All You Need to Know About Bitcoin's Rise, from $0.01 to $11,000 | Hacker News Reader

All You Need to Know About Bitcoin's Rise, from $0.01 to $11,000

bloomberg.com

57 pointsqu4ntumturk106 comments

Many people discuss how much one could buy from the bitcoins today that where used for the first pizza purchase. Few people consider though, that today's value of a bitcoin might not exist without that order.

Yep. The most astonishing thing to me about the price of Bitcoin isn't that it went from $1000 to $11000 this year, it's that it ever made it above $0 in the first place!

Truly an example of where exchange creates wealth.

> , a Nobel laureate in economics, said recently that bitcoin "ought to be outlawed” because it’s designed to evade regulation and "doesn’t serve any socially useful function."

A world where if something is not required it is forbidden is not a world that I want any part of Nobel winner or otherwise.

It seems to me like you're only taking into account half of the argument (the other half being that it's designed to evade regulation).

Regulation itself is not always "socially useful" for most people

If there is some sort of regulation that is harmful (do you have something specific in mind or is this just a generality?), it seems like the thing to do would be to reconsider that regulation, and not to simply allow a handful of savvy investors to skirt the regulation while the average person is still subject to it.

https://en.m.wikipedia.org/wiki/Regulatory_capture

I am familiar with the concept but don't see how it addresses anything I said to link the Wikipedia article with no commentary.

The Nobel prize in Economics isn't a real Alfred Nobel prize as set aside in his 1985 will, either... So you're not the only one :).

For anyone who cares to follow up here's a good article about it: https://www.alternet.org/economy/there-no-nobel-prize-econom...

Economics isn't a real science either ...

Something I rarely see discussed is the gender breakdown of bitcoin ownership.

I'd be surprised if it wasn't something like 90%+ men mining, trading, and owning bitcoin. If bitcoin really takes over the world, it's going to look like a bunch of dudes printed themselves a fortune and then convinced the rest of the world to buy it from them.

> If bitcoin really takes over the world, it's going to look like a bunch of dudes printed themselves a fortune and then convinced the rest of the world to buy it from them.

Well, yeah, that's exactly their fantasy too.

The huge transfer of wealth into China (where mining has shifted) is also an interesting economic outcome that doesn't get discussed a lot.

Maybe this is a result of theory that males have a slight bias to tend to like things while females like people relatively more. Or maybe cause of the theory that males tend to be greater risk takers.

(Not saying one sex is better than another, as in different situations, different traits will succeeded. And not saying that all people of a particular sex must take on these traits, but rather only these are tendencies observed in scientific studies.)

I think the simplest explanation is that Bitcoin got popular in internet communities that didn't have many women to start with.

You can say the same replacing "gender" with "profession" and "men" with "computer people".

You can say the same replacing "gender" with "age" and "men" with "young people".

You can probably do the same with multiple other grouping criteria.

> it's going to look like a bunch of dudes printed themselves a fortune and then convinced the rest of the world to buy it from them.

Just like fiat money.

You can dislike how much fiat the government prints (I do too!), but at least when the government prints money the profit goes towards things that benefit the public (bridges, defense, schools, etc.), some corruption notwithstanding.

I don’t necessarily dislike fiat, I’m just saying that probably the same gender demographics applied to the invention and dissemination of paper money. One example that comes to mind is the Mississippi Bubble. When I read about it most people involved at the beginning were men, but eventually everyone wanted a piece of the action.

What do you see as the barriers for women to participate in bitcoin?

Women are smarter than men.

Not that this will explain the large gap entirely, but aren't women generally more risk adverse?

Sanity and intelligence, mostly.

>What do you see as the barriers for women to participate in bitcoin?

Why do you want to have a discussion involving logic when all I want to do is signal my virtues?

It's against HN's rules to use this site primarily for political or ideological battle. We ban accounts that do that, so please stop doing that. Flamebait, like the comment you posted here, is particularly against the rules.

https://news.ycombinator.com/newsguidelines.html

If you're that concerned you should vote to increase taxe the wealthy. Hell, vote to tax wealth itself.

Then you won't need to worry about things like this as much.

"Bitcoin’s current estimated annual electricity consumption stands at 29.05 Terawatt hours"

I just leave that here...

Do you know what the estimated annual electricity consumption of VISA as a corporation is? What about the Treasury portion of the US government, let alone all the other parts.

I'll just leave that there :).

It's reported VISA's datacenter uses the same amount of energy as around 50,000 US households. Bitcoin energy use is about 2.9m US households.

So say a fiftieth, for around 450x the daily transactions, and it could handle a lot more if demand existed without a commensurate increase in power consumption.

Do you have them? If I had to bet I'd say it is way less. If you don't then your argument is a bit of pointless, no offense.

Is the number of transactions anywhere near comparable?

You could also compare it to how much Google consume.

And you should realize the mining electricity usage is in no way related to scaling Bitcoin.

"Google’s many data centers around the world burn through 260 million watts" way less, besides Google's DC are rather modern and often are rather environmental friendly. Bitcoin on the other hand is mostly mined in China where the energy comes largely from fossil fuels

I am really sad that Bitcoin is the only cryptocurrency that ever managed to touch "mainstream" (it's on Steam, it has Stripe support, etc) and we fucked it up so hard that you need a $4 fee just to pay for one thing with it. I was really hoping it would catch on as a medium of exchange, because there's value in being able to pay for things quickly, cheaply and without giving people a bunch of info, but nope. Digital tulips.

Going mainstream isn't a problem in itself. The problem is that most "mainstream" usages of bitcoin are just using it as a way to get fiat money. For example, the price is currently shooting up because people think it's going to give them a lot of fiat money when they sell it later. If everyone used bitcoin to directly buy and sell things, it would be fine for it to be mainstream. The transaction fees would also be much lower, because there wouldn't be the fee to convert it to fiat money.

I'm not saying going mainstream is the problem, I'm saying it didn't go mainstream enough. I agree with you, it would have been great if we could use BTC to buy and sell stuff instead of just speculate.

It blows my mind that a forum with mostly technically people (hacker news) is constantly awash with blockchain fanatics. Have you people never had a scaling problem? Understanding how well different systems can scale is one of the core competencies required by developers and blockchains are fundamentally designed not to scale because increasing the number of nodes just increases your "trust" in the system.

Right, so what's your alternative? Trust the government to print money at sustainable rates, and trust banks not to steal your money or censor your transactions?

You have to try, even if you know you can't solve all of the problems yet.

people...people can turn any decent technology to crap..Facebook wanted to connect the world, but ended up as the tool to fuck up the democracy..bitcoin pioneers wanted to get rid of banks, but the cryptocurrency ended up as the fucking trading tool used to earn more fucking money and put them in the fucking bank where they are safe..hopefully the AI will end this insanity soon.

How much time and money would it cost you to send a gold bar to the other side of the world? Many people misunderstand the true value proposition of Bitcoin, which is to replace something like ACH (and use second layer payment processors for day to day purchases which are aggregated before reaching the blockchain, just like we do with dollars...)

I didn't say Bitcoin isn't good for anything. I said it isn't good for the thing I wish it would be good for.

Wow, that's a huge transaction cost!

I really don't get the $4-$10 fee that everyone keeps talking about. The exchange I trade on charges me a minimum fee of 0.0001btc (which I keep cribbing about) to withdraw btc. I know from experience many of the times even fee below that gets happily accepted. 0.0001 translates to $1.2 fee.

The 4$-10$ fee being mentioned is a flat flee when transferring between wallets.

When you are trading on an exchange, there could very well be nothing happening in the background. It's instead a process that's just flipping some bits for who owns what in their own database.

I meant between exchange wallet and mine. Don't have to trust me. Look it up: https://blockchain.info/tx/21c79cdba9c5a61d4e342ed946de4c47d...

That is $6.5 fee for 12 different outputs. So around $0.5 per transaction.

I'd argue that certain other cryptocurrencies have "touched" the mainstream - however briefly. Not detracting from your point, though. Bitcoin is definitely the most "mainstream" cryptocurrency.

Hmm, I haven't heard of any cryptocurrencies accepted for payment on standard, automated checkout flows. Stripe accepts BTC, though.

So... I totally agree that the transaction fees are much too high. But it doesn't bother me as much as it bothers many people because every time I start getting upset, I remember that VISA's fees are 1.5%, PayPal's fees are 3%; basically everything has transaction fees and the world has not come crashing down on them.

And then I remember that 1.5% on a $20 purchase is 30 cents and am sad again. I'm not going to pay for my $10 game on Steam with BTC, as much as I'd like to, because I don't need a 30% fee.

But why would anyone spend days downloading the blockchain, significantly increase their data management and opsec responsibilities and cede their usual consumer rights in order to have the same transaction fees as Paypal?

The only reason I can think of is in order to evade various kinds of regulation, but presumably that won't last forever.

Yeah nobody downloads the whole blockchain lmao, 2012 called and wants its argument back

Well I tend to assume people are using bitcoin in a decentralized fashion because that was its entire raison d'etre, but it's true that at this point that seems to have fallen by the wayside.

Depending on what you mean by "in a decentralized fashion" the two aren't mutually exclusive. Many bitcoin clients, like Electrum, are distributed, non-centralized, but rely on the existence of SOME copies of the entire blockchain somewhere, but only verify back a fixed configurable number of blocks themselves when sending and receiving money. I suppose there's a minor degree of "trust" involved there, but I think the number of full nodes talked to is probably also configurable, so it would be pretty hard to fool the client, I think equally hard or harder than other kinds of double spend attacks.

Like many, you’re not aware that the Lightning Network is on its way and will solve most of these issues.

Moreover, transactions between Segwit-compatible wallets is pretty fast and cheap.

I’m kind of tired to hear people complain about the fees while all they have to do is use a different wallet that supports Segwit.

Edit: Ah, the downvotes. I was expecting them.

Maybe I don't fully understand it but from what I've gathered, the Lightning Network is a plan to enable people to do transactions outside of the main blockchain and eventually sync them back. It seems to get touted as a magical plan to solve Bitcoin's scaling problems, but unless I'm missing something (which tbf is very possible) it seems more like a plan for bitcoin to abrogate its primary original purpose of handling end-user transactions.

Lightning Network seems to me to be a hybrid solution that uses the best of both worlds: the security and stability of the main block chain for the overall holding and occasional transfer of large amounts of wealth between large organizations, while having offchain networks to experiment with different solutions for handling lots of small transactions quickly, while address still bring compatible with the main block chain.

The thing you're missing is that in order to achieve scaling, Lightning Network sacrifices one of Bitcoin's main advantages, decentralization: https://medium.com/@jonaldfyookball/mathematical-proof-that-...

https://www.reddit.com/r/Bitcoin/comments/7h1v54/comment/dqn...

This sums it up pretty well.

So the proposed solution for scaling bitcoin is to avoid use of the blockchain whenever possible.

Sure, why not? The objective is "trustless, scalable, secure", not "using the blockchain at all costs".

Lightning network has been "around the corner" for as long as I remember...

And even if it reduced people's needs to one bitcoin transaction per month (say, to deposit their paycheck), it would still reach full capacity with just 8 million users.

The alpha has been published in January. You can use it if you want, at your own risk.

The devs are working hard and the beta is likely to come in 2018. People think naively than increasing the block size will change something. It will in the short or mid term, but not in the long term and you can't keep increasing the blocksize. There needs to be a permanent, well implemented solution and that's what's coming and why it's taking so long.

Blocksize increase alone is not sustainable.

My wallet does support Segwit. The recommended fee was $3 and it took ~15 minutes to confirm.

Segwit to Segwit? Because it’s less than a buck for me since beginning of november.

Hmm, good point, the recipient may not have been Segwit, I didn't notice. Hopefully Segwit transactions are cheaper, as you say, that would be very good news to me.

They are and they will be even more. The bigger the Segwit adoption rate is, the lower the fees. The adoption still is under 50%, it was around 15-20% in October but it's getting there.

It's irrelevant[1] what the receiver is using (for fees), segwit just makes it cheaper when sending a transaction. This is because it applies a discount to the signature data.

[1] There's a few byte different depending on the output type (p2sh/p2wpkh/p2pkh) but it's pretty much negligible.

Heard revolut is going to accept it as well.

Revolut will not accept. But you will be able to exchange USD, EUR and other currencies to Bitcoin (and vice versa). But you will not be able to transfer Bitcoin to Revolut or transfer Bitcoin out of Revolut. At least not at the first iteration of crypto currency support.

Wait, they'll add it as a currency but not let you withdraw, deposit or pay with it? So it's basically purely for speculation?

What you're saying doesn't make any sense. There is no point doing this.

Who fucked it up so hard?

All of us, I guess, by not using it enough for everyday transactions. Although it's a chicken and egg problem, and the fact that it's so different from traditional banking that it's hard to explain to people how it works doesn't help.

The Core developers who refuse to raise the blocksize despite the completely lack of evidence against the smallest increase (1MB -> 2MB).

Some even celebrated when the blocks became full and the fees started to increase...

The bitcoin development team is * rightfully* extremely cautious and correctly moves extremely slowly.

That's a GOOD thing. I don't want "move fast and break things" with bitcoin.

No it's not a good thing. When it takes too long you stop being cautious and start being incompetent.

The "1MB block issue" has been going on for years yet they haven't even come up with good (or any) research for an optimal block size.

For multiple years people tried to make research for "online money" and couldn't.

Anyone that says digital tulips at this point sounds hurt that they didn't invest, do some research on Bitcoin Cash, so this time next year you don't look as foolish

> Anyone that says digital tulips at this point sounds hurt that they didn't invest

I did, several years ago when it looked like a genuinely interesting up-and-coming technology.

At this point though, digital tulips.

at this point you lost a lot of money not investing and it still look like an up-and-coming technology, in the future Solidity developers will be in demand like React developers.

bcash users have active propaganda campaigns to try and confuse people into thinking that it is bitcoin. That should be about all anybody needs to know about it.

Other cryptocurrencies, which are meant for payment (like Dash) will eventually make it into the mainstream. It's a matter of 1 or 2 years in my opinion. Bitcoin is digital gold, that is also a valid use case IMHO, and a good first step for cryptocurrencies. (Real gold has a 7 trillion market cap.)

(Warning: this will be downvoted because of mentioning Dash. Edit after multiple downvotes: Naive people think that they will be able to stop the (by far) best payment focused cryptocurrency by silencing others. The growth of Dash shows its dominance is inevitable.)

I hope so, I did send ETH yesterday with minimal fees and instant confirmation, but no stores accept ETH as payment.

Yes, funny that ETH, which is meant to execute on-chain turing complete code, is much better for simple payment than Bitcoin. On the other hand I think a solution directly designed for payment only is a better fit for this purpose, as it has a bit smaller attack surface than ETH or other dapp platforms. (Admittedly a sophisticated payment system like Dash with the Evolution update has still a higher attack surface than Bitcoin. That is why Bitcoin is perfect as digital gold.)

Why mention Dash when you could have made your point without mentioning it? Dash is well known for its aggressive astroturfing. Mentioning it directly plays into that reputation, which you obviously know about since you acknowledge that your direct mention of Dash will be unwelcome.

I just noticed that when I mention it on HN or /r/cryptocurrency I am downvoted to hell. First I did not know what it is. We have discussed it on the dash subreddit, and seemingly fans of other coins hate and FUD Dash with passion. I am trying to evaluate cryptocurrencies objectively, and try to give few emotion into it. I have found that no other currency provides the combination Dash does, which are: private send, instasend, low fees, high tx/sec and working on even more, user.friendlyness with the evolution update, DAO with treasury budget for development and markteing.

A question to you: Do you accept the behaviour to downvote a normal on topic comment just for mentioning an on-topic cryptocurrency? I find this downvoting behaviour anti-intellectual.

Interesting, are individuals factoring in the possible existence of quantum computers in the future? If Bitcoin does become a trillion dollar space I’d feel uncomfortable knowing there are technical limitations already in place.

Also, what does the end of Bitcoin generation look like? If Bitcoin is truly deflationary why would anyone trade it? The interesting thing about inflation is it requires investment to ensure your money doesn’t lose value over time. Would Bitcoin be incentivizing a market where growth is extremely limited due to greed?

Not taking any sides, trying to understand the long term reprucussions of a substantial Bitcoin market.

I got an international payment recently via bitcoin and the fee was under £2 on the sender side. If it had gone through my bank It would've costed me £7 to receive and way more on the other end to send.

So I do get the criticism about high fees when paying for a coffee, but maybe that's not the ideal use case for bitcoin. It could've been cheaper with another cryptocurrency but it's a tolerable enough percentage at the moment compared to another widely used solution for international transfers.

I haven't been understanding bitcoin for the longest time: It has been more than five years since I first heard about it. I tried to look it up, I can never quite get the overall picture, why it works the way it is.

I finally understood the bitcoin mechanism and I can explain the original paper well just two days ago. I feel dumb reading this paper. Intellectually, I think it's a hallmark of many great inventions in the 20th and 21st century: public-key cryptography (to verify transactions), micro economics - game theory (to incentive people to mine), hashing (bounty), macro economics (to combat inflation), distributed computing synchronization (to trust the system while not trusting any single computer), statistics (to combat fake chains). Only when one has all the pieces of the puzzle together then the whole thing is possible to conceive.

But I feel a sense of achievement when I finally figured the whole thing by myself. If you don't understand bitcoin, I think you should understand bitcoin as a hacker, even you don't need to use it or intend to store money in it.

I only own a small fraction of a coin, I'm not a risk taker. I'm not going to be rich from bitcoins, I have no reason to shill it with memes. It's unlike anything you have encountered before, notably that the only reason why bitcoin is worth money, is because we are better off with it. I do believe the world is a better place when everyone agrees that bitcoin has values and can be traded, because that means many people can buy their own "insurance" should wars happen, which they do. Your money might turn into paper, you might get killed if you smuggle cows, gold, and diamond when you're running for life, but no one can know if you have bitcoins.

Why wouldn’t those same people running for their lives store their money in a numbered bank account? If they need to hide from their own government they could use banks of one of the major players: US, EU, China, Russia. Whomever is the least friendly with your oppressor.

Store how? I was from a country that the money inflated 25% over a year, and the government made it extremely hard to send the money abroad.

In the US, it's not possible to open a bank account without a SSN. How do you get an SSN if you don't work in the US?

Why was this thread nuked from the front page? It was like #2 when I checked and now a few minutes later it's gone.

Wow, another obnoxious self-playing video in the corner. No thanks.

Bitcoin is what’s wrong with our society: An obsession with money over health, community, housing, food, etc. Bitcoin epitomizes our embrace of the new capitalist dystopia.

I’ve also seen this connected with the rise of individualism that’s been going on since the early 80’s.

Allegedly though, according to the historian Arthur Schlesinger Jr, societies tend to move in 40 year periods of either community or individualism. Assuming individualism started in 1980, this would have it end in 2020.

These two books sum it up well:

The Cycles of American History https://www.amazon.com/dp/0395957931/ref=cm_sw_r_cp_api_hYSi...

The Revolt of the Elites and the Betrayal of Democracy https://www.amazon.com/dp/0393313719/ref=cm_sw_r_cp_api_CXSi...

do you mean society is what's wrong with Bitcoin?

Bloomberg? lol

Blockchain may be different. Deviousness is not: https://medium.com/@bitfinexed/spoiler-alert-the-institution...

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