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"If you are long Bitcoin for any appreciable amount of time, it seems you are betting that the Chinese economy will do poorly and capital controls will remain.

"If you are long Bitcoin for any appreciable amount of time, it seems you are betting that the Chinese economy will do poorly and capital controls will remain. Then more people will be increasingly desperate to get more money out of the country. Or you may be betting that the Chinese use of Bitcoin to launder money will increase due to the mere spread of the idea, through social contagion." That's kind of silly. Bitcoin has many uses besides bypassing currency controls.

stanleydrew 13y ago
None of the other uses really justify the current price though. That's the point. Clearly the value of a Bitcoin is not $0. He's not claiming that. He's claiming that if you think it is worth more than the current price of $680, then you are essentially betting on Bitcoin's current Chinese swell to continue.
- ashray 13y ago
  Markets tend to price in future usage. Are there indications that bitcoins will be extremely valuable in the future ? Yes. Is there progress being made every day with bitcoins ? Yes. Is there global potential for bitcoin to be used as some form of currency ? Yes. (it is already being used in small amounts in several places) Markets tend to price these things in. Investor sentiment is optimistic. Bitcoins current position certainly doesn't justify this price. But the market has priced in the future.
  - stanleydrew 13y ago
    Rational and stable markets will tend to price in future usage. But even those suffer bubbles every once in awhile. But that's beside the point. The argument being made is that the future usage being priced into Bitcoin in the current craze depends on China not doing things that would make it less useful to hold Bitcoin.
- patrickk 13y ago
  Bitcoin is a asymmetric bet[1], your cost of buying is known (price you pay relative to local currency when you purchase BTC), and it will either go to 0 or could return x100 or x1000 in the longer term. It's somewhat analogous to spotting the subprime mortgage madness early prior to 2007 and placing asymmetrical bets via credit default swaps on mortgage backed bonds[2]. There could be a fatal flaw uncovered with Bitcoin making it go to zero, Satoshi Nakamoto's true motives could be revealed to be sinister etc., or it could become a major commodity/currency for much of the world's population so the current price is dirt cheap. That's what makes it so intriguing. I personally think of Bitcoin as like Napster. Revolutionary idea, scared the establishment shitless, but was ultimately crushed. However, P2P file sharing exploded in popularity afterward, and has proved impossible to stamp out since. I think whatever comes after Bitcoin will be ultra-resilient, will learn from Bitcoin's flaws, and will change how we think about economics, commerce and currencies. [1] https://news.ycombinator.com/item?id=6753060 https://news.ycombinator.com/item?id=6753060 [2] http://www.vanityfair.com/business/features/2010/04/wall-street-excerpt-201004 http://www.vanityfair.com/business/features/2010/04/wall-str...

stanleydrew 13y ago

None of the other uses really justify the current price though. That's the point. Clearly the value of a Bitcoin is not $0. He's not claiming that. He's claiming that if you think it is worth more than the current price of $680, then you are essentially betting on Bitcoin's current Chinese swell to continue.

ashray 13y ago
Markets tend to price in future usage. Are there indications that bitcoins will be extremely valuable in the future ? Yes. Is there progress being made every day with bitcoins ? Yes. Is there global potential for bitcoin to be used as some form of currency ? Yes. (it is already being used in small amounts in several places) Markets tend to price these things in. Investor sentiment is optimistic. Bitcoins current position certainly doesn't justify this price. But the market has priced in the future.
- stanleydrew 13y ago
  Rational and stable markets will tend to price in future usage. But even those suffer bubbles every once in awhile. But that's beside the point. The argument being made is that the future usage being priced into Bitcoin in the current craze depends on China not doing things that would make it less useful to hold Bitcoin.
patrickk 13y ago
Bitcoin is a asymmetric bet[1], your cost of buying is known (price you pay relative to local currency when you purchase BTC), and it will either go to 0 or could return x100 or x1000 in the longer term. It's somewhat analogous to spotting the subprime mortgage madness early prior to 2007 and placing asymmetrical bets via credit default swaps on mortgage backed bonds[2]. There could be a fatal flaw uncovered with Bitcoin making it go to zero, Satoshi Nakamoto's true motives could be revealed to be sinister etc., or it could become a major commodity/currency for much of the world's population so the current price is dirt cheap. That's what makes it so intriguing. I personally think of Bitcoin as like Napster. Revolutionary idea, scared the establishment shitless, but was ultimately crushed. However, P2P file sharing exploded in popularity afterward, and has proved impossible to stamp out since. I think whatever comes after Bitcoin will be ultra-resilient, will learn from Bitcoin's flaws, and will change how we think about economics, commerce and currencies. [1] https://news.ycombinator.com/item?id=6753060 https://news.ycombinator.com/item?id=6753060 [2] http://www.vanityfair.com/business/features/2010/04/wall-street-excerpt-201004 http://www.vanityfair.com/business/features/2010/04/wall-str...