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Highly volatile doesn't mean it's a bubble
by TomGullen 14y ago
Highly volatile doesn't mean it's a bubble
- dhosek 14y agoIf you look at the value of a bitcoin graphed over time, it looks an awful lot like a bubble. I sure wouldn't keep any assets in bitcoins. I've seen a lot of bubbles in my 44.5 years on this planet and this looks just like all the others (right down to the claims that "this time it's different"). The biggest difference here is that there is no underlying asset behind the bubble. Heck, even the lowliest failed dotcom had, at the least, some aeron chairs to liquidate when the share price hit zero.
- matwood 14y agoHeck, even the lowliest failed dotcom had, at the least, some aeron chairs to liquidate when the share price hit zero. This got me thinking about what is bitcoins value from a book/intrinsic standpoint. Something like: (electricity to generate coin) + (perceived value of allowing anonymous, non-government transactions) - (liquidity hassle)
- maxerickson 14y agoI think you have the electricity on the wrong side of the minus sign.
- matwood 14y agoSo creating a BTC yields positive electricity?
- maxerickson 14y agoNo, but if I told you shining a flashlight on quarters made them more valuable you probably wouldn't agree. And it is worse than that, each transaction consumes a bit of electricity (in a hand wavy sense anyway; the chain must go on for the coins to have any worth).
- boboblong 14y agoOf course, people will also claim that this time is different if this time is, in fact, different. http://lesswrong.com/lw/ii/conservation_of_expected_evidence/ http://lesswrong.com/lw/ii/conservation_of_expected_evidence...