Bitcoin is going to drop to $300-600 within the next year:
* There are only a limited number of coins out there so people are going to stop mining for them as he near that limit. You can see that now with fewer people buying ASIC and similar FPGA modules.
* The transaction fees are getting be as great as the cost of a pizza transaction
* Lost coins - There are millions of wallets out there with people exploring BitCoin that has just been lost. Its a lot easier to lose your wallet hash then your physical wallet.
Do I think block-chain will take over? Yes and then it will crash spectacularly. I honestly look for the markets to take off over teh hype and then die death crashing into a universal central system.
Look for more slow downs with chat-bots, games, and video services, onion routers piggy backing on the service. Then there purposely bad transactions in DOS terrorism to destroy confidence in issued currency. Eventually this will force the 'new banks' take us back a world centralized bank with sharded nodes that a UN like structure will control.
I don't understand why people still do this type of "X will die" predictions.
You have nothing to gain by making these predictions, just like how everyone who predicted the fall of the Internet are now laughed upon. Furthermore, even if Bitcoin DOES go down, it's not like you'll be applauded for being an 'oracle' just because you predicted this either. Pretty much everyone who's risk-averse or doesn't understand the technology is saying the same thing.
Why not actually learn how the technology works, so that you don't make these shallow snarky remarks that sound exactly the same as the conversation I had with my uber driver last night, and instead maybe yourself could come up with a solution?
Regarding all the reasons you pointed out, except for the transaction fee issue, the rest are really non-problems. Just because fewer people buy mining devices you think it will go down to $300? Just because you lost your Bitcoin because of your carelessness, you think Bitcoin will go down to $300?
Transaction fees are really the biggest issue right now, and there are tons of different approaches people are working on. Just like the Internet had hard time scaling in the early days I'm sure people will figure it out.
One thing I find annoying about mainstream media saying Bitcoin will die is how they think Bitcoin is some fixed thing that's doomed because it won't evolve at all. I expected better from HN audience. Bitcoin is designed to evolve through forks and that's the whole point. People will find various ways to fix all kinds of challenges because financial incentivization is built into the protocol.
> Transaction fees are really the biggest issue right now, and there are tons of different approaches people are working on. Just like the Internet had hard time scaling in the early days I'm sure people will figure it out.
"Yes, don't worry we'll just solve this extremely technically challenging problem."
I never said "Yes don't worry". That's stupid, and exactly what Bitcoin devs are doing right now, which is why the price is going down.
My point was that these are extremely challenging problems but not unsolvable. If went back in time and asked anyone whether something like Bitcoin would work, everyone would have thought it was an "impossible" problem to solve. If you're reading HN, I assume you are somewhat technical. If so, it's much more productive to actually sit down to learn what the "extremely challenging" issue really is and see if you could come up with a solution? Bitcoin and cryptocurrency ecosystem is so early that if you mess around and if you're clever enough you will probably see tons of opportunities everywhere. If you can't, then it's either that you didn't understand the tech deeply enough or you're just incapable (which is fine, but most people belong to the former category)
Anyway aside from all that, my real point was how it's not wise to make predictions when you don't know how the technology actually works really well, which is what everyone from Jamie Dimon and my uber driver is doing. A lot of these people are intelligent in their own ways but they're just too lazy to actually study how it works but just like to babble on because that gives them the satisfaction of feeling like a smart person.
Wow that's so weird, what's going on? Did that guy just copy and paste my comment there?
I don't really care about getting credits for this comment (which by the way got downvoted tons) but it's still really weird that someone would copy and paste the same comment on the same thread.
> There are only a limited number of coins out there so people are going to stop mining for them as he near that limit. You can see that now with fewer people buying ASIC and similar FPGA modules.
This is true, but the effect should tend to push the price up, not down. The new coins paid to miners are essentially a "tax" on everyone else.
> The transaction fees are getting be as great as the cost of a pizza transaction
If fees are high, it means demand for transactions is high as well. High fees are evidence that people want to use Bitcoin.
> Lost coins - There are millions of wallets out there with people exploring BitCoin that has just been lost.
I don't know about "millions," but it certainly happens. When coins are lost, it increases the scarcity of Bitcoin, which would tend to make the price go up.
The risk/rate of inflation in cryptos is determined by the market's appetite for the fork/alt. Along with the even distribution of inflation (in the case of forks) vs the traditional "trickled-down" inflation makes it very different in practice.
* Transaction fees go to the miners so high transaction fees mean more miners. There have been a few blocks now where the total transaction fees are larger than the built-in block reward.
* High transaction fees are an issue but they are also directly tied to price & usage. If bitcoin price/usage drops then transaction fees will drop. High transaction fees also make spamming useless/small transactions as part of a DOS quite expensive.
* Lost coins increase the price due to decreased supply.
Bitcoin is going to grow to 50.000 - 100.000 USD within the next year:
* The limit of coins will increase the value of each individual coin (deflation), while the USD's value will still inflate. For miners this doesn't have to be a problem in the long term, since money can still be earned on processing transactions.
* The problems with high transaction fees and slow transaction times will hopefully be solved with the Lightning Network. I know people have been working on the Lightning Network for a long time, but I truly believe it will be introduced for Bitcoin in 2018, because there is a huge need. If Bitcoin will not adopt the Lightning Network by 2018, perhaps some other crypto currency could take over as the number 1 crypto.
* Lost coins will push the value of the existing coins higher.
Do I think block-chain will take over? I do believe so. We should take a very good look at Asia, I believe the most important developments regarding blockchain tech will happen over there. One of the projects that is of great interest to me (I've bought some coins) is Omise GO. Omise GO could give banking capabilities to people without needing them to sign up to bank accounts. It means people without bank accounts might be able to purchase products over the internet using their Omise GO wallets. It also means people can receive money easily without needing a bank account. Asia still has a lot of people without bank accounts. Of course many other interesting applications with block chain tech are developed as well. For example software to track inventory for shipping companies like Maersk.
If some important economy destabilises, look for more common people move into crypto as trust into central banks erode as has been seen already in e.g. Venezuela and Zimbabwe. I believe this could happen in the Eurozone as I believe the Eurozone's economy is still very weak and a small event could evolve into a big crisis over there.
Look for increased efficiency in the block chain and decreased power of governments and banks in the longer term future.
- I think if digital currencies become more popular and more usable for smaller transactions, then it could possibly offset the loss of not being able to mine new coins in the future.
- I think lending out money will still be an important function of a bank, but it would already be awesome if we don't need a bank account anymore to do transactions over the internet or even in shops. Or if we can send money to each other without requiring our counter party to have a bank account.
I don't understand why people still do this type of "X will grow" predictions.
You have nothing to lose by making such predictions, just like how everyone who predicted the rise of tulips is now laughed upon.
Furthermore, even if Bitcoin DOES go up, it's not like you'll be applauded for being an 'oracle' just because you predicted this either. Pretty much everyone who's invested in Bitcoin, hoping to get rich, and doesn't understand the technology is saying the same thing.
Why not actually learn how the technology works, so that you don't make these shallow deceptive remarks that sound exactly the same as the conversation I had with my blockchain-entrepeneur friend last night, and instead maybe stop trying to get rich quick by hyping Bitcoin?
Regarding all the reasons you pointed out, except for the Lightning network solution, the rest are really big problems. Just because more and more people buy Bitcoin you think it will go up to 100.000? Just because you have some Bitcoin because of your speculative greed, you think Bitcoin will go up to $100.000?
The limit and distribution of coins are really the biggest issues right now, and there are tons of different approaches people are working on to keep it that way. Just like tulips were unfairly distributed and overvalued. I'm sure people will see through the get-rich-quick scheme.
One thing I find annnoying about Cryptocurrency enthusiasts saying Bitcoin will grow is how they think Bitcoin is some evolving thing that's sure to succeed because they bought into it early. Bitcoin was designed to enable people a decentralized currency and that's the whole point. People will find various ways to lure people into buying Bitcoin (or Omise GO) without clear benefits because financial inventivization comes from them already owning some coins.
What you should know about Cryptocurrency advocates is they're likely trying to SELL you on the need to buy into their scheme because they want to pass off their cyberbeaniebaby for more than it cost to produce it. Most of the cryptocurrencys started as an intentionally malicious form of a ponzi scheme (best to call it a Satoshi scheme).
Most of the supply is produced early on so you need to psychologically exploit new users into thinking the supply is rare (only the production of new coins becomes less frequent). Because the cryptocoin exchanges are unregulated, traders easily use tactics like wash trading and painting the tape to push the spot price up higher and higher. The game is ultimately to sell for a high fiat price to the uninformed bagholders who are late to the party and don't understand the system.
Perhaps there may be a form of ecash in the future that doesn't use an exploitative economic model of supply production, but for now be warned. (assuming a less manipulative supply production curve is implemented, PoW style mining still only transfers capital in proportion as computational work into the new system)
See also the false equivalency to gold:
If you understand the computer science behind Bitcoin, you'll realize how ridiculous the false equivalency to gold is.
1. The claim of "rare" doesn't exactly hold true.
Consider the 10,000 BTC pizza - how did this happen? This was the direct result of Satoshi's economic policy, granting vast sums of BTC to mint out very quickly very early for a short duration to the very small pool of people who ran the software. Satoshi's algorithm produced BTC in plentiful quantities enabling the 10,000BTC pizza - thus it wasn't rare if you were Satoshi and the dozen other early whales hording as much as possible, until the algorithm begins cutting off the production and limiting later users from producing coins, starving the economy. Now there's a psychological game being played, where public relations and marketing must convince new users to buy in. Because the exchanges are unregulated, they can manipulate the spot price though wash trading and painting the tape [2] (where trades are falsified and you just sell the same item back and forth to your friend for a higher and higher price).
The supply was created by running a piece of software. It's not magic. Most of the supply was produced very early on and as much as 30% of all Bitcoins are owned by less than 100 people.
Best estimates are that there are about one million
holders of Bitcoin; 47 individuals hold about 30 percent,
another 900 hold a further 20 percent, the next 10,000
about 25% and another million about 20%, with 5% being
lost. So 1/10th of one percent represent about half the
holdings of Bitcoin and 1 percent close to 80 percent
(http://www.businessinsider.com/927-people-own-half-
of-the-bitcoins-2013-12). The concentration of Litecoin
ownership is similar
(http://litecoin-rich-list.blogspot.com).
Most of the big wallets have been in place from early on,
so sitting back and watching your capital grow has been a
very successful strategy.
The distribution of Bitcoin holdings looks much like the
distribution of wealth in North Korea and makes the
China’s and even the US’ wealth distribution look like
that of a workers’ paradise
3. Bitcoin network requires ASIC miners, largely centralized in China [3]. Assuming the inveitable surpassing of a more advanced cryptosytem making Bitcoin obsolete, as the market is informed there will be a decline in BTC's spot price and once this falls below the cost of OPEX for miners, the hardware goes offline and the network will ...
Blockchain will administer similar shocks to insurance, healthcare
and all mass payment systems.
Blockchains can do nothing useful for insurance and healthcare.
Publicly accessible databases with auditing and security mechanisms (double-entry accounting, git, and merkle trees predate bitcoin and blockchains) and a public API which will likely be branded as blockchain tech will always outpace any sort of PoW/PoS style blockchain protocol replicated database.
Intermediaries in the service industries will face a new world in
which their routine functions will be performed by machines,
programmed by artificial intelligence, while the blockchain becomes
the new means to do business safely, faster and less riskily.
This is just a poor writer grasping at buzzwords.
SciFi writers at least try to paint a more detailed picture to fit their buzzwords in. Blockchains are notably irreversible, so there's an inherent risk and immense inefficiency in their use.
the blockchain economic model is more efficient and more effective
the larger the network.
This is absolutely false.
Blockchains are insanely inefficient as a design feature attempting to prevent a single group from having write access to the database. As the network grows larger and more computing power is added, the effectiveness and efficiency goes down and transaction throughput remains the same (blocksize bandwidth usually has a hard limit, in rare cases blocksize can be variable and grow but this is unaffected by addition of computational work added to the network, granted the blocktime/hashrate consistency readjustment stabilizes)
> This author is either lying or has no idea how blockchains work.
Or just doesn't care and created whole article from older one mostly by replacing `cloud` by `blockchain`. I guess someone could update http://www.andrewdavidson.com/gibberish/ to generate such fluff pieces.
Whether or not the economics are right, this author doesn’t understand the technology:
> To explain: essentially, “blocks” are segregated, vast bundles of data in permanent communication with each other so that each block knows what the content is in the rest of the chain. However, only the owner of a particular block has the digital key to access it.
I know journalists need to simplify the technology, but those simplifications should basically be correct. This is just... wrong.
I wonder how many journalists don't understand what they are talking about and we think they do. I stopped reading the local paper after a tech article in my field was so wrong that I doubt other articles in fields I don't know anything about are factually correct.
"the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the "wet streets cause rain" stories. Paper's full of them. In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know."
"Humanity’s earliest, truly transformative general purpose technologies were the ability to cross-fertilise plants and cross-breed animals. Suddenly, it made more sense to farm than to hunt and gather"
This article opens up immediately with a stupid and facile analysis of the birth of the Agricultural Revolution. I stopped reading here.
30 comments
[ 3.2 ms ] story [ 84.1 ms ] thread* There are only a limited number of coins out there so people are going to stop mining for them as he near that limit. You can see that now with fewer people buying ASIC and similar FPGA modules.
* The transaction fees are getting be as great as the cost of a pizza transaction
* Lost coins - There are millions of wallets out there with people exploring BitCoin that has just been lost. Its a lot easier to lose your wallet hash then your physical wallet.
Do I think block-chain will take over? Yes and then it will crash spectacularly. I honestly look for the markets to take off over teh hype and then die death crashing into a universal central system.
Look for more slow downs with chat-bots, games, and video services, onion routers piggy backing on the service. Then there purposely bad transactions in DOS terrorism to destroy confidence in issued currency. Eventually this will force the 'new banks' take us back a world centralized bank with sharded nodes that a UN like structure will control.
You have nothing to gain by making these predictions, just like how everyone who predicted the fall of the Internet are now laughed upon. Furthermore, even if Bitcoin DOES go down, it's not like you'll be applauded for being an 'oracle' just because you predicted this either. Pretty much everyone who's risk-averse or doesn't understand the technology is saying the same thing.
Why not actually learn how the technology works, so that you don't make these shallow snarky remarks that sound exactly the same as the conversation I had with my uber driver last night, and instead maybe yourself could come up with a solution?
Regarding all the reasons you pointed out, except for the transaction fee issue, the rest are really non-problems. Just because fewer people buy mining devices you think it will go down to $300? Just because you lost your Bitcoin because of your carelessness, you think Bitcoin will go down to $300?
Transaction fees are really the biggest issue right now, and there are tons of different approaches people are working on. Just like the Internet had hard time scaling in the early days I'm sure people will figure it out.
One thing I find annoying about mainstream media saying Bitcoin will die is how they think Bitcoin is some fixed thing that's doomed because it won't evolve at all. I expected better from HN audience. Bitcoin is designed to evolve through forks and that's the whole point. People will find various ways to fix all kinds of challenges because financial incentivization is built into the protocol.
"Yes, don't worry we'll just solve this extremely technically challenging problem."
That's an article of faith.
My point was that these are extremely challenging problems but not unsolvable. If went back in time and asked anyone whether something like Bitcoin would work, everyone would have thought it was an "impossible" problem to solve. If you're reading HN, I assume you are somewhat technical. If so, it's much more productive to actually sit down to learn what the "extremely challenging" issue really is and see if you could come up with a solution? Bitcoin and cryptocurrency ecosystem is so early that if you mess around and if you're clever enough you will probably see tons of opportunities everywhere. If you can't, then it's either that you didn't understand the tech deeply enough or you're just incapable (which is fine, but most people belong to the former category)
Anyway aside from all that, my real point was how it's not wise to make predictions when you don't know how the technology actually works really well, which is what everyone from Jamie Dimon and my uber driver is doing. A lot of these people are intelligent in their own ways but they're just too lazy to actually study how it works but just like to babble on because that gives them the satisfaction of feeling like a smart person.
I don't really care about getting credits for this comment (which by the way got downvoted tons) but it's still really weird that someone would copy and paste the same comment on the same thread.
This is true, but the effect should tend to push the price up, not down. The new coins paid to miners are essentially a "tax" on everyone else.
> The transaction fees are getting be as great as the cost of a pizza transaction
If fees are high, it means demand for transactions is high as well. High fees are evidence that people want to use Bitcoin.
> Lost coins - There are millions of wallets out there with people exploring BitCoin that has just been lost.
I don't know about "millions," but it certainly happens. When coins are lost, it increases the scarcity of Bitcoin, which would tend to make the price go up.
Very true for BTC, but there an unlimited number of new cryptocurrencies (either competitors to BTC or ICOs). This is the inflation risk.
* Transaction fees go to the miners so high transaction fees mean more miners. There have been a few blocks now where the total transaction fees are larger than the built-in block reward.
* High transaction fees are an issue but they are also directly tied to price & usage. If bitcoin price/usage drops then transaction fees will drop. High transaction fees also make spamming useless/small transactions as part of a DOS quite expensive.
* Lost coins increase the price due to decreased supply.
* The limit of coins will increase the value of each individual coin (deflation), while the USD's value will still inflate. For miners this doesn't have to be a problem in the long term, since money can still be earned on processing transactions.
* The problems with high transaction fees and slow transaction times will hopefully be solved with the Lightning Network. I know people have been working on the Lightning Network for a long time, but I truly believe it will be introduced for Bitcoin in 2018, because there is a huge need. If Bitcoin will not adopt the Lightning Network by 2018, perhaps some other crypto currency could take over as the number 1 crypto.
* Lost coins will push the value of the existing coins higher.
Do I think block-chain will take over? I do believe so. We should take a very good look at Asia, I believe the most important developments regarding blockchain tech will happen over there. One of the projects that is of great interest to me (I've bought some coins) is Omise GO. Omise GO could give banking capabilities to people without needing them to sign up to bank accounts. It means people without bank accounts might be able to purchase products over the internet using their Omise GO wallets. It also means people can receive money easily without needing a bank account. Asia still has a lot of people without bank accounts. Of course many other interesting applications with block chain tech are developed as well. For example software to track inventory for shipping companies like Maersk.
If some important economy destabilises, look for more common people move into crypto as trust into central banks erode as has been seen already in e.g. Venezuela and Zimbabwe. I believe this could happen in the Eurozone as I believe the Eurozone's economy is still very weak and a small event could evolve into a big crisis over there.
Look for increased efficiency in the block chain and decreased power of governments and banks in the longer term future.
Assuming you don't count an Omise GO wallet as a bank account, which it obviously is.
- How does Omise GO provide the most important bank feature: borrowing money? After all that is the main source of bank's income & impact on economy.
- I think lending out money will still be an important function of a bank, but it would already be awesome if we don't need a bank account anymore to do transactions over the internet or even in shops. Or if we can send money to each other without requiring our counter party to have a bank account.
You have nothing to lose by making such predictions, just like how everyone who predicted the rise of tulips is now laughed upon. Furthermore, even if Bitcoin DOES go up, it's not like you'll be applauded for being an 'oracle' just because you predicted this either. Pretty much everyone who's invested in Bitcoin, hoping to get rich, and doesn't understand the technology is saying the same thing.
Why not actually learn how the technology works, so that you don't make these shallow deceptive remarks that sound exactly the same as the conversation I had with my blockchain-entrepeneur friend last night, and instead maybe stop trying to get rich quick by hyping Bitcoin?
Regarding all the reasons you pointed out, except for the Lightning network solution, the rest are really big problems. Just because more and more people buy Bitcoin you think it will go up to 100.000? Just because you have some Bitcoin because of your speculative greed, you think Bitcoin will go up to $100.000?
The limit and distribution of coins are really the biggest issues right now, and there are tons of different approaches people are working on to keep it that way. Just like tulips were unfairly distributed and overvalued. I'm sure people will see through the get-rich-quick scheme.
One thing I find annnoying about Cryptocurrency enthusiasts saying Bitcoin will grow is how they think Bitcoin is some evolving thing that's sure to succeed because they bought into it early. Bitcoin was designed to enable people a decentralized currency and that's the whole point. People will find various ways to lure people into buying Bitcoin (or Omise GO) without clear benefits because financial inventivization comes from them already owning some coins.
I sort of hope this really is a bot account, that would be super impressive how you can take a paragraph and transform it into something else.
:)
Most of the supply is produced early on so you need to psychologically exploit new users into thinking the supply is rare (only the production of new coins becomes less frequent). Because the cryptocoin exchanges are unregulated, traders easily use tactics like wash trading and painting the tape to push the spot price up higher and higher. The game is ultimately to sell for a high fiat price to the uninformed bagholders who are late to the party and don't understand the system.
Perhaps there may be a form of ecash in the future that doesn't use an exploitative economic model of supply production, but for now be warned. (assuming a less manipulative supply production curve is implemented, PoW style mining still only transfers capital in proportion as computational work into the new system)
See also the false equivalency to gold:
If you understand the computer science behind Bitcoin, you'll realize how ridiculous the false equivalency to gold is.
1. The claim of "rare" doesn't exactly hold true.
Consider the 10,000 BTC pizza - how did this happen? This was the direct result of Satoshi's economic policy, granting vast sums of BTC to mint out very quickly very early for a short duration to the very small pool of people who ran the software. Satoshi's algorithm produced BTC in plentiful quantities enabling the 10,000BTC pizza - thus it wasn't rare if you were Satoshi and the dozen other early whales hording as much as possible, until the algorithm begins cutting off the production and limiting later users from producing coins, starving the economy. Now there's a psychological game being played, where public relations and marketing must convince new users to buy in. Because the exchanges are unregulated, they can manipulate the spot price though wash trading and painting the tape [2] (where trades are falsified and you just sell the same item back and forth to your friend for a higher and higher price).
The supply was created by running a piece of software. It's not magic. Most of the supply was produced very early on and as much as 30% of all Bitcoins are owned by less than 100 people.
2. Easy migration to more advanced e-cash services, LTC, XMR, ETH, so on See: https://coinmarketcap.com/currencies/views/all/3. Bitcoin network requires ASIC miners, largely centralized in China [3]. Assuming the inveitable surpassing of a more advanced cryptosytem making Bitcoin obsolete, as the market is informed there will be a decline in BTC's spot price and once this falls below the cost of OPEX for miners, the hardware goes offline and the network will ...
See: https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...
Blockchains can do nothing useful for insurance and healthcare.Publicly accessible databases with auditing and security mechanisms (double-entry accounting, git, and merkle trees predate bitcoin and blockchains) and a public API which will likely be branded as blockchain tech will always outpace any sort of PoW/PoS style blockchain protocol replicated database.
This is just a poor writer grasping at buzzwords. SciFi writers at least try to paint a more detailed picture to fit their buzzwords in. Blockchains are notably irreversible, so there's an inherent risk and immense inefficiency in their use. This is absolutely false.Blockchains are insanely inefficient as a design feature attempting to prevent a single group from having write access to the database. As the network grows larger and more computing power is added, the effectiveness and efficiency goes down and transaction throughput remains the same (blocksize bandwidth usually has a hard limit, in rare cases blocksize can be variable and grow but this is unaffected by addition of computational work added to the network, granted the blocktime/hashrate consistency readjustment stabilizes)
Or just doesn't care and created whole article from older one mostly by replacing `cloud` by `blockchain`. I guess someone could update http://www.andrewdavidson.com/gibberish/ to generate such fluff pieces.
Looks like the writer didn't even tried to use bitcoin.
> To explain: essentially, “blocks” are segregated, vast bundles of data in permanent communication with each other so that each block knows what the content is in the rest of the chain. However, only the owner of a particular block has the digital key to access it.
I know journalists need to simplify the technology, but those simplifications should basically be correct. This is just... wrong.
Michael Crichton
This article opens up immediately with a stupid and facile analysis of the birth of the Agricultural Revolution. I stopped reading here.