For the first time in history people can decide which characteristics they desire in their money.
People look at bitcoin and see money that can be sent anywhere without needing approval from anyone. They can store their money themselves. They can program their money. They know the supply of their money can’t discretely change underneath them.
Some people are opting to change their dollars to btc. Some are opting to hedge a small amount into this new system in case recent monetary experiments explode. Some people are speculating (as they do in forex markets today).
Just because more people want to explore this brave new world doesn’t mean it’s a bubble.
I'm not knocking the concept of cryptocurrencies as a whole, just like I would never knock the Internet as a whole. However, I would say that a lot of people speculating with stars in their eyes without understanding the underlying technology makes me wonder when a market correction event is going to happen.
Currently on my Facebook feed there is a kid I know who is a tech support agent but now posting pictures as a "Bitcoin daytrader" and now offering classes on the subject. There is another girl who is a model for rap videos in Detroit and she posts screenshots of Bitcoin prices to show how well off she is now. I've read about hackers walking away with millions of dollars in a cryptorobbery (now a real thing). The next thing is an Ocean's 11 sequel where George Clooney and Brad Pitt pull off a cryptoheist.
I think the real innovation is blockchain and that there will be a major cryptocurrency to rise out of one of the smaller markets. I get the feeling (just a hunch) that Bitcoin will be lycos/altavista/yahoo that will inspire a Google. Maybe that company already exists (Ethereum?), maybe not.
Probably not. Currency isn't a search engine. It's a fundamental piece of an efficient economy. There's a reason we went to fiat currencies. I like a lot of things about bitcoin actually. I want to see an energy based currency evolve (without the actual expenditure of energy). That currency can basically be a formula that calculates value based on energy consumption and output. I think something like that would allow for a more sustainable economy.
Not sure what world you live in, but the vast majority of new people interested in Bitcoin are interested because they want to make money, not because they believe in the technology. They want to buy in, see it go up 500%, and cash out.
They're not motivated by the actions of the central banks, they likely have no idea what the central banks do. They see "Bitcoin increases 100% in a day!" on the news or on a website and want in on that sweet money making. Coinbase makes it so easy, they have to do absolutely minimal research, don't even have to wait for transactions to be confirmed.
You think its lack of faith in the current banking system and belief in the new tech that's driving the price up as high as it is now, when it's mostly greed and ease of access. Taking that into account it's naive to not believe there is a Bitcoin bubble.
Who are you to speak for all the people buying bitcoin? Of the people I know buying, many do so because they believe in the tech and disagree with modern monetary policy.
That might have been true few years back. Now people buy Bitcoin because they see headlines on Fox News and whatnot about "Bitcoin reaches new all-time high of $ XXXXX" nearly daily. I know it's a bubble when my totally non-tech relatives (the same people plagued by Ask bars) keep asking me where is the best place to buy Bitcoins or to find/recover their lost wallet.
I own some cryptocurrencies, but to be fair most people, in the world -- I think it's very fair to assume -- don't know what these are or how they work.
Do you really think the majority of purchases (as in tranfers from fiats to BTC or another) are done so with intent to pursue political and economic advancement? I mean, is it theoretically possible? Perhaps -- but do you truly believe that the majority even understand the technology at a cursory level?
> Just because more people want to explore this brave new world doesn’t mean it’s a bubble.
I agree with you that there is legitimate innovation happening. I enjoy reading a lot of blockchain research and the cryptographic advancements that go towards improving consensus algorithms.
With that said, I really do not believe most people buying cryptocurrencies want to explore a “brave new world”. I doubt most people buying cryptocurrencies could explain to you 1) what the word “trustless” means, 2) what their investment thesis is, 3) why they’re buying one cryptocurrency over another.
They want to sell to a greater fool. Just as real estate was a legitimate investment vehicle during the 2007 bubble, cryptocurrencies (and bitcoin in particular) can simultaneously enjoy legitimate utility and extreme irrational exuberance.
The real estate bubble of 2007 was only able to happen because of the cheap money the fed made available. The vast amount of bitcoin is paid for from savings, not debt. Meanwhile, Yellen just warned that there is excessive amounts of debt in the economy again. Money has been made available at near 0% interest rates for a decade. There’s definitely a bubble out there, but it’s not bitcoin.
Yes, there is a huge stock market bubble at the moment, but guess what, something that gained 50% in a month is also something worth speculating on,
> The vast amount of bitcoin is paid for from savings, not debt.
Holy crap, got any evidence for this statement?
And when one of the big Bitcoin whales cashes out, there will be a crash, and all those people's money will be gone. Or will they be? I guess you can argue they will still have their bitcoin money, but sadly they won't be able to pay their rent or buy food with that...
I get offers for cash loans, no questions asked all the time. Or on Coinbase I can buy Bitcoin using my credit card, which has a 4-digit Euro limit. What's stopping the neighbor who has the same card to think "Oh I'll just max out my card to buy Bitcoin, it will double (or whatever) its price by the end of the month, I can withdraw my principal to pay off that credit card.".
Some people are opting to change their dollars to btc. Some are opting to hedge a small amount into this new system in case recent monetary experiments explode. Most people are speculating (as they do in forex markets today).
And there is nothing wrong with speculation, but when Coinbase is adding 100k accounts every few days it is not people thinking fiat money is about to implode.
As an aside, if you listen to the hardcore BTC people and replace BTC with gold it is the exact same arguments. Over long periods gold has been a terrible investment compared to something like the S&P [1] so keep that in mind when hyping BTC.
Well, shouldn't I? If the cost of a consistently growing S&P 500 is consistent inflation between 2-6% rather than wild positive and negative swings, that sounds like a win-win.
As I said, you owe your gains in the market to the central bankers. People who didn’t want to risk their life savings in the market suffered due to inflation these last 10years. People who had the luxury of investing in the market benefitted at everyone else’s expense. The policy of keeping stock indexes inflated is directly responsible for increasing inequality.
The next time a significant market correction happens, those of us who value honest saving will have a place to hide. The fed won’t be able to save you at our expense next time.
Lol. Everyone just leaves their money on shady exchanges. A small fraction of people manage their own wallets and they get robbed frequently or lose them.
Most people also leave stocks they own with their brokerage. In fact, they don’t even realize it’s the brokerage listed as the owner of their shares and in all likelihood the brokerage has loaned them out to short sellers and is earning interest on them.
> Just because more people want to explore this brave new world doesn’t mean it’s a bubble.
But if more people want to explore this brave new world _too quickly_ it may be a bubble. As it happened several times already. Yes, the price is much higher at the end of each bubble than at the beginning, but they were bubbles nevertheless.
