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People are very bad at predicting true change in the fundamentals of how they live their lives and then dealing with the implications of that. We've been lulle

People are very bad at predicting true change in the fundamentals of how they live their lives and then dealing with the implications of that. We've been lulled into the myth of a steady-state economy by the post-WW2 Pax Americana. If that's your model, any rapid change is a "bubble" that's going to pop and return us to our original steady state, and real lasting change is consistently undervalued. Here's a pop quiz with a counterintuitive answer: if Bitcoin succeeds at replacing the dollar as both the world reserve currency and the currency of choice for everyday transactions, what's its fair market value? Most optimists would divide total dollar supply ($21T) by total Bitcoin supply ($21M) and come out with $1M. But the true answer is infinite: if this scenario actually comes to pass, the dollar's value will trend to zero and the question will become meaningless, as you won't be able to trade your dollars for Bitcoin at any price. So it is with tech: software is actively replacing many core industries, which sends their value to zero and the owners of their software replacements to effectively infinity. I suspect similar dynamics are at play with prices in general and particularly asset & housing prices. Everybody's calling a bubble and thinking they'll buy stuff later when prices come down. That can happen in localized instances (like lumber last summer), but oftentimes those bubble bursts reverse themselves and end up driving higher. Lumber went up by 250% again in the second half of last year, just as tech company stocks have reached heights that were unimaginable in the dot-com boom. The overall price level in the economy isn't going down.

crate_barre 5y ago
In a sense, most of the so called bubbles occurring right now are due to a lack of tech and innovation. The issue isn’t that Home prices are inflated, the issue is our most innovative solution for home ownership is credit hand outs. The Finance sector is not innovative enough to solve this. We’d need to think about building denser cities and pragmatic modern housing. Affordable housing doesn’t have to mean “middle or low income in certain area”. These are old industries of finance and old progressive ideas that simply are not disruptive enough. We’re starving for innovation.
- BlargMcLarg 5y ago
  >the issue is our most innovative solution for home ownership is credit hand outs I'm fairly certain we have more innovative solutions, but the risks just aren't lucrative for the far majority of investors. It's a lack of (relatively frictionless) experimentation more than anything. The majority of solutions I imagine directly contrast typical western individualism, too.
- onlyrealcuzzo 5y ago
  The problem with housing is not technical - it's the people want their house to go up in value as much as possible. The easiest way to accomplish that is to limit supply as much as possible. If you already have a housing shortage and >67% of the country hell-bent on making the shortage worse - technology is not going to solve the problem.
cma 5y ago
For the dollar to become zero relative to it, I think bitcoin holders in America would have infinite tax burden on any transaction.
JackFr 5y ago
> Here's a pop quiz with a counterintuitive answer: if Bitcoin succeeds at replacing the dollar as both the world reserve currency and the currency of choice for everyday transactions, what's its fair market value? Most optimists would divide total dollar supply ($21T) by total Bitcoin supply ($21M) and come out with $1M. But the true answer is infinite: if this scenario actually comes to pass, the dollar's value will trend to zero and the question will become meaningless, as you won't be able to trade your dollars for Bitcoin at any price. That makes no sense. Assuming dollars remain legal tender (note that those words that actually mean something specific and are not synonyms for currency) in the United States, they will always be worth something. Further the fact that there are dozens of currencies in the world which are not typically reserve currencies, but are also not worth zero indicates a gap in your analysis.
- nostrademons 5y ago
  This hypothetical assumes dollars do not remain legal tender - at least in the sense that people would not be willing to offer credit denominated in dollars. Currencies have pretty strong network effects - there's a strong incentive to use the one most widely accepted, because you can then spend it in the most places, assuming free trade and common markets. That's why national currencies like the deutschhmark and lira have largely been replaced by the euro. Or, for that matter, why BCH, BSV, and ETC are virtually worthless while Bitcoin and Ethereum's value has skyrocketed.
travisjungroth 5y ago
> what's its fair market value? Most optimists would divide total dollar supply ($21T) by total Bitcoin supply ($21M) and come out with $1M. But the true answer is infinite: if this scenario actually comes to pass, the dollar's value will trend to zero and the question will become meaningless, as you won't be able to trade your dollars for Bitcoin at any price. This isn’t valid. You’ve said the question would be meaningless and then use its answer. There’s a shell game here. You’re saying we can measure value in dollars, then we can’t, therefore anything measured in dollars truly has infinite value. I think this is obviously not true. In this scenario, the value of my hat would also be infinite.

crate_barre 5y ago

In a sense, most of the so called bubbles occurring right now are due to a lack of tech and innovation. The issue isn’t that Home prices are inflated, the issue is our most innovative solution for home ownership is credit hand outs. The Finance sector is not innovative enough to solve this. We’d need to think about building denser cities and pragmatic modern housing. Affordable housing doesn’t have to mean “middle or low income in certain area”. These are old industries of finance and old progressive ideas that simply are not disruptive enough. We’re starving for innovation.

BlargMcLarg 5y ago
>the issue is our most innovative solution for home ownership is credit hand outs I'm fairly certain we have more innovative solutions, but the risks just aren't lucrative for the far majority of investors. It's a lack of (relatively frictionless) experimentation more than anything. The majority of solutions I imagine directly contrast typical western individualism, too.
onlyrealcuzzo 5y ago
The problem with housing is not technical - it's the people want their house to go up in value as much as possible. The easiest way to accomplish that is to limit supply as much as possible. If you already have a housing shortage and >67% of the country hell-bent on making the shortage worse - technology is not going to solve the problem.

cma 5y ago

For the dollar to become zero relative to it, I think bitcoin holders in America would have infinite tax burden on any transaction.

JackFr 5y ago

> Here's a pop quiz with a counterintuitive answer: if Bitcoin succeeds at replacing the dollar as both the world reserve currency and the currency of choice for everyday transactions, what's its fair market value? Most optimists would divide total dollar supply ($21T) by total Bitcoin supply ($21M) and come out with $1M. But the true answer is infinite: if this scenario actually comes to pass, the dollar's value will trend to zero and the question will become meaningless, as you won't be able to trade your dollars for Bitcoin at any price. That makes no sense. Assuming dollars remain legal tender (note that those words that actually mean something specific and are not synonyms for currency) in the United States, they will always be worth something. Further the fact that there are dozens of currencies in the world which are not typically reserve currencies, but are also not worth zero indicates a gap in your analysis.

nostrademons 5y ago
This hypothetical assumes dollars do not remain legal tender - at least in the sense that people would not be willing to offer credit denominated in dollars. Currencies have pretty strong network effects - there's a strong incentive to use the one most widely accepted, because you can then spend it in the most places, assuming free trade and common markets. That's why national currencies like the deutschhmark and lira have largely been replaced by the euro. Or, for that matter, why BCH, BSV, and ETC are virtually worthless while Bitcoin and Ethereum's value has skyrocketed.

travisjungroth 5y ago

> what's its fair market value? Most optimists would divide total dollar supply ($21T) by total Bitcoin supply ($21M) and come out with $1M. But the true answer is infinite: if this scenario actually comes to pass, the dollar's value will trend to zero and the question will become meaningless, as you won't be able to trade your dollars for Bitcoin at any price. This isn’t valid. You’ve said the question would be meaningless and then use its answer. There’s a shell game here. You’re saying we can measure value in dollars, then we can’t, therefore anything measured in dollars truly has infinite value. I think this is obviously not true. In this scenario, the value of my hat would also be infinite.