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All of Bryce Day's Comments + Replies

A LessWrong Crypto Autopsy
Bryce Day10

And scarcity, especially of anything with cultural value, gives prestige/significance to whoever owns it. Like rich people buying cool old but relatively useless cars. It's just a cool think to have that everyone else will think is cool too. Most don't care about its appreciation. Some may buy it for that purpose, but not all.

Valuable art pieces also confers prestige on any institutions that hold them. Everyone can oggle at how much the art is worth and assume this must be one of the best museums in the world.

Think of it like buying an overpric... (read more)

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A LessWrong Crypto Autopsy
Bryce Day10

I think it's safe to say it doesn't have a unique value proposition anymore. It just has market share.

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A LessWrong Crypto Autopsy
Bryce Day10

I think expensive art gets its value from the fact that really rich people are willing to buy it for social significance. On top of that intelligent art invesors will also buy it knowing that rich people in the future will still want to buy it, but there will be more competition because of the increased number of rich people and the scarcity created by it being held over time by a private seller (the longer it gets held the less likely you'll get another chance to buy it in your lifetime). What's your theory on where the value comes from?

Agree on... (read more)

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2ChristianKl
I think that art has scarcity and that leads to rich people buying it because they think it wil appreciate in the future. If you are in a third world country and the government raides your house they can easily take all the USD you have at home. On a bigger scale you have big organsiations buying massive numbers of treasury bills with negative yields because they don't want to hold cash. Even in the US you can have the government take your money via civil forfeiture if you carry too much cash around. Numbers suggest that the US police stole more money from citizens via civil forfeiture then was stolen in burglaries.
A LessWrong Crypto Autopsy
Bryce Day10

Thanks. I get your first paragraph. That's what I was meaning to say.

On Bitcoin vs Gold: Gold has physical properties that make it very valuable. It is a great conductor of heat and electricity, the most corrosion resistant of all metals, highly maleable, aesthetically pleasing and scarce. Gold may have some degree of cultural/signalling effect driving its price up but I don't know this for sure.

On Bitcoin vs Art: Art has its aesthetic value but obviously most of the price comes from its cultural/signalling value and scarcity.

Bitcoin obviously ... (read more)

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2ChristianKl
I do think that bitcoins current price is more likely than not a bubble that will pop. But to engage with the issue I don't think that anybody buys artwork worth 9 figures of money for cultural/signaling value. If you are in the US with a relatively trustworthy government it's easy to hold USD and be confident that it won't lose much value due to inflation. The same isn't true in many other countries.
2Richard_Kennaway
The future used to look like a medium for anonymous, untraceable transactions beyond the control of governments for the sorts of goods that you need that to safely deal in. That was the primary, object-level selling point of Bitcoin. Then Silk Road got broken by law enforcement. The newer rivals have their own would-be killer apps to give them real value. I'm not sure what Bitcoin's unique value proposition is these days. For anyone who has some Bitcoin and is willing to say: when did you last use it to buy something, and what?
A LessWrong Crypto Autopsy
Bryce Day10

Is this taking the assumption that it was a sound investment based on its underlying value and therefore predictable? Or is this saying that the explosion in price was predictable even if unjustified?

My belief on bitcoin is that it isn't a viable fiat currency alternative and won't be (nor will any other crypto) because governments won't allow it. I believe this because it wouldn't make sense for a central bank to volunarily give up one of its few economic levers. A government could kill the bull proposition for bitcoin by making it ill... (read more)

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1ChristianKl
It seems like you are using the word predictable in a way that's nonstandard. Everything is predictable. You can put a probability on whether an astroid will hit earth. The core question is what probability is warrented and for bitcoin a reasonable probability assessment would have suggested buying it. Gold isn't a good currency and there's a lot of money stored in it. Similar arguments go for expensive art that gets brought with the belief that it appreciates. If you look at the US, the central bank can't make laws. It's a Republican controlled congress and senate along with a Republican president who currently do. There are powerful people in Silicon Valley who lobby for bitcoin and Republican's don't want to pass regulation that makes life hard for business.