How soon until Bitcoin crashes?
- Thread starter Liar Loan
- Start date
fortune11 said:
Cryptography and distributed ledger technology is a lot more difficult to comprehend (let alone implement) than HTML
Also, I think we tend to look back at the internet as happening a lot faster than it actually did. When we could first access the internet (say 94-95) it was nothing more than a bunch of chat rooms. That was it, literally...chat rooms. That lasted for about 2-3 years before we saw better applications come online, such as fantasy baseball on the internet, etc. The dot-com boom followed. We are currently in the equivalent of 1994.
"The growth of the Internet will slow drastically, as the flaw in ?Metcalfe?s law??which states that the number of potential connections in a network is proportional to the square of the number of participants?becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet?s impact on the economy has been no greater than the fax machine?s.?
- Paul Krugman 1998
Halos said:fortune11 said:
Cryptography and distributed ledger technology is a lot more difficult to comprehend (let alone implement) than HTML
Also, I think we tend to look back at the internet as happening a lot faster than it actually did. When we could first access the internet (say 94-95) it was nothing more than a bunch of chat rooms. That was it, literally...chat rooms. That lasted for about 2-3 years before we saw better applications come online, such as fantasy baseball on the internet, etc. The dot-com boom followed. We are currently in the equivalent of 1994.
"The growth of the Internet will slow drastically, as the flaw in ?Metcalfe?s law??which states that the number of potential connections in a network is proportional to the square of the number of participants?becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet?s impact on the economy has been no greater than the fax machine?s.?
- Paul Krugman 1998
Yeah I get it, I was there using "pine" as my first email program (not sure many remember what that was).
But internet did make things easier -- the protocol layer was the part which made things run smoothly and the application layer which came later made everything bloated and clunky (the grossest iteration of that is companies like facebook and google that are nothing but centralized aggregators)
Whereas bitcoin is all about the protocol layer itself and here is where I have problems -- the protocol layer is an energy and efficiency hog. maybe that will change. but the need to update the entire blockchain each time which is what creates trust without centralized -- also limits its bandwidth.
And as to Krugman, history is littered with people making wrong predictions all the time, he is just a good punching bag for people on the right . Here are just a few a quick google search would reveal --
"I think there is a world market for maybe five computers."
Thomas Watson, president of IBM, 1943
"Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night."
Darryl Zanuck, executive at 20th Century Fox, 1946
"Nuclear-powered vacuum cleaners will probably be a reality within ten years."
Alex Lewyt, president of Lewyt vacuum company, 1955
"There is no reason anyone would want a computer in their home."
Ken Olsen, founder of Digital Equipment Corporation, 1977
"Almost all of the many predictions now being made about 1996 hinge on the Internet's continuing exponential growth. But I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse."
Robert Metcalfe, founder of 3Com, 1995
"Apple is already dead."
Nathan Myhrvold, former Microsoft CTO, 1997
"Two years from now, spam will be solved."
Bill Gates, founder of Microsoft, 2004
fortune11 said:Halos said:fortune11 said:
Cryptography and distributed ledger technology is a lot more difficult to comprehend (let alone implement) than HTML
Also, I think we tend to look back at the internet as happening a lot faster than it actually did. When we could first access the internet (say 94-95) it was nothing more than a bunch of chat rooms. That was it, literally...chat rooms. That lasted for about 2-3 years before we saw better applications come online, such as fantasy baseball on the internet, etc. The dot-com boom followed. We are currently in the equivalent of 1994.
"The growth of the Internet will slow drastically, as the flaw in ?Metcalfe?s law??which states that the number of potential connections in a network is proportional to the square of the number of participants?becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet?s impact on the economy has been no greater than the fax machine?s.?
- Paul Krugman 1998
Yeah I get it, I was there using "pine" as my first email program (not sure many remember what that was).
But internet did make things easier -- the protocol layer was the part which made things run smoothly and the application layer which came later made everything bloated and clunky (the grossest iteration of that is companies like facebook and google that are nothing but centralized aggregators)
Whereas bitcoin is all about the protocol layer itself and here is where I have problems -- the protocol layer is an energy and efficiency hog. maybe that will change. but the need to update the entire blockchain each time which is what creates trust without centralized -- also limits its bandwidth.
And as to Krugman, history is littered with people making wrong predictions all the time, he is just a good punching bag for people on the right . Here are just a few a quick google search would reveal --
"I think there is a world market for maybe five computers."
Thomas Watson, president of IBM, 1943
"Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night."
Darryl Zanuck, executive at 20th Century Fox, 1946
"Nuclear-powered vacuum cleaners will probably be a reality within ten years."
Alex Lewyt, president of Lewyt vacuum company, 1955
"There is no reason anyone would want a computer in their home."
Ken Olsen, founder of Digital Equipment Corporation, 1977
"Almost all of the many predictions now being made about 1996 hinge on the Internet's continuing exponential growth. But I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse."
Robert Metcalfe, founder of 3Com, 1995
"Apple is already dead."
Nathan Myhrvold, former Microsoft CTO, 1997
"Two years from now, spam will be solved."
Bill Gates, founder of Microsoft, 2004
Funny quotes...haha.
Just like the internet, it all starts with something silly and evolves into much morehttps://www.cryptokitties.co/
Not going to try and convince you about how awesome the future will be with the blockchain...haha...too much work, and I think you should come to your own conclusions.
And about Dr. Krugman, he should be considered a good punching bag for those of all political stripes.
irvinehomeowner
Well-known member
The idea of the blockchain and shared ledgers is great... what is suspect is the mining of coins and how those who got in first... or even created the first bitcoin were able to do so with less effort than today.
My spider sense also tingles when we don't really know who invented bitcoin and how much currency they have to begin with.
And like IPOs, there are so many ICOs going on... it's hard to tell what is legit or not.
I like the idea of the blockchain... just not this currency tied to it.
My spider sense also tingles when we don't really know who invented bitcoin and how much currency they have to begin with.
And like IPOs, there are so many ICOs going on... it's hard to tell what is legit or not.
I like the idea of the blockchain... just not this currency tied to it.
irvinehomeowner said:
I did some digging on this for my own benefit and came to the conclusion that what makes the blockchain secure is also what makes it inefficient
the so-called mathematical puzzles being solved are nothing but millions and millions of guessing games being played to get to the next hash outcome. But that onerous and laborious process is also what makes blockchain " unhackable " for a single entity
If they were to make it more efficient to speed it up, then it is possible someone can find a way to optimize it (in other words " hack it ") and right there the integrity of the entire blockchain collapses.
You cant have one without the other . And this is why you have these computers wasting away power equivalent of small countries energy consumption 24 / 7. .... it is simply not scalable without also making it open to hacking attacks .
irvinehomeowner
Well-known member
fortune11 said:
From what I understand, the "puzzles" were easier to begin with. As people threw more processing power at them, from CPUs to GPUs and now FPGA and finally ASIC... and more people mined, the time to guess the new hash has to be recalculated so that the time to produce new coins doesn't exhaust the limit before it's due (there is supposed to be a cap of 21 million bitcoin by around 2024).
So my concern isn't the security of it, it's the question of the initial start of it and who benefited most. Almost like a Ponzi (or even MLM) where the people at the top can reap all the rewards.
While decentralized currency is ideal in that no one entity controls it, the other problem, as we have seen, is there is no system to keep volatile valuation in check. At least with stocks, value is based on the profitability and performance of a company combined with demand, but for bitcoin... it's just demand and that's scary to me. Maybe it's like futures or VIX (USC's currency) but that's also why I don't get into those things either.
What I'm more interested in is the use of blockchain technology as a database and how it can be applied in other areas.
Liar Loan
Well-known member
Kings said:
He is one crazy dude. I watched him in the Libertarian debates for president and he was definitely the comedic relief. It doesn't surprise me at all that he is a Bitcoin enthusiast because he basically believes there should be no governments. I think he was also wanted for murder in South America, but he claims it was all a big misunderstanding.
Liar Loan
Well-known member
Bitcoin?s bubble behaviour
The hyperbolic price movements of bitcoin since its early 2009 inception have been very bubble-like in nature. When one compares bitcoin?s five-year price momentum (adjusted for inflation) against that of previous asset bubbles, bitcoin dwarfs the runners-up ? the Mississippi bubble of 1720 and the Amsterdam Tulip Mania of 1637. And among more recent examples, bitcoin far surpasses the IT bubble of the 1990s and the Japan bubble of the 1980s.
Moreover, bitcoin ticks all of the boxes that we consider to be essential criteria of any asset bubble:
-?New-era? thinking. Bitcoin is perceived to be an entirely new kind of currency and a monetary innovation in the internet age.
-Overtrading. Trading volumes have increased by almost fivefold in the last five years, according to BIS data.
-Ultra-easy monetary conditions. Accommodative policy is still in place globally, despite a series of rate hikes by the US Federal Reserve.
-A lack of financial regulation. The ?Wild West? bitcoin environment is only gradually being addressed by regulators around the world.
-The launch of related financial instruments. New products related to the bubbling asset class are popping up ? from CBOE and CME futures contracts to the launch of ?ICOs? (initial coin offerings).
-Rising leverage. Not only has private-sector leverage increased to record highs globally, but leveraged speculation in bitcoin is increasing.
-Swindles. Bitcoin has become the instrument of choice for many criminals, thanks to its ability to exist entirely outside of traditional banking channels.
-Significant overvaluation. Many other asset classes are pricey in today?s market, but bitcoin?s valuation seems to be without peer.
This brings us to a key question: what is the fair value of a bitcoin? In our view, its intrinsic value must be zero: a bitcoin is a claim on nobody ? in contrast to, for instance, sovereign bonds, equities or paper money ? and it does not generate any income stream. Admittedly, one could make the same argument about gold, but gold has been widely accepted by humankind as a thing of value for more than two-and-a-half thousand years ? compared to less than a decade for bitcoin.
Not a currency ? and not ESG-friendly
So if bitcoin is flawed enough not to be considered a proper asset class, can it at least serve the purpose of being a currency? We believe the answer is no for several reasons:
-First, given the high cost of conducting transactions in bitcoin, it could only be used for paying big-ticket items.
-Second, given bitcoin?s tremendous price volatility, it does not qualify as a numeraire ? a commonly accepted benchmark used to assign value to goods and services.
-Third, considering all the arguments we have previously presented, it seems all but impossible to use bitcoin as a store of value.
https://www.allianzgi.com/en/home/insights/investment-themes-and-strategy/beyond-the-bitcoin-bubble
The hyperbolic price movements of bitcoin since its early 2009 inception have been very bubble-like in nature. When one compares bitcoin?s five-year price momentum (adjusted for inflation) against that of previous asset bubbles, bitcoin dwarfs the runners-up ? the Mississippi bubble of 1720 and the Amsterdam Tulip Mania of 1637. And among more recent examples, bitcoin far surpasses the IT bubble of the 1990s and the Japan bubble of the 1980s.
Moreover, bitcoin ticks all of the boxes that we consider to be essential criteria of any asset bubble:
-?New-era? thinking. Bitcoin is perceived to be an entirely new kind of currency and a monetary innovation in the internet age.
-Overtrading. Trading volumes have increased by almost fivefold in the last five years, according to BIS data.
-Ultra-easy monetary conditions. Accommodative policy is still in place globally, despite a series of rate hikes by the US Federal Reserve.
-A lack of financial regulation. The ?Wild West? bitcoin environment is only gradually being addressed by regulators around the world.
-The launch of related financial instruments. New products related to the bubbling asset class are popping up ? from CBOE and CME futures contracts to the launch of ?ICOs? (initial coin offerings).
-Rising leverage. Not only has private-sector leverage increased to record highs globally, but leveraged speculation in bitcoin is increasing.
-Swindles. Bitcoin has become the instrument of choice for many criminals, thanks to its ability to exist entirely outside of traditional banking channels.
-Significant overvaluation. Many other asset classes are pricey in today?s market, but bitcoin?s valuation seems to be without peer.
This brings us to a key question: what is the fair value of a bitcoin? In our view, its intrinsic value must be zero: a bitcoin is a claim on nobody ? in contrast to, for instance, sovereign bonds, equities or paper money ? and it does not generate any income stream. Admittedly, one could make the same argument about gold, but gold has been widely accepted by humankind as a thing of value for more than two-and-a-half thousand years ? compared to less than a decade for bitcoin.
Not a currency ? and not ESG-friendly
So if bitcoin is flawed enough not to be considered a proper asset class, can it at least serve the purpose of being a currency? We believe the answer is no for several reasons:
-First, given the high cost of conducting transactions in bitcoin, it could only be used for paying big-ticket items.
-Second, given bitcoin?s tremendous price volatility, it does not qualify as a numeraire ? a commonly accepted benchmark used to assign value to goods and services.
-Third, considering all the arguments we have previously presented, it seems all but impossible to use bitcoin as a store of value.
https://www.allianzgi.com/en/home/insights/investment-themes-and-strategy/beyond-the-bitcoin-bubble
Liar Loan
Well-known member
Congressional hearing on cryptocurrencies devolves into bitcoin bash fest
https://www.cnbc.com/2018/03/14/con...bitcoin-bash-fest.html?recirc=taboolainternal
marmott
Active member
That for example: https://www.reddit.com/r/personalfinance/comments/84huks/i_just_discovered_that_i_owe_the_irs_50k_that_i/
Coinbase finally released a tax tool to help with filling taxes.
Coinbase finally released a tax tool to help with filling taxes.