Talking stocks, trading, and investing in general

[otc]

Hodlers: an apology

A mea culpa to mark a BTC milestone

www.ft.com

Regular readers of FT Alphaville may have formed the impression that its current and former writers are united in scepticism about crypto in general and bitcoin in particular.

This is correct. FTAV posts between June 2011 and today may have communicated the idea that bitcoin is a negative-sum game being played on a protocol that’s very clever and hypothetically useful as a unit of account, but is chronically inefficient as a conventional means of exchange and is compromised as a store of value. Our posts may also have promoted the idea that the price of a bitcoin is an arbitrary hype gauge that’s disconnected from any utility the token may have, because it’s trivial to duplicate the utility provided by said token, so any intrinsic worth comes from the sunk costs of infrastructure alongside intangibles like regulatory acquiescence, interconnectedness with mainstream financial systems it was once sold as being the antidote to, and the souvenir attraction of “being the first”.

We stand by every single one of those posts.

Nevertheless, with bitcoin’s price recently crossing $100,000, a significant number of commenters seem to feel they deserve an apology in light of our longstanding cynicism, so here it is:

We’re sorry if at any moment in the past 14 years you chose based on our coverage not to buy a thing whose number has gone up. It’s nice when your number goes up. And we’re sorry if you misunderstood our crypto cynicism to be a declaration of support for tradfi, because we hate that too.

 

[otc]

Funnily enough I was thinking about one of those points right before I saw that article:

Bitcoin is the shïttiest coin. Power hog, slow network, no additional functionality layered in (like smart contracts). Many of the total meme coins are technically better than Bitcoin.

If functional crypto ever finds a use, it won’t be using the BTC chain. It is propped up entirely by first mover advantage and name recognition. It could vanish tomorrow and nothing in the world would change other than some crypto bros’ paper net worths. It is a proof of concept that should have died and been replaced with ETH or SOL or similar.

 

[otc]

That said, I guess I've believed that for years:

My foray into the world of crypto was a bunch of ETH purchases that were partially a convergence play predicated on the idea that ETH would overtake BTC in marketcap and volume as things embraced the smart contract.

Of course nothing useful ever really embraced the smart contract. We did get a boom in NFTs using them, but those were mostly dumb/scams and weren't enough to move the needle on ETH/BTC. Probably partially because a lot of the idiots playing with NFTs were also big BTC buyers and didn't even recognize the difference.

But markets are welcome to stay irrational for long periods...don't ask me what that ETH would be worth today if I still had it. I don't really want to know.

 

[brokencycle]

Funnily enough I was thinking about one of those points right before I saw that article:

Bitcoin is the shïttiest coin. Power hog, slow network, no additional functionality layered in (like smart contracts). Many of the total meme coins are technically better than Bitcoin.

If functional crypto ever finds a use, it won’t be using the BTC chain. It is propped up entirely by first mover advantage and name recognition. It could vanish tomorrow and nothing in the world would change other than some crypto bros’ paper net worths. It is a proof of concept that should have died and been replaced with ETH or SOL or similar.

Well, we would suddenly have 120TWh hours of energy to do something with.

 

[the shah]

If functional crypto ever finds a use

It won’t, there isn’t a single legitimate use case that can’t be better addressed through other means. The last twelve years have only been a testament to that.

 

[double00]

i've wondered how the techie friendly retail shops that accepted bitcoin ended up doing . iirc the candleholder place and cafes in the SF ferry bldg took btc lol

 

[the shah]

i've wondered how the techie friendly retail shops that accepted bitcoin ended up doing . iirc the candleholder place and cafes in the SF ferry bldg took btc lol

Back in 2010 I had a buddy who was mining btc on the lab computers, at some he had about 6 and one drunken evening stumbled across a pizza shop where he traded his coins for a greasy slice. That pizzeria is no longer there and I can only imagine how many similar incidents took place.

By the same token, it’s unlikely that many held through the various peaks. Not everyone is a zealot to the level of idfnl

 

[imatlas]

Well, we would suddenly have 120TWh hours of energy to do something with.

Or we shut that **** down and CO2 emissions suddenly drop below 2000 levels

 

[imatlas]

By the same token, it’s unlikely that many held through the various peaks. Not everyone is a zealot to the level of idfnl

Not like the pizza shop could pay their utility bill with it, or just tuck it away to appreciate for 10 years.

So it was a **** arrangement on both ends. The ATM machine vendors did ok though.

 

[brokencycle]

Or we shut that **** down and CO2 emissions suddenly drop below 2000 levels

Or we could get a lot more AI Appreciation.

 

[otc]

i've wondered how the techie friendly retail shops that accepted bitcoin ended up doing . iirc the candleholder place and cafes in the SF ferry bldg took btc lol

The same as if they took visa…because it was basically the same deal. Use some third party intermediary to do it all in USD.

Very few businesses actually accepted a true on chain transaction between wallets. Nobody is gonna stand around for 10 minutes waiting for it to clear.

I was on some other forum and some dude was SO IMPRESSED that he managed to buy something from a normal non-crypto accepting vendor using some series of crypto exchanges that ended up at PayPal’s stable coin.

Dude…you just invented a roundabout way to use PayPal. There’s no crypto magic there. The key to making it all work was using a “trusted” institution as an intermediary to process the transaction

and PayPal has the ability to lock funds stored in their coin…so it has the exact same problems as using PayPal with regular money.

Just use a damn Visa/mc/amex/discover…turns out they work pretty well.

 

[jbarwick]

I sold my crypto (near the bottom) and bought a Porsche. I don't have FOMO because the older I get, 39 currently, the more I realize that I don't need to compare my goals to others goals. No outperforming on my end needed to hit where I want to be by my early 50s. Just maintain current levels and I'd be fine.

My friend who owns a pretty big auction business and his wife is a partner at a big consulting firm compares himself to all his neighbors and lives a stressful life. I don't want that. Was on his boat at his lake house one time enjoying ourselves and the only thing that grinded his gears was someone on the lake had a bigger house...no thanks.

 

[B1FF]

It is a proof of concept that should have died and been replaced with ETH or SOL or similar.

It probably got lucky that ETH was also a power hog, a slow network, and extremely expensive to use. It created a giant ecosystem of L2s that each delivered part of what ETH offered but actually practical for use. The fracturing may have bought it several extra years of life.

 

[Texasmade]

I sold my crypto (near the bottom) and bought a Porsche. I don't have FOMO because the older I get, 39 currently, the more I realize that I don't need to compare my goals to others goals. No outperforming on my end needed to hit where I want to be by my early 50s. Just maintain current levels and I'd be fine.

My friend who owns a pretty big auction business and his wife is a partner at a big consulting firm compares himself to all his neighbors and lives a stressful life. I don't want that. Was on his boat at his lake house one time enjoying ourselves and the only thing that grinded his gears was someone on the lake had a bigger house...no thanks.

That has to suck for your friend. No matter what he has, he'll never be happy.

Good thing I don't compare my Porsche to yours or Foo's. I'm pretty happy with mine.

 

[nootje]

You guys are forgetting about the one use case for which bitcoin, and all the other are useful for.

Moving around unlaundered money freely across the world. I’d be willing to bet that the zealots and lucky early investors are just a rounding error compared to the cartels using it to move their cash.

The minute any government shows they can tie wallets to individuals you’ll see the price collapse. Until that point, 🤷