7 ms·

that's the nature of any pyramid scheme -- the potential cashout of any individual is higher when more money is put into the system without being removed. The f

by fat0wl 13y ago

that's the nature of any pyramid scheme -- the potential cashout of any individual is higher when more money is put into the system without being removed. The funny thing about the Bitcoin scheme is that everyone has the ability for the cashout, it's simply a really complex Game Theory scenario (lol, simply complex). Still though, the early adopters have a much greater shot at grabbin all the marbles, just people suspect they won't because it's been a while and they still haven't. So either they're A) Absurdly greedy. B) Asleep at the wheel. C) True believers in the idea & want to see it succeed. D) Cashing out coins periodically enough to give them a decent lifestyle without disrupting the ecosystem.

oleganza 13y ago
All three A, C and D for sure. Here's a thing: in both cases, when Bitcoin is a fraud and joke, and when Bitcoin is a future world-changing technology, price must grow up like crazy. So the price alone does not give us any clue about the nature of Bitcoin. Only analysis of fundamentals and analysis of the econo-political environment we are in can tell us something about value of Bitcoin.
- fat0wl 13y ago
  well the thing is.... all economic analyses seem to conclude that it is ridiculous. The only thing keeping it alive is that people are still willing to buy/trade it. As long as that is the case, it will exist. But I don't agree with this idea that it could be rapidly increasing in price because its "a future world-changing technology". This argument has never made sense to me because it's simply 1 implementation of cryptocurrency and has not even performed its function as such. I'm sure there are better possible versions. In fact, I highly suspect that a better alternative has ALREADY BEEN IMPLEMENTED! The only reason Bitcoin is the giant that can't be defeated is because of the lure as an investment, and this is all a sham. Early adopters probably are doing "option D" and even though it's somewhat unnoticeable to consumers it is likely sowing the seeds of destruction for the environment. Perhaps because they're abusing users trust by selling for high prices that are bound to crash. I'm not sure... but the point is, eventually people will stop buying when they realize they're paying $1000 for a coin and they don't even know wtf it is. As you said, only analysis of the fundamentals achieves anything. And these analyses have been done. And can be seen in the market. It's obvious at this point -- Bitcoin is worth what people believe it's worth. Fundamentally, it's nothing. They are sold for cash & then that cash is gone. Spent. The currency doesn't retain anything on it's own. The burden of maintaining the ecosystem stability is passed on to those who now have the money. Similarly to the way in MLM a salesman's sub-tree is responsible for making the product move, unless they can find another to pass the product along to.
  - pizza234 13y ago
    > This argument has never made sense to me because it's simply 1 implementation of cryptocurrency and has not even performed its function as such. I'm sure there are better possible versions. In fact, I highly suspect that a better alternative has ALREADY BEEN IMPLEMENTED! Quality of an implementation doesn't imply success. Success also depends on other factors. History is full of examples (e.g. Betamax). Plus, it's very naive to assume that a Bitcoin is nothing because the only things that gives it value is the belief of people. Belief of people has value. Plus, it's not clear how long the prices will rise, and if something's going to happen in the meanwhile (e.g. more shops accepting it). If it's a bubble, it can't be said with certainty until the bubble bursted.
  - oleganza 13y ago
    Most of modern economics are bullshit promoting government meddling with money supply. No wonder "economic analysis" says Bitcoin is ridiculous. When you dismiss Bitcoin by saying it's only there while "people are still willing to buy/trade" you are missing important point. Ask yourself: why people are willing to hold it. Why people are willing to have any money at all: USD, gold, seashells. Are they stupid? Or money gives some utility to them? http://blog.oleganza.com/post/43378777734/on-circulation-of-money http://blog.oleganza.com/post/43378777734/on-circulation-of-...
    - djur 13y ago
      The "bullshit" and "government meddling" you decry has almost completely eliminated long-lasting panics and depressions in the industrialized world. Even the most cursory examination of pre- and post-Great Depression economic trends in the West shows that recessions became shallower and less common once governments adopted countercyclical policies.
  - notdrunkatall 13y ago
    >all economic analyses seem to conclude that it is ridiculous. Economics is obviously useful, but it is by no means a mature "science."
  - antocv 13y ago

by fat0wl 13y ago

oleganza 13y ago

All three A, C and D for sure. Here's a thing: in both cases, when Bitcoin is a fraud and joke, and when Bitcoin is a future world-changing technology, price must grow up like crazy. So the price alone does not give us any clue about the nature of Bitcoin. Only analysis of fundamentals and analysis of the econo-political environment we are in can tell us something about value of Bitcoin.

fat0wl 13y ago
well the thing is.... all economic analyses seem to conclude that it is ridiculous. The only thing keeping it alive is that people are still willing to buy/trade it. As long as that is the case, it will exist. But I don't agree with this idea that it could be rapidly increasing in price because its "a future world-changing technology". This argument has never made sense to me because it's simply 1 implementation of cryptocurrency and has not even performed its function as such. I'm sure there are better possible versions. In fact, I highly suspect that a better alternative has ALREADY BEEN IMPLEMENTED! The only reason Bitcoin is the giant that can't be defeated is because of the lure as an investment, and this is all a sham. Early adopters probably are doing "option D" and even though it's somewhat unnoticeable to consumers it is likely sowing the seeds of destruction for the environment. Perhaps because they're abusing users trust by selling for high prices that are bound to crash. I'm not sure... but the point is, eventually people will stop buying when they realize they're paying $1000 for a coin and they don't even know wtf it is. As you said, only analysis of the fundamentals achieves anything. And these analyses have been done. And can be seen in the market. It's obvious at this point -- Bitcoin is worth what people believe it's worth. Fundamentally, it's nothing. They are sold for cash & then that cash is gone. Spent. The currency doesn't retain anything on it's own. The burden of maintaining the ecosystem stability is passed on to those who now have the money. Similarly to the way in MLM a salesman's sub-tree is responsible for making the product move, unless they can find another to pass the product along to.
- pizza234 13y ago
  > This argument has never made sense to me because it's simply 1 implementation of cryptocurrency and has not even performed its function as such. I'm sure there are better possible versions. In fact, I highly suspect that a better alternative has ALREADY BEEN IMPLEMENTED! Quality of an implementation doesn't imply success. Success also depends on other factors. History is full of examples (e.g. Betamax). Plus, it's very naive to assume that a Bitcoin is nothing because the only things that gives it value is the belief of people. Belief of people has value. Plus, it's not clear how long the prices will rise, and if something's going to happen in the meanwhile (e.g. more shops accepting it). If it's a bubble, it can't be said with certainty until the bubble bursted.
- oleganza 13y ago
  Most of modern economics are bullshit promoting government meddling with money supply. No wonder "economic analysis" says Bitcoin is ridiculous. When you dismiss Bitcoin by saying it's only there while "people are still willing to buy/trade" you are missing important point. Ask yourself: why people are willing to hold it. Why people are willing to have any money at all: USD, gold, seashells. Are they stupid? Or money gives some utility to them? http://blog.oleganza.com/post/43378777734/on-circulation-of-money http://blog.oleganza.com/post/43378777734/on-circulation-of-...
  - djur 13y ago
    The "bullshit" and "government meddling" you decry has almost completely eliminated long-lasting panics and depressions in the industrialized world. Even the most cursory examination of pre- and post-Great Depression economic trends in the West shows that recessions became shallower and less common once governments adopted countercyclical policies.
- notdrunkatall 13y ago
  >all economic analyses seem to conclude that it is ridiculous. Economics is obviously useful, but it is by no means a mature "science."
- antocv 13y ago