Bitcoin Bubble | Hacker News Reader

Bitcoin Bubble

6 pointstjpaudio14 comments

I'd like to propose my own evidence of a bitcoin bubble: at this level of inter-day fluctuations, bitcoin is completely unusable as a currency. I've recently been wanting to use it for transactions, but I have been holding off for weeks now as the possibility of a +- 25% swing between obtaining and spending bitcoins is too real. If you want to actually USE bitcoins right now, you can't. Use being the primary/only sustainable value growth mechanism, how can this be anything other than a bubble if the segment that actually wants to use it to transact, can't.

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Bitcoin has 3 main use cases that support it's growth.

1. It's an alternative investment. 2. You can make almost anonymous payments. 3. It's a place to store and hide value.

1 is for the gamblers, 2 is for the people who like to get high and 3 is for anyone currently going through a divorce.

To the moon.

Chinese money laundering. Buy $X mining equipment, mine $X-Y bitcoin, move funds out of China.

1. a lot of currencies aren't as stable as US/EURO.

2. Cypto currencies could be used as a reserve currency http://btc-times.com/cryptocurrencies-will-become-reserve-cu...

3. could be used as a settlement system

Yea but none of those reasons explain the current spike, unless you think a nation is starting to build a bitcoin reserve and keeping quiet about it. That's a pretty out there theory on the spectrum of explanations for the current boom.

hedge against stock market bubble?

I agree with you that the price of Bitcoin fluctuates but if you take a look at the price of Bitcoin over the past two years you will see a steady rise. Bitcoin is not mature and it is still in its infancy stage (early adopter). As its usefulness develops globally along with easy to use interfaces it will mature past the early adopter stage. One important point is that the uniqueness of Bitcoin is not only its usefulness as a global exchange vehicle but also the Blockchain technology that backs it. Just my own opinion.

dont tell anyone about this, but:

all major currencies fluctuate, too. the reason you dont see it is because all other prices are quoted in terms of those currencies.

when the price of gold goes up, for example, it may not be gold going up. its possible that the currency is just losing value.

you've just accepted that the price of USD is what you agree on. in a "bitcoin is the currency" world, bitcoins value does not fluctuate at all. everything else does.

I'm not advocating for a screeching echo chamber circle jerk, but please take your FUD elsewhere. Bitcoin's a wild ride, has been for years and years.

And yes, the price is obviously a popping bubble. That's painfully clear.

I spend Bitcoin. "If you want to actually USE bitcoins right now, you can't." Wtf are you talking about.

Can you send me $0.5 with $1 in your wallet?

Can I send? To you? No. It's my coinage.

No, you can't send it because you wouldn't have enough to cover the transaction fee.

He can send transaction with $0.5 fee, but it is very close to the lower level limit. The link below shows that median sized transactions with $0.5 fee (about 75 satoshi/byte) have a waiting time up to 24 hours at the moment.

https://bitcoinfees.21.co/

Consider the scenario where I don't already hold bitcoins, but would use them for a transaction. It is very possible that by the time I obtain them, then go to make a transaction an hour later, that I could lose over 10% due to fluctuations. It's not that I physically can't, its that I would be stupid to rely on bitcoin as an exchange of value when there are other options with less volatility. Yes bitcoin and cryptocurrencies are in their infancy and inherently volatile at this stage, but the volatility until now has been lower such that we are willing to accept losing 1-2% in a transaction for the perceived value of transacting in bitcoin over a fiat currency. With volatility at these levels, that value proposition goes out the window. Adoption of a currency is always a function of how stable it is as a store of value, and wider adoption is what sustains a higher value. Speculation is not able to sustain a higher intrinsic store of value, hence my hypothesis.

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