The Bitcoin and the Taxi driver | Hacker News Reader

The Bitcoin and the Taxi driver

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15 pointsRyan_Shmotkin20 comments

I noticed Bitcoin's most fervent supporters are far removed from reality. They think the regular person in the street cares that "the man" can track his purchases in the supermarket, or the beer he bought in a bar. They don't want to pay taxes. They think Cypriotic people will surely flock from shaky banks to an even more shakier currency and put all their live savings in Bitcoin, because it'll be safe.

It's so hard to actually get bitcoins, that any "1 percent" discounts you get for paying with bitcoin in regular shops or sites just isn't worth it to me. Either enter your CC# and be done in 10 seconds, or go to mtgox and wait 2 weeks until you're verified (hyperboled, but the point stands). I'm assuming less techy people will be of the same mind on this.

The reason any non techy person would get bitcoins is as an investment, that's it. They don't care about any of the advantages of bitcoin because cash works just fine for them, and has most of the practical advantages anyway. If they're using it as an investment, they sure as hell won't use it to buy things.

> It's so hard to actually get bitcoins

This is something that can change. The question is, would it be enough to make people use Bitcoin?

Also, if it is "only" used as an investment, that would still be a huge success.

How can it being used only as an investemt be a huge success ?

Lets just redo the Tulip mania (http://en.wikipedia.org/wiki/Tulip_mania)

In uncertain times, there is big demand for storing value. Whereas tulips are a horrid store of value (they rot, anyone can grow them, are not divisible, etc), bitcoins are an excellent store of value. It is divisible, transferrable and easy to hide. Very similar properties have made gold a huge success as an investment vehicle. There are other goods similar to gold. For example, there are 20 billion CHF worth of 1000-CHF bills in circulation, most of them outside Switzerland. They are not used for purchases - they are used to preserve wealth. If bitcoin becomes one of those assets used to preserve wealth, its price can easily jump to 1'000 EUR per coin, giving it a similar capitalization as Swiss 1000 CHF bills.

Aren't the most fervent supporters of most things pretty removed from reality?

Is the taxi driver on Facebook, using Google, or tapping on an iPhone? Is he using Uber to drive passengers to their AirBnB from the airport they just flew into after booking a trip on Hipmunk? If the taxi driver is aware of it, it must be a bubble.

Over the last five years the people shorting governments/mortgages/banks, buying into gold/tech, and predicting a coming total collapse have in general made an ungodly amount of money.

Is Bitcoin's rise assured? No. But if it was then there would be no gain, no upside. There is a certain kind of person, all too common in our managed and enervated society, who does not know how to take calculated risks. Everything must be structured and approved by the New York Times, Harvard, and the Federal Government before it's safe to do. This same person often says that startup founders who make fortunes were "lucky", and will say the same thing about early Bitcoin adopters in a few years if it succeeds.

But what he never realizes is that you can't be lucky if you don't take risks.

Never underestimate the power of illicit substances and activities to power adoption.

Right now I suspect the bulk of the current spike in bitcoin prices is related to currency controls or the fear thereof now that Cyprus is going down the drain.

That doesn't make sense. If the only reason is to get away from the Euro, why buy bitcoins, a very volatile, cutting-edge currency, when you can just as easily (or more easily actually) buy any other currency such as dollars, or swiss francs, and your savings will actually be safe, as opposed to bitcoin that could lose 20% of its value overnight.

Most of the people who are getting away from euro are going to other currencies; It only takes a small proportion going to bitcoin to affect its price.

Moving from EUR to USD or to CHF does not make much of a difference. Western national banks don't allow for much fluctuation and if one of them starts printing, the others follow. Bitcoin is a currency that does not correlate with them, so from a diversification point of view, Bitcoin is the better choice for you than buying USD.

You can put money into realestate, gold, gov-bonds and hundred other places that don't have 3x monthly fluctuation.

And people in cyprus are not trying to protect their spare change, its their whole savings. Would you put your life savings in bitcoin ?

There are capital controls in place in Cyprus, it's illegal to move more than a certain amount of money out of the country. Thus you can't just move your money to CHF or USD.

Clearly, if you need to move illicit funds around, Bitcoin is a reasonable way to do that.

Why wouldn't you be able to just go to an exchange office and buy CHF or USD? If you have access to your money, which I'm assuming you do, else you can't buy bitcoins anyway, there's really no reason why you wouldn't be able to exchange it in another currency.

Follow me here:

a) it's illegal to 'just go to an exchange office and buy CHF or USD'. Literally can't do that at the moment

b) You can still buy bitcoins from people inside Cyprus

c) then you can convert them back at some later date, to whichever currency you prefer, outside the currency control area.

People keep predicting that but then it might go down after a large dump of Bitcoins and rises to new heights. Don't know what to say, this article has no substance at all. It is based on a possibly made up anecdote. I guess Bitcoin is just one of those things that divides the tech community. Crazy idealistic cyberpunks and BTC skeptics.

Disclaimer: I am a believer

Taxi drivers, grandmas etc; necessary but not sufficient for a bubble.

There are sustained run ups in assets values that can seem crazy but don't reverse. Consider the bane of my life, london house prices.

If bitcoin catches on as a means of exchange, e.g. cash in and out of Iran as is happening to some extent, 1 Billion market cap will seem small.

The fact is BTC is a currency and is currently operating as such. There will be price corrections of course but it is already established and its primary trend is up.

As a currency trader of ten years I see this energy-backed means of exchange reaching astronomical levels if the network does not suffer any major catastrophe.

What looks like a bubble here may well be an attempt to establish a base. $100 seems like a reasonable psychological base level after it is broken. From there, with greater adoption and acceptance, $1000 is targetable.

Anyone knows if there is a way to "short" bitcoins ?

https://icbit.se/

You can do this on http://bitfinex.com.

But be careful about how much you trust any bitcoin service. Bitcoinica, another margin trading platform, was wildly popular but existed for only 6 months; they had to shut down after several hacks and people lost funds.

Also, the main way to get non-bitcoin funds into these kinds of services is via mtgox redeemable codes, but those won't be available anymore after the 10th of April because of legal concerns.

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