Bitcoin: Beanie Babies for Techno-Libertarians?

I’ve got nothing against collectibles, and I have the Franklin Mint plates to prove it. But most of the little I know about economics I got from reading J.K. Galbraith, so whenever people start talking about Free money — guaranteed to appreciate!, the alarm bells go off. From the Washington Post:

Bitcoin soared past the $17,000 mark on Thursday, a dizzying run for a digital currency that was worth less than $1,000 at the start of the year and was once largely the preoccupation of technologists or those looking to avoid scrutiny to launder money or buy drugs and weapons online.

The fast rise — it has gone up more than 40 percent this week alone — is creating a buying frenzy among eager speculators around the world and helping push bitcoin into the mainstream. And it is also forcing U.S. regulators to grapple with whether to legitimize a product that operates outside the control of any government or financial institution.

The run-up in price comes as bitcoin enthusiasts prepare to reach a new landmark. On Sunday, a bitcoin product will trade for the first time on a U.S. financial market, making it almost as easy to bet on the virtual currency as oil, corn or the euro…

McClatchy:

Much of the computer power sustaining bitcoin occurs at massive complexes – or farms – in rural China running on electricity from coal-fired generating plants in Sichuan and Inner Mongolia. Reporters from Quartz and Bloomberg visited one of the massive farms in August, and said it had eight warehouses containing 25,000 processing machines, or about four percent of the global bitcoin network.

As bitcoin prices soar, more processing machines are likely to be added.

The complexes earn money by solving cryptographic puzzles that permit bitcoin transactions in a block, vying for a block reward that is currently 12.5 bitcoins, or $212,487 at the valuation at 2 p.m. Thursday. Competition is fierce between mining operations…

From the Atlantic, “Bitcoin Is a Delusion That Could Conquer the World“:

If every currency is a consensual delusion, then bitcoin, a digital cryptocurrency that changes hands over the internet, feels more like a consensual hallucination on psychedelic drugs. The concept of bitcoin was born in a detailed white paper published in late 2008 by a pseudonymous “Satoshi Nakamoto.” By 2013, one bitcoin was worth $12. As of this writing, it’s worth more than $10,000. Its value has doubled in the last two months alone. For any currency’s value to increase by 100 percent in eight weeks is, to use a technical term, bonkers. If the Japanese yen or American dollar did the same, their economies would plunge into an infernal deflationary spiral…

Nobody knows for sure whether the blockchain will transform the economy of the future, as Andreessen foresees. What’s clearer, however, is that it has not transformed the economy of today. While the number of bitcoin transactions is growing every year, it’s nothing close to a mass-market consumer technology, like Google, or Netflix, or even PayPal. Bitcoin remains cumbersome to use (the typical transaction can take up to 10 minutes) and the price is extremely volatile. It is, for now, a frankly terrible currency built on top of a potential transformative technology.

Which leads to perhaps the most obvious question: If bitcoin appears to have flopped as a mass-market currency, why has it so suddenly succeeded as an investment vehicle?…

Even if one buys the argument that blockchain is brilliant, cryptocurrency is the new gold, and bitcoin is the reserve currency of the ICO market, it is still beyond strange to see any product’s value double in six weeks without any material change in its underlying success or application. Instead, there has been a great and widening divergence between bitcoin’s transaction volume (which has grown 32 times since 2012) and its market price (which had grown more than 1,000 times).

Surveys show that the vast majority of bitcoin owners are buying and holding bitcoin to exchange them for dollars. Let’s be clear: If the predominant use case for any asset is to buy it, wait for it to appreciate, and then to exchange it for dollars, it is a terrible currency. That is how people treat baseball cards or stamps, not money. For most of its owners, bitcoin is not a currency. It is a collectible—a digital baseball card, without the faces or stats…

308 replies
  1. 1
    A Ghost to Most says:

    Tulip-bulb coin, likely.

  2. 2
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    Doesn’t McAfee collect and store his own shit or something?

  3. 3
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @A Ghost to Most:

    I’m hoping that Nick Gillespie’s pay is issued solely in bitcoin…

  4. 4
    eyelessgame says:

    I bet most people buying Bitcoins today don’t even know how many weeks you have to leave them planted in the ground below 55 degrees Fahrenheit for them to bloom.

  5. 5
    dmsilev says:

    You can’t get a great video card for around $300 this year because a bunch of jackhole speculators and “Fuck da gumbint” dicks have bought up all the supply so they can turn electricity into a cryptocurrency pyramid scheme.

    Bitcoin per se isn’t to blame here; Bitcoin “mining” shifted a while ago from GPUs to custom chips (“ASICs”). It’s the other cryptocurrencies (e.g. “Ethereum” etc.) that are causing the GPU shortage.

    That niggle aside, yes it’s a bubble.

  6. 6
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @eyelessgame:

    Nice.

    I’m thinking that all articles on the bitcoin boom need to be accompanied by images of vast tulip fields…

  7. 7
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @dmsilev:

    But it is a bubble that is disrupting the statist paradigm, man.

  8. 8
    dmsilev says:

    Also,

    Surveys show that the vast majority of bitcoin owners are buying and holding bitcoin to exchange them for dollars. Let’s be clear: If the predominant use case for any asset is to buy it, wait for it to appreciate, and then to exchange it for dollars, it is a terrible currency. That is how people treat baseball cards or stamps, not money. For most of its owners, bitcoin is not a currency. It is a collectible—a digital baseball card, without the faces or stats…

    Bitcoin is a horrible currency for buying stuff even without the speculative fever. The bitcoin transaction-resolving system (the infamous “blockchain”) currently maxes out at something like 4 or 5 transactions per second. Worldwide. Transactions are expedited by paying additional processing fees to the “miners” (the guys using all that electricity). That’s vaguely workable in the context of a “currency” that’s really just a highly volatile commodity, but it would suck ass for an actual payment system. VISA, for an example, processes tens of thousands of transactions per second; imagine trying to bid to be in the top few percent of transactions before your credit-card purchase of a cup of coffee can go through.

  9. 9
    Roger Moore says:

    If the predominant use case for any asset is to buy it, wait for it to appreciate, and then to exchange it for dollars, it is a terrible currency.

    Buying an asset in the assumption it will be worth more in short order is more or less the definition of a bubble. I just find it amazing that people can look at what’s going on with Bitcoin and not realize it’s a bubble. Or does everyone who’s investing know it’s a bubble and believe they’ll be able to get their profit out before it bursts?

  10. 10
    Brachiator says:

    Here’s a fun question for armchair economists. Can the dream of techno-libertarians be realized? From reading and podcast listening, I get the impression that these people want bitcoin (or similar) to serve as a currency, a medium of exchange that is totally independent of banks and governments and any kind of regulation. The ideal would to be able to buy goods and services using bitcoin, but to never have to declare it as income, and so never be taxed by any governmental authority. I suppose that this is connected to the dream that the Internet could become an independent state as a kind of virtual community.

    Obviously, the failure of bitcoin to be anything other than an unreliable collectible, for now, gets in the way seeing this dream realized.

    Can their dream ever be realized? I kinda doubt it, but the persistence of discussions about this indicate that it is an idea that will not die.

    Meanwhile, two words. Tulip Fever.

  11. 11
    Fair Economist says:

    @dmsilev:

    The bitcoin transaction-resolving system (the infamous “blockchain”) currently maxes out at something like 4 or 5 transactions per second. Worldwide.

    Every bitcoin transaction requires solving a difficult, novel mathematical problem and sending 100 gigabytes of data to hundreds of miners around the world. How did people think it could ever be used for routine transactions like buying a cup of coffee?

  12. 12
    different-church-lady says:

    That McAfee tweet is sarcasm, right?

    Please tell me that’s sarcasm…

  13. 13
    cgordon says:

    I can make a mathematical case for bitcoin at $billions, based on bitcoin replacing the US dollar as a reserve currency.

    I don’t own any bitcoin.

  14. 14
    Scotius says:

    Bubbles are mathematically impossible in this new paradigm.

    I’m trying to remember, was it during the 80s asset bubble or the 90s Dotcom bubble that I read that we had finally conquered the business cycle and there were to be no more booms and busts? I know that in the runup to the 2008 downturn the theory was that the price of housing could never drop.

  15. 15
    Fair Economist says:

    @Roger Moore:

    Or does everyone who’s investing know it’s a bubble and believe they’ll be able to get their profit out before it bursts?

    Dingdingding! Most people think they are smarter than average and thus will be able to get out of a bubble in time. It’s a major driving force behind all manias.

  16. 16
    Fair Economist says:

    @Scotius:

    I’m trying to remember, was it during the 80s asset bubble or the 90s Dotcom bubble that I read that we had finally conquered the business cycle and there were to be no more booms and busts?

    Yes, it was. Both times. The 2000’s housing bubble too.

  17. 17
    Mary G says:

    This reminds me of the guy I met at a party in 2007 who told me I was an idiot to be paying off my house instead of taking all the equity out to flip more houses, if I didn’t, I would end up in the poorhouse!

  18. 18
    dmsilev says:

    @different-church-lady: McAfee has been …differently sane for a while now, so I’m afraid it’s probably not (deliberately) sarcastic.

  19. 19
    different-church-lady says:

    @Fair Economist: I think the idea behind the weird math problems was to make it secure. Making each one harder and harder was supposed to be a limit on the supply.

    I was on a film crew that worked a Bitcoin seminar at MIT a couple of years back. The way the advocates talked about Bitcoin was utterly at odds with the public perception. To them, Bitcoin was supposed to be a secure, convenient, alternate way of moving money around. Not one of them talked about it like a currency replacement.

    I can’t remember where I saw it now, but I glanced at an article last week that said a lot of the early advocates of Bitcoin are now just giving up, due to the whole concept having been perverted irredeemably.

  20. 20
    germy says:

    McAfee lost the Libertarian Party nomination to Gary Johnson.

  21. 21
    The Moar You Know says:

    Doing the opposite of everything John McAfee has ever done is not a bad rule for living your life.

    I just find it amazing that people can look at what’s going on with Bitcoin and not realize it’s a bubble.

    @Roger Moore: Welcome to the world of the tech-bro. They know what they know, they make more than you so they’re obviously right, and they don’t need to know about anything else, so fuck off, prole.

    I used to work with those people and I hate them more than any other group of people I’ve ever met. I’d rather hang out with frat boys and jocks, they at least don’t seem to need to keep the dick throttle mashed to the floor 100% of the time.

  22. 22
    beef says:

    Bitcoin is designed to be a bubble. There’s a finite supply of bitcoins, by construction; no more than 21 million can ever be created. We’re currently at about 75%. To my mind, that makes it either art or a con.

    If it’s a con, it’s a pretty impressive one. It’d make the Tulip Trust is the greatest stash of pirate’s gold since the days of the Spanish new world.

    It does have a real economic use though: Transferring wealth out of China. That’s its primary use, which means that analyzing it through the tropes of US politics is a mistake. You can call it libertarian, I suppose, but 1.4 billion Chinese still won’t give a shit.

  23. 23
    W. Kiernan says:

    “Bubbles are mathematically impossible in this new paradigm.” Oh, John McAfee, you’re such a kidder! Seriously, I literally laughed out loud at this. It’s “mathematically impossible” that these Pokémon cards will ever decrease in value, I tell ya!

  24. 24
    different-church-lady says:

    @The Moar You Know:

    Welcome to the world of the tech-bro. They know what they know, they make more than you so they’re obviously right, and they don’t need to know about anything else, so fuck off, prole.

    And if it involves devices, it’s inherently better.

  25. 25
    B.B.A. says:

    A Conan O’Brien sketch a few years ago had a series of ludicrously incomprehensible explanations of Bitcoin, culminating in my favorite way to dismiss it: “Bitcoin is a flat circle and everything we do or have done, we will do again.”

    It was funnier when “True Detective” was still a thing.

  26. 26
    TenguPhule says:

    @eyelessgame:Thread won.

  27. 27
    Fair Economist says:

    @different-church-lady:

    think the idea behind the weird math problems was to make it secure. Making each one harder and harder was supposed to be a limit on the supply.

    Oh, absolutely! But the point is that whatever the benefits, it makes it hopelessly impractical for a currency.

  28. 28
    germy says:

    @different-church-lady: One of them even reinvented food! A green sludge called “soylent” that’s meant to be swigged at your workstation, eliminating the need to chew and swallow actual food.

  29. 29
    MikeEss says:

    Those of you in the old school who believe this is a bubble simply have not understood the new mathematics of the Blockchain, or you did not cared enough to try. Bubbles are mathematically impossible in this new paradigm. So are corrections and all else

    …amazing how a few tech guys can repeal the laws of economics that have plagued mankind for thousands of years…

    …or is it more amazing that a guy who should know better has talked himself into thinking something so stupid?…

    I remember the last bubble that was supposed to have been impossible because it was based on all those mortgage-backed securities, making it all immune to crashing…and yet it all crashed anyway. Human beings are so incredibly arrogant and stupid…

  30. 30
    TenguPhule says:

    @beef:

    There’s a finite supply of bitcoins, by construction; no more than 21 million can ever be created.

    Counterfeits will prevail.

  31. 31
    dmsilev says:

    @beef:

    If it’s a con, it’s a pretty impressive one. It’d make the Tulip Trust is the greatest stash of pirate’s gold since the days of the Spanish new world.

    Supposedly the original creator of Bitcoin is sitting on a stash of a million or so of them. Wonder how resilient the market price would be if he decided to start selling…

  32. 32
    Chyron HR says:

    Those of you in the old school who believe this is a bubble simply have not understood the new mathematics of the Blockchain, or you did not cared enough to try.

    Is this that “cudlip” guy?

  33. 33

    @Fair Economist: @dmsilev: This is because bitcoin intentionally makes it really really hard to validate transactions. A non-mining-based blockchain transaction register wouldn’t have this bottleneck.

    @TenguPhule: lol

  34. 34
    Fair Economist says:

    @beef:

    There’s a finite supply of bitcoins, by construction; no more than 21 million can ever be created. We’re currently at about 75%. To my mind, that makes it either art or a con.

    Con, absolutely, because transacting bitcoins requires the creation of new ones. So, necessarily, at some point it will become impossible to use them. The 21 million creates an absolute limit, but more likely a crash will shut down the miners before that.

  35. 35
    Bobby Thomson says:

    This is as nonsensical as the explanations for how asset securitizations could turn shit into gold. And the end will look very similar, especially if big banks are stupid enough to buy this crap.

  36. 36
    Schlemazel says:

    @MikeEss:
    Markets are perfect, markets correct and control their own. Markets can’t work if the government interferes with them.
    Markets can’t fail they can only be failed . . .

  37. 37
    TenguPhule says:

    @Brachiator:

    Can the dream of techno-libertarians be realized?

    No. SATSQ.

  38. 38
    A Ghost to Most says:

    I’ve read that the power used to generate one new bitcoin could power 9 houses for a year.

  39. 39
    Fair Economist says:

    @Major Major Major Major:

    This is because bitcoin intentionally makes it really really hard to validate transactions. A non-mining-based blockchain transaction register wouldn’t have this bottleneck.

    The validations have to be pretty difficult to make the whole blockchain system work. If validators weren’t paid in new bitcoins, they’d have to be paid some other way, and the expense would bring the system down. It’s a very sophisticated Ponzi scheme.

  40. 40
    Doug R says:

    @A Ghost to Most: At least you can eat a tulip bulb, with herring.

  41. 41
    MattF says:

    @different-church-lady: One hopes. ‘This time it’s different’ is the rallying cry for pretty much every bubble.

  42. 42
    Schlemazel says:

    @A Ghost to Most:
    SO they must be really valuable!!!!

  43. 43
    Andrey says:

    There’s some evidence that Bitcoin’s current alleged price is based on one or two groups painting the tape and wash trading, along with some possible outright fraud.

    Simplified/summarized: One organization is creating tokens called “Tether” or “USDT”. They claim that these correspond 1:1 with dollars in their cash reserves, but have provided no evidence of that and have explicitly acknowledged having many banking issues, to the point where no US and nearly no European banks will do business with them. Oh, and their terms of service explicitly deny any obligation to actually exchange Tethers for USD if a user wants to “cash out”. And they control a cryptocurrency exchange where you buy in with real USD, and you get “Tethers” to buy crypto with… and if you try to sell, you just get “Tethers” back. Attempts to cash out into real USD allegedly meet with significant problems ranging from delays to outright failure. Imagine a casino that can choose to disavow its chips at will.

    To add to that, they are suspected of simply “buying” Bitcoin from themselves at increasing prices to push the valuation up and create the illusion of significant activity.

    All of this would be highly illegal in the US stock market, but this organization resides in jurisdictions where its actions are unregulated.

  44. 44

    @Fair Economist:

    The validations have to be pretty difficult to make the whole blockchain system work. If validators weren’t paid in new bitcoins, they’d have to be paid some other way

    Why? Again, this is true for cryptocurrencies, but not central to the idea of a distributed cryptographic ledger.

  45. 45
    Anne Laurie says:

    @Roger Moore:

    Or does everyone who’s investing know it’s a bubble and believe they’ll be able to get their profit out before it bursts?

    Isn’t that exactly what economics call the “Greater Fool” theory?

  46. 46
    Bobby Thomson says:

    @Fair Economist: the math may be sophisticated but the structure is glaringly obvious.

  47. 47
    B.B.A. says:

    @TenguPhule: Counterfeiting isn’t an issue – the blockchain knows exactly who owns each of the finite number of bitcoins in existence.

    The real issue is the deflationary spiral, and what happens when nobody wants to spend a bitcoin on anything because it’s going to be worth more next week.

  48. 48
    TenguPhule says:

    @Anne Laurie:

    Isn’t that exactly what economics call the “Greater Fool” theory?

    Make America Great Again.

  49. 49
    debbie says:

    Has anyone ever actually purchased anything with bitcoin?

  50. 50
    TenguPhule says:

    @debbie: Ransoms,

  51. 51
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @Bobby Thomson:

    When bitcoin augurs in for a spectacular crash, we will inevitably find that some cohort of Our Meritorious Financial Wizards will have planted a number of them squarely within several major investment funds. We’ll wind up bailing them out, and the entire catastrophe will be blamed on inadequate tax cuts and people of color.

  52. 52
    Bobby Thomson says:

    @Anne Laurie: yes. All pyramids run on them. I was just explaining that to my kids the other day.

  53. 53

    @debbie: I got paid in bitcoin for more than a year.

    ETA it was an international company and much faster than transfers

  54. 54
    BlueDWarrior says:

    Once again, Engineers have failed to solve the conundrum of human psychology. And yet they keep insisting that there is such a thing as a ‘foolproof system’.

    Sigh…

  55. 55
    geg6 says:

    Saw a news report last week about some kid, 17 or 18 yo, who has some gigantic dollar amount worth of Bitcoin. Both he and the reporter were sure he was going to be the world’s youngest self-made billionaire because he bought a bunch of this shit and now it’s worth millions. He was a totally smug young asshole and the reporter was totally buying it. The kid reminded me of Skreli, that’s what a smug asshole he was. And I literally said to my John at that moment that these people are unaware of the history of tulips.

  56. 56
    NotMax says:

    Titanic was unsinkable.

    Just sayin’.

  57. 57
    SiubhanDuinne says:

    @beef:

    There’s a finite supply of bitcoins, by construction; no more than 21 million can ever be created.

    Peak Bitcoin?

  58. 58
    moops says:

    @TenguPhule: counterfeiting is the one thing you will not have to worry about with a BitCoin. In fact, that is it’s one hard design feature. Counterfeiting a BitCoin is the same as double-spending one. If you can counterfeit a BitCoin, you can also break the entire planet’s public-key cryptography communication system.

  59. 59

    @Brachiator: I have no idea how to buy bitcoin, and I’ve read a fair number of articles on it. It could be that I didn’t pay enough attention because I wasn’t interested.

    But I can go down the street to my bank and buy euros, pesos, and a few other currencies. I can use my credit cards pretty much anywhere.

    If they want bitcoin to be a currency, it has to be simple.

  60. 60
    Fair Economist says:

    @Major Major Major Major:

    Why? Again, this is true for cryptocurrencies, but not central to the idea of a distributed cryptographic ledger.

    Given the difficulty needed to protect against counterfeiting, it’s needed to pay for the necessary distributed ledger because it’s very expensive. Bitcoin costs almost as much to handle its transactions as Visa even though Visa handles more than a thousand times as many. For non-currency applications, perhaps the lesser costs would be affordable.

  61. 61
    TenguPhule says:

    @BlueDWarrior:

    And yet they keep insisting that there is such a thing as a ‘foolproof system’.

    Our Fools will simply be more ingenious.

  62. 62
    MikeEss says:

    When bitcoin augurs in for a spectacular crash, we will inevitably find that some cohort of Our Meritorious Financial Wizards will have planted a number of them squarely within several major investment funds. We’ll wind up bailing them out, and the entire catastrophe will be blamed on inadequate tax cuts and people of color.

    …well thank god there will be someone to blame, and some way for the rest of us to make them whole (by giving them our tax money…but as long as the buzzword “tranche” is used, it’s all good)…

    (…good grief!…)

  63. 63
    different-church-lady says:

    @Major Major Major Major: I assume you converted them to dollars right away, yes?

  64. 64
    MattF says:

    One thing to remember– the ‘true value’ of a bitcoin is zero. That’s unusual– even tulips had some value as roughage in a salad.

  65. 65

    @Fair Economist: Yes. For instance, if Visa were to use a blockchain to track transactions, they wouldn’t have these issues because it would be private, and therefore require no payout. The work units could be accordingly much smaller.

    @different-church-lady: Yes, it was just a transaction. I sold them via Coinbase. Very simple.

  66. 66
    different-church-lady says:

    @BlueDWarrior:

    Once again, Engineers have failed to solve the conundrum of human psychology.

    Or have they solved it all too well?

  67. 67
    Another Scott says:

    @dmsilev: It sounds kinda like a fancy AmWay scheme to me.

    CryptoCoinMastery (from October):

    […]

    So if we do the math, if there is a halving event every four years, the last Bitcoin should be mined sometime in the year 2140.

    What Happens When the Last Bitcoin is Mined?

    Will the whole system shut down because Bitcoins are no longer awarded for mining new blocks? Probably not. Bitcoin miners are also awarded transaction fees, and these fees should keep Bitcoin afloat. As the the price of bitcoin increases, the fees allocated per each transaction will also increase. Take a look at this chart outlining the average Bitcoin transaction fee over time:

    [ scary spikey graph ]

    Eventually, these transaction fees should become valuable enough that it will encourage miners to keep on mining even though they won’t be getting a block reward. So while new bitcoins will cease to come into existence, bitcoin miners will still get paid. Of course, some miners will be (and already are) pushed out of the market.

    The idea, however, of bitcoins some day being worth $50,000 or a $100,000, isn’t outside the realm of reason. Currently, at the time of writing this article, the fastest and cheapest transaction fee is currently 150 satoshis/byte. For the median transaction size of 226 bytes, this results in a fee of 33,900 satoshis (or about $2). Remember, ALL transaction fees go to the person or people who mine the block.

    However, this isn’t something we have to worry about at the moment. This is still over a century away!

    (Emphasis added.)

    Yeah, I want to have my currency have its value vary +/- 100% per week, and have transaction fees vary +/- 100% per week. And be at the mercy of server farms in China and who-knows where else. What could possibly go wrong?!?1?!!?!ONE

    (sigh)

    Naturally, the uber-rich will find a way to get out before it collapses. Here’s hoping that they don’t destroy China’s (or anyone else’s) economy in the process.

    Cheers,
    Scott.

  68. 68
    Villago Delenda Est says:

    @different-church-lady: McAffee is a glibertarian shithead.

    It was not parody, except unintentional self-parody.

  69. 69
    TenguPhule says:

    @MattF:

    One thing to remember– the ‘true value’ of a bitcoin is zero.

    Less then zero after you factor in the power supply costs.

  70. 70
    different-church-lady says:

    @Major Major Major Major: Which is exactly how the people speaking at that conference I worked were describing it. Not as a replacement currency, just a way to do transactions internationally without the current inconveniences.

  71. 71
    moops says:

    It will be an awkward coming year for BitCoin. That people buy it to hold it is one property that makes it continue to spike. Since it has no inherent value the demand for them is driven just by the desire for gains in value (there is some utility to BitCoin as a form of anonymizing transaction. Internet cash as it were). Since the hundreds of thousands of computers mining coin are only able to process 4 or 5 transactions a second, you have the archaic reenactment of people at the bank door demanding their money like It’s a Wonderful Life.

    The transaction fee for BitCoin has sort of built-in floor. Since it takes about 300kwH of electricity to process a transaction today, even at $0.08/kwH you need $20 of electricity, never mind capital costs and a few dollars of internet bandwidth per transaction.

    BitCoin will die due to the transactions costs. Other currencies trade off storage for processing and might work better since our storage technology trajectory is better than our hashes/Joule trajectory.

  72. 72
    TenguPhule says:

    @different-church-lady:

    Or have they solved it all too well?

    Rocks were simpler solutions for simpler times.

  73. 73
    Chip Daniels says:

    It would be an insult to Beanie Babies, since in the end, a Beanie Baby has the redeeming value of being still kinda cute.
    A Bitcoin has no value whatsoever, except as speculation.
    And for anyone who gets the smug “But dollars also have no value, because gold standard!” thats bullshit as well.

    All government backed currencies are backed by the power of their government to collect taxes. If the US government wanted to, it could collect taxes in the form of wheat from Kansas, oil from Texas, or machinery from Ohio. And it could redeem upon demand any dollar bill for those same tangible commodities.
    Clumsy and wildly impractical, but the point is, dollars have a real and tangible backing to them.

    Bitcoin has nothing but the faith of some greater fool.

  74. 74

    @different-church-lady: blockchains are very good for that.

    They would also be useful for tracking actual beanie babies.

  75. 75
    Fair Economist says:

    @MattF:

    One thing to remember– the ‘true value’ of a bitcoin is zero. That’s unusual– even tulips had some value as roughage in a salad.

    The true value of the bubble tulips was as founders of valuable flower lines. They were tulips that had been infected by a virus that causes color variegations, often strikingly beautiful, and they are still a major product of the Dutch flower industry. They really did have fairly substantial real value because this was right after the variegated tulips had been discovered and they were pretty rare. Of course the lines got founded pretty quickly and an individual bulb became of comparatively low value (that of the bouquet of tulips it could grow, roughly).

  76. 76
    Steeplejack (phone) says:

    @Roger Moore:

    I just find it amazing that people can look at what’s going on with Bitcoin and not realize it’s a bubble.

    It’s different because technology!

    Or does everyone who’s investing [. . .] believe they’ll be able to get their profit out before it bursts?

    Ding ding ding!

    Let’s take a visit to the Market Timing Hall of Fame, which, as an investor acquaintance says, is filled with absolutely nobody.

  77. 77
    Emma says:

    I just downloaded a copy of Galbraith’s A Short History of Financial Euphoria. I didn’t realize it was going to become so amazingly topical so quickly.

  78. 78
    MattF says:

    @TenguPhule: See ‘sunk cost fallacy’. Its value is negative only if you’ve managed to persuade someone else (the greater fool) to pay for it. Otherwise, zero.

  79. 79
    seaninclt says:

    @debbie:

    I have, yes. Quite a few things actually. Newegg takes Bitcoin as payment, so does Overstock.com. I’ve purchased things from there as well. It’s imperfect as a currency, for a number of different reasons, but it works as a store of value. There are other cryptos that work better as a currency though. The last batch of miners I bought, I paid in Bitcoin Cash – a spinoff (for lack of a better term) of Bitcoin.

  80. 80
    Steeplejack (phone) says:

    @Fair Economist:

    How did people think it could ever be used for routine transactions like buying a cup of coffee?

    Well, to be realistic, I would never want to buy a cup of coffee that costs a bitcoin.

  81. 81
    Felonious Monk says:

    Wonder how many Ladies-of-the-Evening and bookies are accepting bitcoin these days.

  82. 82
    moops says:

    @Chip Daniels:
    what are you talking about redeeming a US dollar? what?

  83. 83
    TenguPhule says:

    @Steeplejack (phone):

    Well, to be realistic, I would never want to buy a cup of coffee that costs a bitcoin.

    Pre or Post crash?

  84. 84
    TenguPhule says:

    @Felonious Monk:

    Wonder how many Ladies-of-the-Evening and bookies are accepting bitcoin these days.

    None of em, Katie.

  85. 85
    debbie says:

    @Major Major Major Major:

    Good, glad you sold it.

  86. 86
    Fair Economist says:

    @Emma:

    I just downloaded a copy of Galbraith’s A Short History of Financial Euphoria. I didn’t realize it was going to become so amazingly topical so quickly.

    Memories are just amazingly short on this. The last big bubble was the housing bubble, which only 10 years ago nearly destroyed the world financial system. And here we are off again with the cryptocurrencies.

  87. 87

    @debbie: I kept a little bit for fun, now i have several hundred dollars!

  88. 88
    Chip Daniels says:

    @Steeplejack (phone):
    I see a lot of cryptocurrency posts on Medium, and they all have this manic tone to them of excitement and conspiracy, like a cross between the “One Weird Trick That Has Doctors Fuming” banner ads and people insisting 9-11 was a hoax but One World Government won’t let the truth be told.

  89. 89
    different-church-lady says:

    What I really want to know is when will we finally have self-driving Bitcoin?

  90. 90
    B.B.A. says:

    @moops: You used to be able to take a dollar bill to a bank and get $1 in silver coin in return. Even earlier, gold coin.

  91. 91
    debbie says:

    @seaninclt:

    I would think the fluctuating value would be an issue, no?

  92. 92
  93. 93
  94. 94
    Chip Daniels says:

    @moops:
    In theory, there was a time when you could redeem a dollar bill for a like amount of gold or silver. When Nixon took us off the gold standard in 1972, the dollar isn’t backed by the gold in Ft. Knox, and can’t be redeemed by anything tangible.

    This is the logic used by gold bugs and cranks to insist that the value of a “fiat currency” like a dollar is imaginary, and no different than Bitcoin.

  95. 95

    I strongly suspect I know no one who owns bit coins.

  96. 96
    moops says:

    @B.B.A.: this hasn’t been true for a while now.

  97. 97
    debbie says:

    @Major Major Major Major:

    Decades ago, I invested in Fidelity Magellan, a fund that outperformed other funds by light years. It was lots of fun until it, and practically everything else, crashed in the late 80s. I was lucky in that I ended up with as much as I’d actually paid in. It was much worse for other people, though.

    That’s enough speculation for me for this life.

  98. 98

    @seaninclt:

    Bitcoin Cash, a spinoff (for lack of a better term) of Bitcoin.

    This is another problem with cryptocurrencies, a sufficiently large group of motivated users can do that hard fork bullshit.

  99. 99
    randy khan says:

    The problem with bitcoin is that it makes no sense in modern economies. The reason that bitcoin has appreciated so much is that it’s not like actual money. The algorithm used to make it gets harder and harder, and eventually (as in not very many years from now) will get so hard that it will be effectively impossible to make more. A growing economy needs money that can grow with it. Bitcoin, if it doesn’t crash horribly, will end up having to be divided into micro-Bitcoins and eventually nano-Bitcoins because each Bitcoin will increase in value as the economy grows, or you’ll have massive deflation.

  100. 100
    MikeEss says:

    I see a lot of cryptocurrency posts on Medium, and they all have this manic tone to them of excitement and conspiracy, like a cross between the “One Weird Trick That Has Doctors Fuming” banner ads and people insisting 9-11 was a hoax but One World Government won’t let the truth be told.

    …I know this guy who invented a 200-mile-per-gallon carburetor that would end our energy problems, but the oil companies won’t let anyone sell it! Oh, and if you put your old razor blades under this pyramid-shaped thing, they stay sharp forever, but Gillette is keeping them secret!

    …I’m too old and cynical, and I’ve seen too many previous crazy conspiracies…

  101. 101
    Frank McCormick says:

    @Fair Economist: And all this from the same people that brought you the dot com bubble. “You don’t need a product or business plan to make money. This is the NEW economy!”

  102. 102
    B.B.A. says:

    @moops: No, but it could be true again if Congress and the Fed felt like it, which they don’t. I think Chip meant something similar.

  103. 103
    seaninclt says:

    @debbie: It can be, yes, certainly. As others have said, there are a number of different reasons why Bitcoin itself is impractical for everyday use – transaction limitations. But then you have other platforms, like Ripple which can process north of 1,000 per transactions per second. Ripple is partnering with companies like Microsoft, American Express, etc. From the original blockchain technology distributed ledger technology evolved – which will change the financial transactions happen globally. I’m a true believer. I have a small-ish mining farm but see a significant number of incredible valuable socio-economic upsides to cryptocurrency as a whole. It’s not a hoax, or a scam, or a bubble (at least not yet). It’s new technology still in its infancy.

  104. 104
    Splitting Image says:

    Wrong analogy. Bitcoin is coal rolling for techno-libertarians.

  105. 105
    seaninclt says:

    @randy khan: Fair point, however Bitcoin is not the only cryptocurrency out there. It’s actually one of the more flawed designs, but that was because the designers never really envisioned the sheer number of transactions we have today. There are other cryptos that are far more adaptable, fungible, and (most importantly) scalable to handle the volume of global financial transactions we are heading towards.

  106. 106
    Anne Laurie says:

    @Felonious Monk:

    Wonder how many Ladies-of-the-Evening and bookies are accepting bitcoin these days.

    Everything I’ve read claims that illicit gambling, sex trafficking, drug sales and buying guns are the four pillars of bitcoin (or even cryptocurrency) exchange. And its defender always point out that, yeah, that’s how the *internet* got started outside of the DARPA walled garden, so there!

    But “the internet” had so many other uses — starting with cat videos. Not seeing how bitcoin will make the exchange of cat videos / Pez dispensers / don’t-forget-to-bring-home-a-quart-of-milk messages easier or swifter…

  107. 107

    @randy khan:

    Bitcoin, if it doesn’t crash horribly, will end up having to be divided into micro-Bitcoins and eventually nano-Bitcoins

    Bitcoin is currently divisible to eight decimal places.

  108. 108
    different-church-lady says:

    @Anne Laurie:

    And its defender always point out that, yeah, that’s how the *internet* got started

    And look how well that turned out!

  109. 109
    B.B.A. says:

    @Anne Laurie: Don’t forget money laundering. Lots of Chinese billionaires using BTC to get around the restrictions on CNY.

  110. 110
    seaninclt says:

    @Major Major Major Major: there is truth to that. Hard forks are the bain of my existence at times. Sometimes it’s bullshit (Bitcoin Gold) and sometimes it’s necessary (Ethereum) for growth and continued progress. Hard forks are seen by many as a progression driver, but honestly, some dickheads are using them to scam people. Just like everything else in life.

  111. 111
    Jim, Foolish Literalist says:

    Fellow Luddites: If I read this unwontedly on-topic thread, will I understand what the hell bit coin is?

  112. 112
    WaterGIrl says:

    Raise your hand if you give a crap about Bitcoin. My hand is not raised.

  113. 113
    Chip Daniels says:

    @MikeEss:
    HAH.
    I forgot about the pyramid thing, from the early 70’s.

    My theory is that conspiracy theories proliferate in times of stress, when the world seems so crazy and out of control that any conspiracy or nutty scheme seems as plausible as the daily news, or in our case, having a game show host as President.

  114. 114
    Anne Laurie says:

    @Dorothy A. Winsor (formerly Iowa Old Lady):

    I strongly suspect I know no one who owns bit coins.

    You write fantasy/sf. The fandom *may* have changed dramatically in the last 25 years, but from what I remember, you’re at least acquainted with a few Bold Independent Thinkers who have a secret stash of crytocurrency JUST IN CASE “this time it’s different.”

    It’s the Mensa Curse — people with high IQs tend to overestimate their own abilities to out-think every jamoke out there, at everything.

    Also, of course: TECHNOLOGY WILL SOLVE ALL OUR PROBLEMS!!!1!!!! (Eventually)

  115. 115

    @seaninclt:

    Sometimes it’s bullshit (Bitcoin Gold)

    The name was kind of a giveaway.

  116. 116
    TenguPhule says:

    @Jim, Foolish Literalist:

    If I read this unwontedly on-topic thread, will I understand what the hell bit coin is?

    As long as you understand what tulips were, yes.

  117. 117
    Chip Daniels says:

    @Anne Laurie:
    What little I know about the underlying blockchain technology does make it sound important and with a lot of potentially useful applications, but time will tell.

  118. 118
    Steeplejack (phone) says:

    @different-church-lady:

    I can sort of see how it wouldn’t have worked, but I so wanted that to be in all caps.

  119. 119
    different-church-lady says:

    @Jim, Foolish Literalist: Keyser… Söze… KEYSER… SÖZE!!!

  120. 120
    TenguPhule says:

    @Chip Daniels:

    when the world seems so crazy and out of control that any conspiracy or nutty scheme seems as plausible as the daily news,

    Or in our case, where it is the daily news. And not wrong.

  121. 121

    @Chip Daniels: Blockchain tech will probably be 95% of bitcoin’s legacy.

  122. 122
    different-church-lady says:

    @Steeplejack (phone): DLC’S SHOUTY-NIGHT HAS PROVEN UNEXPECTEDLY POPULAR!

  123. 123
    TenguPhule says:

    @seaninclt:

    but see a significant number of incredible valuable socio-economic upsides to cryptocurrency as a whole.

    Many horrible events started with : “a significant number of incredible valuable socio-economic upsides to ‘fill in the blank'”

    Just saying.

  124. 124
    seaninclt says:

    @TenguPhule: Fair point…the road to hell and all that.

  125. 125
    Jim, Foolish Literalist says:

    @TenguPhule: that was an eco-friendly bubble, at least

  126. 126
    ChrisH says:

    The main problem I see with Bitcoin is the only theoretical thing of value is the block chain technology, not the bitcoins themselves. In theory there’s nothing stopping Visa from making it’s own crypto currency that has no relation to bitcoins.

    There possible use-cases for block chains but none which require you to honor the tech bro’s funny money at any value. I keep thinking of the scene in Get Shorty where the Shylock is told how easy producing a movie is and replies “if it’s so easy then what the fuck do I need you for?”

  127. 127
    🌎 🇺🇸 Goku (aka The Hope of the Universe) 🗳 🌷 says:

    @MikeEss:
    Is that from the Spoils of Babylon? Or That 70s Show?

  128. 128
    moops says:

    @Anne Laurie: well, the internet went from geek toy to in-every-home because of porn. Bitcoin got it’s leg up in this world by the illicit trades, but I don’t think that is where it’s primary utility will end up.

  129. 129
  130. 130

    @ChrisH:

    There possible use-cases for block chains but none which require you to honor the tech bro’s funny money at any value.

    Indeed. It’s silly to judge an entire innovation by its first application.

  131. 131
    MomSense says:

    I’m thinking of getting a fire pit stand for solstice so we can sit outside by the fire. Some retired hippies moved into a house down the steeet and they’ve been sitting outside by their fire pit every night.

    I’m pretty sure libertarians is just another way of saying arrested development.

  132. 132
    Patricia Kayden says:

    @different-church-lady: From what I know about McAfee, he is a very eccentric man. VERY ECCENTRIC, man.

  133. 133
    WaterGIrl says:

    @MomSense: I got a fire pit a few years ago. Used it once – lovely evening – but my entire house smelled of smoke for a week. That was it for me.

  134. 134
    Steeplejack says:

    @WaterGIrl:

    I just want to know why the plural of bitcoin is not bitcoins. I somehow think the exclamation will enrage me, and yet I must know.

  135. 135

    @MomSense: Fire pits are great.

    @WaterGIrl: Your username has a typo.

    @Steeplejack: The technology is called Bitcoin. Like “iPhone”. The unit is called a Bitcoin. Like “iPhone”. If you are talking about two Bitcoins (currently ~$32,000), then the plural is Bitcoins. “I sold 2.0 bitcoins.” At least, that’s how I use it. 2.0 Bitcoin sounds dumb.

  136. 136
    WaterGIrl says:

    @Steeplejack: That is kind of weird. Full disclosure: I think this is without a doubt the most boring thread ever in the history of BJ.

  137. 137

    @MomSense: I checked out Houzz, they have too many ads though! I also like House Beautiful’s website. Everything is too spendy but gorgeous. I was getting tired of the farmhouse style which seems to be popular with DIY and home decor bloggers.

  138. 138
    Roger Moore says:

    @seaninclt:

    Fair point, however Bitcoin is not the only cryptocurrency out there.

    True. But the market cap of Bitcoin is more than all those other cryptocurrencies combined, so in terms of worries about effects on the real economy it’s the one worth paying attention to.

  139. 139
  140. 140
    MikeEss says:

    Is that from the Spoils of Babylon? Or That 70s Show?

    …no, I lived through that stupidity. That was the era of “Transcendental Meditation” and “est” and gas shortages, and Pyramid Power and the Pet Rock, and all sorts of other moronic crap. It was the tail end of Vietnam, Nixon was in power, followed by Ford and then Carter. TV was bad…really bad. I was young enough (10 years old in 1970) to have missed being a part of some of the foolishness, but I saw a lot of it…

  141. 141
  142. 142
    Steeplejack says:

    @WaterGIrl:

    I think you’re supposed to use it outside.

  143. 143
    TenguPhule says:

    @Major Major Major Major:

    I drew a cool vampire.

    Vampires have not been cool since the 1990s.

  144. 144
    eemom says:

    @WaterGIrl:

    I can’t believe there are this many people who understand what bitcoins even are.

    eedad tried to explain it to me, and my brain short-circuited.

  145. 145
    No Drought No More says:

    If American Greed were to replace Meet The Press at NBC, the country would be a smarter and better place to live. Which is why the corporate shot callers that own the media will never let it happen. Still, some of the bit coin investors muster have seen at least seen a few episodes, and all of them have surely heard the expression, “if it’s too good to be true..”.

  146. 146
    different-church-lady says:

    @eemom: It’s like Facebook for your money.

    (OK, that was low of me…)

  147. 147
    Steeplejack says:

    @WaterGIrl:

    I’ve actually added a fair amount to my understanding of bitcoin, but there has been a lot of chaff to thresh out.

  148. 148
    moops says:

    don’t feel bad if Bitcoin is confusing. Some very smart people whose job it is to understand the ramifications of this technology often end up not agreeing on things.

    Overall, I don’t see Bitcoin crashing to zero. We have enough income disparity in this world that there is a huge supply of people with too much money ready to jump in when they think they have timed the bottom correctly. It will be a volatile thing, perhaps forever. There is no process to stabilize it.

  149. 149
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @ChrisH:

    In theory there’s nothing stopping Visa from making it’s own crypto currency that has no relation to bitcoins.

    One of the problems the US faced in its first 50 years of existence was the issuance of multiple forms of currency.

  150. 150
    MomSense says:

    @schrodingers_cat:

    I haven’t used houzz in a while but I’m not surprised it was discovered by the advertisers. The funnthing used to be sorting for region, design style, room, cost, etc. I still think the Use What You Have book is a great resource for furniture placement, and fundamentals of balance, focal point, hanging art, accessorizing, etc.

    I’ve kind of lost track of the decorating world. Full confession, my old farmhouse was in a few magazines back in the day and I decorated some fancy inns and restaurants.
    @WaterGIrl:

    Uh oh. At least this time of year all the windows are closed. I don’t want the house to smell like smoke!

  151. 151
    MikeEss says:

    Vampires have not been cool since the 1990s.

    Vampires were cool before any of us were born, and vampires will be cool long after all of us have made the final exit…vampires are just cool…

  152. 152
  153. 153

    @MomSense: Ohh nice! So you are just the right person to go to.

    ETA: I have put a hold on the Use What You Have book.

  154. 154

    @moops: Freedom from the central bankers!

  155. 155
    woodrowfan says:

    Sheesh, can’t libertarian bros just ruboneout to pics of nekkid girls like normal single young men??

  156. 156
    MomSense says:

    @schrodingers_cat:

    If I go to your website, is your contact info there? I could look at some photos of your rooms and help out. The fun part is color! You don’t have to do muted New England or drab gray. I can imagine some gorgeous Indian fabrics would be an exciting place to start.

  157. 157
    Ken says:

    I still think the failure mode for Bitcoin will be the revelation that the (still-unknown) inventor was the NSA, and they’ve been tracking every transaction since day one.

  158. 158

    @MomSense: Yes, you will find my contact info there.

  159. 159
    Patricia Kayden says:

    @dmsilev: LOL! “Differently sane” = eccentric when we’re talking about millionaires. And McAfee is definitely a special person, so to speak. I suppose he can afford to invest in fool’s gold like bitcoin unlike the rest of us working class rubes.

  160. 160
    The Dangerman says:

    OK, I guess I’m an old fart (too true) but why should I give a shit what Bitcoins are worth compared to the U.S. Dollar if fiat currencies (i.e, the USD) are inferior to Bitcoins? I should just keep the Bitcoins, yes?

    This smells like a massive bubble.

    ETA: Extra credit if you can tell me where to sell a Bitcoin (if I had one) to get dollars. Where is the exchange?

  161. 161
    Steeplejack says:

    @Major Major Major Major:

    And yet, in this very thread: “I got paid in bitcoin for more than a year.”

    You wouldn’t say, “I got paid in dollar for more than a year” or even “I got paid in iPhone for more than a year.” You would say, “I got paid in dollars,” etc.

    And, from the Atlantic article above: “Surveys show that the vast majority of bitcoin owners are buying and holding bitcoin to exchange them for dollars.”

    There is a fuzziness about bitcoin phraseology that seems awkward and needlessly complicated. Is it just pretentiousness? (Present company excepted, of course.)

  162. 162
    Mike J says:

    Jet fuel can’t melt bitcoin.

  163. 163
    Ken says:

    @MikeEss: Charles Stross’ vampires from the Laundry Files novels are definitely not cool.

  164. 164
    Roger Moore says:

    @woodrowfan:

    Sheesh, can’t libertarian bros just ruboneout to pics of nekkid girls like normal single young men??

    If they could, they probably wouldn’t be libertarians.

  165. 165
  166. 166

    @Steeplejack: Again, I think the plural is reserved for when you’re talking about units. “I was paid in bitcoin. I was paid n bitcoins.”

    @Ken: Everybody knows there’s no such thing as a vampire novel in the Laundry Files, don’t be ridiculous.

  167. 167
    trnc says:

    … or you did not cared enough to try. Bubbles are mathematically impossible in this new paradigm. So are corrections and all else

    Said the guy who requires a typing or grammatical correction for literally every single tweet he poops out.

  168. 168
    efgoldman says:

    @eyelessgame:

    most people buying Bitcoins today don’t even know how many weeks you have to leave them planted in the ground below 55 degrees Fahrenheit for them to bloom

    I’m not a programmer or code writer, far from it. But I know my way around a desktop and the intartoobs. And bitcoin has a strong whiff of all those can’t-miss startups of the 90s dot-com boom. Can’t miss? Check. Guaranteed to go up? Check. Unregulated? Check.

  169. 169
    Peale says:

    @trnc: I’m sure he checked his math as dilligently as he checks his spelling.

  170. 170
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @woodrowfan:

    That would amount to sexist objectification of exploited womyn and fetishizes one standard body type for the perverted desires of The patriarchy. The young men are allowed only to pleasure themselves to images of Andrea Dworkin giving a pomo crit lecture on the empowerment of womyn and crushing the male dominated binary, provided that a committee of womyn has granted (after public hearing) consent for the young man to pleasure himself.

  171. 171
    debbie says:

    @efgoldman:

    I was thinking: Enron!

  172. 172
    debbie says:

    @MomSense:

    A couple of friends have fire pits, as well as a neighbor. I love the toasty warmness, but the smoke starts stinging my eyes almost immediately. I avoid them like the plague now.

  173. 173
  174. 174
    Mary G says:

    If it relies on having that much electricity, that’s a big vulnerability.

  175. 175
    seaninclt says:

    @Roger Moore: Spot on, correct. Bitcoin dwarfs all others out there, and it’s really not even close – you’re 100% right. Having said that, in terms of utility, there are better options. BTC is simply the first to market and brand leader.

  176. 176
    Peale says:

    So if there was a major bitcoin sell off, how do those dollars materialize?

  177. 177
    TenguPhule says:

    @debbie:

    A couple of friends have fire pits, as well as a neighbor.

    How did the neighbor taste?

  178. 178
  179. 179

    @Peale: I just sold some via Coinbase, which direct deposited into my checking account.

  180. 180
    p.a. says:

    If you throw a bitcoin into Orodruin, will it melt?

  181. 181
    TenguPhule says:

    A federal judge Monday declined to punish former Trump campaign chairman Paul Manafort for helping write an opinion article for a newspaper in Ukraine defending his work there. But the judge warned she would likely consider any similar actions in the future as a violation of the existing gag order barring comments outside court as Manafort faces trial on criminal fraud charges.

    White Collar Privilege.

  182. 182
    WaterGirl says:

    @Major Major Major Major: Very nice. Much more interesting than bitcoin, singular or plural!

  183. 183
    Kathleen says:

    @Schlemazel: Bernie would have won with Bitcoin.

  184. 184
    WaterGirl says:

    @Steeplejack: hahaha

    The smell of a burning fire is awesome outside. Inside, not so much.

  185. 185
  186. 186
    WaterGirl says:

    @eemom: Agree! But there are lots of new nyms on this thread – perhaps people have alerts when “bitcoin” shows up on-line? I tried to read people’s comments, really I did, but my brain screams boring, alternated with this is stupid. I like techie stuff, but I just can’t get myself to care enough to try to figure it out.

  187. 187
    WaterGirl says:

    @Steeplejack: Here’s what I caught: blockchains blah blah blah blockchains.

  188. 188
  189. 189
    Kathleen says:

    @Cheryl Rofer: But aren’t there bitcoin banksters?

  190. 190

    @WaterGirl: more likely that normally-lurkers decided to comment on something they’re very passionate about, IMO. I recognize a couple rare names.

  191. 191
    Feathers says:

    The most interesting uses of block chain technology I’ve seen (at least on posters around MIT) is to secure electronic medical records. The idea goes back to the original mentioned above as a way of securely moving electronic things around. Your medical record would be tied to a block chain which would serve to record all transactions, including adding or viewing data, in a secure and traceable way.

  192. 192
    Steeplejack says:

    @Major Major Major Major:

    “I was paid in bitcoin” is not referring to units but to “the technology”?! GTFO.

  193. 193
    Roger Moore says:

    @debbie:

    I was thinking: Enron!

    Enron at least owned some tangible assets and had business units that theoretically could earn money.

  194. 194
    Cacti says:

    Those of you in the old school who believe this is a bubble simply have not understood the new mathematics of the Blockchain, or you did not cared enough to try

    With endorsements like that, who could doubt its magnificence?

  195. 195

    The NPR tubes tell me that the New Yorker just fired Ryan Lizza for sex allegations.

  196. 196
    WaterGirl says:

    @efgoldman:

    most people buying Bitcoins today don’t even know how many weeks you have to leave them planted in the ground below 55 degrees Fahrenheit for them to bloom

    You just highlighted the one fun thing that was early on in the thread. I laughed.

  197. 197

    @Steeplejack: if you don’t like my description of how people use the language, don’t get mad at me for describing it.

    ETA it’s like “I was paid in cash”, cash is the technology, when you talk about the units, you use the word for the units. It’s not my fault that the technology and the units are basically the same word.

  198. 198
    Roger Moore says:

    @Peale:

    So if there was a major bitcoin sell off, how do those dollars materialize?

    They don’t. SATSQ.

  199. 199
    WaterGirl says:

    @Major Major Major Major: As my dad used to say: it takes all kinds, and that’s what makes the world go ’round.

    edit: I should have started this reply with “good point”, because that’s what I was thinking.

  200. 200
    MomSense says:

    @debbie:

    Hmmm. It seems I have to think this through a bit more.

  201. 201

    @WaterGirl: diversity is our strength!

    @Roger Moore: I just got some.

  202. 202
    eemom says:

    @WaterGirl:

    I can’t wrap my brain around the concept of a money that is not a tangible thing. Ya just gotta draw the line somewhere with virtual existence. Hell, I don’t even do Kindle.

  203. 203
    Mnemosyne says:

    @different-church-lady:

    My spouse hates driving so much that we will probably be some of the first people to get a self-driving car. Sigh.

  204. 204
    Roger Moore says:

    @Kathleen:

    But aren’t there bitcoin banksters?

    There’s a difference between a bitcoin bankster and a bitcoin central bankster. That is to say you can have a bank that manages people’s bitcoin for them, loans them to people who need them, etc., but you can’t have a central bitcoin bank that creates more when there’s more demand. Some people think this is a positive, but they obviously have not studied the economic history of the US in the 19th Century.

  205. 205
    Patricia Kayden says:

    @Major Major Major Major: What!? Wow. That’s shocking.

  206. 206
    TenguPhule says:

    @Roger Moore: Admittedly a lot less then most people were expecting.

  207. 207

    @Kathleen: As I understand it, the blockchain substitutes for mere human trust. So banksters are not needed. This is supposed to be part of its virtue.

    But there are people with a great deal of money tied up in many bitcoins (or coin, depending on your faction in the current argument).

  208. 208
    Steeplejack says:

    @WaterGirl:

    Well, Ginger, I think you got the gist, then.

  209. 209
    SiubhanDuinne says:

    @MikeEss:

    Vampires were cool before any of us were born, and vampires will be cool long after all of us have made the final exit…vampires are just cool…

    Vampires lived then to make us happy now….

    No, wait. That’s dinosaurs.

  210. 210
    Roger Moore says:

    @Major Major Major Major:
    You selling your Bitcoins is not a major selloff. The Winkelvoss twins deciding to cash out would be a major selloff.

  211. 211
    TenguPhule says:

    @Mnemosyne:

    My spouse hates driving so much that we will probably be some of the first people to get a self-driving car. Sigh.

    Look on the bright side, by the time the cars are available you’ll probably no longer be able to leave the house on your own anyway.

  212. 212
    WaterGirl says:

    @MomSense: Or you could do what I did. Buy one on sale for $99. Plan to use it for a really long time, finally use it, live with the smell of smoke in the house for a week, move it to the carport in the front of the house, 3 months later be in such a hurry to bring your groceries in the house that you forget to put the car in park, from several steps away see the car about to crash into the house, then see the car come to a complete halt without hurting the house at all because the crumpled fire pit has taken the hit instead of the house.

    Best $99 I ever spent. THE END

  213. 213
    Mnemosyne says:

    @WaterGirl:

    That’s pretty much me, too. The Beanie Babies comparison is seeming very apt right about now. I didn’t get that frenzy, either.

  214. 214
    TenguPhule says:

    @eemom:

    I can’t wrap my brain around the concept of a money that is not a tangible thing.

    Credit Cards.

  215. 215
    Ken says:

    @Peale:

    So if there was a major bitcoin sell off, how do those dollars materialize?

    The usual way – the first few sellers get the good price, then the panic sets in, and later sellers don’t get nearly as much. There’s a nice illustration of the principle near the end of Trading Places.

  216. 216
    WaterGirl says:

    @Steeplejack: I have always loved that cartoon.

  217. 217
    B.B.A. says:

    @Roger Moore: And if they lose all their money in the bitcoin crash, well, it couldn’t have happened to a better pair of douchebags.

  218. 218
    TenguPhule says:

    @WaterGirl:

    then see the car come to a complete halt without hurting the house at all because the crumpled fire pit has taken the hit instead of the house.

    Best $99 I ever spent. THE END

    I admit, that cracked me up.

  219. 219

    @Roger Moore: I would like to point out that this is a correct use of the plural.

  220. 220
    TenguPhule says:

    @Ken:

    There’s a nice illustration of the principle near the end of Trading Places.

    I understand the movie is actually used as study materials in certain economic classes.

  221. 221

    @Cheryl Rofer: one of the ideas is that it allows people who (game theoretically) have no incentive to trust each other to agree upon a fair representation of reality without additional human intermediation, yes.

  222. 222
    WaterGirl says:

    @Mnemosyne: I think it’s because blockchains seem like a real thing I can wrap my head around. The rest, not so much. Beanie babies – at least they were better than strawberry shortcake. (Not the kind you eat.)

  223. 223
    Roger Moore says:

    @Major Major Major Major:
    I always strive for grammatical correctness, unless I’m writing in LOLcat.

  224. 224
    Steeplejack says:

    @Major Major Major Major:

    Bah. Pure sophistry.

  225. 225
    TenguPhule says:

    Republican Fan Fiction.

    Hat tip Wapo

    In addition to a static score, JCT calculated the increase in government tax receipts in the Senate Finance
    tax plan due to growth. They estimated $408 billion of additional tax revenue. Adding this $408 billion
    to the static score leads to a change in total projected receipts under JCT’s assumptions of approximately
    -$1 trillion on a current law basis.
    OTP has modeled the revenue impact of higher growth effects, using the Administration projections of
    approximately a 2.9% real GDP growth rate over 10 years contained in the Administration’s Fiscal Year
    2018 budget.

    OTP compared this 2.9% GDP growth scenario to a baseline of previous projections of 2.2% GDP
    growth. Treasury expects approximately half of this 0.7% increase in growth to come from changes to
    corporate taxation. We expect the other half to come from changes to pass-through taxation
    and
    individual tax reform, as well as from a combination of regulatory reform, infrastructure development,
    and welfare reform as proposed in the Administration’s Fiscal Year 2018 budget.

  226. 226

    @Steeplejack: use whatever words you want then, I’m sure it will work out great.

  227. 227
    WaterGirl says:

    @Major Major Major Major: I never thought of it that way, but I guess I was raised to appreciate diversity before we ever used the word diversity. Thanks, Dad!

    PS. That doesn’t explain how my two sisters completely missed that message, though.

  228. 228
    WaterGirl says:

    @eemom: Paying for something with your iPhone is intangible. I guess even checks and credit cards and debit cards are all intangible, so I don’t think that’s what bugs me. For me it’s just that there is no reason to care.

    I worked in a grocery store putting myself through college, and in that 5 years I never learned the difference between endive and escarole. The price varied, but in that 5 years those two items were ALWAYS the same price, so I didn’t need to know the difference. Something about bitcoins just screams “I don’t have to care about this.”

  229. 229
    Steeplejack says:

    @WaterGirl:

    I used to hate walking my brother’s Italian greyhound, Woody, off leash (which happened unavoidably sometimes). He would start to go on a ramble, and as I called to him in increasingly urgent tones he would look back like: “Why are you yelling at me? And who’s Woody?”

  230. 230

    @WaterGirl:

    Something about bitcoins just screams “I don’t have to care about this.”

    I mean, you don’t, but hey, let people enjoy things.

  231. 231
    woodrowfan says:

    @Le Comte de Monte Cristo, fka Edmund Dantes: eh, still better than clown porn.

  232. 232
    Ken says:

    @TenguPhule: Trading Places certainly helped me understand the principles of the futures market.

    Speaking of which, I don’t see how anyone expects a bitcoin futures market to work, when no one has any idea how much they’ll be trading for next week much less six months from now.

  233. 233

    @Ken: I worked for a company that dipped their toes into bitcoin hedge derivatives.

  234. 234
    Steeplejack says:

    @Roger Moore:

    Then why no plural here?

    That is to say you can have a bank that manages people’s bitcoin for them, loans them to people who need them, etc. [. . .].

  235. 235
    TenguPhule says:

    @Ken:

    I don’t see how anyone expects a bitcoin futures market to work, when no one has any idea how much they’ll be trading for next week much less six months from now.

    Ignorance has never stopped Goldman Sachs from doing anything, ever.

  236. 236
    WaterGirl says:

    @Major Major Major Major: I’m sorry, I don’t want to be that person who says I HATE SPORTS on the football thread.

  237. 237
    lamh36 says:

    This is DEF not on topic, and I was waiting for an open thread, but I’m sharing it anyway, and I’ll repost it in the next open thread

    @VaughnHillyard
    Father, who says he’s a local peanut farmer in Wicksburg, outside Roy Moore rally talks about losing his gay daughter at age of 23 to suicide. “I was anti-gay myself. I said bad things to my daughter, which I regret.”
    https://twitter.com/VaughnHillyard/status/940366306016223232

    I admit it, this legit made me cry…real tears…you can hear the pain in his voice when he talks about his daughter…he doesn’t say she committed suicide cause she was gay, but just that he knows he and other say things like Roy Moore had said about gays and he knows how those saying would have hurt his daughter…

    TEARS!!!

  238. 238
    B.B.A. says:

    @Ken: There are futures on volatility of volatility, which is already abstract enough to make my head spin. Bitcoin makes sense compared to that stuff.

  239. 239
    Felonious Monk says:

    @BlueDWarrior:

    And yet they keep insisting that there is such a thing as a ‘foolproof system’.

    Yes. It resides in the closet next to the perpetual motion machine.

  240. 240
    Lapassionara says:

    @lamh36: Wow! Thanks for posting. Tears indeed.

  241. 241
    Jim, Foolish Literalist says:

    Front pagers on strike?

  242. 242
    George says:

    Bitcoin cannot fail.

    It can only be failed. Just like conservatism and the GOP.

  243. 243
    Mike J says:

    @Felonious Monk: I have worked on designing fool proof systems. I can assure you the fools will always be one step ahead of you.

  244. 244
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @woodrowfan:

    Have you ever seen photos of Andrea Dworkin?

  245. 245
    WaterGirl says:

    @lamh36: That was quite moving, I’m in tears, too. Good for him for doing something.

  246. 246
    magurakurin says:

    @Steeplejack: The word for Japanese currency, yen, is used that way in English. 1 yen or 1000 yen. I have never seen or heard the word pluralized as yens. I believe the same is true for the word for Thai currency, bhat.

  247. 247

    @Mike J: I made a foolproof system one time but I forgot where I put it.

  248. 248
    WaterGirl says:

    @Jim, Foolish Literalist: Betty Cracker is visiting her 100-year-old gram who has pneumonia. The rest are off lolly-gagging, apparently. :-)

  249. 249
    Mike J says:

    @Major Major Major Major: One of my babies is being killed this week. I worked on AIM.

  250. 250
    WaterGirl says:

    @Le Comte de Monte Cristo, fka Edmund Dantes: I have not followed your conversation, but I can’t see any way that “Have you ever seen photos of Andrea Dworkin?” isn’t a dick thing to say.

  251. 251
    sharl says:

    I haven’t read many of the comments here yet, so apologies for any duplication…

    John Cole requested a primer on Bitcoin back in Feb. 2014. Some of us provided some links in response. Much-missed commenter pseudonymous-in-nc quoted a bit from a Bitcoin primer by (former) tech reporter Quinn Norton (pseudo’s comment #180 in that old Cole post).

    Quinn Norton’s piece is a decent way into understanding Bitcoin in terms of the ledger: “money is a way of remembering”. As she says, it creates a distributed record of transfers within an infrastructure built upon duplication rather than transfer.

    The implementation is interesting — mysteriously so, given its origins — and I think it has potential to be used in more interesting ways than libertarian scrip.

    Compliments of the IEEE, here’s a single-page schematic of how a Bitcoin transaction works, in case it helps (as opposed to, say, making your eyes glaze over; I make no promises that this won’t happen).

    I don’t know how much Bitcoin has changed in subsequent years, or whether it has at all. Nor do I know if Quinn remains bullish on the Bitcoin concept in the way she was back then.

    The mechanics and theory of Bitcoin are a different matter from its politics and business aspects. The business aspects in particular are what seem to have sometimes tripped up techno-libertarian utopian types, who have fallen prey on occasion to unscrupulous and/or incompetent Bitcoin brokers (or whatever they’re called these days). I haven’t heard any sad stories along these lines recently, but I haven’t been paying attention to this topic of late.

  252. 252
    Roger Moore says:

    @Steeplejack:
    I didn’t say I was always successful, just that I always try.

  253. 253

    @WaterGirl: somebody should make a feature that automatically generates an open thread when enough people complain. I’m sure it would be foolproof.

  254. 254
    Starfish says:

    I know you jest, but check out the CryptoKitties. You can have a virtual bitcoin pet. ;)

  255. 255
    WaterGirl says:

    @Major Major Major Major: Great idea! I nominate you to implement it. In your spare time, of course. Speaking of spare time, are you still kinda full-time busy at work now?

  256. 256
    MomSense says:

    @lamh36:

    Same here. My heart breaks for him.

  257. 257
    bago says:

    Compute power is as real as gold. It’s a thing you can measure. Why people equate them with money is a conversation.

  258. 258
    Roger Moore says:

    @magurakurin:

    The word for Japanese currency, yen, is used that way in English. 1 yen or 1000 yen. I have never seen or heard the word pluralized as yens.

    I assume this is because Japanese doesn’t work that way- it’s not an inflected language- and English has a tendency to copy the way other languages treat their words when we copy them. And, of course, there are a few oddball words in English that use the same as the singular and plural, like deer, so we’re comfortable with the basic concept.

  259. 259
    WaterGirl says:

    @lamh36: @MomSense: I am trying to imagine my calling a person an abomination, or a class of people an abomination, for any reason. And this guys is a judge who wants to be a senator. It’s like we are in a Flash timeline, gone bad.

  260. 260
    NotMax says:

    @MikeEss

    Mood rings. Must not forget those.

    Also too, Deely Bobbers (okay, very early 80s for those).

    @woodrowfan

    Vampire clowns can but vainly/veinly aspire to coolness.

  261. 261
    Fair Economist says:

    @Steeplejack: Sometimes with “Coin” the plural is “coin”. E.g. you might say of somebody wealthy “they have lots of coin”. “Bitcoin” seems to share those uses. “Paid in bitcoins” sounds wrong to me (especially since these days you’d only be getting a fraction of a bitcoin unless you had a heck of a salary).

  262. 262

    @WaterGirl: I did about four hours of work today. Which isn’t bad for an unallocated developer. For the rest I ate lunch, bothered y’all, and learned more Smalltalk.

  263. 263
    gorram says:

    @Scotius: I wasn’t alive in the 80s, was too young in the 90s, but I absolutely remember the Conviction of some people that there was no way the housing bubble could burst.

  264. 264
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @WaterGirl:

    She was a thoroughly miserable troll, mentally and physically…

  265. 265
    Le Comte de Monte Cristo, fka Edmund Dantes says:

    @B.B.A.:

    Futures on derivatives are nothing more than pure gambling.

  266. 266
    lamh36 says:

    smh…these people!

    @chpbrownlee
    Kayla Moore: The media would “have you believe my husband doesn’t support the black community. My husband appointed the very first black marshall to the Alabama Supreme Court. … We have many friends who are black. We fellowship with them in our church and our home.” #alsen

    @chpbrownlee
    Kayla Moore: “One of our attorneys is a jew. … We also fellowship with them.”

    “Fake News, they are the ones that are embarrassing. And they should be ashamed of getting involved in this election for our opponent. … We have been invaded.”#alsen

  267. 267
    magurakurin says:

    @Roger Moore: @Roger Moore: could be. No plurals in Japanese. All nouns are uncountable and maybe that carried over in this case. Typhoon is a count noun as is say kimono, but sushi is uncountable. For whatever reason yen is uncountable. And as I said,Thai bhat as well. There’s probably others. Words are how speakers use them. I still won’t be buying any bitcoins though.

  268. 268
    Adrift says:

    @Roger Moore:

    Or does everyone who’s investing know it’s a bubble and believe they’ll be able to get their profit out before it bursts?

    Imagine being the one who sells at the high price but loses everything due to a 10 minute delay in transaction processing. Oh well, free market and all that.

  269. 269
    WaterGirl says:

    @Major Major Major Major: Is that really what your position is called? Are you unallocated permanently or temporarily?

  270. 270
    Adrift says:

    Assuming open thread here, I was at Port Authority today on my way to work when the incident happened. My experience was more of the “stampede” type but it was still a bit rattling on my nerves. I have to say however that NYPD and other associated agencies moved incredibly fast.

  271. 271
    WaterGirl says:

    @lamh36:

    We have been invaded

    They are “other-ing” Doug Jones, just like they did with Barack Obama.

  272. 272
    WaterGirl says:

    @Adrift: Glad you are safe.

  273. 273
    sharl says:

    @lamh36: Thanks for that. I had scrolled past it earlier in my twitter TL, but watched it based on your recommendation. It definitely packs a wallop.

    Someone in the replies linked to a letter-to-the-editor Nathan Mathis wrote in 2012 for the local paper on his feelings about homophobic dehumanization and his daughter’s despair.

  274. 274
    Steeplejack says:

    @Fair Economist:

    “They have lots of coin” is not a plural. It’s a colloquial use of the word coin as a synonym for cash, money or wealth.

  275. 275
    scav says:

    Ah, memories. I once kept a spreadsheet simultaneously tracking a Beanie Baby portfolio and Microsoft stocks. People in the lab would occassionally ask for updates. I continue to be easily amused.

  276. 276
    Adrift says:

    @WaterGirl: Thank you. I was never actually scared but it did rattle my nerves. And of course 2 hours later I was told that I have to move out of my house in 3 months. I hadn’t seen that coming.

  277. 277

    @WaterGirl: oh, no, I’m just underutilized right now.

    Maybe it just means everything is working.

  278. 278
    Roger Moore says:

    @sharl:
    As I understand it, the technology in Bitcoin hasn’t changed much. There was an attempt to fix some of the technological limitations of Bitcoin a while back, but it resulted in a fork, with Bitcoin proper maintaining the old technology and a new version called Bitcoin Cash using the updated form.

  279. 279
    Adrift says:

    @Roger Moore: Maybe its my age but all of this Bitcoin and forking business is a bit Buck Rogers and Battlestar Galactica for me. Whatever happened to shillings, pence and pounds? Not to mention pfennigs, francs and lire?

  280. 280
    JR says:

    How many Assignat is a bitcoin worth?

  281. 281
    magurakurin says:

    @Steeplejack: yeah, it’s a different word. “coin” the physical round metal object used as money, and “coin” money in general. The first is a count noun the second in uncountable. Similar to “chicken(s)” the individual animals and “chicken” the meat from those animals. Many examples exist.

  282. 282
  283. 283
    Bill Arnold says:

    @Chip Daniels:

    This is the logic used by gold bugs and cranks to insist that the value of a “fiat currency” like a dollar is imaginary, and no different than Bitcoin.

    Well, no. There is a finite amount of Bitcoin-ium [1] in the entire reachable universe (and spending must be in solar system?). As far as I can see, over deeper time, due to loss of keys (memory, disks failing, people dying and forgetting passphrases, etc), the effective supply decreases, in the limit decaying to zero. (Am I wrong?) Also … quantum computers will turn Bitcoin-ium into lead, eventually, without remedial measures. [2]
    One literally cannot “print” or “mine” more, unlike paper (or whatever) or gold. If a fiat currency had a finite supply, then maybe. It would suffer the same problem of losses over time.
    [1] Not to be confused with bitcoinium and similar.
    [2] e..g Quantum attacks on Bitcoin, and how to protect against them (October 2017),

  284. 284
    Roger Moore says:

    @Adrift:

    Whatever happened to shillings, pence and pounds?

    The British switched to decimal currency decades ago, and nobody misses the old system. Even people who grew up using shillings and pence forgot how they worked in short order.

    Not to mention pfennigs, francs and lire?

    Blame the Euro.

  285. 285
    WaterGirl says:

    @Adrift: Holy cow, have to move in 3 months. Are you renting?

  286. 286
    Mary G says:

    @WaterGirl: Me too, Charley Brown’s teacher voice, I feel like I’ve spent hours checking for a new thread.

  287. 287
    WaterGirl says:

    @Major Major Major Major: Say, are you a mac guy at all? I am sitting here working on my MacBook, with my iPhone off and right beside me, and my iPad off, in the kitchen, and I am alone in the house except for my furry companions. I just got a pop-up saying that a device is trying to log into my account. I answered “don’t allow”, but still weird.

  288. 288
    WaterGirl says:

    @Mary G: That’s because it has been hours. Thank goodness a new thread is finally up.

  289. 289
    Jim, Foolish Literalist says:

    @Roger Moore: Blame the Euro.

    I blame it on Rio. And the bossanova.

  290. 290
    Adrift says:

    @WaterGirl: Yes, I’ve been renting here for a while, and my incredibly wonderful landlady and her partner will be moving into the house for a variety of reasons, the major one being a medical condition, so I have no room to be upset, and I am not. I’m actually more worried for them than myself. It is the timing that got to me. I can deal with it, and will be fine, but I was already rattled from the morning adventure so was caught a bit off balance.

  291. 291
    Adrift says:

    @WaterGirl: Adrift: The resident threadkiller. Again.

  292. 292
    moops says:

    @gorram: Was it really a bubble if went right back up over a few years and pushed the prices right up to where they were before, but with tighter regulation of mortgage and security practices?

    We don’t have BS zero-interest predatory lending, but house prices are back up. Is anyone shouting about a bubble about to burst right now for housing?

  293. 293
    WaterGirl says:

    @Adrift: I think a lot of us feel like we have that effect, so it’s not just you.

    Sometimes the near misses can be just as anxiety-producing as what actually happens. So it makes perfect sense that you would be caught off balance. What’s more basic than the issues of physical safety and having a place to live. Glad you have a decent amount of time to find somewhere else to live.

  294. 294
    gorram says:

    @magurakurin: IMO bitcoin is being used similarly to those livestock examples – as a non-countable mass noun (either the general market or a specific subset – hence “bitcoin is volatile” and “I get paid in bitcoin”) or a countable definite quantity (which is why it almost always is proceeded by a number – hence “My annual salary is currently equal to two bitcoins”).

    I dunno if this parallels any other currencies or items. Namely, I don’t think it’s what most English speakers do with yen or bhat, but I could be wrong.

  295. 295
    gorram says:

    @moops: I’m not an economist, and I think there’s reasons why people might quibble with specifically describing the housing bust as a bubble specifically for those reasons. Housing has long been a hot commodity, it just was fueled by a lot of needless and ultimately dangerous speculation. That’s part of what creates a bubble, but compared to the 1980s bust or the tulip bubble specifically, it seems like it doesn’t quite describe the situation with housing derivatives circa 2007 or early 2008.

    That being said, the overspeculation in the housing market has been argued to have been a result of people getting their money out of the collapsing web market in the late 1990s (which similarly rebounded in a very non-bubble fashion), so the argument could be made that modern US economics have worked out a way to circumvent the kind of busts that are “true bubbles” or whatever. It’s still worth noting, there’s still massive shocks to the larger economy and most of the general social problems with bubbles, but none of the total worth collapse associated with earlier bubbles, so arguably its something with none of the immediate risks to those most responsible for the overspeculation but all of the bigger fallout problems. Socialized risk and privatized security, eh?

    I wouldn’t reach too far with that conclusion, we could make the argument that it’s specifically due to the particulars of the commodities (housing is again a longstanding commodity highly valued by uh people, and web companies and the like have long been rising in economic stature) or just as much to their social and political positions (as the government rescued the financial institutions in the housing bubble and more generally encourages high valuing of housing, and R&D has arguably driven the tech/web/whatever industries meteoric rise).

    tl;dr – we can quibble about “bubble” but it was unamibiguously dangerous speculation, which is the relevant topic here.

  296. 296
    gorram says:

    Also, too, housing isn’t *quite* as high again, but supply hasn’t expanded and the population has (and it’s among the quintessentially inelastic commodities). By and large, most people are paying more for lower quality housing and pissed off about it. There’s not as much selling or flipping happening so the point of price disagreement (that would drive rapid devaluing in a bubble-burst) can’t happen because it’s such an essential commodity, but there’s the same discrepancy between what people expect and are told something costs. In the long term it’s not tenable.

    I suspect it might be more regionalized than the prior housing “bubble” – it’s more localized to areas that *have* economically “recovered” – most of the Midwest (and to a lesser extent many rural areas) AFAIK hasn’t seen quite the resurrection of housing prices you’re describing. The process transfers one submarket to another (ie: gentrification in this market’s case) which has been rolling without stop in a large chunk of the urban US. Eventually the demand is going to outstrip the supply of houses being newly built or that are left over from people being evicted. The blows been softened by increasing ability for people to telecommute among other changes, but that can only do so much. Arguably it’s also not a classic “bubble” just like the prior crunch, but this is a market that’s going to blow up just like before.

  297. 297
    Captain C says:

    @Mnemosyne: I once knew someone who funded a trip to Europe (in the ’90s) by selling a beanie baby.

  298. 298
    JR says:

    @moops: yes, actually there are

    I’m no economist but the price to rent ratio is a good place to see if home prices are in fact supported.

  299. 299
    Bill Arnold says:

    @TenguPhule:

    Republican Fan Fiction.

    That (the linked pdf) is pretty funny. I’m assuming that it projects no recession in the 10 year window because recessions can’t be predicted, or some such sophistry? Or is it predicating a few years of recession, and a 4-5 percent growth rate otherwise?
    Meanwhile my (live in a blue state (that is paying already significantly more to the feds than it gets back in spending), and pay a mortgage) taxes will be going up to pay for tax cuts for rich people job creators in red states. And probably local real estate values will take a hit so home equity will take a hit, guessing 5-10 percent on total house value. Not complaining (doing OK and kinda a socialist with anarchist bent) except about the Republican lies.

  300. 300
    ginger says:

    McMegan’s idiocy is extra-special here, and as usual I’m left unsure if she’s in on the scam or not.

    In any case, she’s conflating the fact that bitcoin is inherently deflationary (she sees this as good) with the *exchange rate to USD*.

  301. 301
    randy khan says:

    @seaninclt:

    @Major Major Major Major:

    Bitcoin is currently divisible to eight decimal places.

    So, not quite ready for nano-Bitcoins, but close. ;-)

    The issue in the real world (which is sort of the inverse of why countries revalue inflated currencies is that people like to work with convenient denominations. Paying 0.00000043 bitcoin for your coffee is the kind of thing that seems strange to people.

    Anyway, even if that wasn’t an issue, the problem of not accounting for a growing economy would remain. As seaninclt mentions, other cryptocurrencies handle that better.

    Right now, all of the cryptocurrencies feel like pure financial instruments to me, not really like currencies. Since none of them are backed by a nation-state, there are definite questions about the stability of all of them. I’m not saying those questions won’t be resolved, but to a certain extent, that’s the big issue.

  302. 302
    Amir Khalid says:

    @magurakurin:
    The Malaysian ringgit doesn’t change in the plural, either: one ringgit, many ringgit. In fact, I’ve noticed this is usually true for non-English currency names.

  303. 303
    Jack the Second says:

    For people wondering how full of shit the Bitcoin bubble is, folks often talk about the “Bitcoin market cap”, the hypothetical value of all existing Bitcoin at the nominal current price.

    If Bitcoin goes up another 10x, the way boosters say it surely will, the nominal market cap of Biicoin will be equal to the US money supply (M1). If it goes up another 100x, which all the best, smartest people say it surely must so you better buy now, Bitcoin will nominally be worth more than all the hard gold and paper money in the world.

    Buy now! You don’t want ot miss out, do you?

  304. 304
    NotMax says:

    @Amir Khalid

    In Brazil it takes up valuable cranial real estate just to remember what the currency is called. Rundown during the 20th century:

    Reís? Gone.
    Cruzeiro? Defunct.
    Cruzado? Nada más.
    Cruzeiro real? History.
    Real? Good to go. For now.

    (Plural of the real is reais.)

  305. 305
    Bruce K says:

    Let’s see – Bitcoin is deflationary by design, rewards hoarders over people who add value to society, and Valve just quit honoring it for purchases because it’s too volatile and transactions take so long that they’ll time out and you’ll end up being charged another (excessive) transaction fee to re-try a transaction that stalled…

    There’s a reason that one pet name for Bitcoin is Dunning-Krugerrands…

  306. 306
    opiejeanne says:

    @NotMax: I remember the first three of those, then I lost track.

    And the plural of Euro is Euro, although half the time people put an “s” on the end.

  307. 307
    NCSteve says:

    So which is more inherently laughable and thus the definitive Bitcoin Bubble metaphor, the Tulip Bubble or the Beanie Baby Bubble? Discuss.

  308. 308
    Chris T. says:

    @MattF: Actually, tulips are mildly toxic and should not be eaten: https://www.ehow.com/info_12315251_tulips-poisonous-humans.html

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