There's a lot of people giving a lot of reasons why stocks have taken a sudden correction in the last couple of days. There's loads of pundits, market experts, macro experts, all giving some pet theory about why the sell off has happened.
But here's a funny thing. Bitcoin and stocks bottomed out at almost the exact same moment. And then the dead cat bounce for each was almost identical. It shows, I think, that the price of each asset is driven fundamentally by mood and group psychology, not the actual value of the underlying asset. I mean that's a big claim from one comparison of data sets, but I'm gonna make it anyway.
My theory would also mean that much of the previous rise in each asset was also unrelated to the underlying fundamentals of the asset.
Well yeah, the stock market stopped being about actual investment in terms of money being used to purchase new assets, grow business, etc (you know, the stuff they still repeat in econ classes) a long time ago. Now it's just hype and legalized gambling.
ScarletRose wrote: Well yeah, the stock market stopped being about actual investment in terms of money being used to purchase new assets, grow business, etc (you know, the stuff they still repeat in econ classes) a long time ago. Now it's just hype and legalized gambling.
The markets always had big climbs and plunges. You are right to an extent, in that the market is somewhat different in its purpose - it is now used much less to raise capital for expanding companies (that's done mostly through VC and internal funding), but is used by owners to cash out, make good on their gains by selling a share of their company to the public. But that doesn't mean its just a vehicle for gambling. Yes, there is number of people with very speculative approaches to the market, but claiming that's what the market is for is like seeing that sports betting exist and therefore the only purpose of sport is so people can gamble.
Just as most people just like watching sport for its own sake and don't gamble, most people buy stocks with no interest in making quick gains on short term volatility. They buy and they hold, getting those bi-annual dividends, and maybe cashing out in retirement. In 2008 when the market plunged, 97% of investors... did nothing. They just held on to their stocks, watched the paper price plummet and then recover, because they're invested long term.
But that's not really the point I was making. The point I was making was about what drives the short term volatility. And it is very interesting that two unrelated assets dropped at almost the same time, then recovered at exactly the same time, and bounced up an almost idenitical %. That's a signal that maybe the pattern behind this short term sell offs may have no real fundamental cause, but still be in some way predictable.
I'm going to be contradictory here and say no, I was exactly on the point you're making, that it's just psychology and specifically the psychology of hype that everything seems to be running on these days.
It shows, I think, that the price of each asset is driven fundamentally by mood and group psychology, not the actual value of the underlying asset
My point was that there is no "actual value of each asset", that it's all smoke and mirrors to just keep the growth going. To just keep posting ever bigger numbers without any real world connection (hence why I said investing has almost nothing to do with 'investing' in the econ 101 sense).
ScarletRose wrote: I'm going to be contradictory here and say no, I was exactly on the point you're making, that it's just psychology and specifically the psychology of hype that everything seems to be running on these days.
Sure, my post is about market psychology impacting short term market movements, but you've gone from there and run with it to argue, it seems to me, that there is nothing in the market at all but psychology. Which is taking things way too far.
My point was that there is no "actual value of each asset", that it's all smoke and mirrors to just keep the growth going. To just keep posting ever bigger numbers without any real world connection (hence why I said investing has almost nothing to do with 'investing' in the econ 101 sense).
Of course there is. Well bitcoin arguably has no underlying value, but shares have a clear underlying value - they pay dividends, which is a future cashflow that it is good to get. So obviously people will pay money for that future cashflow, and the only question is how much they are willing to pay. That's the basis for discounted cashflow, ie CAPM, which you refer to with Econ 101*. That's still real (well as real as it ever was, the model is much too subjective to ever prove in any useful way).
The issue is that while that value underpins an asset, over the top of that there's a whole lot of complex factors, institutional and especially psychological. And that's what we're seeing here, and likely what we saw for much of the last few years of this very long bull run.
*Actually I think it'd be more like 201 as part of teaching EMH, or through a finance unit.
Bit coin is kinda like high stakes shared as it has not real perceived or legal limits on how or high and low it can be graded. It's not regulated and is basically a commodity investment minus the physical products that at least give it a base value as a asset.
They do share some values. However id say commodity trading vs the stock market as it has no dividers, can be used as a currency, traded for assets and so.
Commodities have an inherent value because people need them for real purposes.
"Real" money has a commodity value because it is needed to make transactions. That is why there is a foreign exchange market, among other things.
Bitcoin is useless as a regular currency now, so I don't think it has any inherent value. The crazy swings in valuation over the past month show that it is being traded as a pure asset in a bubble.
Because if you do it right you can make a lot of money doing not very much actual work. Meanwhile those building "mining machines" can just leave the computer working at making bitcoins rather than doing work.
In short its the new "get rich quick scheme". It's the same reason a lot of other online currencies are seeing a surge in popularity; everyone investing is betting on which one will increase in value and then gambling on when to pull out to get the most profit.
Some will win and some will lose; some of those that win (and some that lose but hide it well) will go on to give seminars and write books on how they got rich quick in order to turn a bit more profit out of their activities. So that in itself can generate continued interest in the system by encouraging others to take part.
I have a slightly different interpretation of the matter. In my eyes there is fundamental value to stocks, as they are a share of a real company, yet the perception of that value is affected by group psychology, etc. Same page there. What I see is that since bitcoin (and the like) has no fundamental value the overall valuation of the stock market is used as one by proxy. So bitcoin essentially piggybacks on the same mood of the market without as much of a psychological 'identity' of it's own, while the latter operates independently.
Because if you do it right you can make a lot of money doing not very much actual work. Meanwhile those building "mining machines" can just leave the computer working at making bitcoins rather than doing work.
In short its the new "get rich quick scheme". It's the same reason a lot of other online currencies are seeing a surge in popularity; everyone investing is betting on which one will increase in value and then gambling on when to pull out to get the most profit.
Some will win and some will lose; some of those that win (and some that lose but hide it well) will go on to give seminars and write books on how they got rich quick in order to turn a bit more profit out of their activities. So that in itself can generate continued interest in the system by encouraging others to take part.
I don't follow US stock market, but I was following BTC (without any investing in it) and other cryptocurrencies for the last three months on a daily basis and all I can say is that charts for those are pretty much "big data" charts on human psychology and nothing else.
In a long timescale, BTC chart is 1:1 a textbook bubble chart, to an astonishing extent. In a daily or weekly timescale one can see all those "magical" "psychological barriers" that market commentary so often invokes - BTC always drowns or bumps up around "round numbers". There are some more characteristic behaviors involving derivatives (in mathematical, not economical meaning) to be clearly seen from BTC charts. And for anyone still believing, that there is any significant "fundamental value" within stockmarket, read this: http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis and see for yourself how much of "proffesional stock trend analysis" is based solely on "chart numberology", not far removed from depiction in Aronofsky's "Pi" movie (great film BTW).
And answering OPs question - in days of interwebz stockmarket analysis follows the same pattern of mass behaviour as "netlisting" in 40K. "Serious investors" follow same "serious" webpages (there is huge homogenisation of content between different sites dedicated to the same, limited area of interest) and base their knowledge of "chart analysis" on same tutorials/schools/tools. Those tools show results based not on fundamental condition of a company/currency/country, but on a previous chart flow itself. It's pure psychology and numberology, so things like Blue Monday, Christmas, even a full moon or weather changes (metheopathy is a thing) influence stocks, even more nowadays than in pre-internet era, because of one additional mechanism:
nowadays you can spread your emotions instantly to the masses - one single Tweet or FB post, that can be written and sent during momentarily upset can reach and upset thousands of people - like avalanche. In pre- social media times it was a lot, lot harder to "synchronise" emotional reactions this way, as you don't usually stay upset over trivia long enough to write and send a paper letter and you can phonecall only one person in such state. So only deeper upset/unease got spread far enough to get magnified to entire countries, unless it has been "catched" by mass media coverage. This mechanism got more and more pronounced during the last decade or so and is till not recognised widely, but is widely influential (in stock behaviour, in political behaviour, in "shocking news" attention, etc). It has been forseen by various sci-fi writers as early as late '90 (one great Polish writer, Jacek Dukaj depicted it ideally in a book "Czarne oceany", but unfortunately it is available only in Polish...) and is emergent property of "global village", so there is pretty much nothing that can be done to revert or prevent such synchronisations. Our psychology evolved to living in a small tribes of dozens of individuals and has hard times adapting to "tribes" counting millions...
Bitcoin has an inherent value, it's just different from a normal currency. The blockchain makes it difficult (impossible?) to counterfeit. Every transaction requires a computation that verifies the bitcoin. So someone accepting a bitcoin can't be handed a 'fake' bitcoin that might turn out to be worthless - a risk most retail stores take when accepting hard currencies.
Essentially, bitcoin can be trusted to be bitcoin, which makes it IDEAL for currency transfers between people who don't trust one another and can't use banks as a trusted go-between. Which basically means criminals, and part of the bitcoin bubble was companies buying bitcoin to pay criminals in the event hackers managed to encrypt their company's data.
You can, of course, use bitcoin for legitimate purposes - for example, international currency transfers without having to employ a banking institution (bitcoin transfers still involve a fee, however), but it's value is to cut police and government out of the transfer of wealth.
The vast majority of investors are using it as a get rich quick scheme. It's highly likely that governments will ban the use of blockchain for anonymous currency once the market for it falls apart and the wealthy can't make money off it, though you can expect the banking sector to adopt blockchain as an additional layer of security.
That's why I never invested in crypto - eventually it's going to be illegal, or the market will be so fragmented any individual currency will be worthless.
For the record I just added to my position big this morning. I think the worse is over.
A lot of stop trades were triggered yesterday, and people are going to have to buy back in before things rally if they dont want to lose money. Plus, interest rates ARE still low, so people are going to quickly realize there isn't anywhere else to put their money.
These corrections happen. Its why you also invest in bonds and keep some cash on hand.
Edit: Just noticed Bitcoin was brought up and I want to point out I am talking about equities. Especially ETFs. Wouldn't touch Bitcoin and don't recommend others do either.
It's like investing in gold. It's valuable because everyone wants it, and everyone wants it because it's valuable. It feeds into itself.
You should really dig deeper into history, chemisty and physics behind gold to understand why it was a metal of choice in pretty much every culture throughout history. There are plenty of solid reasons why it was and still is a basic wealth storage medium that nothing else really compares to. In modern days it is not used for day-to-day transactional reasons anymore because because it would be cumbersome and slow, but it is still a "safe harbour" for investors after each major bubble bursts.
It's like investing in gold. It's valuable because everyone wants it, and everyone wants it because it's valuable. It feeds into itself.
Being an element, it's also a strictly finite resource, and far from being a particularly common one. Large scale mining is expensive in itself.
Bitcoin? Doesn't actually properly exist - and was just invented by A.N.Other with absolutely nothing in place to prevent said creator/s just giving themselves more and more and more.
It's like investing in gold. It's valuable because everyone wants it, and everyone wants it because it's valuable. It feeds into itself.
I wouldn't say this. Gold had a far longer history. Very very few businesses accept bitcoin.
Bitcoin fails as a currency because it is too volatile. It fails as an investment because it doesn't it itself doesn't generate any wealth. The only reason to 'invest' in it is speculation. You might as well go to a casino.
And when countries and governments start restricting it, it and all the others are done. And you can't talk about bitcoin without talking about all of the others.
Basically creating cryptos is easy to do, and everyone is scrambling to create their own and cash in on the madness. And don't think that by the end of today, someone else will have created a new one. Meanwhile, you can't spend the vast majorities of these anywhere. Fine when the economy is good. But when it crashes and you can't pay your rent or buy gas with any pf them, whatever wealth they have generated will evaporate.
And keep this in mind, if the US stock market dropped the same in value as Bitcoin just did, or the US dollar did the same, there would be a worldwide crisis. And at that point, even gold wouldn't hold much value. The only thing of any real value would be cigarettes and bullets.
It's like investing in gold. It's valuable because everyone wants it, and everyone wants it because it's valuable. It feeds into itself.
I wouldn't say this. Gold had a far longer history. Very very few businesses accept bitcoin.
Bitcoin fails as a currency because it is too volatile. It fails as an investment because it doesn't it itself doesn't generate any wealth. The only reason to 'invest' in it is speculation. You might as well go to a casino.
And when countries and governments start restricting it, it and all the others are done. And you can't talk about bitcoin without talking about all of the others.
Basically creating cryptos is easy to do, and everyone is scrambling to create their own and cash in on the madness. And don't think that by the end of today, someone else will have created a new one. Meanwhile, you can't spend the vast majorities of these anywhere. Fine when the economy is good. But when it crashes and you can't pay your rent or buy gas with any pf them, whatever wealth they have generated will evaporate.
And keep this in mind, if the US stock market dropped the same in value as Bitcoin just did, or the US dollar did the same, there would be a worldwide crisis. And at that point, even gold wouldn't hold much value. The only thing of any real value would be cigarettes and bullets.
And lighters People who survived Balkan war often mentioned lighters as a practical currency during war times - those are small enough and have so fundamental usefullness, that became "coins", while gas and other combustibles became larger nominals equivalents.
Look at any piece of electronics and tell me gold has no inherent value. Our computer chips depend on gold (and tin), at least for now.
It's conductive, ductile, doesn't oxidize and shields against radiation. It's also pretty, has a low melting point and easily alloys with several other metals. Gold is pretty awesome.
John Prins wrote: Bitcoin has an inherent value, it's just different from a normal currency. The blockchain makes it difficult (impossible?) to counterfeit. Every transaction requires a computation that verifies the bitcoin. So someone accepting a bitcoin can't be handed a 'fake' bitcoin that might turn out to be worthless - a risk most retail stores take when accepting hard currencies.
Essentially, bitcoin can be trusted to be bitcoin, which makes it IDEAL for currency transfers between people who don't trust one another and can't use banks as a trusted go-between. Which basically means criminals, and part of the bitcoin bubble was companies buying bitcoin to pay criminals in the event hackers managed to encrypt their company's data.
You can, of course, use bitcoin for legitimate purposes - for example, international currency transfers without having to employ a banking institution (bitcoin transfers still involve a fee, however), but it's value is to cut police and government out of the transfer of wealth.
The vast majority of investors are using it as a get rich quick scheme. It's highly likely that governments will ban the use of blockchain for anonymous currency once the market for it falls apart and the wealthy can't make money off it, though you can expect the banking sector to adopt blockchain as an additional layer of security.
That's why I never invested in crypto - eventually it's going to be illegal, or the market will be so fragmented any individual currency will be worthless.
Yes, Bitcoin has value as a currency within criminal circles mainly because it is untraceable rather than because it is trustable. There is a currency value, of course. I meant that Bitcoin is no longer operating in the general economy as a currency.
The main reason investors own gold is a hedge against other investments. Thats fine for a stock market crash or correction. I am saying if the US Stock Market dropped 60-70%, no one would be thinking about their gold investments. There would be worldwide pandemonium. In the example above regarding lighters, they had real value. Survival depended on it. Gold is a nice to have. And in conditions that bad, you arent going to be bargining with a nugget to someone who's got some food you want, and sealing the deal by arguing that "they can build chips and be protected against radiation."
I am not saying Gold doesn't have value. I am say there is a point that as an investment there will be other things far more important.
Yes, Bitcoin has value as a currency within criminal circles mainly because it is untraceable rather than because it is trustable. There is a currency value, of course. I meant that Bitcoin is no longer operating in the general economy as a currency.
It can be traced. Thats the point of blockchain and the ledger. Its why criminals are abandoning it for cryptos that aren't easy to trace.
So think about that for a moment and where the technology is heading. Its all very shady.
I am not saying Gold doesn't have value. I am say there is a point that as an investment there will be other things far more important.
Of course! Land would be the most valuable investment - arable land. People need to eat and if the crap really hits the fan, it's the people who can farm that survive.
Gold (and silver) only becomes important once an economy grows to the point where barter becomes cumbersome. I don't think the world economy can collapse below that point anymore, barring a extinction level event, so gold will remain valuable.
Mostly probably true. But I was using the example (comparing it to Bitcoin as an investment) if the US Stock Market dropped 60-70% over the span of a few weeks That kind of drop in Bitcoin is nothing to the world market because it's total market cap is only $118 billion dollars. The NYSE alone is $21.3 trillion. If it went from that to $13 trillion (following the same percentage drop as bitcoin) in the same time frame, the world would flip on its axis. And what is worse is the crisis would spread to other exchanges around the world that would probably be hit even harder, and worse, effect the bond markets, which is far larger than the equity markets.
If the US Dollar dropped like Bitcoin (as a currency), that too would not only effect the stock and bond markets, but it would also directly effect those invested in neither. We wouldn't have to wait for the depression to kick in before people would be unable to pay for groceries or gas and so on.
So the absolute last thing you want is something as volatile as Bitcoin becoming powerful enough to trigger events in other investments or currencies. Especially when these can be created in a garage and aren't backed by a country.
The stock market performs relative to the difference between the market's expectations a given companies performance will be and what its actual performance was. With a dose of mob mentality.
Bitcoin, and indeed any cryptocurrency, is a little different. It behaves like a cross between a stock, currency, and commodity.
It's like investing in gold. It's valuable because everyone wants it, and everyone wants it because it's valuable. It feeds into itself.
You should really dig deeper into history, chemisty and physics behind gold to understand why it was a metal of choice in pretty much every culture throughout history. There are plenty of solid reasons why it was and still is a basic wealth storage medium that nothing else really compares to. In modern days it is not used for day-to-day transactional reasons anymore because because it would be cumbersome and slow, but it is still a "safe harbour" for investors after each major bubble bursts.
Indeed. Gold, and a handful of other precious metals, has some fundamental properties that make it an eternal measure of wealth. Not to mention its value as a raw material.
And because it has a hard finite cap on how much there is its value can always increase. Bitcoin, and any fiat currency, are infinite in potential future amounts.
There is a finite amount of Bitcoin available, actually, because eventually it becomes too difficult to perform the computations necessary to mine them. This is one of Bitcoin's flaws as a working currency.
Oh man, gold... there's an even better example of psychology and hype over inflating the value of something. Sure Bitcoin's bubbling, but what can beat a shiny metal horded by bunker dwellers convinced "fiat" currency is just a conspiracy to steal their precious bodily fluids?
Because if you do it right you can make a lot of money doing not very much actual work. Meanwhile those building "mining machines" can just leave the computer working at making bitcoins rather than doing work.
In short its the new "get rich quick scheme". It's the same reason a lot of other online currencies are seeing a surge in popularity; everyone investing is betting on which one will increase in value and then gambling on when to pull out to get the most profit.
Some will win and some will lose
Some are born to sing the blues?
Seriously this reminded of another impact Bitcoin has had - it's massively increased the prices of computer hardware since graphics card GPUs are apparently ideal for doing the mining calculations.
ScarletRose wrote: Oh man, gold... there's an even better example of psychology and hype over inflating the value of something. Sure Bitcoin's bubbling, but what can beat a shiny metal horded by bunker dwellers convinced "fiat" currency is just a conspiracy to steal their precious bodily fluids?
Well, in regards to investing, most gold investors don't actually own bars of gold. They own gold miners or gold related ETFs. So Gold is kind of a loose term. Yes, some guys might have a couple bars of it in a bank vault, but again, how are you going to cash it in for something when the don't bypass the language filter like this. Reds8n
hits the fan. So most have a small portion of their portfolio in gold-related investments and sell those when they spike when peeps retreat from equities.
Yes, Bitcoin has value as a currency within criminal circles mainly because it is untraceable rather than because it is trustable. There is a currency value, of course. I meant that Bitcoin is no longer operating in the general economy as a currency.
BTC isn't used for black market purchases, it hasn't been for months. The transaction fees are ridiculous and can double or even triple the cost of whatever you're buying, dark net exchanges use Litecoin for small time stuff like pot or shrooms. If you're going to buy something that the FBI/InterPol/whatever is going to be breathing down your neck over you don't use a coin with a distributed ledger. Frankly the people using cryptos for illegal purchases a lot of them think like normal small business owners, they want stable currency and minimal processing fees.
The point is gold is either a real physical material or ownership of businesses that deal in it. Stocks are ownership of businesses that exist in the world around us. Those things have tangible value. Cryptocurrencies only have psychological value--there isn't actually anything there.
There is a finite amount of Bitcoin available, actually, because eventually it becomes too difficult to perform the computations necessary to mine them. This is one of Bitcoin's flaws as a working currency.
That's not finite. It's simply more difficult to create a bitcoin, but it is not a hard finite cap on how many bitcoins could exist. As opposed to gold, where there is an exact and finite amount of Gold atoms on this planet.
And of course, eventually somebody is going crack the code that generates bitcoin formulas, which would result in "Print bitcoin on demand". That's the real flaw with Bitcoin. Somebody will eventually crack the main formula and then Bitcoin will truly be useless.
ScarletRose wrote: Oh man, gold... there's an even better example of psychology and hype over inflating the value of something. Sure Bitcoin's bubbling, but what can beat a shiny metal horded by bunker dwellers convinced "fiat" currency is just a conspiracy to steal their precious bodily fluids?
You mock it, but as mentioned earlier Gold has value as a means of wealth storage. Provided there is at least some sort of functioning society in existence where trade still occurs.
Currency is really the only reason modern society exists as without it you are only left with barter. And barter is woefully time consuming and cumbersome. If you have chickens and want to buy a cow, but the guy with the cow doesn't want any chickens. You have to track down someone who wants chickens and will give you something else you can eventually trade for what the guy with the cow wants.
Gold is a convenient medium of exchange to facilitate this. It does have some worth in and of itself because its pretty and people like to make jewelry out of it. So you can be fashionable and have a convenient way to carry a medium of exchange around with you.
So in many ways, Gold is better than something like Paper money(which truly is worthless in and of itself) if you are worried about a collapse of the overall economy. At the least, its never bad to have a diversified portfolio.
There is a finite amount of Bitcoin available, actually, because eventually it becomes too difficult to perform the computations necessary to mine them. This is one of Bitcoin's flaws as a working currency.
That's not finite. It's simply more difficult to create a bitcoin, but it is not a hard finite cap on how many bitcoins could exist. As opposed to gold, where there is an exact and finite amount of Gold atoms on this planet.
And of course, eventually somebody is going crack the code that generates bitcoin formulas, which would result in "Print bitcoin on demand". That's the real flaw with Bitcoin. Somebody will eventually crack the main formula and then Bitcoin will truly be useless.
I think KillKrazy is right, you're just getting caught up on the word "finite". It is finite, they increase the mining difficulty to make sure they're not mined out before a certain date. The mine time for a block is always kept at ~5 min, the network scales the complexity of the block to match the avg hash rate to hit that ~5 min. Which just leads to an arms race to increase hashing power relative to the network, especially during a boom. In theory the rise in value of BTC was supposed to compensate for increased mining costs but in practice it failed. Which drove up the exchange fee for processing transactions from BTC to USD. It fluctuated between $6-50 just to convert from BTC to USD in the last 2 months.
The more popular BTC got the worse, it became as a currency. It became too fat to fly after a certain point.
whembly wrote: With regards to the DOW markets... this is a correction eh?
It's bouncing today... was -900 and now +400ish. Prolly land at +/- 10pts at the end of the day.
Yeah as I mentioned earlier I bought the dip and it is paying off. I think this will rebound quickly.
The thing is, there just isn't a lot of places where investors can put their money and get the same kind of returns the market has provided the last 40 years (on AVERAGE) about 12%. Yes there have been some bad years, and some stellar years. Bonds, at these rates, aren't good. But as rates go up and they will drain some money from the equity market. But until then, peeps are either going to stand around with cash in their hand looking at each other, or they are going to invest it somewhere. Right now the action is in stocks.
There is a finite amount of Bitcoin available, actually, because eventually it becomes too difficult to perform the computations necessary to mine them. This is one of Bitcoin's flaws as a working currency.
That's not finite. It's simply more difficult to create a bitcoin, but it is not a hard finite cap on how many bitcoins could exist. As opposed to gold, where there is an exact and finite amount of Gold atoms on this planet.
And of course, eventually somebody is going crack the code that generates bitcoin formulas, which would result in "Print bitcoin on demand". That's the real flaw with Bitcoin. Somebody will eventually crack the main formula and then Bitcoin will truly be useless.
It's a hard cap in the sense that eventually the resources required to mine a new coin will exceed the capacity of the planet to generate them. IDK how many coins would have been made by then, but it's a bit theoretical given you can't spend them now, and people are only mining them for their value as a bubble asset.
In related news, the value of bitcoins has dropped below $6,000.
NinthMusketeer wrote: The point is gold is either a real physical material or ownership of businesses that deal in it. Stocks are ownership of businesses that exist in the world around us. Those things have tangible value. Cryptocurrencies only have psychological value--there isn't actually anything there.
I can use cryptos to get moon rocks, boiiiiiiii and the gubmint can't stop meeeeee!
Or more intelligently put. There's value in cryptos as a medium of exchange for semi-illegal businesses. ie Marijuana businesses in the US.
I can't imagine being a business, and accepting payment for something that is wildly volatile. Imagine if going into a grocery store with dollars, and prices are in bitcoin, and there is a digital conversion monitor showing the current price for each item, and its rising and falling all over the place. One minute your dollar can buy a lot, the next it can't. And if you are the business owner, one minute you are making a killing, the next not so much.
If I were living in Venezuela, bitcoin and others would be an option. In the US? its silly. Maybe crypto can be a hedge against the US dollar, which I never hear anyone talk about, but again, if the US Economy joined Venezuela, we'd have much bigger problems on our hands than having a little bitcoin could solve.
And it's traceable, and it requires an hour's wait roughly to know if a transaction reliably occurred.
Bitcoin really accomplished absolutely nothing it set out to do. I suppose at least some people got rich off it. Still a little bitter I didn't. At least I didn't lose anything I guess.
KTG17 wrote: I can't imagine being a business, and accepting payment for something that is wildly volatile. Imagine if going into a grocery store with dollars, and prices are in bitcoin, and there is a digital conversion monitor showing the current price for each item, and its rising and falling all over the place. One minute your dollar can buy a lot, the next it can't. And if you are the business owner, one minute you are making a killing, the next not so much.
They use crypto because they have to, not because they want to. Illegal business after all. To be clear I'm talking about LTC not BTC.
You'd be surprised at the complexity of market spaces in the dark net, there's all kinds of methodology to middle man the transactions to minimize hassle. I mean there's even a Google equivalent. However it's all decentralized now into a more traditional drug trade business model (referrals only) since the FBI and Dutch police dredged the river half a year ago.
daedalus wrote: I suppose at least some people got rich off it. Still a little bitter I didn't. At least I didn't lose anything I guess.
Being jealous of others ability to stack paper is a waste of energy. Everyone is in different points in life when the opportunity presents itself and you have to have the lucky timing to have assets to speculate with. Many of them got lucky and caught a wave and just as many failed. Passive income from index investments are still a thing...
LOL Snap is up 25% after hours for losing money but beating estimates. Only on planet Earth.
Futures up 870 lol. Doubt that holds.
Yeah, things are going to be fine.
Automatically Appended Next Post:
avantgarde wrote: They use crypto because they have to, not because they want to. Illegal business after all. To be clear I'm talking about LTC not BTC.
Well, I was thinking of the legit businesses, but I can see that too.
Being jealous of others ability to stack paper is a waste of energy. Everyone is in different points in life when the opportunity presents itself and you have to have the lucky timing to have assets to speculate with. Many of them got lucky and caught a wave and just as many failed.
I agree with this. There are a lot of peeps who bought Bitcoin at 20,000 and I am sure they are pretty depressed right now.
Passive income from index investments are still a thing...
Which I highly recommend. Just put it away in a low cost ETF like VOO or VTI and forget about it.
NinthMusketeer wrote: The point is gold is either a real physical material or ownership of businesses that deal in it. Stocks are ownership of businesses that exist in the world around us. Those things have tangible value. Cryptocurrencies only have psychological value--there isn't actually anything there.
I can use cryptos to get moon rocks, boiiiiiiii and the gubmint can't stop meeeeee!
Or more intelligently put. There's value in cryptos as a medium of exchange for semi-illegal businesses. ie Marijuana businesses in the US.
Ehhh. IDK about that.
You still have the issue that the value of Bitcoin is more volatile than any sane person would want in a currency.
Best case I could see you occasionally accepting payment in it, and immediately selling it off so you don't lose anything. You certainly wouldn't want to keep any amount of assets in Bitcoin form for very long. Plus its still a transaction done in electronic form. At which point you might as well have just used a credit card or a money wire for the transaction. If you actually cared about anonymity.
Illicit businesses still will just operate with regular money. The goal when running an illegal business is to not have it be easily traceable. Physical cash is still better at that since Bitcoin still lives on the internet.
It's like investing in gold. It's valuable because everyone wants it, and everyone wants it because it's valuable. It feeds into itself.
Somehow, all of you completely missed my point. I chose the word gold as an easy example, but please don't get stuck on that one word. Replace "gold" with any other word of your choice. The point is that, all too often, a thing is valuable because people want it. And when a thing is valuable, even more people will want it. It creates a cycle of ever-increasing value and ever-increasing demand.
That "thing" could be gold. It could be Bitcoin. It could be Action Comics #1. It could be a really good brand of artisan made shaving soap that's made in small quantities.
It's like investing in gold. It's valuable because everyone wants it, and everyone wants it because it's valuable. It feeds into itself.
Somehow, all of you completely missed my point. I chose the word gold as an easy example, but please don't get stuck on that one word. Replace "gold" with any other word of your choice. The point is that, all too often, a thing is valuable because people want it. And when a thing is valuable, even more people will want it. It creates a cycle of ever-increasing value and ever-increasing demand.
That "thing" could be gold. It could be Bitcoin. It could be Action Comics #1. It could be a really good brand of artisan made shaving soap that's made in small quantities.
The point you're missing here is that gold as wealth storage did not fell from the sky and is not really comparable to any other examples you've listed here. What you say above is indeed true in many cases, like tulips, BTC, MtG cards, vintage post stamps or lighters, but is fundamentally different with gold. If you have chosen any other word as a substitute, then the response would be different. But you chose gold specifically.
NinthMusketeer wrote: The point is gold is either a real physical material or ownership of businesses that deal in it. Stocks are ownership of businesses that exist in the world around us. Those things have tangible value. Cryptocurrencies only have psychological value--there isn't actually anything there.
I can use cryptos to get moon rocks, boiiiiiiii and the gubmint can't stop meeeeee!
Or more intelligently put. There's value in cryptos as a medium of exchange for semi-illegal businesses. ie Marijuana businesses in the US.
Ehhh. IDK about that.
You still have the issue that the value of Bitcoin is more volatile than any sane person would want in a currency.
Best case I could see you occasionally accepting payment in it, and immediately selling it off so you don't lose anything. You certainly wouldn't want to keep any amount of assets in Bitcoin form for very long. Plus its still a transaction done in electronic form. At which point you might as well have just used a credit card or a money wire for the transaction. If you actually cared about anonymity.
Illicit businesses still will just operate with regular money. The goal when running an illegal business is to not have it be easily traceable. Physical cash is still better at that since Bitcoin still lives on the internet.
Again I'm speaking of the various cryptos used which hasn't been BTC for months. BTC is more volatile because A) Bitcoin is the flagship hype wagon that everyone piles on or off. B) The popularity of BTC significantly affects exchange fee rates to convert from USD to BTC.
LTC exchange rate range for last two months: $0.25 to $1.55 BTC exchange rate range for last two months: $6 to $55
Secondly I'm talking about semi-legal businesses, because of the amorphous legality and the lackadaisical enforcement from the USDOJ of domestic trade, anonymity concerns aren't at the forefront. I'd not be surprised if the largest distribution network of pot in the US was the US Postal Service. That's how little people care about anonymity.
As a business owner you could be running a completely legal dispensary or farm out in Cali or Colorado but wanna make some cash on the side in "dry" states. They don't care if a trail back to them goes into a ledger. It's big money since traditional business models can't compete in pricing with stuff grown legally and the dispensaries have access to labor intensive products your traditional dealer isn't going to sell at nearly a competitive price or find at all. I'm talking moon rocks, dabs and the big ones: edibles and vape fluid.
As a customer if you expect your state to legalize in the next 5-10 years and the local law enforcement aren't enforcing, a common situation in many states, why gaf about your IP address going into a massive ledger either.
I'm not disputing BTC, as in the coin itself not cryptos as a whole, is a poor currency in general. I am also not arguing the value of the LTC is intrinsic, the value comes from the murky legality of the situation and LTC as a "good enough" exchange medium when you can't move money through legal channels. Once the legal status becomes well defined, say if pot is nationally legalized, LTC will lose a lot of value.
Ugh now I feel dirty writing that. I swear I don't browse the dark net looking for drugs and stolen credit cards guys.
The point you're missing here is that gold as wealth storage did not fell from the sky and is not really comparable to any other examples you've listed here.
I am missing no point whatsoever because THAT WAS NOT MY POINT AND NEVER WAS A PART OF MY POINT. Did I mention "wealth storage"? NO. Do not, I repeat, do not put words in my mouth or misrepresent what I have said to pursue your own arguments.
sebster wrote:Just as most people just like watching sport for its own sake and don't gamble, most people buy stocks with no interest in making quick gains on short term volatility. They buy and they hold, getting those bi-annual dividends, and maybe cashing out in retirement. In 2008 when the market plunged, 97% of investors... did nothing. They just held on to their stocks, watched the paper price plummet and then recover, because they're invested long term.
I don't know if I remember correctly but I think most people don't buy stocks for long term investment/retirement. I think it was Buffet who said that an index fund is the better long term option because those have smaller fees but also because more than 50% of the market are speculating (not necessarily day trading but for a much wider definition of speculating). That combination of higher fees and sometimes winning (looks good) and sometimes losing (gets ignored the moment you win again) leads to people thinking they are outperforming index funds but overall they are not smarter and in the long term an index fund tends to do better.
If I remember correctly he (or it was the dude who Google brought in to explain their workforce about stocks before they got their IPO) explained that speculators (as in people who don't just leave this for a long time) would need to be reduced to less than 40% of the pool (or something like that) to be able to actually abuse the situation of index funds dominating and being less flexible (and work around that information to create profits at the cost of index funds). Of course if so many people were to actually move to index funds this reversal of benefits would then lead to people moving away from index funds (and into speculation) thus again creating a situation where index funds are under 60% (or whatever the number was). The secondary point was that index fund never had that high of a percentage because so many people think they can outsmart the market (while the middlemen skim off their fees and get rich without risking anything).
whembly wrote:As for Bitcoin... to me, the future seems to be something like Berkshire Shares something kinda sorta stable... (minus the dividends of course).
Like in Alien where the crew gets paid in company shares (implying that it's become more stable than government issued currencies)?
Unlike many cryptocurrencies that are derivatives of Bitcoin, Monero is based on the CryptoNight proof-of-work hash algorithm, which comes from the CryptoNote protocol[7]. It possesses significant algorithmic differences relating to blockchain obfuscation.[8][9] By providing a high level of privacy, Monero is fungible, meaning that every unit of the currency can be substituted by another unit. This makes Monero different from public-ledger cryptocurrencies like Bitcoin, where addresses with coins previously associated with undesired activity can be blacklisted and have their coins refused by other users.[3]
In particular, the ring signatures mix the spender's address with a group of others, making it exponentially more difficult to establish a link between each subsequent transaction.[5][10] Also, the "stealth addresses" generated for each transaction make it impossible to discover the actual destination address of a transaction by anyone else other than the sender and the receiver. Finally, the "ring confidential transactions" mechanism hides the transferred amount
Mad Doc Grotsnik wrote: I mean, it's electronic. What's to stop the people that invented it just awarding themselves Fifty Squillion Bitcoins at any point in time?
No-one has any power to just create new coins. New coins are only created through an automated process, which are allocated to people who supply computers for tracking processing. That's what 'bitcoin mining' is.
In that sense bitcoin is actually really clever. Because no-one can just make more of the currency, unlike current fiat currency where the various Federal Reserves, Reserve Banks, Central Banks etc around the world can choose to print more money if they want. That's what got people really excited, this was a currency that didn't need any faith in government.
Only problem is those really excited people didn't understand currency, and had a very strange, ideological opinion of the Fed. Because what the Fed does is control money supply to ensure currency inflation stays in a narrow band which doesn't upset commerce - keeping inflation around 2% meant shops didn't have to worry about changing prices constantly, and there's an incentive to spend money now, not just sit on it. Whereas bitcoin, because it is unmanaged and increasingly scarce, it attracts speculators, which causes the price to fluctuate widly.
The irony is what makes people excited about bitcoin as an investment is what makes it terrible as a currency, and because it is bad as a currency, means it will never end up a good investment.
Automatically Appended Next Post:
NinthMusketeer wrote: I have a slightly different interpretation of the matter. In my eyes there is fundamental value to stocks, as they are a share of a real company, yet the perception of that value is affected by group psychology, etc. Same page there. What I see is that since bitcoin (and the like) has no fundamental value the overall valuation of the stock market is used as one by proxy. So bitcoin essentially piggybacks on the same mood of the market without as much of a psychological 'identity' of it's own, while the latter operates independently.
So bitcoin as a purely speculative, ends up piggybacking on the trends of the stock market (which themselves have a cause that is a combination of fundamental and psychological elements)?
That, to me, is an excellent explanation. Seriously, I pinched this from a twitter thread where it was being discussed by economists, and I don't think any of them gave answers that were close to being as complete, and as concise. Mad props to you.
Automatically Appended Next Post:
nou wrote: And for anyone still believing, that there is any significant "fundamental value" within stockmarket, read this: http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis and see for yourself how much of "proffesional stock trend analysis" is based solely on "chart numberology", not far removed from depiction in Aronofsky's "Pi" movie (great film BTW).
We're talking at cross purposes here. Fundamental value refers to the idea that the asset has on some level an actual value to the owner divorced from its sale price. So for instance the price of an apartment in NY might swing wildly in value based on the moods of the market, and all that chaos might leave someone wondering what the real value of the property is, and some concluding that it's all nonsense. But at the end of the day, the apartment can be lived in, or it can be rented - it will deliver some fundamental, real world value to its owner.
That's what I'm saying about stocks. Prices go all over the place and it's a fool's errand to claim any real knowledge about what the stock's price 'should' be... but that doesn't mean the stocks have no value. They pay a dividend to the holder. That's a fundamental, real world value
And yeah, Pi is a great movie. I've been an Aronofsky fan ever since
And answering OPs question - in days of interwebz stockmarket analysis follows the same pattern of mass behaviour as "netlisting" in 40K. "Serious investors" follow same "serious" webpages (there is huge homogenisation of content between different sites dedicated to the same, limited area of interest) and base their knowledge of "chart analysis" on same tutorials/schools/tools.
I think chartists went out of fashion with suspenders and power suits. These days the big trend for retail investors is in to passive funds, while the big firms move increasing the quant stuff, trying to make their money by getting in ahead of trades by a fraction of a second.
nowadays you can spread your emotions instantly to the masses - one single Tweet or FB post, that can be written and sent during momentarily upset can reach and upset thousands of people - like avalanche. In pre- social media times it was a lot, lot harder to "synchronise" emotional reactions this way, as you don't usually stay upset over trivia long enough to write and send a paper letter and you can phonecall only one person in such state. So only deeper upset/unease got spread far enough to get magnified to entire countries, unless it has been "catched" by mass media coverage.
I don't doubt the ability of people to put out mass impact information, but the ability to coordinate such an attack to spread across multiple institutions is dubious at best. If anything the various schemes built to manipulate in this way have declined, as modern communication means leaving a record. The days of pump & dump and short to panic are way down, because you run these scams out of a call centre anymore, instead you have to use hucksters like zerohedge, and that tends to be a lot more difficult to hide from regulators.
Automatically Appended Next Post:
whembly wrote: With regards to the DOW markets... this is a correction eh?
People like to say 'correction' because it sounds like what's happening has meaning. As if someone knows what the correct price should be, and can see the market moving towards that 'true' price.
The market is just wobbling because people got the jitters. There has been a long bull, which started as a healthy recovery from the GFC, but since then has kept going and going and so people are looking for a reason to jump before the train crashes. So small downward movements become big downward movements, then when they settle everyone jumps back in.
Seriously, the whole thing is just silliness, and so we should take care when pundits feed us terms like 'correction' as they imply a level of reason and control that really isn't there.
Automatically Appended Next Post:
Grey Templar wrote: You mock it, but as mentioned earlier Gold has value as a means of wealth storage.
That's a tautology. Gold's ability to be used a store of value is not evidence of gold's value.
So in many ways, Gold is better than something like Paper money(which truly is worthless in and of itself) if you are worried about a collapse of the overall economy. At the least, its never bad to have a diversified portfolio.
People have this idea that if there's governmental/economic collapse to the point where people aren't accepting USD, they're not going to take gold either. Gold is valuable for its decorative purpose and its use in electronics, neither of which are particularly high on people's priority lists during total civilization collapse.
So in terms of having a real value, gold backed currency and actual are no better as currencies than pure fiat. But gold does give you lots of issues, as it can deflate over the long term and it in the short term it can swing wildly in price, both of these can cause major issues that fiat currency does not.
This is why we moved past gold and gold backed currencies. They sucked.
Automatically Appended Next Post:
Mario wrote: I don't know if I remember correctly but I think most people don't buy stocks for long term investment/retirement. I think it was Buffet who said that an index fund is the better long term option because those have smaller fees but also because more than 50% of the market are speculating (not necessarily day trading but for a much wider definition of speculating). That combination of higher fees and sometimes winning (looks good) and sometimes losing (gets ignored the moment you win again) leads to people thinking they are outperforming index funds but overall they are not smarter and in the long term an index fund tends to do better.
There's I think a few things to note there. Most money in the market is there for long term capital appreciation. Remember that most money is in large institutional investors like pension funds. There's also a huge growth in passive funds and shift to passive management, Vanguard and Blackrock are now the two largest investment companies I believe, the former is purely passive and the latter primarily passive.
I think most individual investors are planning long term. But the issue is a lot of investors think they have to trade constantly, chasing trends. They waste some money in commissions, and a lot more money buying at peaks and selling in troughs. It isn't that their overall goal isn't long term, its that they get caught up in short term information loops.
Oh and lastly, almost everyone underperforms the market. It sounds weird, but it happens because winners and losers in the market aren't a mirror image of each other. Instead what you get is some companies that lose value or go nowhere, a whole lot of companies who make modest gains, and a handful of companies that grow incredibly. Most people, even passive investors looking to buy a diversified list of stocks, won't own that many companies. They'll maybe 50 stocks, out of the many thousands listed. So most people won't be holding Apple before it took off, and as a result they'll underperform the market.
nou wrote: And for anyone still believing, that there is any significant "fundamental value" within stockmarket, read this: http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis and see for yourself how much of "proffesional stock trend analysis" is based solely on "chart numberology", not far removed from depiction in Aronofsky's "Pi" movie (great film BTW).
We're talking at cross purposes here. Fundamental value refers to the idea that the asset has on some level an actual value to the owner divorced from its sale price. So for instance the price of an apartment in NY might swing wildly in value based on the moods of the market, and all that chaos might leave someone wondering what the real value of the property is, and some concluding that it's all nonsense. But at the end of the day, the apartment can be lived in, or it can be rented - it will deliver some fundamental, real world value to its owner.
That's what I'm saying about stocks. Prices go all over the place and it's a fool's errand to claim any real knowledge about what the stock's price 'should' be... but that doesn't mean the stocks have no value. They pay a dividend to the holder. That's a fundamental, real world value
And yeah, Pi is a great movie. I've been an Aronofsky fan ever since
And answering OPs question - in days of interwebz stockmarket analysis follows the same pattern of mass behaviour as "netlisting" in 40K. "Serious investors" follow same "serious" webpages (there is huge homogenisation of content between different sites dedicated to the same, limited area of interest) and base their knowledge of "chart analysis" on same tutorials/schools/tools.
I think chartists went out of fashion with suspenders and power suits. These days the big trend for retail investors is in to passive funds, while the big firms move increasing the quant stuff, trying to make their money by getting in ahead of trades by a fraction of a second.
nowadays you can spread your emotions instantly to the masses - one single Tweet or FB post, that can be written and sent during momentarily upset can reach and upset thousands of people - like avalanche. In pre- social media times it was a lot, lot harder to "synchronise" emotional reactions this way, as you don't usually stay upset over trivia long enough to write and send a paper letter and you can phonecall only one person in such state. So only deeper upset/unease got spread far enough to get magnified to entire countries, unless it has been "catched" by mass media coverage.
I don't doubt the ability of people to put out mass impact information, but the ability to coordinate such an attack to spread across multiple institutions is dubious at best. If anything the various schemes built to manipulate in this way have declined, as modern communication means leaving a record. The days of pump & dump and short to panic are way down, because you run these scams out of a call centre anymore, instead you have to use hucksters like zerohedge, and that tends to be a lot more difficult to hide from regulators.
That is why I used the term "significant". There is of course some fundamental value in stocks (as percentage of actual price) of real-world companies, but changes of value have only vague correlation to actual actions performed by those companies. Emotional effect of "exceeding expectations" or "failing expectations" are more important than actual performance/growth/decline in fundamental rems. I don't know about US stockmarket, but in Poland there were cases, when total stock value of a company was lower than re-sale value of land/property/machines owned by such company.
And you misunderstood this "synchronisation" part - it is not a "targeted tool", it is emergent interaction of masses and is self driven and spontaneous, but it influences everything to quite large degree and as a new phenomenon is not understood well enough to be "weaponised". But "mass hysteria" episodes are nowadays much deeper than decade or two ago. Think of it more like "changed fundamental property of society". Are you familiar with "liquid sand" (aerated sand) phenomenon? This synchronisation is more akin to such change in behavior of a "social material" than "targeted" building of any specific "sand castle". I'm also mentioning this here in reference to stockmarket as a sidenote, I'm personally much more fascinated how this mechanism influences politics and societies. Economics, as being a derivative of social interactions is simply not immune to this effect. This is partially reason why Richard Thaler got his Nobel prize only after internet became a thing - individual stock player psyche did not changed much between "great crysis" and nowadays, but this "synchronisation via global village" became influential enough to patterns of mass irrational behaviour become become visible enough to study them.
And answering to your comment about "leaving a record" and regulators, this is completely untrue for cryptocurrencies, as those are still totally unregulated and had quite a number of scams coexisting with "primary" cryptocurrency market already. Cryptocurrency (and forex) market is also full of "chartists" as you call them, because those are "direct play" markets for individuals. You also undervalue another inherent property of modern internet: people have innate desire to "be right" not to "have true knowledge", and because it is very easy to find echo-chambers, the result is that many, many people are, what I call, "very well and thoroughly miseducated" and will hold their ground no matter the real evidence. This can be seen in pretty much any internet discussion on any wide enough subject. In relation to economics, this translates to bizarre and inrational behaviours being common and in fact on the rise. BTC bubble is quite strong evidence for this.
[sidenote]: I'm operating on metaphore level as English is not my primary language and it is often tedious to translate accurately for me and metaphores are "good enough" means of non-academic discussion on dakka
sebster wrote: The irony is what makes people excited about bitcoin as an investment is what makes it terrible as a currency, and because it is bad as a currency, means it will never end up a good investment.
Nah, bitcoin is already terrible as a currency (and a rather stupid investment) before even getting to the question of stability and being able to deliberately control its supply and value. Bitcoin is terrible as a currency because there's absolutely zero reason to adopt it from the point of view of any legal business. Bitcoin offers you almost nothing compared to taking payment in conventional government-issued currency, at best the processing fees might be lower than the processing fees charged by the credit card company. The only people with any reason at all to deal with bitcoin are drug dealers, hitmen, etc, who need a harder to trace method of taking payment for their illegal goods and services. And why would any sane person not associated with those illegal businesses want to get tied up in a currency that is so closely linked to them and has so little value anywhere else? Even if you magically give bitcoin government-style value control it's still going to be a worthless gimmick whose value is entirely from gullible people hoping it will magically increase in value forever, and scammers hoping to make an easy profit off the gullible investors before the whole thing collapses.
There was exactly one logical reason for big companies like Steam to briefly accept BTC as payment method - it was easier and more cost-efficient for such popular platform to accumulate BTC for speculative purposes via payment than via mining. Valve dropped BTC when exponential growth phase of BTC bubble was obvious enough (dec.6th) to expect it to burst soon.
I have been following the drastic fall of bitcoin as I got into it late. Luckily I'm not head over heals invested but Im gonna lose enough if it continues that my WH40k addiction will have to go on hold until this levels back out.
I can't wait for Bitcoin to finish it's inevitable crash so the prices for PC stuff can go back to normal. I just barely managed to get my wife a 1060 before tulip mania ripple miners jacked the price up enormously.
The real reason Nvidia has been trying to cut down on sales of GPUs to crypto miners isn't some altruistic defense of PC gaming, it's that they're trying to soften the blow of when a bajillion used 1080s and 1070s go on ebay to try and recover some tiny scraps back from failed coin enterprises.
There's a guy who's been trying to sell his rig on the local craigslist here. I take particular schadenfreude in that he's been listing it for about the last month, apparently without takers.
Ouze wrote: I can't wait for Bitcoin to finish it's inevitable crash so the prices for PC stuff can go back to normal. I just barely managed to get my wife a 1060 before tulip mania ripple miners jacked the price up enormously.
The real reason Nvidia has been trying to cut down on sales of GPUs to crypto miners isn't some altruistic defense of PC gaming, it's that they're trying to soften the blow of when a bajillion used 1080s and 1070s go on ebay to try and recover some tiny scraps back from failed coin enterprises.
nou wrote: That is why I used the term "significant". There is of course some fundamental value in stocks (as percentage of actual price) of real-world companies, but changes of value have only vague correlation to actual actions performed by those companies. Emotional effect of "exceeding expectations" or "failing expectations" are more important than actual performance/growth/decline in fundamental rems. I don't know about US stockmarket, but in Poland there were cases, when total stock value of a company was lower than re-sale value of land/property/machines owned by such company.
Price changing relative to expectation isn't an emotional impact, it is a real impact. A company that is expected to have sales of $100m and a net profit of $10m is going to be priced at one price, so when sales come in at $90m and net profit at $5m, the company is going to be valued less. It isn't an emotional thing, it's reacting to there being certain expectations about the profits and future cashflows of the company, and those expectations changing.
And you misunderstood this "synchronisation" part - it is not a "targeted tool", it is emergent interaction of masses and is self driven and spontaneous, but it influences everything to quite large degree and as a new phenomenon is not understood well enough to be "weaponised".
Ah, fair enough. I misread, my mistake.
I think you are right that information is increasing, and that information is far less controlled than it once was (financial news was never a bastion of reasoned or responsible reporting, but it was miles better than the likes of zerohedge). And yeah, the same is true for overall society (where again, the media was never a bastion of responsible and objective reporting, but it was miles better than Breitbart or stuff your uncle on Facebook links to).
And there are lots of social problems forming which people are linking to the new information environment, but I think there's a lot of over-prescription going on. Because while the political environment is a hot mess, we've just seen one of the most stable growth periods in market history. It's now national news because there was finally a single hiccup. So I agree that the new information environment has issues, but I think the impacts are complex and very far from universal.
Automatically Appended Next Post:
Peregrine wrote: Nah, bitcoin is already terrible as a currency (and a rather stupid investment) before even getting to the question of stability and being able to deliberately control its supply and value. Bitcoin is terrible as a currency because there's absolutely zero reason to adopt it from the point of view of any legal business. Bitcoin offers you almost nothing compared to taking payment in conventional government-issued currency, at best the processing fees might be lower than the processing fees charged by the credit card company.
Saying 'at best the processing fees might be lower' is a weird argument. Because lower processing fees are a great reason for adoption. That's like saying 'the only reason anything thinks they're a great team is those three championships they won'
So yeah, if bitcoin could reach lower transaction fees, it would have some merit, and given how high forex transaction fees can be, this is a very good reason. The problem is that bitcoin is a long way from that point right now. For starters, right now transaction fees aren't lower, and there's remarkably little work being down to bring down transaction fees. Second up is that bitcoin has such awful problems with volatility that holding a purse of bitcoin becomes problematic, instead people would likely trade in/out just for the 1 second of the trade, which raises transaction costs further. And lastly, if bitcoin was able to manage this... it wouldn't make it a replacement currency. It'd be more like a replacement for a part of Paypal.
Automatically Appended Next Post:
Ouze wrote: I can't wait for Bitcoin to finish it's inevitable crash so the prices for PC stuff can go back to normal. I just barely managed to get my wife a 1060 before tulip mania ripple miners jacked the price up enormously.
My PC chugs along running Total War Warhammer okayish, and I have no idea what card I have. So that part of the bitcoin silliness hasn't impacted me.
But I can't wait for the bitcoin crash just for the schadenfreude. I mean, have you guys ever talked to the bitcoin people? Not just people who bought some coins on speculation, but the true, real believers? I know a few people who've commented how nasty those guys can be and to be honest I never experienced that, but what I experienced was still something pretty amazing. It's like taking the politics of libertarianism at its most strident, then adding in the unquestioning cult mentality of Scientology, and the passive aggressive salesmanship of Amway.
sebster wrote: Saying 'at best the processing fees might be lower' is a weird argument. Because lower processing fees are a great reason for adoption. That's like saying 'the only reason anything thinks they're a great team is those three championships they won'
Not really, because lower processing fees is not likely to have a huge impact on the customer. If a GW tactical marine costs $49.95 instead of $50 if you buy with bitcoin are you really going to care about the $0.05 you save? Is the company even going to pass the savings on to you and give you incentive to use bitcoin? Will the credit card company simply concede the price advantage to bitcoin, or lower its own prices to compete? It's going to be relatively weak adoption pressure, and the strongest demand for bitcoin is going to continue to come from illegal and/or embarrassing transactions.
And lastly, if bitcoin was able to manage this... it wouldn't make it a replacement currency. It'd be more like a replacement for a part of Paypal.
Well yeah, that's where I was going with that thought. Bitcoin is useless as a general currency, its only legal purpose is as a (hypothetical) paypal competitor. But, as you said, that's still very speculative at the moment.
Ouze wrote: I can't wait for Bitcoin to finish it's inevitable crash so the prices for PC stuff can go back to normal. I just barely managed to get my wife a 1060 before tulip mania ripple miners jacked the price up enormously.
The real reason Nvidia has been trying to cut down on sales of GPUs to crypto miners isn't some altruistic defense of PC gaming, it's that they're trying to soften the blow of when a bajillion used 1080s and 1070s go on ebay to try and recover some tiny scraps back from failed coin enterprises.
The whole thing is incredibly stupid all around.
Actuallt, I want this to happen. My laptop is dying, and I need a new one with gaming capacities. So please crash already.
Peregrine wrote: Not really, because lower processing fees is not likely to have a huge impact on the customer. If a GW tactical marine costs $49.95 instead of $50 if you buy with bitcoin are you really going to care about the $0.05 you save? Is the company even going to pass the savings on to you and give you incentive to use bitcoin? Will the credit card company simply concede the price advantage to bitcoin, or lower its own prices to compete? It's going to be relatively weak adoption pressure, and the strongest demand for bitcoin is going to continue to come from illegal and/or embarrassing transactions.
The cost of buying in a foreign currency isn't 0.1%, as in your example. The cost is more like 3% at best (and often unfavourable exchange rates can push it over 5%). If someone is buying a $50 thing, then they are likely to look for a service that costs them 50c, rather than a service that costs them at least $1.50. If that other service is convenient and reliable, of course.
The problem now is bitcoin costs more for a transaction because the supporting infrastructure is completely disfunctional, and because its so volatile that keeping a purse for transactions means opening yourself up to huge risk, which means you'd want to go in/out instead, which basically doubles your transaction fees.
I understand there's other crypto that's cheaper to trade, so if someone could come up with a crypto that's actually stable (maybe by pegging to the USD) then that'd really be worth something.
sebster wrote: The cost of buying in a foreign currency isn't 0.1%, as in your example. The cost is more like 3% at best (and often unfavourable exchange rates can push it over 5%). If someone is buying a $50 thing, then they are likely to look for a service that costs them 50c, rather than a service that costs them at least $1.50. If that other service is convenient and reliable, of course.
But that's an even smaller victory. Now you're talking about the limited market where there's enough demand for international purchases for the benefits of a cheaper transaction fee that the costs of setting up your store to accept bitcoin are worth it, but you don't have enough demand to just sell stuff in their native currency. If you buy a GW space marine for $50 you are only paying the transaction fee, you aren't paying a conversion fee to buy in GBP because GW isn't charging you in GBP. And even in the best case scenario you're talking about a $1.50 fee. That's a rounding error that most people aren't going to notice, and paying $1.50 occasionally isn't going to motivate people to adopt bitcoin.
To be successful bitcoin needs to undercut the transaction fees on high-volume purchases. For example, if bitcoin can undercut the credit card companies (and continue to undercut them when the credit card companies lower their rates to stay ahead of bitcoin) on general transaction fees they might give your local grocery store a reason to accept bitcoin. A grocery store is a high volume, low margin business where per-item profits are extremely low and even a small cost reduction per item can produce a massive percentage-wise increase in profits. But that's a tough goal to accomplish.
NinthMusketeer wrote: I have a slightly different interpretation of the matter. In my eyes there is fundamental value to stocks, as they are a share of a real company, yet the perception of that value is affected by group psychology, etc. Same page there. What I see is that since bitcoin (and the like) has no fundamental value the overall valuation of the stock market is used as one by proxy. So bitcoin essentially piggybacks on the same mood of the market without as much of a psychological 'identity' of it's own, while the latter operates independently.
So bitcoin as a purely speculative, ends up piggybacking on the trends of the stock market (which themselves have a cause that is a combination of fundamental and psychological elements)?
That, to me, is an excellent explanation. Seriously, I pinched this from a twitter thread where it was being discussed by economists, and I don't think any of them gave answers that were close to being as complete, and as concise. Mad props to you.
Thanks mate! I respect you as a poster so coming from you that means a lot.
Peregrine wrote: But that's an even smaller victory. Now you're talking about the limited market where there's enough demand for international purchases for the benefits of a cheaper transaction fee that the costs of setting up your store to accept bitcoin are worth it, but you don't have enough demand to just sell stuff in their native currency. If you buy a GW space marine for $50 you are only paying the transaction fee, you aren't paying a conversion fee to buy in GBP because GW isn't charging you in GBP. And even in the best case scenario you're talking about a $1.50 fee. That's a rounding error that most people aren't going to notice, and paying $1.50 occasionally isn't going to motivate people to adopt bitcoin.
To be successful bitcoin needs to undercut the transaction fees on high-volume purchases. For example, if bitcoin can undercut the credit card companies (and continue to undercut them when the credit card companies lower their rates to stay ahead of bitcoin) on general transaction fees they might give your local grocery store a reason to accept bitcoin. A grocery store is a high volume, low margin business where per-item profits are extremely low and even a small cost reduction per item can produce a massive percentage-wise increase in profits. But that's a tough goal to accomplish.
I think you're making a lot of assumptions, the biggest is assuming this has to be a consumer led change, and that it must replace traditional currency. Those outcomes are unllikely at best, but also not needed. There's huge potential for a blockchain product to work entirely as an unseen financial intermediary, so I'm online and I press pay, and $50 disappears from my bank account. Right now the bank will shift my money to a financial intermediary (it may be a subsidiary, but even if it is it still costs money), then that intermediary will shift the money to another intermediary in the other country, trading the currency in to the vendor's currency, and then that intermediary will deposit the money in the vendor's account.
With a system underpinned by blockchain all that extra handling is dropped, because instead of needing all those agencies to verify each other, blockchain's ledger system does it automatically. There's huge potential savings, if someone can build a blockchain that focuses on getting costs to near zero.
The really big thing to realise is the consumer doesn't even need to know what is happening. Right now, the consumer has no idea about how his money is moved through intermediaries. He doesn't know what paypal does to shift the money after he click 'make payment'. But if a company can offer banks a system to move money for next to nothing, you bet they'll take it.
Automatically Appended Next Post:
NinthMusketeer wrote: Thanks mate! I respect you as a poster so coming from you that means a lot.
Not a problem mate. It really was an excellent answer.
Ouze wrote: I can't wait for Bitcoin to finish it's inevitable crash so the prices for PC stuff can go back to normal. I just barely managed to get my wife a 1060 before tulip mania ripple miners jacked the price up enormously.
The real reason Nvidia has been trying to cut down on sales of GPUs to crypto miners isn't some altruistic defense of PC gaming, it's that they're trying to soften the blow of when a bajillion used 1080s and 1070s go on ebay to try and recover some tiny scraps back from failed coin enterprises.
The whole thing is incredibly stupid all around.
Actuallt, I want this to happen. My laptop is dying, and I need a new one with gaming capacities. So please crash already.
Watch out for that, tho, because miners pretty much melt the cards in the process.
reds8n wrote: [Do wonder how many IT guys for large companies take advantage of things like the Xmas holidays to try things like this.
We haven't foiled any insider jobs yet but as a datacenter employee for a fortune 100 company we've definitely seen people load miners onto servers. It's not very productive since those are almost all virtualized and have limited processing power to begin with, and we see alarms if the CPU spikes for a certain threshold.
No ones ever gotten one onto the big iron yet, which is where it would actually be worth it, but we'd see that really quickly (within an hour tops) since we're constantly monitoring CPU usage for normal batch processing work that somehow got screwed up or was written poorly. The heavy duty stuff gets heavy duty eyeballs - my guess is that the change control and SOX processes in the former Soviet countries is, uh, not as robust.
Ouze wrote: I can't wait for Bitcoin to finish it's inevitable crash so the prices for PC stuff can go back to normal. I just barely managed to get my wife a 1060 before tulip mania ripple miners jacked the price up enormously.
The real reason Nvidia has been trying to cut down on sales of GPUs to crypto miners isn't some altruistic defense of PC gaming, it's that they're trying to soften the blow of when a bajillion used 1080s and 1070s go on ebay to try and recover some tiny scraps back from failed coin enterprises.
The whole thing is incredibly stupid all around.
Actuallt, I want this to happen. My laptop is dying, and I need a new one with gaming capacities. So please crash already.
Watch out for that, tho, because miners pretty much melt the cards in the process.
Ouze wrote:
reds8n wrote: [Do wonder how many IT guys for large companies take advantage of things like the Xmas holidays to try things like this.
We haven't foiled any insider jobs yet but as a datacenter employee for a fortune 100 company we've definitely seen people load miners onto servers. It's not very productive since those are almost all virtualized and have limited processing power to begin with, and we see alarms if the CPU spikes for a certain threshold.
No ones ever gotten one onto the big iron yet, which is where it would actually be worth it, but we'd see that really quickly (within an hour tops) since we're constantly monitoring CPU usage for normal batch processing work that somehow got screwed up or was written poorly. The heavy duty stuff gets heavy duty eyeballs - my guess is that the change control and SOX processes in the former Soviet countries is, uh, not as robust.
the cards are not made to run 24/7 at full power output.. , these are high end but regular joe level parts, we not talking a commercial grade server system built to run at months at time with extremely rare pauses.
There gonna be fried by the time they done.
and doubt it would be easy, your average massive companies will have constant demand on servers, logs, and other systems to monitor usage, they cost many millions of dollers and they be watching even the smallest problems and errors, because breaking, crashing or shutting one down costs a fortune and a huge headache rerouting all the tasks it performed.
However, you never know CIA may have a qautom computer in the basement mining away to fund there black projects!
Scientists listening out for broadcasts by extra-terrestrials are struggling to get the computer hardware they need, thanks to the crypto-currency mining craze, a radio-astronomer has said.
Seti (Search for Extraterrestrial Intelligence) wants to expand operations at two observatories.
However, it has found that key computer chips are in short supply.
"We'd like to use the latest GPUs [graphics processing units]... and we can't get 'em," said Dan Werthimer.
Demand for GPUs has soared recently thanks to crypto-currency mining.
"That's limiting our search for extra-terrestrials, to try to answer the question, 'Are we alone? Is there anybody out there?'," Dr Werthimer told the BBC.
"This is a new problem, it's only happened on orders we've been trying to make in the last couple of months."
Mining a currency such as Bitcoin or Ethereum involves connecting computers to a global network and using them to solve complex mathematical puzzles.
This forms part of the process of validating transactions made by people who use the currency.
As a reward for this work, the miners receive a small crypto-currency payment, making it potentially profitable.
...*sighs* ... we hadda choose the dumbest timeline eh ?
Scientists listening out for broadcasts by extra-terrestrials are struggling to get the computer hardware they need, thanks to the crypto-currency mining craze, a radio-astronomer has said.
Seti (Search for Extraterrestrial Intelligence) wants to expand operations at two observatories.
However, it has found that key computer chips are in short supply.
"We'd like to use the latest GPUs [graphics processing units]... and we can't get 'em," said Dan Werthimer.
Demand for GPUs has soared recently thanks to crypto-currency mining.
"That's limiting our search for extra-terrestrials, to try to answer the question, 'Are we alone? Is there anybody out there?'," Dr Werthimer told the BBC.
"This is a new problem, it's only happened on orders we've been trying to make in the last couple of months."
Mining a currency such as Bitcoin or Ethereum involves connecting computers to a global network and using them to solve complex mathematical puzzles.
This forms part of the process of validating transactions made by people who use the currency.
As a reward for this work, the miners receive a small crypto-currency payment, making it potentially profitable.
...*sighs* ... we hadda choose the dumbest timeline eh ?
Mine Bitcoin, or look for Aliens. Mining for Bitcoin would be a better choice IMO since you might actually make some money. Instead of blindly looking for something that you are never ever going to find.
Scientists listening out for broadcasts by extra-terrestrials are struggling to get the computer hardware they need, thanks to the crypto-currency mining craze, a radio-astronomer has said.
Seti (Search for Extraterrestrial Intelligence) wants to expand operations at two observatories.
However, it has found that key computer chips are in short supply.
"We'd like to use the latest GPUs [graphics processing units]... and we can't get 'em," said Dan Werthimer.
Demand for GPUs has soared recently thanks to crypto-currency mining.
"That's limiting our search for extra-terrestrials, to try to answer the question, 'Are we alone? Is there anybody out there?'," Dr Werthimer told the BBC.
"This is a new problem, it's only happened on orders we've been trying to make in the last couple of months."
Mining a currency such as Bitcoin or Ethereum involves connecting computers to a global network and using them to solve complex mathematical puzzles.
This forms part of the process of validating transactions made by people who use the currency.
As a reward for this work, the miners receive a small crypto-currency payment, making it potentially profitable.
...*sighs* ... we hadda choose the dumbest timeline eh ?
Mine Bitcoin, or look for Aliens. Mining for Bitcoin would be a better choice IMO since you might actually make some money. Instead of blindly looking for something that you are never ever going to find.
I feel like SETI is like buying a lottery ticket. You definitely aren't going to win the jackpot if you buy a ticket, but you actually definitely aren't going to win the jackpot if you don't buy one.
Grey Templar wrote: Mining for Bitcoin would be a better choice IMO since you might actually make some money.
Actually, as a normal person, mining bitcoin is a really stupid idea and almost guaranteed to lose money. The rate of bitcoin generation is less than the cost of the hardware and the power required to run it. Unless you're running ASICs or stolen server farms or similar you're just throwing away money.
Grey Templar wrote:Mine Bitcoin, or look for Aliens. Mining for Bitcoin would be a better choice IMO since you might actually make some money. Instead of blindly looking for something that you are never ever going to find.
Grey Templar wrote: Mine Bitcoin, or look for Aliens. Mining for Bitcoin would be a better choice IMO since you might actually make some money. Instead of blindly looking for something that you are never ever going to find.
Finding evidence of extra terrestrial life changes human history forever. Getting some bitcoin... you might make some money if you get out before it falls over, but so what? You make some money, the idiot who bought off you before the crash loses some money. In terms of human history the whole thing gets remembered as just another bubble in a long history of stupid bubbles.
sebster wrote: Finding evidence of extra terrestrial life changes human history forever. Getting some bitcoin... you might make some money if you get out before it falls over, but so what? You make some money, the idiot who bought off you before the crash loses some money. In terms of human history the whole thing gets remembered as just another bubble in a long history of stupid bubbles.
To be fair, "make money over helping society" is a pretty common theme of human history. The stupidity of bitcoin is not prioritizing personal wealth over advancing science, it's that the vast majority of people mining bitcoin (IOW, anyone not running ASIC farms on cheap Chinese electricity) are throwing away money on it and never going to make a net profit.
Peregrine wrote: To be fair, "make money over helping society" is a pretty common theme of human history. The stupidity of bitcoin is not prioritizing personal wealth over advancing science, it's that the vast majority of people mining bitcoin (IOW, anyone not running ASIC farms on cheap Chinese electricity) are throwing away money on it and never going to make a net profit.
Definitely. I didn't want to claim people should suddenly start thinking only of greater human advancement or anything utopian like that, I just wanted to contrast that while SETI has long odds, if it works then there's an actual social benefit, a huge one. But bitcoin, that's just a zero sum game, a person might make some money, but only by selling to someone else who gets stuck holding the coins when the crash wipes it completely. The only way bitcoin is anything more than that is if it becomes an actual currency with some kind of benefit that modern currency doesn't give, and the odds of that ever happening seems a lot less likely than SETI discovering aliens in the next minute.
Grey Templar wrote: Mine Bitcoin, or look for Aliens. Mining for Bitcoin would be a better choice IMO since you might actually make some money. Instead of blindly looking for something that you are never ever going to find.
Finding evidence of extra terrestrial life changes human history forever. Getting some bitcoin... you might make some money if you get out before it falls over, but so what? You make some money, the idiot who bought off you before the crash loses some money. In terms of human history the whole thing gets remembered as just another bubble in a long history of stupid bubbles.
Not to mention that SETI scanning the sky also provides coverage and the potential to pick up interesting signals to be studied even if they are not of alien origin.
Grey Templar wrote: Mine Bitcoin, or look for Aliens. Mining for Bitcoin would be a better choice IMO since you might actually make some money. Instead of blindly looking for something that you are never ever going to find.
Finding evidence of extra terrestrial life changes human history forever. Getting some bitcoin... you might make some money if you get out before it falls over, but so what? You make some money, the idiot who bought off you before the crash loses some money. In terms of human history the whole thing gets remembered as just another bubble in a long history of stupid bubbles.
Not to mention that SETI scanning the sky also provides coverage and the potential to pick up interesting signals to be studied even if they are not of alien origin.
I get that they do find some actually interesting stuff. My point is maybe they should make that their main mission goal. Instead of trying to metaphorically win the lottery.
Its like a homeless person putting all the money they panhandle for into lottery tickets instead of trying to find some help to no longer be homeless. Sure, they might win, but there are more productive things they could do.
SETI is basically a scam that by accident sometimes finds useful stuff. When instead they could just look for that useful stuff in the first place.
Bitcoin viability depends entirely on it being difficult to produce. That is tied directly to processing power of CPU's. Moore's law states that processing power will continually increase - which means bitcoin was doomed to fail from the start. It is that simple.
SETI is basically a scam that by accident sometimes finds useful stuff. When instead they could just look for that useful stuff in the first place.
The issue is that the useful stuff they find is often stuff no one would have thought to look for in and of itself.
Discovery is not something that can be driven by clearly defined goals in the same way you run a business. Many of the most useful and world changing discoveries were complete accidents or byproducts of people pursuing other things. As silly as SETI's stated goal is (and it really is silly), it's not like we're so devoid of money that we can't toss them bones just to see what turns up. There's no functional way to know when, where, and how the next penicillin, pacemaker, microwave oven, or x-rays will be discovered (all of these things were discovered/invented by accident) which isn't to say we should throw money to the wind, just that we shouldn't arbitrarily discard or throw away ideas just because they're a little silly to us now. Someday we might be grateful we threw some dollars into a silly project because it came up with something useful.
I thought the complexity of calculation goes up as more coins are mined, which is why some theorize there will be limit on the number of coins, as the calculations will eventually become too complex.
Xenomancers wrote: Moore's law states that processing power will continually increase - which means bitcoin was doomed to fail from the start. It is that simple.
That's not actually how Moore's law works. It's more specific - that circuit count in an IC will double ever 18 months. That's definitely not a thing that could have continued forever and in fact it's pretty much busted now.
Xenomancers wrote: Moore's law states that processing power will continually increase - which means bitcoin was doomed to fail from the start. It is that simple.
That's not actually how Moore's law works. It's more specific - that circuit count in an IC will double ever 18 months. That's definitely not a thing that could have continued forever and in fact it's pretty much busted now.
It's stopped following the pattern but processing power still regularly increases. Plus - we are on the cusp of some huge breakthroughs in processing power. Biological circuits and quantum computing for example.
feeder wrote: I thought the complexity of calculation goes up as more coins are mined, which is why some theorize there will be limit on the number of coins, as the calculations will eventually become too complex.
Bitcoin is limited to only ever reaching 21,000,000 coins by the design of its maker not so much because calculations will become too complex but rather because the cost-benefit of making new coins for miners will eventually hit zero. Bitcoin rewards miners with coins, but the reward his halved as certain milestones are reached (functionally the reward is halved ever 4 years). This is an artificial limitation imposed by the creator of bitcoin and not a technological or computational limitation so as to artificially enforce scarcity and thus eliminated the otherwise inevitable problem of inflation on a currency that would functionally be infinite. Keep in mind that even as the calculations become more complex, the ability to calculate for the foreseeable future follows a fairly linear curve. We're not going to be hitting any walls in our ability to speed up computers for quite sometime. Basically the logic is that once there is no longer a reward for mining new coins, no one will bother and thus there will never be an infinite number of coins.
feeder wrote: I thought the complexity of calculation goes up as more coins are mined, which is why some theorize there will be limit on the number of coins, as the calculations will eventually become too complex.
interesting I didn't know that about bitcoin. That's still not an unbeatable mechanic since it is updated periodically - which means it will always be unstable. Not good news for a currency.
Xenomancers wrote: Bitcoin viability depends entirely on it being difficult to produce. That is tied directly to processing power of CPU's. Moore's law states that processing power will continually increase - which means bitcoin was doomed to fail from the start. It is that simple.
No one uses CPUs for mining bitcoins because it's not effective (1). Moore's law doesn't state that processing power will continually increase. It an observation that the number of transistors on an IC doubles every two years due to miniaturization (2). That just happens to be loosely correlated with processing power increasing. And it's not even holding true nowadays (3), because processor manufacturers have mostly focused on parallelization and black magic (4) to make processors faster (5) which is backfiring spectacularly (6). Also, Bitcoin isn't doomed for that reason because there's only a finite (albeit large) number of bitcoins that can ever exist (7), and they become increasingly harder to mine. (8)
Xenomancers wrote: Moore's law states that processing power will continually increase - which means bitcoin was doomed to fail from the start. It is that simple.
That's not actually how Moore's law works. It's more specific - that circuit count in an IC will double ever 18 months. That's definitely not a thing that could have continued forever and in fact it's pretty much busted now.
It's stopped following the pattern but processing power still regularly increases
A Town Called Malus wrote: Not to mention that SETI scanning the sky also provides coverage and the potential to pick up interesting signals to be studied even if they are not of alien origin.
I didn't know that and its really cool. Thanks for posting it.
Automatically Appended Next Post:
Grey Templar wrote: Its like a homeless person putting all the money they panhandle for into lottery tickets instead of trying to find some help to no longer be homeless. Sure, they might win, but there are more productive things they could do.
Your example sucks, because society isn't investing everything it has in to SETI. We're throwing in pocket change. So its more like a upper middle class person buying a lottery ticket with the change they just found in between the sofa cushions.
Automatically Appended Next Post:
Xenomancers wrote: Bitcoin viability depends entirely on it being difficult to produce. That is tied directly to processing power of CPU's. Moore's law states that processing power will continually increase - which means bitcoin was doomed to fail from the start. It is that simple.
You've got the 'doomed to fail' part, but you've got the reason why completely the wrong way around. The problem isn't that bitcoin will keep producing endless coins, the problem is that it won't. And even now, while the stock of coins is increasing, that increase is tied to arbitrary rules rather than the actual demand for coins. The result is a currency that wildly volatile in the short term, and (for now) appreciating over the long term.
It can't be said clearly enough - that's a really terrible currency. ST volatility - imagine a store owner trying to set a price with a currency that moves 20% in a couple of days. LT appreciating - imagine a buyer thinking about buying something, then deciding if they just wait 6 months and leave their coins sitting there the price will probably. come down
And so, because bitcoin is such a bad currency... what is it? Its a speculative investment with no final payoff. This means it isn't even a bubble, it's actually a pyramid scheme.
Grey Templar wrote: Its like a homeless person putting all the money they panhandle for into lottery tickets instead of trying to find some help to no longer be homeless. Sure, they might win, but there are more productive things they could do.
Your example sucks, because society isn't investing everything it has in to SETI. We're throwing in pocket change. So its more like a upper middle class person buying a lottery ticket with the change they just found in between the sofa cushions.
In my example Homeless Person = SETI scientists, not society as a whole.
They'd be better served looking for valuable minerals in the asteroid belt or on Mars as potential resources for future mining, or focus on designing a manned mission to Mars, etc...
Grey Templar wrote: In my example Homeless Person = SETI scientists, not society as a whole.
Then your example sucked in a different way. Because if the homeless person is the scientists, then talking about them spending money on SETI/a lottery ticket makes no sense - for the scientists SETI isn't spending, it is their income.
Grey Templar wrote: In my example Homeless Person = SETI scientists, not society as a whole.
Then your example sucked in a different way. Because if the homeless person is the scientists, then talking about them spending money on SETI/a lottery ticket makes no sense - for the scientists SETI isn't spending, it is their income.
You're being deliberately obtuse.
The point is that SETI scientists could be spending the money they are receiving pursuing something of actual value. Rather than going on a Snipe hunt which sometimes turns up useful data by accident. They'd probably find even more useful stuff if they were deliberately looking for stuff. Even if it was just "lets look at X quadrant and see what we find today!" instead of "lets desperately look at X quadrant in search of alienzzz!"
The point is that SETI scientists could be spending the money they are receiving pursuing something of actual value. Rather than going on a Snipe hunt which sometimes turns up useful data by accident. They'd probably find even more useful stuff if they were deliberately looking for stuff. Even if it was just "lets look at X quadrant and see what we find today!" instead of "lets desperately look at X quadrant in search of alienzzz!"
No, I'm pointing out your analogy stinks and confuses a fairly simple set of decisions. SETI searches for alien life because that's what they're paid to do. And greater society funds SETI because the funding needed is less than pocket change, with a very small, but potentially huge chance of an enormous pay off.
The analogy you created hid that reality. It made it out that person spending money (the homeless person) was throwing all their money in to the project, when in reality the people putting up this money are putting in a handful of disposable change.
Grey Templar wrote: In my example Homeless Person = SETI scientists, not society as a whole.
Then your example sucked in a different way. Because if the homeless person is the scientists, then talking about them spending money on SETI/a lottery ticket makes no sense - for the scientists SETI isn't spending, it is their income.
You're being deliberately obtuse.
The point is that SETI scientists could be spending the money they are receiving pursuing something of actual value. Rather than going on a Snipe hunt which sometimes turns up useful data by accident. They'd probably find even more useful stuff if they were deliberately looking for stuff. Even if it was just "lets look at X quadrant and see what we find today!" instead of "lets desperately look at X quadrant in search of alienzzz!"
Of course with that logic great many useful discoveries we are grateful of today would have been not discovered. Likely resulting in lives lost and generally worse living standards.
Perhaps nothing captures the feel of our times more than this one perfect thing. A man who is nominally famous for a 'die hard on a battleship' movie 25 years ago, but these days basically is an unintentional self-parody of the tough guy persona, is fronting for an investment that is such pure hype based it is basically Pets.com without the bit where people ran a website and posted people bags of Chum. Vacuous hype selling vacuous hype. These are our times.
Perhaps nothing captures the feel of our times more than this one perfect thing. A man who is nominally famous for a 'die hard on a battleship' movie 25 years ago, but these days basically is an unintentional self-parody of the tough guy persona, is fronting for an investment that is such pure hype based it is basically Pets.com without the bit where people ran a website and posted people bags of Chum. Vacuous hype selling vacuous hype. These are our times.
Sure, you could mine bitcoin on that old PC in your garage, or you could use a whole power station to do it.
That's the idea behind the Blockchain Application Centre -- an Aussie tech initiative that will see one of the country's now-shuttered coal-fired power plants reopened to provide cheap power for blockchain applications.
It's the work of Australian tech company IOT Group, which has partnered with local power company Hunter Energy on the project. According to The Age, Hunter Energy will recommission the Redbank power station in the Hunter Valley, two hours drive north of Sydney.
Once the power plant is reopened (expected to be completed within 12 months), it will offer wholesale or "pre-grid" power prices to blockchain companies, allowing them to do things like mining cryptocurrencies, without having to pay retail power prices.
There's no doubt blockchain is the next big thing in the tech world. It's essentially a technology that stores individual transactions in an ever-growing set of data blocks, allowing different parties to see the same information because it's distributed across computers, rather than being stored in one place.
But while blockchain guarantees trust in a digital world, mining blocks (the process of adding and securing data) is an incredibly compute-intensive task, and one which consumes a huge amount of power. World mining of bitcoin (probably the most well-known blockchain application) currently uses about as much power as the country of Singapore.
IOT Group and Hunter Energy want to get around that, offering cheaper power to companies in the blockchain field and hopefully enticing international operations to base their operations in Australia.
According to a spokesperson from Hunter Energy, it expects roughly 5% of the energy from the power plant will be used for blockchain related processes.
Honestly, that's what I've been telling my friends for ages but no one will listen. Everyone was in panic mode when this happened, and even before when I first got into crypto, everyone felt that there was no way the prices of something so 'virtual' would go up. When it did, no one believed it would last and now that it's crashed, they all feel justified that they were right - for now. It's the same as all other past investment forms and even insurance: skepticism over something sooo potentially worthwhile limits their beliefs and taking any action on it.
I believe, Bitcoin is gold without the weight and the ability to take flight. It's a distributed ledger which no one entity controls, but is visible and verifible by all. t takes a while for people to understand what it is. My advice for crypto is as follows: even if you are not going to invest in crypto, just read news from cryptolinks resources and keep yourself updated in the crypto world.
People who survived Balkan war often mentioned lighters as a practical currency during war times - those are small enough and have so fundamental usefullness, that became "coins", while gas and other combustibles became larger nominals equivalents.
