Bitcoin - Part 2

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Bitcoin is 'worthless'

Capital Economics: Bitcoin is likely to fare worse than other assets in the coming months because it has no fundamental worth
"Bitcoin's correlation with equity prices has strengthened recently, but we think that this will be just temporary. We still think that bitcoin is essentially worthless, meaning that it is likely to fare much worse than other assets in the coming months," Capital Economics said.

"We expect equity markets to fall as investors cotton on to the fact that rising U.S. interest rates will slow economic growth. But the main factor driving down the price of bitcoin is likely to be a realization that it is simply not a credible long-run alternative to conventional currencies"
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psionl0 said:
Why? Do you think that everybody who spent thousands buying this "novelty" will suddenly get bored with cryptos and dump them?
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psionl0 said:
Why did you dodge the question?
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No, it's just a hypothetical example of how it could play out if the demand based on speculation goes away.

Probably many who bought at a high price would hold them forever, hoping for a comeback.

But if the only buyers were in the nostalgia market and only willing to pay $10 for a bitcoin then I believe that there would be enough willing to sell at that price to satisfy that market. That possibility is why I believe that an ultimate value of $0, as some have stated, is unlikely.
 
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Roger Ramjets said:
Capital Economics: Bitcoin is likely to fare worse than other assets in the coming months because it has no fundamental worth
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And how many price peaks does this article say bitcoin has had? One?

Do they think that the battering that bitcoin took in 2015 was not as severe as the current one because the price drop was "only" $900 instead of $13,000? Or maybe they didn't bother to research the price history and think that bitcoin was only invented yesterday?

It is a rubbish article that discredits Capital Economics but I guess that confirmation bias is confirmation bias.
 
jrhowell said:
But if the only buyers were in the nostalgia market and only willing to pay $10 for a bitcoin then I believe that there would be enough willing to sell at that price to satisfy that market. That possibility is why I believe that an ultimate value of $0, as some have stated, is unlikely.
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People might do it 'for the nostalgia' like they play old computer games. But would they be willing to pay for it? The blockchain is just a file, and 'mining' Bitcoins only takes a bit of computer time. When very few are doing it the cost will be negligible.

But hey, you could be right! In another 20 or 30 years Bitcoin might make a comeback, just like other stuff that was previously considered worthless.

Remember Those Free AOL CDs? They’re Collectibles Now
 
Bitcoin an infectious disease?

Bitcoin's soaring value was down to 'infected' buyers, economists say
Barclays analysts compare speculation in digital currency to spread of infectious disease

Using studies from the world of epidemiology – the branch of medicine concerned with the occurrence, distribution and control of epidemic diseases – the bank’s economists built a model for bitcoin prices that assumed more people were now “immune” to the lure of making money on the new financial asset.

They said prices tend to rise when “infections” spread from one buyer to another, transmitted by word-of-mouth between friends – especially to those with a “fear of missing out” on a chance to get rich quick. The rate of new entrants to the market helps to set prices, while more people losing money will lead to immunity.

Arguing that the “susceptible” population for the bitcoin bug has now fallen, the economists said the peak reached just before Christmas was probably the ultimate price that could ever be achieved for the digital currency.
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But that's just the sort of FUD you would expect from Barclays, right? Don't listen to the banksters, buy Bitcoin now!
 
Bitcoin Miners in Trouble?

Falling bitcoin prices land rent-a-miner scheme in hot water
One Norwegian company, Selksapet Digital Gruveindustri, or Digital Mine Industry reckoned it found a symbiotic solution. Customers buy powerful ASIC bitcoin miners outright with Norwegian krone, and receive 70% of the bitcoin mined by the rigs.

It all went as planned until bitcoin prices dropped, E24 news reports. Even with its arrangements, the company was losing money hand over first by simply switching the machines on. Its customers, some of whom had forked out hundreds of thousands of kroner for a big stake, weren't particularly interested in the company's shrinking margins and simply wanted to get the bitcoin they were promised.

Even keeping the full profits, the company is probably still losing money by switching on the machines. A bitcoin price of about $8,000 will see most miners barely break even, so at the time of writing, prices under the $7,000 range are unsustainable unless you have a huge set-up and access to some of the cheapest electricity in the world.

It takes time to set up a mining operation, so even as bitcoin prices dropped from their December highs, people were still joining the mining race, and raising the difficulty level and bringing more competition in the process. At current prices, most of these miners are probably getting burned simply by switching on their machines. Their options now are to either switch them off and wait for better days, keep mining and hope bitcoin prices rise enough in the future to make it retroactively worthwhile, or try to sell off their machines.
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But of course all of this is by design. A design that is either deeply flawed, or a scam.
 
Roger Ramjets said:
If my life depended on having money in a safe place with easy access I would pull it out of the bank and put it all into Bitcoin - NOT!

Good attempt at an Ad hominem though...
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You were the one who implied that Barclays was beyond criticism and their word must not be questioned. As it turned out, their "infectious disease" analogy was just crap uttered by an institution with a vested interest in seeing cryptos fail.

This is just another example of somebody saying something you like to hear. (Good attempt at a non-sequitur though ...)
 
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Blockchain is Revolutionary? Or is it all Bull...

Why Bitcoin is ********, explained by an expert
"There are private blockchains, which is a 20-year-old technology that somehow causes idiots to throw money at it, and then you have public blockchains, which is supposed to be a decentralized record-keeping structure but, in reality, is both centralized and horribly inefficient. The use of private blockchains is pretty varied because there’s nothing new and it’s an old idea"...

"The rationale for these things is that there’s no central authority, which means no one can block or undo a transaction. And so far at least, it’s true that transactions aren’t blocked. But why do you need such a system? Because you’re doing a transaction that a central authority would otherwise block, like paying off a hitman or buying drugs... if you don’t need to buy drugs or hitmen, the cryptocurrencies are vastly less efficient."

"...there’s a self-selecting bias. Most people who think this is bogus simply walk away. Those who are believers are believers. Very few people have followed it like I have for five years and still find it ridiculous, but that’s because I’m an academic and I have the space to do it and I find parts of it, especially the criminality, interesting. But the arguments in defense of this stuff are getting loonier and loonier."
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psionl0 said:
You are really scraping the bottom of the barrel if you are not willing to identify the "expert" nor examine their creds.
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The points in there really don't seem in dispute. It is really just interpretation on known facts. Not really something you need an "expert" for.

ETA: I said points, but I meant the underlying evidence that he uses to make his points.
 
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Ron_Tomkins said:
Will there also be Bitbills? What about Bitchecks?
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Not sure what your point is. Psion at least regards bitcoin as a speculative venture, not a full fledged currency.

Is anyone here advocating bitcoin as a real currency anymore?

Psion can correct me if I misrepresent him.
 
BobTheCoward said:
The points in there really don't seem in dispute. It is really just interpretation on known facts.
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The description of miners as a "central authority" is seriously flawed - especially since they have nothing to do with cryptocurrency exchanges. Anybody who would make up such nonsense is no expert.

The only consideration in getting a valid transaction onto the block chain is whether you have offered enough of a fee to get a miner to do so. Even if one miner chose to boycott your wallet, others would not.
 
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Decentralized? Not so much

Cornell Researchers: Bitcoin Not as Decentralized as Assumed
The paper measures the actual practice of decentralization, rather than hype to that effect, surrounding two the largest market cap cryptocurrency networks, Bitcoin and Ethereum...

“Compared to Ethereum, Bitcoin nodes tend to be more clustered together, both in terms of network latency as well as geographically,”... Researchers attribute this to data centers holding a larger percentage of Bitcoin nodes, over half in fact. Data centers can become troublesome in the quest for decentralization because they’re often held by corporations...

The study indeed found in both Ethereum and Bitcoin “mining [is] very centralized, with the top four miners in Bitcoin and the top three miners in Ethereum controlling more than 50% of the hash rate.” Indeed, the “entire blockchain for both systems is determined by fewer than 20 mining entities.”
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