Ask HN: Why is Bitcoin suddenly so popular?
Taking a look below at price, you can see that 1 bitcoin is worth around $4400 US dollars.
https://www.coindesk.com/price/
I remember a time when they were giving out free bitcoin at hackathons and conferences etc.
For a casual outsider and a passive market speculator, whats going on with bitcoin and maybe the rest of cryptocurrencies, what are they seeing that we can't?
And any clues as to whats with the recent surge in East Asian interest of bitcoin?
https://www.coindesk.com/annyeong-bitcoin-south-korea-canada-changing-crypto-market/
Note that I've tried googling but a lot of the urls are before May 2017 and are trying to explain about Bitcoin's peak at ~$2000 which is not helpful much.
64 comments
[ 2.8 ms ] story [ 112 ms ] threadNote the actual comment I'm responding to:
> The more people that are willing to accept Bitcoin in exchange for goods and services, the more valuable Bitcoin is.
Approximately nobody accepts Bitcoin in exchange for goods and services except to buy drugs. Which does count as a use case, but it's a trivial one compared to the speculation; and even drug buyers and sellers are endlessly frustrated by the transaction clogs.
The price was actually comparatively low as of Q1 2017
Wallet activity continues to grow
[1]:https://blockchain.info/charts/n-transactions?timespan=all
[2]:https://blockchain.info/charts/n-unique-addresses?timespan=a...
I think Ethereum has come up with a novel use case for Blockchain as a distributed computer (as opposed to merely a distributed ledger). And all the alternative cryptos are trying to show that there are use cases for other protocols, too.
So the competition, the tooling, the ecosystem, all of these are exploding right now. There's a lot of money pouring in, developers are getting excited about it...It feels like a new paradigm, distributed apps have some exciting implications. No one knows what this will look like, but it feels a bit like the early dot com era right now.
In fact one bitcoin is worth almost 6 HTC Vives. I'd argue that there was even bigger interest in VR than Bitcoin specifically and yet Bitcoin has emerged the winner recently.
Crypto is an investment that provides yield at a point in time where very little can be found, equity markets are overvalued according to many indicators and an increasingly wealthy population in China is seeking investment opportunities not associated with the Yuan that they can't get in any other form.
Crypto has the potential (however likely you think) to completely redefine the world economy via decentralization. A decentralized, unregulated currency that doesn't require intermediaries and can rapidly transfer and store massive amounts of value with relatively limited transaction fees is unprecedented. VR by comparison is largely a mere iteration on existing entertainment systems right now.
Daimler for example is currently using Blockchain to manage a 100 million Euro loan [1]. They will still use their old tech (faxes and lots of beaurocracy) in parallel on this deal since is there is much at stake, obviously. But it is a nice experiment that will certainly inspire others, if successful.
[1] https://www.daimler.com/investors/refinancing/blockchain.htm...
> Joint pilot project
The surge becomes self-sustaining, in that as news stories of easy wealth spread and more speculators bundle into the market, it fuels more demand from new participants looking to get rich quick. This is not sustainable in the long run, and as soon as the crowd gets spooked all the dumb money will bail out very quickly, leading to a very fast crash.
The Gladwell book "The Tipping Point" is a good read about how ideas and fads take hold in societies. It's more a function of the way information spreads than about any secret knowledge about Bitcoin. Nobody can predict the future, but Bitcoin speculation is an attempt to gamble on it.
There's an investment adage that's something like "When your barista's telling you to invest in something, it's time to get out". Have had a number of non-tech/non-finance friends ask about how to invest money into Bitcoin lately, which is a signal to me that Bitcoin is becoming dangerously overheated.
Take a look at http://static4.businessinsider.com/image/515b40886bb3f7bd490... from the South China Seas bubble in the 18th Century. The first half of that curve look familiar? Guessing we will see a lot of Newtons in the not so distant future...
(Still, I have some crypto as part of my investment portfolio, about 2% of my net worth... you never know...)
We're talking about the rise of a self-contained, decentralised currency and transactional system, all rolled into one. It literally has blatant potential to be a game changer, 100%.
In saying that, I wouldn't be surprised if it all falls apart in the short term.
Few revolutiinary technologies generate sizeable returns overall. Railroads and airplanes are a classic example of technologies that changed the world and produced poor-to-negative returns.
Time and time again some financial instrument has become unmoored from it's intrinsic value and lax regulation allows speculative money to pour in, some early adopters get rich, the financially naive jump on the bandwagon without understanding the underlying instruments, they get spooked and the entire thing plummets back to it's fundamental value (which may well be zero) leaving some with fortunes and some with nothing. Bubbles appear to be a natural occurrence in a lightly regulated market economy and typically follow a very similar pattern.
I think that Bitcoin can be both a speculative bubble and a potentially world-changing technology. The dotcom bubble is a fine prior example - huge classic speculative bubble, also radically changed how we are all now living.
I don't think shininess counts.
For BTC this would be the value as a payment network and a means of facilitating transactions. Its value as an investment would not count.
Why not?
Gold is often used as a comparison, but gold doesn't generate anything either. And gold will generally lose value compared to an investment in a productive asset.
And I don’t understand why we have this gold comparison. Compared to a productive asset, gold won’t be generating any value. But gold’s value in the first world is at least somewhat in lockstep with inflation, where Bitcoin is all over the place and can’t be used as a hedge like gold can.
First time round I got into Bitcoin and was able to time the peak right (by luck) and made enough for a few nice dinners, should've held onto them though.
This time my strategy is just to buy and hold - my hypothesis being that there is a small chance Bitcoin/crypto will form the basis of a new economic mode - if it isn't and it crashes to zero, I'm only in as far as I can lose my stake completely (or lose my nerve and cash out what's left which is also highly likely). I am a very boring and amateur investor. I am the dumb money :)
I'm getting emails from friends whose retired parents are being targeted by crypto hucksters. My brother sent me an email this morning which was a glaringly obvious scam a friend of his had fallen for and was trying to get him in on.
I thought the bubble was bad a few months ago, right now it's clearly in batshit insane territory. What they're "mining" is the money from normal people who shouldn't be going within a mile of cryptos, and it'll be a bloodbath. The 2017 bubble is so much bigger than the 2013 bubble.
Again, I have no evidence to back this up, I just have a feeling that spectacular mistakes will be made, things will crash and burn when idealism can no longer paper over the parts where naive hopes cannot be reconciled with harsher realities, learn from that, and then get it right the second time around.
EDIT: Note that this is basically a criticism of human nature, not of cryptocurrencies
Doesn't mean I don't regret throwing some BTC away when they were worth cents!
That said, I believe there will be a lot of disappointments regarding expectations of bitcoin sparking a revolution. My belief is that it will be "only" one more tool among the several financial tools that exist in the world.
It may be that cryptocurrencies are going through this boom/bust/rise-from-the-ashes cycle on a much shorter timescale. After all, software development is much faster than setting up internet infrastructure and adoption. So what used to take decades to get right might now take years.
It's still a tiny portion of total commerce but an absolutely massive jump from previous bitcoin usage.
i.e., regulated it in any way at all; specifically, they said exchanges could trade BTC and ETH.
> Peach Airlines has started taking bitcoin,
no, they ran press releases saying they may well by the end of this year probably.
> huge chains of convenience stores like FamilyMart have been accepting payments in bitcoin, etc.
no, one of their payment processors added a bitcoin option; there's so far no evidence of non-negligible usage.
You're inadvertently parroting speculative bitcoin hype here. The general rule with all bitcoin (and blockchain) media coverage is that there's always much less to it than there appears.
I was in Japan two weeks ago and saw for myself. I was actually surprised about payments being taken in bitcoin when I heard a customer at a FamilyMart talking about it and double checked with the clerks just to make sure I wasn't misunderstanding.
I may have misunderstood the timing with Peach's support, since I wanted to book in NTD (the currency of my bank account) anyway. That said, exactly none of my comment comes from speculative media coverage. It's literally all from first-hand experience interacting with companies as a customer.
https://www.coindesk.com/price/
https://www.coindesk.com/price/
and you will see what I mean.
A huge jump in pricing (~3500 USD) in less than 5 months is a jump in popularity no?
Like individually it seems small, but once you realize the market cap, its pretty big. If this was Apple stock price in the same scale of time (Apple's market cap jumps 350% in 5 months, note that Apple stock price has always been less than Bitcoin so it would be even greater if for Apple), people would be running around screaming and asking why Apple stock suddenly became so popular.
Read Satoshi's original paper.
Imagine rebuilding the entire internet in a decentralized fashion.
Since no one mentioned it yet - deflation.
The total amount of bitcoins is limited. Although the last bitcoin has not yet been mined, the available amount of bitcoin has stabilized, because the bitcoin-mining-process has slowed down and is in parity with the bitcoin-got-lost-process.
http://avc.com/2017/08/store-of-value-vs-payment-system
Note: I don't have a position or view on this topic either way, just posting it here to see if there are any interesting comments here on it, from which I or others might learn something.