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Comment by shubhamjain | Hacker News Reader

From a technical standpoint, Bitcoin makes no sense. Bitcoin supply is fixed. How can, then, a currency be valued 100x within a few years when there's no major possibility of finding a magical utility of it. But, neither does Facebook's success. I couldn't have imagined anyone could create a $400B+ social network company.

I guess if by being rational you're avoiding burning your hand, you're also missing out on the hen who will lay golden eggs in the future. In a few years, $10,000 might look peanuts to pay for Bitcoin. It seems logically absurd to think so, but time and again, the skeptics have been proven foolish and the believers have made the gains.

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"Past performance is no indicator of future returns"

New things come along, and they don't have to make sense in the old worldview in order to be good. So the analysis of 60 year olds, even the really smart ones, is less valuable than it sometimes appears.

HOWEVER -- the opposite is also true, "flavors of the month" come and go, and proving worldwide utility takes more than convincing a lot of people to buy for a period of time.

It's going to take years to see the outcome and who is right. Humans are absolutely fucking terrible at predicting the future. Don't buy the hype.

Do your own research, run your own experiments, and hedge your own risk.

The utility of Bitcoin, and the value it provides right now, is almost entirely the returns it provides relative to a fiat currency during the period of hyper-valuation.

If it fails to continue growing relative to the perception of the people buying it, it's value on the market will plummet, and that will likely cause a run on the exchanges.

Is there even reason to expect exchanges to play along if the value starts to really go south? It's pretty obvious that exchanges would be practically out of business after a total collapse of bitcoin valuation, so a collapse would be an existential threat to them and existential threats are known to inspire desperate measures. What regulation would keep market makers from experiencing "unexpected technical difficulties" in a panic (e.g. until their own holdings are liquidated, and those of their friends)? There are many ways to add arbitrary friction and hidden prioritization to sell offers if you are not under the full scrutiny of all that regulation bitcoin aficionados want so dearly removed.

If you were forced to find buyers for your btc on your own in a panic, without the help of market makers, then collapsing nominal market rates would not be the main problem of "btc millionaires", getting that collapsed rate, or even just a significant fraction thereof, would.

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