The housing bubble built actual houses. Even tulips grow.

This might be the first bubble with zero utility. Seems like the reductio ad absurdium of financial capitalism.

The irony is that many who started Bitcoin wanted to get away from the whole financial debt based bubble driven system. Bitcoin is becoming what it sought to escape.

I have used Bitcoin a few times to do actual transfers, but the bubble has ruined its utility.

Edit: yes there are some good ideas in the ICO space, but with a few exceptions most of the non-scam projects have been unable to actually ship working software that non-nerds can use. Even for those I don't know a single person using them for actual work or anything actually serious.

As for the rest, most of those just raised their money in the past year or two and haven't had a chance to actually build their platform yet (if they're ever going to, I have a feeling a bunch of them are going to end up being vaporware).

Hi! Serious question: can you explain more about what you mean here? I'm having trouble imagining what "development platform" means here, or how/why a division would use Ethereum as one. I'm guessing you mean something other than software development?

Sadly, the whole dApp ecosystem is flooded with initiatives that in practice would run better, and more efficiently outside the EVM. By this I mean the costs of running the contract on the blockchain do not really scale up to the benefits of running it in a decentralized, trustless context.

So your instinct, that it is not advantageous to run applications on the EVM is in fact correct in most of the use-cases I've seen so far (cough cryptokitties)

They wrote up a blog post about some practical use cases for it: https://www.blogs.conduent.com/2017/12/05/the-possibilities-...

You just described the value in your question. A wealth store/transfer platform that does require armies to protect its "banks", as they are distributed/global, does not encourage wars.

Sure it does. It uses an insane amount of power. Wars are fought over the resources to generate that power all the time. You could argue that the governments of the world are indirectly subsidizing crypto by using war to maintain a stable source of energy. With no government around to protect the river that powers the hydro dam, or acquire the oil / coal required for the power plants, what is gonna power these blockchains? Solar? Who makes the solar panels? That requires trade... who structures that trade? Government.

Sorry. Bitcoin, nor any blockchain, cannot function without the all mighty government.

There has been a lot of exaggeration around the amount of power used for mining. It's less that the energy used to run Google, Facebook, and many industrial applications and certainly not remotely comparable to the bulk of oil consumption in 1st world countries.

(Don't get me wrong: I'm not a fan of Bitcoin and I don't use cryptocurrencies.)

> You could argue that the governments of the world are indirectly subsidizing crypto by using war to maintain a stable source of energy. > Sorry. Bitcoin, nor any blockchain, cannot function without the all mighty government.

This is a complete strawman. You just conflated the efforts being spent by countries to protect their entire wealth including stocks, gold, fiat money, derivatives with the efforts to access energy sources.

Hyper-deflationary token systems that not only don't scale but lose their utility when adopted are horrible currencies. The more people use a particular block chain the less utility it has because the system doesn't scale in either transaction volume or token price stability.

I see something about price stability but then there's a chart and it does not appear stable at all.

In the startup world we say if nobody can tell what your company does after 10-20 seconds on the site, you have a problem. At the very least they should be able to get the gist like "this is a networking company that does computer network stuff" or "this is for writing web apps."

I was just 15 but one of my current day co-workers was active at the time and he lost a lot of money in shares that he thought would keep their value.

Shares he had received from employers.

But with cryptocurrencies people can't stop talking about how it will burst. Maybe that will change things in a somewhat psychological way.

My suspicion is that, because a much higher percentage of the population isn't going to be able to make sense of blockchain, it will be easier for the finance industry and startups to trick idiots into investing, and they will have a deeper pool of idiots to draw from.

Just like the .com bubble, there is real value in blockchain. You just can't judge that from the investments.

People say this, but I maintain it isn't true. The only thing the blockchain is good for is when you cannot have any kind of central trusted authority. "Central authority" typically meaning government institutions like regulations and the legal system. Once you remove a central trusted authority, transaction costs get very expensive very fast. If you can't trust anybody but yourself it means you bear the cost of validating every single part of a transaction. You see this in the blockchain--it is massively more expensive to process a transaction than using a simple database. You see this in "smart contracts" because without a legal system to fallback on, you have to code every single edge case no matter how remote or you'll get fucked (which is actually impossible anyway, and is one of the reasons why the entire idea of "smart contracts" is a bunch of baloney...).

My point is, for 99.9% of every day things we have no need for any kind of distributed trustless ledger. The transaction costs for them outweigh the alternative of simply trusting people and using our legal system when something goes bad.

The only real use case for trustless distributed ledgers are for stuff that cannot use the legal system--eg organized crime, crypto-ransomware software, illegal drug trade, etc. For everything else, a database is all you need.

By the way, I'm not even going to go into the fact that "The Blockchain" only functions with mining, and the only way to incentivize mining is to bolt a "currency" on top like Bitcoin or ETH and then find a market to sell all the "coins" the miners generate. Take away that, and who the hell pays for the mining? If your answer is "the banks would" or "the parties would"... well, if they are gonna do that why the hell wouldn't they just pay for a traditional database instead? After all, that kind of cooperation sounds pretty centralized anyway and a large Postgres instance is a lot cheaper than thousands and thousands of miners....

I'm not very informed but I was under the impression that the blockchain is just a technology that happens to be used for cryptocurrencies. When used for currencies it requires "mining".

But if one were to use the technology for tracking shipping containers or mail then what sort of mining would need to be done?

So to answer your question indirectly, unless you like using inappropriate, inefficient data structures--if you are gonna be tracking shipping containers or the mail.... a good old fashioned database is what you need.

Greenspan called it "Irrational Exuberance" in 1996 [1], although I personally don't remember it being that bad then.

By 1999, the word "bubble" was all over the media.

[1] https://en.wikipedia.org/wiki/Irrational_exuberance

I specifically remember hearing him address the question (it might have been rhetorical or from the audience) as to how this was sustainable given that most of companies involved didn't actually earn any profits.

Most of the overvalued companies involved during the bubble was consultancy companies making web pages for other companies.

I still remember being somewhat stunned by the answer he gave. He explained that that was not an issue since the new economy worked differently compared to the old one.

At that point I shook my head, focused my attention back on the servers and came to the conclusion that the bubble would burst sooner than later.

Yes, people who worked in dot com expected it. Those who did not thought they were smarter than us. Going to coffee shops was surreal - there were people who were telling us what our companies were doing.

In the dotcom bubble, people were buying shares at prices such that justifying those prices would require companies to make more money than any company had made before. But people, including experts, said this time it's different because the internet will change everything, and those companies really will make more money than any company has before. Even though no actual hard data justified that optimism.

If, in the mania of the 2000s, things could head towards $6.7tn, I don't believe that this bubble will be smaller in the age of loose monetary policy.

Money is essentially free today. A few weeks ago, Saudi Arabia paid $450m for a painting. If that isn't a sign of how money has lost its value, I don't know what is.

Would I bet everything I own on crypto? No, of course not. Can you still get a 10x return on money you invest today? I wouldn't be surprised. Even knowing there will be a major correction at some point, it's probably a mistake not to own at least some.

They're both Turing-complete blockchains which can run decentralized apps/smart contracts, and of course be used for transactions directly.

Ethereum (ETH):

Created in 2015, currently successfully running. Right now ETH uses a proof of work consensus algorithm with plans to move to a proof of stake algorithm over time. Its smart contracts can be coded in two purpose-built languages, and work is being done on cross-compilers to facilitate writing in more. ETH can currently handle ~20 tx/sec, but the community is very active in working toward vast improvements in this regard via very technical solutions (sharding, plasma), but they're not quite there yet. Ethereum is truly decentralized and runs tens of thousands of validating nodes.

EOS:

Planned creation date is in June 2018. Its smart contracts will use WASM (allowing the use of many general purpose computer languages), support parallel computation, and have some sort of ability to change deployed contracts to allow for debugging and updates. It will handle 100,000+ tx/sec out of the box, and transactions will have 0 fees. Instead of fees, percentage of holdings determines allowable transaction bandwidth (If you have 1% of EOS, you get 1% of EOS transaction throughput).

However, instead of tens of thousands of validating nodes, EOS will have 21, with all coin holders having the ability to vote for who these validators are. EOS will trust the consensus of these validators for transaction security. This is how EOS achieves such high transaction volume and zero fees. IMO, this is the main weakness of EOS.

Look at Bitcoin. Clearly a bubble. But... do you pull out, or do you roll the dice and see if it goes to $30k?

Hey don't diss Kozmo. I remember being a punk teenager and ordering a single 20oz bottle of soda and having it delivered by some dude in a car an hour later. Clearly, it wasn't a bubble :-)

It's unfalsifiable and meaningless. We don't need to have this same "point" made on every post.

In fact, if they sell today, they'd probably be set for life.

Yes it might be a gamble and speculation, but get it right in a bubble and you're (sort of) set for life. You can make a good calculated bet and see it pay off. Any engineer on $100k to 200k a year can probably afford to put $200k in crypto and recover if it evaporates.

If you compare to certain high risk shares trading on the stock market (i.e. some tech and biotech shares), even though crypto might have a 10x upside, I don't think investing in crypto is 10 times as risky. If you're aggressive, you're probably better off investing in crypto today than in the market.

I was just pointing out that it can be profitable riding a bubble, as long as you're careful about it. I have an old money friend who put in a few million last year. That's exciting stuff.

One thing I wonder: since they own so little, do they even move the market?

Otherwise you risk just being in a positive-reinforcement echo chamber.

See the story above.

> And a few months ago. And in 2016, and 2014, and 2012.

Nothing changed other than paper gains increased.

Is this implying that cryptocurrencies have not evolved over that time period? I think you know that this is false.

1. they are slower

2. it is more difficult to cash them out

Looks like utility decreased.

But that doesn't mean that it will all be bubble. In the end, the potential of cryptocurrencies competing with central banks is still there. But if they will, and which one, and which one is now under- or over-valued, is anyone's (calculated) guess.

> We saw it yesterday. We saw it last week. And a few months ago. And in 2016, and 2014, and 2012.

You do realize that economic bubbles rise and fall in the span of years, right? This isn't going to inflate and then pop next week.

> You do realize that economic bubbles rise and fall in the span of years, right?

Yes. And everyone making these bubble / tulip comparisons should acknowledge how the view is unfalsifiable.

Cryptocurrencies and blockchains are significant technological innovations. There is more to discuss than making the same tired tulip comparisons.

Hardly. The Blockchain uses the same kind of underpinnings as git. In fact, for many applications git might even be a better data store than The Blockchain--it doesn't require a bajillion miners consuming several hydroelectric dams worth of power to stay online.

https://globenewswire.com/news-release/2017/12/21/1268978/0/...

Unfortunately predicting bubbles is nigh impossible. Bubbles can only be defined after they exist.

Predicting the timing of a bubble bursting, OTOH, is hard, as is predicting the natural support level they will revert to.after bursting.

Has the cost of the thing separated from it's usefulness? (Bitcoin is too slow and expensive for transactions. It's too volatile to be a storage of worth.)

Does slapping unrelated products with it's name boost that products purely from branding?

New financial instrument backing the bubble? In this case we have the holy grail where the backing instrument is the thing itself! https://www.forbes.com/sites/investor/2017/05/31/cryptocurre...

Bubble Talk Cycle: Not talking about a bubble, discourse of a bubble, denying a bubble, seeing a bubble, late investors rushing into to get gains from the bubble.

Shoeshine boy: Everyone is excited about bitcoin, seeing the large numbers you start getting random people proffering as the next sure thing.

That's not what the parent said. They said "detect one".

"detect" != "identifies the potential"

no?

But if you were a smart investor during the .com bubble, you might have invested in Amazon or Ebay.

The question is, will there be an Amazon or Ebay cryptocurrency, and which one?

And if a frog had wings, it wouldn’t bump it’s ass when it hops. If you were a smart investor, you stayed the hell from internet stocks (because just like ICOs, the vast majority were losers). What you describe as “smart” was just someone who got lucky or had a crystal ball.

Not that I followed my own advice, but at least I learned something for the tuition I paid.

Edit: 32 with over a billion dollar cap.

Is the current total outstanding global debt a bubble from where it was 20 years ago?

Are institutional purchase of negative yielding bonds a bubble?

Are global central bank purchases of global stocks a bubble?

From where I sit, the bickering over the price and how justifiable it is/isnt where, is ignoring the larger societal changes taking place. All I know that, in Indonesia, I can have a website with a monero miner on it, and use the proceeds to pay for electricity, food and shelter directly.

This wasn't happening 5 years ago. And this says nothing about tax enforcement, law, and even warfare that won't go untouched by this.

For the non marginal users of crytocurrency, typical speculation rules with financial instruments still apply, but for those who can do what they couldn't before… yeah, this is just the beginning.

I’m not immediately seeing how that would be the case.

Wait wait, you're right. I'm going to go get a dog puppet for my new business, Bitcoin Pets.

Everyone is fearful about the blockchain bubble right now, it seems. Time to be greedy? :)

Never fails.