Cryptocurrencies

[gg]

When your mechanic and plumber start investing and touting the wonders of cryptocurrency, you should start to get concerned!  Both have tried to arrange meetings with me recently on how amazing and hot Bitcoin is, as well as they want to introduce me to their Bitcoin guys.

Also, the fact that Patrick Byrne is now spending Overstock.com money on this, should also concern people!

Cryptocurrency is the future, but the winners will be few and far between, like how Amazon presently leads the internet wars with the dead carcasses of its competitors littering the street or barely surviving.

Cheers!

Agree 100% when these sort of people are getting excited about stocks or real estate, or other assets they can speculate on, which have a maximum intrinsic value... the one difference here is that bitcoin has positive network effects, so hysteria/speculation can actually end up increasing their intrinsic value

[SharperDingaan]

Bitcoin is an 'Oracle' with a token called 'Bitcoin'. Because other people will accept 'Bitcoin' as payment for goods or services, 'Bitcoin' functions as money. Because it uses cryptography we call  it 'cryptocurrency', & assign magical properties to it. Long time ago we assigned similar properties to anything ended '.com' - & it didn't go so well.

Bitcoin owes its popularity to first mover advantage, and the blockchain technology that runs it. As it features prominently in a number of textbooks, it is probably never going to go away. And with more people reading those textbooks, demand is likely to increase - driving price and volatility changes.  Mougayar (2016) The Business Blockchain. Nothing wrong in any of this, but at least recognize the drivers.

The underlying blockchain technology is the killer app, and it is operating in 'blue sky' - on just about everything it touches. New monopolies are being created almost quarterly, and are in the process of scaling up; once complete they will make the old Standard Oil Trust look like kiddies play.

The potential impact has started to register with the public, but it is being articulated as 'Bitcoin'; ie: the wrong words are being used. Just as many people thought a 'mouse' was a rodent - when the first computers came out.

SD

   

[rkbabang]

When your mechanic and plumber start investing and touting the wonders of cryptocurrency, you should start to get concerned!  Both have tried to arrange meetings with me recently on how amazing and hot Bitcoin is, as well as they want to introduce me to their Bitcoin guys.

Also, the fact that Patrick Byrne is now spending Overstock.com money on this, should also concern people!

Cryptocurrency is the future, but the winners will be few and far between, like how Amazon presently leads the internet wars with the dead carcasses of its competitors littering the street or barely surviving.

Cheers!

Agree 100% when these sort of people are getting excited about stocks or real estate, or other assets they can speculate on, which have a maximum intrinsic value... the one difference here is that bitcoin has positive network effects, so hysteria/speculation can actually end up increasing their intrinsic value

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?

[rkbabang]

To further diversify, Tezos looks interesting.  I am thinking about participating in the ICO at the end of this month.  If you participate in the first 2 days you get 6000 TEZ per Bitcoin which decreases down to 5000 TEZ/BTC over the 10 day offering.  It is an open-ended ICO, so the resultant market cap will depend on how many participate, they are hoping to raise $20M.  I would be using my current bitcoin holdings to further diversify my cryptocurrency basket, not new money.

Some info:

https://bitcoinmagazine.com/articles/tezos-receives-investment-smart-contact-system-polychain-capitals-digital-currency-fund/

Tezos, the generic self amending crypto-ledger

Tezos.com

[Jurgis]

Perhaps I should ask if people are paying taxes on cryptocurrency gains. 

[wachtwoord]

Tezos isn't even clear about the number of tokens they are giving out which makes it impossible to calculate a market cap. Completely uninvestible.

[tng]

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?

I'm not sure if it is even comparable like this. If there is a huge advancement in social media, Facebook can simply change their core code to put that feature into it. Other smaller social networks did stuff like videos, live streaming, stories, etc first and Facebook adopted the ones that worked well. Facebook at launch was a wall that people can write on. Now it is very different.

The crypto-currencies are very limited in their ability to change like that. What if someone figures out something better than Bitcoin's block chain? It's almost certain to happen over time. When someone invents a vastly superior crypto-currency, is everybody going to stick with the old one?

[wachtwoord]

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?

I'm not sure if it is even comparable like this. If there is a huge advancement in social media, Facebook can simply change their core code to put that feature into it. Other smaller social networks did stuff like videos, live streaming, stories, etc first and Facebook adopted the ones that worked well. Facebook at launch was a wall that people can write on. Now it is very different.

The crypto-currencies are very limited in their ability to change like that. What if someone figures out something better than Bitcoin's block chain? It's almost certain to happen over time. When someone invents a vastly superior crypto-currency, is everybody going to stick with the old one?

Over time sure something better might be found. Thus far it took all of human civilization to come up with a solution for the Byzantine generals problems allowing for the trust-less transactions enabled in Bitcoin.

[rkbabang]

Exactly.  Similar to Facebook. The more people using it the more valuable it is.  The only question is if Bitcoin is the Facebook of cryptocurrencies or the MySpace?

I'm not sure if it is even comparable like this. If there is a huge advancement in social media, Facebook can simply change their core code to put that feature into it. Other smaller social networks did stuff like videos, live streaming, stories, etc first and Facebook adopted the ones that worked well. Facebook at launch was a wall that people can write on. Now it is very different.

The crypto-currencies are very limited in their ability to change like that. What if someone figures out something better than Bitcoin's block chain? It's almost certain to happen over time. When someone invents a vastly superior crypto-currency, is everybody going to stick with the old one?

Over time sure something better might be found. Thus far it took all of human civilization to come up with a solution for the Byzantine generals problems allowing for the trust-less transactions enabled in Bitcoin.

Yes, but once a solution to a problem is found using new technology (remember in the grand scheme of things the internet and even computers themselves are new technologies) is the first solution likely to be the best solution?  It took all of human civilization to get off the ground, but the Wright brothers original aircraft has been improved upon a bit over the years.  But that is just playing devil's advocate a little, because we don't really know.  To answer tng's question, cryptocurrencies can be changed in how they work.  ETH has forked a number of times to change things and add features, there is a huge debate going on now in the Bitcoin community over forking the blockchain to change some things.   It isn't easy to do. Building consensus is never easy to do, and it probably shouldn't be easy to do, but it can be done.  If something was invented that didn't evolve a blockchain at all, could bitcoin and others evolve to support that?  I don't know, probably not, but I don't think that is likely.  I think blockchains in one form or another are going to be the fundamental building blocks for many useful technologies in the coming decades.  Blockchain technology in 2017 is like the internet in 1985, most people have no idea it even exists, and even those who are excited about it have no idea what exactly it will look like in a few decades.  And maybe the killer app (such as the WWW was for the internet) hasn't even been invented or thought of yet.  I think it is possible that revolutionising money is just the beginning of what the blockchain will do.  Back in 1985 the internet was supposed to revolutionise mail delivery and personal communication, I don't think many people thought it would change the entire global retail industry or the entire entertainment industry in their lifetimes.

[wachtwoord]

The right question isn't whether it can be improved but rather whether it's good enough