ransomware, no intrinsic value, there's a million clones of it, unbearable volatility, can't be used as a currency, maxes out at 7 tps, miners will bail when rewards goes down, and all of the other "wont you think of the children" type arguments) don't carry much wait in the face of these 3 properties.
  • captn3m0 5y ago
    The majority of retail investors in BTC are not buying it for the above properties - they are buying it on exchanges that report to the taxman as a speculative asset. For these users, both 1 and 2 are not Satisfied (the bank knows you invest in crypto, and the exchange holds your crypto, you don’t have control over it). (3) is getting harder to claim every day but time will tell.
    • ur-whale 5y ago
      > they are buying it on exchanges that report to the taxman as a speculative asset I believe you are correct for the vast majority of small retail crypto investors, and you are also correct that many of them are in a get-rich-quick type mindset. I feel sad for them, but ... there's no known cure for human nature. But none of these arguments contradict the fact that the asset does have these desirable properties, and that it does create strong demand, especially from HNWI type investors. As for 3) I disagree: it has always been very hard, and it's actually been much harder in the past. A 30% downswing like the recent one is total peanuts compared to what happened in the early days. I seem to recall a time where it went from $30 down to $2 in a matter of weeks.
• polote 5y ago
  What's the difference between BTC and a GOOG share ? Google doesn't give any dividend and the GOOG share has not any voting right. But even the GOOGL share there is a voting right, but Google founders will have the majority anyway. So what's the difference ? In both case you posses a piece of electronic paper that can be exchanged on a market and there is no other benefit. Not defending BTC, I'm just curious
  • captn3m0 5y ago
    Google has assets (both physical like servers and virtual like user data) and revenue, the liquidation of which can make the shareholders whole. With BTC, there’s no underlying asset.
    • scotty79 5y ago
      But the piece of paper that is GOOG stock has nothing to do with servers. You can't go to Google give them GOOG stock and say "give me some servers for that, please".
      • sudosysgen 5y ago
        If you've got enough, yeah you can
        • scotty79 5y ago
          No, you can't because Larry Page can step in, wave the golden action in your face and say "nope".
    • kayamon 5y ago
      > With BTC, there’s no underlying asset. lolwut BTC defines computation/energy as a tradable asset -- that's literally the whole point of it.
      • wutwut5521 5y ago
• dcolkitt 5y ago
  > BTC is supposed to be a "value store" yet is down 30% from November It certainly would be hard to argue against the fact that gold and silver are stores of value. (Even if you don't invest in them, it's pretty clear that the vast majority of market demand for precious metals comes from store of value.) Yet silver is currently 55% off its peak, just a few years ago gold was 40% off its peak. Store of value doesn't imply that an asset can never decline in price. It implies that an asset is likely to hold its value when other assets in your portfolio are down significantly, or even worse when other assets are seized or destroyed. > It's supposed to be a "currency" but you can't use it as one The dollar is a currency, but the majority of dollar owners live in foreign countries where you can't pay for things in dollars. > "decentralized" but mining is monopolized by a handful of mining pools The concentration of miners is essentially irrelevant at current levels to decentralization. From a user's perspective decentralization matters because of the possibility of censorship. Bank of America can freeze my account. To censor a transaction in the Bitcoin network for more than 1 day would require controlling 99% of the hash power in the network. Consequently a Bitcoin transaction has never been censored in the history of the network.
  • dvt 5y ago
    > It certainly would be hard to argue against the fact that gold and silver are stores of value. I don't think gold and silver are stores of value, but (certain) Rolexes and Ferraris are. And so is real estate. > The dollar is a currency, but the majority of dollar owners live in foreign countries where you can't pay for things in dollars. Not sure if you've done much traveling, but the USD is basically usable everywhere. > Bank of America can freeze my account. I think this is a solution looking for a problem. It's extremely rare that a bank will freeze an account for non-legitimate reasons. But I mean, sure, you're technically correct: there's a non-zero probability BofA will freeze your account.
    • lowkey 5y ago
      > I think this is a solution looking for a problem. It's extremely rare that a bank will freeze an account for non-legitimate reasons. But I mean, sure, you're technically correct: there's a non-zero probability BofA will freeze your account. It’s lucky I guess that you don’t hold any unpopular political views. Let’s hope for your sake it stays that way. If you for example wanted to donate to Wikileaks or Julian Assange’s defense or the Canadian Truckers - the banks would very likely want to censor those transactions. Or imagine you held political views that called into question the validity of the big banks or you if you wanted to get in the business of sex toys or some other ‘immoral’ industry, suddenly censorship resistance matters quite a bit. Just because Bitcoin’s censorship-resistant properties haven’t benefited you personally yet, doesn’t mean they don’t offer the world value by means of freedom to engage in commerce - even if the bankers would prefer you didn’t.
• tejohnso 5y ago
  Here is Every Reason Bitcoin Will Not Fail[1]. I believe some of what you mentioned is at least partially addressed. [1]: https://safehodl.github.io/failure/ https://safehodl.github.io/failure/
  • pharmakom 5y ago
    Nice list but what if governments don't ban bitcoin, but make it more onerous to trade, tanking the price. it would only take one major bloc to do this for price movement to happen.
• rufus_foreman 5y ago
  I'm part of that not so smart crowd also. I was naive and easily scammed, I bought some Bitcoin around 2013 or so, I think it was $100 for a Bitcoin then. Where do you think I should have stored my value instead?
  • dang 5y ago
    Sorry for being off topic but can you please email hn@ycombinator.com? I want to send you a repost invite.
• lowkey 5y ago
  > Maybe I'm just not smart enough to understand BTC. I don’t think that’s true. I suspect it is more likely that you’ve given Bitcoin only a cursory study where you compared it to a very inefficient database, recognized that on-chain transactions are slow and expensive, energy-consumption is significant, and it isn’t as easy to spend as US dollars - and so you dismissed it as a fraud. Everyone I know who eventually embraced Bitcoin, initially rejected the idea - myself included. It is not easy to appreciate the brilliance of Bitcoin unless you first understand the problem it is trying to solve. Unfortunately few of us really understand what fiat money is and how it is created - or at least that was true before Bitcoin forced us all to investigate. One of the funniest implications of Bitcoin is that now every time the talking heads on CNBC or CNN mention US dollars, they now refer to it as fiat. Bitcoin proponents call it the hardest money ever created. Unlike fiat, Bitcoin is virtually impossible to debase. The supply of Bitcoin is predictable for the next 10 minutes or the next thousand years. No other currency has a predictable inflation policy. No other currency is resilient to the desires of centralized actors to manipulate the money supply. Here is an exercise I like to do on any complex topic I don’t fully understand. I ask myself what the proponents know that I don’t know? (and vice versa, what do I know about the subject that the proponents don’t get?) Here is a list of mostly billionaires who all hold and advocate for Bitcoin. Ask yourself, what do they know about Bitcoin that you don’t? Also, what do you know that they don’t which makes you so confident it is a scam? Bitcoin Proponents: Elon Musk, Barry Silbert, Mark Cuban, Michael Saylor, Mike Novogratz, Tyler & Cameron Winklevoss, Paul Tudor Jones, Tim Draper, Bill Miller, Stanley Drunkenmiller, Anthony Scaramucci, Jack Dorsey, Steve Wozniak, Tim Cook, George Soros, Mark Zuckerberg