Bitcoin's price will ultimately come down to what the product can offer, not how much hype you can inject into it. It should give you pause if bitcoin's future relies on hype and news coverage.

Really appreciate your thoughts. There's a lot to think about/respond to here but I wanted to hone in on this question: to what extent does your bitcoin moon thesis depend on the notion that fiat is going to collapse, or at least go through a very rough time as Western debts become unmanageable? How much is it weakened if I could look into the future and tell you for a fact that mainstream economic theory is correct and fiat will never hyperinflate/blow up outside a few fringe countries like Venezuela?

I think the price it reached off the hype is the highest it will go. That should be pretty obvious from the post. The future is likely servicing the niche market it settled into before the hype.

Gold is something you can see and touch. Although jewelry demonstrates the psychological attachment we have to gold (vs fake gold etc), it's not the only reason it has value. It's used to back currency and investors do the same. They don't try to get rich by owning gold, they own it as a defensive asset against catastrophe. Only loons or leveraged traders try to get rich via gold..... or any other sort of "store of value"


You need to think about what money isn't and who has it. 99% of the world has no money. They spend it on food, rent, and muff. They work for 2 weeks, it's spent, repeat

The 1% that actually accumulates assets buys a home or shares of companies. Those are assets, not a currency or a "store of value". Companies produce things, have revenues and profit. Gold and bitcoins do not produce anything. There's no dividend or profit. When you own a bitcoin you don't own a share of the blockchain tech just like when you own an iphone you don't own part of the company. When you own shares of apple you own the tech.

The point is, almost nobody stores wealth in or holds cash/gold. It's used for transactions. In order for you to get rich off of bitcoin you need to sell yourself some mass adoption scenario where its as common for people to be paid in crypto as their local currency and willing to dump their local currency at a loss to do so. In that case you profit in the same way as a ponzi. The other way is to profit off of speculation. Speculation and delusions of grandeur have rallied the price to this point. If you were blind to that before then it should be obvious now. There have been no major swings in adoption yet the value has skyrocketed and cratered from and to here. FOMO frenzy

He is describing a massive asset bubble on money printing and cheap debt from the largest central banks in the world. Everything has inflated from real estate, stocks, art, collectibles, and bitcoin. Take a look at bitcoins performance and the stock market. Were both ripping higher last year? How are they doing this year? The idea people will be jumping in to crypto in some sort of crisis when its down 80% pre crisis is absurd. The debt blew these bubbles and will pop them, not the other way around. Bitcoiners don't want a crisis or recession, you wan't the largest population of rich dummies with lambo's and tigers possible. Your path to fortune is speculation
I don't bag on charting but talking about support and breakouts on bitcoin is silly. This whole space is a circus. Calling it a market is even a stretch

Jesus that's a lot of words. Fun game, when will the price of BTC drop below the character count of that AW post (3,834).

I'll guess Thanksgiving at 0400

Is it concerning to you that libertarians have been incorrectly predicting hyperinflation for decades now?

The point is that the demand for it's industrial uses would account for a tiny fraction of price and even it's demand as jewelery would take a major dive if it lost it's mystique as being a universally recognized store of value.


I think the more relevant factor here is that there isn't enough money flowing in parts of the world where people make $2/day to cater to their banking needs. Whose going to open up a branch where you need 5x the security personnel just to rake in a few points a year on savings account that have on average $100 in them? This is an argument for the utility of digital currency if anything even though it probably wouldn't have a big impact on market cap.

Good post.

A bit like what's his face predicting the end of oil, for like 10 years now.

Perhaps whales are purposely dropping the price so that when the Mt. Gox coins are released people will sell them and them whales will pump it up again?

Just a little conspiracy theory I'm throwing out there.

Out of curiosity, how low does Bitcoin have to go in price before you admit it has failed for mainstream adoption?

I think I may consider rebuying if it goes below $700.

Another poster before me mentioned the 94% thing which is pretty cool. We will see whether it reaches another "support level" at that point or continue to plummet.

Since pot is now legal in a lot of states, perhaps online gambling will become legal once again in a few years. I can only imagine that this will affect the price of Bitcoin in a negative way if this happens.

Why would price be the metric by which "mainstream adoption" is measured?

Wouldn't transactions or number of retailers accepting it be much better?

RTCoin is currently trading at $2MM, but its adoption is a little on the low side if I'm being honest.

In that case Bitcoin is in big trouble because retailers are dropping bitcoin more and accepting it less.

On the other hand.

At what point will the 'bitcoin is a bubble' proponents accept defeat? How often can a bubble pop and recover? At what point does it become pointless to call it a bubble?

Just asking in advance, so we can get our definitions straight.

It can be in a bubble over and over just like things like housing and the stock market can be. Just because it has popped and reinflated itself multiple times doesn't mean late 2017 wasn't a bubble.

This definition implies that Bitcoin provides significant and lasting value, like houses. Its value is just sometimes inflated.

My feeling is that a lot of people, when they say Bitcoin is a bubble, they mean Bitcoin is like tulips.



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The arguments about "gold is money because it has the properties of money" have been put forward mostly by highly intelligent, highly convincing but loser and wrong Austrians, who no one really bothers to refute because they're fringe losers. Don't get me wrong, I love Austrian economics with a passion - it's highly intuitive and contains a strong sense of natural justice - but it's simply wrong.
Gold is valuable because it's rare and has about 10 unique properties which are highly valuable (unique highly pleasing golden shine, doesn't tarnish, the most malleable of the metals so a tiny bit goes a long way for ornamentation or plating). For example, $5 worth of gold can gold plate a statue due to the fact you can plate it three atoms thick, unlike all other substances. Gold leaf can cover a dome or a statue at low cost and it will last untarnished for centuries. This is why it's so valuable per gram, not because of some cuck notion that it's a store of value. It's valuable per gram because a gram goes a very long way providing a unique untarnishable extremely pleasing shine and there's strong demand for this untarnishable shine relative to the tiny amount of gold that exists.

To plate say the Dome of the Rock for 10 centuries using 80 kilograms of gold requiring no further maintenance is an absolute bargain; nothing else offers anything near that economic value. Similarly, to make untarnishable jewelry or cover statues that will last for centuries as good as new for a tiny amount of gold is extraordinary and highly demanded economic value that no other metal can match. That is the sole source of gold's value; the "store of value" piggybacks off that.

Bitcoin is nothing like this. It has no economic utility whatsoever to provide a bid when demand from people buying into as a currency wanes; in fact, it costs a lot of money to maintain security, so it has negative economic utility.
Money is valuable because it's protected by state force and a reliable legal framework. If someone refuses to take my money for his goods at the going rate I can have the entire US army show up to ultimately kill him for me. That's like the definition of stable value, and that's not a ponzi. No one buys USD in the hope of having greater purchasing power in future. It's not in any way a ponzi. Most people who buy bitcoin buy bitcoin in the hope of having greater purchasing power in future because more people will buy in after them. That's like the definition of a pyramid scheme.
So your sane thesis condensed down is basically:

1. Digital currency adoption for non-bank uses is certain to grow
2. Bitcoin is a Schelling Point solution to the problem of which digital currency to choose at 5% < x < 30%
3. Bitcoin is offering 20-200 bagger if (1) and (2) is true.
4. Therefore it's a good bet

This was wonderful logic a few years ago when it was a potential 10,000 bagger. And this is all very reasonable. Two objections:

1. The problems that bitcoin solves (apart from the illegal and fringe <1% libertarian use cases) can also potentially be done faster and better and cheaper by banks. Instant ultra low fee domestic and international transfers via banks will come about at ome point. They already happen via credit cards at POS on a grand scale. This kills the Schelling Point for those use cases which is >95% of potential bitcoin interest. Whether banks will do it in time remains to be seen, but there is nothing that bitcoin solves except unseizable money, and a bunch of stuff it does meaningfully worse and actually rather badly as a medium of exchange or store of value.

2. Bitcoin doesn't scale. In fact, its comical inability to scale even to small size is one of the reasons it topped at $20K. If it can't scale, it can't be a solution for anything at the higher valuations you need to justify the bet.

So the less sane case is:

1. Fiat money is going to blow up at some point
2. Bitcoin is where this frantic money will go as a safe haven, sending it to the moon.

I put #1 at less than 1%. I put #2 at <10% if #1 is true. Fiat money is a zero asymptote that can easily go on forever. That's highly counter-intuitive so I understand why people get weird notions around this, but the act of inflating the money supply alone is insufficient to make this case. As is debt. Infinite asymptoting works just fine, no matter how "wrong" it feels to you, and to me.

Exactly. So my Q stands for the tulip crowd.

This take is always hilarious and always shows that you haven't really thought too hard about it. I think you meant to say FIAT/Capitalism/Consumerism/the exploitation of the third world countries

Consumerism=evil but setting 30 gallons of gasoline on fire to do a SINGLE transaction = good and not consumerism.

Bitcoin bull logic. rofl.

Those 30 gallons were always getting set on fire though, btc making it more expensive to do so is not an environmental catastrophe

If you are looking for investment opportunities, my new startup will bring blockchain technology to military-style MREs.

The wastefulness is temporary and a result of the massive bubble. Over time it will only make sense to mine when/where electricity costs are very small or negative. It's the dirty peaker plants that cause disproportionate harm so the load balancing is actually potentially environmentally beneficial.

I agree with the prediction that fiat money will collapse. Our economy is entirely dependent upon cheap credit. The Fed's attempt to normalize interest rates and unload its balance sheet is causing downward pressure on bonds, housing and stocks. At some point, if the Fed continues its trajectory, these assets will crash.

The Fed will respond with yet another round of 0% interest rates and QE. People will eventually realize they can never normalize rates and unload their balance sheet without collapsing the economy. And they will realize that the previous rounds of QE were a disguised debt monetization. This will cause a severe devaluation of the dollar and very high inflation (which will cause long-term interest rates to rise and crash the bond market anyway).

At this point, even if the Fed decides to tighten, the economy will be destroyed in their attempt to save the dollar. Credit will freeze, there will be massive government and private defaults, banks will fail, etc. And we will still see a massive collapse of the dollar, due to the global flight from US assets.

I don't see Bitcoin as the solution, but I disagree with the gold supporters who say Bitcoin can't work because it lacks intrinsic value. The USD has lacked any intrinsic support since 1971 but has remained as a functional currency that entire time, despite the Fed's monetary policy.

The problem I see is Bitcoin's unstable value. You can't transact using a currency that is liable to fluctuate 10%+ on any given day. And I don't see how it can accomplish a transition from a speculative asset to a stable functional currency. Even if it shoots up again, it seems that run-up is always going to be based largely on speculation and not based on demand for it as a currency.

If the dollar fails, gold just makes so much more sense as a currency than BTC. Its value rarely fluctuates, it is backed by its intrinsic uses, and governments already own it. There is a reason there is such a strong negative correlation between the price of gold and the value of the dollar. It is insurance against the dollar's failure. Bitcoin is a pure gamble.

BTC is secured by proof of work.

The cost of waste must always be an appreciable amount of the total value to maintain security.

> BTC is fatally flawed and must die.

btw I use this to do a lot of what BTC does: https://www.plooto.co/ca/

For you consultants out there losing fees on credit card payments, do yourself a favor and get paid with that. You'll thank me later.

This doesn't make any sense if you think it through. OK there's countries in central america and Africa where people are extremely poor and its not worth it to provide banking services for them. Let's pretend that's a real problem. The solution is for them to get on their smartphone and laptops and adopt a currency that exists in cyber space?

I think the more interesting point is why crypto kids praying to lord satoshi that poor people pile in behind them and send them to the moon (cough not a ponzi)? They want their lambos. They also tell themselves that crypto has some sort of humanitarian aspect. It's fascinating. Is there some sort of denial that the moonboys are dreaming of lambos and foreign muff? do they convince themselves that are apart of or care about some sort of humanitarian project to suppress the reality they are slobbering all over themselves at the idea they get super rich through buying cyber coins early and everyone else piling in behind them?