Comment by DINKDINK | Hacker News Reader

Comment by DINKDINK | Hacker News Reader

Was the collapse of the German Deutsche Mark, the Zimbabwean Dollar, the Venezuelan Bollivar a bubble too? Good money drives bad money out, so I’d argue that no, Bitcoin’s price is not a bubble. Clearly there’s no price that bitcoin holders will sell at so they’re clearly exiting the USD ecosystem.

I think the logical fallacy that’s occuring right now with critics of bitcoin’s price rise is that all bubbles has dramatic price rises (Pets.com, endless bullshit dot com IPOs, housing bubble) but not all dramatic price rises are bubbles (currency collapses)

Because bitcoin is measurable scarcity one can provable show it’s a good store of wealth.

OTOH, the ICO binge is an apt analogy for the IPO craze of the 90s. Investors are buying up securities with no viable business model expecting returns which isn’t going to happen on software that anyone can copy and run themselves. It doesn’t take a $200 million raise for a few engineers to build an MVP. It does take $200 million to run a successful Ponzi scheme (ICOs are probably not scarce and are therefore improper stores of wealth)

> Was the collapse of the German Deutsche Mark...

I think you may have this backwards. Your example currencies all tanked against USD. BTC is appreciating, heavily, against USD.

> so they’re clearly exiting the USD ecosystem

Sorry, are you suggesting that there's currently a run on USD? Because I'm pretty sure there isn't.

What you have here is pretty standard speculation in the price of BTC. I don't think you can read a lot more into it.

> Because bitcoin is measurable scarcity one can provable show it’s a good store of wealth

One can't, provably, do anything of the sort. It might prove to be a good store of wealth but neither its scarcity nor its current price gymnastics are indicators one way or the other.

>> Because bitcoin is measurable scarcity one can provable show it’s a good store of wealth One can't, provably, do anything of the sort.

You don't understand how Bitcoin and Proof of Work works. The block hash in the following block is a measure of how scarce or rare it was to produce the bitcoins that were minted in this block: https://insight.bitpay.com/block/0000000000000000002c8fe4629... If you don't understand how scarcity works in a blockchain, the rest of your points are pretty suspect.

>Your example currencies all tanked against USD. BTC is appreciating, heavily, against USD.

Yes currencies have tanked against each all throughout history, whichever is the weakest tanks the first. Quantitative easing and other forms of inflation executed by the Federal Reserve.

>are you suggesting that there's currently a run on USD? Because I'm pretty sure there isn't.

Yes literally this is what the BTCUSD price plot is showing you. Wake up. the ZWDUSD looks the same. People dump bad money. They are dumping USD for something that doesn't inflate away their value.

If you think that scarcity is sufficient to prove that something is a good store of wealth, I have some paintings, that my children did, that I'm happy to sell you. Hint, you probably don't want them.

> Yes literally this is what the BTCUSD price plot is showing you. the ZWDUSD looks the same.

So you're equating the current performance of USD with ZWD? Wow, ok. I've changed my mind. I'm more than happy to sell you those pictures in exchange for just a few thousand of those worthless US dollars.

I find this an incredible shame. Bitcoin is a very interesting experiment and we have learnt a lot. It's by no means perfect but the major limitations are fairly easy to see and, I think, could have been rectified. I have a horrible feeling that the ignorance that seems to have surrounded it will not only kill it but make the whole idea toxic.

>If you think that scarcity is sufficient to prove that something is a good store of wealth, I have some paintings, that my children did, that I'm happy to sell you.

Scarcity is literally the only thing that makes goods valuable in a capitalist society. This is basic econ 101. Gold is more valuable than air because it is scarce and hard to produce (mining is the only way to generate it). If you think that an entity, that your children can at their will generate in any quantity is scarce, it means you're confusing uniqueness and scarcity.

If you're certain that bitcoin is doomed to fail, you certainly should be shorting it or selling calls / buying puts above spot price. Are you? You're a fraudster if you advocate a position for which you have no downside exposure in case you're wrong (Doctors who advocate patients to take drugs they haven't assessed the side effects are morally bankrupt).

Feel free to remember this thread in 10 years.

> Good money drives bad money out

what? dude that's some serious misinformation you're spreading here

Have you ever lived in a county that went through hyperinflation and had to use the USD to stabilize prices? It's because it was the best alternative to a high inflation currency. The USD dollar drove bad money out because it was relatively good to their alternative. Now people have a better alternative to the USD, so they are dumping it for something that is relatively good/better to their alternative.

> Clearly there’s no price that bitcoin holders will sell at so they’re clearly exiting the USD ecosystem

This may be true for some idealists, but most people view Bitcoin as an investment and haven't "exited" the USD ecosystem anymore than if they'd bought shares or bonds.

Very true, over time less and less people will move into temporary USD positions.

Bitcoin has scarcity, but so does Litecoin or Bitcoin Cash

What makes Bitcoin special?

Network effect - same thing for Facebook. The more valuable bitcoin is the more secure and more resilient. Thus purely by price appreciation bitcoin is doing hiperbitcoinization - once people realize that fundamental value of fiat currency is a myth, more fiat currencies will collapse

This is exactly right.

If you create a company and copy Facebook's code, the resulting company will not be worth as much as Facebook.

Why? Because much of Facebooks' valuation derives from its network.

Bitcoin is the same.

The problem with being by design a fungible commodity is that your network lock-in isn't anywhere near as strong as Facebook's. Or AOL's...

Network effects. It's the reserve currency of the entire crypto ecosystem.

Right now (it would be possible to change) Bitcoin is more provably scarce than litecoin or bcash.

https://fork.lol/pow/difficulty

Bitcoin is 7X scarcer than bcash.

> Clearly there’s no price that bitcoin holders will sell at so they’re clearly exiting the USD ecosystem.

I reckon there would be a lot of sellers if the price went to $1000.

Bitcoin on the main chain has scarcity.

Anyone can fork the codebase, or even the blockchain, or one of the many other blockchains out there. There is absolutely nothing provable about BTC as a store of wealth.

The amount of leaves produced by the cherry tree in my back garden during its expected lifetime is limited too, that doesn't make them a provable store of wealth.

>Anyone can fork the codebase, or even the blockchain, or one of the many other blockchains out there. There is absolutely nothing provable about BTC as a store of wealth.

Let's rewrite the above as follows:

>Anyone can copy Facebook's model, or even its code, or one of the many other social networks out there. There is absolutely nothing provable about facebook as a good social network.

>> >Anyone can copy Facebook's model, or even its code, or one of the many other social networks out there. There is absolutely nothing provable about facebook as a good social network.

That's a false analogy. You can rewrite it that way if you like, but it doesn't actually show anything.

The OP claimed that "one can provable show it’s a good store of wealth."

That's more akin to saying that facebook will provably continue to be the top social network. You can't prove that, and much like with cryptocurrencies it depends on what else comes along, how facebook continues to perform and whether people lose interest in the whole area of social networking (or cryptocurrency).

BTC has been around a few years. Saying "It has scarcity therefore I can prove it's a good store of wealth" is bollocks, sorry. Lots of things have scarcity.

I see what you mean, let me take back my previous comment, which was typed hastily.

I actually agree with you on the most part, you really can't prove that Bitcoin is a good store of wealth.

I am making an educated guess that a cryptographically secure way to transfer value for very cheap is probably here to stay, but it's far from provable.

In fact, if it were provable, it would become a very crowded trade and the returns would drop to zero immediately. The fact that it's unknown allows for potential greater returns (and greater losses if people who agree with me are wrong).

If Facebook had quit providing any sort of value to the people, had quit providing incentive to store their valuable assets like photos, videos, opinions etc. on their system, then yes, I think if someone copied Facebook %100 and started operating it properly, they'd be a good social network.

Facebook is not just a code or just a network. ICQ had a network. MSN Messenger had a network. Heck Google actually has a network.

But without providing value, a network is not worth a thing.

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