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Comment by throwaway6420 | Hacker News Reader

This. So much. As a developer, I personally feel sick thinking about all the greed associated with cryptocurrency right now. I was an early adopter of both Bitcoin and Ethereum, but I only mined a bit or purchased enough to build little side projects for fun.

Now I have non-technical friends and coworkers who are suddenly millionaires (literally, a friend bragged to me about having a few hundred BTC. He since quit his job) because they decided to dump their life savings into this stuff knowing nothing about it. It frustrates me to no end when I have family members ask, why didn't you buy or mine more? Why aren't you a millionaire? You were so into this stuff, weren't you?

Yeah, I was. As a developer, not as a speculator. It's not just about the markets. But all of the exciting tech constantly gets drowned out by the noise of people going on about lucrative investments and comparing coins to gold. I'm so sick of the hype. I'm disappointed at the lack of millions I could have made (maybe, if I were a serious "hodlr"), but I do actually see value in the tech so it's extremely frustrating...

Distributed ledgers and consensus algorithms are neat. Greed isn't.

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If you understood and saw the promise, why didn't you load up? If you believe Sathoshi's thesis, and believe that the technology can fulfill the stated function, it is kind of a no-brainer to buy a few/a bunch?

In addition, even now, at $3200, the market cap of bitcoin is still only ~50 billion. If you believe it has a good shot of being a superior global reserve currency, then it is still cheap and you should be glad that you can buy it for $3200.

Most people I know who knew about it but did not buy constantly thought it is worth less than the current price, whether that price is $3000 or $30. So they never buy. Your job as an investor/speculator is to guess what something is worth, not just look at a chart going up and wish you got in at sometime in the past. In addition, you need to realise that the people who really do well in any bull market or bubble are people who did stupid or manic things and managed to catch the upside. Sensible people rarely make outlandish returns. If you are a very level-headed, sensible person, you will not make outlandish returns, especially short-term.

> If you understood and saw the promise, why didn't you load up?

His answer is right there in his original post, he understands the tech, which is cool, but he doesn't understand money and markets, which is the real reason the entire edifice has any value at all. His observation is akin to being interested in technology purely at the intellectual level, and not understanding how it can serve humanity and fill needs that are desperately unmet in our present paradigm, and people are more than willing to pay to have those needs met. What they already pay to have what we have instead of that is the net economic cost of all states and state controlled financial infrastructure in the world (which, to be clear, I mean all financial infrastructure, because there simply is no such thing as a private unregulated financial instutition outside the bounds of cryptocurrencies), which by comparison make the entire cryptocurrency market cap even now after the rapid appreciation look like the office tea budget.

You need to understand both the tech and its utility to markets, and in turn the real utility of markets to humankind, and imho ideally the terrible threat represented by political authority, to do well out of the cryptocurrency wave. All these people that have loaded up without understanding the technology are eventually going to get taken as that technology matures and differentiates between all the available options, and they'll have no idea how to gauge the actual product level value of one relative to another, and they'll transfer value to those that do.

You can't win with just one side of the equation.

> Your job as an investor/speculator

You missed the part where he wrote that he was into this "as a developer, not as a speculator."

> I'm disappointed at the lack of millions I could have made (maybe, if I were a serious "hodlr")

He might say (and even believe) that he's looking at this purely from a dev standpoint, but it's just another investor angry over sour grapes.

We are all "investors" whether you/he likes it or not. Even if you choose to keep all your funds in cash stuffed in your mattress - that's just investing in fiat currency :)

The technology hasn't fallen back. It's evolved, even. (With the new fork we'll potentially even see competing alternate realities soon :D) Several devs I know are still happily tinkering away and following the progress of various cryptos - if you're "sick" over the sphere as it currently is, don't blame it on external forces.

I took it more as the frustration of someone who wanted to grow a garden when the circus rolled in to drill for oil.

> wanted to grow a garden

And what's stopping him? There is nothing he could do yesterday that he cannot today, other than invest at yesterday's prices.

Hell, it's probably significantly easier to develop with today's landscape - services and libraries being much more numerous than before - so you're going to have to enumerate specifics if you want to argue otherwise.

Having been bitten by this aswell (had ~100 Bitcoins in 2011) the issue is less with being angry about sour grapes and more about being I'll prepared for the situation.

When I made the decision to sell my BTC, I was completely uneducated regarding the economics of investments and didn't have any family members with any sort of investment at all, so there was nothing pushing me in the right frame of mind to consider BTC anything other than another tech-toy I created.

So the anger that I heard from many in a similar boat mostly stems from this sentiment "hey I was there, I was a programmer, I understood this, but still the wrong people won out, as always." because one wasnt educated to be a evil capitalist/banker/investor. (The evil connotation stemming from group think especially in Europe where rich = villain)

We will see more of this kind of behavior the next time a big tech crunch happens and the VC dries out for years. "Why did nobody teach me how to raise capital when it was still plentiful?"...

IMO it seems weird to be interested in a technology which enables digital scarcity and therefore value, but not be interested in the value created by a practical implementation of the technology.

It's a strange enough position to me that it makes me question whether people who say this actually understand the technology.

Plus, who cares about other peoples' "greed"? There's lots of greed in traditional finance but that doesn't stop most of us from investing in stocks and that kind of thing. If I think GOOG is a sane, rational long-term investment while others are going bonkers over it, I don't see why that would change my mind.

> In addition, even now, at $3200, the market cap of bitcoin is still only ~50 billion. If you believe it has a good shot of being a superior global reserve currency, then it is still cheap and you should be glad that you can buy it for $3200.

I don't really understand finance, so bear with me here : why should being a "superior global reserve currency" entail a stratospheric valuation? The USD has been a de-facto global reserve currency for the last 50 years, yet it's not like an individual dollar is worth 5000+ GBP, CHF, EUR, or JPY.

It seems to me like the high BTC valuation is being driven by speculation. That's fine and dandy, and as the Economist said is part of a "harmless bubble" - but ascribing this insane valuation to some kind of innate feature set of BTC seems to be misleading.

Happy to be proven wrong and/or educated. This isn't exactly my wheelhouse, after all.

> The USD has been a de-facto global reserve currency for the last 50 years, yet it's not like an individual dollar is worth 5000+ GBP, CHF, EUR, or JPY.

that is because Fed doesn't want it to be that way (and for a good reason) and prints [tons of] new USD. BTC can't be printed that easy and that unlimited.

Depending on how you define the money supply then you could say that the total supply of the US dollar is around 12 trillion dollars (based on M2 money supply.)

Given that bitcoin has a hard-coded cap of 21 million coins, if bitcoin became a reserve currency of the importance the USD currently has, you could assume it would reach a market cap of 12 trillion, meaning each bitcoin will be worth $570000.

The reason the USD value has not spiraled to $5000 each is because the economists advising the government believe in inflationary currencies, and believe for some reason that the best thing for a currency to do is to devalue by 1-2% each year. They give some reasons for this which, like a lot of economics are driven by conjecture and not evidence-based. Money is printed approximately to achieve this target, however in recent years, 4 trillion dollars has been printed and given to banks, again based on very little other than economic conjecture. I'm not going to argue with proponents of this sort of economic theory because its a waste of time, however I am glad that a currency not linked to a nation state is going to be able to challenge all of these assumptions.

Jacques once said that happiness is accepting what you have, not what you could have.

It's not a direct quote, but the gist is worth taking to heart. It's easy to say, not so easy to do. But you gain nothing by tossing and turning.

My guru as far as this lesson goes is Zachtronics. He's a game dev who makes programming games and who created infiniminer, which Notch adapted into minecraft.

Zachtronics' games are some of the most fun I've played, and from a brief encounter (not irl) with the guy he seemed unperturbed (or like he'd made peace if he ever was) by the outcome.

There is a lesson here. In comparison, Notch appears very dissatisfied despite his accumulation of wealth.

That's sound advice, but as you said it's easier said than done. Every time I read about BTC, I get sick to my stomach thinking of what could have been. It's very tempting to view money as a possible solution to all of life's problems, particularly for those of us who don't have very fulfilling lives to begin with.

This reminds me of a fun story. Back in 2011, our then head of IT kept a server under his desk that nobody but me seemed to notice. It was there for at least a year. One day over lunch he let it slip that it was a bitcoin node, but insisted it wasn't actually mining.

I was at the office one night kinda late, and I walked around the corner to see him working on the server. He was installing what looked a lot like a graphics card. Sure. Not mining.

In the end, he never got caught. I recently looked him up on LinkedIn and he hasn't been working for over a year. I obviously don't know this for sure, but given what a bitcoin enthusiast he was, I would not at all be surprised if he made a fortune mining for free by stealing the company's money and also investing heavily.

Indeed, greed in cryptocurrency is a thing.

(Created a throwaway to protect the privacy of the guilty, even though they don't deserve it.)

Back of envelope suggests he was stealing $20k per year in power, probably not more than that. Considering this was 2011, the return on that $20k could have been gigantic. Reimbursing them would have been a drop in the bucket, if he could do it without outing himself...

You need a new envelope. One server does not pull $20k worth of electricity a year.

I'd say $2000 would seem more likely, assuming it's some monster thing that draws 2KW when running flat out. 1 watt-year in the US costs around $0.75-$2.

Your envelope is more inflated than bitcoin itself. I am a miner, and i was a miner back in 2011. One of my rigs right now uses 923W with 6 high end graphics cards. That rig costs me ~$3/day * 365 = $1095.

Do you really think you can hide the amount of heat from anyone - my rigs are basically a furnace - and in 2011, I think I could probably melt steel =P The guy may have had a few cards in there, but $20k is absurd.

Well, he said a lot of graphics cards. I plugged in 20 at 1kwh each. Trying to charitably interpret OP's tone of outrage, which seemed misplaced to me.

I feel the same way. And I'm ever since disgusted by cryptocurrencies as I see a lot of people who I don't want to be associated with them being the driving force. Also, I believe in distributed ledgers, I respect Bitcoin as being the first, but it's the worst from a technical point of view and wastes tons of energy, which is getting ridiculous!

I would feel the same if I started Google - to build something cool like a powerful search engine just to sell ads. Ewww!

There are better and worse ways of making money. Crypto speculation and ads are the some of the worse, in my opinion. Charge for your service - it's the only honorable and clean thing to do. Don't be a sellout!

Shortly put, I do believe in the blockchain, I don't believe in Bitcoin, which is majorly driven by low-class Chinese speculators and exchanges!

I don't think the google founders started the company "just to sell ads".

It is just how they make money. What they DO is make the best search engine, host every video and livestream anyone on earth wants to upload, run the best email service on earth, run the best cloud office suite etc etc.

Maybe that was the only viable option back then. Today, more people are willing to pay for services and not be bothered by mostly irrelevant and annoying ads! Yet, Google isn't changing as we're the product!

I was an early adopter of Contributor, which got shot down in its original form! This speaks loudly about nowadays Google!

In order to bootstrap a currency you need the price factor to interest lay people and generate adoption. There is no other way. I haven't seen the argument lately, but in the early days when the price started to rise, there was a lot of complaining from people who wanted the price to be stable.

Stability is boring. It doesn't garner attention. It's the high fluctuations that generate interest and bring in new people to the ecosystem.

Without it, Bitcoin would have been basically another technology that most people would have never heard of.

Or, you could make it useful rather than a vehicle for speculation. There are plenty of other ways.

Well, Bitcoin is such an outlier. $1 invested in April 2010 would be worth $1 million today. A insane 1000000x ROI over 7 years. It's nuts. No other investment opportunities even come close to that so it's very, very hard for most people to avoid greed and envy. Not sure what the solution is.

The solution is for the market to correct itself (if it is thus insane as claimed). If that happens it will be very very hard for the greedy to find buyers or sympathy.

Why would the market correct itself? What could possibly cause a crash, short of some kind of catastrophic security vulnerability being discovered, or hostile regulation in one of the core markets?

Because tulips?

Fair. A liquidation race is certainly plausible.

It was funny to compare Bitcoin to tulips back in 2010. However the Bitcoin ecosystem has now sustained impressive growth—by all metrics—for 8 straight years... I think we are past the "it's tulips" stage.

When someone asks Why would the market correct itself?, the comparison with tulips seems completely appropriate.

even better than the founders seed stage of Uber $200,000 -> around 20% of $65B ($13B)

$1 -> $65,000

I can beat that. $7 got me gameplay.com. That sold for $70K. That 70K I put into ww.com, which got me $1M. That's about twice as good an ROI.

Hah, did you sell it to the UK video games retailer? I used to buy from them all the time. Funny to know where the domain originated from.

Yes. Long negotiations with some lawyer and then finally someone from the company called and we had a deal in 10 minutes.

I was going to buy $3000 worth when it was $10 and I was talked out of it. The only way I sleep at night is knowing that I would have sold it when it hit $20.

I think you are reading it wrong. It isn't about greed. It's about recognizing an opportunity and having the drive and interest to jump on it, sometimes at great personal risk.

I have failed to recognize and/or act on a number of opportunities so far in my life.

One was when the consumer Internet was "waking up". Domain name registration was free. And, even later, as Network Solutions started to charge for them, domain names, good one's, were plentiful.

And so, there I sat, living through the technical birth of the Internet, fully understanding it from an engineering perspective and yet, due to my lack of experience at the time, never made the mental connection to the opportunity that lay ahead. While other less technical people gobbled-up tons of good and very valuable domains I was geeking out making use of the embryonic consumer Internet. These people made millions. I did not.

Another missed opportunity happened during the economic downturn of 2008. The market crashed. I had been a day trader a decade earlier and have always kept a level of awareness about the market. I was on the phone with a friend and made the comment that Ford was an absolute goldmine as it had dropped down to about $1.50 per share. The company had none of the problems the other auto makers had. It just got dragged down with the rest of the market. It told him I should get off the phone and buy 100K shares of F.

In other words, I recognized the opportunity and had the ability to take advantage of it. Yet, I did not. I would have made somewhere in the order of $1.7 million inside of a year and a half or so.

I'm sure people who also recognized the opportunity and brought themselves to pull the trigger made a killing. I, for some strange reason, did not.

I look at cryptocurrency and your comments the same way. You probably recognized the opportunity yet did not act. This has nothing to do with being intelligent or dumb. I have no clue what it is but it happens.

I wouldn't feel bad about it at all. Plenty more opportunities ahead. Just try to grab onto of one when the time comes.

Luck favors the prepared. I've slowly woken up to this stuff over the years, I figure in your life you'll have somewhere between 1 and 10 of such opportunities, how you handle those will make all the difference in how you'll live the remainder of your life.

In my life so far:

- electronics

- digital

- computers

- the web

- cellular communications

- smartphones + app ecosystems

- crypto currencies (in progress)

- deep learning (in progress)

Yup. I am currently studying the idea of designing better (more efficient) mining hardware. That's the arms race. I have a few ideas. Not intelligent enough yet to know if this makes any sense as a business venture given the current state of the art.

Not doing much with deep learning yet other than spending as much time as possible learning. Need to identify opportunities.

I did jump into the iOS fray years ago. It proved to be a bust. The App Store is so bad in terms of discoverability, building relationships with your users and the race to the bottom that it became impossible to make a profit.

I wonder how many of these instant millionaires are savvy enough financially and emotionally to handle the wealth. I could see it being easy to lose it all like many lottery winners, or lose friends or become depressed with nothing to do.

Occurrences of people getting hacked to the tune of 6 figures are common in bitcoin forums and subreddits. I think by now so many hackers must be rich out of this.

Ah, I imagined this would be the case, but I actually never looked for details. Do you have anything in mind to share with us? Or simply just go search on Reddit and you find plenty?

https://www.reddit.com/r/ethereum/comments/53xwal/got_hacked...

https://www.reddit.com/r/ethereum/comments/3ird55/holy_shit_...

https://www.reddit.com/r/ethereum/comments/6qlxxa/i_lost_150...

https://medium.com/security-news/report-shows-230k-of-crypto...

http://www.altcointoday.com/chinese-exchange-yunbi-lost-4000...

You sound like some one who has ever made a lot of money. In a flash

What does it mean to be a Bitcoin millionaire? Did they sell near the highs and buy near the lows? Or do they hang on to it because they hope it will go higher?

If you put $3,000 into bitcoin in early 2009 (EDIT: Actually, mid-2011), you'd have around $1M today.

There's not much sense losing sleep over that statistic though. Most of us had $3k and didn't do that. All you can do is keep your eyes open for the next opportunity, which may never come.

More like $1.5B today, if you could even have bought $3,000 worth of bitcoin at that time (early 2009 was weeks after the first block was mined).

Whoops, thanks. It wasn't until February 2011 that BTC hit $1.00.

And, buying $3,000 BTC at $1.00 in 2011, means that today you would be worth $10M, not $1M.

The trouble with alleged worth is that liquifying this much BTC is going to be problematic even at current market cap.

Looking at the activity on Bitstamp right now, I don't think selling a few thousand BTC even affects the price noticably. Someone just sold almost 30,000 BTC for within half a percent of the previous trade - which is basically just the bid/ask spread these days.

Not at all... $10M (3k BTC) is a drop in the bucket at current volumes. Bitfinex weekly volume is $640M (200k BTC). http://bitcoinity.org/markets/list?currency=ALL&span=7d

I understand that part. I just don't see how they could sell any coins because the urge will always be, "It's still going up! I can't sell now." So it seems to me the wealth is more "on paper" than on selling and spending the proceeds. Like the bubble in the late-90s?

(Not that I'm arguing or worrying. I was just curious.)

Often the urge is more "Ive made 10x gains on these things! I'll sell them for $15/$150!".

At some point you have enough money that it doesn't really matter. If you had $20k in Bitcoin you may be tempted just to keep holding. If you had $3mm, who really cares? Sell half or two thirds to diversify if you still believe it has room to grow or just drop it all into more traditional investments and take your interest and dividends for the rest of your life.

Holding millions of dollars worth of coins yourself, rather than in a bank can become quite nerve wracking. Open your wallet on the wrong computer, or let someone untrustworthy to see where/how you hide your key, or how much you own, and you can wake up one day with all your funds gone.

I know there is the other side of that, that the government can seize your funds in a bank account, but realistically they won't target you out of millions of people who have millions in their name.

That's what hardware wallets, paper wallets, and safe deposit boxes are for. It doesn't take that much effort or technical skill to keep coins very secure, and the information on doing it well is readily available.

I also want to point out that even if you did put $3000 in, most people don't have the guts to hold that much for that long. I've heard countless stories of people selling when Bitcoin was only worth hundreds because they panicked.

I didn't panic, but I thought it was worthwhile to exit when BTC was at about $12. It paid for the down payment on my car. I kept some (and I'm still holding a fairly substantial amount) because I do believe that it will revolutionize a lot of things and will be worth a lot more in the long-term. It wasn't about "having the guts" or "panicking" as much as it was about "I have an opportunity here".

Thanks for the correction. I should have said something like many people thought Bitcoin was peaking when it was only worth hundreds.

Sure. I even thought to myself for quite a long time how it would have been nice to hold onto it until it was worth $1100-1200 a few years ago. But then I would have started wishing I'd held out for the $3k price. And surely, I would have wished that I'd held out for the $5k, $10k, $50k, or more. And truly, that's why I'm still holding a fairly substantial amount. But the most important thing is that I am not frustrated or disappointed in how I've handled this frankly unexpected and astonishing source of wealth ("wealth" perhaps is a strong word here). Because of other circumstances in my life, I feel lucky to be alive. I do not have any regrets about exiting most of my Bitcoin position when it was worth $12. It helped me to provide for my wife and myself, and that's more than some people get in life, so I'm really happy with how it worked out.

Sorry for being dumb. If someone wants to encash it to USD. Who's going to pay them? My knowledge in this subject is very minimal hence it sounds like the scene of Housing crisis.

There are many Bitcoin exchanges and "banks" where you can buy USD for Bitcoin from someone looking to buy Bitcoin. Currently, about $70 million per day - $billions per month - is exchanged for Bitcoin, so it's easy to get in or out of it.

> hence it sounds like the scene of Housing crisis.

If everyone wanted to sell BTC and no-one wanted to buy, it would crash just like anything else.

People hoping for the next 10x increase, people who want a tax-proof and mobile value store, people who need it for a transaction involving something illegal (e.g. paying off a ransomware operator), people who want it for a regular payment or money transfer.

It's up for anyone's guess how big each of those groups is relative to the others. Believers tend to assume that the last one is big, e.g. the "send money back to the home country" use case.

> tax-proof

https://xkcd.com/538/

(replace "encrypted" with "untraceable" and make the skiddie a webmaster of some unregulated exchange and you can see the future of this situation)

Bitcoin was "launched" in January 2009. There were no exchanges until mid-2010.

It's more insane than that: $1 invested in April 2010 would be worth $1 million today. 1000000x ROI. (First exchange was BitcoinMarket.com and opened then at $0.003/BTC).

I'm just fed up hearing about cryprocurrency. I have no interest in "better currency" and the topic keeps coming like it will change anything.

I'm a full-time developer on Ethereum, and also wish I'd bought more early ETH. But developers who understand this stuff are in high demand right now, and there are all sorts of opportunities. There's plenty of money to be made by working instead of just hodling.

This can be said about so many tech innovations, not just Bitcoin.

Not quite. Unlike virtual money other innovations have intrinsic value, however small it may be.

Bitcoin's intrinsic value lies in the system that can securely, verifiably, transferably and trustlessly store numbers, assign them to password-protected wallets and keep the sum of those numbers below a constant (21M). Due to these traits, such a system is suitable for representing value just like gold (but BTC is more easily transferable). It is pretty hard to create such a system, therefore it is valueable.

Wow, you got some unkind family members!

I think I would say that I have some regrets not buying/mining. When I first heard about bitcoin I thought that it was pretty neat but I did not want to support it because I thought it is such a waste of exergy.

Why did this require a throwaway? unless you're a well-known bitcoin contributor, which would be entertaining.

I'd love to know what % of BTC trading is speculation and what % is non-BTC related trade.

A few million dollars really isn't much. And, once you make a few million, human nature takes over and decides it isn't enough--you always need more. I find it's helpful to count your blessings, and also remember that there's really something to the adage easy come easy go.

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