Hacker News Reader

Comment by mindfulplay | Hacker News Reader

It's hard to explain the levels of stupidity in this.

- people trading 'coins' in the same way Pokemon / WWF kids trade cards.

- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)

- to top it off, siphoning off electricity and giving a load of shitty excuses 'it could be like Seattle's.

I don't know where to begin with this Bitcoin crap; it's gotten crazy that so many naive people are into this plopping their hard-earned money into a well-functioning sinkhole.

View on HN

I find myself hoping it implodes sooner rather than later. Purely selfish on my part - but I would like to be able to buy a new graphics card some day. I'm already dreading the insane scramble when Nvidia announces their new cards (likely this summer).

Crypto and the AI boom are funneling money to Nvidia for R&D and to ramp up production.

If you want advancement in graphics cards to come more quickly, it’s not a bad trend.

One good thing that comes out of this at least, though it's not only cryptocurrencies, it's AI as well.

However, after crypto blew up in their face last time (they ramped up production just before bitcoin gpu mining got replaced by ASICs and ended up with a load of unwanted GPUs), they haven't been so quick to ramp up production this time.

I _do_ want advancement to come more quickly - but I also want to have access to those benefits.

Hopefully both can be achieved.

I last built a gaming rig in 2012 and just this January decided it was time to upgrade. It took me a bit to figure out why the hell a mid-range graphics card was $700 minimum.

Good for Xbox and PlayStation which are screaming deals right now.

Can you rob the video card out of them?

They pretty much use Radeon HD 7870s, though...

That’s true if your knowledge of their lines is 5 years old.

bitcoin is already 65% off the highs. many other coins down 80% + more. I think that is pretty much close to imploded

That has happened like half a dozen times before in the history of Bitcoin. Not really a sign of demise.

How many times before did your mom ask you about it?

Precedent isn’t here.

But, if you are willing to say what happened in the yesterday will happen tomorrow, I assume you’ve taken a HELOC put on your house and invested in bitcoin - rift?

You comment is hard to understand but, I'm not saying the near term price is an indicator of it's long term health I'm saying it historically isn't a prediction of anything.

Bitcoin has a lot of interesting failure modes if the price falls too far.

People will start taking mining hardware offline. This will result in a lot of idle capacity. There will be a number of people capable of pulling off a 51% attack. And if the hash rate falls very quickly, say 50% in a week, the difficulty adjustment will be unable to keep up. This would have all sorts of nasty effects.

If the price goes to $4000 it should go to zero. That's assuming that the "investors" will behave sensibly, which is never a safe bet.

> If the price goes to $4000 it should go to zero

Will you short bitcoin then?

This comment applies to any revolutionary technology. Let's substitute cryptocurrencies with "the internet" in 1999:

- people trading 'stocks' in the same way Pokemon / WWF kids trade cards.

- thinking this is actually a long-term 'investment' strategy (well its idiots trading with each other ...)

- to top it off, siphoning off capital and giving a load of shitty excuses 'it could be like Detroit at the beginning of the 20th century.

Many people were left holding pets.com stocks, but others were left holding Amazon stocks.

Most of the things that you point out are truisms that the people that have been in the bitcoin space for a few years also see. I would suggest you make an effort, and try to see through all the bullshit projects or outright scams, and you will see that there is real value in what bitcoin and a handful of other projects are trying to build. If you want to avoid the current noise, read what cypherpunks were writing about in 1998: http://cypherpunks.venona.com/date/1998/12/msg00203.html

You’ve generalized to a point of nonsense, I’m afraid

Amazon and Pets.com didn’t possess truly novel tech, to a trained eye

I don’t think truly novel tech matters much to most people.

I think ease of utilitarian life is good enough

We don’t need the energy sucking monstrosity that are the data centers we have if we looked at different models of commerce

This is just getting people to be tribal over something that appears magical but will fade out

Goodhart’s Law, Buffets Institutional imperative, and similar ideas, will win out. Human quest for novelty will end bitcoin and its tribal urges for nostalgia and fetishizing their LEGO train

Humanity doesn’t care to ogle dead men’s workshops showcasing their individual brilliance for long

The difference is that the Internet had clear useful applications at that point and billions of dollars in real business (not just speculation) was happening annually. Yes, there were plenty VC misfires with no plausible path to profitability — my favorite was cement.com, with free shipping! — but there were tons of existing businesses finding significant value from it and new companies like Amazon, eBay, Travelocity, etc. who were making money on each sale. The daytraders were indeed chasing bad deals but anyone who paid attention to basic market fundamentals wasn't buying those stocks[1].

10 years into Bitcoin there's still no reason for someone to buy in other than speculation. It's not competitive as a currency and the current “store of value” pivot is undercut by the lack of fundamentals. One particular reason why that comparison doesn't work is that if you had, say, bought AMZN in 1997 even if the stock didn't do great you owned part of a profitable book seller which could carry on just fine even if it never saw rapid growth. Bitcoin doesn't have any value other than its current popularity so there's no floor on the losses if people switch to something else.

1. I actually sat in on some calls with Pets.com around the time one of our clients was thinking about buying them and it was quickly evident that they had no strategy beyond cashing out at the IPO.

Saying that there is no reason to buy a crypto-currency is absolutely false. You probably live in a Western country where you mostly trust the banking system and stability of your own currency. That is not the case in many other countries. You will probably say that most crypto-currencies are extremely volatile, which is true, but there are already existing and active projects that have addressed that issue, for example the DAI stablecoin. In Russia there's been a banking crisis recently, stablecoins, tokens tied to commodities and such would have directly benefited people keeping their money in these opaque and vulnerable institutions.

Countries without stable currencies tend to use things like USD which have stable values rather than wild fluctuations. That’s a product of a social system and years of practice, not hand waving about magic real-soon-now technology. In your Russian example, the value would be in the link to the commodity rather than whether it’s a printed bill, entry in a database, or record in a block. If that’s honest, any of them will work and if it’s not, none of them will.

Besides, if I lived in Venezuela or Russia, would I really want to record my black market activities in a public ledger which is hard to disavow?

I get lots of bitcoin payments.

>10 years into Bitcoin there's still no reason for someone to buy in other than speculation

This is simply completely wrong, perhaps you should research the subject a little bit more.

Perhaps you could list a legal reason — not the marketing pitch we've all seen for the last decade but something where it makes financial sense to favor it?

I’m not saying it can’t be used but just that there aren’t many reasons other than speculation or an ideological stance. If I was, say, the corner coffee shop what would balance out the extra fees, delays, and lack of fraud protection?

What's the obsession with needing a legal reason? Why do people reject the illegal but interesting uses? Doesn't the fact that bitcoin has managed to subvert drug prohibition for many people make clear that it is capable of interesting things?

Legality matters for two reasons: one is simply that the huge predictions about market valuations and transformative social effects require more volume than people buying drugs online.

The other reason it matters is that if something is primarily used for illegal activities that'll really hold back the whole system: most businesses aren't going to offer a payment option which makes them look shady, people are going to hesitate to use have the software installed, running an exchange will be even riskier, etc.

For Bitcoin in particular, there's also the practical risk that doing something illegal in a public ledger with non-repudiation guarantees is not generally a good call.

Shops near borders often take the neighboring country's currency because it is convenient for travelers. If bitcoin was accepted more places, then those same travelers wouldn't have to worry about currency conversion. Sounds useful to me.

Okay, so continue that thought to why would that business do that — is it faster, cheaper, etc.? How many transactions are there where the cost of currency conversion is greater than the cost of the Bitcoin transaction fees and conversion into the currency the receiver needs to make most purchases?

>extra fees, delays, lack of fraud protection

It sounds like you are talking about credit cards and not bitcoin.

Compared to credit cards, bitcoin has extremely low fees and fast payments. The fraud protection for merchants is far superior compared to any credit card payment solution.

It seems pretty obvious that most people spreading this kind of bullshit have never actually tried to use bitcoin, and have instead built their knowledge based on forum posts by other uninformed people.

This is all wrong. Many people receive payments and pay in bitcoin. All without having to trust some centralized oracle that cannot, at the end of the day, be trusted.

Take a look at what is happening in Venezuela with bitcoin, and you will see why your statement is wrong. The fact bitcoin, an open source project, continues to flourish with some of the brightest minds in computer science ten years after its foundation speaks to its core strength: the removal of trust.

I sold an old phone through traditional fiat a few months ago, it took paypal 3 weeks to process my payment. With bitcoin, I could have been paid with in the hour.

> Take a look at what is happening in Venezuela with bitcoin

Is anybody actually using Bitcoin as a currency in Venezuela? I can only find references to people mining excessively there because the electricity is so subsidized.

Yes, reports of people paying rent, for school fees, etc. Plenty of use as a currency going on.

Bitcoin, at this point in time (and for the last two years or so, though not really for the preceding eight) is digital gold. It's a version of gold that, with proper preparation, can be carried inside your head when you move from place to place, or transferred by voice or text message.

Most people in the west have about the same use for gold[0] and bitcoin - speculation, gamble, "investment". However, people of Venezuela, Turkey, Libya, Iran and even Russia have a lot of use for gold (and bitcoin): A store of value they can take with them if they leave. And unlike gold, bitcoin can be made confiscation proof. The official currencies of these places have more volatility and less stability than BTC.

[0] Gold does have ornamental and industrial use, but that's NOT why people buy it, and not why it is valued the way it is. The "investment" claims on gold outnumbers the industrial/ornamental claims by some 3 or 4 orders of magnitude.

Everything you say about bitcoin is equally true of a bank account in pounds in London. There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts. At very best there’s a temporary advantage in bitcoin’s favor as oppressive governments take time to understand and lock down the newer avenues for evading their controls.

While you are right, and this is a common practice among wealthy individuals, it's virtually impossible for most people in those countries to open bank accounts abroad.

I started with "at this point in time". At this point in time, it is easy for a person not suspected of crime (or otherwise being on the wrong side of the government) to move their british pounds from their London account to e.g. one in New York or Switzerland, convert them to USD or CHF either before or after the transfer, and generally hedge against government by betting on other things.

At this point in time, the same is certainly not true for the people of Iran or Venezuela, where there are capital controls, and the only way to get a different currency is on the black market. Effectively, compared to the west, everyone there is "on the wrong side of the government".

> There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts.

In principle that's true, but that just makes bitcoin's raison d'etre more evident. At this point in time it does not seem to be needed, but it may become needed with less than a day's notice. This has happened to the people of Cyprus (a "western" European country). Even the US confiscated gold in the 1930's.

History does not repeat, but it rhymes. Bitcoin is a hedge; it's far from perfect, it has a lot of drawbacks, but at this point in time , it is more useful than gold for people who might have to flee.

You seemed to have missed the point. There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks.

The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoin’s utility in the face of an oppressive government is wildly exaggerated.

You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.

That area of magical thinking just amazes me: look at the Chinese Great Firewall or Erdogan’s Turkey to see how this would actually work. People get arrested for visiting websites or having the wrong app on their phone and there’s no reason to believe that capacity wouldn’t be used the same way.

This especially bad for Bitcoin since unlike cash they’d get your full history and quickly deanonymize everyone you know.

This area of magical thinking just amazes me: Look at the recent two years! The big run up in bitcoin value has happened because people were moving money out of China despite capital controls put in place.

Is it still as easy? Probably not, I'm not up to date. Could people who have done that get in trouble for that in the future (thanks to bitcoins long memory)? possibly, if their opsec wasn't top notch and even if it was top-notch but they were unlucky enough to use a mixer that cooperates with the chinese government.

And Erdogan's turkey is also a great example; While the "coup" was happening, it was possible, even easy, to move money out of the country using bitcoin (not so fiat money). Quite a few people left the country afterwards, and many were arrested regardless of phone app. I don't know how many of them took their wealth with them in bitcoin, but they had much easier time doing that than any other way. at the time

That’s just telling us that it’s easier to get away with something before the authorities take it seriously. Once something grows big enough that window closes, which means it’s not much of a selling point for mainstream adoption.

You can keep moving the goal posts if you enjoy that. Yes, everything becomes harder once the authorities take note.

But if you have managed to acquire bitcoin, e.g. before a government crackdown, or some other way through help from people in other countries, it still provides the "cross border value store" function that gold cannot by virtue of being hard to move.

I am looking at what is actually happening, not hypothesizing.

> There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks.

There's also nothing to stop an oppressive government from killing its people (and some do). But oppressive is not binary, and people have used bitcoin to "smuggle" money out of (at least) Venezuela and China, despite capital controls and government crackdown, in ways that they weren't able to do with british pounds (and which would have been much harder and riskier with physical gold).

> You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.

I am not attributing any magic powers. I am observing the reality as it happens now ; governments crack down on digital networks and black markets but it's much, much harder for them to shut down than bank transfers.

To stop bank transfers, all you need to do these days as a government is click the right button. To take down the Silk Road, the US government took many months and a lot of work; an oppressive regime might have done that more quickly and swiftly, but it would still have taken considerably more effort than shutting down wire transfers. The special feature cryptocurrencies have is ease of carrying across borders .

> The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoins utility in the face of an oppressive government is wildly exaggerated.

Oppressive is not binary. Cypriots were (perhaps still are) subjected to very strict capital controls, with no attempt to crackdown on bitcoin.

So just to understand, you are doing an eulogy to Silk Road and to all the illegal ways of using bitcoin with your posts, or I’m missing something?

Certainly not. You are missing something.

I am not lamenting the downfall of Silk Road - I think it should have been shut down. I was pointing out that "an oppressive government can do everything" is a weak argument, because we have experience showing the limit and effort needed.

All I am saying that bitcoin has some of the same uses that gold has, albeit in an easier-to-carry-across-border and harder-to-confiscate way -- which was a response to G-G-..-G-P saying "bitcoin has found no use".

Now, "illegal" is a problematic word, because it is a technical definition that changes with time and location. It is now legal to own gold in the US, and it was legal in the 1920's but it was illegal to do so in the 1930s. Gold was confiscated, and (since USD was still denominated in gold at the time), it's value in USD was doubled overnight, or rather, the value of USD in gold was halved overnight.

It is still illegal for an unmarried couple to kiss, perhaps even hold hands in public, in the Saudi Arabia.

The technical legality of owning gold in this case is an interesting discussion, but I am interested in the properties and implications of an un-confiscatable store of value, which in some (limited) ways cryptocurrencies are. It keeps governments in check in a way that fiat currency cannot.

Unless you believe every single government anywhere in the world is, at all times, always "just" and "right" and "good" (for whatever definitions of those adjectives), then it is a good that some "illegal" acts in some places and some times have mitigations. And at this point in time, bitcoin provides these mitigations for the people of venezuela and iran, and has provided them earlier for the people of china.

No, no and no. Sweden and Denmark are taxing bitcoin capital gains so I don’t see a single reason why a malicious government cannot confiscate them. The beautiful story of “digital gold” is just a story. To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears. Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..

The Netherlands is taxing (my) Bitcoin holdings as well. The way they do that, is by depending on my honesty. The reason I'm honest is because I don't want any troubles when I'm going to buy my lambo (no, not serious).

Afaik Bitcoin is handled the same as cash: they don't really check how much you have, but they will come down hard when you start spending more than you should be able to.

> so I don’t see a single reason why a malicious government cannot confiscate them.

Technically, how can they confiscate them? They cannot.

They can tax them 100% or 150%, true. And they can imprison or kill their taxpayers if they with. true.

But if I managed to cross the border from (hypothetically) malicious Sweden to (hypothetically) benevolent Liberia, with the private key in my head, what can they do about it?

They can, and money governments in the past have, deny me passage with anything of value but my clothes - it is often the case that anything of value gets taken at the border (hell, it is likely the US will take anything above $10,000 on your person unless you are very well equipped legally). But there is no technical way for them to do that with bitcoin, and for that matter to even know that you carry the private key of a $1B wallet in your head, unless they have researched it before hand -- which, at last for now, is hard to do for the entire population.

> To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears.

Art pieces that go for >$1M feels like analog organic crap. But the value is determined by the market, not but our feeling.

> Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..

I agree bitcoin is likely wasting significant energy and co2, but ...

Have your ever seen a rough estimate of the costs (in resources / energy / co2) that our existing monetary system imposes? It is certainly not free, and e.g. in a lot of places more than 1% of real-estate / energy is consumed by financial entities, many of which have usefulness to society arguably comparable to bitcoin.

I have looked for a study as such and has not found one.

(sidenote: some estimates are that 1% of global energy use goes towards clothes drying. probably provides even less value to society than bitcoin)

> 10 years into Bitcoin there's still no reason for someone to buy in other than speculation

If you're comparing with the Internet, I'd say 10 years is still quite early into the Bitcoin and Blockchain space. You could say the Internet of 1999 was almost 15-20 years of development from the time TCP/IP was introduced on the ARPANET.

With the attention that Blockchain has received in the past year and the sheer number of smart people working in this field (yes there are plenty of scammers as well but you can't deny smart people are flocking to it right now), I'm pretty sure you'll be surprised of what it looks like in just another 3 years or so.

I don't think that does anything other than make the comparison worse for Bitcoin: while it's technically true that the Internet started well before 1989, what was popular in 1999 was the web and that really wasn't mainstream before 1993 or so when e.g. Mosaic was released but by 1995-6 it was having significant impacts around the world in most fields.

More interestingly, however, is that Internet was difficult to get and expensive throughout most of that period, not to mention the slow and expensive connection speeds of that era, all of which limited adoption substantially. Even with those barriers to adoption, however, there was plenty of demand because it was immediately useful to have email, Usenet (at least in technical fields), FTP, etc. even before the explosion of activity around the web. When the web boomed, millions of people paid (often by the minute) to surf it at 56K or less.

In contrast, Bitcoin has been available to almost anyone on the Internet for many years without anything like those barriers to adoption but most people haven't had a reason to care.

The smart people are the ones choosing an inherently unsafe language not that different from JavaScript on which to build “smart” contract for which the code is law just until the point a bug is found and they hard fork to avoid losing hundred of millions of dollars? I’m honestly not very impressed by what I’ve seen. They may be much smarter than me and I may be a complete idiot, but I never fucked up in a such majestic way honestly.

Oh, and so cryptocurrency programmers are the only people who "fucked up in a majestic way"? Seems to me like there are times past where automobile makers had some spectacular recalls where they had to correct unforeseen situations.

Pointing out that other revolutionary tech looked stupid to some people at first doesn't mean that things that look stupid are going to be revolutionary.

You could just as easily point out that investing in beanie babies looked stupid, or any of a number of other totally failed ideas seemed stupid.

Most things fail. Your comparison adds no meaningful information and is attempting to mislead based on fallacious reasoning.

I think you missed the point I was trying to make; I was mentioning that OP has made a too broad of a statement which could apply to any successful technology too.

I wasn't trying to make any comparisons, since these are two very different situations.

I think you were unclear - I also thought you were saying that bitcoin was like the successful tech you mentioned.

Thanks for pointing it out. Comparing the current bitcoin space to the '99 internet is a common so I should have been more clear. I think that the comparison to the 70s internet is better, but that doesn't work that well to explain current valuations.

But people aren't telling me to invest in btc companies. They are telling me to invest in btc. That is fundamentally different.

No ones forcing you to do anything.

The key difference is there is no BitInternet craze. In a funny way, there was the craze around PetSmart and other dotcom 'crap' which is very similar to the FOMO-naivety that goes on in this Bitcoin world...

The fact that you think cryptocurrencies and internet is comparable pretty much says it all.

If you had said blockchain vs internet then it might have made for a marginally plausible line of reasoning. Blockchain at least has some proven real life applications that scale.

Well now you know what the market cap is for snake oil. For the first time we've gotten a clear view of the market size -- and with that kind of size there's no doubt this won't be the last one.

It's not exactly snake oil because you used to be able to buy thinks with it. It's just become snake oil. Maybe that's pedantic, but I don't think it would have become large if it hadn't initially been on a path towards being useful as a currency.

You can still buy things with it. The only thing that has really changed is way more people are speculating on it than before, and that's revealing some serious scalability problems with the blockchain and security/trust problems with the exchanges.

Everything I buy except for maybe my mortgage, I decide to buy it and expect that within moments the payment will go through. I expect it to be cash-like in ease and quickness. For a while bitcoin looked to be headed that way, but no longer.

Snake oil has actual medical benefits. It wouldn't have become a widely known fake cure-all ripoff if it hadn't initially been useful as a medicine.

Oh cool. TIL, thanks. Seems like a kinda perfect analogy then.

But... but, its math, and new. So it must be cool. Right? Plus when they talk about it they get to say 'crypto' which sounds hackeresque.

Humans are hilarious. Anyone here old enough to remember the dot-com boom with absurd business models, that, when questioned, got the response that you obviously just don't 'get it'.

Proof of energy consuming work as currency is a sure path to environmental catastrophe.

In regards to the 'cool hysteria' and bandwagon jumping stupidity of humans, classic solutionist mistake being made by the Australian Government: Find a problem that we can solve with Blockchain!

https://www.itnews.com.au/news/turnbull-directed-dta-to-stud...

“Lots of vendors were [also] coming to government and talking about blockchain.”

Not a good way to determine expenditure...

It's irrelevant what the customer wants to use the electricity for. The increase in electric cars is already challenging how we manage our power grids. If it's in demand, charge more.

The only correct response.

Lasing out against noise or heat I can understand, but unless electricity is being subsidized, I can't fathom the line of logic people take to justify lashing out against how someone chooses to use electricity they're pay for.

I suspect it's due to irrational hate rather than sound reasoning.

Well, we know that electricity is subsidized in many ways, see coal, petroleum or solar power for examples.

Furthermore, electricity prices do no include environmental externalities. So when you burn so much electricity for things that many people deem wasteful, those people do have reasons to get pissed and yell at you in the internet. Wellcome to modern society!

I made the similarity the other day between to crypto-commodities (i refuse to call it coin or currency) and beanie babies...

It stuck pretty hard with me. The truth about bitcoin is like beaniebabies they have no value, and despite concensus other wise could at any time be ruined by the decisions of a dozen people or so. Anyone that still believes the “it’s decentralized!!” just because the database is - nonsense has a dose of reality coming.

Do I wish I would have gotten in at $5, yea, would I have sold at $20 not $20,000 almost certainly. But it’s over, it’s a fools game now.

People have and are using bitcoin in legal transactions. Legitimate companies accept it, legitimate customers pay using it, and legitimate products are traded for it. This is reality.

If all you want to continue posting emotional comments on how much you hate bitcoin, then by all means I wont stop you. but to attempt to dismiss the currency as a toy strikes me as delusional and a bit sad. Approach this issue (and any other) with a level head. Don't let emotions take control you like this.

What is the ratio of " Legitimate companies accept it, legitimate customers pay using it, and legitimate products are traded for it." to people using it for money laundering, ransomware and other illegitimate activities. Ransomware would probably not exist if it wasn't for cryptocurrencies.

Add the power usage, the graphic card shortage and the illegal activities and I suspect you're two to three order of magnitude larger than legitimate uses. Sooner or later cryptocurrencies will get banned, or at least fully regulated.

All I'm saying is that, like it or not, cryptocurrencies are here to stay. It's far more constructive to focus on providing and improving legitimate services that accept or deal with these currencies than spending energy shouting at the clouds.

If you want to continue shouting, be my guest. The rest of use will continue accepting and transacting with these currencies.

I realize it's easy to speak in a derogatory manner about something we don't like and hope it will go away, but I think that ignores the reality: for now, and for several years, a lot of people have made a lot of money. It may be an opportunity, or it may be a problem that needs addressing, but after 9+ years, I think there comes a point where it's no longer a sinkhole.

A lot of money? As in actual, hard currency? Color me skeptical.

Don't really understand where your question is coming from. Are you implying that exchanges aren't real? That people never cash out?

Even so, how much wealth in this world is based in "actual, hard currency"? How many developers have unvested options? How much of Musk's wealth is in the bank as opposed to tied up in his businesses? I think you're trying to stand up a strawman.

>A lot of money? As in actual, hard currency?

Yes. Definitely.

That's not how bubbles work. It can still be worthless snakeoil even if someone pays you for it.

Of course. Many have become rich investing in startups that added no value to the world as well. My point is the many arguments that this is a just a house of cards that will inevitably come crashing down, and I don't think that's the case. A bubble by definition has to pop. A fad has to pass. At what point does something become entrenched to the point that its continuing existence is essentially guaranteed?

The closest thing I've found for estimating how long something nonperishable (i.e. technology or an idea, not food or animals) will stick around is with a theory called The Lindy Effect. Generally speaking, the longer something has lasted, the longer you can expect it to last. So if something has lasted for X amount of time, you can expect it to last for X more amount of time. And 5 years from then, if it's still around, you can expect it to last another X+5 years.

In other words, most things don't last very long, but things that do last for a long time tend to stick around a lot longer than you might normally expect them to. Like people predicting the death of Facebook. Sure, something will probably eventually take it down or become the next Facebook. But it's been around for so long now, a betting man shouldn't bet on it happening anytime soon.

Now one might argue that on the day Myspace died this effect would predict that it would be around for yet another 6+ years (or whatever it ended up being). And to that I'd say that this is a guide for predicting future behavior, not a crystal ball that can accurately predict everything forever. And some would argue that the writing was on the wall for Myspace long before it actually went kaput anyway.

So Bitcoin has been around in some form or another for 9+ years, and withstood a huge laundry list of setbacks, tests of its security, and evolution of the ecosystem in the meantime. So it's probably going to stick around for awhile.

Meanwhile, XYZCoin and it's hot new ICO has been around for about five days, so there's nothing to suggest that it's going to stick around for very long and you should be a lot more careful about putting your money into it.

More info on the Lindy Effect: https://en.wikipedia.org/wiki/Lindy_effect

I think that is a really bad line of logic. There are lots of things that have been around for a long time and make some people plenty of money that are bad things. Pyramid schemes fit your definition - should I start buying in?

The opposite way to pose this is: Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet. The important thing to ask is whether it has a purpose and has it delivered on that purpose. There's really only one theoretical purpose that it's meant to serve - being free from tyrannical government. Well that kind of worked when capital fled into it from China - but there's also been crack downs. It also doesn't explain the US fascination.

I think there comes a point where 9 years in, you have to ask: What purpose does cryptocurrency serve beyond enriching people who are already invested.

Who cares? If people want to play in Bitcoin, what difference does it make. Nobody is being forced.

Did you read the article? I believe it highlights the difference it makes.

It'll force us to fix our infrastructure and be prepared for the future, sounds like a good thing.

Preparing the infrastructure for uses that it was never intended, and most people will never use, doesn't sound like a good thing to me -- it sounds like a waste of money.

> Who cares? If people want to play in Bitcoin, what difference does it make.

The externalities. This very thread is about how Bitcoin is messing up power grids and will soon be responsible for a non-negligible percentage of Earth's entire power usage (and the attendant pollution). It's not consequence-free fun.

>Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet.

That's weird, I've been using it to buy stuff off amazon and aliexpress. Am I a conned rube?

Does that mean Visa is conning rubes as well?

> That's weird, I've been using it to buy stuff off amazon and aliexpress.

How? Neither company seems to accept Bitcoin directly.

Purse.io lets you buy from Amazon

Is Amazon accepting the Bitcoin or is that just a way to convert it into real money first? If the seller doesn't know, it doesn't count as Bitcoin usage — just another Visa transaction.

>If the seller doesn't know, it doesn't count as Bitcoin usage — just another Visa transaction.

You've got some strong arms on you my friend, moving those goal posts so far so fast.

I pay with bitcoin. Stuff arrives in the mail. I am using bitcoin.

That’s as accurate as saying that Amazon accepts payments in stock if I sell some before making a purchase. The fact that you paid a different company to convert your Bitcoin into some real currency is a separate transaction. It doesn’t mean that Amazon has any exposure or investment in the Bitcoin world - just that they take credit cards like everyone else.

If I sell some gold, then use the proceeds to buy from Amazon, I haven't bought anything with gold from Amazon. Yes, you are using Bitcoin, but not to buy from Amazon--it's just another layer on top, it's just another (largely unnecessary) transaction in addition to the existing transaction.

A reminder to yourself and acdha, the original assertion was:

>Cryptocurrencies have been around for 9+ years, and there has been literally 0 use for it apart from conning rubes on the internet.

So...

>Yes, you are using Bitcoin

Yes, I am. I don't understand why you two are so angrily and bitterly agreeing with me.

I use olodolo, but same difference.

I'm not arguing necessarily for its utility or intrinsic worth, just that it's entrenched and far from the inevitable house of cards that detractors wish for.

Call it gambling if you will. What is the intrinsic value of a game of blackjack? None, yet an entire industry is propped up by it.

>What purpose does cryptocurrency serve beyond enriching people who are already invested.

Limited scope and obviously doesn't justify the money that is swirling in crypto right now.

However, if we want digital things to be non-fungible we're probably going to need something like a block chain. Cryptokitties(as beanie-baby-esque as they are) and the implementation of the ERC-271 token come to mind.

Again I realize cryptokittes are not really a great example other than proof of concept, but imagine with me for a second a fine art market where all the art is digital, this requires a decentralized non-fungible token, maybe digital house or car keys would be another thing where we want to limit the number of people with access to the thing, again if we don't want to trust someone like say equifax, with control over that we're going to want a decentralized non-fungible token.

I realize these aren't necessarily the best examples of non-fungible assets we might want one day. However it seems absurd to me that moving forward society won't at some point demand some digital asset that is non-fungible. If that assumption holds true then some form of cypto-currency is going to be necessary to provide such an asset.

What makes an investment in 'this Bitcoin crap' any different from an investment in say Facebook shares or Snap shares? Aren't they just unnecessary digital crap too that nobody actually needs?

Bitcoin has become the gold standard for crypto and many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.

If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.

Facebook actually makes money. That's the difference.

What is money really? Is it just people's attention? Isn't that what Facebook is capturing then selling off to advertisers?

Isn't that what Bitcoin is doing as well? Capturing people's attention as well as development resources (minds/energy) from some of the smartest people right now?

The stock market is relatively stable. Bitcoin and cryptocurrencies can fluctuate hundreds or even thousands per day.

Crypto is meaningless, stock is actually owning part of a company.

Facebook and Snap became part of most people’s lives within a few years. Bitcoin has been around for 10, and aside from trading bitcoin, has found very limited use. That’s what makes it different. Every prediction for what Bitcoin would be good for, and what would justify its price has failed to come to fruition.

I believe Venezuela proves you completely wrong. You should read up on what is going on there with Bitcoin. What Satoshi envisioned is actually happening there.

The fact that bitcoin has gone 10 years, with limited use, to me signals just how amazing the technology is. Ten years is nothing for a tech that can last 1000 (or more..).

Last I heard about Venezuela and bitcoins, people there were using the "free" electricity to mine bitcoins, contributing to the rolling blackouts. And then using the bitcoins to import overpriced stuff. Yeah, you shouldn't give people electricity flatrates, because of stuff like this. This is why we can't have nice things, this is why socialism doesn't work etc. But the bitcoin miners are really destructive in this case and not something you should praise.

You need to read up about bitcoin.

Bitcoin’s success in Venezuela is because it is a inflation hedge. It has allowed Venezuelaeans to hold on to their savings and out of reach from the government’s ability to confisticate wealth via inflation.

It is working exactly as Satoshi intended it to.

What's going on in Venezuela with Bitcoin? From googling, it sounds like a small fraction of the population is setting up mining operations because electricity is subsidized enough to make it profitable. But I'm not finding anything describing significant adoption of Bitcoin as a currency.

Shares give you a stake in a productive(hopefully) enterprise, cryptocurrency does not give you anything but a token.

This is the problem that Buffett has with cryptocurrencies.

When you buy shares in a company you are buying claims to its future earnings at least in theory. Theory being that should the company not serve shareholder needs you can force the company to distribute the earnings/dissolve/merge etc etc. (Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks).

When you are buying Bitcoin or any other cryptocurrency and yes that means ICOs too you are buying digital tokens with no claims to anything besides being a proof of having that token. It is solely 'castles in the air' which Keynes so long ago stated regarding stock market but in the stock market it is not the sole factor.

In some ways cryptocurrency is closer to regular currency but not backed by the government's mandate to receive taxes in said currency.

In other ways cryptocurrency is closer to tulips,gold,MagicTheGathering cards in that the value is based on something that some number of people agree on(ie the market).

Except cryptocurrency has no utility besides being a token, wherein tulips, gold and MagicTheGathering cards possess some utility outside being a token of exchange.

One: Thank you for helping rationalize that my Magic The Gathering habit isn't a problem.

Two: I know you said >Not going into the whole modern abomination to strip lesser shareholders of their rights to vote as Google, Facebook, Snap have done with their tiered stocks

However if you want to argue you're problems with crypto (there are many) we need to make arguments using the way things are in the real world.

Given I'm a retail investor. In one universe I place a bet on Snap for 50k. In another I took that same 50k and put it into bitcoin. In both universes my bet goes bad, both asset's price per unit goes to 0. Snap goes through the process of being liquidated. Remember I'm a retail investor, I own common stock.

Now am I better off in one universe over another? I'd argue that I'm not. However if I were Warren Buffet, I'd have been much better off bought Snap as I would have preferred shares.

You might not be better off in either universe but my reply was regarding difference between buying cryptocurrencies and buying shares.

Buying shares is like investing 50k in your Uncle Eddies seashell harvesting venture. In return you receive 50% share in his venture that is you get half of all future seashells harvested by Eddie.

Buying cryptocurrencies is like giving 50k USD to your Uncle Eddie and getting some seashells back but that is it! There is an active market for these seashells and price goes up and down.

However you do not get to claim any more seashells produced by Uncle Eddie.

Buying common shares implies certain rights to some enterprise while buying cryptocurrencies implies nothing.

>What makes an investment in 'this Bitcoin crap' any different from an investment in say Facebook shares or Snap shares? Aren't they just unnecessary digital crap too that nobody actually needs?

There's a fundamental difference between buying shares of a publicly traded company on a regulated exchange and investing in bitcoin. This is quite literally comparing apples and oranges - your examples are not only different in kind, but in purpose. Also, there is a large, rather well funded government institution who aggressively works to make sure the stock market isn't subject to the sorts of abject manipulation, ponzi schemes, and other such unsavoriness that Bitcoin has been subject to. (Side note - watching the Bitcoin market is like watching the last 150 years of finance happen in 2-3 years. It's an interesting object lesson in market manipulation and why the SEC maybe isn't a bad thing).

As to Facebook/Snap being digital crap no one needs - yes. However, just because there's no physical good being created doesn't mean their value is entirely ephemeral/a financial illusion. Facebook/Snap create value by solving a problem people are willing to spend money to solve. Bitcoin creates value by...well it doesn't yet. People invest because they hope that "there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come." That's a nice thought, but it's an assumption.

>If Bitcoin remains the gold standard for crypto then it's value will rise accordingly.

It's funny that you mention the gold standard, a standard that was dropped because of its votility, the fact that it was subject to manipulation, and the fact that it benefited some segments of the market FAR more than other.

>...many people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.

I think this is undeniably true. However, I think the assumption that bitcoin will be the vehicle for this growth is incorrect, or more charitably, overly optimistic. Bitcoin has accrued a lot of non-technical overhead that I think will prevent it from being used to drive these solutions - things like its association with speculation, the fact that the majority of miners are on the Chinese mainland, etc. I think the growth in blockchain technology will come from companies and individuals taking the concepts of the blockchain and using them to build products with real value (as in, they solve a problem that someone is willing to pay money to have solved). Bitcoin's value (sadly) doesn't come from the technology, which is fascinating and interesting - it comes from the fact that it's created an unregulated market with no barriers to access, which has allowed rampant speculation, incessant hype about 'the technology of the future', and a continual influx of new money to create 'value' that ultimately, has no real value.

>people invest on the basis that there'll be huge growth in the area of blockchain technology and tokenised digital assets in the years to come.

That's been the 'investment thesis' for the past 5-8 years.

And people have been bidding these things up ever higher, because any day now someone's going to figure out something actually useful to do with them...

(And in the mean time if some coiners get to skim a little cream from the irrational exuberance, I'm sure they don't mind to do so.)

But where is any coherent trend line supporting claims of huge growth in the area of blockchain technology and tokenised digital assets in the years to come.?

Seems to be wishful thinking that is completely at odds with the reality of these systems.

Am I missing something?

It reminds me of Pogs.

The technology keeps advancing and once the efficiency reaches a place that some consensus network can become a democratized cloud (the SAFE network is a strong contender) then there will be actual value behind the tokens. For now bitcoin represents the belief in that dream.

Whilst I agree that it is a sinkhole, I also hold a fraction of a bitcoin just-in-case I am totally wrong!

I don't want to say to my kids, "in my day you could still buy a bitcoin for only $7k."

The other side is that you paid $7,000 for a pet rock.

> a fraction of a bitcoin

Significantly less than $7k worth.

I paid £30 for a framed print and that sits on the wall doing nothing (it's resale value is probably a fiver on ebay), I have even bought a particularly pleasant rock on more than one occasion, pet or not. I have no use for them. Some are sat on the side because I like to look at the impressions of the creatures who died in it. Some are embedded in my wife's engagement ring (a pointless piece of bent metal), I'm not sure I get any value for them any more since we are married.

Why do we ascribe value to anything? I have a piece of paper in my wallet with a picture of the queen on. It's just a piece of paper, yet if I take it to the shop they will swap it for food! If I take it to the bank they will swap it for a number in a database (woop). Yet if I have a big number in that database or a lot of those special pictures I become a Big Man in society.

Yet, through no fault of my own, if I wanted to swap those pieces of paper for pieces with dead US presidents on, I would get 20% less than I would have 2 years ago! It would be worse but the value of dead-president-paper is not as high as it was. Holding Queen-paper or Dead-president-paper sounds like a huge risk.

Easy for you to say from the comfort of the first world, but there are other places in the world without the luxury of a functional banking system. Granted there are a lot of idiots trading, which is why I trade myself (easy prey) as it affords me living funds without having to be subordinate to poorly-implemented scrum processes and egotistical brogrammers.

Well-functioning sinkholes are better than the other kind.

People trade stocks like they do Pokemon but we call them 'shares'. Does that make it less like Pokemon than calling them 'coins'? Also, you trade coins all the time. It's called coins. Fiat coins.

Yes, it does make it less like coins, because lying about the assets backing a share's value is a quick way to end up in low sec Federal prison for 5 to 20 years.

I completely agree that there are regulations that enforce a somewhat honest economy. But look at 2008. A bunch of cheaters and the only people penalized were the ones who believed in it the most, such as homebuyers at the time. Bitcoin is much more chaotic, but that has its advantages too. For example, it is not tied to a single country's government.

I think bitcoin is kinda dumb too, but I do have some confidence in blockchain tech generally based on its history so far (ie, the good parts of bitcoin).

> I don't know where to begin with this Bitcoin crap

Begin by addressing the actual strengths of blockchain tech (I think the weaknesses are fairly stated in this thread).

So far, in its short life, it has provided:

1) A store of value that can be easily held on the person and that lives outside the state-corporate banking infrastructure

2) A way to buy psychoactive compounds and other medicines which have been wrongly (and violently) prohibited.

Although I have no problem with Pokemon, nor do I judge people's proclivity to collect them, I do think that cryptocurrency has already achieved something that Pokemon haven't.

edit: Ouch - quite a lot of downvotes with no rebuttal. I guess we're in an anti-blockchain mood this morning.

A set of objective financial rules into a place full of whim, abuse, corruption and stupidity.

And that idea is pretty powerful (even if the manifestations thus far still seem to be pretty much the above as well).

I think you're underselling Pokemon.

Perhaps it isn't a stupid as you think? Perhaps people like the idea of trading computational power for social mobility?

If your computer could do your work for you, leaving you to do whatever you want in life, why would you NOT want that? The stupidity is that we are not all doing this, that we are not tearing down the halls of congress for cheaper power collection methods. What is crazy is that we never demand accountability from our traditional finance system, leaving us to trust a few tremendously wealthy individuals who have no obligation to the rest of society. With bitcoin, there is no trust, in fact this is even a key feature: remove the trust. I think this is an idea that is very powerful, and is something that people like.

If you are looking at bitcoin as an investment, then you are already looking at it all wrong. This isn't about investing, its about financial independence.

I would suggest you look into the fundamentals again.

ultimately real work that produces actual goods and services has to get done. how does computing hashes "do all your work for you, leaving you to do whatever you want in life"

Yes, the computer crunches the transactions, and you get rewarded in bitcoin. Why should Visa be the only to profit from something like this?

So this leaves me to do what I want. I can get another job, or not. Who wouldn't want this? Its a simple idea, trade computation for social mobility. There are people doing this all over Venezuela right now.

>I don't know where to begin with this Bitcoin crap; it's gotten crazy that so many naive people are into this plopping their hard-earned money into a well-functioning sinkhole.

George Soros said it best, " All of financial history is one lie and deceit after another, your job as a speculator is to get on the lie while it is being propagated and get off before everyone finds out".

I feel like a lot of folks are going to get burned but what do I know? I could be full of shit....

Is there a source for this quote? I'm having trouble finding it.

Is there a basis to this claim that Bitcoin is a lie?

Is there a basis to the claim that it isn't? At this time it's anyone's guess. Bill Gates and Warren Buffet along with a handful of others seem to think it is, who am I to disagree with them. I'm indifferent since I don't have a dog in the fight.

Bill Gates Oct 2014: "Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient." And financial transactions will eventually “be digital, universal and almost free.” https://www.bloomberg.com/news/videos/2014-10-02/bill-gates-...

Bill Gates May 2018: "I would short bitcoin if I could." <-- He can. He didn't bother to look into it though.

Elon Musk also said on stage that Bitcoin is mainly for illegal use. Based on what? https://youtu.be/7WMJs1v63C0?t=2m50s

He barely knows anything about crypto, and neither do these other guys, and they talk like they do. They DO have a horse in this race, and it's clearly in fiat USD. They're not omniscient and neither are we, so let's keep our eyes and ears open.

Reply on news.ycombinator.com