Questions I ask myself about Bitcoin
1/
Is Bitcoin a good investment.
No. Yes… it’s complicated...
1/
Is Bitcoin a good investment.
No. Yes… it’s complicated...
2/
In 2015 a restaurant patron paid for a $14 meal with Bitcoin. Now 0.057BTC is worth $661 plus $103 in @BITCOlNCASH Isn't that a good investment?
Maybe it's a bubble.
In 2015 a restaurant patron paid for a $14 meal with Bitcoin. Now 0.057BTC is worth $661 plus $103 in @BITCOlNCASH Isn't that a good investment?
Maybe it's a bubble.
3/
Why might Bitcoin/Blockchain be a bubble?
@Gartner_inc research says we are almost at the top of the Blockchain Tech Hype Bubble. gartner.com/newsroom/id/34…
Why might Bitcoin/Blockchain be a bubble?
@Gartner_inc research says we are almost at the top of the Blockchain Tech Hype Bubble. gartner.com/newsroom/id/34…
4/
Are you sure Bitcoin is a bubble?
It looks like we are in a bull trap based on the typical Bubble Cycle (in red, BTC in gold, src @BTCTN).
Are you sure Bitcoin is a bubble?
It looks like we are in a bull trap based on the typical Bubble Cycle (in red, BTC in gold, src @BTCTN).
5/
@Forbes said Bitcoin was in a Bull Trap in 2013. forbes.com/sites/jessecol… Why is this different?
Very amateur people are investing. @paulkrugman, Nobel prize-winning economist, tweeted
@Forbes said Bitcoin was in a Bull Trap in 2013. forbes.com/sites/jessecol… Why is this different?
Very amateur people are investing. @paulkrugman, Nobel prize-winning economist, tweeted
6/
Is Cryptocurrency doomed with no future?
No, it IS the future. Maybe not in 2018. But within 10 years it could be more valuable than the value of all USD and gold. @CoinMarketCap
Is Cryptocurrency doomed with no future?
No, it IS the future. Maybe not in 2018. But within 10 years it could be more valuable than the value of all USD and gold. @CoinMarketCap
7/
How soon until Crypto takes over?
Adoption rate happens quickly once a technology reaches 5-10% of the market. Right now Crypto is at <0.5% adoption rate. Once technologies get a foothold, they tend to spread quickly.
@blackrock
blackrockblog.com/2015/12/11/eco…
How soon until Crypto takes over?
Adoption rate happens quickly once a technology reaches 5-10% of the market. Right now Crypto is at <0.5% adoption rate. Once technologies get a foothold, they tend to spread quickly.
@blackrock
blackrockblog.com/2015/12/11/eco…
8/
Which currency will be a good investment?
The most useful currency will be the most valuable.
Which currency will be a good investment?
The most useful currency will be the most valuable.
9/
What makes a currency useful?
In the long term, 7 characteristics define useful currencies: Acceptability, Durability, Portability, Divisibility, Limited Supply, Uniformity and Intrinsic Value. Related MentalModel: First Principles
What makes a currency useful?
In the long term, 7 characteristics define useful currencies: Acceptability, Durability, Portability, Divisibility, Limited Supply, Uniformity and Intrinsic Value. Related MentalModel: First Principles
10/
Why isn't Bitcoin valuable?
It’s not widely accepted (low Acceptability), though places like Overstock.com accept Bitcoin.
Why isn't Bitcoin valuable?
It’s not widely accepted (low Acceptability), though places like Overstock.com accept Bitcoin.
11/
Why does Bitcoin have low Acceptability as a payment method?
As far as I can tell, the reasons are: Bad governance, Bad User Experience, Long confirmation time and High transaction fees. Oh, and Instability. If it's not stable, how can a business use it?
Why does Bitcoin have low Acceptability as a payment method?
As far as I can tell, the reasons are: Bad governance, Bad User Experience, Long confirmation time and High transaction fees. Oh, and Instability. If it's not stable, how can a business use it?
12/
Why do $BTC txns take so long to confirm?
The block time is ~10mins. Shorter block times mean more wasted computing power and miners closest to the confirmed block get an unfair headstart. $ETH has a 14 second block time. reddit.com/r/Bitcoin/comm…
Why do $BTC txns take so long to confirm?
The block time is ~10mins. Shorter block times mean more wasted computing power and miners closest to the confirmed block get an unfair headstart. $ETH has a 14 second block time. reddit.com/r/Bitcoin/comm…
13/
Why are transaction fees high for Bitcoin?
The block size is limited to 1mb worth of transactions so only txns willing to pay the highest price are accepted. A larger block size would solve the problem. Txn fees are now >$20
Why are transaction fees high for Bitcoin?
The block size is limited to 1mb worth of transactions so only txns willing to pay the highest price are accepted. A larger block size would solve the problem. Txn fees are now >$20
13b/
Why no make the block size bigger if it's causing high txn fees?
Bitcoin Cash $BCH did that. There is currently a bitter soap opera between BTC and BCH including developers with a conflict of interest documented by @danielmorgan hackernoon.com/the-great-Bitc…
Why no make the block size bigger if it's causing high txn fees?
Bitcoin Cash $BCH did that. There is currently a bitter soap opera between BTC and BCH including developers with a conflict of interest documented by @danielmorgan hackernoon.com/the-great-Bitc…
14/
Bitcoin is too volatile to be used as a currency.
The volatility is going down. By 2019 BTC/USD exchange could be less volatile than USD/EUR charts.woobull.com/bitcoin-volati… @woonomic
Bitcoin is too volatile to be used as a currency.
The volatility is going down. By 2019 BTC/USD exchange could be less volatile than USD/EUR charts.woobull.com/bitcoin-volati… @woonomic
14b/
What’s wrong with Bitcoin’s user experience?
Aside from the confusion of many wallets, some backed by questionable companies, if you lose your private key there's no one you can call to reset your password. That’s a problem for me, not to mention my grandmother.
What’s wrong with Bitcoin’s user experience?
Aside from the confusion of many wallets, some backed by questionable companies, if you lose your private key there's no one you can call to reset your password. That’s a problem for me, not to mention my grandmother.
15/
How does bitcoin value increase with # of users?
By Metcalf’s law, a network’s value increases with the number of users squared. businessinsider.com/Bitcoin-price-… @fundstrat
How does bitcoin value increase with # of users?
By Metcalf’s law, a network’s value increases with the number of users squared. businessinsider.com/Bitcoin-price-… @fundstrat
16/
What can I use crypto for?
Drugs, remittance, tips (@tipprbot), a savings account that the government can't touch. Startups raise capital in ICOs using $ETH. But no one has a breakdown. Or knows how many transactions are speculative investments or not.
What can I use crypto for?
Drugs, remittance, tips (@tipprbot), a savings account that the government can't touch. Startups raise capital in ICOs using $ETH. But no one has a breakdown. Or knows how many transactions are speculative investments or not.
18/
Sounds pretty risky. Can I wait out the crypto bubble?
Sure. But we might have a dollar crash in the next 10 years. It lost 95% of its value the last 100 years due to inflation. Will the USD in your retirement Acc still be valuable in 40 yrs?
Sounds pretty risky. Can I wait out the crypto bubble?
Sure. But we might have a dollar crash in the next 10 years. It lost 95% of its value the last 100 years due to inflation. Will the USD in your retirement Acc still be valuable in 40 yrs?
19/
Can I hedge my bets and get a crypto index fund?
Currencies have strong network effects and likely winner take all. Based on past performance, index funds might lose money in the future. Related MentalModel: Survivorship Bias
Can I hedge my bets and get a crypto index fund?
Currencies have strong network effects and likely winner take all. Based on past performance, index funds might lose money in the future. Related MentalModel: Survivorship Bias
20/
But Bitcoin is expensive. Do I have to buy a whole one?
It’s infinitely divisible. You can buy a sliver of a bitcoin if you want. twitter.com/i/web/status/9…
But Bitcoin is expensive. Do I have to buy a whole one?
It’s infinitely divisible. You can buy a sliver of a bitcoin if you want. twitter.com/i/web/status/9…
21/
Bitcoin will be valuable in the future?
Maybe. But more likely Bitcoin is the MySpace (or Friendster) of Cryptocurrencies.
Bitcoin will be valuable in the future?
Maybe. But more likely Bitcoin is the MySpace (or Friendster) of Cryptocurrencies.
21b/
Bitcoin is the 1769 Cugnot Steam Car of cryptocurrencies. What is the @Tesla of cryptocurrencies?
Bitcoin is the 1769 Cugnot Steam Car of cryptocurrencies. What is the @Tesla of cryptocurrencies?
23/
What do all of the cryptocurrencies do?
Here’s a spreadsheet of the top 14 that you can play around with docs.google.com/spreadsheets/d…
What do all of the cryptocurrencies do?
Here’s a spreadsheet of the top 14 that you can play around with docs.google.com/spreadsheets/d…
24/
Why should I trust you?
Trust no one. But you might like:
Podcasts: @laurashin
Wisdom: @naval
Critic (+ MarmotCoin): @prestonjbyrne
Overexhuberance: @crypto_rand
Scientist: @peterrizun
Founder: @satoshilite
Data: @woonomic
Dev->Journalist: @Schusterdev
Summaries: @ljxie
Why should I trust you?
Trust no one. But you might like:
Podcasts: @laurashin
Wisdom: @naval
Critic (+ MarmotCoin): @prestonjbyrne
Overexhuberance: @crypto_rand
Scientist: @peterrizun
Founder: @satoshilite
Data: @woonomic
Dev->Journalist: @Schusterdev
Summaries: @ljxie
