Topic: cryptocurrencies are not just stores of value, they are networks - page 2. (Read 1774 times)

Apparently this is correct. Though price appreciation over rate of adoption shows positive results as of now, we still can't be sure that this would be the case for the next coming months or years. Adoption is very critical for the growth of the network since the little minnows that support the reef is needed for the ecology to thrive.

Your Subject and OP aren't the same.

To your Subject, I respectfully disagree with you - cryptocurrencies are stores of value, the blockchain is the network.

What does this have to do with bubbles? Everything. Stores of value have bubbles. Networks not so much.

To your article, when I first saw this chart I actually thought it was real data. It would be nice to see the real data up to this point and then the projections. I realize you didn't create it. The key point of that chart (which I do agree with you on) is that thus far after every decline there's been a roaring return. It make take a year or more, but it's happened.

The best part for me is, what will happen next?

I don't know where you got that.
The bubble burst because at a public auction of tulips in Haarlem, nobody showed up.
The Dutch government would have been quite crazy to ban it, it was Holland's fourth largest export product.

Crypto has introduced the idea to have scarce tokens that are not that easily manipulable without a trusted central authority ; at least, at first sight.  On the other hand, this also means that everybody can invent a crypto ; and there's something that has not been tested a lot, but that seems to me to be unavoidable in the long run: successful crypto chains can be split, copied, copied with modifications, etc...  Crypto has power games to it, that can lead to a small cartel of people to decide about the modifications of the rules of a crypto.   

So contrary to what it seems, crypto is NOT a single chain with rules graved in stone ; but the way these are modified, copied, morphed .... are obscure games we are still in the process of discovering.  We don't know what the eco-system of many crypto, evolving, morphing, crossing over, being created, .... will look like (for the moment, we see what it looks like: a huge speculative market like the complex derivatives).   The only thing such eco system provides, more and more, is a rather opaque means to get value from one place to another that may not see the daylight.  As such, it is honouring somewhat its initial purpose of being an anarchist payment method where one can gain a form of economic freedom (for the better - dark markets, avoiding taxes and bribing deciders - or the worse - financing terrorism and ransoms), but the price to pay is that we have created a speculative bomb that will, like any speculative bomb, blow in our face. 

Will this complex eco system of different morphing crypto come to a kind of equilibrium that gives it a useful economic function apart from the economic freedom I mentioned above, or will it have brought a new form of economic instability one doesn't know how to master ?  I don't see how a morphing boiling sea of speculative crypto can bring much good in the long term apart from the side application, which is economic freedom.  But maybe this thing will find its own equilibrium and become something that moderates speculation but I don't see how.

Useful there are a variety of proposals to use it as a means of confirming election votes without serious counting errors.
The mainstream news looked at that a while back in detail
https://www.forbes.com/sites/realspin/2016/08/30/block-the-vote-could-blockchain-technology-cybersecure-elections/#bfca02f2ab31
https://venturebeat.com/2016/10/22/blockchain-tech-could-fight-voter-fraud-and-these-countries-are-testing-it/

How does anyone else on this thread feel about blockchain being used for things other than currency? For example: voting polls

That makes more sense now. I would imagine any exchange could be hacked whether it be crypto or fiat. I have major trust issues. That's why I ask a lot of questions. Playing around in those exchanges is a gamble anyway.

well the beauty of gold is that things like hackers cant scam your credit card..  but if you put your gold into a storage box and not care who has the key.. then someone can steal it.

the point of bitcoin is not to use things like mtgox!!!

i have never been victim to exchange hacking. my hoard has remained in my sole control. the only time it leaves my control is when spending it. but then its not my problem anymore, its the recipients.

bitcoin is not about using online wallet. but some people cannot look passed the fiat mindset, to be in self control.. so end up being lazy and "trusting" others to hold their value because its all they have ever known

This is where I get a little confused. I thought the beauty of block chain, was that events like Mt.Gox wouldn't happen.

You've got very good points there, especially with the notion of increased (not mass I think) adoption already priced in. That's not the only thing... I believe speculators are trying to predict based on history and pricing these events in as well:
1. Future halving in 2019/20
2. More coins lost in Mt. Gox like events
3. near term scarcity at exchanges

Yes it's possible, but I'd say world reserve currencies will be kept afloat for a long time until a real collapse happens. The inflation will continue and what now costs $100 will be $200 in 10 years. You'll need a million to buy a house and new cheap cars will cost at least $20000, that's a near future. A 100 years ago people were working for $1 per hour, now they need at least $10, when we reach $100 per hour you'll know your fiat is hyperinflated and collapsing.

FIFY.
Now that we're finally out of that 2013-2015 slump people are rushing to get bitcoins again. We're just back on track to where we should have been in 2014. More people are adopting bitcoins, more places are accepting it, more countries are declaring it legal currency. It's not a fad or whatever. This is the real value of bitcoins. Get on the bus or or watch it drive away.

I read the article on zerohedge the day it was posted. It is a brilliant article which shows us why bitcoin is invincible. Old timers who compare bitcoin to gold and think bitcoin is just another tulipmania which is about to die. They do miss the main point(s).

1) If we were able to trade tulips P2P through the world since the year 16xx's, we would still be doing it. We would have named it, Tulipcoin.
2) Bitcoin is different than tulips because tulip trading died because people just couldn't trade it anymore. The government banned it. Bitcoin is invincible in this regard.

Even if they close all the exchanges, shut all the miners down, bitcoin will still keep being traded. The trading volume will drop %99, the prices will drop %99 but it won't die completely. It will always find users. That is why bitcoin is no tulips. Not even close.

There's still the question of adoption. More and more people are accepting crypto as currency. If the rate of this takes off, is it possible that the USD (or other world currencies) could collapse? Or would they simply create their own "USDCOIN" and convert to block chain technology?

Crypto is something truly revolutionary, but not what we think it is.  It has not much to do with "currency".  Crypto is essentially the purest form of "speculative financial asset".  Most speculative financial assets have some or other link with the real economy, apart from gold.  Real estate, stock, derivatives etc .... are formulated in such a way that their value is somehow linked to something in the real economy (you could say that the real economy is the random generator that is trusted by the financial players to give the outcome of their speculative game).   Crypto has invented the "economy-less derivative".  Financial institutions had invented de facto such kind of assets to be able to gamble big time - which led to the banking crisis of 2007-2008.  Since the financial sector is much more restricted now in the speculative games it can play, and technology was ripe, a new "Wild Wild West" speculative asset had a market opportunity: crypto.

Regularly, the financial world looks for such assets to speculate on when they have too much easy money on their hands, and are in need of bubbles.  Crypto is the perfect asset for that.  When financial markets are in the stock market and gamble with stock (like before 1929 or dot-com), or they gamble on real-estate (Japan in the 90-ies, US/Spain/... real estate bubble) or they invent unfathomable derivatives (2007), financial markets live off irrational bubbles ; the problem is, most of the time, they use "real-economy connected" assets to gamble on, and at a certain point, the disparity between the fundamentals and the market value indicates a bubble.  Crypto has the advantage to be a purely speculative asset without almost any "real economy connection": it is a token on which to gamble, and the market price is PURELY determined by other gamblers.  

I think there are still a lot of legal barriers for big finance to enter crypto, but I think they are just having wet dreams of being able to play with it.  Crypto will be banks and financial institutions' best friends, and if the legal barriers fall, it will most probably be one of the better bubbles out there, paling the 1929 or 2007 banking crisis: crypto has the potential to cause one of the biggest financial catastrophes of history if it seriously takes off (no, it won't be its cure, it will be its cause).

This is essentially due to the "collectible" nature of most crypto, without value capping, which makes it a gambler's asset like no other.  This is why we see it bubbling, and growing at the same time: it is a highly unstable asset, the perfect wet dream for financial institutions.  The bubble it might blow could very well be much, much higher than what we're used to, so this ride can go very very high.

i don't get what this new wave of way of thinking is coming from but it has just been a thing recently!

for years whenever you looked around on the social media everyone was excited to say "we spent bitcoin", and acknowledge bitcoin as a currency. then recently i keep hearing some people starting to insist on convincing others that bitcoin is not a currency but a store of value!

nice chart by the way...

Agreed, we're not in a bubble. It's the normal growth of the crypts as the inflow increasing periodically. But the second thing doesn't look appropriate, crash is realistic but with bitcoin it differs. Unlike market shares it won't be sustaining long in the crash. In a short time lapse it retains.

What goes up, must come down.

Ahem.  This is how all bubbles start, with a new technology that's gonna change the world.  Railroads, cars, planes, internet, radio.  All their stocks got hyped to the point where a bubble formed, and they all popped.  Any time you think "it's different this time!", it's not. 

Having blabbed all that, I don't think we're in a bubble exactly.  But if the price keeps rising like it is, it's going to crash down to earth just like everything before it.  You watch.