Post: #1

Saw this on Reddit, thought I should share it here, seems to make a lot of sense.


1.) Enthusiasm starts in Wallstreet and becomes a bubble when the regular Joes get into it. Joes are the final bagholders, the last ones to get in. And with the Joes come volatility and unsteady and inexperienced (weak) hands—going from stable to volatile to pop. If Bitcoin is a bubble, it is the reverse of most bubbles, starting from the Joes first (already going through volatility and shaky hands) to Wallstreet and stability and attempts at regulation. A lot of the worst parts are behind us. Yes, we'll see corrections and drawdowns, but Bitcoin has already been around ten years and survived Mt. Gox (where 850,000 Bitcoins were lost) and Silk Road (an online open market for illicit goods). We've seen Bitcoin drop from 19,000 to 13,000 in a matter of days. $6,000 sounds like a lot of money, but that's only a 32% drop. In its early days, Bitcoin survived 95% drops. The mainstream is just opening their eyes to Bitcoin but most of its worst days are behind it. There are children now who have never lived in a world without Bitcoin.

2.) If this is a bubble, it's a very responsible one. In most bubbles, average investments are very high (consider the last three: real estate, dot-com, and automobiles). With Bitcoin, most people just want to know where to buy it, not how much they should put into Bitcoin. There are some accounts of people taking out loans to buy Bitcoin, but that's mostly clickbait. Most people getting in are putting in a few hundred bucks, maybe a few thousand. I would say half the people I know only put in fifty dollars. Someone putting in fifty dollars wouldn't make much of a story worth clicking on.

Everyone is scared of Bitcoin; they liken it to gambling, which somehow makes them more reasonable. They set a very small limit they won't go over, an amount they wouldn't care about losing. It's their "let it ride and let's see what happens" money. That's not how people are with houses or with cars. That's definitely not the attitude during the dot-com era. In fact, there are minimum buy-ins for most investment vehicles. Bitcoin has no minimum, regardless what the price of one Bitcoin is, you can still buy one dollar's worth. In past financial bubbles, regular folks were putting in $100,000 and above. But if you're only putting in fifty dollars and it goes to twenty-five, it's a lot less painful than if your 100k goes to 50k. You're a lot less likely to pull the remainder of your twenty-five dollars out. (Which is why Bitcoin has consistently rebounded from drawdowns.)

Most Bitcoin owners are called hodlers. It's crypto slang for someone who will never sell no matter how much it drops. This culture of holding (hodling) makes Bitcoin robust. No other asset has an attitude where the majority of its owners will hold it no matter what. This is why Bitcoin is the only community who has a term for being a holder. For Bitcoin to go to zero, all the hodlers must sell; otherwise, it will correct back up again. This is unlike anything we've seen before (refer to my "What Bitcoin Can Tell Us about Our Evolving Politics" post). In my opinion, what can destroy Bitcoin isn't a financial collapse but rather better technology, something better than blockchains. Or perhaps it's an energy shortage. (Or perhaps artificial intelligence.)

3.) People say it's a bubble because it has no real value but that's a binary statement—if it has no real value, even at one penny, Bitcoin would be a bubble because it's still above zero. So understand when people say bubble, they don't mean it will no longer be a bubble if it goes down to 1k but down to 0. Do you believe it has no value? If you do, then any price is too much. If you do believe it has value, then what do you believe it is? And is its current price above or below the number you came up with? And if you come up with any number above zero, don't listen to anyone who says it has no real value. Even one dollar is infinitely bigger than zero. You might believe it's overvalued, but that's completely different from no value.

4.) Bitcoin is not dangerous because it's a bubble but because it's Bitcoin. It is always real value and but its real value is always fluid. This fluidity is what makes it dangerous. It can be a calm sea or a tsunami. That's the nature of fluidity. (Think of "be like water" from Taoism, introduced to the West by Bruce Lee.) You don't need to call it a bubble to understand its dangerous. (It actually makes your thinking less precise.) It's dangerous because it's Bitcoin. A revolution is dangerous because it's a revolution, not because it's a bubble.

Dot-com and housing were scary because it went up so much, but most of the money that pumped into it was domestic (localized and unsustainable). Bitcoin has been going up, but it's been going up for ten years, and it's not domestic, it's absorbing money from the globe (and still has a lot more to go). If you consider people from every country is putting in a little bit of money and have been doing so for ten years, Bitcoin's current price doesn't seem that high. In fact, many speculate, with all this in mind, if it is the world's store of value, it is still heavily underpriced.

5.) People keep referring to Tulip Fever when bringing up Bitcoin, where supposedly the Netherlands went crazy for tulip bulbs, which led to the bankrupting of the whole country; however, according to the Smithsonian and most historians, there never was Tulip Fever. (It was a very localized incident that lasted for about a week, and the prices were high but not Bitcoin high.)

To assume this many people for this long have been enthusiastic about something and not have it turn into a real thing has never happened. At this point, Bitcoin is already real. (You know what also used to get compared to Tulip Fever? The internet and the whole tech industry, especially startups. These are the same people calling Bitcoin a fad.)

Here's another thing people forget about bubbles, the housing market crashed, but we're still buying houses. Dot-com crash came and went, and the internet is still here, and we have more dot-coms than ever. A crash doesn't mean the end. It just means a crash, then life, so far, has gone on.

Post: #2

I think this is a largely fallacious post that fails to address the key technical (scaling) and economic (scarcity) issues with bitcoin.

Quote:1.) Enthusiasm starts in Wallstreet and becomes a bubble when the regular Joes get into it. Joes are the final bagholders, the last ones to get in. And with the Joes come volatility and unsteady and inexperienced (weak) hands—going from stable to volatile to pop. If Bitcoin is a bubble, it is the reverse of most bubbles, starting from the Joes first (already going through volatility and shaky hands) to Wallstreet and stability and attempts at regulation.

Bitcoin didn't start on Wall Street because it's not a stock, simple as that. It started in tech and libertarian circles and grew from there. As of 2018, the Joes are in. The ETH thread just linked a fluff piece about crypto guys in the NY Times. Believe me, the Joes are in and are hodling the bags. The only question is how many illusory dollars are there.

That Wall Street might have been late to the party is irrelevant. Also, it's not like we know how many Wall Street traders were putting money into BTC off the books during the early years. BTC is unregulated, remember?

Also, Bitcoin's volatility does not come from the Joes but from the massively distorted distribution of currency and its scarcity.

Quote:2.) If this is a bubble, it's a very responsible one. In most bubbles, average investments are very high (consider the last three: real estate, dot-com, and automobiles). With Bitcoin, most people just want to know where to buy it, not how much they should put into Bitcoin. There are some accounts of people taking out loans to buy Bitcoin, but that's mostly clickbait. Most people getting in are putting in a few hundred bucks, maybe a few thousand. I would say half the people I know only put in fifty dollars. Someone putting in fifty dollars wouldn't make much of a story worth clicking on.

I'd say this is unfounded optimism. When the bubble bursts and the price of BTC plummets, there will be plenty of secondary economic consequences. People are going to lawyer up and fight over what's left. Projects started and investments made based on incorrect predictions about future funds will be canceled. The government is likely to get involved. It won't be pretty. Maybe it won't be as bad for people not directly involved. But that seems unlikely, we'll have to wait and see.

Quote:Most Bitcoin owners are called hodlers. It's crypto slang for someone who will never sell no matter how much it drops. This culture of holding (hodling) makes Bitcoin robust. No other asset has an attitude where the majority of its owners will hold it no matter what. This is why Bitcoin is the only community who has a term for being a holder. For Bitcoin to go to zero, all the hodlers must sell; otherwise, it will correct back up again. This is unlike anything we've seen before (refer to my "What Bitcoin Can Tell Us about Our Evolving Politics" post). In my opinion, what can destroy Bitcoin isn't a financial collapse but rather better technology, something better than blockchains. Or perhaps it's an energy shortage. (Or perhaps artificial intelligence.)

This is really bad, if true. What you want to hear is: "most Bitcoin owners just keep it to use because it's so useful and convenient for online transactions". If most people are hodling it because they think the price will keep rising, that is the very definition of a speculative bubble. Meanwhile, a "culture of holding" just means there's a lot of religious fools willing to be the proverbial bag-holders.

Quote:3.) People say it's a bubble because it has no real value but that's a binary statement—if it has no real value, even at one penny, Bitcoin would be a bubble because it's still above zero. So understand when people say bubble, they don't mean it will no longer be a bubble if it goes down to 1k but down to 0. Do you believe it has no value? If you do, then any price is too much. If you do believe it has value, then what do you believe it is? And is its current price above or below the number you came up with? And if you come up with any number above zero, don't listen to anyone who says it has no real value. Even one dollar is infinitely bigger than zero. You might believe it's overvalued, but that's completely different from no value.

If BTC loses 99.99% of its value overnight, I don't think you're going to care about the subtle distinction between "no value" and "overvalued."

Quote:4.) Bitcoin is not dangerous because it's a bubble but because it's Bitcoin. It is always real value and but its real value is always fluid. This fluidity is what makes it dangerous. It can be a calm sea or a tsunami. That's the nature of fluidity. (Think of "be like water" from Taoism, introduced to the West by Bruce Lee.) You don't need to call it a bubble to understand its dangerous. (It actually makes your thinking less precise.) It's dangerous because it's Bitcoin. A revolution is dangerous because it's a revolution, not because it's a bubble.

This is the kind of vague hype that is fueling the bubble. The reality is that Bitcoin has fundamental structural problems. Transaction costs are rising. Lightning networks are unproven and work against the very decentralization that is supposed to be BTC's big selling point. LNs will also not address the scarcity problem, so volatility and growth will continue to be an issue.

Post: #3

So as not to be completely doom and gloom:

1. Bitcoin has the best name recognition of any crypto. This is definitely a benefit.

2. Bitcoin is the only crypto I know of that is actually accepted as a currency outside of the crypto market and the black market. Although I personally believe that most normal businesses will drop BTC support eventually (they are starting already), for now this is an advantage for BTC.

3. Bitcoin has active developers and a lot of people invested in its continued success.

I am still pessimistic on the future of Bitcoin due to its fundamental technical and economic issues. But, those points above do work in its favor and it might carve itself a permanent niche somewhere.

Post: #4

This is one of the funniest shit I've read in a long while.

Bitcoin might or might not be a bubble, only time will tell that but the arguments put forward in this post are utter horse shit especially argument #2

Just because you can buy into it with 50-100$ wont make it a bubble? First of all that argument is very misleading as it has left out stocks. You can also buy into stocks with as little as a dollar, and bubbles regularly form in the stock markets. 97 Asian crisis, dot com bubble, Japanese Asset bubble are few examples of stock market bubbles.

But one thing is certain, you have your average joe running around thinking he will be the next soros thanks to crypto. It has given people that hope thanks to the amazing bull market this year.
However most people bought into bitcoin after it hit 10k, it was only 250$ 2 years ago.

Yesterday I saw a post of some guy predicting that Ripple will hit 200$ before 2020.
A lot of financially illiterate people are buying into this hype. Lets assume Ripple hit 200$ for a minute, that would mean a market cap of 8 trillion dollars. So Ripple will be worth 8 times more than Apple?
It has a created a bunch of people with unrealistic expectations.

Post: #5

(01-14-2018 10:33 PM)Blancpain Wrote:  However most people bought into bitcoin after it hit 10k

And how would you know this?

Post: #6

(01-14-2018 10:50 PM)yaku Wrote:  

(01-14-2018 10:33 PM)Blancpain Wrote:  However most people bought into bitcoin after it hit 10k

And how would you know this?

Basic common sense, but google trends helps too.

Post: #7

So you believe more people bought their initial BTC over the last two months than the previous nine years combined?

That seems rather preposterous.

Post: #8

(01-14-2018 11:06 PM)yaku Wrote:  So you believe more people bought their initial BTC over the last two months than the previous nine years combined?

That seems rather preposterous.

Look at the below chart



The wealth distribution will give a rough idea.

4% of btc wallets hold 96% of the BTC in the market.
The remaning 4% of BTC are owned by 96% of the wallets

In that 96% you have the guys posting on reddit, your average joe. Basically everyone who bought post 1k. The poorer the wallet, the higher the buying price.
Had you bought 500$ worth of BTC in 2015, your wallet would be worth 26k. That would put you in the top 3-4%

Post: #9

you do make a point. But some of the wallet with a lot on are held by exchanges. So they are really a lot more "distributed" than the impression you get from that table.

Post: #10

Get out of here you no-coiner!

Post: #11

(01-14-2018 11:15 PM)Blancpain Wrote:  The wealth distribution will give a rough idea.

4% of btc wallets hold 96% of the BTC in the market.
The remaning 4% of BTC are owned by 96% of the wallets

That is a misleading statistic, as some of those are exchange wallets with the funds of many thousands of users.

Post: #12

There are some really silly and pedantic arguments in that post, especially the one that as long as it is worth 1 cent it technically cannot be a bubble because it still has value. That seems to be typical of Reddit. And sadly only about 1 in a thousand reddit users are able to even make posts this good, and it's still stupid.

The dotcom bubble burst when mass adoption of the internet actually happened and people realised that the internet is not as profitable as they thought it would be. Even today it's still kind of a bubble, Twitter is worth billions, but how does it make money? just advertising?

Maybe the same thing could happen when cryptocurrency becomes mainstream. People will realise a currency for a certain app is just as worthless as all the other apps we already have. Also the idea of using a different currency for every single different things doesnt sound logical either.

You walk into a shop, your smartphone automatically mines some Nucleus Vision coins for you in return for giving away your shopping information, then you go home and trade that for some Webflix Tokens so you can watch some entertainment on your PC/laptop/whatever. All the time you are trying to be careful not to lose money from the fluctuations of these currencies. Now you realise the value of one of the more speculative coins has gone up 200% so you cash it out to buy some of whatever the reserve currency will be.

You also have several online businesses, you're a musician and you get paid for people streaming your songs in Musicoin, you have some affiliate marketing going on so you get paid in AdvertCoin, and you also teach English online so you get paid in EnglishTeacherCoin. There aren't many other currrencies you can be paid in for this work, so instead of trying to keep track of the value of all of them, you just cash out every month and hope for the best.

How is this going to work, everyone is going to be a crypto trader in the future?

So what if it never becomes mainstream? I think we will always have a need for physical coins and notes. I would definitely not want to give that up. I like cash, I like paying people in small businesses without any electronic equipment. I live in a third world country, what the fuck would I do without cash?

Maybe this bubble could just go on forever, only used as like a worldwide stock market, a way to fund new companies and make money, which of course people will convert back into real money. Maybe it will stabilize when there is more money in it like other bigger markets.

Post: #13

Quote:If most people are hodling it because they think the price will keep rising, that is the very definition of a speculative bubble.

I wanted to clarify, that this the definition of a speculative currency bubble, not a stock bubble. It's possible for a majority of stock owners to hold on to stock and hope that the price keeps rising, because stock shares represent a stake in a business that gains value independently of the stock's trading activity.

But Bitcoin is not a stock. Bitcoin is the product. There's no bitcoin company that you own a share in, whose value can grow independent of the value of the digital currency. It's true that Bitcoin will never go bankrupt like a company can, but as stated this is not a particularly meaningful distinction from an investment perspective.

Post: #14

Watch this video from Molyneux from 2013 about bit coin. The last part of the video is dedicated to explaining why the banking elite want to destroy crypto currency. Because crypto offers a secure yet de- regulated and anonymous alternative to FIAT currency. Which means the elite have less control over people.

http://youtu.be/w4HGVJjqDVk

What the elite are currently doing is fuelling the crypto bubble. The idea is to burst the bubble, and in so doing take A LOT of money from the small investor - many of whom have borrowed heavily in order to invest in crypto. This sudden loss of confidence will further cause crypto currencies to crash and if a big enough bubble and crash could trash the US economy just in time to prevent Trump getting a second term.

I hope the Don is wise to this and takes steps to ensure crypto has a soft landing followed by steady sensible growth.

Post: #15

It is a bubble, especially the alt coin market. It will probably go to 10-15 trillion before normalising. This is why I would ideally like to exit most of my holdings before the end of 2018.

Post: #16

not that secure. especially since holders are responsible entirely for their own security.

not that anon either, though maybe new coins like Monero will be. btc is only pseudonymous. if anyone links an address to a real name, your entire transaction history is public.

lack of regulation isn't that much of a benefit for most people. most regulations exist to protect investors and consumers.

the only real benefit to crypto is elimination of the need for a 3rd party trusted relationship. if all you want is a digital currency, blockchain is unnecessary. is risky, expensive, and insecure.

Post: #17

only a fool would think big $ hasn't come into the space.

VC $ has def flooded the space. Some private investors (family office) basically same as hedge funds are in the space.

But no serious institutional $ has come in yet and no pensions funds. Until we see the FOMO of insitutional (bigger $) we are nowhere close to the top.

The average joe (40-60 years old) hasnt come in yet. Its very much wealthy tech-centric, wealthy .1%, and sin industries heavily invested.

Id follow them into the space rather than sit out.

Crypto is a backlash to low interest rates and increasing government surveillance and control of our lives.

Post: #18

(01-15-2018 01:24 AM)RedPillUK Wrote:  Maybe the same thing could happen when cryptocurrency becomes mainstream. People will realise a currency for a certain app is just as worthless as all the other apps we already have. Also the idea of using a different currency for every single different things doesnt sound logical either.

You walk into a shop, your smartphone automatically mines some Nucleus Vision coins for you in return for giving away your shopping information, then you go home and trade that for some Webflix Tokens so you can watch some entertainment on your PC/laptop/whatever. All the time you are trying to be careful not to lose money from the fluctuations of these currencies. Now you realise the value of one of the more speculative coins has gone up 200% so you cash it out to buy some of whatever the reserve currency will be.

You also have several online businesses, you're a musician and you get paid for people streaming your songs in Musicoin, you have some affiliate marketing going on so you get paid in AdvertCoin, and you also teach English online so you get paid in EnglishTeacherCoin. There aren't many other currrencies you can be paid in for this work, so instead of trying to keep track of the value of all of them, you just cash out every month and hope for the best.

How is this going to work, everyone is going to be a crypto trader in the future?

Omise, a payment processing company in Southeast Asia, is currently testing a system that will instantly convert any coin/fiat to a coin/fiat of your choice. If you have AdvertCoin on your Omise wallet, and want to buy a cup of coffee in Japan, then you can spend that AdvertCoin in the coffee shop, with the shop owner getting paid in yen (or his currency of choice).

OmiseGo is the token that will be used to secure the network, and in my opinion the best long-term buy in crypto.

Post: #19

I read an article stating their are about 3.3 million people in the world that own bitcoin, about as many as watch a garbage network TV show that will soon be canceled.

The average Joe may have heard about Bitcoin, but he certainly hasn't bought any yet.

Post: #20

(01-15-2018 02:26 PM)yaku Wrote:  The average Joe may have heard about Bitcoin, but he certainly hasn't bought any yet.

I told some of my coworkers about crypto, got a couple in making gainz.....one dude keeps asking me why he can't find Bitcoin on his Fidelity/Ameritrade list. Told him about Coinbase yet he keeps adamant that needs to buy it from Fidelity.

Post: #21

Thanks to the expansive monetary policy, employed by world leading central banks (EU/Japan), the bubble won't burst in 2018.

It's very simple: As long as interest rates are super low, where should I invest to get a nice ROI? Crypto, real estate, and the stock market are options. On the other hand, monetary policies won't "normalize", since most of the industrialized world has accumulated huge amounts of national debt together with a fast-aging population. An increase in the interest rates would just kill countries such as Japan or Italy.

=> People will continue to put their money in alternative investment options.

Post: #22

It will burst, big money has already entered the space, it's just a question of when. Name recognition for BTC is great, but only gets you so far.

Post: #23

If you consider the purpose of most of these coins, they are not and should not be used as currency. Having a token as the result of a transaction like the sale of something or perhaps even something along the lines of a carbon credit shouldn't be used as a currency; that's why I think that the majority of these projects are doomed to fail. You should be buying shares in a company instead of a currency that could be used to buy or sell something else.

That being said, the big coins and the ones that promote a secure transactional base will succeed I believe. You're going to see Bitcoin, Etherum, Monero, Zcash, and Litecoin succeed I feel, each serve a specific niche. These little cryptos that are looking to "democratize" industries will fail. These companies should be focusing solely on the blockchain technology, and not on pumping up the value of their individual coins. Ripple is one of these that I do not see succeeding longterm.

Post: #24

This thread did not age well...

Post: #25

$9,200 moments ago with it back up to $9,615 at the moment.

Massive loss since this morning though