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It's not seemingly impossible, it's scientifically proven that the general public can't know when the price of Bitcoin will collapse. And it has nothing to do w
by username332211 3y ago
It's not seemingly impossible, it's scientifically proven that the general public can't know when the price of Bitcoin will collapse. And it has nothing to do with the general public being stupid and any of that bullshit.
It's called the efficient market hypothesis.
If it was known that the price of Bitcoin will collapse on the 7th of June 2025, every owner would have sold their Bitcoins on the 6th of June. But then the price would collapse on the 6th, not on the 7th. But of course, the definite knowledge the price will collapse on the 6th would mean the price would collapse on the 5th and so forth.
Hence why accurate, definite and widely believed predictions are impossible.
- mrguyorama 3y agoThe efficient market "Hypothesis" (is it even testable?) presupposes a rational market, doesn't it? Real life markets are not rational, by definition. Humans are not rational actors.
- __loam 3y agoCareful mentioning any actual economic theory here lol.
- bandrami 3y agoI remember being annoyed on the 2nd day of Econ class when the prof mentioned that empirically we know human preference graphs can be cyclic but we have to pretend that's not true for any micro to work at all.
- HWR_14 3y agoThat's succinctly phrased. I don't know why it would bother you. It seems like it's admitting a limitation of the model he's about to teach.
- bandrami 3y agoIt's a fundamental premise of the entire discipline and it's known to be empirically false
- HWR_14 3y agoDoes it also bother you that engineers designing bridges use Newtonian physics and discount relativistic effects?
- bandrami 3y agoThere's not a scale at which acyclic preferences is a good approximation of what actually happens, so that's not really a good comparison. But even given that, structural engineers use nonlinear models that are more complicated than Newtonian physics, whereas economists say "math is too difficult so we'll use a simplifying but false set of assumptions"
- HWR_14 3y agoApparently I choose a great example then! There are a lot of examples where the assumptions, especially this one, of microeconomics hold. Profit-maximizing corporations don't have cyclic desires. In many cases, people don't have cyclic desires (e.g. in the flavor of the soda they want). Microeconomics starts with those, much as becoming a structural engineer requires understanding the basics of Newtonian physics. They get into more complicated math in more advanced courses, but they don't start there. All of engineering, science, etc, is "the math at a deeper level is too complex, here's a simplifying but false set of assumptions". And then a subset of people who learn about that care about cases when the assumptions break down and studies the next level.
- bandrami 3y agoRight, but Newtonian physics can fairly accurately predict gross body mechanics whereas economics can't even predict the large-scale wage or price level. They'll simultaneously model the income effect and the replacement effect of taxes and then shrug and say "of course we can't say in advance which one will dominate".
- winstonprivacy 3y agoMarkets are not efficient much of the time. And Bitcoin even less so. Source; I make a living exploiting market inefficiencies.
- solveit 3y agoHis point stands though. The general public can't know exactly when Bitcoin will collapse, because if they could, it already would have collapsed.
- LexiMax 3y ago"A strange game. The only winning move is not to play."
- nico 3y agoJust saw it for the first time last night It was so cool, especially after reading ready player one and discovering that one of my favorite Sega games as a kid was Galaga, but didn’t know the name until I saw it in an arcade a few weeks ago 80s movies about smart kids are awesome
- mrguyorama 3y agoHis point is built on a theory with as much scientific rigor as Freud's penis envy work. If economics was a functioning field of scientific study, The list of top 100 richest people would all be economists withholding scientific findings for their own gain, not a bunch of rich kids swinging their money dicks around.
- solveit 3y agoI wrote a long response but realized I don't want to enter a discussion with someone being as exceptionally uncharitable you are.
- mensetmanusman 3y agoYou are what makes the market slightly more efficient.
- crote 3y agoMarkets can remain irrational a lot longer than you and I can remain solvent.