Bitcoin Bubble


#583

So is use cases of the block chain technology and not the cryptocurrency itself.
I believe is a matter of time, some1 would come up with a better mousetrap.
Search has to wait till Google.
Social media has to wait till Facebook.
Cryptocurrency has to wait till wucoin :thinking: and Krypton ledger :rofl:


#584

It does not matter if bitcoin has any use besides speculating and profiting from the boom. Did tulips have any real use back in the 1600s? Insanity does not need any use cases to support it. Prices will keep rising and rising until it finally pops. I don’t think I’m going to feel sorry at all to the last people holding the bag.

Also, with the crypto crash, up to a trillion dollars worth of assets could be wiped out. I’m not sure if that will mean the end of the current economic boom…


#585

Is fake anyway.
Let say there are 10 million bitcoin.
Say, 1,000 BTC had changed hands at $12,000 per coin. That is, $12M worth had changed hands.
However, total worth of BTC is valued at $120B.
When BTC becomes 0, $120B vaporized. But they are fake :rofl: so no impact on economy.


#586

The analysis is right but bitcoin could be an indicator rather than a cause for the economy’s downfall. It could be because we are nearing the end of an economic expansion, that’s why people are behaving irrationally about bitcoin. So the downfall of bitcoin could coincide with people’s realization that the economy has over-expanded.


#587

https://www.quora.com/How-many-Bitcoins-are-currently-in-circulation

As we foresee, FED is consistent to increase 0.25 rate every qtr including dec 12-13, reach 1% rate hike 2018 DEC. Then economy may be highly volatile another six months before cryptocrash happens.

As of June 1st, 2017 there are 16,366,275 BTC BTC out of a total 21,000,000 BTC in theoretical supply, which has yet to be mined.

Let us assume 15M instead of 10M, your estimate is $210 B. If this bitcoin grows 500% in 2018 and another 200% in 2019 first half, eventually it grows 700%. In such case 210B*7 = 1.47 Trillion.

The impact of 1.47 Trillion is quiet big as dot.com crash was almost 1.75 Trillion crash and RE crash was 9 Trillion


#588

Exactly right !

https://www.quora.com/How-many-Bitcoins-are-currently-in-circulation

As we foresee, FED is consistent to increase 0.25 rate every qtr including dec 12-13, reach 1% rate hike 2018 DEC. Then economy may be highly volatile another six months before cryptocrash happens.

As of June 1st, 2017 there are 16,366,275 BTC BTC out of a total 21,000,000 BTC in theoretical supply, which has yet to be mined.

Let us assume 15M instead of 10M, your estimate is $210 B. If this bitcoin grows 500% in 2018 and another 200% in 2019 first half, eventually it grows 700%. In such case 210B*7 = 1.47 Trillion.

The impact of 1.47 Trillion is quiet big as dot.com crash was almost 1.75 Trillion crash and RE crash was 9 Trillion (or 4.5 Trillion QE impact)


#589

Fake anyway.

Worth of RE is partially real, partially fake. The real part is purchased with cash, with mortgage, re-financing, HELOC and used as collateral.

For example John purchased a house for $1M, that is real. When price appreciates to $2M, the extra $1M is fake. John can make it real by re-financing or borrowing against it.

Do you know how much bitcoin have actually changed hands? I believe the bulk is merely digits in the ledger.

What Wu QiJun said is the collapse of bitcoin could be the catalyst, the key word is could. The realization of irrational exuberance could also take down bitcoin as collateral damage. Basically is only a conjecture.


#590

All financial instruments are “fake” to a certain degree but impact is real. How real is an option contract?

When bitcoin explodes the debt people took out to buy bitcoin still needs to be paid. The mining equipment people paid for with “real” money is still there.


#591

Since there’s zero regulation on bitcoin, how do you know if an exchange is even legit? You don’t really know if they bought bitcoin or not. They could be Bernie Madoff and just making money off the frenzy. It’d be easy to run a ponzi scheme when people are constantly opening new accounts, putting in fresh money, and the price is rapidly increasing. It wouldn’t surprise me if at least one of these crypto brokers turns out to be a total fraud. We’ll find out when the crash happens, and there’s no money there.


#592

Fake, you mean artificially created? Yes, but it is real people’s money.

First, you need to account all cryptocoins, not only bitcoin. IN one year, the total crypto market will be around 3-4 Trillions level, it can be more we do not know at this stage.

All cryptocoins are limited by its own open source and protected by block chains. It is basically demand and supply. People are/will be taking credit card loans, helocs, line of credits and buy crypto coins, many hedge funds are buying (already 125 funds).

Any thing uncontrolled and spiraling without real value is bound to fall and cryptocrash is imminent as republican government favors deregulation.

I foresee appx middle of 2019 we will have a cryptocrash if FED hikes four 0.25 before Dec 2018.

Prepare our self ready to take a deep breath for local real estate.


#593

That’s right. Even for the hard cold cash, only 10% of the US dollars is in physical form. The rest is just a number in the computer somewhere. I hope they have proper backup. :rofl:


#594

I only have $20k in my bank account… Never kept anything more than that. FDIC only insures you up to $250k anyways…


#595

Now over 13k!


#596

https://www.pragcap.com/will-bitcoin-mania-end/

That brings me to my grand conclusion and how I think this might all play out over time. Bear in mind I am just spit balling, but I think this view kind of resolves the above issues and creates a parallel crypto world where these decentralized applications blossom.

A stablecoin will develop over time to become the “reserve currency” of cryptocurrencies. The peer-to-peer applications will boom over time and create many seamless activities that streamline currently mundane and archaic transactions and transfers. However, the holy grail of the coin world is a stable coin. For instance, I’ve reviewed this white paper by the founders of Basecoin and find it extremely appealing.² Their goal is to create a decentralized cryptocoin that would settle at par. This coin could then serve as a reserve coin of sorts. People (even miners) want to be paid in something stable. That’s why people use the banking system. Not because they love banks, but because they don’t want to be paid in something that might drop 50% in nominal terms before they even buy their morning coffee. You have $5 in your wallet and coffee costs $5? Awesome, you can afford it. But if you have $5 in Bitcoins in your wallet you might only have $4.50 by the time you get to Starbucks. Not cool. You get the point.
A parallel financial system will develop. This stable coin will become a parallel monetary unit to global currencies. It will settle at par (pegged to the domestic economy) as one player obtains what is essentially a monopoly on the coin market and all applications will settle through this coin or some derivative of it. Think of it as the reserve currency of coins. This will create a system where we can seamlessly transact and process data transfers without the need for a centralized money issuer to validate every little transaction we make. Think of it as electronic cash. It’s just more convenient and impossible for anyone to censor.
Governments will become necessarily involved in much (but not all) of this. Let’s go back to the example I used where we transfer the title of a house in the future. I sell you my house for $500,000 Basecoins and you can instantly transfer that into USD (if you want). But the transaction gets recorded in the Basecoin ledger. Now, there’s a problem here. You haven’t just been transferred my house title. You’ve been transferred my house’s property taxes as well. I am not going to let this transaction go unnoticed by the County Recorder so the Recorder MUST be involved in the process somehow. Taxes are central to so many property transactions and transfers so there’s no getting around this reality. I suspect the government will eventually embed itself in the blockchain process by automating some form of transfer process whereby my house title is transferred to you seamlessly, but you also get recorded as the rightful owner and lovely new owner of my tax liability.


#597

So, a question that I am hoping some of you can answer for me.

Mining is the process of creating new coins in exchange for validating the ledgers and verifying their accuracy.

Given this definition of mining, in the case of bitcoin, why would the miners continue to do mining after all bitcoins have been mined? I suspect something is missing here. My earliest understanding of mining was that it is the activity of solving complex theoretical computational problems in exchange for bitcoin.


#598

Coins won’t get exhausted. It will just get exponentially harder. So the end game maybe you will need the whole worlds power supply to mine one coin. That one coin will be worth billions. Just one coin.

Provided humans are still playing the bitcoin game of course.


#599

The bitcoin price graph has become vertical. At this rate it would just take minutes for it to climb another several percentage. I’d say the end is near.


#600

Correction is not the same as the end though. I like to buy some at the dip, but the dip is really brief recently. This vertical rise can’t last, but the bull run can last longer with corrections and dips.

I think the peak is still at least 1 year away. Super majority of the population does not believe in Bitcoin. When everyone thinks it’s a bubble, the bubble can still grow bigger and bigger


#601

It will correct like 2014 where price will drop 90% and flatline for several years. Wait for it to reach the end of that flat line and then buy.


#602

It has people that do zero investing buying it. I literally have two friends that only “invest” with bets on MMA fights. They are both day trading crypto currencies. They post about it on Facebook and a bunch more people that know nothing about investing are following them in. They all think it’s “easy money”.