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More Wall Street Pundits Caution Against Investing In Bitcoins (cnbc.com)
Peter Boockvar is the Chief Investment Officer of Bleakley Financial Group, a $3.5B wealth management firm -- and he predicts "an epic crash will hit the cryptocurrency market," according to CNBC. "He isn't sure if it'll come to a grinding halt or be a slow and steady drop -- but he says it's coming."
"When something goes parabolic like this has, it typically ends up to where that parabola began," he said on CNBC's "Futures Now." Boockvar, a CNBC contributor, contends bitcoin is in danger of dropping 90 percent from current levels. He calls it a classic bubble. "I wouldn't be surprised if over the next year it's down to $1,000 to $3,000," he added. That's where bitcoin, the largest cryptocurrency player, was trading less than 12 months ago. Friday afternoon it was trading above $11,000.
Meanwhile, today the International Business Times chronicled the predictions of tech billionaire Mark Cuban. In June of last year as bitcoin was climbing toward the $3,000 threshold, Cuban cautioned potential investors about jumping in on the bandwagon... "[C]rypto is like gold. More religion than asset. Except of course gold makes nice jewelry." He told his followers at the time that he wasn't questioning the value of Bitcoin but was questioning the "valuation" and said , "I think it's in a bubble. I just don't know when or how much it corrects." Cuban suggested that when everyone is "bragging about how easy they are making [money]," that indicates there is a bubble happening...
Still, the Dallas Mavericks owner was open to the idea of using cryptocurrencies as a volatile investment vehicle. "If you're a true adventurer and you really want to throw the Hail Mary, you might take 10 percent and put it in Bitcoin or Ethereum," he said. Cuban also cautioned, "If you do that, you've got to pretend you've already lost your money"... Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...
Meanwhile, today the International Business Times chronicled the predictions of tech billionaire Mark Cuban. In June of last year as bitcoin was climbing toward the $3,000 threshold, Cuban cautioned potential investors about jumping in on the bandwagon... "[C]rypto is like gold. More religion than asset. Except of course gold makes nice jewelry." He told his followers at the time that he wasn't questioning the value of Bitcoin but was questioning the "valuation" and said , "I think it's in a bubble. I just don't know when or how much it corrects." Cuban suggested that when everyone is "bragging about how easy they are making [money]," that indicates there is a bubble happening...
Still, the Dallas Mavericks owner was open to the idea of using cryptocurrencies as a volatile investment vehicle. "If you're a true adventurer and you really want to throw the Hail Mary, you might take 10 percent and put it in Bitcoin or Ethereum," he said. Cuban also cautioned, "If you do that, you've got to pretend you've already lost your money"... Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...
Except of course gold makes nice jewelry.
And gold also has uses in electronics, medicine, and aerospace applications.
If I remember a recent Ars Technica article correctly, bitcoin has had 4 exponential spikes in prices similar to the current one. After each there was about a 75% drop in price. The last one was in 2014, up to $1,100, then down to $250-300 and staying there for years until the current spike to $19,000 occurred.
But now we have a new variable. Those past spikes were when bitcoin owners were largely geek speculators who were also true believers in bitcoin. This current spike coincided with wall street speculators getting involved and soon followed by speculators from the general public. These "newcomers" may not be as forgiving as the preceding "true believers".
That said, don't conflate blockchain and bitcoin. Blockchain technology is likely to be part of our future. Bitcoin is just one user of blockchain technology, it may or may not be part of our future. "Not" is a serious possibility given that bitcoin has deviated from its design and its assumptions about its blockchain security are no longer valid. Its security required a global distributed community of miners who are regular individuals using their own computers and this has not been true for years. Bitcoin is plausibly vulnerable to mining cartels and government intervention due to the current state of affairs where we have a relatively small number of miners using expensive specialized ASIC hardware that is geographically located in a single country and reliant upon inexpensive government supplied electricity. Are cartels or the government likely to subvert the bitcoin blockchain? Probably not, but it remains plausible, and bitcoin security is based on the assumption that such things are not even remotely plausible.
Bitcoin is entirely replaceable by a another coin with better security, new features and/or better performance. Before anyone makes a "network effect" argument, keep in mind that a network effect needs high switching costs to be effective. There is little to no switching cost to move from bitcoin to a different coin.
The valuation of bitcoin surged on the assumption that it will become a major currency. However, it's hard to see how bitcoin is going to be good for much of anything. Transactions are too expensive and too slow for it to become a regular currency. Early on, people believed it was an anonymous form of payment - but in fact every transaction is public. It was also supposed to be a democratic currency, but that promise has failed as well because now a few big players hold most of the bitcoins. By all reports, it wastes a tremendous amount of electricity and contributes to global warming.
To quote one economist, "It's not a currency until people are paid with it." I don't see it ever getting there, especially with governments against it. And if it isn't destined to become a currency, then it it is destined to crash, maybe even disappear.
Any tech created by the alt coins can always be adopted by Bitcoin. As we see happening now.
Except when inertia, politics and greed stop it from happening. You think those folks with the huge ASIC mining farms are going to support switching to a GPU friendly algorithm?
Even if Bitcoins stay the same in value, it beats the living shit out of gold, and is far more secure against theft.
Probably not a lot of gold owners sweating it out over the fear of their gold being stolen via the internet, or becoming worthless if their computers crash or they forget a password. But now we're getting into the differences between a store of value and a currency. Gold is a store of value, you don't use it for transactions as it's not well suited for that. Bitcoin wants to be a currency, but has its own shortcomings there (and let's not even get started discussing the number of high profile thefts of bitcoin to date ...)
Can you create an algorithm that is sufficiently hard so that coins don't flood the market but sufficiently energy efficient that we don't roast ourselves to death from greenhouse gasses mining computer money? I am opposed to crypto from a purely environmental standpoint, I think there are better things humanity could be spending its limited resources on than a bunch of calculations that prove you did a bunch of calculations.
Monstar L
It actually does. The Bitcoin network (and all secure distributed networks) depend upon consensus, whomever controls 51% of the mining effort controls the transactions and in turn dictates how things happen. The bigger issue is the politics-heavy update side of the actual protocols which don't change the minting process at all. The new lightning network they've been trying to roll out has some pretty serious security flaws nobody seems to be discussing but to say they don't want to use it (since a hint of insecurity could itself spoil the fun, especially when it's already been technically implemented and it's just that nobody is using it.)
The only problem I could see here is that the market itself will only grow based on the currency itself. There is no value added aside of the speculation that the value will rise.
That's not sustainable.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
You can store your bitcoin private key on a USB stick, next to your pile of gold coins, and it will be just as secure.
"...Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it..."
He doesn't have to hold the currency longer than a few seconds. So, he doesn't have to "believe in it" at all.
As much as I'd love Lightning to be a panacea, I don't see how it'll work out. It's too easy to anonymously bring your competitors to financial ruin by challenging the off-blockchain ledger, forcing the ledger to be posted to blockchain, costing your competitor a huge transaction fee every time you do this. Now, say you have a bot challenging the ledger every 5 seconds, or 5 milliseconds; those savings become a huge liability very fast. This just brings us back to the real problem: posting to blockchain is way too expensive. If Lightning fails to work as advertised, Bitcoin will be out of magic bullets.
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
How long does the memory on a USB stick last?
How long does the memory on a USB stick last?
It's not safe. However, you can also burn it on a couple of blurays, print it and transfer it to microfilm. All these storage methods should easily outlast your lifetime... if you speak German, here's how to get your coins on a vinyl record https://www.heise.de/security/...
Showing just have far Cuban has come on bitcoin and cryptocurrency, he announced earlier this week that his Dallas Mavericks will accept bitcoin and Ethereum as a method to pay for tickets starting next season. Even if the tech investor doesn't fully believe in cryptocurrency, he's clearly willing to try to profit off it...
Many/most retailers that previously accepted Bitcoin have walked away from the cryptocurrency because the valuation is too erratic - there is a fair to better chance any bitcoins accepted today as payment for goods and services will go down in value before the retailer can convert them to US currency tomorrow, costing retailers rather than profiting them. .
Ken
... which is why there is Monero