Hacker News Reader

Comment by andyakb | Hacker News Reader

This is not rational thinking. Simply because something has gone up in the past does not mean it will continue to. The returns for the past 5 months have been insane, but that doesnt mean it was a good investment 5 months ago because thats based entirely on results oriented thinking. In a casino, if a roulette wheel hit black 10 times in a row, somebody letting it ride on black the whole way would have made a fortune, but that doesnt mean it would have been a good bet, it means the people making those bets got lucky. It also doesnt affect the chance of the wheel hitting red or black on the next spin, so it doesnt tell us anything about the future.

View on HN

> In a casino, if a roulette wheel hit black 10 times in a row, somebody letting it ride on black the whole way would have made a fortune, but that doesnt mean it would have been a good bet, it means the people making those bets got lucky.

Equating a currency to a game of chance based on independent events—now that's irrational thinking.

My conclusions might not be valid, this isn't something I'm an expert at, but I really don't think that's a good example.

the problem is that you did not base any of your arguments on actual facts. you just said "if you would have invested 5 months ago, your investment would have grown by a factor of 10." when that is the logic presented, the analogy holds. if you were to give specific reasons why you believe bitcoins grew at that rate AND why the will continue to grow, then it would be a different argument [not that it would necessarily be correct]. however, my point is that when you do not have any sound logic underlying your "investment" it is truly the same as gambling.

A better example is some stock that went up 10X in the last 5 months.

The difference and what a lot of people seem to miss is the scarcity of bitcoin and the fact that its makers and followers are bootstrapping a new global economy. Having only $1B in liquidity is not enough to participate in all global markets. If bitcoin successfully acquires fractions of all global markets, there is but only one direction the exchange rate can go, and that is up until there are hundreds of billions of dollar value in bitcoin. Divide that by the 11 million bitcoins in current circulation, and each one will be worth thousands and thousands of dollars.

Reply on news.ycombinator.com