The truth is nobody knows what will happen. Meanwhile people who have a risk tolerance and budget keep making money.

The 'sane' people have missed out on some of the best returns in history. There is more there than you think, and everyone should investigate for themselves rather than having a knee-jerk reaction.

> The 'sane' people have missed out on some of the best returns in history.

Are these actual returns (ie, BTC sold for fiat) or paper returns on an assumption of market depth at current spot?

Serious question. Most bitcoin enthusiasts I know are either still holding their bitcoin, or traded them for other cryptocurrencies. Few have crystallised their gains in fiat.

I GPU-mined some BTC in 2011 and was a 100% HODLer until yesterday when I sold everything, including the forked BCH.

Now trying to figure out how to invest the proceeds into stocks. Somehow I doubt I will be able to get another 1000000% RoI over 6 years.

Everyone I know in BTC cashed out months/years ago. Makes them feel sick thinking about what they've missed out on recently. But I keep telling them they made a the same decision any rational actor would

and those I know who still hold BTC, the few that have tried to cash out so far haven't received a single dollar, euro, yen, or pound.

So what exactly have they "tried"? It's really pretty straightforward.

So if you transfer BTC into Coinbase, you can't get your money out?

$10k at a time, unless you make some kind of agreement.

There are also ATMs and other exchanges to tap. Cashing out a large sum is nearly impossible.

If you have millions worth of BTC, it's better to just auction them off at a discount to a large buyer.

To be clear: You can sell 100 btc today for USD. Coinbase will hold your USD (and the balance is insured). They will limit your withdraws to 10k, however. To take out more faster, you'll need to contact them and speak with a human. None of this seems unreasonable.

It paints a bleak picture of bitcoin runs on insolvent and poorly insured exchanges when the bottom falls out.

Coinbase is insured via FDIC, so I don't think "poorly" as an appropriate adverb.

Assuming everything goes smoothly in that regard, it’s still a limited coverage.

Nearly impossible? I don't have millions in BTC, but I do have six figures. I requested a limit increase with Coinbase and they bumped it up to 50K per day. I've had no problems withdrawing that.

My roommate sells $40k worth every 3 months. In cash. He travels a lot now.

>My roommate sells $40k worth every 3 months. In cash. He travels a lot now.

I seriously hope he's aware of the tax implications here. I feel like the IRS is going to be working some serious overtime after this nonsense is over.

Yeah, the first thing I would do is see a tax specialist and make sure I am setting aside enough to may my dues before I went on any sprees.

Good advice. We're in Canada so he should be ok.

Returns from greater fools? I'd better stay without profits than participate in a pyramid.

Plenty of us find value in a currency that isn't controlled by a central authority and isn't subject to inflation. We're betting others who value saving over risking their savings in the stock market will also value such a currency.

Plenty of us believe there's potential in programmable money. Certainly more potential than yet-another-social-media-platform-selling-ads.

You're welcome to dismiss Bitcoin as a bubble. You don't, however, speak for everyone who finds legitimate reasons to get involved.

"and isn't subject to inflation"

what do you call price of BC going up 16000 fold in 6 years??? the theory was you can buy the same good with the same amount of coin regardless of what dollar is doing, did that happen in practice? no, because no one knows true value of BC because there is no central authority. I am with you on hating the central authority but inflation part didn't work out as it was planned!

what you are mentioning is deflation, the opposite of inflation. there is a limited amount of bitcoins, so indeed it is indeed deflationary, unlike most fiat, that central authority keep printing anytime they need.

you are right, and why deflation better than inflation?

Well, inflation makes the money you have in the bank loose value over time. In extreme examples you have countries like Venezuela and results are bad: people struggle to keep their buying power, companies are leaving the country, imports become way more expensive, etc.

I don't think there is a real world example of a country with deflation, so I don't know if the opposite would be true or what real consequences would be, but you can expect the opposite to happen.

This is a rediculous argument. You can’t just introduce a radically new technology and currency to the market and expect it to instantly be priced at is true value.

Give it time. Bitcoin is a populist movement. Eventually the market will find it’s correct value and volatility will decline (volatility in bitcoin has actually been declining for some time now).

volatility has declined?

are you for real?

bitcoins were at 700 last year. And its 'value' dropped by 3000 just a few days ago, just to go back up. In what way has it dropped?

Percentages my friend.

Do you mean savings in a single overvalued highly volatile $100bln commodity are more sustainable than savings in the overvalued international market diversified between sectors and countries?

Yes. In my opinion the diversified international market is being propped up by coordinated actions by the worlds central banks. These markets lost more than 50% of their value in 2008. Central banks are keeping them afloat at the expense of people trying to simply save their money and not take on debt.

Janet Yellen recently expressed concern regarding the amount of debt in the economy. Apparently giving out loans at rates less than inflation causes a lot of malinvestment.

Those I know investing in Bitcoin do so because it's the only asset that exists outside the system we have today. It's the escape hatch. The volatility of course concerns us, but we believe in the fundamental ideology and in the long term believe it'll change the world. The monetary policy we have today is, quite frankly, insane.

People that purchase Bitcoin are not investing, they're gambling. It's unfortunate that this lesson wasn't learned from the very recent 2008 meltdown when many did the exact same thing with real estate. But, as you say, there's going to be a lot of mal-investment with so much cheap money floating around...

I purchased Bitcoin to escape what I believe is a financial system based on fraud. Who are you to say what my motivations are for purchasing Bitcoin? Who are you to speak for everyone else deciding to purchase Bitcoin? It takes quite an ego to presume everyone buying hasn't researched what they're buying and are just mindless sheep hoping for a payday.

I didn't claim to know your motivations. You could be entirely earnest in your motivations, but that doesn't change the facts on the ground: your "escape" is up to its elbows in the same fraudulent financial system that you decry. It's cheap money looking for easy returns that is fueling Bitcoin's rise.

"Cheap money" implies people are taking on debt to buy bitcoin. I see no evidence of this. Real estate, on the other hand...

So your position is that the world is awash in cheap money but Bitcoin, with its stratospheric rise, is the one thing that isn't a beneficiary of this cheap money ?

Debt is given for student loans, and education has never been more expensive.

Cheap debt is given for housing with a mere 10% down becoming quite common, and housing has never been more expensive.

Debt is being used by companies to buy back stocks, and stocks have never been more expensive.

Loans are being given at 0% interest to buy cars, and cars have never been more expensive.

Banks only loan money for the above things because they are backed by, in the banks opinion, collateral.

Which banks are loaning money to buy bitcoin? My position is the amount of debt being used to purchase bitcoin is very small relative to the rest of the economy.

The effect of cheap money on Bitcoin is a second-order effect whereby people have access to money they wouldn't otherwise have, due to additional debt. It's similar to the effect witnessed during the run-up to the 2008 meltdown where people were refinancing their homes and cashing out (on-paper) equity to use for propping up their lifestyle or buying more real estate.

The point is that it is impossible to separate Bitcoin and it's fate from the greater economy. Cheap money fuels bubbles. Last time it was real estate, this time it looks like Bitcoin.

Sounds like you're arguing for another global financial crisis that isn't limited to cryptocurrencies.

> isn't subject to inflation

lol

>isn't subject to inflation?

The USD is regularly debased to reward people who have taken on debt. Bitcoin, on the other hand, has a fixed supply that cannot be manipulated.

Puh-lease. Everyone knows what will happen.

Madoff had pretty good returns too.

>and there is no point trying to stop them.

Then don't? I fail to see why you would care so much about anonymous strangers gambling away their money. We've all heard both sides of the argument countless of times, it's not really worth reiterating "it's a bubble!" "it's not, to the moon!" in every slightly related thread.

When the bottom drops out, there will be people who kill themselves, or have seriously damaged their financial lives. If people speaking as a voice of reason can convince at least some of those people to reconsider, or to at least not invest more than they can lose, I view that as a service.

I do wonder if a catastrophic hit to bitcoin might shake consumer confidence in other parts of the tech or finance industry.

Bitcoin has already suffered three catastrophic losses in its history. -70%/-80%/-90% in 2011, 2013, 2014. See http://bitcoin.zorinaq.com/price/ It has always recovered with suprising ease.

>Bitcoin has already suffered three catastrophic losses in its history. -70%/-80%/-90% in 2011, 2013, 2014. See http://bitcoin.zorinaq.com/price/ It has always recovered with suprising ease.

...with 10x lower market cap. This is getting out of hand, which is the problem. Complete know-nothings are getting into it now. There are ads on Reddit asking people to invest their IRA in Bitcoin. It's like the whole world has lost its' mind.

It could reduce confidence of retail investors, according to Deutsche Bank.

https://www.bloomberg.com/news/articles/2017-12-07/deutsche-...

#13 on the list.

Your argument for why you think it's madness is more constructive than your frustration that others here don't echo your feelings.

If you have made your case before on HN, post a link and we can discuss it. If not, please make your case.

I stopped saying “this is stupid” when I realized that was just a shortcut to a brutal donvoting and inane comments full of either mindless greed or equally mindless ideology. This is a group of people who just know they’re too smart to be left holding the bag...

So, instead of calling people stupid, you call them greedy and mindless? Is that an improvement?

Just being offended is a nonstarter, sorry.

What did you intend to start? You think something productive was going to arise from insulting people?

Last night in a restaurant I overheard the table next to us getting excited about Bitcoin, based on the rumors of friends of friends. At the point when one quizzically said "But you only use it on the Internet? You can't see a broker in person?" we all started recalling that line about when the taxi driver starts giving you stock tips...

You recalled that line about when the taxi driver starts giving stock tips? Wow, you're so original. No one involved in bitcoin over the last 8 years has heard that one before. What other insights do you have?

You've been violating the guidelines a lot, and we have to ask you to please stop and read them: https://news.ycombinator.com/newsguidelines.html. We ban accounts that keep breaking them. We also ban single-purpose accounts that abuse Hacker News with the advancement of an agenda rather than joining in on seeking to gratify one's intellectual curiosity.

I guess technically I'm one of those people whose been involved in bitcoin over the past 8 years, so the general take is that people who've been interested in bitcoin for a long time generally care about the idea of decentralizing power and allowing truly free exchange more than any particular currency, should recognize that wild speculating on bitcoin can only hurt its effectiveness in achieving these goals (and probably indicates that bitcoin itself isn't the right tool for this in the long run), and should be keeping their head down until the overvaluation passes and we can go back to valuing bitcoin/other cryptocurrencies on their actual merits, rather than because we think we can trick someone in the future into caring about them even more than we do. Thanks for the question!

Ironically, this is now the top comment in this thread. While I’m firmly in the “this is madness” camp, I disagree that there’s a lack of bitcoin skepticism on HN. There’s just also a lot of exhuberance.

The skeptic arguments are not especially hard to find or understand. People just get dollar signs and don’t want to hear it.

Originally I thought it was going to be an interesting collapse to watch. But it's growing so large as to have real impacts on other parts of the economy that I'm no longer entertained by this.

Then short cryptocurrencies and become a billionaire.

That could make it worse. What you’ve described are really just derivatives, which brought down the economy in 2008. An infinite number of bets on a finite amount of resources.

Think about it like going to the horse racetrack. Nothing stopping anyone from betting $40 billion on a few horses. Win or lose, a ton of instability will occur once they either need to come up with $40 billion to cover their losses or have someone pay them $40 billion for their winnings.

Assuming someone shorts BTC and it crashes, how are they going to collect when the other parties are likely heavily invested in BTC to begin with?

The people who went long get liquidated into USD by the exchange, and you ACH that USD into whatever account you want to.

The parent comment suggests becoming a billionaire through a short. The people who bet long are likely leveraged to some extent, and if they have enough of a BTC portfolio to allow a short against them to make you a billionaire it's not unlikely that they just won't have the money to cover the bet.

We saw this prior to the Great Recession, and in the 1929 crash too. I'm ignoring the potential for a bank run to complicate matters, just sticking with counterparty risk which is easy to model.

Agreed, I'm considering catching a few falling knives when the inevitable crash happens, but that's about it. Looking at the Bitcoin price chart for the past week/month activates the same part of my brain that prevents me touching unrecognizable, large, red, spiky arthropods.

History will think of you the same way we think of the Xerox executives handing Apple some of the most important technology of our generation.

Wealthy Elites losing and Wealth Elites gaining, while the normal folk just get to look on in disgust at both.

Sounds like the current state of cryptocurrencies for sure.