Behavioural Aspects of Cryptocurrencies

Popping The Bubble: Cryptocurrency vs. Dot Com

"There are two metrics I will use: speculation and application. We speculate on what application the asset will have, always contrasted by its actual application. The biggest bubbles always occur when the potential for disruption is enormous. This creates the largest discrepancy between the speculation and the application. This is why a new noise canceling headphone technology probably wouldn’t result in a bubble. The application of the technology is very clear — to drown out the cries of airborne babies — and thus, there’s not much room for speculation. We can base assumptions off the current headphone industry, and besides, the technology only affects one industry, so its potential for massive disruption is limited."

"It’s also possible that blockchain and cryptocurrency defies all predictions, all historical models. It’s possible blockchain transforms every industry and never sees a crash such that dominated the early 2000s. It’s possible that blockchain and cryptocurrency rivals today’s equity markets. It’s possible that decentralization is so dramatically different and successful that it fundamentally changes the way companies and projects develop, the way humans psychologically interact with markets. It’s possible….but I doubt it."

Nobody Understands Bitcoin (And That's OK)

Why Bitcoin is Hard to Understand:

1. Game Theory

2. Cryptography

3. Computer networking and data transmission

4. Economic and monetary theory

Mainly not a technology, but rather a cultural paradigm shift.

James Lopp's Twitter:

First step to understanding Bitcoin: admitting you don't understand Bitcoin

Final step: realizing that "understanding" is a moving target