Eventually this will be common knowledge, but it isn't yet. It's early days.
DeFi is being able to trade unregulated equities or lend on their collateral on decentralized exchanges with transactions guaranteed by code.
In other words, it's for degens that think avoiding taxes on shitcoin trading is peak crypto.
There are other interesting things on blockchains that can be done outside of decentralized finance. But trading shitcoins is what people are getting off on right now.
It reminds me of how porn is almost always first in new technology adoption.
ETH has been known to fork to change the blockchain and eradicate some transactions the leadership didn't like (see the DAO story).
That may be a good thing in some people's book. In the Bitcoin world, this kind of thing is not very popular.
See the "Value overflow incident" of 2010, which was fixed with human intervention which ultimately rolled back 53 blocks through a soft-fork.
Anyways, both this and theDAO incidents are far away in the past now.
1. Bitcoin has some sort of "first mover" advantage which gives it a critical number of investors/PR that allows it to keep trading high, and no other coin will ever be able to catch up to it.
2. Bitcoin is actually technically superior to other coins, and it won't be supplanted until whatever the special sauce is, is replicated.
3. Something is hinky in the Bitcoin markets, eg, Tether, and this explains its divergence from other coins.
Can you elaborate? I was under the impression that it had notable failings, including privacy, compared to something like Monero
Well, there's the fact that Ethereum supply isn't finite.
As a matter of fact, from a practical point of view, it's pretty much anyone's guess what the issuance's rate is (there is an algorithm buried somewhere in the code, but whenever you ask an ETH acolyte how many more ETH there will be in existence in X months, I've never gotten a straight answer).
Ethereum aspires to have fun.
And to be fair Ethereum has more scalability problems than Bitcoin.
The problem Bitcoin solves is creating a non-sovereign store of value that can't be manipulated/inflated by governments and central banks. That's a problem worth solving.
Bitcoin started with smart contracts on day one, but the focus has been on robustness. However, there's plenty of work going on with layer 2 and side chains to for DApps, etc.
https://blockstream.com/2020/10/22/en-blockstream-amp-issue-...
I believe they proposed the essentials of 2.0 years ago, and there were a lot of tutorials and workshops related to dapps that made it sound like a scalable, global compute network was just on the horizon.
Between that and the fork after the DAO got hacked, I’ve personally been staying away from it until 2.0 proves itself (phase 0 just came out this month).
I agree it’s very technically interesting, and think they’re responsible for the bulk of the innovation in the crypto space (them and monero for advances in privacy), but I don’t follow crypto super close/there might be others pushing the same ideas or better ideas in better ways.
Have you considered the possibility that this is a bug, not a feature?
This leads to weird rationalizations where people compare losing their $1000 investment to the “what it” scenario of Bitcoin going to $500k or $1 million, in which case $1000 suddenly feels negligible. Of course, Bitcoin going to a million dollars per coin doesn’t make any sense, but the “what if” and FOMO are strong drivers for some people.
The strength of those properties in Bitcoin are fairly unique and unprecedented. It makes it an ideal means of storing value in the long term. I think the main downside is the amount of speculation that’s been going on and the volatility that results from that speculation. That’s likely to change as it becomes more and more mainstream and more people use it as an emergency savings account protected from fiat devaluation rather than an investment.
I agree that the unlimited upside some people are touting doesn’t make any sense, but I think it does have the potential to grow further. I don’t know how much, but it’s still a niche area. Would be interested to see what the world looks like where most people have 5% of their savings in bitcoin.
Compound interest is often treated as magic, but like the magic of special and general relatively, it only really kicks in under conditions that don't really matter to ordinary people.
Money going into an index fund will increase roughly 10x over the course of 30 years or so. This is nice; if you can stop living paycheck-to-paycheck by age 30 and save 10% of your pre-tax income (which is not a given), you can have a comfortable retirement, and the more frugally you live in your youth the more comfortable a retirement you can achieve.
But you won't get rich that way. Best case scenario, if you are absurdly frugal and save nearly all of your money, prudently invested, for forty, fifty, sixty years, you can get one big bang at the end after decades of deprivation.
To get rich you need to win the metaphoric lottery, by founding a unicorn startup, or going all-in on a series of absurdly risky investments, or by just winning an actual lottery.
Bitcoin is decentralized fiat currency which you can perceive to be very valuable like the USD or worthless like the Venezuelan bolivar, as none have any intrinsic value or fundamentals besides trust.
Should any rational investor put some over their portfolio in roulette spins every year?
By the same logic any rational investor should own some Tesla stock: hide potential upside in battery tech going forward and "limited" downside.
Problem is at least one of these options has some fundamentals.
https://www.investopedia.com/ask/answers/050115/what-types-o...
BT could easily crash back to $3k if people get spooked
That said it seems like a more solid foundation of interest now.
If you think it will break the previous floor on fear alone, absent the technical uncertainty and unsustainable rapid growth leading up to the 9k crash, let alone the institutional investment this round, you are speculating without any real basis.
According to [1] (2018) , actually getting down to the metal to track what happens in the tether blockchain isn't straightforward.
According to coincap [2] there is around 20B tether in circulation.
Also according to coincap, the Bitcoin market cap is around 380B.
Now, the question is one of market depth: can 20B be used to manipulate a 380B market.
What I would very much like to see is an aggregate market depth number for - say - the top 30 exchanges. Does anyone have a reference for this?
[1] https://hackernoon.com/a-closer-look-at-tethers-blockchain-5...
You can track the Tether issued on Ethereum in real-time by looking at this contract https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c...
Currently over $12.4 billion Tether issued on Ethereum
Of course, getting back onto Coinbase and I'm now asked to verify my identity and upload my driver's license and all. I mean they should have done that in the first place insofar as governments are concerned, but still.
edit: I also spammed random cryptocurrencies (ripple, dash, augur?) on Kraken, those have tanked since then, lol.
You have zero bitcoins if you don't control your private keys. Millions of bitcoiners worldwide got screwed by the exchanges.
I’m considering moving to a trusted exchange. Do you see disadvantages in storing and managing all on your own? It also carries risk. I’m more frightened to loose my Trezor T than Coinbase screwing me.
TSLA up 15x over same timeframe
BTC only 4x Tesla rn
(So BTC is only 4x more of a scam than TSLA is)
Maybe BTC should split so retail investors don't have to look at any big impressive feeling numbers
I am curious whether this peak will go significantly (2x) higher than the last one, or whether the number looks "too big" and discourages investors, even though Bitcoins are finely divisible.
Just change your measuring stick.
there are always new opportunities !
I expect BTC to rise. It’s a store of value. Holding USD in the bank is a terrible idea right now.
Even real estate is shooting up like crazy - at-least in Seattle area (well because supply is constrained)
A typical store of value doesn’t have annual 80% price swings.
> Holding USD is a terrible idea
Strongly disagree, the USD is still the main flight to safety in the world. I don’t see that changing any time soon.
That was before a global pandemic and the printing of many trillions of dollars this year, with no end in sight. Why do you think Saylor [1] put his corporate treasury of $425 million into BTC? And then issued bonds to buy even more? Because keeping his company treasury in cash and cash equivalents would mean losing 5-20% each year, since interest rates are zero and inflation is increasing.
[1] https://www.microstrategy.com/en/bitcoin
[2] "The Fraying of the US Global Currency Reserve System"—https://www.lynalden.com/fraying-petrodollar-system/
Volatility is a thing but Bitcoin has outperformed every stock and commodity over the past 5 and 10 years. It can't be deflated or manipulated by central banks and governments.
Parroting shallow conclusions you've heard on the internets a thousand times without actually investigating them yourself isn't going to make you popular on HN.
Speaking about the fact itself and not just quipping: I think this latest all-time high speaks a lot more about USD than it does about BTC. Lots of money floating around at the moment looking to get busy and all that.
Seems like interest rates are very low, and monetary supply is going up in the US. Investors are looking for better alternatives to escape ZIRP. Don’t quote this as financial advice cause I’m no expert, but ill keep betting on BTC.
The number of VCs seems to be growing faster than the number of startups, so VCs are increasingly competitive to get the scoop on potential deals before their competitors. This leads to mass spamming of anyone and everyone who might potentially have a lead.
The new trend for aspiring VCs is to source deals and bring them to actual VCs. It’s not uncommon to be hit up by people implying that they have connections to VCs, when in reality they’re just hoping to find a new, unknown deal to bring to a VC firm to build rapport.
It’s becoming a numbers game.
In regards to the hardware wallets, I'd buy 2 Trezors and store them in separate locations, so that if something happens to one, then you can still quickly and easily access your coins with the other one. (If you don't do this, then if you lost your Trezor for some reason, you'd have to order another one and wait for it arrive before you could recover and access your crypto)
If you're going bitcoin-only, you should consider Coldcard, which is the hardware wallet the hardcore bitcoiners love [1].
Cobo Vault is fairly new on the scene but is also getting rave reviews [2].
If you're going multisig, you should buy hardware wallets from different vendors to guard against a flaw or security vulnerability from any one vendor. For example, Trezor has some issues recently [3].
[1] https://coldcardwallet.com
[2] https://cobo.com/hardware-wallet
[3] https://blog.kraken.com/post/3662/kraken-identifies-critical...
Coinbase and Gemini are both regulated and safe as well.
Each cycle is punctuated by a media hype deluge. Nonstop coverage of Bitcoin in the popular media. Face ripping rallies every other day. Tales of freshly-minted millionaires and fortunes buried in landfills. That hasn't happened yet.
Each cycle brings in more news coverage, more users, more holders, more speculators, more critics, and more haters. If this trend holds, Bitcoin will follow one of two paths: it will be replaced by something better at its primary function; or it will replace something else. Network effects favor the latter.
The current cycle just happens to coincide with the largest expansion money base the world has ever seen.
What is its primary function? I used to think it was supposed to be a currency, but it's failing quite badly at that. But it keeps growing so what's the actual primary function?
It's crazy to see btc hit this price. Everyone said I was silly when I spent 5k on mining rigs back in 2013!!
