The awkward mathematics of booms and bubbles

When short and long aren't opposites.

One of the most common responses in the many, many comments to my pieces on Bitcoin over the last couple of weeks has been to ask me why, if I'm so sure it's a bubble, I don't short it.

The simplest answer is that journalism isn't a career which leaves a huge amount of money left over after the bills are paid with which to gamble, and that I'm not entirely sure it's ethical anyway. There's also the fact that the two main Bitcoin meta-exchanges aren't particularly liquid, which leaves me doubtful that I'd get the best value for money on any shorting contract,

Then there's the problem that being pretty certain the bubble is going to pop doesn't leave me any surer about when it's going to pop – something which most methods of shorting require you to know.

Shorting usually involves borrowing the thing you want to short for a fixed amount of time, selling it straight away, and then buying it back just before your loan is up. Ideally, the commodity has dropped in value, and so you make a profit by you pocketing the difference.

In a normal commodity, going short and going long – buying the commodity to sell at a higher price – are roughly symmetrical. If a share in Apple goes up $1, the people who are long make a dollar a share; if it goes down, the people who are short do.

But that symmetry breaks down when you're dealing with a commodity on the sort of parabolic trend that Bitcoin is shooting along now.

If I spend £100 on Bitcoin, then the most I can lose is £100. Conversely, if the trend continues, I could have £1000 in a month. And the maximum possible payoff is basically uncapped. Suppose I'm catastrophically wrong, and Bitcoin becomes the world currency by the end of the year – anyone who'd bought in to it, even at today's inflated prices, would be a millionaire.

But what if I short it, by borrowing £100 of Bitcoin? Well, then the most I can earn is £100, if the price drops to zero. But the amount I could lose is potentially uncapped, for the exact same reasons that make buying in to it so appealing.

That lack of symmetry – which is an innate feature of, well, maths – serves only to goose the bubble higher and higher. And at the other side, when the down swing comes, it will be vicious; with no shorters ready to step in and buy the coins of people trying to cash out, the volatility will have nothing dampening it.

So that's why I'm keeping my money where it is. But don't think I'm not pretty damn confident when I say that if I had any extra, it still wouldn't be in Bitcoin.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why are YouTube comments the worst on the internet?

A perfect storm of factors ensures that YouTube is home to the most toxic comment section on the web.

It is often said that Mozart’s Requiem Mass in D minor is one of the most beautiful pieces of music ever composed, but you wouldn’t know that from the YouTube comments. “Thanks mozart for adding more sexiness to my sexy sex life with this music... me and my girlfriend enjoy having sex with this music... HAIL TO MOZART!!!,” wrote Mr or Mrs impuredeath2 on an upload of the song last month.

As far as YouTube comments go, this is a good one. There is no racism, homophobia, or antisemitism, there are no conspiracy theories, it is a full sentence, and it doesn’t contain the words “thumbs up if u agree”. For years, YouTube has notoriously been the home of the worst comment section on the internet, and if you Google “Why are YouTube comments…”, the search engine will helpfully complete your sentence with the options “so bad”, “so racist”, and “so toxic”. We are all aware that YouTube comments are terrible, but much like the fact that jet fuel can’t melt steel beams, although we know it’s true, we don’t really know why.

There are, in fact, many reasons. The first (“First!!!!”) is that all internet comment sections are terrible, but Facebook, Reddit, and many news sites filter their comments so that the first comments you see are the ones that have received the most positive votes. In these systems, toxic comments are often hidden away after they are voted down too many times. On YouTube, the “Top” comments are the ones with the most replies, and although you can “Thumbs down” a comment, pressing this button doesn’t affect its overall number of “Thumbs up” nor move it any further down the page (try it yourself). The comments you see first are therefore often the most controversial.

But it’s not just the “Top” comments on YouTube that are awful, and this is mostly to do with how immediate and popular the comment section is. Unless you get a lot of replies or thumbs up, your comment will disappear underneath a multitude of others soon after it’s written. YouTube has no “View all comments” option that people can CTRL+F through to find your name and words, so if anyone wanted to find out what you’d written, they’d have to arduously click “Show more” hundreds of times.

This means that despite the fact YouTube’s comment section isn’t anonymous – the site forces people to sign up via their Google account – people don’t really have to be scared of what they say. Unlike on Facebook, Reddit, or Twitter, a user’s profile doesn’t hold a collection of their comments or a list of things they’ve commented on. It is for this reason that you never see headlines about people being fired for their comments under Mozart’s Requiem, but often do for their Facebook statuses or Tweets. This set-up only compounds the fact that, contrary to popular belief, non-anonymous individuals are actually more aggressive than anonymous individuals online.

Just like there are few consequences for awful comments, there is also little reward for good ones. On other social media platforms, people crave Likes and shares, but on YouTube these are – once again – not visibly collected on your profile. People are also less inclined to go to YouTube for an intelligent debate (thumbs up if you’re reading this in 2016!!!), which makes the problem cyclical.

Top this all off with the fact there are no comment moderators and pretty much everyone goes on YouTube (including lots of kids), and you have a perfect storm of factors. Although some popular YouTubers have chosen to ban certain words from their comments so they’re automatically filtered out, most people who upload to the site do so casually, without considering this option.

Now, that's settled, we’d best get down to business. ~★☆★ If you share this article on the next seven YouTube videos you watch, your true love will kiss you on Friday at midnight. ★☆★~

Amelia Tait is a technology and digital culture writer at the New Statesman.