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Comment by evanwise | Hacker News Reader

I'm committing the cardinal sin of commenting before I'm done with the article, but whenever this discussion comes up, I feel like asking: why not both? Could it be that Bitcoin is currently overvalued and in a "bubble", but it or something like it still may have huge value and utility in the long run? The idea that the Bitcoin bubble is something more like the Dot Com bubble than Tulipomania seems plausible to me.

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Yes. Internet stocks were in a bubble in the late 90's. It burst but the Internet turned out just fine. The question is, when the crypto bubble bursts, will Bitcoin recover, or will it be something else?

I think the contents of that bubble will fill another, more technically useful crypto. Something with 0 cost transaction fees.

It's not currently possible to have a crypto with 0 fees that's both distributed/non-centralized as well as very secure against attacks.

If there is, Bitcoin can easily incorporate the technology.

I'd say IOTA might fit your criteria, although it's still early stage.

I don't think bitcoin could integrate their tech since it's not a blockchain, but a DAG (what they call a tangle).

Interesting stuff.

I have been following IOTA for a while now and while concept of IOTA is very neat, it appears that the community/leadership surrounding it are in shambles. The network is not really working unless you run a full node, and even then if you send your IOTA to an address you have transferred IOTA out of you can lose them forever. These issues make me very nervous about the whole project.

Proof-of-stake is "very secure against attacks" but is less decentralized than proof-of-work. See Peercoin, Raiblocks.

Raiblocks [1] offers zero fee transactions. It will be interesting to see if node operators can be motivated by the same decentralization/benevolence that causes people to run bitcoin nodes today.

[1] https://raiblocks.net/media/RaiBlocks_Whitepaper__English.pd...

RaiBlocks has PoS consensus so node operators are incentivized. It also has PoW as a spam prevention mechanism (transactions are not completely free (few seconds on commodity CPU), and you can also "cache" PoW). I think it makes sense, unlike IOTA for example.

I have to correct that actually PoS is voluntarist. Node operators don't collect fees in RaiBlocks. They operate just to secure the network and their own investment.

Having read a thousand rabid forum posts over the last week, I get the feeling people will hold for decades regardless of short term changes or regulation. They think there is unlimited upside as it eats into gold and fiat, so it's only rational told hold until the new world order comes and everyone in the world is using bitcoin. I'm hard pressed to disagree. But diversification is important. Best strategy I've seen so far is to take some bitcoin profit and put a chunk into altcoins and the rest into dividend producing equities.

I hold a diverse portfolio. In my experience when the price of bitcoin falls, the alts fall too. Additionally, if I'd held bitcoin only I'd have greater dollar value today. If my alts were protecting me I'd be happy to sacrifice the greater growth I could have seen but honestly I am not so sure that I am protected at all.

I believe in the usefulness of the blockchain and related technologies though, and I am certain that adoption among businesses of said technology will only keep rising.

I don't know if the crypto currencies have a future though. And even if they do I don't know if they will ever be priced as highly again as they are now. I hope they do, but if my portfolio fell to $0 tomorrow I'd be bummed out but it wouldn't be critical.

Can’t just be “alt” coins.

Harvest profits and put into multiple uncorrelated premises or theories of how digital value works.

The Bitcoin bubble has already burst, multiple times in fact.

  From the high point of $31 all the way to $2 in Dec 2011.
  From $266 to $130 in May 2013.
  From $1200 to $200 in Mar 2015.
  From $5000 to $2900 in Sep 2017.
  From $7300 to $5500 in Nov 2017.
  From $18000 to $14000 in Dec 2017.

Long term, the price has increased exponentially. As expected. There have been a few bubbles, as well. And it's pretty clear, as you say, that it's currently in one now.

Tulipmania lasted 6 months. Bitcoin is now 8 years old.

Stop comparing Bitcoin to flowers. It's not even close to the same thing.

But the bitcoin mania has only been going on within the past year.

There were at least two previous Bitcoin manias and bubbles. I remember a lot of hype when it hit $70 (from single-digit prices), and then again when it hit $1000. Both times people said it was a bubble, and then the bubble popped.

The worst part of all of this Bitcoin speculation is that you have someone like the person you're replying to get on and talk out of their ass. Literally. And then they are the ones getting upvoted cause all the haters love to talk to trash with zero intellectual honesty.

This is actually bubble #4. Here's an analysis of the previous 3: https://steemit.com/bitcoin/@huku/bitcoin-bubbles-a-brief-hi...

tulips had existed for quite a long time before they became the object of a speculative bubble.

Reading comprehension is hard. I know.

(No where did I say Tulips)

Believe it or not, tulip bulbs existed for a reaaaaaally long time before tulip mania. For the vast majority of Bitcoin's history, it has been known by virtually no-one outside of the tech circle, and its price was relatively stable/low [1]

[1] https://www.xe.com/currencycharts/?from=XBT&to=USD&view=10Y

Tulipmania lasted 6 months. Bitcoin is now 8 years old.

Tulipmania includes the time it took for the belief that tulips were special and valuable to take hold, and the time it took for merchants to cross breed specific colors for the Dutch nobility. When you include the history behind the bubble and why it happened, tulipmania took decades.

That's not to say that Bitcoin will end the same way, but it is to say that bubbles don't start and end within 6 months.

You’re making a false comparison between the period of mania in tulips and the entire lifespan of Bitcoin.

Comparing two financial instruments during their lifetimes is now a false comparison apparently.

The South Seas bubble is a more apt comparison. Many of the ICOs that are springing up are exactly like the fraudulent companies that arose in that era (some of them even sold tokens like ICOs!)

If you chart them, they're actually right on top of each other.

http://www.zerohedge.com/news/2017-12-12/its-official-bitcoi...

This chart shows nothing interesting and is hardly scientific. Of course by lining up price charts of various speculative bubbles they will roughly line up. The chart also intentially discards the first 4 years of Bitcoin trading data (2010-2013) where Bitcoin has actually gained the most. None of the other assets in the chart even remotely compare to Bitcoin's gains in these 4 years. Also, it should really use a log scale: http://bitcoin.zorinaq.com/price/

> The chart also intentially discards the first 4 years of Bitcoin trading data (2010-2013) where Bitcoin has actually gained the most.

Sure, just like the comment being replied to discards several hundred years worth of tulip sales to say "Tulipmania lasted 6 months. Bitcoin is now 8 years old."

Bitcoin has, until this year, largely escaped widespread public notice beyond "isn't this odd/interesting" pieces in the media.

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