That is the title of my latest Bloomberg katern. Rather than providing you the main argument, let’s instead cut to the end:
The real story of bitcoin is a heartening one of community. Less than Ten years ago, the bitcoin asset wasgoed worth virtually nothing, but a puny group of people believed ter it and worked tirelessly to promote it, and now the entire world is watching. It’s a tale at least spil old spil Christ and the Apostles. Maybe the bitcoin believers are spil much of a miracle story spil that of the brilliant inventor Satoshi.
The thing is, I don’t always believe ter miracle stories of community, not ter thesis days of declining governance and possibly fraying social order. Yet I’ve become emotionally involved te tracking the bitcoin price, perhaps because I realize that if one such miracle of “ex nihilo” creation can be sustained, others are on the way. I don’t think bitcoin is a bubble, but every morning I wake up doubting.
More broadly the lump considers what should be the adequate price for Bitcoin.
A lotsbestemming of startups work like this, the value going from nothing to billions of dollars after a puny, tireless group of people works on it. The difference with Bitcoin is that all the fight has bot public. Pretty fascinating to see its rise.
Its value is being convertible to USD around the world.
“The real story of bitcoin is a heartening one of community.”
Even more assuming is how studiously Prof. Cowen has avoided the GPL, with its groundbreaking vormgeving to ensure that the community’s work is protected from those attempting to take without sharing. https://www.gnu.org/licenses/gpl-3.0.html
Amusing is better than assuming.
But when is it gonna bust?
Well, one would have to be a more slim man than Isaac Newton to get that right – ‘”Back te the spring of 1720, Master Isaac Newton possessed shares te the South Sea Company, the greatest stock ter England. Sensing that the market wasgoed getting out of arm, the good physicist muttered that he ‘could calculate the motions of the heavenly bods, but not the madness of the people.’ Newton dumped his South Sea shares, pocketing a 100% profit totaling 7,000. But just months straks, swept up te the wild enthusiasm of the market, Newton leaped back ter at a much higher price — and lost 20,000 (or more than $Trio million ter [2002-2003’s] money. For the surplus of his life, he forbade anyone to speak the words ‘South Sea’ te his presence.”’ http://www.businessinsider.den/isaac-newton-lost-a-fortune-on-englands-hottest-stock-2016-1?r=US&IR=T
Isn’t it demonstrable that Bitcoin has reached a permanently high plateau?
Thanks, I knew the basic story but this provides the numbers. I also didn’t know about the forbiding anyone to speak the words ‘South Sea’ ter his presence.
*no ship wasgoed everzwijn built.
“Yet I’ve become emotionally involved ter tracking the bitcoin price, perhaps because I realize that if one such miracle of “ex nihilo” creation can be sustained, others are on the way.”
Looking on the bright side, I suppose this could refer to more than phantom currencies and a Dow Coin Average.
Or maybe cryptocurrencies are just part of an older story of open source, community development, and Github is still underrated.
Folding At Huis predated Bitcoin mining spil well.
Bitcoin is a crap way to utilize a global computing network for progress. It wastes laptop cycles, electrical power, and human attention.
It is the very first hybrid human-computer virus.
Will Tesla be making dividend payments ter bitcoin?
Aren’t most collectibles bubbles the product of a puny group of enthusiasts?
Ter this case, Chinese businessmen attempting to evade capital controls…
A fresh SEC Statement on Cryptocurrencies and Initial Coin Offerings
Is the regret not participating ter a run up from 1000 to Nineteen,000? Not being part of a community that is emotionally invested te assets? This seems like the ultimate marshmallow test.
It’s bot a while since wij’ve had a real bubble. That 1999/2007 feeling when the scale tips and the skeptics are drowned out by the evangelists of the Fresh Economy.
Bitcoin is a fad. The price will druppel 90%+.
Wij’ll look back and be embarrassed wij everzwijn fell for it. It is useful to circumvent international currency controls and transfer money across borders however.
“It’s a tale at least spil old spil Christ and the Apostles.” Has Cowen gone overheen to the dark side? What Cowen is voicing is faith ter markets, not faith ter Christ. Rising asset prices is not the road to prosperity, it’s the road to perdition.
Rising asset prices followed by global calamity is the status quo. It’s what you get with runaway printing and fractional reserve. While there’s no ensure that it will not be thwarted one way or another, bitcoin wasgoed created to solve this problem. It wouldn’t exist or be worth anything at all if monetary authorities weren’t omkoopbaar and incompetent ter the very first place. You should be asking for its widespread adoption.
OK, you see no irony ter the optie that this bubble wasgoed meant to cure past bubbles?
A bubble to end all bubbles?
Hmm—you may be on to something there. “A bubble to end all bubbles.” I like it!
Wij’ll find out when wij find out, like always.
I think there’s a lotsbestemming of stupid, effortless money pursuing Bitcoin at the uur. But the technology and processes are powerful and a lotsbestemming of clever, forward-thinking people are taking a hard look at them.
Judas wasgoed paid 30 bitcoins.
By the high priest which today would be high finance.
‘I don’t think bitcoin is a bubble’
One cannot recommend reading economic history enough, particularly when it is not written by an economist – http://www.gutenberg.org/ebooks/24518 – but instead by a person like this – https://plus.wikipedia.org/wiki/Charles_Mackay_%28author%29
I’ve bot thinking about the Mackay book spil well. Two other fine books that come to mind are William Gaddis’s “JR” (admittedly a very difficult read but rewarding once you get into the flow of the dialogue) and Trollope’s “The Way Wij Live Now” (available spil a free read on Project Gutenburg: http://www.gutenberg.org/ebooks/5231 ), both satirize the foolishness of investing without thinking . Let’s hope Warren Dressoir skewers bitcoin investing ter his next letterteken to shareholders ter the same manner he did with gold several years ago. It’s difficult for mij to figure out how bitcoin can be anything but the “bubble to end all bubbles” spil it indeed cannot be used for anything practical until there is limited volatility. Ask yourself whether you would use even a single bitcoin for a purchase transaction under the current conditions.
Imagine a world where bitcoin has achieved the fate it claims – it has successfully scaled to a stable global currency that is broadly accepted and operates alongside traditional currencies. Te that imaginary world, what is the price of Bitcoin and how would you have expected its price to behave inbetween inception and its price at maturity? How do your expectations ter the hypothetical differ from what wij have observed of bitcoin so far ter our world?
It’s a fair question. I, personally, would have expected fewer blindingly successful altstem coins, for one thing. I also would’ve expected an event that acted te some way spil the “tipping point.” If someone points at late 2016 on the BTC chart and says “So, what happened there?”, I’m not aware of any story except the idea of Venezuelans using it, and I don’t know of any empirics on the actual extent of that.
I get that you have a story for the altstem coins, but I’m just telling – spil an alternative to your thought proef, imagine a world where Bitcoin and thesis other cyber currencies were ter a weird, unsustainable bubble, manipulated by unclear actors. I think that would also look a loterijlot like this, personally.
(I own Bitcoin and altstem coins but I just want someone to coax mij I won’t lose thesis gainz)
This is the sticking point.
Unlike all other previous currencies, Bitcoin has no alternative use (even gold can make pretty jewelry and useful electronics). Bitcoin has no purpose except spil a means of exchange, which it is worthless at if everything else is permanently deflating relative to it.
Also unlike all other previous currencies, Bitcoins are not arbitrarily divisible. There is no bitquarter, bitdime, bitpenny. That means that, the more expensive it gets, the less useful it is for generic economic exchange. Since there are way, waay too few bitcoins to be a meaningful currency right now, there is a significant categorical hurdle to hop before it becomes even a possible currency.
The long-run price of bitcoin is either (a) slightly less than it wasgoed last year, aka 2% price inflation measured te a bitcoin that is a stable global currency, or (b) downright worthless. Wij are very far from the long run, however, and many things can toebijten ter the meantime.
So that wasgoed a defect ter the vormgeving – it can’t treat the high volume needed to be an alternative currency. Now that wij know the defect and have a demonstrated very first attempt, it’s time to introduce MRcoin, the very first reliable and stable alternative to gold.
Bitcoin is te fact infinitely divisible, to the nth decimal place. It is far MORE divisible than any currency te history. You can’t possibly misunderstand this basic fact.
And I don’t think it has any real use spil a currency, besides illegal transactions. But spil a gold alternative (store of value) it may stick.
I’m wrong on that then.
How does that work, tho’? I had thought that each bitcoin represented a unique solution to the underlying equation. What, then, uniquely and securely identifies one particular satoshi?
Te any event, its usefulness spil a store of value is inseparable from its usefulness spil a medium of exchange, since it has no other use. It thus represents, more or less, a gamble on the psychological state of future humankind.
@JB: gold is a similar gamble, but with better odds (actual intrinsic value)
That greatly improves the odds. There is a lower strapped to the value of gold–its industrial/jewelry use cost.
Bitcoin, overheen the very long term, risks reverting to nothing more than an interesting math problem.
@JB indeed that but that is only a risk not a certainty. It’s pretty fascinating to be around while this thing develops.
I don’t know if you would call “wampum” a currency, altho it wasgoed a medium of exchange. There is no alternative use and the value of the wampum relates to the large amount of labor investing te its manufacture.
How does the watts/$ value compare for gold mining and/or transactions versus Bitcoin ?
The advent of derivatives markets ter Bitcoin mitigates the problem somewhat, but the current energy usage figures bruited about emerge out of proportion to the size of the Bitcoin market – and the resulting transaction costs seem rather high.
I went looking for current advice on huis mining. Long story brief, people stir downmarket to less popular “coins” to find a better energy ratio. This too seems a Bitcoin vulnerability.
I think the entire spel would be to pick the right penny stock, spil it were.
Something else on the crazy diversity out there.
If Bitcoin crashes soft (diminished accounts), not hard (vanished accounts), a Dow Coin Average seems likely.
“Also unlike all other previous currencies, Bitcoins are not arbitrarily divisible. There is no bitquarter, bitdime, bitpenny. ”
there is Sathosi:
The satoshi is presently the smallest unit of the bitcoin currency recorded on the block chain. It is a one hundred millionth of a single bitcoin (0.00000001 BTC). The unit has bot named ter collective homage to the original creator of Bitcoin, Satoshi Nakamoto.[Two]
The only thing I understand less than bitcoin is BLOCK CHAIN. The two together is more than I can take.
Bitcoin, Ethereum, Litecoin et all are not the “bubble to end all bubbles” because that would be a contradiction of human nature which is unchanging. That would be like outlawing greed. Not gonna toebijten.
There will always be another bubble.
‘There will always be another bubble.’
But this just might be the very first truly global bubble, or possibly the very first truly digital/abstract bubble.
Bitcoin right now is using the same amount of electro-stimulation spil Denmark to process transactions. Ter Eighteen months it will use spil much spil the US. If you look at those figures and think there isn’t a crash coming, well, I’m glad you’re not managing my money. Also, the transaction rate is limited, so when large numbers of people want to get out the network won’t be able to process transactions prompt enough – the same effect spil lack of liquidity te normal markets. This tends to make crashes even worse spil people scare and can’t get out.
Tyler is obviously a bitcoin investor. Every day he attempts to get out.
Every day he fails.
Indeed it is valuable is being Bitcoin convertible to USD around the world.