The biggest problem with every blockchain thing I've seen is "it takes 3 households of electricity per day to power every transaction, of which we can only do a few thousand per day because of Reasons, but we insist this is a good thing"

A bunch of Chiefsplaneteers are bemoaning not getting out of BTC and ETH at the top. Change the symbols and it could be a Motley Fool thread from 1999.

(Not saying it couldn't go bananas again many times over - but there will be a crash someday and it won't be pretty - IMO)

Bitcoin has crashed 3-4 times already and recovered each time. I wouldn't guess that these recoveries would happen without some real usage occurring underneath all the speculation.

Fun fact: I owned 400 bitcoins at one point. I sold most of them in the first run-up in price and lost the rest in an exchange failure. I think I netted about $2000.

I didn't realize until listening to Radio Lab this week that BC tracks every single transaction, and people still fund the dark net with it?

It has to track every transaction or it doesn't work. You have to be really careful not to link your wallet to your personal details

Although a funny thing is that every client has to download the entire transaction history for all time

This happened to all of the internet high-flyers. Then most of them finally had a big crash they never recovered from. Even a company like Amazon which absolutely nailed the top of its range (and we tend to forget the rest, confirmation bias, etc.) took a decade to recover to previous highs. You'd have been better off with your money in govt bonds over that time.

What scares me about BTC and ETH is there is no intrinsic value, no real stickiness, all kinds of incentive to jump to new currencies (early adopters get all the spoils), and incentive to hoard rather than use for its intended purpose.

I've read extensively on bubbles and lived through a couple of them. They all have several key factors:

1) "This time it's different" - the 4 most dangerous words in investing. IE - some new aspect that's never happened before: New World spoils (South Seas bubble), radio stocks, railroad stocks, internet stocks, Florida real estate, subprime loans blessed with fancy risk math voodoo. Although don't ask me wtf happened with Tulipmania.

2) A base of True Believers that doesn't jump ship on the first crash (like they would in a pure pyramid scheme). The early adopter kids who believe they're creating a new world order and are going to run the banks and Feds (you know, the guys with all the tanks and fighter jets) of the world out of business are that base. The late-comers will jump ship sooner.

3) Hard to quantify value. How high can it go - who knows? Crypto takes the all time cake on that one. At least internet high fliers had liquidation value and tulips could be planted to grow a nice flower. The subprime crisis started when Meredith Whitney took a look at Citibank and realized it had zero net worth. The fact that the hottest crypto atm is literally named after the ether is just icing on the cake.

Fast forward the tape to 5 years from now and just assume crypto has crashed, ETH is gone, BTC is down like 99% but still used for sketchy internet purchases. Imagine a conversation where you try to explain to someone why these things had $100B in market cap at one time when they weren't backed by anyone or anything. You'll get the same reply that you'd get to any bubble in retrospect "well duh, of course that was gonna crash".

Now having said all that - make it easy for my uncle to invest and all this stuff could 10x from here or more. IE - clean up all this "I lost a bunch due to an exchange failure", "don't link personal information to your wallet", "my exchange folded and kept my BTC", "someone hacked my walled", "be careful on August 1st - you could lose everything" bull****. That's what's holding crypto back. Clean that up and things could go bananas.

Then again - when my uncle is in BTC the crash is close. Remember the old adage about your mailman asking you for stock tips. No matter how much things change that one is always true. Or for a more modern version when strippers are flipping houses and you get pre-approved for a $600k loan you can never begin to afford.

I have a hard time with Bitcoin (et al) because I actually think it could be a "game changer". There are some fundamentally cool things that can happen with it.

But, like you say, I have no idea where its value should be right now. I actually assume it should keep going up (long term) because its gaining traction with more and more merchants which seems like the true value of a currency.

I don't really have any intention of getting on for a ride at this point though.

I think it could be a game changer too. But it's almost fighting against itself to be used as a currency. When it's rising people won't want to spend it, when it's falling people won't want to accept it.

Also the biggest issue with poker sites was getting money on and off through US banks and the 3rd party providers like neteller. Why don't we have offshore BTC-based poker sites yet? Seems like a perfect application.

I think there are? Back a few years ago I had a minor resurgence of being a tiny bit interested in poker again, and the safest option that seemed available to me at the time was this site that only worked in bitcoins.

The "game changing" aspect is if it's done right it's untraceable meaning governments can't tax it, which just means governments outlaw it or tax you on the things you own instead the money you have.

Govt gonna get theirs one way or the other. First they'll manufacture some kind of scandal, then outlaw it and use it as an excuse to monitor our bank statements. Govt is the pimp and their pimp hand is the strongest.

B*tch better have my money
Not some
Not part
Not half
B*tch better have my money
Or I'm gonna plant my foot dead in her ass

You do. Merge, WPN, Bovada all use BTC.

Cool - I thought I might be out of the loop on that.

This weeks Radio Lab podcast is about the start of Zcash and is pretty interesting and I'm not that interested in bitcoin. Probably much better if you are...

Yeah I'm not an expert on the workings of BTC by any means. It's always possible this could be a real game changer and not a bubble. I'm just saying if I had to bet I'd bet that this time it's not different.

I'd consider putting down some $$ if there was a way to short crypto. But like I said it could 10x from here and squeeze me out. I'd rather do a 3-year put option or something.

Which btw lack of shorting is one thing along with keeping my uncle scared away that could keep the bubble from getting really bubble-icious. Shorting creates side bets that allow the overall market to grow much bigger.

My biggest concern with digital currency is how brittle it is, it seems there isn't a middle ground between secure and totally hacked.

Why not both?

Yeah I guess that's possible.

This is true for all currencies. Maybe Americans feel it less because of the status of the US dollar and most of you aren't use to thinking about the exchange rate (?). Bitcoin is definitely more volatile, and so its a bigger problem. But that will also stabilize over time.



The taxing part is just a tiny part of it. It's a lot more than that though.

You can short bitcoin on many exchanges.

This is a huge one.

Outside of the tech circles, few people know about crypto-currency, even among the tech-oriented, few even know how to use it. Look at this conversation among tech-minded people. We don't sound any different than a farmer talking about the big city he's never seen. I can't see BTC ever reaching critical mass, certainly not enough to compete with standard currency.

I think another feature of bubbles is that only a few know the rules of the game. These people know deep down if it a bubble, but they aren't going let the outsiders hear the whispers. They want the bubble to exist because that's how they win.

Chiefsplanet is all over it and most of them aren't techies.

Regarding the uses of block chain (aka distributed consensus) I always thought in theory it would be cool to have a "headless" security architecture where networked machines granted the security access to resources by consensus for one another plus serving as an uncorruptible audit trail.

My knowledge of blocking chaining is awful though but I know you'd have to work it out so that resource access is fast and the block chaining doesn't become prohibitively more difficult like bit coin mining does.

Back when I was looking at bit coin for my previous employer a lot of the economic articles I red would state bitcoin won't catch on is because it's only a value storage mechanism that has no intrinsic value. It is not a currency because no government entity will accept it as payment for taxes or guarantee it's value. It's also not like gold which has many uses that make it valuable outside of it's price.

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I suppose it's a matter of perspective. I've met exactly one person in the meat space world who owns a bitcoin. I've been asked about it a few times (always in context with TOR, which I know nothing of).

I still think though, that the people at the bottom are the ones who are going to get taken. I really don't see how you'd play a long game on BTC or any crypto at this moment. Heck, it's nearly daily you see a major hack, release of GPUs, rotten ICOs, etc, on the front page of HN, including one today and one two days ago.

Good for the proletariat and the starry-eyed. They are sharing in the next big thing.