Around the time of the late 1990s Internet bubble, I read someone's observation that you can identify an investment bubble when barbers and nurses and taxi drivers start investing on the assumption that prices will just keep going up. That matched my own experience of having lived through the stock and real-estate bubble in Japan in the late 1980s: I knew shopkeepers and rice farmers who borrowed money to buy stock and land and condominiums, certain that their value would continue rising. The American real-estate bubble that led up to the 2008 crash looked very similar, as does Bitcoin now. It seems certain to collapse, though I can’t predict when.

Sounds like the Ford story:

The fable about Henry Ford has rarely been as apposite as now. During an American recession, the shoeshine boy on the sidewalk gave Ford some tips on the stock market. Ford's response: "When the shoeshine boy is telling you what to buy, it's time to sell!"

For what it's worth the first hit I got searching for it was from January 2008...

Yes, the shoeshine boy! That was the story I read. Probably it was in 2008, too. Thanks for the clarification.

I’ve also heard it attributed to Joe Kennedy, who supposedly went on to short the market as the Great Depression was about to hit.

The version I heard had Joseph Kennedy.

Same thing happened when it peaked at 20k - the hairdressers were talking about Bitcoin and altcoins. The difference this time is big time investors started gambling with it - so who knows where it's going to go.

Silver was a big bubble at that time too. I knew the end was near when the owner of a restaurant I frequented showed me the silver statue he had made of his dog.

Once you have real ETFs the crypto mania will turn into yet another debt fielded bubble. In the meantime, enjoy the ride!

It is the bed central banks have laid for ourselves. They did and continue doing everything in their power to prevent asset price deflation, and this is the result. And I imagine that when things will get even more out of control we will get capital controls.

Given that money supplies contract during recessions, which drives deflation, I would argue that they did everything in their power to prevent both asset price deflation, in addition to actual, main-street deflation.

Indeed, silver is actually useful in a huge number of ways, from electronics and technology, to making beautiful and functional items for the home, to defending against supernatural creatures, which brings us back to Bitcoin.

It will be interesting to watch silver prices in the long term (20 years),as it's supply will be getting lower,while some important industrial applications will unlikely to ne replaced quickly enough.

I think Silver is the straw that will break the camels back, it’s hard to know if it will be in 1 or 50 years but it’s fungible and affordable while also having increased industrial usage. At this point it is almost at parity for industrial consumption as it was in the 90s when silver was used to develop analog film. It’s certainly true that topological insulators may replace silver in many electron transfer applications. That being said medical uses due to the way it kills micro organisms through sulfur attraction, and it’s thermal properties, will possibly continue to expand industrial consumption.

I'm guessing a lot of people also tried to get in on the dot com bubble, does it mean we write off the internet as a speculative bubble that's not providing any value?

I mean sure, but this is sort of a straw man - of course bubbles can exist even if the underlying asset has fundamental value. The Internet, housing, and tulips are all great things with value. But it’s not entirely clear to me that Bitcoin provides more value than the energy cost it requires to sustain it.

Consider the costs, both environmental and financial, to mine, secure and transport gold.

How does it compare against Bitcoin? What intrinsic value (besides "ooh, shiny") does gold actually have?

I agree that BTC and cryptocurrencies generally are utterly wasteful, but what too many look at is the headline figure of energy consumed, and not what energy is being consumed.

Disclaimer: I think BTC is a total waste of time, and I am long BTC because I think it'll buy me a house one day too.

(EDIT: I also have gold too)

Gold is used to make electronics cheaper, and it's used in medicine.

Shiny gold prevents oxidation on electrical contacts and makes your computer work. In most chips there is a bit of gold, not a lot, so there is value in that.

Isn't platinum better for that?

platinum is more electrically resistive (less conductive) and more expensive than gold

Gold can be used to make jewelry which is a big cultural thing in most of the Old World. It's still "ooh shiny" but it has value in being a tangible "shiny" good used to keep up appearances and show status.

I don't know how you can show status with Bitcoin though. Maybe show your server farm or something.

Most of the bitcoins i bought are super shiney! did you get dull ones?

> a lot of people also tried to get in on the dot com bubble

Ex ante, it is difficult to differentiate a Pets.com from an Amazon, or a dot com bubble from a beanie baby boom.

> it is difficult to differentiate a Pets.com from an Amazon

Arguably a small minority were able to differentiate and it paid off very well for them.

They may feel like they were able to differentiate, but without an actual explanation of how they differentiated, we can’t determine whether they differentiated or whether they got lucky.

> a small minority were able to differentiate and it paid off very well for them

True. But from a policy perspective this punts the problem. Ex ante, identifying the president from the deluded is difficult.

> identifying the president from the deluded

I'm guessing you might have meant "prescient" there?

Then again, perhaps not.

The time someone explained email to me, I was immediately hooked.

But we're well over a decade into cryptocurrencies, and there is no application for them yet except crime.

That’s hardly fair. The world is full of unbanked people, people who are simply not interesting to the regular banking system and so have no access to it. Yet they have needs. Bitcoin is probably crap for this because transaction costs, but the need is still there.

My friend, this bank the unbanked meme is a tired trope that all the cryptocurrency apologists love to push. But does anyone really want to be their own bank? Consider the following...

- You could lose your wallet and have nobody to phone in to get your information back (regular banks often can help you here)

- Conversely, you may think "Gee, I should make backups of my keys!" which isn't a bad strategy, except if any one of your backups is compromised, you lose everything, and each new backup creates an inherent new risk in getting leaked

- You could get some trojan horse with steals your cryptocurrency, and once again, you're SOL

- There's a lot of moving parts that all need to be present to make cryptocurrency even remotely viable to so-called unbanked classes (I presume you mean poor people that have little means in the first place?)... like an active internet connection to talk to said blockchain, possibly even a vendor or other party even willing to deal with cryptocurrency in the first place

- The volatility swings are absolutely ridiculous

And of course let us not forget that those that simply want to transfer to someone, then have that someone quickly convert to their home currency of choice may not necessarily be possible, due to some exchange level ban by their country's exchange controls.

I wish cryptocurrency proponents would just be honest and just say they want to make a quick buck with as little effort as possible, and leveraging the peanut gallery to get here is the best way to do it.

Sounds unethical.

I've yet to see bitcoin produce anything close to the utility of something like M-Pesa for the unbanked.

Cryptocurrency/blockchain is a valuable concept the way the internet is, but Bitcoin? Bitcoin is a nice proof of concept, but as a currency it has big problems that look like they won't be solved. Pets.com was also a good proof of concept.

It's not fine even without environmental impact: getting yourself into an asset class with zero understanding about it is a recipe for disaster. There are tons of examples of real estate investors burning their money because they lacked fundamental knowledge and etc. Even the management meetings I attended are now peppered with crypto news and how x gone by y%, even by the sound of it everyone would have been better off just buying some ETFs, instead of pouring money on random peaks or troughs.

"they lacked fundamental knowledge"... you think people should get fundamental knowledge ? on _bitcoin_ ? It is fundamentally worth $0.

The only knowledge I try to spread is correcting anyone who uses the word "invest" and recommend the proper words of buy, speculate, or gamble when it comes to cryptocurrencies. I guess I will add "fundamental" too since I think you meant technical analysis. But even that implies brains when it really is just voodoo unless you are an influencer.

By fundamental in this cas I meant general understanding about how it works and how shady the ecosystem is,with endless pump and dump drummers,random kids selling 'tips',etc. An average person, with absolutely zero information advantage is losing the moment they buy it hoping it will bring fortunes.

USD, EUR etc are also "fundamentally worth $0". Fiat currencies and crypto currencies are just a median for representing value for real goods and services. What's unique about crypto currencies is the distributed method of transacting and therefore the inability for them to be regulated. The whole financial industry, is fundamentally a massive waste of humanity's resources. Fiat currencies are regulated, regulators are a target for bribery, deals are made etc... Cryptos are a massive waste of electricity. Decentralization is a great way to curb corruption and restore a natural economy but we need to solve the electricity problem. The electricity problem came from the mechanism chosen to "fairly" distribute the initial pool of cryptocoins based on mathematical effort.

Well USD is fundamentally worth $1. Really the most fundamental of all.

What’s $1 worth? It hasn’t represented a physical asset since Nixon.

Separate question. I was responding to a question about the value of things as measured in currency.

$1 is worth $1, tautologically. If you happen to believe $1 has no worth, just send me all your dollars. I can use them. I'll send you a loaf of bread, which you can eat to sustain life.

Nearly everyone believes $1 is worth something so it's not in my interest to give you $1, particularly with a snarky response like that. Dollars are not actually a measure of any physical thing, unlike metres or whatever. They represent what we perceive as worth. That only exists in our heads.

Currencies can be valued based on interest rate differentials.

Bitcoin is a bit underdeveloped there.

As I understand it, Doge works on auxpow now so it's not nearly as bad as it used to be, or as bad as eth/btc is currently (and asic mining is not as profitable as daggerhashimoto for retail miners; ASIC miners will already be located in a DC where electricity is cheap/likely underutilized).