Most of us would have. I mean, 4->32 is great a return. A lot stories about people who didn't sell were those who had lost and then found their wallets. Pure luck.
I learned about Bitcoin at exactly the same time. I told my father about it and asked him if I could invest $100. I didn't press him on it though, but I'm sure I would have sold way before $1000+.
I believe it's just going to keep going higher: more and more (legitimate, blue-chip) institutions see the value in Bitcoin for moving currency around due to its near-zero transaction fees, rapid clearing, and the impossibility of chargebacks - and given there's a cap of 21m BTC it means deflation is going to keep going on, if not accelerating further. I do expect to see BTC reach $10k or $20k within 5 years, even if it crashes this year.
I don't know if BTC will reach $100k or even $1m - it depends on how the rest of the financial industry treats it - or if there's a mass ditching of BTC for ETH or possibly even a bank-controlled blockchain.
BTC has one hurdle coming up: the darknets - the original populizers of BTC - are switching to Monero due to its increased privacy protections.
Yeah honestly, why do people keep saying this? Real life bitcoin transactions are much more expensive to users than credit card or ACH transfers.
I can move money for free between my bank accounts and the money is settled in three days. I can pay friends for free with venmo and it settles likewise.
Bitcoin needs to become significantly faster and cheaper, since there's nothing holding back the competition from getting more efficient from self-imposed limits.
Because they're confusing theoretical transaction costs with reality. This isn't an insurmountable technical limitation; this is a political issue within the miner community.
Maybe for the US, but in other western countries the fee is generally zero for individuals, or a few cents for businesses, and the time a few hours at most (often seconds).
In what western countries do you have wire transfers within hours? My experience in several EU countries is about two working days for transfers to be credited to the other person's account.
We must have different EU countries — though the EU is aiming for these systems to be available across the Eurozone by the end of the year (!) [1].
I know for certain it's very fast (around a minute, but the guaranteed time is <2 hours) for the UK, Denmark and Sweden. I think Norway and Finland have similar systems.
Seems like it. France and Austria, in my case. If I pass a transfer in my French online banking system in the afternoon, my bank even tells me outright that it won't be processed until 8 o'clock the next morning (until which time I can undo it). It's then deducted from my account at that time, and the day after that the receiver sees the payment in their online banking as "you will be getting this money, but you don't have it yet, it's being processed".
> EU is aiming for these systems to be available
Well... it's "encouraging" providers to do it. Not holding my breath ;-)
On reflection, we might be talking about different things here. Can you use this Faster Payments service to transfer money to any bank account, like to a friend? It reads like this might only be meant for instantaneous payments to merchants. Those services exist elsewhere as well, yes.
Faster Payments is certainly used for transfers between individuals, like between friends and family. That website was mostly for the banks, sending money between friends is listed on a bank's site [0].
There's a mobile phone-base service, called PayM [1], which uses Faster Payments. I don't think it's used much, but the systems in Sweden (Swish) and Denmark (Mobilepay) are pretty much the same and are used a lot, probably the majority of payments to friends, and at least 25% of payments to small businesses.
I wonder if in the future "bitcoin miners" might be a more literal name, for those digging through landfill looking for hard drives like the one you threw away.
I bought a bunch when it was around $9; probably $1,000 worth, just for fun. Then I spent most of it on stupid stuff like pizza, and had about $5 left.
A couple years later that $5 had grown to become worth $200, so I again spent it on a couple stupid things.
I would be mad, but it was in my MtGox account anyway.
That's what I do with all my BTC: MTGO cards, Steam games. My initial "investment" was ~$10 worth of Stellar when that was given away for free, and I currently have ~$30 spread between BTC and a couple alt-coins from that initial free $10. So it's all just play money to me.
Historically, as soon as bitcoin makes national press, it drops. Amateur investors jump on without the stomach for the hiccups, leading to the subsequent virtual "bank run"
A bank run is a pretty specific thing (https://en.wikipedia.org/wiki/Bank_run), you shouldn't use that term for any general situation where lots of people decide to sell something at the same time, or where a price of something drops precipitously.
There often is a run on the exchanges, with people desperately trying to withdraw cash or cryptos before the exchange collapses. Often that's what pushes the price to the very top. On one or two exchanges there is a liquidity crisis, so people will bid up Bitcoin because that can be the fastest way to get money off the exchange.
Historically, Bitcoin is still very young so not enough data to predict let alone the fact that predicting these kinds of things is by nature hard/impossible.
At least 5x in the past 1.5 months, actually - from ~$.00025 to ~$.00145 (now $.00125). I watched it climb in disbelief. Most of the top 20 or 30 alt-coins saw at least 2x market cap increases in the past 2 months, some had 10x or greater increases.
LTC spiked because Coinbase added them to their trading service - I'm surprised that making something simple and easy to use would bolster activity like that.
Is it safe to say "Coinbase is the iPod of Bitcoin"? That's what it feels like.
Only if iPods constantly broke and when you bought songs on iTunes they weren't delivered on time.
I'd advise anyone thinking of purchasing Bitcoin through Coinbase to take a look at /r/coinbase. Their support is pretty much non-existent.
Edit: Not only is support non-existent, people are having problems accessing their funds, getting charged different amounts than what they agree to when buying... It's feeling like MtGOX all over again.
Coinbase isn't perfect but 99% of the problems people have with them are due to KYC/AML. That, or they're shocked (indignant!) that they have to pay taxes on capital gains.
Well as someone who's currently waiting on support@coinbase.com to respond to a ticket, it certainly doesn't feel like FUD. It's not related to KYC laws either, I've been a customer since 2014.
Only if trying to buy songs on an iPod caused your bank to freak out. I'm at a top 5 US bank for my checking and credit card. They were nonplussed with my attempts to move money to Coinbase.
ETH has actually gone up 9x since mid-February. That was when it was first available on Coinbase too, so it was easy to buy then. I got some myself at that time, just not enough.
Some of these exchanges have come a long way and the volatility makes it great to trade cryptos. I still view it as the wild west, so scammers everywhere, but where there is chaos there is profit!
Something about this doesn't make sense. Either he pays in BTC or JPY. If he pays in JPY, then he has to sell the BTC, which if he does that on market, will tank the price. If he pays in BTC and the courts recognize it, then BTC must be officially recognized as a currency, no? Not sure.
In any case, if the courts recognize that he can pay back in BTC, and he has enough BTC to do so, then I don't see why it's contingent on the BTC price. He could do it today.
Excited about this... I had $5,000 in cash that was supposed to be wired to me. They kept saying its in the process of being sent... Then one day I go on HN, and it says that MTGox is insolvent. Haha.
> Where does the $52 billion market valuation come from?
That seems to be a mistake in the article. $52 billion market cap is of all currently tracked cryptocurrencies, not just bitcoin.[1] Bitcoin is ~$28.7 billion right now.[2]
Another problem with that number is there is no way to tell if a coin is being hoarded or if it lost forever. If that hoarded number is high, it presents a risk that a hoarder could offload their coins and crash the market. If that hoarded number is low, it means the actual size of the market is much less than people claim.
Also, beware that the marketcap figures are not quite true [1]. They calculate based on the total supply rather than the circulated supply and on some (scam)cases like the recent Gnosis ICO it results in crazy amounts.
As for lost coins, we can only guess. Much of this depends on whether you think the coins mined very early on by Satoshi are lost forever, or could come back into play. There's very roughly 1 million 'Satoshi Coins'. I'd estimate about another 500,000 that are lost on discarded hard-drives and whatnot. 1-2 million coins seems reasonable.
I think I can claim that I wrote the 1st academic paper on Bitcoin in early 2011. Anyone else trying to claim that title? :)
Unfortunately I was broke in school so bought and sold only a few coins. Asked my lawyer dad for money, he laughed, just as all my Wharton finance friends did.
My understanding is that people use bitcoin to buy other cryptocurrencies because they can more easily exchange their conventional currencies for bitcoin. As a result, bitcoin demand is maintained at elevated levels.
We'll see what happens to the demand if the Winkelvoss ETF gets approved. It's under review right now, should hear on or before May 15. [1] There's an Etherium ETF under review as well. If institutional and retail flows start causing crypto purchases through ETF creation unit mechanics, it's going to blow sky high. There are similar efforts going on in other countries. Crypto as an asset class is going to be a theme. Japan also legalized Bitcoin as a payment method [2], so there's been lots of buying there. I'm sitting on some BTC (not nearly as much as I used to though, :'( ).
It's not clear to me how much Trump policies will be influencing this decision. So far the extent of Trump's influence over the SEC is his appointment of one of the three current commissioners, right? I don't see that causing a 180 on this decision in the near term. I'd be happy to be wrong.
Market cap is a fairly easily manipulated statistic, and doesn't make a whole lot of sense as a comparison anyway.
For one thing, a lot of those tokens are either centralized or represent products that don't even exist.
For another, they are over-counted. Imagine the thought experiment: I create a new eth token and sell a bunch, pumping the market cap of my new asset to $100M. That eth that was paid for my asset was not sold - I'm still holding onto it.
Now I've just added $100M+ to the 'dominance' factor by doing nothing. People bought my token, and maybe even bought eth to buy my token, with no sell pressure being added anywhere in the eth ecosystem. This extra dominance was just sort of poofed out of nowhere.
So, 55% is not really as meaningful as some people ascribe.
True, no statistic tells to whole story and should be taken with a grain of salt. However, I think this metric has a lot of psychological value as it's easy to grasp and has been generally accepted by the bitcoiners when it was 80%.
Do you think there could be any other metrics that can tell a better story? (serious question, just wondering what your thoughts are)
It's killing me too because I'm waiting on the next correction to come before buying any more, but I thought that was going to happen earlier and I'm kicking myself for not buying some a week ago.
The future looks bright for cryptocurrencies, but I don't want to buy some at 1700 and feel like a fool when it crashes back down to 1100
And we can't know, because it has no intrinsic value and nobody even understands why it's so high right now. It might drop from 6000 to 2500, it might drop from 1800 to 300.
Its value only comes from the trust people put in it, and from nothing else. If that trust evaporates, so does the value.
Pretty much my approach. When there's a big spike, I just sell it and buy after the crash. Sucks timing t, but when you feel its gone too far I just sell and buy back when it's lower. I'll bite one eventually, I think, but for now, I'm pretty on top.
why didn't you buy last week? the price is never too high to buy, and never too low to sell.
if you really believe it will go up, why not buy when you think the chart looks good and move your stops up as it increases? your position sizing algorithm and exit strategy should allow you to capture some of that profit and protect yourself from a large correction
It kills me too, but I've given as much as I could without failing to make rent as a grad student. Seeing how the combined market cap for all cryptocurrency has more than doubled in a month, I think we're due for a correction.
At this point, I speculate that any correction would start with a trigger on the major coins, like frustration over the Bitcoin fees and transaction delays, a bug in the segwit implementation for Litecoin or a false flagged segwit activation from a malicious miner, or some major exchange (like Coinbase) loses user coins. Even just Bitcoin not receiving the ETF would cause investors to second-guess themselves.
The bull run going on with Bitcoin right now is very concerning to me. There's been no recent improvements to the utility of Bitcoin, instead there's been scaling issues and an ugly, contentious civil war over how to solve it. It's utility if anything has dropped considerably, as mining fees have become far higher than traditional methods and more unpredictable, leaving smaller transactions to sometimes take 16+ hours to confirm, even with the default fees set by the wallet.
Historically, a lot of this activity tends to be from unregulated exchanges in Asia, many of whom could be engaging in some form of price manipulation (it wouldn't be the first time - google for Willy Bot). My Bitcoin friends in town have started to joke that the reason it's going up is just the word "China", because it tends to be a repeated explanation of why the price is increasing, suggesting to me that nobody really knows what's going on or even where the demand is coming from.
I'm not anti-bitcoin, but I'd vastly prefer to see a slow, stable increase in price based on the currency improving in utility, not these giant blasts of speculation that, IMHO, only work to discredit Bitcoin as a serious instrument for financial systems. An extreme example of how bad this is getting right now that I seriously hope is just a joke: https://np.reddit.com/r/Bitcoin/comments/6a3lvd/today_i_took...
One way to read this is that every year that goes by without the discovery of a major, world-ending flaw in the Bitcoin protocol should increase your confidence that there won't be one soon, so you should expect growth even if all else is equal. It's not just time either, as the "bounty" on such a discovery is proportional to the market cap of Bitcoin.
All crypto will eventually be broken. SHA-1 seemed bulletproof a few years ago, and now people are trying to phase it out.
If it becomes worth it to break bitcoin, these vulnerabilities will be used, discovered faster, and likely won't be published before someone uses it to profit off Bitcoin and crashing the price.
Bitcoin is priced this high because uneducated people expect it to replace paypal and credit cards but it will never be able to because 1 transaction take 30+ minutes and that is by design. The faster they make transactions take, the higher chance of forgery. Other crypto-currencies that attempt to have faster transactions are simply trading safety for speed.
For a merchant a CC transaction can take up to 30 days. A customer can initiate a charge back any time between when they txed and when they pay their bill.
With bitcoin the ~10m+ tx time is a cost, but is in material if you are dealing with either a trusted party or a small amount of $
> For a merchant a CC transaction can take up to 30 days. A customer can initiate a charge back any time between when they txed and when they pay their bill.
Customers don't care how long a transaction takes for the merchant.
Have you ever tried selling anything for bitcoin? Nearly no one will use it even when being told of all the "benefits". They don't want to wait 30+ minutes. When they see they need to give some exchange a scan of their passport and wait 3-5 days to link their bank account, and losing the ability to do a chargeback, they never think about using Bitcoin again.
I've only bought a couple things with bitcoin, never sold.
The current story for bitcoin is pretty sad, largely due to slow adoption and not much of a good story for consumers.
The good thing is that bitcoin doesn't have to compete directly with CC companies. There are cases that it solves that CC companies aren't interested in.
There's all this concern about price volatility and tx rate, but it's been used continuously in spite of price volatility, and saying no one wants to use bitcoin because there's too many outstanding bitcoin transactions just isn't a serious argument.
I care about bitcoin because it is an interesting piece of technology that enables things that weren't possible before. I'll hold bitcoin so long as they don't go to zero, none of the concerns listed about bitcoin that I have heard are serious arguments on why it might go to zero, so I'll hold.
>The good thing is that bitcoin doesn't have to compete directly with CC companies.
Current CC companies are essentially two products. One is the transaction processing side of things, and the other is the financial + insurance product which protects both parties from fraud, chargebacks etc. Crypto currencies should be able to make transaction processing effectively free. All you need is an insurance product that operates at margins lower than 2-3% (current credit cards).
This has always been the weakest arguments in favor of bitcoin. It shows people don't understand how actually CC transaction to a merchant works.
There is always inherent distrust when money is involved. Hence the ability to charge back a fraudster. Unless of course you deal with a "trusted party" but then the chargeback argument is immaterial, it doesn't matter whether transaction is bitcoin or credit card.
Now as for settlement times, sure banks are catching up. Faster is not always better. It always leaves room for fraud. Banks are distrustful on behalf of their account holders. So a particular merchant's bank is not going directly to the customer's bank and demand money. They go to an exchange to ask for a debit and credit. This takes time.
Currently bitcoin takes 10m for how many transactions per minute? If we were to talk billions of transactions (not money but actual transactions) flowing through a payment processor and calculate the scale of bitcoin - how much time are we talking about?
> "Other crypto-currencies that attempt to have faster transactions are simply trading safety for speed."
This hasn't been true since about 2013. Altcoins don't just twiddle the parameters of BTC anymore. They're all over the place in terms of what algorithms they use, and many of them are clearly better. A lot of what Bitcoin has going for it is inertia, network effects, and price stability. (Yes, compared to alts, Bitcoin is considered stable.)
What you say doesn't really disprove my point. Yes you can change to a different algorithm.
But the underlying principal is the same. You require participants to spend X time in a problem with no shortcuts. Changing the problem does not allow you to bypass this issue. If you choose a problem that requires less time to calculate, you increase the probability that someone spams the network with fake data.
You either have a centralized system that can cheaply tell you if something is legitimate, otherwise this is the only way to protect a decentralized system. To my knowledge, there is no altcoin with any significant amount of use that does not use this principal. Please tell me which altcoins do not use this principal.
If you do 1 transaction every minute then someone needs a ~51% attack to "win" after 10 minutes because without that you will not have the longer chain. Having a protocol that can do 1 minute blocks is hard, but not nessisarily less safe because it's number of clocks * computing power that provides safety not the actual effort a block takes.
> If you choose a problem that requires less time to calculate, you increase the probability that someone spams the network with fake data.
No you just decrease the faith you can put into each confirmation.
> You either have a centralized system that can cheaply tell you if something is legitimate, otherwise this is the only way to protect a decentralized system.
There are some interesting efforts to create systems that work in complement to the main block chain.
One complimentary idea is the lightening network which functions by creating channels that only transact of bitcoins that are currently locked out of the bitcoin system. This eliminates the potential for double spending these bitcoins in a tx with a third party. Once you eliminate the potential for double spending you can do just about whatever you want quickly and off chain. The system is set up to be able to be able to resolve all of the txs that happened off chain when the locked up bitcoins are unlocked.
Once many of these channels are established you can start to establish a connection. For instance if I have 12 bitcoins in my own wallet I might keep ~1 BTC locked up to a connection to coinbase. From there they may charge a fraction of what the on chain cost for any tx would be. It'd take a regular on chain fee to establish the connnection, but once it is up the fee and latency should drop dramatically.
> Once many of these channels are established you can start to establish a connection. For instance if I have 12 bitcoins in my own wallet I might keep ~1 BTC locked up to a connection to coinbase.
This is old news and all you are doing is giving up decentralization to coinbase. The alternative is opening a "lightning channel" to every store which in this case does not solve the slow transaction problem.
> "To my knowledge, there is no altcoin with any significant amount of use that does not use this principal. Please tell me which altcoins do not use this principal."
Ripple, which currently has a market cap of $6.4B USD and $223M USD in 24-hour trading volume, making it the third largest after briefly passing Ethereum for #2 yesterday.
Ripple can hardly be called an altcoin. The currency was all premined and seems to only be used by some banks as an alternative to ACH. You need to choose which nodes to trust, which can be a small set of easily compromised nodes. So once again you are trading speed for safety. It seems more like a distributed database with the cryptocurrency slapped on it to make banks think they are getting in on new technology.
SHA256 is not going to be broken by Moore's law computational improvements in our lifetimes. If it's going to get broken, it'll be by some breakthrough cracking method. An attack that could so thoroughly vanquish SHA256 to bring it within computationally tractable range has a good chance of clobbering SHA512 too.
Right. Unless a flaw discovery is coming, in which case the passage of time and an increasing "bounty" both make it more likely there will be a flaw soon.
Besides technical risk there's also legal risk. Bitcoin is "legal" in most countries now, but most Bitcoin users aren't following the laws (see IRS vs. Coinbase). But every year that goes by without a government crackdown increases people's confidence that there won't be one.
I don't think that's the right way to value a world ending flaw.
Say whatever flaw allows the attacker to extract value somehow. In that case, the value of the flaw is whatever they can extract before getting noticed. And it's illegal.
Say it just makes bitcoin not trustworthy in an obvious way. In that case, the value probably depends on trying to blackmail the big miners. But it's hard to blackmail them without letting them know that you are going to destroy their business. Illegal and probably otherwise dangerous.
Extracting value gets easier if bitcoin are worth more, but people also start paying more attention to smaller amounts of bitcoin.
Even if your strategy is short-selling companies with exposure to Bitcoin assets before alerting the world, your profits are proportional to how big Bitcoin is.
The first blockchain currency that corrects the unreasonable value gained simply because of demand (via redistribution?), will be the blockchain that wins the whole market.
I really doubt that reddit post is anything but attention seeking. It would take weeks to conduct such a transaction from start to finish. You couldn't do it on a whim "today".
The market always prices in future utility (as best predicted), not present.
The same with future non-utility - oil price is dropping because everybody knows that Saudi (and the rest) sit atop a sea of oil which is not as needed anymore (solar, electric cars, ...)
Except that it isn't, really. Looking at the data at http://www.wolframalpha.com/input/?i=oil+price , it has been fairly constant over the last two years. It did go down by 50% over the second half of 2014 but hasn't made dramatic moves since. If Tesla hype had anything to do with the oil price, it should have moved.
Well the price has been bound in a wide channel since the start of 2016, showing stable growth within that channel for 18 months. The second half of 2016 was very benign growth, especially compared with bitcoin's past.
It was only the surge to 1500 that finally broke out of the channel, and we're seeing typical channel breakout price action. We will test the previous upper bound to see whether the price will stay outside the channel or not. This would be a crash back below $1500 at this point.
Think about utility from this angle: 300k transactions per day are willing to pay the fees to get into the blockchain. Higher fees necessarily crowd out lower-value use cases for bitcoin. This means that bitcoin remains useful for ever-higher value transactions, which continue to find utility in the coin.
The Reddit post about the home equity loan is a sure sign of the top. Of course this sort of investment folly is not unique to the crypto world.
If Bitcoin is not useable for low value transactions, then what is it good for? Normal people don't do high-value transactions with cash. High value transactions are done with loans, bank guarantees and signatures. Nobody has big piles of cash ready for big transactions, except for criminals.
So is crime really going to be the only valid use case for Bitcoin?
Interesting how you jumped to that conclusion, just like many other bitcoin skeptics since 2009.
Think about this: with bitcoin, you have a highly-secure, trustless, immutable distributed ledger that anyone can pay a fee to get in to, with no restrictions. Let's say we take a hash of a huge Wall Street swap contract worth $100M and embed that hash in the blockchain. Now both parties can verify the integrity of the contract without involving lawyers or governments, and nobody else knows any better than "there is 32 bytes in the blockchain." How much is it worth to those parties to verify that contract?
How about this one: I'm a wealthy businessman in China, and I don't like how the economy feels. My government imposes strict limits on how much foreign investment I can do, since the state and the banks are in partnership. I can use bitcoin to move money across the imaginary borders imposed by governments, even if I trade it back for dollars as soon as it moves out of China.
Or maybe you're a gold bug, but you want something that's actually useful ;-) It's very hard to spend gold or move it around.
What about the global foreign exchange markets? Companies are moving trillions of dollars daily through the interbank network. There are fees and counterparty risks associated with those moves, especially if you're doing business in a developing country. Bitcoin may eliminate some of those risks. And the fees are agnostic to the transaction value, which is why high-value use cases crowd out low-value ones. I pay the same fee whether I'm transferring $1 or $1M.
It's not exactly trustless, unless you completely ignore that people expect their bitcoins to be worth something. But many people see bitcoin as a kind of money, and that unavoidably means they will have to trust its value. And in bitcoin's case, trust in the network and community behind it, and that seems to be the thing that a lot of people don't really trust anymore.
I'm not entirely sure what the point is of your first example. How will bitcoin help to varify the integrity of a contract without lawyers? If it's a contract, you still need lawyers to interpret it (if it's complex enough to require lawyers) and a government to enforce it. Without that, it's an agreement, not a contract. Maybe I don't get it, but I don't see what it has to do with bitcoin.
The second one is an example of crime. You may think that this shouldn't be illegal, and it certainly seems victimless, but it's still a way to circumvent the law.
As for more useful than gold, that depends a lot on context. Both of them only have value because of the trust people put in them, but at the moment, a lot more people trust gold than bitcoin, which means gold's value is far less volatile than that of bitcoin.
Companies and banks certainly move enormous amounts of money, but if they move bitcoin instead, they still need to convert it to money somehow. And companies don't really need the anonymous and decentralized features of bitcoin, unless they are trying to circumvent the law.
So I'm still doubtful about the usefulness of bitcoin in the face of these higher fees. Except for criminal/illegal transactions, where the use case is fairly obvious.
Don't get me wrong; I would like bitcoin to be a good idea, and I used to believe in it, but I've lost my trust in it.
You're confusing trust in the integrity of your coins with trust in the value -- whatever that means. By trustless, I mean that you can verify that you control your coins without having to trust anyone else. This is as opposed to the banks that wink and say, "trust us, your money is safe."
> I'm not entirely sure what the point is of your first example.
Contract integrity in my case is the cryptographic hash of the contract document. Neither party can tamper with the document's wording and maintain cryptographic integrity. As for enforcement, there are "smart contract" features enabled by the Bitcoin scripting system that do not require lawyers or governments for enforcement. These are more interesting to me than simple transfers of value.
> a lot more people trust gold than bitcoin, which means gold's value is far less volatile
Yes. The deeper a market, the less volatile.
> The second one is an example of crime. ... unless they are trying to circumvent the law .. Except for criminal/illegal transactions, where the use case is fairly obvious.
Quite a stickler for money transmission laws, aren't you? What does it matter to you if someone wants to move money across a border? Do you think those laws make any sense?
> So I'm still doubtful about the usefulness of bitcoin in the face of these higher fees.
Yet the system continues to process >300k transactions per day. And users continue to pay the higher fees. So maybe you are priced out of the system but many others continue to see utility in using bitcoin.
> I've lost my trust in it.
The bitcoin system has operated with almost perfect uptime for nine years. It has never been fundamentally compromised. It has never censored economic activity or blacklisted "dirty" coins. It is not susceptible to coercion or corruption. There are no haircuts, bail-ins, or bail-outs. It does not impose imaginary barriers on the free flow of value. Yes, the exchange rate fluctuates, but the underlying technology is far more reliable than the banks and governments when it comes to money.
I'm not a stickler for money transmission laws, I'm explaining to you what a law is and what the word 'crime' means. I also said: "You may think that this shouldn't be illegal, and it certainly seems victimless, but it's still a way to circumvent the law."
If you then say: yeah, that's the point, then you confirm that circumventing law is indeed the purpose.
By all means argue that those laws don't make sense. I won't disagree with you. But then you are confirming that circumventing the law is an advantage of bitcoin. And I'm arguing it might be the only true advantage.
To refute a few of the other advantages you're claiming:
> By trustless, I mean that you can verify that you control your coins without having to trust anyone else. This is as opposed to the banks that wink and say, "trust us, your money is safe."
But this is no different from normal money. If you keep that entirely in your own control, it's just as safe. But if you keep your bitcoins in MtGox, they're significantly less safe than in a bank.
> Yet the system continues to process >300k transactions per day. And users continue to pay the higher fees. So maybe you are priced out of the system but many others continue to see utility in using bitcoin.
Absolutely. But do you have any data on who those others are, and what they use it for? The fact that you can be priced out of the system when it becomes popular, seriously reduces its usefulness to a lot of people. Those who stay in the face of rising prices, will be those who can afford the fees, people for whom the stakes of that transaction are high enough, and for whom the benefits of bitcoin outweigh the costs.
Everything still sounds like money laundering and other criminal transactions might be the most important killer application of bitcoin. It would be different if it was actually far and cheap to use, but for most people, regular bank transactions are far more effective.
I think the biggest change recently is that the civil war inside the bitcoin community has calmed down, a lot. There's still a deadlock, but at least people aren't at eachothers throats 24/7.
It's a reassuring change of pace. I think it's a combination of some people realizing that you can do a LOT with 3 tps (the global gold market is far less than that), and also of many people realizing that Bitcoin's incentive structures protect it even in the face of a miner with >50% hashrate. (Mining costs hundreds of millions in electricity, and hardware costs hundreds of millions as well. If the miners become malicious, either users will hardfork or leave, and those hundreds of millions suddenly can't be recovered by mining a now devalued asset).
And, externally, I think more people are starting to understand the whole decentralization thing. Bitcoin is extremely powerful in that:
It's very difficult to censor transactions
It's very difficult to seize money
There is full immunity to hyperinflation
Nobody controls it. Not the devs (segwit wouldn't be struggling if they did), not the miners (we'd have 2MB or 8MB blocks if they did), not the regulators (drug markets wouldn't be so pervasive if they did). That's powerful, and Bitcoin is basically the only option if you want a money where some central authority (be it the Etherum foundation or the federal reserve) can't decide to enforce some new rule that you aren't expecting and aren't okay with.
The fee calculation is the weirdest thing about modern Bitcoin to me. It was a lot simpler when we used to do it - basically a constant with a simple multiplication of the transaction size.
Dynamic fee computation has some interesting game theory aspects to it. Fee rate (bitcoin / byte) dropped significantly after dynamic fees caught on. They have been rising with full blocks as users bid to have transactions included in the limited block space.
We'll see what Litecoin does when SegWit activates tomorrow!
Maybe people value the current state of Bitcoin with its 'flaws' and all.
The Bitcoin-as-gold vision is the current de facto situation (vs Bitcoin as coffee payment system). The scaling issues are really a simplistic way to explain the conflict between this two visions (worth mentioning that the block size increase, another simplification, won't solve either in mid/long term)
Also, improving utility is subjective in this case.
Bitcoin is a not a product or service in the traditional way: it does not have to serve all the users, there's no clients as such, there's no companies to sell the 'product' to. Its roots are real financial disruption, not another payment network.
If Bitcoin doesn't have to serve "users", then it will not be able to "disrupt" anything. You'll only "disrupt" banks and credit card companies if you manage to offer "services" to their "users".
I can't tell you that Bitcoin is a scam, but I can tell you that if I were going to devise a Ponzi for the 21st century, Bitcoin is what it would look and feel like.
Can someone explain to me why Bitcoin is compared to a Ponzi scam so often. I understand what a Ponzi scam is and have a decent understand of Bitcoin. I'm curious if people just mean it's scam and a Ponzi scam is fresh in their memory.
People holding it want the price of it to go as high as possible. There is no incentive to have a stable currency when people are still wanting to buy into the hype and liquidity is still there to dump it.
I don't think it is a true Ponzi scheme but I definitely think people mistreat it.
Here's one way to see it: if you need to use Bitcoin to pseudonymously transfer large amounts of money anywhere in the world relatively easily, then you should worry not about the price it's currently trading at. If you want to transfer 1 million $'s, then you buy the appropriate amount of BTC and cash out when the transaction is done. A lot of people who are "invested" in Bitcoin are there to make money selling it for a higher price than they bought it for.
No because a lot of investments intend to create value along the way. Investing in a startup for example hopes that one day they will be profitable. You may intend to sell or exit before that point, but the people who buy from you are looking forward to real world profits from adding real value.
It's only ponzi-esque if each person just expects the next one to pay more than the last, with no value-added at any point in the process.
That's not what a Ponzi scheme is. Specifically, Ponzi's require fraud, not just making money off new investors. All investments make money from new investors, it's the fraud that makes something a Ponzi where there's no actual underlying asset but just a money pumping scheme. Bitcoin is an actual underlying asset.
Simple really, most people don't actually know what a Ponzi scheme is nor what qualifies something as a Ponzi. Bitcoin is not remotely a Ponzi scheme so you can immediately tell those who claim it as as someone without the faintest clue as to what they're talking about.
> IMHO, Bitcoin is a more brilliant scam than GP gives it credit for. It was a scam that was designed to end up not a scam. IIRC, Bitcoin being a pyramid scheme was explicitly stated in the original design doc from Satoshi. The problem was that even though bitcoin could work well once it was widely adopted, it had a chicken-egg problem in the beginning. It had no value until it was widely adopted, but no rational person would adopt it until it had value.
> The solution was to prime the pump with a pyramid scheme. By structuring the system to highly reward risk-taking early adopters, Bitcoin motivated millions of dollars of high-risk early investment which is worth billions today.
> But, return on investment was only a nice side effect on the way to the end game. The end game was to get Bitcoin up and running as an exchange medium --only coincidentally as an investment vehicle. As an exchange medium, Bitcoin is not yet 100% solid. But, in general the plan has already worked. Someone in Haiti can exchange value with someone in the Ukraine and for once there is little that the games of the politicians or the banks can do to stand in their way. That was the real goal. A bunch of nerds gambling was just a necessary bit of fun on the way to setting that up.
I don't know if it's a Ponzi scheme but it's definitely a strange phenomenon.
Is there a bank where after you deposit your money, it grows in value if other people after you also deposit in the same bank? The more and more people deposit the higher your deposit becomes?
I know it's insane. The danger is that if more people start withdrawing your deposit will start shrinking.
This is one of the reason Bitcoin is not really money.
The other reason is that it's not a measure of value. Is there any one who will give their product or service price in bitcoins? The way the price of Bitcoin fluctuates, it's impossible to do so.
You may not be aware, but there are still real Ponzi schemes operating in the 21st century, and they don't look and feel like Bitcoin. Some of them use Bitcoin as a method for money transfer, but that doesn't make Bitcoin itself a Ponzi, and Ponzi schemes are not the main driver of Bitcoin usage.
I believe MMM is the most popular Ponzi scheme at the moment after being revived. This is what a 21st century Ponzi scheme looks like:
On what market? I don't think there are any on CBOE. I'd be skeptical of a market run by a bitcoin company even if it raised VC because:
1) The failure rate of VC in general, and especially in fintech bets.
2) It's probably "pre-revenue" eg. not profitable company
3) It will probably be a low volume market & therefore have few counterparties.
Currency is NOT supposed to be an investment mechanism in and of itself.
If I buy a loaf of bread for $1 now, I should be able to buy a loaf of bread for $1, 10 years from now.
Currency inflation is BAD, and so is currency deflation.
Stability is GOOD.
The fact that bitcoin's value keeps skyrocketing proves that it is a speculative currency which is too volatile for use. The only way I would trust bitcoin for anything would be for short-term holding to transfer value from point a to b, and then convert it back into a stable currency.
The only way I would invest in Bitcoin is if I was totally okay with potentially losing every penny I invested. It could literally drop to zero tomorrow if something happened to it (like a major country making it illegal, for example).
If you buy in today and it drops to $1.7 tomorrow, do you spend or do you hope that it'll get back near $1700.00 soon? how much are you willing to do with out for how long? that's the question that volatility is constantly asking and it depresses the velocity of money, depressing whatever economy is based on it.
Suppose I get paid in BTC, and have a landlord that accepts BTC in rent. Let's say my rent is $2000/month. I get paid X amount of BTC a month for my job. If the price of BTC drops below where my X Bitcoin is not enough to pay my rent, that illustrates volatility being a bad thing.
When you sell the coin for cash you know exactly the amount you will have. Bitcoin needs a stable secondary currency or an exchange that will process the transaction immediately but sent payment at a later date.
It's kind of lost to history, but in the 1930s when Nobel Prize winner F.A Hayek was lecturing at the London School of Economics and arguing with Keynes he made some pretty good arguments against a constant increase in the quantity of currency in his critique of Keynes' Paradox of Savings: https://www.mises.org/library/hayek-paradox-saving
> The fact that bitcoin's value keeps skyrocketing proves that it is a speculative currency which is too volatile for use.
Or it shows that the market still hasn't figured out a reasonable price for it.
> It could literally drop to zero tomorrow if something happened to it (like a major country making it illegal, for example).
There are use cases for it in the illegal markets that keep it from dropping to zero IMO (holding files for ransom, moving capital out of china, buying illegal goods etc), a major fall in price is possible though.
>If I buy a loaf of bread for $1 now, I should be able to buy a loaf of bread for $1, 10 years from now.
I'm no economist, but can't it be argued that moderate inflation is a good thing? The reasoning, as I understand it, is that it maintains liquidity since the progressive loss of values nudges towards expenditure.
Inversely, massive deflation means you're "making money" just by saving it, ergo people would rather save than spend.
Again, I'm no economist, but assuming I'm not wrong in my understanding of inflation/deflation, I'm going to doubt the rest of your claims on the grounds that they smell like oversimplification.
Inflation and deflation do benefit some people, but in general it makes it more difficult to conduct business when the value of a currency is not stable.
>but can't it be argued that moderate inflation is a good thing?
Better in relation to deflation.
Money works like any other commodity; there is supply and demand. We hedge towards inflation to ensure that the currency circulates (holding it is "bad") and to ensure there is no excess demand that prevents financial transactions.
Yeah, I just opened HN to waste a few seconds and saw this on the front page and my jaw literally dropped. If all my money was invested here I couldn't imagine what I would be thinking. This currency could probably make me bipolar all by itself.
> Currency isn't SUPPOSED to be this volatile. Currency is NOT supposed to be an investment mechanism in and of itself.
Agreed.
> If I buy a loaf of bread for $1 now, I should be able to buy a loaf of bread for $1, 10 years from now.
Don't agree.
> Currency inflation is BAD, and so is currency deflation.
Don't agree.
> Stability is GOOD.
Agree. But stability doesn't mean the value of currency doesn't change, it only means the value is predictable. A currencies value need only be predictable, not stable.
Stable value of a currency is impossible, you cannot keep the loaf of break the same price over a decade and you certainly can't even attempt to do it without the power to inflate or deflate the currency.
The things you want from a currency, i.e. unchanging value without inflation or deflation is simply not possible. Wealth isn't fixed in supply, it fluctuates drastically over time and thus so much the supply of money if you want to attempt to keep the value stable and that's why we inflate the value of our money ever so slightly each year, to maintain predictable value over long periods of time while avoiding the negative feedback cycle inherent to deflating it.
We had a currency that relatively stable in supply, gold, it made a horrible currency because as wealth fluctuated in supply, and there was no ability to manage the supply of gold, the only natural thing that could happen did, the value of the gold supply fluctuated wildly, exactly what you see happening in bitcoin. If you want stable value from a currency, you need the ability to inflate and deflate it to maintain parity with the fluctuating supply of wealth in the world.
Depends on what you are doing. Is it really a currency? I dont personally treat it as such no matter what anyone says. I enjoy and profit off the volatility, at this point its impossible for me to lose any money if it crashes to zero even while I am holding botcoins. If I want "stable" I have stock market etc.
> The only way I would trust bitcoin for anything would be for short-term holding to transfer value from point a to b, and then convert it back into a stable currency.
So use Bitcoin that way yourself. And as more and more people with this mindset use Bitcoin, the price will rise due to increased demand, even if only to hold for a short duration.
Bitcoin has value because it can do things that no other money can do. It won't drop to zero because people need it for things they can't get anywhere else.
If you want money that can't be seized, can't be frozen, can't be manipulated, Bitcoin is your asset. If you want to be able to send money across continents, bitcoin is your asset. If you want to hedge against USD risk, bitcoin is a great choice (very very different fundamentals, and almost always rises with political instability). Some people want that badly enough for at least some of their portfolio that they are willing to accept the volatility risks.
The volatility is a detractor, but that definitely doesn't mean it's good only for speculation. Bitcoin keeps coming back crash after crash because there is real value in owning some.
Bitcoin certainly isn't useless, but "money" is something that is widely acceptable in exchange for goods and services. Living in the tech bubble might skew your view somewhat, but I don't think Bitcoin is more widely accepted than tons of other commodities.
bring on the downvotes, but my loaf of bread costs $2.99 now and was $1.19 twenty years ago. Why hasn't inflation affected your bread? Can I get some of your bread shipped in bulk?
Bakers have adjusted the supply of bread accordingly. If there's massive drought/volcanoes erupting/disruptive event the price of bread will likely go up.
Let's be real, the vast majority of the development into crypto currencies is due to the speculative qualities that comes from having a limited supply of coins.
Stable currencies works fine only in cases where there's significant power structures/momentum behind them. If Bitcoin didn't increase in value with increased usage, barely nobody would use it (since nobody/nothing would support it). Bitcoin had neither when it launched.
People used to say the "world is SUPPOSED to be flat."
It is natural that Bitcoin works differently than our existing notion of currency because it IS new. So when you say "Currency isn't SUPPOSED to be this volatile", that's nothing more than saying the currency you know works that way.
I also think it's inconvenient, but I don't think that's how it's "SUPPOSED" to work.
> So when you say "Currency isn't SUPPOSED to be this volatile", that's nothing more than saying the currency you know works that way.
No, the point of currency, as a medium of exchange and more particularly a unit of account, is that it should be stable (it can have a long term change trend, but it should not be volatile.)
Volatile but appreciating may be an acceptable thing in a store of value, but not a currency.
My point was that when a disruptive new idea comes along, it is natural that everything people thought they knew about something can completely change overnight.
Of course I know the qualities of a currency. But that's what we've learned in classes. But is this some absolute law of nature that's been around since the beginning of universe? No, it's just a man-made concept. And man-made concepts change along with human evolution.
You can choose to believe whatever you want, but your belief doesn't change the fact that people are actually spending bitcoins to make transactions online.
> My point was that when a disruptive new idea comes along, it is natural that everything people thought they knew about something can completely change overnight.
Volatile currency isn't a disruptive new thing; many past currencies have been volatile.
One might, perhaps, reasonably argue that Bitcoin has other features which warrant using it as a currency despite its volatility, but that volatility is bad for the purposes which define currency isn't mere conventional wisdom born from ignorance of anything different than the modern dominant forms of currency.
> Volatile currency isn't a disruptive new thing; many past currencies have been volatile.
Who said being volatile is disruptive?
> One might, perhaps, reasonably argue that Bitcoin has other features which warrant using it as a currency despite its volatility, but that volatility is bad for the purposes which define currency isn't mere conventional wisdom born from ignorance of anything different than the modern dominant forms of currency.
Like you said, "volatility is bad for the ..." doesn't make it NOT a currency. It just makes a "bad currency". Just like how being slow is bad for file downloads but people download files through Bittorrent all the time. It's "bad" in terms of "conventional wisdom", but obviously people are using it for file transfers, so you can't say it's NOT a file transfer protocol. It's just a shitty one. Except that with the shittiness it brings some novel benefits.
I was specifically criticizing your point about how it's NOT a currency. There's a difference between "it's a bad form of currency" and "it's NOT a currency". No one is godly enough to say the latter. If people buy and sell stuff using seashells then it IS a currency, you can argue it's a bad form, but you are no in place to decide whether it is or not, since it already is.
Having fun laughing all the way to the bank at idiots like you. Just as an example. I saw what Bitcoin was right way and invested a few thousand. That couple thousand has since netted me more than $200,000. I now have much more in Bitcoin than I ever put in and have withdrawn more than I put in.
Sorry, but you are naive. New things happen, nations change, "money" has not always been USD. I am having fun laughing at fools like you work your life away because you are too proud to try and understand a new paradigm.
In my early 30's I am financially secure for life, have a happy family and am working on a PhD, all because of what Bitcoin has allowed. And its still going up.
Good luck at your 9-5 and with your employee matched Roth IRA.
Bitcoin is not a "normal" currency. It's a new kind of digital asset with unique properties. It doesn't fit into the boxes you are trying to shove it into.
You may argue that it is not fulfilling the role it was intended too, but the discussion around what bitcoin is "supposed to be" is a complex one.
I suspect most Bitcoin holders view bitcoin as an investment or an asset with extrinsic value (whether consciously or subconsciously). Somewhat like what gold is.
I'd like to understand where the trade flow is coming from, it may have something to say about other, legitimate markets. That's way more interesting and valuable.
The reason BitCoin has spiked is because it is the most supported crypto currency and the easiest to get hold of when setting up your wallet with a bank or exchange.
There has been and influx of people trying to buy Etherium but first they need to buy BitCoin.
For anyone who is interested in looking at some growth data take a look at this chart showing the worldwide value transfer of Bitcoins through localbitcoins denominated in USD:
Went to a bitcoin conference recently and met a plumber who had quit his job to margin trade altcoins. I think a lot of his positions would have been wiped out in the beartrap 12 hours ago.
Of course the price of Bitcoin is going to keep rising due to the fixed amount of coins that can be mined and all the long forgotten stale accounts with coins just sitting in them. There will be a real issue with the velocity of coins exchanged decreasing over time as they're horded in this fashion.
It's amazing to me how many people on HN don't really get why Bitcoin is valuable.
The simplest way of putting it: if one doesn't believe gold is going to imminently plunge in value, then there you go. That's why Bitcoin is valuable. It's digital gold. The analogy isn't perfect, but as far as analogies go, it is a very good one.
It's not digital gold, and it has plunged in value far more dramatically than gold ever has.
That said, I don't grok the value of gold either. It doesn't have any intrinsic value, it's only valuable because people agree they need something that has value. Bitcoin is the same, except without the centuries of history of people irrationally relying on its value.
Value is socially constructed by people wanting things for complex, dynamic reasons -- it is entirely dependent on the context, which is never static. My understanding is that the concept of "intrinsic value" is flawed and leads people astray. Gold has strong money like properties [0], which is why it has remained valuable for so long (ornamental and industrial usage are a small fraction). Bitcoin has all of these properties as well (perhaps with minor caveats about fungibility), plus some of the very interesting benefits that come from being digital. Being digital brings a few negatives as well, but it seems the positives more than compensate.
There are other considerations -- gold is found in the ground and has limited alternatives (platinum and silver, for example), while anyone can create their own cryptocurrency. It appears to me that the huge network effects, first mover advantage, and the principle of "well, it's good enough" are very important dynamics that counteract the near infinite possible competitors.
[0] Recognizable, durable, fungible/uniform, and very hard to counterfeit. Two other big ones are portability and divisibility, which it's alright at.
Intrinsic value is a real thing. Land has it. Labour has it. Companies and machinery do. Anything that can produce useful things. And of course the useful things themselves.
The real reason for the value of currencies is not the gold backing up that currency, but the economy backing it up. And when that economy goes down, so does the currency. And that's the problem with bitcoin and other cryptocurrencies: they only have value when people accept them as payment for something valuable. Without that, they are worthless, as shown by both the history of bitcoins and other cryptocurrencies, and by the fact that anyone can make a cryptocurrency.
Bitcoin works as long as there are enough people who have faith in it, and as long as there are a lot of people accepting it as payment. But when nobody accepts it because nobody trusts it, then bitcoin is worthless. Trust is the only thing it's based on.
Of course being able to pay digitally is tremendously useful, but you don't need bitcoin for that.
> Intrinsic value is a real thing. Land has it. Labour has it. Companies and machinery do. Anything that can produce useful things. And of course the useful things themselves.
These things all have value but that value is not static or independent of the context. The word intrinsic implies otherwise, which is problematic.
Valuable beach front property may become essentially worthless if the sea level rises and the area becomes flooded. Varieties of labor can become mostly irrelevant (and thus much less valuable) if technology
provides a more effective solution.
> Trust is the only thing it's based on.
People trust bitcoin as the protocol and immutability of its ledger have proven to be impressively reliable, to name a few reasons. It isn't blind trust.
Of course, it is an open question to see how this will play out in the future. But the bitcoin experiment has been quite successful so far.
It's not just Bitcoin. I see most cryptocurrencies going up in recent months. Probably people and organizations pouring money from other assets into cryptocurrencies, as these are not taxed and not subject to state/central bank control.
For speculation on short term direction, current price of BTC which is above $1,750 is a SELL. This move is parabolic and looks to be complete. I'd put a stop loss for a short trade at $1,875.
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[ 71.6 ms ] story [ 261 ms ] threadStill paid nicely for a lavish time in college though.
I don't know if BTC will reach $100k or even $1m - it depends on how the rest of the financial industry treats it - or if there's a mass ditching of BTC for ETH or possibly even a bank-controlled blockchain.
BTC has one hurdle coming up: the darknets - the original populizers of BTC - are switching to Monero due to its increased privacy protections.
I can move money for free between my bank accounts and the money is settled in three days. I can pay friends for free with venmo and it settles likewise.
Bitcoin needs to become significantly faster and cheaper, since there's nothing holding back the competition from getting more efficient from self-imposed limits.
Because they're confusing theoretical transaction costs with reality. This isn't an insurmountable technical limitation; this is a political issue within the miner community.
I know for certain it's very fast (around a minute, but the guaranteed time is <2 hours) for the UK, Denmark and Sweden. I think Norway and Finland have similar systems.
The British system is called Faster Payments: http://www.fasterpayments.org.uk/about-us — I doubt the others have easily accessible information in English.
[1] https://www.nfcworld.com/2017/01/11/349411/european-central-...
Seems like it. France and Austria, in my case. If I pass a transfer in my French online banking system in the afternoon, my bank even tells me outright that it won't be processed until 8 o'clock the next morning (until which time I can undo it). It's then deducted from my account at that time, and the day after that the receiver sees the payment in their online banking as "you will be getting this money, but you don't have it yet, it's being processed".
> EU is aiming for these systems to be available
Well... it's "encouraging" providers to do it. Not holding my breath ;-)
There's a mobile phone-base service, called PayM [1], which uses Faster Payments. I don't think it's used much, but the systems in Sweden (Swish) and Denmark (Mobilepay) are pretty much the same and are used a lot, probably the majority of payments to friends, and at least 25% of payments to small businesses.
[0] http://www.halifax.co.uk/onlinebankinghelp/fasterpayments.as...
[1] http://www.paym.co.uk/ or http://www.halifax.co.uk/aboutonline/things-you-can-do/pay-a...
Of course, for every Bitcoin, there's a million stupid schemes that don't work out, and it's hard to tell them apart.
A couple years later that $5 had grown to become worth $200, so I again spent it on a couple stupid things.
I would be mad, but it was in my MtGox account anyway.
$1000 => $2.8M
:'(
The mods didn't like it and deleted my thread saying that the whole Bitcoin thing sounded a bit scammy :D
Is it safe to say "Coinbase is the iPod of Bitcoin"? That's what it feels like.
I'd advise anyone thinking of purchasing Bitcoin through Coinbase to take a look at /r/coinbase. Their support is pretty much non-existent.
Edit: Not only is support non-existent, people are having problems accessing their funds, getting charged different amounts than what they agree to when buying... It's feeling like MtGOX all over again.
Coinbase isn't perfect but 99% of the problems people have with them are due to KYC/AML. That, or they're shocked (indignant!) that they have to pay taxes on capital gains.
Really? This is Apple's business model (you know, the biggest company in the world). This is what I've built my career around (UX designer).
If I create a krisCoin with 1 million total coins and sell 1 kCoin to you for $10 the market cap of krisCoin is suddenly $10 million.
(https://www.reddit.com/r/BitcoinMarkets/comments/6a24et/if_p...)
In any case, if the courts recognize that he can pay back in BTC, and he has enough BTC to do so, then I don't see why it's contingent on the BTC price. He could do it today.
Any evidence of the # of coins lost forever? I know I had one or two from the early days that got forgotten and lost with a hard drive wipe.
Also, do BTC disappearing from circulation affect the currency differently than a fiat currency?
That seems to be a mistake in the article. $52 billion market cap is of all currently tracked cryptocurrencies, not just bitcoin.[1] Bitcoin is ~$28.7 billion right now.[2]
[1]: https://coinmarketcap.com/charts/
[2]: https://coinmarketcap.com/currencies/bitcoin/
[1]: https://blog.sia.tech/want-to-deflate-the-token-bubble-fix-t...
As for lost coins, we can only guess. Much of this depends on whether you think the coins mined very early on by Satoshi are lost forever, or could come back into play. There's very roughly 1 million 'Satoshi Coins'. I'd estimate about another 500,000 that are lost on discarded hard-drives and whatnot. 1-2 million coins seems reasonable.
The only ones we know for sure are ones sent to 'Bitcoin Eater' addresses. Example: https://blockchain.info/address/1BitcoinEaterAddressDontSend... IIRC there are perhaps a few hundred lost in that way.
Unfortunately I was broke in school so bought and sold only a few coins. Asked my lawyer dad for money, he laughed, just as all my Wharton finance friends did.
https://www.scribd.com/document/86764784/Diepenbrock-Bitcoin...
[1] http://www.cnbc.com/2017/04/26/bitcoin-price-sec-winklevoss-... [2] http://www.cnbc.com/2017/04/12/bitcoin-price-rises-japan-rus...
For one thing, a lot of those tokens are either centralized or represent products that don't even exist.
For another, they are over-counted. Imagine the thought experiment: I create a new eth token and sell a bunch, pumping the market cap of my new asset to $100M. That eth that was paid for my asset was not sold - I'm still holding onto it.
Now I've just added $100M+ to the 'dominance' factor by doing nothing. People bought my token, and maybe even bought eth to buy my token, with no sell pressure being added anywhere in the eth ecosystem. This extra dominance was just sort of poofed out of nowhere.
So, 55% is not really as meaningful as some people ascribe.
Do you think there could be any other metrics that can tell a better story? (serious question, just wondering what your thoughts are)
The future looks bright for cryptocurrencies, but I don't want to buy some at 1700 and feel like a fool when it crashes back down to 1100
Its value only comes from the trust people put in it, and from nothing else. If that trust evaporates, so does the value.
if you really believe it will go up, why not buy when you think the chart looks good and move your stops up as it increases? your position sizing algorithm and exit strategy should allow you to capture some of that profit and protect yourself from a large correction
At this point, I speculate that any correction would start with a trigger on the major coins, like frustration over the Bitcoin fees and transaction delays, a bug in the segwit implementation for Litecoin or a false flagged segwit activation from a malicious miner, or some major exchange (like Coinbase) loses user coins. Even just Bitcoin not receiving the ETF would cause investors to second-guess themselves.
Historically, a lot of this activity tends to be from unregulated exchanges in Asia, many of whom could be engaging in some form of price manipulation (it wouldn't be the first time - google for Willy Bot). My Bitcoin friends in town have started to joke that the reason it's going up is just the word "China", because it tends to be a repeated explanation of why the price is increasing, suggesting to me that nobody really knows what's going on or even where the demand is coming from.
I'm not anti-bitcoin, but I'd vastly prefer to see a slow, stable increase in price based on the currency improving in utility, not these giant blasts of speculation that, IMHO, only work to discredit Bitcoin as a serious instrument for financial systems. An extreme example of how bad this is getting right now that I seriously hope is just a joke: https://np.reddit.com/r/Bitcoin/comments/6a3lvd/today_i_took...
If it becomes worth it to break bitcoin, these vulnerabilities will be used, discovered faster, and likely won't be published before someone uses it to profit off Bitcoin and crashing the price.
Bitcoin is priced this high because uneducated people expect it to replace paypal and credit cards but it will never be able to because 1 transaction take 30+ minutes and that is by design. The faster they make transactions take, the higher chance of forgery. Other crypto-currencies that attempt to have faster transactions are simply trading safety for speed.
With bitcoin the ~10m+ tx time is a cost, but is in material if you are dealing with either a trusted party or a small amount of $
Customers don't care how long a transaction takes for the merchant.
Have you ever tried selling anything for bitcoin? Nearly no one will use it even when being told of all the "benefits". They don't want to wait 30+ minutes. When they see they need to give some exchange a scan of their passport and wait 3-5 days to link their bank account, and losing the ability to do a chargeback, they never think about using Bitcoin again.
The current story for bitcoin is pretty sad, largely due to slow adoption and not much of a good story for consumers.
The good thing is that bitcoin doesn't have to compete directly with CC companies. There are cases that it solves that CC companies aren't interested in.
There's all this concern about price volatility and tx rate, but it's been used continuously in spite of price volatility, and saying no one wants to use bitcoin because there's too many outstanding bitcoin transactions just isn't a serious argument.
I care about bitcoin because it is an interesting piece of technology that enables things that weren't possible before. I'll hold bitcoin so long as they don't go to zero, none of the concerns listed about bitcoin that I have heard are serious arguments on why it might go to zero, so I'll hold.
Current CC companies are essentially two products. One is the transaction processing side of things, and the other is the financial + insurance product which protects both parties from fraud, chargebacks etc. Crypto currencies should be able to make transaction processing effectively free. All you need is an insurance product that operates at margins lower than 2-3% (current credit cards).
So then don't use the bare blockchain for transactions.
There is always inherent distrust when money is involved. Hence the ability to charge back a fraudster. Unless of course you deal with a "trusted party" but then the chargeback argument is immaterial, it doesn't matter whether transaction is bitcoin or credit card.
Now as for settlement times, sure banks are catching up. Faster is not always better. It always leaves room for fraud. Banks are distrustful on behalf of their account holders. So a particular merchant's bank is not going directly to the customer's bank and demand money. They go to an exchange to ask for a debit and credit. This takes time.
Currently bitcoin takes 10m for how many transactions per minute? If we were to talk billions of transactions (not money but actual transactions) flowing through a payment processor and calculate the scale of bitcoin - how much time are we talking about?
This hasn't been true since about 2013. Altcoins don't just twiddle the parameters of BTC anymore. They're all over the place in terms of what algorithms they use, and many of them are clearly better. A lot of what Bitcoin has going for it is inertia, network effects, and price stability. (Yes, compared to alts, Bitcoin is considered stable.)
But the underlying principal is the same. You require participants to spend X time in a problem with no shortcuts. Changing the problem does not allow you to bypass this issue. If you choose a problem that requires less time to calculate, you increase the probability that someone spams the network with fake data.
https://en.wikipedia.org/wiki/Proof-of-work_system
You either have a centralized system that can cheaply tell you if something is legitimate, otherwise this is the only way to protect a decentralized system. To my knowledge, there is no altcoin with any significant amount of use that does not use this principal. Please tell me which altcoins do not use this principal.
No you just decrease the faith you can put into each confirmation.
> You either have a centralized system that can cheaply tell you if something is legitimate, otherwise this is the only way to protect a decentralized system.
There are some interesting efforts to create systems that work in complement to the main block chain.
One complimentary idea is the lightening network which functions by creating channels that only transact of bitcoins that are currently locked out of the bitcoin system. This eliminates the potential for double spending these bitcoins in a tx with a third party. Once you eliminate the potential for double spending you can do just about whatever you want quickly and off chain. The system is set up to be able to be able to resolve all of the txs that happened off chain when the locked up bitcoins are unlocked.
Once many of these channels are established you can start to establish a connection. For instance if I have 12 bitcoins in my own wallet I might keep ~1 BTC locked up to a connection to coinbase. From there they may charge a fraction of what the on chain cost for any tx would be. It'd take a regular on chain fee to establish the connnection, but once it is up the fee and latency should drop dramatically.
This is old news and all you are doing is giving up decentralization to coinbase. The alternative is opening a "lightning channel" to every store which in this case does not solve the slow transaction problem.
Ripple, which currently has a market cap of $6.4B USD and $223M USD in 24-hour trading volume, making it the third largest after briefly passing Ethereum for #2 yesterday.
From Satoshi's post on BitcoinTalk: https://bitcointalk.org/index.php?topic=360.msg3520#msg3520
Say whatever flaw allows the attacker to extract value somehow. In that case, the value of the flaw is whatever they can extract before getting noticed. And it's illegal.
Say it just makes bitcoin not trustworthy in an obvious way. In that case, the value probably depends on trying to blackmail the big miners. But it's hard to blackmail them without letting them know that you are going to destroy their business. Illegal and probably otherwise dangerous.
Extracting value gets easier if bitcoin are worth more, but people also start paying more attention to smaller amounts of bitcoin.
The first blockchain currency that corrects the unreasonable value gained simply because of demand (via redistribution?), will be the blockchain that wins the whole market.
The same with future non-utility - oil price is dropping because everybody knows that Saudi (and the rest) sit atop a sea of oil which is not as needed anymore (solar, electric cars, ...)
Except that it isn't, really. Looking at the data at http://www.wolframalpha.com/input/?i=oil+price , it has been fairly constant over the last two years. It did go down by 50% over the second half of 2014 but hasn't made dramatic moves since. If Tesla hype had anything to do with the oil price, it should have moved.
Bitcoin is an easy, hard to trace way for them to convert RMB to USD.
It was only the surge to 1500 that finally broke out of the channel, and we're seeing typical channel breakout price action. We will test the previous upper bound to see whether the price will stay outside the channel or not. This would be a crash back below $1500 at this point.
Think about utility from this angle: 300k transactions per day are willing to pay the fees to get into the blockchain. Higher fees necessarily crowd out lower-value use cases for bitcoin. This means that bitcoin remains useful for ever-higher value transactions, which continue to find utility in the coin.
The Reddit post about the home equity loan is a sure sign of the top. Of course this sort of investment folly is not unique to the crypto world.
So is crime really going to be the only valid use case for Bitcoin?
Think about this: with bitcoin, you have a highly-secure, trustless, immutable distributed ledger that anyone can pay a fee to get in to, with no restrictions. Let's say we take a hash of a huge Wall Street swap contract worth $100M and embed that hash in the blockchain. Now both parties can verify the integrity of the contract without involving lawyers or governments, and nobody else knows any better than "there is 32 bytes in the blockchain." How much is it worth to those parties to verify that contract?
How about this one: I'm a wealthy businessman in China, and I don't like how the economy feels. My government imposes strict limits on how much foreign investment I can do, since the state and the banks are in partnership. I can use bitcoin to move money across the imaginary borders imposed by governments, even if I trade it back for dollars as soon as it moves out of China.
Or maybe you're a gold bug, but you want something that's actually useful ;-) It's very hard to spend gold or move it around.
What about the global foreign exchange markets? Companies are moving trillions of dollars daily through the interbank network. There are fees and counterparty risks associated with those moves, especially if you're doing business in a developing country. Bitcoin may eliminate some of those risks. And the fees are agnostic to the transaction value, which is why high-value use cases crowd out low-value ones. I pay the same fee whether I'm transferring $1 or $1M.
I'm not entirely sure what the point is of your first example. How will bitcoin help to varify the integrity of a contract without lawyers? If it's a contract, you still need lawyers to interpret it (if it's complex enough to require lawyers) and a government to enforce it. Without that, it's an agreement, not a contract. Maybe I don't get it, but I don't see what it has to do with bitcoin.
The second one is an example of crime. You may think that this shouldn't be illegal, and it certainly seems victimless, but it's still a way to circumvent the law.
As for more useful than gold, that depends a lot on context. Both of them only have value because of the trust people put in them, but at the moment, a lot more people trust gold than bitcoin, which means gold's value is far less volatile than that of bitcoin.
Companies and banks certainly move enormous amounts of money, but if they move bitcoin instead, they still need to convert it to money somehow. And companies don't really need the anonymous and decentralized features of bitcoin, unless they are trying to circumvent the law.
So I'm still doubtful about the usefulness of bitcoin in the face of these higher fees. Except for criminal/illegal transactions, where the use case is fairly obvious.
Don't get me wrong; I would like bitcoin to be a good idea, and I used to believe in it, but I've lost my trust in it.
> I'm not entirely sure what the point is of your first example.
Contract integrity in my case is the cryptographic hash of the contract document. Neither party can tamper with the document's wording and maintain cryptographic integrity. As for enforcement, there are "smart contract" features enabled by the Bitcoin scripting system that do not require lawyers or governments for enforcement. These are more interesting to me than simple transfers of value.
> a lot more people trust gold than bitcoin, which means gold's value is far less volatile
Yes. The deeper a market, the less volatile.
> The second one is an example of crime. ... unless they are trying to circumvent the law .. Except for criminal/illegal transactions, where the use case is fairly obvious.
Quite a stickler for money transmission laws, aren't you? What does it matter to you if someone wants to move money across a border? Do you think those laws make any sense?
> So I'm still doubtful about the usefulness of bitcoin in the face of these higher fees.
Yet the system continues to process >300k transactions per day. And users continue to pay the higher fees. So maybe you are priced out of the system but many others continue to see utility in using bitcoin.
> I've lost my trust in it.
The bitcoin system has operated with almost perfect uptime for nine years. It has never been fundamentally compromised. It has never censored economic activity or blacklisted "dirty" coins. It is not susceptible to coercion or corruption. There are no haircuts, bail-ins, or bail-outs. It does not impose imaginary barriers on the free flow of value. Yes, the exchange rate fluctuates, but the underlying technology is far more reliable than the banks and governments when it comes to money.
If you then say: yeah, that's the point, then you confirm that circumventing law is indeed the purpose.
By all means argue that those laws don't make sense. I won't disagree with you. But then you are confirming that circumventing the law is an advantage of bitcoin. And I'm arguing it might be the only true advantage.
To refute a few of the other advantages you're claiming:
> By trustless, I mean that you can verify that you control your coins without having to trust anyone else. This is as opposed to the banks that wink and say, "trust us, your money is safe."
But this is no different from normal money. If you keep that entirely in your own control, it's just as safe. But if you keep your bitcoins in MtGox, they're significantly less safe than in a bank.
> Yet the system continues to process >300k transactions per day. And users continue to pay the higher fees. So maybe you are priced out of the system but many others continue to see utility in using bitcoin.
Absolutely. But do you have any data on who those others are, and what they use it for? The fact that you can be priced out of the system when it becomes popular, seriously reduces its usefulness to a lot of people. Those who stay in the face of rising prices, will be those who can afford the fees, people for whom the stakes of that transaction are high enough, and for whom the benefits of bitcoin outweigh the costs.
Everything still sounds like money laundering and other criminal transactions might be the most important killer application of bitcoin. It would be different if it was actually far and cheap to use, but for most people, regular bank transactions are far more effective.
It's a reassuring change of pace. I think it's a combination of some people realizing that you can do a LOT with 3 tps (the global gold market is far less than that), and also of many people realizing that Bitcoin's incentive structures protect it even in the face of a miner with >50% hashrate. (Mining costs hundreds of millions in electricity, and hardware costs hundreds of millions as well. If the miners become malicious, either users will hardfork or leave, and those hundreds of millions suddenly can't be recovered by mining a now devalued asset).
And, externally, I think more people are starting to understand the whole decentralization thing. Bitcoin is extremely powerful in that:
It's very difficult to censor transactions
It's very difficult to seize money
There is full immunity to hyperinflation
Nobody controls it. Not the devs (segwit wouldn't be struggling if they did), not the miners (we'd have 2MB or 8MB blocks if they did), not the regulators (drug markets wouldn't be so pervasive if they did). That's powerful, and Bitcoin is basically the only option if you want a money where some central authority (be it the Etherum foundation or the federal reserve) can't decide to enforce some new rule that you aren't expecting and aren't okay with.
No other money can make these claims.
Don't even get me started on segwit.
PS: Hi Clark! Been a while.
We'll see what Litecoin does when SegWit activates tomorrow!
The Bitcoin-as-gold vision is the current de facto situation (vs Bitcoin as coffee payment system). The scaling issues are really a simplistic way to explain the conflict between this two visions (worth mentioning that the block size increase, another simplification, won't solve either in mid/long term)
Also, improving utility is subjective in this case. Bitcoin is a not a product or service in the traditional way: it does not have to serve all the users, there's no clients as such, there's no companies to sell the 'product' to. Its roots are real financial disruption, not another payment network.
People holding it want the price of it to go as high as possible. There is no incentive to have a stable currency when people are still wanting to buy into the hype and liquidity is still there to dump it.
I don't think it is a true Ponzi scheme but I definitely think people mistreat it.
It's only ponzi-esque if each person just expects the next one to pay more than the last, with no value-added at any point in the process.
> IMHO, Bitcoin is a more brilliant scam than GP gives it credit for. It was a scam that was designed to end up not a scam. IIRC, Bitcoin being a pyramid scheme was explicitly stated in the original design doc from Satoshi. The problem was that even though bitcoin could work well once it was widely adopted, it had a chicken-egg problem in the beginning. It had no value until it was widely adopted, but no rational person would adopt it until it had value.
> The solution was to prime the pump with a pyramid scheme. By structuring the system to highly reward risk-taking early adopters, Bitcoin motivated millions of dollars of high-risk early investment which is worth billions today.
> But, return on investment was only a nice side effect on the way to the end game. The end game was to get Bitcoin up and running as an exchange medium --only coincidentally as an investment vehicle. As an exchange medium, Bitcoin is not yet 100% solid. But, in general the plan has already worked. Someone in Haiti can exchange value with someone in the Ukraine and for once there is little that the games of the politicians or the banks can do to stand in their way. That was the real goal. A bunch of nerds gambling was just a necessary bit of fun on the way to setting that up.
The early adopters are paid profits based on new "clients" incoming funds, who then sell to even newer "clients". A ponzi relies on the greater fool.
I doubt Bitcoin is a Ponzi, but of all the things people call a Ponzi scheme nowadays, it's a reasonable analogy.
I believe MMM is the most popular Ponzi scheme at the moment after being revived. This is what a 21st century Ponzi scheme looks like:
https://mmmglobal.org/ (Warning: real operating Ponzi scheme)
The challenge will be finding a counterparty. But look at The Big Short; they're out there.
How many crashes did the tulip price recover from during this period?
Did the tulips have a well known price before speculation started?
Currency is NOT supposed to be an investment mechanism in and of itself.
If I buy a loaf of bread for $1 now, I should be able to buy a loaf of bread for $1, 10 years from now.
Currency inflation is BAD, and so is currency deflation.
Stability is GOOD.
The fact that bitcoin's value keeps skyrocketing proves that it is a speculative currency which is too volatile for use. The only way I would trust bitcoin for anything would be for short-term holding to transfer value from point a to b, and then convert it back into a stable currency.
The only way I would invest in Bitcoin is if I was totally okay with potentially losing every penny I invested. It could literally drop to zero tomorrow if something happened to it (like a major country making it illegal, for example).
It doesn't seem that obvious to me. Every time price stability is forced onto something, it just destroyed its market.
It's self-evident that a stable currency is preferable to volatile, though I'm interested in reading an argument to the contrary.
volatile: liability to change rapidly and unpredictably, especially for the worse.
stable: not likely to change or fail; firmly established.
Or it shows that the market still hasn't figured out a reasonable price for it.
> It could literally drop to zero tomorrow if something happened to it (like a major country making it illegal, for example).
There are use cases for it in the illegal markets that keep it from dropping to zero IMO (holding files for ransom, moving capital out of china, buying illegal goods etc), a major fall in price is possible though.
I'm no economist, but can't it be argued that moderate inflation is a good thing? The reasoning, as I understand it, is that it maintains liquidity since the progressive loss of values nudges towards expenditure.
Inversely, massive deflation means you're "making money" just by saving it, ergo people would rather save than spend.
Again, I'm no economist, but assuming I'm not wrong in my understanding of inflation/deflation, I'm going to doubt the rest of your claims on the grounds that they smell like oversimplification.
Better in relation to deflation.
Money works like any other commodity; there is supply and demand. We hedge towards inflation to ensure that the currency circulates (holding it is "bad") and to ensure there is no excess demand that prevents financial transactions.
Agreed.
> If I buy a loaf of bread for $1 now, I should be able to buy a loaf of bread for $1, 10 years from now.
Don't agree.
> Currency inflation is BAD, and so is currency deflation.
Don't agree.
> Stability is GOOD.
Agree. But stability doesn't mean the value of currency doesn't change, it only means the value is predictable. A currencies value need only be predictable, not stable.
Stable value of a currency is impossible, you cannot keep the loaf of break the same price over a decade and you certainly can't even attempt to do it without the power to inflate or deflate the currency.
The things you want from a currency, i.e. unchanging value without inflation or deflation is simply not possible. Wealth isn't fixed in supply, it fluctuates drastically over time and thus so much the supply of money if you want to attempt to keep the value stable and that's why we inflate the value of our money ever so slightly each year, to maintain predictable value over long periods of time while avoiding the negative feedback cycle inherent to deflating it.
We had a currency that relatively stable in supply, gold, it made a horrible currency because as wealth fluctuated in supply, and there was no ability to manage the supply of gold, the only natural thing that could happen did, the value of the gold supply fluctuated wildly, exactly what you see happening in bitcoin. If you want stable value from a currency, you need the ability to inflate and deflate it to maintain parity with the fluctuating supply of wealth in the world.
Yeah, nobody is using Bitcoin...
> The only way I would trust bitcoin for anything would be for short-term holding to transfer value from point a to b, and then convert it back into a stable currency.
So use Bitcoin that way yourself. And as more and more people with this mindset use Bitcoin, the price will rise due to increased demand, even if only to hold for a short duration.
If you want money that can't be seized, can't be frozen, can't be manipulated, Bitcoin is your asset. If you want to be able to send money across continents, bitcoin is your asset. If you want to hedge against USD risk, bitcoin is a great choice (very very different fundamentals, and almost always rises with political instability). Some people want that badly enough for at least some of their portfolio that they are willing to accept the volatility risks.
The volatility is a detractor, but that definitely doesn't mean it's good only for speculation. Bitcoin keeps coming back crash after crash because there is real value in owning some.
Bitcoin certainly isn't useless, but "money" is something that is widely acceptable in exchange for goods and services. Living in the tech bubble might skew your view somewhat, but I don't think Bitcoin is more widely accepted than tons of other commodities.
Let's be real, the vast majority of the development into crypto currencies is due to the speculative qualities that comes from having a limited supply of coins.
Stable currencies works fine only in cases where there's significant power structures/momentum behind them. If Bitcoin didn't increase in value with increased usage, barely nobody would use it (since nobody/nothing would support it). Bitcoin had neither when it launched.
It is natural that Bitcoin works differently than our existing notion of currency because it IS new. So when you say "Currency isn't SUPPOSED to be this volatile", that's nothing more than saying the currency you know works that way.
I also think it's inconvenient, but I don't think that's how it's "SUPPOSED" to work.
No, the point of currency, as a medium of exchange and more particularly a unit of account, is that it should be stable (it can have a long term change trend, but it should not be volatile.)
Volatile but appreciating may be an acceptable thing in a store of value, but not a currency.
Of course I know the qualities of a currency. But that's what we've learned in classes. But is this some absolute law of nature that's been around since the beginning of universe? No, it's just a man-made concept. And man-made concepts change along with human evolution.
You can choose to believe whatever you want, but your belief doesn't change the fact that people are actually spending bitcoins to make transactions online.
Volatile currency isn't a disruptive new thing; many past currencies have been volatile.
One might, perhaps, reasonably argue that Bitcoin has other features which warrant using it as a currency despite its volatility, but that volatility is bad for the purposes which define currency isn't mere conventional wisdom born from ignorance of anything different than the modern dominant forms of currency.
Who said being volatile is disruptive?
> One might, perhaps, reasonably argue that Bitcoin has other features which warrant using it as a currency despite its volatility, but that volatility is bad for the purposes which define currency isn't mere conventional wisdom born from ignorance of anything different than the modern dominant forms of currency.
Like you said, "volatility is bad for the ..." doesn't make it NOT a currency. It just makes a "bad currency". Just like how being slow is bad for file downloads but people download files through Bittorrent all the time. It's "bad" in terms of "conventional wisdom", but obviously people are using it for file transfers, so you can't say it's NOT a file transfer protocol. It's just a shitty one. Except that with the shittiness it brings some novel benefits.
I was specifically criticizing your point about how it's NOT a currency. There's a difference between "it's a bad form of currency" and "it's NOT a currency". No one is godly enough to say the latter. If people buy and sell stuff using seashells then it IS a currency, you can argue it's a bad form, but you are no in place to decide whether it is or not, since it already is.
Sorry, but you are naive. New things happen, nations change, "money" has not always been USD. I am having fun laughing at fools like you work your life away because you are too proud to try and understand a new paradigm.
In my early 30's I am financially secure for life, have a happy family and am working on a PhD, all because of what Bitcoin has allowed. And its still going up.
Good luck at your 9-5 and with your employee matched Roth IRA.
You may argue that it is not fulfilling the role it was intended too, but the discussion around what bitcoin is "supposed to be" is a complex one.
There has been and influx of people trying to buy Etherium but first they need to buy BitCoin.
https://coin.dance/volume/localbitcoins
The simplest way of putting it: if one doesn't believe gold is going to imminently plunge in value, then there you go. That's why Bitcoin is valuable. It's digital gold. The analogy isn't perfect, but as far as analogies go, it is a very good one.
That said, I don't grok the value of gold either. It doesn't have any intrinsic value, it's only valuable because people agree they need something that has value. Bitcoin is the same, except without the centuries of history of people irrationally relying on its value.
There are other considerations -- gold is found in the ground and has limited alternatives (platinum and silver, for example), while anyone can create their own cryptocurrency. It appears to me that the huge network effects, first mover advantage, and the principle of "well, it's good enough" are very important dynamics that counteract the near infinite possible competitors.
[0] Recognizable, durable, fungible/uniform, and very hard to counterfeit. Two other big ones are portability and divisibility, which it's alright at.
The real reason for the value of currencies is not the gold backing up that currency, but the economy backing it up. And when that economy goes down, so does the currency. And that's the problem with bitcoin and other cryptocurrencies: they only have value when people accept them as payment for something valuable. Without that, they are worthless, as shown by both the history of bitcoins and other cryptocurrencies, and by the fact that anyone can make a cryptocurrency.
Bitcoin works as long as there are enough people who have faith in it, and as long as there are a lot of people accepting it as payment. But when nobody accepts it because nobody trusts it, then bitcoin is worthless. Trust is the only thing it's based on.
Of course being able to pay digitally is tremendously useful, but you don't need bitcoin for that.
> Intrinsic value is a real thing. Land has it. Labour has it. Companies and machinery do. Anything that can produce useful things. And of course the useful things themselves.
These things all have value but that value is not static or independent of the context. The word intrinsic implies otherwise, which is problematic.
Valuable beach front property may become essentially worthless if the sea level rises and the area becomes flooded. Varieties of labor can become mostly irrelevant (and thus much less valuable) if technology provides a more effective solution.
> Trust is the only thing it's based on.
People trust bitcoin as the protocol and immutability of its ledger have proven to be impressively reliable, to name a few reasons. It isn't blind trust.
Of course, it is an open question to see how this will play out in the future. But the bitcoin experiment has been quite successful so far.