Bitcoin Skeptics

Discussion in 'Bitcoin and Cryptocurrency' started by Millard Baker, Dec 6, 2017.

  1. Millard Baker

    Millard Baker Member

    Angela Walch, an Associate Professor at St. Mary’s University School of Law whose research focuses on money and the law, blockchain technologies, governance of emerging technologies and financial stability, says Bitcoin shows all of the hallmarks of a speculative bubble:

    "Some of the hallmarks to me involve the FOMO idea—the fear of missing out and never being able to get in. People see other people making a lot of money and they just want in on it. The housing bubble is a good example of that. People thought another person would always want to buy their house from them at a higher price.

    "The other thing that makes it look like a bubble to me is the way people are talking about it. If you watch any of the CNBC, Bloomberg type shows, people are just saying, "Wow, how high can it go!" The media just continues to talk it up, and the people that the media interview are, too. It's fascinating to me that we can continue to be seized by manias at any given time. And people keep saying, "This time is different. It's not a bubble."

    I'm skeptical that it is different. Another feature of a bubble is the failure of people to understand what they're investing in at all. They forgo that. People are making money, so they just want to jump in. They don't know the history of Bitcoin. They don't understand the scalability issues. They don't understand the mining centralization issues. But they see other people doing it.

    [...]

    Yes, the dot com bubble I see as applicable because all you had to do was throw "dot com" on the end of a company name and have no business plan and no profits to get people to throw money at it. A lot of other cryptocurrencies are riding the coattails of Bitcoin, and people are rushing to those, too. As long as it's "crypto," you see hedge fund managers putting their money in. It's a trend.

    It's similarly comparable to the housing bubble due to the failure of financial institutions to appreciate risk, as we've seen, with subprime mortgages being packaged up into mortgage-backed securities, so that everyone could have access to assets that were thought to only be able to increase in value. I'm worried that we're creating structures that mimic that, and that the futures we're creating, which will lead to [exchange-traded funds], which will come to rely on the one underlying asset of Bitcoin or other cryptocurrencies, which are moving targets and not an asset that can support that kind of structure built on top of them
    ."​

    Source: https://www.vice.com/en_us/article/d3xywq/buy-bitcoin-with-debt-insane
     
  2. Millard Baker

    Millard Baker Member

    Andrew Bailey, the chief executive of the UK Financial Conduct Authority (FCA), warns investors they could lose all of their money in Bitcoin:

    "It's not a currency, it's actually not regulated in its Bitcoin form," Mr Bailey told me in an interview for Newsnight.

    "It's a very volatile commodity in terms of its pricing.

    "If you look at what has happened this year, I would caution people.

    "We know relatively little about what informs the price of Bitcoin.

    "It's an odd commodity as well, as the supply is fixed.

    "If you want to invest in Bitcoin be prepared to lose your money - that would be my serious warning."

    Source: Regulator warns investors off Bitcoin
     
  3. Millard Baker

    Millard Baker Member

    Ranko Berich, thehead of market analysis at foreign exchange broker Monex Europe Limited, says Bitcoin is either "birth of a new paradigm... or a speculative bubble".

    “Anyone with even a passing familiarity of the history of financial markets will be happy to tell you how such trends usually end.

    “If you see a hockey stick chart on a security price, you’re either looking at the birth of a new paradigm [such as] Apple, or a speculative bubble that will one day go the way of the tulip."

    Source: Bitcoin for investors: what the experts think
     
  4. Michael Scally MD

    Michael Scally MD Doctor of Medicine

     
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  5. Oldman.

    Oldman. Member

    I like how this guy is analyzing it from an acadimic viewpoint not taking one side or another. Just using the theory and math to say what’s possible either way.
     
  6. Millard Baker

    Millard Baker Member

    Andrew Bailey, the Chief Executive of the UK Financial Conduct Authority, says Bitcoin investors could lose all of their money.

    "It's not a currency, it's actually not regulated in its Bitcoin form," Mr Bailey said in an interview for Newsnight. "It's a very volatile commodity in terms of its pricing.

    "If you look at what has happened this year, I would caution people. We know relatively little about what informs the price of Bitcoin.

    "It's an odd commodity as well, as the supply is fixed. If you want to invest in Bitcoin be prepared to lose your money – that would be my serious warning
    ."​

    Source: Bitcoin buyers 'should prepare to lose all their money'
     
  7. Michael Scally MD

    Michael Scally MD Doctor of Medicine



    The cryptocurrency has wowed markets this year with breakneck gains as investors flocked to an asset that exists only in cyberspace. But the laborious creation of each digital bitcoin by private computer networks has real-world consequences in the form of massive energy use -- including from fuels that cause the most pollution.

    Eight 100-meter-long metal warehouses in northern China are a case in point. Bitmain Technologies Ltd. runs a server farm in Erdors, Inner Mongolia, with about 25,000 computers dedicated to solving the encrypted calculations that generate each bitcoin. The entire operation runs on electricity produced with coal, as do a growing number of cryptocurrency “mines” popping up in China.

    The global industry’s power use already may equal 3 million U.S. homes, topping the individual consumption of 159 countries, according to the Digiconomist Bitcoin Energy Consumption Index. As more bitcoin is created, the difficulty rate of token-generating calculations increases, as does the need for electricity.

    “This has become a dirty thing to produce,” said Christopher Chapman, a London-based analyst at Citigroup Inc.
     
  8. Michael Scally MD

    Michael Scally MD Doctor of Medicine

     
    Last edited: Dec 19, 2017
  9. Millard Baker

    Millard Baker Member

    Lars Rhode, the Chairman of Board of Governors at Danmarks Nationalbank, says Bitcoin is deadly (interview with state broadcaster DR published online on December 19, 2017):

    “You should stay away (from bitcoin). It is deadly...

    “It is not a regulated market. It is not the responsibility of the authorities. It is the responsibility of the individual...

    “I see bitcoin as tulipmania, which is a bubble that is out of control
    ."​

    Source: Danish central bank head issues stark warning on 'deadly' bitcoin
     
  10. Millard Baker

    Millard Baker Member

    Robert Shiller, the winner of the 2013 Nobel Memorial Prize in Economic Sciences for his work on asset pricing bubbles, says ambiguous value of Bitcoin makes it especially likely to become a bubble (interview with CNBC's "Trading Nation" on December 18, 2017):

    "I think that the value of bitcoin is exceptionally ambiguous," he said.

    "There is the medium of exchange function that it's offering, and there's also a store of value function; that is, you can hide away your wealth in there. And it's mobile; you can go anywhere, and get at it. How valuable is that, though? I don't personally see any value to that. That's the problem; they have a really clever technique to generate something, and it could be valued. But that's why it's especially likely to become a bubble, because when you see people valuing it, you start to wonder, 'Maybe they're right,'" Shiller said.

    "The fascination people have with bitcoin is partly because of the mystery of money itself. Why do these pieces of paper have value, and couldn't something else have value? Plus, we all believe in a first-mover advantage. Bitcoin was first."

    "People believe in 'first mover,' and so it sounds right to them. I can't say that it's definitely wrong, but it sounds like a flimsy argument
    ."​

    Source: Bitcoin valuation is 'exceptionally ambiguous,' says Robert Shiller
     
  11. Millard Baker

    Millard Baker Member

    What Is Bitcoin Really Worth? Don’t Even Ask. By Robert Shiller.

    "Bitcoin market is a marvelous case study in ambiguity and animal spirits. It is providing invaluable information about how millions of human brains process stimuli coming, in this case, from public acceptance, imagination, and innovation surrounding cryptocurrencies.

    "This is fascinating from a psychological and neurological perspective. But it isn’t grounded in solid economics. No wonder the Bitcoin market has been so chaotic."
     
  12. Gbro

    Gbro Member

    What we are witnessing is irrational exuberance.
     
  13. janoshik

    janoshik Member

    10/10 journalism.

    1. Implying all the electricity used to mine is from coal in order to create an article out of nothing. Check

    upload_2017-12-19_22-19-56.png

    2. Not realizing that miners flock to hydro, which is especially abundant in mountain regions of China. Check


    Implying there's anything wrong with supply and demand. Check.


    Spreading absolute bullshit. Check.

    Difficulty has NOTHING to do with more bitcoin being created and the difficulty calculation is like basics. Which means if somebody is not ashamed to put something like that into the public it means they know jack fucking shit and not even basics.
     
  14. Millard Baker

    Millard Baker Member

    Teunis Brosens, the Senior Economist covering the Eurozone economy for ING, says Bitcoin has long-term value only as niche product for tech nerds, enthusiasts and criminals.

    "In the long term, Bitcoin has little to offer to a wider audience, and will likely return to being a niche product for a select group of enthusiasts. What they regard as key benefits, may actually be impediments to wider adoption. Moreover, bitcoin’s high value today is based on shaky foundations, given that the platform is open source and can, therefore, be forked and copy-pasted easily. Scope for such cryptocurrency debasement is limited only by network effects and switching costs, but those may be smaller than expected...

    "Our current thinking is this: One day, beyond the hype, Bitcoin will return to being the niche product that it was in its initial years. Users will include tech nerds, people obsessed about their privacy, people afraid of (hyper)inflation in traditional currencies, and people wanting to circumvent central banks for ideological or criminal reasons
    ."​

    Source: https://think.ing.com/uploads/reports/Why_Bitcoin_to_become_niche_asset_151217_OWEN_17.pdf
     

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  15. janoshik

    janoshik Member

    Blah blah general talk.


    wow, actually true.


    aaaaaand we have another idiot with complete lack of understanding

    1. good luck forking off millions of users
    2. FORK SECURITY AND HUNDREDS OF MILLIONS OF HARDWARE, LOL




    It is the initial years of bitcoin right now.

    Posted on a forum where most of the population uses it.

    It's not like people stock weapons or food just in case, they totally couldn't do it with money. oh.

    Or it's not like there are fiat money fucked around on ideological reasons. Except india monetary reform. Saudi suspicious corrupion charges. China stopping outflow of capital.


    Is there any QUALITY material in this thread?
     
  16. Michael Scally MD

    Michael Scally MD Doctor of Medicine

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  17. Michael Scally MD

    Michael Scally MD Doctor of Medicine

     
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  18. Michael Scally MD

    Michael Scally MD Doctor of Medicine

     
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  19. DrinkFlintWater

    DrinkFlintWater Member AnabolicLab.com Supporter

     
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  20. Millard Baker

    Millard Baker Member

    Joseph Stiglitz, the recipient of the 2001 Nobel Memorial Prize in Economic Sciences and former Chief Economist of the World Bank, says no "socially useful function" for Bitcoin. (Bloomberg Television interview with Francine Lacqua and Tom Keene, November 29, 2017)

    So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function...

    “It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down."​

    Source: Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says