Is Bitcoin the Next Big Thing?

[dee]

First to market didn’t save MySpace, or the early search engines. If something genuinely better comes along and starts getting traction, it can be “game over” surprisingly quickly.

Although very true of course, My space wasnt built on the back of another system other than the internet. If you could have bought shares in the web you would have done well no matter what sites made it.

I personally reckon that investing in ETH especially long term will do well as its the backbone for so many potentially good systems.

 

[martin-s]

First mover advantage is a big deal. It's always possible to find losers, but there will be more winners out there.

 

[RobM]

It's not possible to have more winners than losers. The wins have to be made up by the losses. ie for every transaction there has to be someone willing to take it and be on the other end - both cannot win indefinitely. That is why so many people fail at forex trading - their losses fund the successes of others and you need massive to losses to offset the large wins of a few. Hence 90% failure rate. The absolute maximum it could ever be to work is 50/50. The btc market needs the people who got in at 20k to lose if they ever want to cash out. This is why a market that has value...because it appears to have value.. is nothing more than a pyramid scheme. It may be successful for a while but ultimately far more people will lose than win - it's just the winners here know this and need losers - hence the vested interest and attitude. Interestingly there have been suicide hotlines and a few people have supposedly already taken their own lives over it - these are the people that feed the early adopters. Eventually you simply won't be able to cash out at the reported value.

 

[Edwin]

I wonder if that’s strictly true of the stock market?

My view of it is naive at best, but imagining a very very simplistic situation where there’s just a single stock in the index, will both the following move the index (in opposite directions) by the same amount?
1) A block sale of 1000 units of stock
2) 100 purchases of 10 units of stock

If the answer is no, that would suggest the market’s sentiment (= price) could be overly influenced by large events (or by small events - my thesis works either way) and therefore lead to scenarios with more losers than winners, depending on how the initial gains accumulated.

Put another way, are stocks and the stock market strictly zero-sum in that every time somebody makes £1 somebody else (or groups of people collectively) loses exactly £1?

 

[RobM]

I was talking about currencies which btc claims to be. The stock markets have the underlying value of the stocks. So yes everyone can lose - the company goes bust, the stock values hit 0, and all investment is swallowed up (although you could argue that the money is used to cover debts and pay off loans making a zero sum situation). However this is rare and people are always aware that it's a possibility - the hype surrounding btc completely fails to mention any risk and suggests everybody will be rich. As did Ponzi

 

[Edwin]

Answered my own question... stocks and the stock market are not a zero sum game, but futures and options are
https://www.investopedia.com/terms/z/zero-sumgame.asp

 

[RobM]

Exactly - futures, options, and currency pairs need a transaction either side. Stocks can rise in value either because the service or product produced creates more income or people overestimate the perceived value but the market corrects itself. Bitcoin, in reality, is NONE of these things.

 

[Edwin]

I was talking about currencies which btc claims to be.

Thanks for clarifying. I found this a simple lucid explanation of why forex is zero sum...
http://theessentialsoftrading.com/Blog/2007/06/22/the-zero-sum-game/

If Bitcoin is too, then for everyone “making bank” somebody else must be losing bank, which doesn’t sound good.

 

[websaway]

Stocks have earning potential, bitcoin is a money scheme, money in money out.

 

[Edwin]

Bitcoin might not be a zero sum if it’s just pretending to be a currency?

If I buy 1 BTC from you at £50 then a bunch of over-hyped articles come out in the mainstream media and the price of BTC shoots up (because more people want to buy BTC but nobody is willing to sell it so cheap any more because of the press) that market sentiment effect looks more like a stock price change than a forex price change...

 

[RobM]

Bitcoin is not a currency or a stock. It really shouldn't even be mentioned in the same breath but the world has been led to believe you are 'investing'. As someone said earlier - some people really want to buy a bridge

 

[RobM]

If you buy BTC from me at 50 pounds then that means I don't have that btc anymore. If it doubles in value you have made money and I have lost the potential profit. If it collapses you have lost 50 pounds and I have lost nothing. Of course we can keep shifting it from person to person (as many are doing) but eventually someone will buy that btc at a price it will never reach again once lowering. That is even assuming that one can cash out after it all loses so much.

 

[ausername]

Market cap now 177 billion. Am I missing something again. The people who invested early and made billions take some of their money out every time the price of the Ponzi scheme rises. They then market the scheme aggressively and encourage new money so that when it rises they can take more of the profit from early investments. I am not very analytical so may well be way out but common sense seems to solidify my initial view that it's robbing Peter to pay Paul.

I don't think its fair to call it a ponzi scheme, if it were a ponzi scheme then the founder of Bitcoin would have sold some coins... and he hasn't. If he is even still alive, and isn't actually the CIA.

There are actual crypto ponzi schemes (or MLM schemes as they are better known today) being closed left right and centre.

I don't know WTF bitcoin is, but its never going to work as a currency or replace cash.

Anybody who thinks bitcoin or any other crypto will replace cash will first need to explain how they intend to mitigate the following:

1). The 15% of people in the world who don't have access to electricity
2). The 50% of people in the world who don't have access to the internet
3). The 37% of people in the world with no access to a mobile phone or a mobile network.

Consider the three factors above, and then tell me how a crypto could ever replace fiat money as a major global reserve currency. It can't, as simple as that, no matter how cheap and fast transaction fees can become.

Blockchain technology definitely has a roll to play in 'the city' for trading platforms etc, to effectively serve as a promise note or IOU, but not in the real world....

 

[dee]

Worth noting that possibly as much as 10% of bitcoin is permantly 'locked' out. Over the years, people who mined / bought in and then lost private keys on old hardrives or whatever so cant retrieve from wallets.

 

[ausername]

I should just chime in and say I have no intention of 'getting out', because if this works out as expected, then crypto will be the new world currency,

Good lord.

If you actually think about this comment, then consider why it is that everybody in the third world loves dollars.

You think a street kid in Mumbai is going to walk up your car trying to sell you something for 50 cents is going to pull out a Samsung to complete the transaction over the blockchain.

You think horse traders in rural Mongolia are going to start pricing their mares in litecoin and bitcoin? Do they even hang around near a cell phone mast?

Think about how the majority of the world lives, and then how a global reserve currency works, and then the level of technology required to exchange goods for digital currency.

La la land.

Is it also fair to point out that what you are hoping for, or advocating, is the continuation of a two tier world controlled primarily by white Europeans and the Chinese..... where Africa gets none of the wealth again, because they didn't have a) the money, or b) the climate to mine any crypto?

Doesn't sound very fair to me.... although I'm not going to worry about it, just because the idea of bitcoin ever becoming the new global reserve currency is just so crackpot.... even now it is still sounding like something L Ron. Hubbard would write.

 

[dee]

I don't think its fair to call it a ponzi scheme, if it were a ponzi scheme then the founder of Bitcoin would have sold some coins... and he hasn't. If he is even still alive, and isn't actually the CIA.

There are actual crypto ponzi schemes (or MLM schemes as they are better known today) being closed left right and centre.

I don't know WTF bitcoin is, but its never going to work as a currency or replace cash.

Anybody who thinks bitcoin or any other crypto will replace cash will first need to explain how they intend to mitigate the following:

1). The 15% of people in the world who don't have access to electricity
2). The 50% of people in the world who don't have access to the internet
3). The 37% of people in the world with no access to a mobile phone or a mobile network.

Consider the three factors above, and then tell me how a crypto could ever replace fiat money as a major global reserve currency. It can't, as simple as that, no matter how cheap and fast transaction fees can become.

Blockchain technology definitely has a roll to play in 'the city' for trading platforms etc, to effectively serve as a promise note or IOU, but not in the real world....

Moving forward though, the thought is that crypto is EXACTLY what will make a huge difference in the places that are coming online tech wise.And the 37% of people with no phones is coming down rapidy. There are massive swathes of the globe that are skipping tech generations ( the landline phone for example) and jumping straight to mobile technology. It's also true that for a lot of these areas, there is a huge drain of people who are migrant workers and send cash back home to families etc. The advantage of being able to do that instantly and via a mobile phone is huge . A son sends 100 quid to a mother in the middle of nowhere from London and 20 mins later she can buy real food with it. You cant do that with fiat.

I doubt actually BTC will winout longterm as a currency. It's not nimble enough, even with segwits or whatever planeed down the line. Something will though.

EDIT. Im not saying crypto will replace fiat anytime soon, but once its mainstream and easy to convert from whatever traceable system wins then it will probably work in tandem

 

[ausername]

A son sends 100 quid to a mother in the middle of nowhere from London and 20 mins later she can buy real food with it. You cant do that with fiat.

Can't you? Pretty sure paypal withdrawals to bank account are pretty much instant now, and that most bank transfers between accounts clear within 2 hours.... as most domain traders would attest? Not like we ever have to wait 7 days for a BAC to process is it? That may have been the case 5 or 10 years ago.... in fact, isn't it now Bitcoin which takes 10 days to transfer?

So crypto solves a problem which doesn't actually exist anymore? And in the few places where the problem still exists, which are served by Western Union, bitcoin is actually more expensive for poor people because of the high transaction fee for small payments? So only rich people sending huge amounts of money would save money with a Bitcoin transaction over more conventional methods?

In fact.... A son converts cash into bitcoin, transfers bitcoin to a really poor parent (who isn't that poor because she can afford a smartphone with internet access), with a high transaction fee, then that mother has to convert that bitcoin into cash, and then withdraw that cash to buy food...

... when the son could have just opened an HSBC account for his mum, and got fiat to her within 2 hours, which she could then just take out of an ATM with no internet access required?

I find that Bitcoin advocates are really clutching at straws these days with their global reserve currency predictions and imagining solutions to problems which don't exist in 2018.

 

[dee]

Can't you? Pretty sure paypal withdrawals to bank account are pretty much instant now, and that most bank transfers between accounts clear within 2 hours.... as most domain traders would attest? Not like we ever have to wait 7 days for a BAC to process is it? That may have been the case 5 or 10 years ago.... in fact, isn't it now Bitcoin which takes 10 days to transfer?

Not crossborder. Bank to bank cross border can take days and cost a lot. It's one of the reasons XRP has taken off .Ripple labs are now for the first time making cross border transactions bank to bank quickly via blockchain and for a fraction of the cost . Even though XRP is actually not needed to do that , people associate it with the tech so it gone skyward.

 

[ausername]

Not crossborder. Bank to bank cross border can take days and cost a lot. It's one of the reasons XRP has taken off .Ripple labs are now for the first time making cross border transactions bank to bank quickly via blockchain and for a fraction of the cost . Even though XRP is actually not needed to do that , people associate it with the tech so it gone skyward.

But I buy domains from people all over the world in Namepros, and it takes about 10 minutes to pay with paypal and get the domain in my possession?

They can then withdraw from paypal to their bank account, which I'm pretty sure would still only take a couple of hours.

Its a problem which doesn't exist for most of the world.

Paypal doesn't do business in a small handful of countries (Pakistan is one I think?), but they have alternatives like Payoneer which essentially do exactly the same thing.

If I can take transact $1 with pretty much anybody in the world already with paypal, in minutes, then why does the third world need bitcoin?

If they have the ability to download and access a digital wallet then they have the ability to sign up for a paypal account and log in to it.

Problem = None.

Solution = Not required.

 

[websaway]

But I buy domains from people all over the world in Namepros, and it takes about 10 minutes to pay with paypal and get the domain in my possession?

They can then withdraw from paypal to their bank account, which I'm pretty sure would still only take a couple of hours.

Its a problem which doesn't exist for most of the world.

Paypal doesn't do business in a small handful of countries (Pakistan is one I think?), but they have alternatives like Payoneer which essentially do exactly the same thing.

If I can take transact $1 with pretty much anybody in the world already with paypal, in minutes, then why does the third world need bitcoin?

If they have the ability to download and access a digital wallet then they have the ability to sign up for a paypal account and log in to it.

Problem = None.

Solution = Not required.

There is definitely a future for the blockchain concept of payment without the need for an intermediate, it makes sense.