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Neil Lindholm
Byrne Robotics Member


Joined: 12 January 2005
Location: China
Posts: 4940
Posted: 03 December 2017 at 3:55pm | IP Logged | 1 post reply

The people calling it a bubble are usually people in industries that are threatened by the disruption that Bitcoin can cause them. It allows people to transfer money immediately to anyone around the world, bypassing the middleman (banks). It also allows storage of funds and loans, also bypassing banks. It is a finite resource so governments cannot inflate it or control it since it is decentralized. Many people calling it a bubble also have a vested interest in it dropping in price (they can then buy more). 

If it is a bubble, it has been in a bubble for around seven years. Every time the price drops, it shoots back up faster than before because many people understand what it is all about and believe in it. 
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Joe Zhang
Byrne Robotics Member


Joined: 16 April 2004
Location: United States
Posts: 12857
Posted: 03 December 2017 at 11:57pm | IP Logged | 2 post reply

I have a pal who mined Bitcoins on his ordinary PC when the price was a few cents. Later he sold his Bitcoins and went on vacation for a year. I'm sure he wish he kept those now.

A couple years ago I knew guys involved with Bitcoin startups. They gave me a strong "drank the Kool-Aid" vibe. Really smart people can invent terrific ways to fool themselves. On the other had, they are probably living it up right now.

I still believe Bitcoin is a self-destroying mechanism. It is no longer a currency, because if you had any it would be stupid to buy anything with it. Like my friend who cashed in his coins, thinking he got a good deal, but missed out on becoming rich. So what is Bitcoin? Something you buy, with the unshakable belief that someone else would buy it from you at a higher price. There's no other use for it. In some circles, that is known as a Ponzi .... 


Edited by Joe Zhang on 04 December 2017 at 12:02am
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Wilson Mui
Byrne Robotics Member


Joined: 27 June 2004
Location: United States
Posts: 4524
Posted: 04 December 2017 at 12:46am | IP Logged | 3 post reply

It is my understanding that bitcoins are mainly used for illegal purposes.
I think at some point the government is going to start regulating this
market. If that happens, the price of bitcoins will collapse.
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Neil Lindholm
Byrne Robotics Member


Joined: 12 January 2005
Location: China
Posts: 4940
Posted: 04 December 2017 at 1:15am | IP Logged | 4 post reply

We don’t know what bitcoins price is because it is so new. There is a limited amount, unlike cash, so it makes it an attractive medium of storage. No government or person can ever create more, other than the fixed amount available in mining, which kills off the inflation. Image if all the money in the world was based on bitcoins. Think of it as gold. Finite amount and you can’t inflate it. Now think back to the days of the gold standard. All money was based on gold. This is the model people want. Government corruption is gone since there is a fixed record of every transaction that cannot be lost or manipulated. It makes money transfers immediate and completely open. Of course governments don’t like it. They can’t manipulate it for their own gain. 

As for funding illegal purposes, this is just nonsense created by the banks who know their business model is in trouble. Good thing cash is never used for criminal purposes. And again, since every coin is trackable, if you have the account of a crook, you can find out immediately who paid them. Good luck doing that with cash. 


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Wilson Mui
Byrne Robotics Member


Joined: 27 June 2004
Location: United States
Posts: 4524
Posted: 04 December 2017 at 10:43am | IP Logged | 5 post reply

If bitcoin is to ever supplant fiat currencies, it will
have to be much less volatile and much easier to use. I
can't imagine a lot of businesses accepting bitcoin if
there is a chance the price could be down 10 or 20% the
next day.
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Brennan Voboril
Byrne Robotics Member


Joined: 15 January 2011
Posts: 1734
Posted: 04 December 2017 at 10:57am | IP Logged | 6 post reply

Bitcoin reminds me of the great Tulip mania of the 1600s.  
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Peter Martin
Byrne Robotics Member


Joined: 17 March 2008
Location: Canada
Posts: 15783
Posted: 04 December 2017 at 10:59am | IP Logged | 7 post reply

The problem with Bitcoin is what stops its decline when the bubble bursts?

If Bitcoin is a genuinely attractive medium of storage, ask yourself: let's say you were forced to store your life savings in USD or bitcoin. Which would you be more comfortable doing?


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Jean-Francois Joutel
Byrne Robotics Member


Joined: 06 November 2008
Location: Canada
Posts: 315
Posted: 04 December 2017 at 11:25am | IP Logged | 8 post reply

Another issue with Bitcoins are the brokers.

Back in 2012, a friend of mine was investing and mining in bitcoins. He was trading through a broker called MtGox. It was the largest broker of bitcoins at the time, processing about 70% of all transactions.

They got hacked, and lost all of their bitcoins ($450 million dollars worth). My friend lost all of his bitcoin investments. MtGox declared bankruptcy and eventually liquidated.

In 2016, the largest bitcoin broker, Bitfinex also got hacked, but only lost $72 millions worth of bitcoins.

When a bank gets robbed, their assets are insured. That does not apply to bitcoin brokers.

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Neil Lindholm
Byrne Robotics Member


Joined: 12 January 2005
Location: China
Posts: 4940
Posted: 04 December 2017 at 3:20pm | IP Logged | 9 post reply

Digital currencies are where the Internet was in 1996. This is a very new technology and things are happening at a rapid pace, making it very volatile. This is normal with any new disruptive technology. The dot-com bubble got rid of many of the websites that had no real use but imagine if you had bought Apple or Amazon shares during this time. The useful ones survive and the deadwood clears out. 

The tulip analogy has been going around for years but it is not very accurate. Tulips were not a new technology and they had no useful qualities, other than being pretty. As well, the whole "tulip mania" thing is pretty much a myth. 


US dollars are massively manipulated and counterfeited and inflated. Digital currencies can be manipulated but not on the level the government can. They cannot be counterfeited or inflated. 

Finally, as for storage, I am at a loss why people would trust a third-party access to their private keys to brokers like Mt. Gox. If you don't control your private keys, you don't really own the coins. Things are much more stable now since Mt. Gox. Again, new technology, new learning curves. Bitfinex has refunded all of the losses to its clients and Mt. Gox is looking at methods of repaying back a well. Like anything else, risk=reward. You can leave your money in the bank and have it lose its value due to inflation but at least it is "safe". That is until the government decides to freeze your account or repeats what happened in Cyprus or Greece. 

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Brennan Voboril
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Joined: 15 January 2011
Posts: 1734
Posted: 04 December 2017 at 3:56pm | IP Logged | 10 post reply

Goldgar does use the term tulipmania.  She also claims Holland went wild about tulips (all in the introduction of her book). 

I think the term tulipmania is an appropriate one to use in comparison to Bitcoin but if it is offensive, pick any speculative bubble in history. 




Edited by Brennan Voboril on 04 December 2017 at 4:17pm
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Neil Lindholm
Byrne Robotics Member


Joined: 12 January 2005
Location: China
Posts: 4940
Posted: 04 December 2017 at 4:30pm | IP Logged | 11 post reply

"In fact, “There weren’t that many people involved and the economic repercussions were pretty minor,” Goldgar says. “I couldn’t find anybody that went bankrupt. If there had been really a wholesale destruction of the economy as the myth suggests, that would’ve been a much harder thing to face.”

The article I linked to explained how the entire thing is overhyped. Nothing offensive about the term, it is just the wrong term to describe what is happening. 

People have been saying it is a bubble since bitcoins were introduced. If you understand the actual technology, you realize how disruptive it is, which is a serious threat to the established beliefs. No wonder they attack it constantly. You have to feel almost bad for a large investment banker whose entire world-view on how money is supposed to work is turned upside-down. No wonder they go after it. Reminds me of the music and publishing industries who believed the internet was just a fad and would soon go away and let them go back to their old way of doing business. 
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Matthew Chartrand
Byrne Robotics Member


Joined: 17 June 2007
Location: United States
Posts: 1357
Posted: 04 December 2017 at 4:58pm | IP Logged | 12 post reply



 If all Bitcoins are trackable then what happened to the ones the hackers stole? They could never use them, could they?
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