If stocks go down and you hold long-term, ultimately selling for a profit, would you describe that as “investor ‘still’ thinks he can make money on stocks”?
I respect that most of crypto is a scam, but it’s upsetting that a place like HackerNews can’t even acknowledge the good ones.
No. Let me phrase this in a sensible way: if a trillion dollars in stated stock market value evaporated over a year, I would not be remotely surprised at the WSJ putting out an article with "still" in the title.
What do you consider to be the good ones? I think it is likely that whatever argument you would give for most of crypto being a scam probably also applies to the ones you think are good. Crypto has caused us all as a society to waste a huge amount of electricity for very little tangible benefit.
Personally, Bitcoin and Ethereum are the only two that I truly trust, but I’m always willing to learn about new projects.
Edit: I look forward to seeing where we are in the crypto space in 15-30 years. Looking back, I expect it to be funny hearing over and over “look at all the energy we wasted” as people shook their fists at the sky.
Well, I would disagree that Bitcoin or Ethereum are doing anything useful for us. Bitcoin fails as a currency due to being impractically expensive and slow to perform transactions with. In addition, since there is no central organization to help with fraud protection you end up with a very difficult interface to use, and many ways to accidentally lose your money with no recourse. The code is easy to copy, so you end up with a mess of competing forks with no incentive to converge.
I guess we'll just have to wait and see how it goes. I expect it to be funny looking back in the sense that we wonder why people ever thought that bitcoin had value.
Gold has very little practical value outside of the small % used for manufacturing. Most precious stones have lab-created near equivalents. There is still a multi billion $ market for the real deal. BTC is just a bunch of code so it's not even pretty, but a lot of things have value despite not being very useful, and if people have "faith" that BTC has a certain value, then it has that value.
Anecdotally, I considered BTC to be worth ~20-25k USD back when it was at < 3,000 USD, and including when it was well over 50000 USD. Turns out that seems to be the resting point currently.
A stock is considered overvalued when its price is not justified by its earning outlook. Bitcoin does not have earnings, so if we tried to value it the same way we value stocks, the intrinsic value would be zero. People often use the word value to mean the market value though, in which case, yes I would agree that bitcoin has a nonzero market price.
What sort of factors were you considering when you determined a valuation of 20-25k as the true worth of bitcoin?
No factors that could be considered useful analysis. Something like: since most BTC has been mined + its general popularity + its usefulness, it seemed to me to be undervalued by some 10-20x (when it was 1-3k). Similarly, when it was 50k+, it felt over valued relative to popularity + usefulness.
If it becomes more useful, such as if it becomes the main currency of countries with terrible currencies, then its value can skyrocket since it will be sought after like crazy.
> if it becomes the main currency of countries with terrible currencies
Yeah I guess we would just disagree about the probability of that happening. There are inherent technical limitations preventing bitcoin from ever reaching a high transaction volume, and I think the lightning network has its own problems, so I don't see that as a solution either. Also, since it is so extremely energy intensive, for the good of our planet's environment I hope that this misguided experiment in cryptocurrencies dies out sooner rather than later.
I feel like the Lightning network addresses the ease of use and transaction cost issues, but I agree that there is still work to be done.
Regardless, this is the part where I’d tell one of my friends that I’ll buy them a beer if they’re right. Time flies so I’m sure we’ll get our answer soon enough.
The main problem in my mind with the Lightning network is that in order increase transaction speed, it is reducing the decentralization by requiring participants to trust the other network operators that they create channels with. For the lightning network to really scale to a global payment system, we would need large central hubs for the payments to route through and you would end up with a poor imitation of the centralized banking system that bitcoin is attempting to avoid.
I respect that most of crypto is a scam, but it’s upsetting that a place like HackerNews can’t even acknowledge the good ones.