Comment by AnIdiotOnTheNet | Hacker News Reader

Comment by AnIdiotOnTheNet | Hacker News Reader

AnIdiotOnTheNet

At one time I had 137k Dogecoin, which was traded from leftover BTC after cashing out[0]. I picked Dogecoin solely because I could get 137k of them, which I think was worth about $20 at the time. Apparently that would be worth over $1k right now, but sadly I shoved it in a bter account and it is now lost. C'est la vie.

I still think cryptocurrencies are largely an experiment in the application of contemporary memetics to scam people, but I have to admit that said experiment has produced wildly more successful results so far than I had ever anticipated. The power behind the convergent desires of get-rich-quick schemers, true believers, conspiracy theorists, anarcho-capitalists, and complexity fetishists is a pretty terrible thing to behold. My prediction would be that this particular maneuver won't work because only just over one of those groups really have any interest in its success (believers and some schemers). Then again, all my other predictions about cryptocurrencies have been wrong so far.

[0] I took advantage of a hype cycle to make ~$1k. I kinda regret it because in a small way my greed-driven maneuver contributed to the current state of BTC and its ludicrous energy usage.

I have an honest question, since a lot of your predictions have been wrong so far. Why are you not interested more in some alternative explanation/theory that would better fit data you have at hand ?

I am, but as of yet I find other theories unconvincing and difficult to disentangle from the propaganda besides.

For instance, people claim that cryptocurrencies have real utility, and cite their use of moving money out of countries where traditional international currency transfer is difficult. While that is true, since the function of those transactions is to use the currency as a medium of exchange of other currencies it cannot explain the volatility of the exchange rate, as the current exchange rate is irrelevant if your purpose is simply to convert to and from other currencies.

The volatility is due to speculation, but without real utility it is difficult to see what anyone could be speculating on. One could say "belief that the value of the currency will continue to increase", but that's essentially admitting to it being a pyramid scheme. If people ever stop believing and refuse to buy, which would be easy to do since it is nothing to spin up another coin, the price collapses.

Now admittedly I am not an economist, so I make no claim to the correctness of my assessment other than that it makes sense to me. However, the vast majority of people pushing cryptocurrencies aren't economists either.

I think a lot of the volatility could be attributed to moving money around. When you want to move money out of a country you need to find someone willing to sell bitcoin in the currency you have. Then you need to find someone willing to buy the bitcoin in the new currency you want. Since it’s difficult already to move money between said currencies, the friction is likely to be seen as volatility in the price. You’ll also see big swings just from moving a lot of money.

I’d be more skeptical of the moving money around hypothesis but I know people who looked into it when thinking about leaving the US. So at least people are honestly looking at bitcoin for that purpose, even if it may be impractical.

More like $4,000 now!

Crazy.

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