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It is ridiculous to talk about the Bitcoin "bust" when it is still trading at $60-70 which was the all-time high as of March 20, a mere 4 weeks ago ?! "Bust" m

by mrb 14y ago

It is ridiculous to talk about the Bitcoin "bust" when it is still trading at $60-70 which was the all-time high as of March 20, a mere 4 weeks ago ?! "Bust" means "a complete failure". Bitcoin, so far, is an incredible success. Let's not let the temporary bubble of the past week blind us from the big picture. Edit: the only failure are the buyers who lost money because they failed to realize it was stupidly dangerous to buy during a price bubble.

corin_ 14y ago
I bought a few Bitcoins a while back when they were something like $5-$10 and thought I was an idiot for buying during a bubble then (but only bought a few to play with, not as a way of making money - the fact that I forgot about them until a few days ago was just a happy coincidence). Sure right now it looks like you were stupid if you bought them a week ago, but if you bought them when they were at $150 and sold at $250 then who's the idiot?
- eurleif 14y ago
  > if you bought them when they were at $150 and sold at $250 then who's the idiot? If you buy a lottery ticket and win then who's the idiot? You.
  - corin_ 14y ago
    There's a difference between blind luck and speculation. Of course your point is still debatable, but between the guy who looked at that $150 and said "no way it's about to burst" and the guy who said "this is going to keep going up" (for the record that wasn't/isn't me), how do you settle who's the idiot and who's the genius?
    - dmix 14y ago
      > how do you settle who's the idiot and who's the genius By those who analyze historical trends and make rational future projections, such as this person (who is the latter): https://scottlocklin.wordpress.com/2013/04/17/btc-bubbles/ https://scottlocklin.wordpress.com/2013/04/17/btc-bubbles/ The former disregards the odds of winning in a lottery or the signs that a bubble exists and could pop at any moment.
      - corin_ 14y ago
        Good answer. But still overlooks the fact that if you buy in before the bubble peaks and sell before it bursts, you can do well. I've no idea if that means that at $150 it was a reasonable gamble to take that it would go up before it comes down, or if it was a reasonable gamble at $40, or never, or... Like I said, I felt it was an unreasonable gamble when I bought at $5-$10 a while ago, and so didn't buy more than a handful.
        dragontamer 14y ago
        IE: the greater fool theory. http://en.wikipedia.org/wiki/Greater_fool_theory http://en.wikipedia.org/wiki/Greater_fool_theory Come on, people have been doing this stuff for centuries. It doesn't make you a genius, it makes you the lesser fool. Buying something that has little value, because you believe you can find a greater fool to dupe later is both risky and unethical.
    - fossuser 14y ago
      Exactly - it wasn't too hard to game. I bought a few at $88 and saw it go up to $260. As soon as it slipped a bit immediately cashed out.
      - b6 14y ago
        Fooled by randomness.
        fossuser 14y ago
        It's a market - as long as you're paying attention and there's someone who wants to buy from you you're fine. It's not entirely random, just good timing and keeping an eye on things.
        polymatter 14y ago
        In case you didn't get the reference, 'Fooled by Randomness' is a book by Nassim Taleb.
        b6 14y ago
        Hi, my original reply was too short, sorry. If you had said you bought BTC at $88 and sold at $260, I would have thought cool, good job. But you didn't stop there. You said it wasn't hard, you just used common sense. That's when my alarm bells went off and my brain started printing you a "Congratulations, you have been fooled by randomness" certificate to put on your wall. I'm not saying you are not really smart. I'm not saying your reasoning was wrong. Maybe you did get it totally right, and for the right reasons. But in another dimension, you bought at $88 and it went down to $20. Or you sold at $260 right before it went to $1000. You placed a bet and this time you won, and I'm glad. But you seem to think you won because you fully understood. That's almost certainly wrong. That's why the guy wrote the book. That's pretty much all his book says. "Yep, yep, I just thought it through and used my brain and kept my eyes open and placed my trade and made a big profit, not too hard really" -> fooled by randomness.
        fossuser 14y ago
dmix 14y ago
Yep big vendors such as OKCupid (today) announced they were accepting bitcoins [1]. A ton of hype was created thanks to the "boom" and people started paying attention. The only losers were the speculators who hoarded BTC at higher prices and didn't cash out. The average consumer used it as a decentralized [2] transactional tool and not a rational capital investment. There is still, very much so, legitmate value in bitcoins. Assuming legitimate value exists, stability always comes after bubbles. [1] http://thenextweb.com/insider/2013/04/16/okcupid-partners-with-coinbase-to-become-the-latest-web-service-to-support-bitcoin/ http://thenextweb.com/insider/2013/04/16/okcupid-partners-wi... [2] http://paulbohm.com/articles/bitcoins-value-is-decentralization/ http://paulbohm.com/articles/bitcoins-value-is-decentralizat...
- Nursie 14y ago
  The 'average consumer' has almost no way of obtaining bitcoins, AFAICT, without going through long validation processes at an exchange or paying significantly (50%) more to some other service. Huge barrier to entry there.
  - dmix 14y ago
    What? When was the last time you tried? In Canada you signup at https://www.cavirtex.com/ https://www.cavirtex.com/ then go to any of the big banks and deposit cash into an account with an account number. No validation required, takes 2-4 hours to complete. In the USA with http://bitinstant.com/ http://bitinstant.com/ you go to CVS/Walmart or other vendors and use MoneyGram to deposit cash. No validation required, takes 30-60 minutes to complete. Or just use http://bitlocal.com/ http://bitlocal.com/ It's as easy as paying a bill... http://howdoyoubuybitcoins.com/ http://howdoyoubuybitcoins.com/
    - Nursie 14y ago
      UK here. Localbitcoins relies on someone close by selling at near market rate, which seems unlikely (bitlocal.com is not a bitcoin site, btw.)
Nursie 14y ago
Bitcoin, so far, is an incredible success. If you consider a serial bubble generating speculative asset a success, sure. It's not a success as a currency or a payment system though (and this is a good thing, it's really badly suited for those roles).
- StavrosK 14y ago
  > it's really badly suited for those roles Why do you say that?
  - Nursie 14y ago
    My views can be summed up thusly: Bitcoin is badly suited to be a currency because deflation is BAD Bitcoin is badly suited to be a payment system because chargeback is GOOD Basically. I can go into detail if you like but I'm sure everyone's heard it before. I expect many bitcoin enthusiasts disagree.
    - StavrosK 14y ago
      Ah, I see. I agree with the deflation part, but the chargeback part is just one downside. There are also many upsides, it's exactly like cash. There's nothing preventing escrow services from popping up, like credit card companies do now for cash.
      - Nursie 14y ago
        Sure, sure, it is like cash, which is why I don't think it's a great online payment system. By the time you add in escrow services (which you have to trust and will likely want fees) and other layers... well we already have credit cards and I like the legal and conventional consumer protections provided by them. I can see the use-case for stuff like wire-transfers, though TBH there are already good, low-fee services for that too. --EDIT-- obviously there is a silk-road use case too! Though I still think there must be a better scheme waiting in the wings or even just lurking in someone's brain, that expresses crypto-currency differently and manages to balance scarcity without deflation, or even just weights the allocation curve such that early adopters don't stand to become a new aristocracy if it takes off.

by mrb 14y ago

corin_ 14y ago

I bought a few Bitcoins a while back when they were something like $5-$10 and thought I was an idiot for buying during a bubble then (but only bought a few to play with, not as a way of making money - the fact that I forgot about them until a few days ago was just a happy coincidence). Sure right now it looks like you were stupid if you bought them a week ago, but if you bought them when they were at $150 and sold at $250 then who's the idiot?

eurleif 14y ago
> if you bought them when they were at $150 and sold at $250 then who's the idiot? If you buy a lottery ticket and win then who's the idiot? You.
- corin_ 14y ago
  There's a difference between blind luck and speculation. Of course your point is still debatable, but between the guy who looked at that $150 and said "no way it's about to burst" and the guy who said "this is going to keep going up" (for the record that wasn't/isn't me), how do you settle who's the idiot and who's the genius?
  - dmix 14y ago
    > how do you settle who's the idiot and who's the genius By those who analyze historical trends and make rational future projections, such as this person (who is the latter): https://scottlocklin.wordpress.com/2013/04/17/btc-bubbles/ https://scottlocklin.wordpress.com/2013/04/17/btc-bubbles/ The former disregards the odds of winning in a lottery or the signs that a bubble exists and could pop at any moment.
    - corin_ 14y ago
      Good answer. But still overlooks the fact that if you buy in before the bubble peaks and sell before it bursts, you can do well. I've no idea if that means that at $150 it was a reasonable gamble to take that it would go up before it comes down, or if it was a reasonable gamble at $40, or never, or... Like I said, I felt it was an unreasonable gamble when I bought at $5-$10 a while ago, and so didn't buy more than a handful.
      - dragontamer 14y ago
        IE: the greater fool theory. http://en.wikipedia.org/wiki/Greater_fool_theory http://en.wikipedia.org/wiki/Greater_fool_theory Come on, people have been doing this stuff for centuries. It doesn't make you a genius, it makes you the lesser fool. Buying something that has little value, because you believe you can find a greater fool to dupe later is both risky and unethical.
  - fossuser 14y ago
    Exactly - it wasn't too hard to game. I bought a few at $88 and saw it go up to $260. As soon as it slipped a bit immediately cashed out.
    - b6 14y ago
      Fooled by randomness.
      - fossuser 14y ago
        It's a market - as long as you're paying attention and there's someone who wants to buy from you you're fine. It's not entirely random, just good timing and keeping an eye on things.
        polymatter 14y ago
        In case you didn't get the reference, 'Fooled by Randomness' is a book by Nassim Taleb.
        b6 14y ago
        Hi, my original reply was too short, sorry. If you had said you bought BTC at $88 and sold at $260, I would have thought cool, good job. But you didn't stop there. You said it wasn't hard, you just used common sense. That's when my alarm bells went off and my brain started printing you a "Congratulations, you have been fooled by randomness" certificate to put on your wall. I'm not saying you are not really smart. I'm not saying your reasoning was wrong. Maybe you did get it totally right, and for the right reasons. But in another dimension, you bought at $88 and it went down to $20. Or you sold at $260 right before it went to $1000. You placed a bet and this time you won, and I'm glad. But you seem to think you won because you fully understood. That's almost certainly wrong. That's why the guy wrote the book. That's pretty much all his book says. "Yep, yep, I just thought it through and used my brain and kept my eyes open and placed my trade and made a big profit, not too hard really" -> fooled by randomness.
        fossuser 14y ago

dmix 14y ago

Yep big vendors such as OKCupid (today) announced they were accepting bitcoins [1]. A ton of hype was created thanks to the "boom" and people started paying attention. The only losers were the speculators who hoarded BTC at higher prices and didn't cash out. The average consumer used it as a decentralized [2] transactional tool and not a rational capital investment. There is still, very much so, legitmate value in bitcoins. Assuming legitimate value exists, stability always comes after bubbles. [1] http://thenextweb.com/insider/2013/04/16/okcupid-partners-with-coinbase-to-become-the-latest-web-service-to-support-bitcoin/ http://thenextweb.com/insider/2013/04/16/okcupid-partners-wi... [2] http://paulbohm.com/articles/bitcoins-value-is-decentralization/ http://paulbohm.com/articles/bitcoins-value-is-decentralizat...

Nursie 14y ago
The 'average consumer' has almost no way of obtaining bitcoins, AFAICT, without going through long validation processes at an exchange or paying significantly (50%) more to some other service. Huge barrier to entry there.
- dmix 14y ago
  What? When was the last time you tried? In Canada you signup at https://www.cavirtex.com/ https://www.cavirtex.com/ then go to any of the big banks and deposit cash into an account with an account number. No validation required, takes 2-4 hours to complete. In the USA with http://bitinstant.com/ http://bitinstant.com/ you go to CVS/Walmart or other vendors and use MoneyGram to deposit cash. No validation required, takes 30-60 minutes to complete. Or just use http://bitlocal.com/ http://bitlocal.com/ It's as easy as paying a bill... http://howdoyoubuybitcoins.com/ http://howdoyoubuybitcoins.com/
  - Nursie 14y ago
    UK here. Localbitcoins relies on someone close by selling at near market rate, which seems unlikely (bitlocal.com is not a bitcoin site, btw.)

Nursie 14y ago

Bitcoin, so far, is an incredible success. If you consider a serial bubble generating speculative asset a success, sure. It's not a success as a currency or a payment system though (and this is a good thing, it's really badly suited for those roles).

StavrosK 14y ago
> it's really badly suited for those roles Why do you say that?
- Nursie 14y ago
  My views can be summed up thusly: Bitcoin is badly suited to be a currency because deflation is BAD Bitcoin is badly suited to be a payment system because chargeback is GOOD Basically. I can go into detail if you like but I'm sure everyone's heard it before. I expect many bitcoin enthusiasts disagree.
  - StavrosK 14y ago
    Ah, I see. I agree with the deflation part, but the chargeback part is just one downside. There are also many upsides, it's exactly like cash. There's nothing preventing escrow services from popping up, like credit card companies do now for cash.
    - Nursie 14y ago
      Sure, sure, it is like cash, which is why I don't think it's a great online payment system. By the time you add in escrow services (which you have to trust and will likely want fees) and other layers... well we already have credit cards and I like the legal and conventional consumer protections provided by them. I can see the use-case for stuff like wire-transfers, though TBH there are already good, low-fee services for that too. --EDIT-- obviously there is a silk-road use case too! Though I still think there must be a better scheme waiting in the wings or even just lurking in someone's brain, that expresses crypto-currency differently and manages to balance scarcity without deflation, or even just weights the allocation curve such that early adopters don't stand to become a new aristocracy if it takes off.