Comment by elliotec | Hacker News Reader

Comment by elliotec | Hacker News Reader

People seem to conflate Bitcoin with cryptocurrency as a whole. It has been clear for a long time that Bitcoin's pace is unsustainable, especially with the exorbitant transaction fees and mining costs.

But if you look at other cryptocurrencies like Etherium for example, you'll see an interesting differentiation. Not all cryptocurrency values are tied to Bitcoin. Etherium, at the time that I write this, is up 2.4% over a month ago while Bitcoin is down 37% over the same period.

So, while I do think Bitcoin especially is pretty much definitionally a bubble, crashes and volatility are the nature of the game right now. We should be careful to lump digital currency as a whole into the the same category as Bitcoin. Bitcoin was the first, but probably wont be the last and certainly isn't the best.

I think there is value in cryptocurrency that is difficult to see for many people past the black market stuff and the gambling aspect people put to it. If you've ever transferred Etherium to a friend to pay them back for the pizza they bought you, you'll feel that value in a small way.

I'm certain there is a reason these currencies exist beyond the sketchy reasons and I'm quite sure they are here to stay, bubble or not. There was a massive housing bubble, but we still have houses and they are, mostly, recovered above the peak of that bubble ten years later.

It's not hard to imagine a (near) future where cryptocurrencies are a primary means of monetary transactions.

> If you've ever transferred Etherium to a friend to pay them back for the pizza they bought you, you'll feel that value in a small way.

I think it's hard for people to appreciate this because this is already a pretty trivial task using tools like Venmo (or whatever your choice might be).

> There was a massive housing bubble, but we still have houses and they are, mostly, recovered above the peak of that bubble ten years later.

There's not really an alternative to houses (assuming you include e.g. apartments under that umbrella). You have to live somewhere, you don't have to use cryptocurrencies.

I think a more apt analogy would be the dot-com bubble. If there truly is a use for cryptocurrencies (as there turned out to be for internet-based companies), they'll stick around and we'll see them again.

That said, I also think it's a bit dangerous to rely on historical bubbles for predicting the future here. There are plenty of "bubbles" that never recovered at all, and we just moved on to the next thing entirely. We tend to forget about them.

I think it's hard for people to appreciate this because this is already a pretty trivial task using tools like Venmo (or whatever your choice might be).

Venmo is great - for people in the US who only transact with others in the US. I had the same problem in Belgium - my local friends used Payconiq, which of course only works if you have a Belgian bank account.

Sure, and I think this problem of transferring small amounts of money internationally painlessly is probably the strongest case for cryptocurrencies. But:

1) I don't think that's what cryptocurrencies want to be relegated to (a forex market essentially)

2) This also seems like a way around currency controls and things like AML compliance. If that became a problem at some point, I have to imagine governments will start putting the screws on any major exchange that interacts with fiat (and to some extent they already have).

I agree, Ethereum is an example of something that took the concepts underpinning Bitcoin: distributed immutable legder and verifiable trust and created an platform that I think can be very interesting for building decentralized marketplaces.

The technology is new so there are going to be hurdles but in terms of scaling and obviously a lot of speculation, but I think there are also a lot of socio/geopolitical factors that will continue to make cryptocurrencies a thing.

Reply on news.ycombinator.com