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At this point virtually everybody I know in the tech space is buying at least one coin to "hedge" against bitcoin achieving "gold 2.0" status. What are the cha

by aresant 13y ago

At this point virtually everybody I know in the tech space is buying at least one coin to "hedge" against bitcoin achieving "gold 2.0" status. What are the chances that as this message echoes out to virtually any urban-dwelling or internet connected human on the planet we may all, as a human race, wind up accidentally embracing a unified digital currency while in pursuit of what amounts to a lottery ticket?

pfraze 13y ago
Only if it's real growth, and not just a speculation bubble. The only way bitcoin reprsents real value is if people transact with it. My vague guess is that it can do that if its users can exhange to/from it per-transaction, because otherwise the value fluctuations will make it too risky.
- oleganza 13y ago
  It is a speculation bubble. People are betting that Bitcoin will become world money and be worth millions of products in many countries. Anything can become money only when it has value and acceptance which are created by speculators. Such bubble can pop only if some other, more promising thing may become money, or if there's a flaw in the currently hyped thing. http://unqualified-reservations.blogspot.fr/2013/04/bitcoin-is-money-bitcoin-is-bubble.html http://unqualified-reservations.blogspot.fr/2013/04/bitcoin-...
  - Lerc 13y ago
    Bubbles pop because people lose confidence. The ways in which that can happen are infinitely varied. While the reasons you list can cause that, people also can lose confidence for irrational reasons or decide that their confidence was not rational. Most commonly their confidence will just align with what they perceive other people's confidence to be, causing feeback. Remember there were people who dumped a lot of money into bitcoin at $200 last bubble and then bailed at $100 an extremely short time later. Something like that will probably happen again with the current rise. The long term probably doesn't really care about the blips along the way though.
    - zamalek 13y ago
      > Bubbles pop because people lose confidence. Or, in the case of cryptocurrencies, when something goes wrong with the underlying encryption. We are very far away from that eventuality (SHA256 is pretty damn secure and ECC is in the realm of "we don't think this will ever be broken unless the NSA curve weakness is real"). Still, one day. Still, bubbles really worry me on a psychology level. All it takes on journalist to write an ignorant article on Bitcoin (which they never do) and then a whole bunch of other journalists then cite without research (which they never do) and POP!
      - Lerc 13y ago
        >Or, in the case of cryptocurrencies, when something goes wrong with the underlying encryption. I think it is actually exclusively confidence. Something could go horribly wrong with the underlying encryption and the perceived value would not drop until people recognised the implications of the problem and consequently lose confidence.
      - XorNot 13y ago
        We are on the verge of functional quantum computers. Encryption could die very suddenly.
        Lerc 13y ago
        That is not a specific weakness of bitcoin. If encryption stops working, most of the worlds economic systems run into serious issues. Transferring money by _any_ electronic mechanism becomes problematic.
        oleganza 13y ago
        Correction: the only money that is being transferred by electronic means is Bitcoin. All the other payment channels do not transfer ownership, but promises. When your bank sends 100 bucks to another bank, there's no hard ownership being transferred, only an agreement between a bunch of people. That's why the current system is so fragile and so abused to no end.
chc 13y ago
The important question on the other side: What are the chances that we all, as a human race, wind up accidentally embracing a digital tulip?
- oleganza 13y ago
  Only if Bitcoin fails at its promise and can't be fixed. E.g. some crypto breakthrough makes all security worth nothing. Only if P=NP, in other words.
  - pcrh 13y ago
    Bitcoin is no longer the only cryptocurrency, so it has to hold value against gold, diamonds (both of which are completely anonymous), all fiat currencies, as well as alternate methods of payment. It is highly unlikely that it will be adopted as a currency for major business transactions (too unstable and unknown), and is completely traceable, so will not be adopted by major elements in the black market. In the end, if bitcoin specifically (as opposed to some alternate cryptocurrency) remains in use for a long period, it is likely to be for relatively small transactions in niche markets. Does that warrant it's current valuation? I have no idea.
    - dwaltrip 13y ago
      Diamonds and gold make for quite shitty currencies Gold is extremely laborious to move, and not divisible enough for most usage. Diamonds are not fungible or very divisible. Both are very susceptible to physical theft. Network effects for money are very strong, and bitcoin has a huge first mover advantage. Any competing digital currency will require quite the innovation or distinguishing factor to gain any traction. It is becoming more 'known' and trusted with each month that passes. Pre-bitcoin-era financial groups are slowly yet increasingly giving it more legitimacy (Mainly VCs, a few funds, the occasional bank, and research groups -- also Second Market and the Winklevoss ETF are two big things to watch right now). The main counterpoint currently is that bitcoin use is quite error-prone and hard to digest, but this seems more like a temporary roadblock to me. Y'all remember geocities and AOL right? Bitcoin will become much easier and more secure to use in the coming years. Software is relatively easy to improve, compared to gold, fiat, and the like. There are some potential solutions to traceability, but it is uncertain how that will play out (I can't even pretend to fully understand the regulatory environments and international politics that will affect this). The one thing I can guarantee -- the way we use and conceptualize money is going to change drastically in the next several decades, and I think bitcoin will have a huge influence on this.
Anonymous8202 13y ago
I thought about buying a coin recently, but then I realized, I don't think Bitcoin will ever be successful as an online currency. The process of buying into Bitcoin, and getting money out of Bitcoin is a complete disaster in my book. Everyone is looking at Bitcoin as an investment, and the only people putting in the effort to join are those aiming for financial gain. My prediction is the price is going to rise, faster and faster in the coming weeks. The hype is still building, people are seeing these 20% gains overnight, and thinking they're going to get rich. It feels like a pyramid scheme, where the people already owning coins are going out and recruiting others to buy into Bitcoin, to raise the value of their own wallet. Now, time for a wild guess. I say it peaks at 900-1,000 two to three weeks from now, then starts to level off. People get worried not seeing gains, and decide to start cashing out in time for the holidays. By the new year, under 300. If I had a coin, I'd hold it until the end. As others have said, I think it's going big, or going to zero in the coming years.
- plumbzium 13y ago
  While it's very true that Bitcoin could use major improvements in general usability and user-friendliness, I don't know your location, but buying BTCs here in Poland is trivial - transfer money to bitcurex, buy and transfer coins out within 1-2 working days top.
cylinder 13y ago
That's pretty much the reason behind every bubble.

by aresant 13y ago

pfraze 13y ago

Only if it's real growth, and not just a speculation bubble. The only way bitcoin reprsents real value is if people transact with it. My vague guess is that it can do that if its users can exhange to/from it per-transaction, because otherwise the value fluctuations will make it too risky.

oleganza 13y ago
It is a speculation bubble. People are betting that Bitcoin will become world money and be worth millions of products in many countries. Anything can become money only when it has value and acceptance which are created by speculators. Such bubble can pop only if some other, more promising thing may become money, or if there's a flaw in the currently hyped thing. http://unqualified-reservations.blogspot.fr/2013/04/bitcoin-is-money-bitcoin-is-bubble.html http://unqualified-reservations.blogspot.fr/2013/04/bitcoin-...
- Lerc 13y ago
  Bubbles pop because people lose confidence. The ways in which that can happen are infinitely varied. While the reasons you list can cause that, people also can lose confidence for irrational reasons or decide that their confidence was not rational. Most commonly their confidence will just align with what they perceive other people's confidence to be, causing feeback. Remember there were people who dumped a lot of money into bitcoin at $200 last bubble and then bailed at $100 an extremely short time later. Something like that will probably happen again with the current rise. The long term probably doesn't really care about the blips along the way though.
  - zamalek 13y ago
    > Bubbles pop because people lose confidence. Or, in the case of cryptocurrencies, when something goes wrong with the underlying encryption. We are very far away from that eventuality (SHA256 is pretty damn secure and ECC is in the realm of "we don't think this will ever be broken unless the NSA curve weakness is real"). Still, one day. Still, bubbles really worry me on a psychology level. All it takes on journalist to write an ignorant article on Bitcoin (which they never do) and then a whole bunch of other journalists then cite without research (which they never do) and POP!
    - Lerc 13y ago
      >Or, in the case of cryptocurrencies, when something goes wrong with the underlying encryption. I think it is actually exclusively confidence. Something could go horribly wrong with the underlying encryption and the perceived value would not drop until people recognised the implications of the problem and consequently lose confidence.
    - XorNot 13y ago
      We are on the verge of functional quantum computers. Encryption could die very suddenly.
      - Lerc 13y ago
        That is not a specific weakness of bitcoin. If encryption stops working, most of the worlds economic systems run into serious issues. Transferring money by _any_ electronic mechanism becomes problematic.
        oleganza 13y ago
        Correction: the only money that is being transferred by electronic means is Bitcoin. All the other payment channels do not transfer ownership, but promises. When your bank sends 100 bucks to another bank, there's no hard ownership being transferred, only an agreement between a bunch of people. That's why the current system is so fragile and so abused to no end.

chc 13y ago

The important question on the other side: What are the chances that we all, as a human race, wind up accidentally embracing a digital tulip?

oleganza 13y ago
Only if Bitcoin fails at its promise and can't be fixed. E.g. some crypto breakthrough makes all security worth nothing. Only if P=NP, in other words.
- pcrh 13y ago
  Bitcoin is no longer the only cryptocurrency, so it has to hold value against gold, diamonds (both of which are completely anonymous), all fiat currencies, as well as alternate methods of payment. It is highly unlikely that it will be adopted as a currency for major business transactions (too unstable and unknown), and is completely traceable, so will not be adopted by major elements in the black market. In the end, if bitcoin specifically (as opposed to some alternate cryptocurrency) remains in use for a long period, it is likely to be for relatively small transactions in niche markets. Does that warrant it's current valuation? I have no idea.
  - dwaltrip 13y ago
    Diamonds and gold make for quite shitty currencies Gold is extremely laborious to move, and not divisible enough for most usage. Diamonds are not fungible or very divisible. Both are very susceptible to physical theft. Network effects for money are very strong, and bitcoin has a huge first mover advantage. Any competing digital currency will require quite the innovation or distinguishing factor to gain any traction. It is becoming more 'known' and trusted with each month that passes. Pre-bitcoin-era financial groups are slowly yet increasingly giving it more legitimacy (Mainly VCs, a few funds, the occasional bank, and research groups -- also Second Market and the Winklevoss ETF are two big things to watch right now). The main counterpoint currently is that bitcoin use is quite error-prone and hard to digest, but this seems more like a temporary roadblock to me. Y'all remember geocities and AOL right? Bitcoin will become much easier and more secure to use in the coming years. Software is relatively easy to improve, compared to gold, fiat, and the like. There are some potential solutions to traceability, but it is uncertain how that will play out (I can't even pretend to fully understand the regulatory environments and international politics that will affect this). The one thing I can guarantee -- the way we use and conceptualize money is going to change drastically in the next several decades, and I think bitcoin will have a huge influence on this.

Anonymous8202 13y ago

I thought about buying a coin recently, but then I realized, I don't think Bitcoin will ever be successful as an online currency. The process of buying into Bitcoin, and getting money out of Bitcoin is a complete disaster in my book. Everyone is looking at Bitcoin as an investment, and the only people putting in the effort to join are those aiming for financial gain. My prediction is the price is going to rise, faster and faster in the coming weeks. The hype is still building, people are seeing these 20% gains overnight, and thinking they're going to get rich. It feels like a pyramid scheme, where the people already owning coins are going out and recruiting others to buy into Bitcoin, to raise the value of their own wallet. Now, time for a wild guess. I say it peaks at 900-1,000 two to three weeks from now, then starts to level off. People get worried not seeing gains, and decide to start cashing out in time for the holidays. By the new year, under 300. If I had a coin, I'd hold it until the end. As others have said, I think it's going big, or going to zero in the coming years.

plumbzium 13y ago
While it's very true that Bitcoin could use major improvements in general usability and user-friendliness, I don't know your location, but buying BTCs here in Poland is trivial - transfer money to bitcurex, buy and transfer coins out within 1-2 working days top.

cylinder 13y ago

That's pretty much the reason behind every bubble.