Bitcoin has died 166 times, so far
99bitcoins.com
99bitcoins.com
To me, bitcoin died sometime in 2013 when mining became hopelessly centralised, breaking the economic and security models Satoshi had set forth. The bitcoin thereafter has been a soulness Frankenstein animated by a mixture of ego, greed, and hubris. I don't want to make any predictions, but when the crash comes it will be over before you knew it.
As for the wider field of blockchain/DLT, it bears an uncanny parallel to the early days of nuclear physics when radioactivity was first discovered by the Curies: The science behind it was be sound, yet any benefit to mankind was overshadowed by the cottage industry selling radioactive snake oil for a long time before the mania died down. And people died when basic precautious were not taken.
It may work down the road and it may not, but right now all I see is woo in every direction.
The key management involved in a Bitcoin wallet faces the same problems and complications as any other implementation of crypto and user key management faces. Some have implemented it well, some have implemented it poorly.
In healthcare IT the blockchain is hot right now. Government bureaus are pushing for adoption, care institute executives heard somewhere that this blockchain thing is the bee's knees and well suited for healthcare stuff like insurance mutations, and IT vendors are worried someone else will beat them to it.
Is it a useful technology? Probably. But right now for many the blockchain is the goal, not the solution to any specific problem.
Perhaps, for a new generation, certs are too old fashioned, or many have never heard of their uses?
I'd think that small banks/financial institutions would benefit far more than large companies. They can confidently share data with each other and enforce standards among themselves. Big companies, on the other hand, already have that trust through their reputation and detailed, legally enforceable contracts.
Nice example: say you wanna send $5M from the US to another country. Traditionally, you'd call a big US bank, send them the money b/c you trust them, and they'd send it to another large foreign bank b/c the US bank trusts the foreign one. There's a chain of trust based on the stature of the companies, and they charge a nice fee for that peace of mind. Blockchain can allow smaller companies to get into that game, but not entirely sure how it helps the big ones.
I am definitely not saying blockchain is the only or even the best way to achieve that! Just that this helps explain its appeal
I'm not saying big banks have nothing to gain, they do, but proportionally less than a smaller company that no one knows about. It allows "Bank of Mom & Pop USA" to confidentially do deals with "Little-Town Bank" Shanghai" without going through the mega-banks.
- IT staff wanting to write "blockchain" on their CV (I have seen CVs driving technological choices so many times, hadoop used to store a 10MB csv file, etc)
- Some senior management reading in Newsweek that blockchain is the new hot thing and asking his CTO to give him blockchain stuff.
When such a storm forms, no objection from anyone in the organisation, no budget constraint or any form of rationality can stop it, a category 5 bullshit hurricane. A hammer looking for anything looking remotely close to a nail, even a finger.
I don't want to critique any sentences, but this one is heavy on rhetoric and low on information.
- There is a lot of wash trading going on with several exchanges, some of which has had serious accounting issues since 2016. When they fail, the fallout will be far more spectacular than that of the late MtGOX because many traders are heavily leveraged.
- Upcoming Segwit2x hard fork potentially splitting the network.
- Uncertainty with China where the majority of hash power resides. The current crackdown on exchanges is pretty well reported. What I am concerned about is what will happen to the network when electricity price goes up in winter as hydro generation winds down, making mining more expensive. Historically miners were able to get favourable deals with remote thermal plants to cover the shortfall, which may be more difficult due to negative press and an ongoing effort to curb smog.
The view I share with a few perssimistic pundits is that there will be one final rally to $5000 before November for people to cash out before the freefall. What we don't agree on is the timeframe and where the price will hit the bottom. Hence my reluctance to make predictions.
And do you believe this crash/correction will be lethal? Or will Bitcoin "die" and rise again?
My best guess is that it could go through more boom/bust cycles before speculators move on; actual users have already started to move to other cryptos as we speak.
https://twitter.com/bitfinexed single-mindedly covers the dodgy company. If there was some way of filtering their tweets to show just the linked articles and not all the comments/retweeting noise, you could find some good coverage of the issue.
Hand wavy nonsense. Exchanges have failed before and bitcoin is still going strong.
> - Upcoming Segwit2x hard fork potentially splitting the network.
There already was a hard fork, and the network did split, yet bitcoin is still going strong.
> - Uncertainty with China where the majority of hash power resides. The current crackdown on exchanges is pretty well reported. What I am concerned about is what will happen to the network when electricity price goes up in winter as hydro generation winds down, making mining more expensive. Historically miners were able to get favourable deals with remote thermal plants to cover the shortfall, which may be more difficult due to negative press and an ongoing effort to curb smog.
The bitcoin difficulty rises and falls with the ability to mine it. If the number of miners go down, the network remains unaffected. What's your point here?
The stakes are different this time.
>There already was a hard fork, and the network did split, yet bitcoin is still going strong.
The previous party line is "Hard fork bad, soft fork good". Anyway, we can agree that now everyone is free to start their own fork and it's a good thing for bitcoin^TM.
>The bitcoin difficulty rises and falls with the ability to mine it. If the number of miners go down, the network remains unaffected. What's your point here?
The network recalculates difficulty every 2016 blocks. Assuming regular 10 minute intervals it is updated approximately every 14 days. If the BTC network was to split evenly in the 2X hard fork, then in the worst case it will take 28 days before an adjustment is due. If the split is not 50/50, then the minority chain will need proportionally more time.
In the meantime both chains will be congested due to longer average block interval. That said, both chains will need several months to stabilise as miners move between forks to maximise their profit, as we have already seen with the BCC/BCH split, and that was initiated by a <5% pool.
tl;dr A chain split will make the network unusable for weeks if not months.
Does the price of a painting determine it is a good painting? Afaik not.
Just because some people want something, doesn't make it a good currency. To stay in the same metaphor, I'd like to own the Nightwatch of rembrandt, just as many others do, still doesn't make it a currency or even gives it properties of 'currency'.
I agree that those other properties are important too.
Speaking as a bitcoin owner and proponent, there is zero (actually negative) market uptake of bitcoin as a payment platform (which I happen to believe is bitcoin's primary use case). This is because no work has gone into scaling up transaction throughput, which has predictably suffered as a result of increased mainstream interest (even with practically no merchant adoption).
The narrative has shifted recently that bitcoin is now a 'settlement layer', only that makes the situation even worse, because there is no 'payment layer' on top of it, only pie-in-the-sky designs.
So yeah, I don't share in the exhilaration over $4000+ bitcoins.
No, or only partly so. The other, more fundamental reason why bitcoin will never be a payment platform, is that it doesn't behave as a currency, but as a commodity. The hard limit on the number of bitcoin is both the guarantee of its value and what makes it an intrinsically deflationary good. Its monstrous current price proves it, and it can only go up (almost) indefinitely or go bust.
With these characteristics, nobody will ever want to use it as a payment method. You don't want to pay with a bitcoin, when you know that in the future that same bitcoin will be worth n times its value today. If you have used bitcoins in the past for transactions- you might have paid 50 bitcoins for a book in 2011- I'm sure you're sorely regretting it now.
Which is odd, because without any other utility, what's the point in choosing this commodity over others?
People have used gold as a payment method for millenia. If holding bitcoin is as attractive as you say it is, businesses will give discounts for bitcoin payment which can compensate the effect you describe.
In other words, if bitcoin is as attractive as you say it is, you would convert to fiat only when you want purchase something, and the merchant would immediately convert from fiat to bitcoin. Why would both parties in the transaction chose to transact in such an inefficient way?
Unfortunately no one runs news stories on the growth of unique addresses in the bitcoin network
However yes I agree the past couple of months at least has been filled with rabid noobs, but HODL culture does a decent job of counteracting this
[1] http://business.time.com/2012/02/27/warren-buffett-on-succes...
However, since we live on a planet with unlimited resources capable of unlimited growth, the theoretical loss of being the "last investor" is perpetually shifted to the next generation, thereby solving the pyramid scheme problem once and for all.
Once and for all, I said!
No. 'Dividends' do not matter.
The cash going into the companies bank account belongs to the shareholders, and it's reflect in the stock price.
When a company gives out $1 in dividends, it's valuation goes down by $1.
Technically, dividends don't matter.
In reality it's a little different, and dividends mean certain things, mostly about the companies ability to generate returns with that cash than you, the investor.
And FYI - there can be 'unlimited growth' - as long as there is innovation, and 'stuff keeps getting better' - we will see growth.
How's that work, bud?
The entire medical industry's growth is based on innovation.
Do you think the medical industry is growing because it's 'digging more resources' out of the ground?
'Cutting more trees'?
The entire financial industry, basically all of high tech.
Education.
Very few sectors depend on 'natural resources' for growth.
And even for some that do, it's minimal.
Most materials are abundant anyhow.
This would be very unwise.
BTC is highly volatile, and could go to 0 tomorrow.
It could could be made useless by the stroke of the pen someone in any big government.
Nobody keeps most of their assets in cash.
Stocks, Bonds, real estate, a basket of commodities, a basket of currencies - or even a decent long-term-interest savings account ... are all considerably better than BTC as stores of value if you don't like fiat.
When considering the 'risk premium' - BTC is a speculative instrument only. Not a currency, and definitely not a store of value.
BTC on the other hand, is deflationary by design.
You lost me after this. A huge amount of work is going into scaling across the entire crypto coin space. The issue among the various factions is disagreement over what approach to take and how aggressively to implement it.
That is completely false. Development of Lightning Network and other solutions by multiple teams has been steady and robust. To cite a few working on LN:
* https://github.com/ElementsProject/lightning
This project is a web development tool and has nothing to do with crypto.
Back to your comments on the state of LN development, I would not call it robust when the current implementation requires every client to monitor the blockchain 24/7 just in case a node attempts to cheat the system, and there is a good chance the cheater will succeed when the settlement layer becomes congested. For now they are very much pie in the sky.
Channel monitoring will be outsourced. I did not claim everything was finished, but it is far from pie-in-the-sky.
Off-chain scaling is the only way to scale bitcoin as a day-to-day payment system, and always has been. This must have been clear to everybody from the start.
The notion of "to me, bitcoin died" sounds like "that show/band/social network/news site died to me, because...".
Bitcoin seems a bit like many other economic systems, where it doesn't make sense that it survives or survives so long. I don't think predictions about such systems can be made by purely rational means by any feasible means. There is too much emotion and seeming "randomness" involved.
However, I am sure that at one day be that in two weeks, decades or more it will be over and everyone will have seen it coming, as the most obvious thing. So I agree. Bitcoin will end. However, life on earth will too and even there you have speculations reaching from only decades to billions of years. ;)
I think you are right, however. But I also thought Bitcoin would have been over years ago.
The price rising is validation for services on the periphery. Established services that can add a lot of utility for bitcoin.
For example, the volatility problem is completely solved by CME Group and CBOE and the CFTC pursing and allowing hedging instruments on bitcoin.
This opens up the market to many market participants, some of which are much larger markets than cryptocurrency has ever touched yet, and obliterates a primary rebuttal on the bitcoin concept.
The decision makers in those organizations would not have considered bitcoin as more than a toy until the market cap was larger. The CFTC has approved cryptocurrency hedging instruments only a few months ago. In 2017, 9 years into the concept.
So what standard of fail would you even be using? What would ever give you validation for more than a few weeks or months?
> but when the crash comes it will be over before you knew it.
Bitcoin has crashed 70%, 80%, 90% several times before. Most bitcoin holders know that is a possibility.
There are market participants that will use it at a lower price, that will buy it at a lower price, and continue expanding the reach of it.
After hedging instruments are prevalent, many market participants won't even be notice the price fluctuations.
So again, what standard?
Apart from brand recognition, which application is best conducted on the bitcoin ledger than every other alternative? Please don't say "Store of value".
>Established services that can add a lot of utility for bitcoin.
How would you go about doing it? Bitcoin was not designed to have side chains and tokens pegged all over it and there is a reason why the ICO fad universally chose ETH.
>There are market participants that will use it at a lower price, that will buy it at a lower price, and continue expanding the reach of it.
Again, which users? Bitcoin was able to recover before as there were significantly fewer competitors; now there is at least one for each use case.
It was unclear whether you were criticism bitcoin as a criticism to all cryptocurrencies, or bitcoin by itself.
Fortunately it looks like it is just bitcoin by itself.
> which application is best conducted on the bitcoin ledger than every other alternative?
Bitcoin has to compete on its own. I'm all for other cryptocurrencies unseating it. In a world where 90% drops are not uncommon or controversial, and in a world where blockchains don't die, in a world where the code is open source, I don't think it is worth entertaining the bitcoin failed idea as it will always be a political mess that can have utility added any time.
> Bitcoin was not designed to have side chains and tokens pegged all over it and there is a reason why the ICO fad universally chose ETH.
This comment and your next comment go hand in hand. Bitcoin had ICOs on it several years before Ethereum was ready or existed. When its network got full it lost its innovative edge as it took over two years to upgrade. In the meantime more fully featured competitors have focused on specific use cases.
An upgraded bitcoin may have irreparably lost some of its network effect advantage, and thats okay. It will have robust scripting for the next wave of ICOs and other organizations, decreasing the point of most altcoins. The top 10 may have differentiating qualities and markets already. Play it by ear, it isn't controversial to notice.
Yes, my comment is mainly about BTC, although its many flaws are hardly unique so the same criticism will inevitably apply elsewhere.
>When its network got full it lost its innovative edge as it took over two years to upgrade. In the meantime more fully featured competitors have focused on specific use cases.
I think we are actually in agreement here. Bitcoin was innovative and exciting for a while but has gradually become stale and boring without good leadership. And the competition is catching up fast.
>An upgraded bitcoin may have irreparably lost some of its network effect advantage, and thats okay. It will have robust scripting for the next wave of ICOs and other organizations, decreasing the point of most altcoins. The top 10 may have differentiating qualities and markets already. Play it by ear, it isn't controversial to notice.
Good point, but I don't see it happening anytime soon. For starters, malleability was identified as a problem as early as 2011 and it took six years to be fixed. Other proposed additions are either minor tweaks (Schnorr signature, MAST) or vaporware (Lightening network anyone?).
That's huge.
I can send money to anyone I want to, I have no expectation of censorship or interference. The fees are low to zero depending on the exact method, and I don't have to jump through hoops to try to interact with a crypto-currency broker. I have protections, insurance and various forms of reversibility to fall back on if something screws up.
For me it's not huge, or even really relevant.
Except for donations to WikiLeaks. Or if you want to buy weed in one of the many states where it's legal. Or if the recipient's Paypal account has been frozen.
> The fees are low to zero depending on the exact method
Chase bank charged me $25 to send a wire transfer recently. Credit cards and Paypal charge me 3% to 5% when I sell something online.
> and I don't have to jump through hoops
When I sent that wire, I was required to answer slew of questions from a Chase representative including "What is this transaction for?" and "Do you plan to transact with this company again?"
> I have protections, insurance and various forms of reversibility
Perhaps as a buyer, but as a merchant, chargebacks are a nightmare.
> For most people, not really.
Huh. Most people I know detest banks and don't like the idea of handing over complete control of their money to someone else.
There just haven't been any alternatives until now.
These are not pressing use-cases for me.
>> When I sent that wire
It appears your banking service is a bad one, I have had none of these problems, even transferring large amounts between countries.
>> Perhaps as a buyer, but as a merchant, chargebacks are a nightmare.
Yet without them, many buyers would have given up buying online by now, chargebacks and buyer protections allow the online marketplace to function.
I think what you might have there is (yet another) criticism of how backwards the US market is.
Proponents continue to build castles and waste electricity hoping people bite so they can profit. But the game is over.
Money is a social tool based on consensus, and today democracy and accountability, that has evolved with human societies however imperfect it may be. At least societies can exercise some control over governments.
Why would anyone give up this hard won rule of law and accountability to private individuals operating out of self interest peddling illusions about some imaginary 'freedom'?
As someone working in the financial industry, the amount of regulations, internal audits, external audits, reporting requirements, etc. that financial institutions have to comply with is truly staggering.
Sure, they 2008 financial crisis demonstrated that all of this was no silver bullet, but I still consider that system many orders of magnitude more trustworthy than a system that allowed for the shit-show that was MTGOX, and other failed exchanges.
Bitcoin itself is completely auditable in transparent. The system will behave exactly as the code is written.
tl;dr: Neither Ethereum nor Bitcoin have address checksums on the protocol level (remember this HN thread here is about trust) but by now all Bitcoin clients decided to implement it. In this case, the exchange used an Ethereum client which didn't.
It works well enough for me. I do stuff for people. They pay me in Bitcoin. I lease servers and stuff. And pay Bitcoin. All of that can be as anonymous as I like. So yeah, it works for me.
> Proponents continue to build castles and waste electricity hoping people bite so they can profit.
Sure, some investors do. Me, I wish that they'd find something else to screw up. If it weren't for all the damn miners, we could still mine on our own devices.
> Money is a social tool based on consensus, and today democracy and accountability, that has evolved with human societies however imperfect it may be.
So you say. I don't see any obvious connection between money and democracy or accountability. Money is what people use in trade. Trade is a private matter.
> Why would anyone give up this hard won rule of law and accountability to private individuals operating out of self interest peddling illusions about some imaginary 'freedom'?
So authoritarian jerks can't mess with them?
The idea of the UASF was that miners would be economically incentivized to follow user nodes signaling and then enforcing new rules - and that is exactly what happen.
It is also not out of the question to alter how blocks are mined in Bitcoin - Ethereum is doing that in an upcoming hard fork[0].
With Bitcoin it would be possible to not only introduce a new PoW with a soft-fork, or introduce multiple proof of work methods so that each has a difficulty target and no one PoW has a geographic, technological or regulatory advantage allowing it to achieve more than 100 / number_of_proofs_of_work% hashrate
[0] Ethereum is transition from proof-of-work to a combined proof-of-work/proof-of-stake with the Casper project https://github.com/ethereum/research/wiki/Casper-Version-1-I...
I think it will be the same with Bitcoin, it might be dead if it will stay in the form that it is today but my guess is that it won't be the case.
Most of us weren't driven by gain. The last bank crisis burnt everyone. The hackers did what hackers do: trying to find a workaround to this stupid bug. Build a POC for another paradigm.
In that sense, Bitcoin is a tremendous success.
Yes, it didn't become the alternative currency we hoped for, turning into a speculative mess. But boy, shake things up it did.
Bitcoin changed everything. The tech scene. How we perceive money and exchanging values. It opened a new door that will never close, a new paradigm that is changing the way we are living.
It's so new that we see dozens of alternatives, with variation, trying to be the new big things. It's so important people can't stop talking about it to the point it triggers a bubble. It's so influential a gigantic country such as China had to take measures to coerce it. And yet, it's just a piece of code...
Bitcoin was spot on.
Thanks for everybody that took, with all the little guys like me, the time, risk and resources to believe in it when nobody did. When we were mocked for trying. When we were doubting but having so much fun. It was a beautiful thing.
I'm glad to have now the feeling those kind of people will always be around, and that we can always try to build something. Can't wait for our next failure :)
Visiting the page for the first time and immediately getting a popup is not one of them.
Safari (on macOS) will use the native macOS notification system to display notifications AFAIR. I have no idea what IE on Windows does.
https://blogs.windows.com/msedgedev/2016/05/16/web-notificat...
It should work like the popup blocker, just show a red cross somewhere, that some action was blocked, and if the user wants to, he can go and unblock it. The onus should be on the site owner to tell his user "if you want this additional functionality, please go and enable <this or that>".
Use Chrome?
Then the settings are here: chrome://settings/content/notifications
At least the latest version of Safari supports blocking all these requests.
With nickel and paper money, banks can create as much cash as they like, it's virtual value, not real. Crypto currency is just like that, but more secure and not (yet) controlled by the banks. And again you see the allegations that crypto would be a pyramid scheme etc.. Do people notice that our actual economy/financial-system is a very proven pyramid scheme? All money flows to the rich. And especially those people in power now, are getting a little nervous seeing they might lose some control.
Crypto currencies can be a boon for humanity, unless governments are going to criminalize it and only allow banks to use the technology.
Yeah, your type have been saying that a long time.
There's no conspiracy with bank or governments, only people that want to be richer and richer, because of this stupid economy. The great democraty, this is the reason, because we failed to put priority about life quality, but about making money = success
Also if people stop looking for conspiracy but start to elect, vote for a more better world where everyone can own the same amount of land (that mean I have right to go to amercia without your passeport because you are not a real amercian, just a Citizen of the World), can have the same access to medecine or wathever, there's no need of money.
We all are little ants.
All they have to do is to lend some money.
The amount of money lent vs the amount of parties is the leverage ratio. It's usually managed well, but can get out of hand pretty quickly.
Edit: Forgot to mention reserve amounts. They are crucial.
The difference may seem meaningless most of the time, but occasionally it becomes extremely important.
Are you seriously suggesting that in 10 years there will no longer any physical currencies? Or is soon 50 years? Or 100 years? Can you give a concrete vision for how that would work?
> banks can create as much cash as they like, it's virtual value, not real.
No they can't? The government can, but not arbitrary banks.
> And again you see the allegations that crypto would be a pyramid scheme etc
As I understand it, it's more that it's incredibly unstable, and can be taken over by whomever has the most cpus at any given moment.
I'm sure crypto currencies have lots of uses, especially for more cases around the edge (people in countries with dodgy governments etc), but I can't understand what value it provides outside of that.
I am no expert. At the moment though, if I want to buy a widget online, and I have visa or bitcoin as my options, my choices are either to trust visa, the company that is bound by at least some regulation, has a physical office and PR that can be damaged, or trust a random bitcoin conversion service which is not bound by any regulation, could literally just disappear with my money, could record an internal log of every single transaction and tell it to third parties etc… and then disappear into the night if something went wrong.
Maybe this is all incorrect. But this is the perception that I and others have. So it's either an actual issue, or an issue of bad marketing.
Physical currency is already less than 10% of currency.
>As I understand it, it's more that it's incredibly unstable, and can be taken over by whomever has the most cpus at any given moment.
Stability decreases as value stored in it increases. You can't bootstrap a global decentralised currency without some growing pains. The thing about bitcoin is that is constantly crashes upwards.
>I'm sure crypto currencies have lots of uses, especially for more cases around the edge (people in countries with dodgy governments etc), but I can't understand what value it provides outside of that.
It prevents fraud from Governments. Instead of allowing them to print money when they want, they can't. It allows for global transactions in minutes, 24 hours a day (every day) for far lower transaction fees. It allows an internet of money.
>or trust a random bitcoin conversion service which is not bound by any regulation
You are mixing up a currency with a payment merchant. There's no reason that Visa wouldn't be able to use Bitcoin and charge you like it currently does.
I got my terminology wrong here. I didn't mean physical currency like notes or whatever, I really just meant currencies backed by a government, £/USD etc.
> It prevents fraud from Governments
Doesn't it just replace it with another form of fraud, but this one without any ability to democratically replace it? Specifically, consensus algorithms that fall over if you manage to own enough computing power?
> You are mixing up a currency with a payment merchant.
Sorry, you're right. As someone who has tried to learn about bitcoin et al and never seen the point, the fact that I have to trust another payment provider for no obvious benefit is where I lose interest.
Presumably in the future that won't be the case.
Most likely, other than being caused by a global catastrophe, is that the center of global finance gradually shifts elsewhere long before the US dollar becomes worthless, and if that ever happens, barely anyone (outside of the US, especially) notices much.
Those are features.
Not to mention that proof-of-work isn't ecologically sustainable on a larger scale anyway.
Anyone who says this hasn't been to massive datacentres to see what infrastructure it takes to share your cat videos and avocado toast images. If Crypto wipes out a few banks the costs will be completely negated anyway.
Yes, it may die next week. But next week may also bring another reason to stick with it.
Even if it dies, we already had a taste of it, what are we gonna do? Not try again?
100 years from now bitcoin will be around since there is no one entity that defines it and control it. What the community has shown is that they are willing to adapt to the situation. Right now bitcoin has problems but as time moves the code will be modified. What's happening now is that bitcoin is being locked into people's mind as a currency with real value. Whether one can justify it or not is irrelevant. As long as one person is willing to trade goods and services for it will survive. No one throws away a stack of money if they can help it. The community will not let bitcoin die.
The mistake people make is that all the current bitcoin constraints are locked forever. I had the same idea but I finally realized that it is not true. The currency is defined by code and code can be changed. It's very hard to change since the majority of the community has to agree but its possible and people will find a way to keep it going.
One way to think about bitcoin's future is to look at what software was like 40 years ago and then look at what it looks like today. There's a big difference. Bitcoin still has a long way to go before it can be defined as a mature technology. I have no doubt that what we call bitcoin now will not be what we call bit coin 40 years from now. It will evolve in to the currency and store of value people are hoping it should be.
No, bitcoin is not dead.
I'm not certain that's true. Most of the trading in bitcoin is based on speculation that it'll rise in value, and secondly, that'll become more commonplace. Currently, it's not a useful (or usable) form of currency for the vast majority of the planet. So there's no value backing it (yet).
The true test is in X many years, whether BitCoin will be used as actual currency, in which case the value will keep climbing, or whether it'll remain a speculative investment, in which case it'll crash.
I learned about bitcoin when it was less than a dollar, and I'd love to invest, but it's just gambling.
People forget that the only reason fiat currency has value is because you can always find someone that will exchange it for goods or services. It has no value on its own. It's a believe in people's mind. Bitcoin will have that same trust in time. One big advantage over fiat is that the community is world wide and it's not locked to one country. I can see a country disappearing from the world but by definition bitcoin is a world monetary unit that's slowly embedding itself into the world psychic.
I truthfully believe that in less than 40 years it will as common as the dollar is now. My only fear is that the world's countries will fear it and outlaw it. That doesn't mean it will go away but might slow it down.
BTW, I was a anti bitcoin guy but after a little analysis I've come around.
If that is true, there is strict confidence that it's not going away in near future. But that also means that it is surely regulated or at least heavily monitored. Or it leads all of us to such economical crashes that world never seen (and can't just deal with). Idk where it goes and how one evaluates it, do you have any ideas on that hypothesis?
The basic idea that regular people use it for freedom and security is parallel to this one, and is of no interest since the volume of it in ordinary currencies is too low to consider.
One question that I don't really understand is how can the total supply of BTC serve its own growth.
If the market cap reaches the same value as gold for example - how long before one Satoshi becomes too large a divisible unit to be useful?
Can you divide Satoshi?
And I only own one. There are lost of people out there who owns thousands of bitcoins. 1000 bitcoins is 1/22k of the entire market cap.
How could this be sustainable?
Consider that wealth in the real world also accumulates in a non gaussian distribution.
I'd add that I almost feel like there could be a bit of a paradox there in regards to Bitcoin's actual usefulness for real purchases.
Let’s say Bitcoin takes off and various merchants start accepting it.
Since Bitcoin is useful now, more people buy in. But since more people are always buying in and the total pool is limited, the value continues to go up. The more merchants support Bitcoin, the more people adopt Bitcoin, and the more valuable it becomes.
The more the value continues to increase, the better it seems as an investment, and the more people lean towards holding instead of spending. The more useful it becomes, the better it is to not spend it.
This is called currency "deflation" (the opposite of inflation), and it's one of the key things that central banks try to control. If a currency is gaining value rapidly, then it makes more sense for people to hold onto it, no one buys anything, and the economy drives to a halt. In these cases, central banks may print money to lower the value of the currency.
The effects of how it would play out with Bitcoin are probably different, as it isn't close to being universal, it travels across political borders, no single economy relies on it, and it's under no control. Sounds like an Econ PhD thesis.
If you compare that with the global economy, the wealth is accumulating at a single point.
https://upload.wikimedia.org/wikipedia/en/b/b8/Share_of_weal...
I do however agree that's a problem.
I also think that gold and precious metals are doing good, despite being (currently, essentially) limited.
The problem is that with bitcoin, the total amount of currency is fixed, which means that when value is added to the system, you the value of the bitcoin has to increase.
You might think that not having inflation sounds like a great idea, but the problem is that unless the total amount of currency increases to match the value of the system you will not end up with zero inflation, you'll end up with deflation.
Deflation is really bad, because it encourages people to sit on their cash instead of spending it, and an economy without spending means that more value is not added to the system.
Of course, I am arguing against people who I have heard who suggests that bitcoin is all we need and it can take over all currencies in the world. That seems more or less impossible based on what I just said.
Perhaps cryptocurrency is the future of finance, I have no opinion on that, but if it is, I don't see that it would be bitcoin.
But the truth is that at this point, it's still mostly gambling. The use-cases for BitCoin are numerous, but I don't see many in place just yet. Right now, the value is based solely on speculation.
I certainly have no intention of spending my bitcoin. Not because I don't have anything to spend it on, but because if it becomes more popular, then by definition it will have to increase in value by a huge number. Unless of course it collapses before then.
If BTC were to reach that market cap, one BTC would be worth $363,636 yet one Satoshi would still be worth less than 4/10 of a cent.
It is not an imminent problem.
The Bitcoin of ~a month ago is not the same as today, that's a big power, to have upgradable decentralized money. Certainly Bitcoin is not perfect, but the good thing is that there are a lot of talented engineers working on the issues and new features, the majority of them even before Bitcoin really was worth much. But having it being valuable at the moment also acts a huge security/bug bounty and an incentive for more people work on it and make it better.
= All about the price
Even if the price crashes horribly, unless there's a unrecoverable catastrophe, it will keep on going because there's an ecosystem around it and clear price-independent advantages. Using Bitwage to be paid in Bitcoins and avoid crazy cross-border/currency fees of banks will be still an advantage no matter the price of bitcoin. Same goes for prepaid/debit cards backed with bitcoin. Doing commerce painlessly without crazy procedures with Africa & Latin America or wherever. Being immune to capital controls and asset seizures.
= Hype
I hate the hype everywhere, but it's not the tech's fault so many cluessless & irrelevant gold-diggers try to ride the wave, just with a lot of things you can just ignore. If you follow the devs, they are pragmatic and don't try to pump-up things like most altcoins do, that's something I greatly respect.
Anyway, there's a long way to go, but just because there are flaws at the moment, it doesn't mean it's dead, it's a live technology. Being pragmatic is key, Bitcoin is not some Utopian perfect invention, but it's good enough for a lot of things at the moment and I see it getting better every year.
Bitcoin offers true permissionless commerce and ownership of wealth and it now might not make any difference in a lot of democratic countries until it begins to do.
Bitcoin handles both pretty well, in my experience. Except for the transaction-scaling problems, anyway. Price fluctuations just reflect its miniscule capitalization, and movements of capricious investors. When Bitcoin, or more likely, one of its descendants, reaches fiat-currency scale, that won't be so problematic.
My humble analysis of why startups are like tulips. Like tulips you can grow more, and with startups you can always build/start your own. Building your own startup is easy, just think of an idea, say Uber for toilet paper, and it takes only 1 minute. See the point? It's easy (not rocket science ;-).
Sorry but I had too, the easiness to create something has no barring on how hard it is to make it a globally used system. Whether you can create a new blockchain in minutes is completely irrelevant and offers nothing to the discussion.
Clearly, in that situation you can subdivide coins as far as required, so it isn't a risk to bitcoin as such. However, I have often wondered if there is any estimate of the "effective supply", that is to say ("minted coins" - "coins where the private key is lost")?
So, there are probably a lot of private keys that get lost, but not a lot of bitcoins.
Nevertherless, there is >0 probability of multiple harddrive failure, or much greater probability of incompetence, so there must be some rate of loss of bitcoins over time, and i'd be interested to know what that is.
I think it is interesting because once the speculation dies down, the market will set the fiat price of bitcoins according to the actual supply and demand, so this attrition has a real affect. For example, imagine if the coins believed to belong to Satoshi (1 million coins out of the current 16.5 million) were to move. The mere knowledge that they can be moved would increase the effective supply by 6-7% overnight, the effect could be dramatic.
Bitcoin enjoys a reality distortion field that keeps it inflated beyond any reason. It's not that different from any other coin on these lists: http://deadcoins.com, https://magoo.github.io/Blockchain-Graveyard/
As for the ones that collapsed, they tended to involve dictators and wars rather than people simply deciding they weren't worth wasting time on because nobody was interested in exchanging them.
Indeed, I see on that list the several Brazilian Cruzeiro/Cruzado currencies. The only difference between each of these and their predecessor is that three zeros were cut: if you had 1000 of the old currency, you had 1 of the new currency. The last of these was replaced by the current currency (Real) at a slightly different rate (2750 instead of 1000). That is, it was more like a renaming than the currency actually dying and being replaced. And there was no different authority in these cases, they were all issued by the same central bank.
When I had bitcoin first explained to me in ~2011 I was told that it would save us all from the evil that are banks, transaction fees, and the government. Six years later, bitcoin has made a few people very, very wealthy, but us laymen still can't use it as a cash replacement and the people with decision making power in the Bitcoin community are not interested in ever letting that happen.
It was a fun experiment, but it failed its primary goal.
Weird.
My point is not to confirm or deny the bear or the bull, but to point out this is simply noise.
When are market news reliable indicators of supply and demand?
Not proof, but it very strongly implies it
If the sun has risen at least 166 times, the probability that it will rise tomorrow is at least 99.4% according to https://en.wikipedia.org/wiki/Sunrise_problem
https://www.wsj.com/articles/bitcoins-wild-ride-shows-the-tr...
When a traditional wall-street analyst sees a peak, he was trained to freak out and sense it as an extreme point of the crowd's greed. And shows off his training by telling the world that it's a bubble and it's going to burst, as the peak is occupied mostly by greedy investors who panic on losing their money and sells off double the speed they entered the trade. But this stands true when the value of the instrument surpasses the intrinsic value of the asset way too high. But with bitcoin no one knows hence majority investors still think it cheap and keep piling up.