A few thoughts - Monday, May 19, 2014

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Steve Sokolowski
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Joined: Wed Aug 27, 2014 3:27 pm
Location: State College, PA

A few thoughts - Monday, May 19, 2014

Post by Steve Sokolowski » Mon May 19, 2014 12:00 pm

A few thoughts for today:

1.

I've developed a theory that provides a general rule of thumb for evaluating bitcoin business proposals: the quality of the website is generally inversely correlated with the quality of the product.

On the one hand, you have pretty websites for companies like Circle, the dark wallets, and many altcoins, but what they are providing is not available, buggy, or useless. On the other, you have services like the middlecoin pool, which has an extremely poor interface but provided a useful service for a time.

This may be for practical reasons as well. Companies that spend lots of time innovating on their products don't allocate huge amounts of resources on their websites - they spend the time on their products instead.


2.

There are quite a few people here who are looking for some sort of mass adoption in order for the next bubble to occur. I don't agree that any sort of significant adoption is necessary for the next bubble. I think that, again, people are assuming that there has already been a lot of bitcoin uptake, so there isn't as much room for growth.

On the contrary, there has not been as much bitcoin uptake as I believed initially, which means every price floor will be higher than most people suspect given a certain level of adoption. The reason might be that there are a lot more lost coins than anyone believed.


3.

There are also some discussions by notable contributors about whether the next bubble will continue to rise without any "pop," given that Wall Street investors have stronger hands. This thinking is just as foolish as the people who say that bitcoins will fall to zero and not repeat the bubble cycle.

There are many bubbles in assets like stocks and real estate. There have been bubbles in things like silver, where people lost 7% of their net worth in a single day. There have been crashes where the entire market falls 10% in 15 minutes due to runaway bots. Wall Street traders know how to trade in bubbles just like bitcoin traders do, so they aren't going to hold while everyone else is losing money.


4.

That said, the amplitude of the bubbles will continue to decrease, so perhaps the next crash will only cost 50% of bitcoins' value. The most recent crash bottomed out at about 1/3, and the April crash bottomed out at 1/5, although it was actually impossible to buy at those prices with Mt Gox down. The bubble before that had a 95% drop.

Bubbles aren't going to go away, but the crashes will likely become lesser as time goes on.


5.

I still believe that the uptrend of this cycle will begin to ramp up towards the second half of June, like in other bubbles. However, I think that /u/moral_agent's theory that the bubble might begin more quickly than most people think has some merit.

In the past, like in December, everyone believed that the market would recover once January 2 arrived and people went back to work. But the price actually started to rise on Christmas, when nobody was at work. Predictions from people here have been shown to be consistently a week too late in the past.


Other

For some foreigners, here is a lesson in US healthcare. Americans have had this happen to them before, so it's nothing new.

I wrote off $520 yesterday because I decided that it wasn't worth my time to pursue any more, given that I hope to make more money working on my mining pool during the valuable hours I have in the evenings. I will allow the statute of limitations to expire tomorrow.

In this case, I submitted claims to UnitedHealthcare on 2013-05-20, for four appointments with a doctor over the course of six months. They had accepted all of my claims before that, but now they suddenly need some sort of code called a "CPP code." Their system spit out various errors rejecting these claims and I resubmitted them four times over the course of a year. They want the doctor to write this code on the bill and resubmit the claim again. But the doctor's office staff all resigned in protest over some issue, nobody is in the office when I go there because they are on "summer semester hours," and they aren't answering the phone.

UHC won't allow me to simply write the code on the bill, and the doctor's practice is so mismanaged they are nowhere to be found, so my only recourse is to sue, which for only $520 isn't worth the time. Three years ago, I lost $1600 to UHC in another similar case of "denial due to obscure new rules," although a class action lawsuit later earned me a consolation check for $350. When people say that the medical system "works fine," this is what they are talking about.
  • Days until July 24: 66
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