The bubble dynamics of bitcoin

Can bitcoin be a currency if you never know its value? Living outside the traditional banking network by design, its fluctuating value makes it too cumbersome for petty transactions. Yet despite the hurdles, bitcoin and its underlying technology is seen as a kind of “digital gold.” Economics correspondent Paul Solman reports.

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Written by frances

Lawyer, Believer, Idea Agent, Database Wrangler, Human Casserole. I want to see your peacock.


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  1. What investors don't understand about cryptocurrencies is that it will always be volatile (gambling), and won't replace any fiat currency until it actually has something valuable (especially to other countries) at it's base.

    You may say that the dollar is already not based on any tangible commodity, but unlike cryptocurrencies, it's based on government assets, the largest of which is debt. Now, you might then say, "that's not a good thing," but it's still better than nothing.

    This is a classic case of "It's better to have bad credit than no credit" and cryptocurrencies won't change that.

    The other down sides to cryptocurrencies, is that it takes on the same "double-edged sword" the internet/social media has as a whole, which is it makes criminal exchanges even more easy and untraceable than they already were, and the long term logistics of replacing the dollar (let alone the global currency) is that nobody is going to "carry"/keep track of potentially dozens of different cryptocurrencies because every establishment (from McDonald's to Apple) doesn't take every other cryptocurrency.

    You cannot expect to take a single currency (like the dollar) and replace it with something so fragmented and volatile. Currency is only as strong as its government and its assets. Cryptocurrency has none of that so it's value is based similarly to how the stock market fluctuates and that's not likely to change, so it would be a terrible replacement for the dollar.

    Which means, in the long term, cryptocurrencies will likely gain the stigma of only being used for illegal transactions and/or people who are paranoid/distrust banks/goverment and eventually fall out of favor.

    Cryptocurrencies are to banks, as getting payed under-the-table is to the IRS.

  2. People buy illicit stuff with cash. Bitcoin has a public record of everything. Cash is anonymous; bitcoin is not. PBS really needs to be smarter than this. You're scaring the elderly for no reason. Grandma trusts you for accuracy… and this piece isn't it. This is a FOX NEWS level scare piece.

  3. The dollars lost well over 95 percent of its value since the creation of the Federal Reserve. It’s a currency backed by less than bit coins, it has no algorithmic restraint on its creation.

  4. You assholes know nothing of crypto i guess that stupid thing called the internet was a fad and stupid bubble too…..that internet will never go anywhere either right………

  5. Smart folks identify the Bitcoin hype as the Dutch Tulip Mania. They steer clear from it. While the morons whose IQ can’t look pass to the other side of the coin screaming Bitcoin is the currency of the future. After this video, Bitcoin is going to worth $0.01

  6. Cryptocurency is a misnomer. It's the same as investing in gold, knowing for sure how much gold there is total, how much has been mined, and how much will eventually hit the market, and when. Those tens of thousandths of bits is like shaving flecks off a gold coin and exchanging them for goods and services.
    If all the world's treasuries bought out every single bitcoin, we might have a chance at a one world currency that works, that is owned by all of the world's peoples.
    There's still the problem of the divide between rich nations and poor nations buying in at different levels, but if you let poor countries buy in first, instead of America first, we could really change the world. That would be in a reset, where all private owners sold out and all governments buy in.
    Hence Trump's "America first" plan, where America buys high and destroys the national debt, and decimates the dollar, meaning keeping the federal reserve fully intact, or just letting rich American billionaires stay in power.
    Right now, the bit coins are in private hands, just like the world's gold is in private banks and people buy gold certificates.
    Although this is different from our current fiat currency system, there's no real regulation or safety mechanism.
    We could end the fed and preserve our country all at the same time.
    But that's not what the people pushing bitcoin want. They're imagining a decentralized currency which will bring down governments across the world and lead to peaceful global anarchy. (Yea right, can anybody say Koch Brothers? Waltons ring a bell? How about the Oracle of Omaha? Or Jeff Bezos and Mark Zuckerberg? They all have the most to gain if this currency stays private, because their current billions mean nothing in reality, and are backed only by America's military might and the social security system which America's loans are sold against.)
    Problem is big investors borrowing money and driving the bubble, as cited in the news clip, and most investors are only in it for the money, and don't have access to systems to take care of all people like governments do.
    When you tie this together with the libertarian psychological secret facebook attack of the last election, get it?
    Like all commodities, futures, etc, bitcoin is becoming inflated, and there are many new competing and less thought out cryptocurrencies entering the market. Basically, it's turning into a very dangerous money printing game of its own.
    Just Wall Street screwing things up as usual, unless people wake up and demand regulation, safety, and control.
    There's still a chance the UN could develop a stronger cryptocurrency system and do it right and really change the world, but it would have to rely on universal public ownership, on national treasuries.
    This is also why the GOP is attempting to destroy the federal government right here right now.
    Remember Herman Cain, 9999? Bitcoins are mined based on a logarithm, which extends forever, almost to a whole number, but not quite, ending in .9999999repeating
    They were all in on it. Evil evil evil.

  7. bitcoin is well made . i see nothing so wrong about it for now , thats that . i wont talk ShT about that . we will see

  8. Yes, BUT "this time it's different".
    At conclusion of video, they both concluded "I really don't know", What's the point?

  9. So they compare cyrpto with the internet saying itgoing to fail like the .com bubble did…. huh? Guess I'll buy some then. I am pritty sure the internet is a success…..

  10. Do not watch this if you want to learn anything about Bitcoin. The interviewer and everyone he talks to admit that 'they're not experts in Bitcoin, and really don't understand it, but they think it's a bubble.' Funniest part is when one expert compares it to the internet bubble. Last I checked the internet is working out pretty well.

  11. ***Publicly funded***. Your tax dollars are paying for your own fake news. Incredible. Watch your media. The government is now trying to crush bitcoin because they know the prosperity and freedom it could bring to people like you. Why would someone in control want that?! Oh yeah, and the dollars in you pocket probably have physical cocaine on them…but of course bitcoin is the real dirty money that buys drugs… FUCKING LYING, MONEY LAUNDERING BANKERS!

  12. I would sell myself for 1 bitcoin its going to be so valuable in the future. Oh wait, I guess bitcoin is used for illegal activities…lmao

  13. Love watching media do stories they literally know nothing about. They got so much wrong and then they go and get a Bias Bubble Guy who studies Bubbles for a living and wrote books lol. Why even do a story when it's this bad? There is no bubble and never was. Of course the guy is going to say there are bubbles because if there were none he wouldn't have a job lol think about it.

  14. Hey PBS why didn't you interview the thousands of economists, business owners and computer scientists that are extremely optimistic about Bitcoin? It almost seems that you're trying to push an agenda. And using US tax dollars to do it.

  15. This is a terrible report on bitcoin… not a single mention about the value of blockchain, or even asked anyone developing in the crypto space. This is totally one-sided and biased reporting.

  16. Last time I checked cryptos like Bitcoin can evolve and are open to evolution hence soft and hard forking. Bitcoin will scale one day and will be more widely used like its being accepted in everyday shops in South Korea, Japan, and USA. Most of asia is onboard and already accepting a wide range of cryptos as everyday payment. When the Fiat dollar inflates and robs every man,woman, and child of his/her property I will be laughing at those who doubted the power of decentralized currency owned by the people for the people.

  17. So glad I'm gonna be rich and I'll be able to make my own platform to ruthlessly make fun of these dinosaurs. Y'all are so done lmao

  18. This report carries an odd tone of skepticism. If btc goes up from its current value, it will not be getting "its second wind." …more like its fifth or eighth wind. Using the invention of cars and radios in the 1920s as examples of irrational exuberance is just plain bizarre. Cars and radios (and later the internet) are all still around. They WERE revolutionary. And more interest gravitates toward btc in spite of a higher price because, unlike fiat currency, its a DEFLATIONARY ASSET. THAT'S THE BEAUTY OF IT BEING DECENTRALIZED, WHICH YOU DON'T MENTION ONCE.

  19. The News media and banks in America are a bigger fraud. The Dollar is backed by nothing and who knows how many were made. To pay for something with a credit card costs 2% but bitcoin and other crypto currencies is a small fraction of that. The current dollar system is riddled with fraud and run by white collar crimminals. the big banks are trying to get into Bitcoin. They bad mouth it and when it comes down they are first in line to buy it. we need a new economic system and Bitcoin stepped up for the task.

  20. Very ignorant and one-sided. Shame on you PBS…spreading #FUD. I can’t wait to hear what the Nobel Prize winner says about the political aspects of Bitcoin…oh wait he got his prize in economics and of course money has NOTHING to do with politics. Lol

  21. problem is there is no limit to the amount of these currencies we can create. early adopters will promote theirs as best…its greater fool theory.

  22. "They want to believe in a new story, a new era, a new dynamic. This is a common phenomenon. We saw this back in the 1920s with radios and cars. You saw it during the internet bubble where the internet was going to change everything! and in fact you can see it today in this crypto domain, where this is the new form of money." HAHAHHAHA He says this sarcastically! As if the radio, the car and the internet DIDNT take over the world! What an idiot.

  23. These guys on PBS are poorly educated. I can tell they know nothing because they say nothing about the underlying technologies that are being developed right now to improve sustainability and eliminate many layers of centralization. Cryptocurrencies is comparable to the internet. It's not not a bubble, it's an upgrade to our technical interactivity that creates a trustless transfer of value. PBS needs to do research.

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