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Looking at the actual charts presented in the article, I can't help but draw a very different conclusion: the spikes in Bitcoin-related HN posts do not precede BTC price increases, but instead they more or less mirror the price swings (as do most other relevant news sources).

It's deceiving, especially at the scales used, because it's easy to compare the peak of a price swing with the uptick in news stories (implying some kind of predictive power) when in reality, the upticks in stories are fairly proportional to the price changes leading up to the price peaks - it's just not as noticeable due to the difference in scales.

As with other markets, a trading strategy based on public news is - for any normal trader - a losing strategy. The people who are able to make gains based on news in other markets often have to pay a premium to colocate servers at or near the exchange's servers, and a trade delayed by more than a few milliseconds will have lost any potential upside in the market's reaction to the news. You can bet on the same thing happening with Bitcoin (and the decentralized nature of Bitcoin doesn't change the requirement to be located near the exchanges' servers since these trades all happen outside the blockchain - i.e., on traditional servers).

Exactly, so many times I've seen BTC price reaches $X. A Github repo of the R files for a public review would be nice.
We are past bubble stage with Bitcoin IMO. It has failed to become much other than a bullshit investment vehicle. People only worried about how high it can go, instead of actually using it daily.
> It has failed to become much other than a bullshit investment vehicle.

I disagree, and think there is some observation bias going on here. I've been using a Bitcoin-linked debit card for a couple of years now, and take payment in Bitcoin for odd jobs I do for people online. I also always list that I accept Bitcoin when I post things for sale on Craigslist and other "classifieds" sites, and probably 10% of people use it for payment now. I've had several people buy things from me on Craigslist from across the country and the world that I wouldn't have accepted otherwise due to payments fraud. I'm happy to ship a $400 fountain pen to a buyer in Lagos (which I've done!) if they pay in Bitcoin, but I'd never consider doing so if they used any other payment method for fear of fraud.

I don't see anyone posting about everyday uses, but they do seem to be happening.

> People only worried about how high it can go

The only time I really think about the current price of Bitcoin is when it's in a period of volatility. Otherwise it seems to be consistently slightly deflationary, which is exactly what I expect it will be long-term.

If it's a $400 fountain pen and not a 144mBTC fountain pen, then I think you are thinking about the current price of bitcoin ;)

I'm assuming you're placing your ad in USD and converting to BTC for the transaction, instead of listing a BTC price.

You shouldn't need to be told that, as a HackerNews reader, you aren't representative of the population. Consider how many people still don't even understand how to use credit cards properly, and then ask yourself how many of them will be willing to jump through the mental hoops necessary to understand Bitcoin at even the most basic levels when alternatives like Apple Pay, Paypal, Google Wallet, and Venmo make exchanging money simple and easy. Bitcoin solves a problem that 99% of people don't have.
Remember that you have been using it for the last couple years only, which were a bull market for bitcoin.

If you hold during the bear market, you might have had a different opinion about the slightly deflationary nature of the beast. x10 return in a couple years is not slightly deflationary by any measure.

Do you increase the price in BTC due to pricing fluctuations or do you eat the difference?
> I've been using a Bitcoin-linked debit card for a couple of years now,

Please, tell us about the debit card. Who is the issuer?

I guess that might be the majority of the situation, but for me personally it's been a lifesaver. Capital controls don't matter, I don't need a bank account, I pay whatever I can with bitcoin and if not possible I use my debit card which I load with bitcoins.

That's been my daily life for a couple years now and it's been liberating. Certainly there's a challenge so you don't loss net-worth with volatility when it drops, but I see it as a cost of freedom.

It sounds like you're describing normal banking + massive volatility. How is that a lifesaver or particularly liberating? And what do you actually buy with Bitcoin?

Also curious: is there a debit card that you can back with Bitcoins?

I wouldn't expect bitcoin to be used as a currency for transactions. Bitcoin is deflationary, and is the "best" currency (other currencies lose value due to inflation). You don't pay for things with your "best" currency--you hoard it.

https://en.wikipedia.org/wiki/Gresham%27s_law

Try buy drugs online with USD
I'm waiting for scaling to be fixed. Only then will daily use cases become relevant again. It's hard to sell a merchant on a payment method that can take hours to confirm.
What exactly makes it as "bullshit" investment vehicle, as opposed to a good investment vehicle?
Here it is from my perspective:

I raise this every once in a while on BTC discussions and nobody's ever been able to tell me anything about the investment fundamentals of BTC. Why should it even be worth anything, and why should it go up? Owning (some part of) a BTC just means that you can use the blockchain to prove that a while ago, someone raised the total entropy of the universe by solving a relatively unimportant crypto problem. I fail to see why that (solving an insignificant crypto instance) should be worth money in the first place.

BTC is literally just some bits in a few computers out there. It is not backed by the full faith and credit of a stable entity like the US government, and, because the blockchain is literally a distributed, public transaction ledger, it's more trackable than cash (as another commenter noted. I can't reasonably expect to make significant amounts of transactions with them in day to day life (Bay Area coffee shops that accept BTC notwithstanding). I can't explain it to my mom, which tells me I don't understand it, and nobody else can explain it to me, which tells me they don't understand it.

Even assuming you can answer why they should be worth something, why should these bits be worth more than the output of /dev/random, or some bits that make up a MP3 file?

This might be your perception, but it certainly isn't reality. If that were the case the amount of transactions and acceptance of bitcoin and other cryptocurrencies wouldn't be continuously trending upwards, which it is. There is a tremendous amount of adoption that's happened over the last couple of years. All you have to do it look at real data.
But how much of that transaction volume is legal use of Bitcoin as a currency?

Sure, it's being adopted by criminals. Great. Not many startups opportunities there, unless you want to risk a lifetime in jail.

Seems pretty consistently used in drug trading nowadays.
Obligatory: "Dollars are still used far more often for buying drugs than Bitcoin"

That said, evasion of governmental restrictions is and always has been a core use case for Bitcoin. While that's not my primary concern I don't see that as a negative.

Can you blame a startup oriented news aggregator for being drawn to bubbles?
HN is not special. Every public exposure precedes a bubble, that's how it works, influx of new buyers raises the price.
Intuitively, HN may be special. We're probably the most tech-savvy community of our size on the Internet; I would expect that HN would discuss happenings in the world of cryptocurrencies before, for instance, the NY Times.

I would also expect that the demand that drives market bubbles comes from a larger, less-technical audience. Therefore, I would expect that news hitting HN would be one of the first indications that a "hype cycle" is starting, which will likely result in a price increase due to speculation by the general public.

If NYT is the "mainstream" general media, then HN is the "mainstream" tech media.

Just as some stuff reaches the NYT late, most tech stuff tends to reach HN quite late, too. A perfect example of that is the "hype" for cryptocurrencies. The hype cycle is not starting when it reaches HN, but it's close to its peak at that point.

HN started being interested in Ethereum and Bitcoin again less than two months ago. That's pretty much when both of those reached their peak prices in this cycle. So when Ethereum, or Bitcoin, or some other hot cryptocurrency reaches HN in a year or two, know that then it's not the time to buy it, but to sell it (obviously if you already knew about it beforehand, which you wouldn't if you only got your crytocurrency news from HN, as mentioned above).

Considering Floyd Mayweather just announced he's going to make a "shitload of money" thanks to an upcoming ICO in August, I think we're definitely at, or very near, peak hype for crypto.
The direction of causality, if it exists at all, should probably be the other way around.
Did you see something in the article that implied causality? You can make predictions without a direct causal link, though having one typically helps you make more robust predictions.
This is not true stories come out all of the time. The big news lately isn't related to price but the split.
> The big news lately isn't related to price but the split.

These things are not mutually exclusive. The fork will have an impact on price.

I'd argue it's already priced in. There wasn't even a slight reaction when coinbase notified their customers that they wouldn't support the fork.

I used to work as an equities trader. One of the first things they told me was "if you know something, the market already knows it".

This is just when there's tech news on Bitcoin. If you want to get ready for bubbles just keep an eye on google trends "how to buy bitcoin". Worked for me, admittedly only once though.
When I overhear random people on the train, my coworkers during coffee break etc. discuss bitcoin, I know that the bubble is about to burst. This predictor has never failed.
Funny. Beside looking at Google Trends, this trigger was the same for me,

The 16 year old brother of a friend of mine suddenly wanted to buy Ethereum but didn't know what it was. A month before that he wanted to get rich with binary option websites.

I sold him the amount he wanted (30 eur worth at around 380USD/ETH) and then sold all of my ETH.

Everyone loves to watch a train-wreck.
Yes, the train wreck that has been bitcoin.

The $2765 train wreck.

As it continues to plummet ever further upwards onlookers can only watch and exclaim.

By what possible metric is BTC a trainwreck? This thread sounds like it's from 2012. I understood the skepticism then, but how do people still deny the utility of the blockchain?
the post could have had a lot more value if it compared against other news outlets to see if HN has its own independent trends or it just plain and simple follows media trends.
From TFA: "You might have got the imperssion that there are a lot of Bitcoin-related posts on Hacker News lately."

A typo in the first sentence means to me that quality control on form, and possibly content, was neglected when writing this post.

Fixed now, thanks.
Would be great to see the BTC price chart in the overlay graph in logarithmic fo, it may uncover that third incident early in the chart.
Here's a logarithmic graph: https://bitcointalk.org/index.php?topic=831547.0;all

It doesn't look like it's in bubble territory.

I read somewhere that bitcoin was deemed a pyramid scheme. Not sure about that, but doesn't it get more and more expensive to do transactions as more and more people use it? Is there a limit to unique sigs people could use?
This 'researcher' has no control group. There's more interest in a financial asset when the price of that asset (or asset class) is increasing sharply. That's all there is to it.