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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Pomegranate12 on December 26, 2020, 09:19:05 AM

Title: Bitcoin is funny money
Post by: Pomegranate12 on December 26, 2020, 09:19:05 AM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now 
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 26, 2020, 12:01:56 PM
Bitcoin, and all cryptos, are a joke.

No one with half a brain cell would think these things are worth dabbling in.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 26, 2020, 06:24:48 PM
It could go a different way. It could become money. I think crypto's are great ideas. A money without government backing and true world currencies. The ability to transfer small amounts and have a record means they have the potential to be fantastic means of exchange.

I think investing in bitcoin and cryptos is stupid though. You don't invest in money. You can gamble on currencies and to me that is what everyone into crypto is currently doing.

The way I look at it the best case scenario is that cryptos do become a valid means of exchange. If that does occur that doesn't mean though that cryptos go up in value. They are just a means of exchange. You use them to buy stuff.

The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.
Title: Re: Bitcoin is funny money
Post by: effigy98 on December 26, 2020, 06:50:28 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

You can tap your phone on the payment pad and pay in bitcoin... Look at what Square and Paypal are doing. There are VISA debit cards that you have your balance in bitcoin and it subtracts from your balance when you spend. Nearly every merchant accepts VISA. Bitcoin can be used in the normal economy.

You shouldn't be involved in an investment you don't understand so why worry about it and post things like this? If others understand it better then you and are willing to risk part of their portfolios, more power to them.
Title: Re: Bitcoin is funny money
Post by: EvenSteven on December 26, 2020, 07:07:20 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

You can tap your phone on the payment pad and pay in bitcoin... Look at what Square and Paypal are doing. There are VISA debit cards that you have your balance in bitcoin and it subtracts from your balance when you spend. Nearly every merchant accepts VISA. Bitcoin can be used in the normal economy.

I thought these applications first converted the bitcoin to dollars and transacted in dollars. Are they transacting directly in bitcoin now?
Title: Re: Bitcoin is funny money
Post by: Telecaster on December 26, 2020, 07:22:52 PM
You can tap your phone on the payment pad and pay in bitcoin... Look at what Square and Paypal are doing. There are VISA debit cards that you have your balance in bitcoin and it subtracts from your balance when you spend. Nearly every merchant accepts VISA. Bitcoin can be used in the normal economy.

Bitcoin cannot be used in the normal economy and will never be used in the normal economy beyond fringe, specialized transactions.    With Square and Paypal you can indeed pay with Bitcoin.  But merchant gets paid in good old Yankee Dollars.  All Square and Paypal do is make the conversion and take a cut of the transaction. 

Here's why I say it can't be used in the normal economy:  Let's say you want to hire someone to paint your house for one BTC.  He's booked a month out.  So you last you month you booked and today he shows up today only now he's 50% more expensive than he was at the beginning of the month (which is approximately the actual price appreciation of BTC this month).  But if you had hired him back in February he would he have been 50% cheaper by the time he started, which was approximately the decline in value from February to March.  As far back as there has been written records of money, economies have always worked on a credit system.  Obviously, there has always been the situation where you pay with cash or gold coins or what have you, but there have always been contracts payable in the future.  I paint your house, you pay me when I'm done.  You can't do that if you don't know what the future value of the medium of exchange is. 

All labor is based on the concept of fixed payments in the future.  So are mortgages, leases, and virtually every type of financial transaction you care to name except cash.  Bitcoin can function as cash, as long as someone is willing to pay the transaction fee, but that's about all it can do. 

Title: Re: Bitcoin is funny money
Post by: forgerator on December 26, 2020, 08:57:53 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

Umm I actually did just that this morning. Went to my grocery store, got a few vegetables, fruits and some water bottles. Paid with my Bitpay card which is backed by a Bitcoin Cash wallet. It deducted the balance, and oh by the by, what I spent was less than what I originally had in dollar amount because the price of BCH was up 15% from when I purchased it.
Title: Re: Bitcoin is funny money
Post by: EvenSteven on December 26, 2020, 09:19:36 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

Umm I actually did just that this morning. Went to my grocery store, got a few vegetables, fruits and some water bottles. Paid with my Bitpay card which is backed by a Bitcoin Cash wallet. It deducted the balance, and oh by the by, what I spent was less than what I originally had in dollar amount because the price of BCH was up 15% from when I purchased it.

Again, are you actually transacting in bitcoin, or are you having a third party convert your bitcoin to dollars, and then transacting in dollars? I think there is a difference between the two if you are claiming utility as a currency.
Title: Re: Bitcoin is funny money
Post by: Syonyk on December 26, 2020, 10:24:52 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food?

Hand?  Hard, but there used to exist some physical tokens one could pass around.  Transfer?  Sure, if the store accepts it.  One could make the same argument for stocks/bonds as well, though.  They're not directly useful to pay people.

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You use money to buy goods and services.

And people have used, and continue to use, Bitcoin to buy goods and services.  Either directly person to person, or from the range of companies that accept bitcoin and various other cryptocurrencies, directly or via payment processors.

People have used, and continue to use, gold and silver (physical metal) as a way to buy goods and services, though most grocery stores won't take them directly either.

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Bitcoin is funny money and will disappear

12 years in, people are still insisting that it will go away, really soon, soooon, just wait for it, ignore the new highs indicating that there's pretty strong demand, wait for the correction, see, it'll disappear, er, just after this new high, and... any day now... waaaaait for it...

I'm comfortable saying that it will disappear at some point, heat death of the universe, end of the internet, or something of the sort, but... much like predictions about the end of the world, predictions of Bitcoin's demise seem rather overstated and have yet to come to pass.

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It's not a wise long term investment

The people who put a lot of money into it back when it was at the "insane" top of $1000, assuming they've held most of it, are probably fine with their 25x returns in less than a decade.  Even if you bought at the literal last peak, returns aren't half bad in a few years.

I'd consider it a bit more of a speculative value store than an investment, but... sure.  What would you consider wiser?  If one holds any sort of metals in their investment/value store collection, splitting some of the gains there in recent years into crypto would seem a halfway sane decision to me.  The risk/reward balance is exceedingly aggressive, but there's a space for that in a sane and balanced portfolio.

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Cash out now

What, you want in and can't find any for sale? :p

I think investing in bitcoin and cryptos is stupid though. You don't invest in money. You can gamble on currencies and to me that is what everyone into crypto is currently doing.

The various people making money on foreign currency fluctuations would probably disagree with you, and would probably assert, halfway reasonably, that if you're going in informed, it's not gambling.  One could consider Bitcoin a contrarian position against "most or all current fiat currencies," betting that they'll be devalued in real terms over time.  It's been a decent bet for a long while...

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The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.

"Investing" implies a hope for gains, and there are certainly some in gold/silver who hope for gains (though mostly this seems to be companies interested in selling you on the concept of "investing" with gold through them, in my experience...).  However, there are also plenty who view them as a halfway stable value store.  +/- 50% is fine, if you're looking to store some value through a currency collapse (of which there have been many within the lifetime of people alive today).  Gold/silver have some value as industrial metals (silver, especially, doesn't get recycled nearly as aggressively as gold), and the history of the world would indicate they don't have a floor of 0, unlike Bitcoin, but as part of a blend of value stores and contrarian investments, I don't see a huge downside, and I certainly wouldn't call it "stupid" if done as a considered part of a portfolio.  Gold/silver have some utility for local, in person transactions, Bitcoin has some utility for internet based transactions, so... *shrug*  I don't get the hate, really.

I thought these applications first converted the bitcoin to dollars and transacted in dollars. Are they transacting directly in bitcoin now?

It depends on how the merchant has configured it.  I've not looked into all of them, but for Bitpay, at least:  https://support.bitpay.com/hc/en-us/articles/201890513-What-are-my-options-for-settlement-

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BitPay offers direct settlement via bank deposit, so you can receive funds in your local currency, cryptocurrency, or a mix of the two.

...

BitPay supports settlement in 12 currencies and direct bank deposit in 37 countries. Cryptocurrency settlements are supported in over 200 countries.

Cryptocurrency - Bitcoin (BTC), Bitcoin Cash (BCH), Gemini Dollars (GUSD), Paxos (PAX), and USD Coin by CENTRE (USDC)
AUD - Australian Dollars
EUR - Euros
GBP - Pounds Sterling
MXN - Mexican Pesos
NZD - New Zealand Dollar
USD - US Dollars
ZAR - South African Rand

So, while the initial transaction is converted from your local currency to crypto, the details of the backend (if it remains as cryptocurrency, comes out as local currency, or some blend) is up to the merchant - if they support bitpay or another payment processor.

If it's coming directly off one of the debit/credit type cards, it's certainly being settled in your local currency, but there's a convenience of being able to use it at places that don't directly support cryptocurrences.  I'm really not certain how most places are set up, though.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on December 27, 2020, 02:18:58 AM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now
You can tap your phone on the payment pad and pay in bitcoin... Look at what Square and Paypal are doing. There are VISA debit cards that you have your balance in bitcoin and it subtracts from your balance when you spend. Nearly every merchant accepts VISA. Bitcoin can be used in the normal economy.
The stores receive cash, not Bitcoin.  Bitcoin doesn't enter the economy, it just stays in your secured credit card account with Visa.  Most people buy on credit, with no assets held by Visa, and are billed monthly.  I think "Bitcoin can be used in the normal economy" is not an accurate depiction of merchants receiving US dollars.

That said, I don't think "funny money" is an apt description either.  Back in 2017 when BTC's price crashed (after a 20x gain), you didn't hear about institutional investment in Bitcoin.  In 2020, you do:
https://finance.yahoo.com/news/bitcoin-hits-new-all-time-high-driven-by-institutional-buying-153215272.html
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 06:28:43 AM
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The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.

Wrong.

Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.
Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on December 27, 2020, 10:57:22 AM
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The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.

Wrong.

Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.

I don’t hold metals or Bitcoin in my portfolio. The biggest risk I see with Bitcoin is the risk of losing it all due to a hack or mistake, either while holding it or trying to transact it.

For it to make an meaningful change in my allocations, I’d have to hold on the order of $100,000 worth of Bitcoin. Based on my reading the recommendation is to use one of the big exchanges with a history that might stretch back ten whole years now! Make the exchange, then get the Bitcoin off the exchange and in to a cold wallet ASAP. Make sure you understand how to secure the wallet and the key. Don’t lose the key or you lose everything. Don’t get hacked or you lose everything. Then, when you go to make the exchange back to regular currency you have another risk point.

Cash in banks and investments with fidelity/vanguard/etc. have a whole regulatory/legal regime around them to protect you from fraud and theft. The infrastructure around cryptocurrency still seemed to be in the Wild West stage when I briefly looked into it. I have no interest in becoming a computer security expert. I also don’t have much interest in digging through company histories to figure out which cryptocurrency exchanges are actually run well vs which are incompetent vs which are run by criminals who will run off to Thailand with all of their customer’s assets and then fake their deaths in order to steal all their money.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 27, 2020, 04:47:56 PM
Quote
The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.

Wrong.

Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.

You are completely wrong. Does technology exist. What about data in databases. The blockchain is a fantastic tech creation. It exists. If anything I'd argue Bitcoin is a significantly better money alternative than gold and/or silver.

A lot more transactions would be completed today via Bitcoin than gold and/or silver.

Try to be logical and rational when making a point. Imagine trying to make out that in today's economy only physical assets have value. That is completely and utterly delusional.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 27, 2020, 04:57:17 PM
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The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.

Wrong.

Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.

I don’t hold metals or Bitcoin in my portfolio. The biggest risk I see with Bitcoin is the risk of losing it all due to a hack or mistake, either while holding it or trying to transact it.

For it to make an meaningful change in my allocations, I’d have to hold on the order of $100,000 worth of Bitcoin. Based on my reading the recommendation is to use one of the big exchanges with a history that might stretch back ten whole years now! Make the exchange, then get the Bitcoin off the exchange and in to a cold wallet ASAP. Make sure you understand how to secure the wallet and the key. Don’t lose the key or you lose everything. Don’t get hacked or you lose everything. Then, when you go to make the exchange back to regular currency you have another risk point.

Cash in banks and investments with fidelity/vanguard/etc. have a whole regulatory/legal regime around them to protect you from fraud and theft. The infrastructure around cryptocurrency still seemed to be in the Wild West stage when I briefly looked into it. I have no interest in becoming a computer security expert. I also don’t have much interest in digging through company histories to figure out which cryptocurrency exchanges are actually run well vs which are incompetent vs which are run by criminals who will run off to Thailand with all of their customer’s assets and then fake their deaths in order to steal all their money.

I can understand not holding metals or Bitcoiin in your portfolio. These are rational decisions based upon not holding something that only has value as a means of exchange. It's just like not investing in currencies. They have no real value. Sure metals have some value in their physical use but on the whole increases in value of cryptos and metals are just the same as currency speculation.

You don't have to do what you are stating. You can hold bitcoin extremely safely now and you have been able to in the past as well. People were ripped off via not holding their bitcoin and giving it to an exchange.

The great point to me about cryptos is that you don't need an exchange and/or bank to store the money. If anything I think your own physical wallet is significantly safer than the regulatory bodies you are talking about:- https://en.wikipedia.org/wiki/Cryptocurrency_wallet.

Personally I'd love to see cryptos become much more dominant. I think they have the potential to really revolutionize how we conduct transactions. It's miles away from that level and that may never happen. I also wouldn't bet on cryptos but that is because they should be viewed as money. I'd much rather invest in a stock index. These indexes are really a bunch of businesses that have a profit motive. They aren't just speculative tools with no value apart from a means of exchange.
Title: Re: Bitcoin is funny money
Post by: Syonyk on December 27, 2020, 05:48:14 PM
Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.

Nobody is dumb enough to confuse bitcoin for being a physical metal, but in terms of the behavior and characteristics in terms of mining and behavior in use, gold/silver (physical commodities, formerly commodity based currencies) and bitcoin have a lot in common.

Bitcoin behaves more or less as a synthetic digital commodity - both in creation/extraction and in use.  It's the best term I've found to describe it, and it does a decent job of explaining how it behaves in practice.  As the world has moved away from commodity currencies, this is a more foreign concept, but it behaves like a commodity with a fairly low total market cap, which is exactly what it is - though becoming less and less so, over time, as the total value goes up.  Back in the day, the weekly pump and dump was obvious in the patterns (some well backed person or group was manipulating the market to their benefit, rather successfully if you looked at the behavior), and that's mostly gone because it takes an awful lot more to shift it around than it did back at $30/btc.

If you've got a better description for how it behaves, feel free, though "Damned scamcoin pyramid scheme power wasting criminal use bullshit" is not a useful explanation for it, in terms of any sort of predictive power.

Very clearly demand for btc is going up based on price, and I expect that to continue as the USD gets printed in mass quantities (it works fine, right up until it stops working, and plenty of historical fiat currencies have hit that point eventually).
Title: Re: Bitcoin is funny money
Post by: Syonyk on December 27, 2020, 06:31:47 PM
Based on my reading the recommendation is to use one of the big exchanges with a history that might stretch back ten whole years now! Make the exchange, then get the Bitcoin off the exchange and in to a cold wallet ASAP. Make sure you understand how to secure the wallet and the key. Don’t lose the key or you lose everything. Don’t get hacked or you lose everything. Then, when you go to make the exchange back to regular currency you have another risk point.

Yup.  Entirely correct.

Earlier observations on risk/reward are relevant here.  You keep your Bitcoin wallet on your gaming PC with tons of pirated games, well... don't be surprised when it gets emptied out.  Keep your bitcoin in an exchange, online, run by God knows who, having repurposed a domain (and presumably some code) for trading Magic the Gathering cards, well... yeah, you may have a bad time of it.

Keep your btc on a halfway secure system, with backups various places, and the risk is pretty low of losing it all.  Distribute as needed to a few different systems, and hold it yourself.  If you're not up for that, well, then, perhaps bitcoin isn't for you, but that you don't feel like dealing with the details doesn't mean there aren't other people who are perfectly fine with those details.

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Cash in banks and investments with fidelity/vanguard/etc. have a whole regulatory/legal regime around them to protect you from fraud and theft.

Sure, and some would argue that said system is also nicely designed to protect the profit of banks and investment groups, keeping them from any risk of loss from the sort of idiotic decisions that would ruin individual investors, and may wish not to support that as much. ;)

Though it hardly seems to stop fraud and theft, it's just done in a different way from those places.

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The infrastructure around cryptocurrency still seemed to be in the Wild West stage when I briefly looked into it.

Yeah.  It is.  We're into the third generation or so, and it's far better than the first and second generation, but... still not really anything trustworthy with large sums of money for extended periods of time.  Fortunately, you don't need to trust them with large sums of money for extended periods of time. ;)

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I have no interest in becoming a computer security expert. I also don’t have much interest in digging through company histories to figure out which cryptocurrency exchanges are actually run well vs which are incompetent vs which are run by criminals who will run off to Thailand with all of their customer’s assets and then fake their deaths in order to steal all their money.

Ok.  So Bitcoin isn't for you.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 07:51:46 PM
Quote
The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.

Wrong.

Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.

You are completely wrong. Does technology exist. What about data in databases. The blockchain is a fantastic tech creation. It exists. If anything I'd argue Bitcoin is a significantly better money alternative than gold and/or silver.

A lot more transactions would be completed today via Bitcoin than gold and/or silver.

Try to be logical and rational when making a point. Imagine trying to make out that in today's economy only physical assets have value. That is completely and utterly delusional.

The block chain is a stupid creation. It is a solution looking for a problem. Nothing needs to be done on-chain.  It only adds problems, worthless complexity, and inflexibility to everything it touches.

I am being logical and rational. We just disagree (mostly because I haven’t drunk the kool-aid that you clearly have).
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 07:56:43 PM
Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.

Nobody is dumb enough to confuse bitcoin for being a physical metal, but in terms of the behavior and characteristics in terms of mining and behavior in use, gold/silver (physical commodities, formerly commodity based currencies) and bitcoin have a lot in common.

Bitcoin behaves more or less as a synthetic digital commodity - both in creation/extraction and in use.  It's the best term I've found to describe it, and it does a decent job of explaining how it behaves in practice.  As the world has moved away from commodity currencies, this is a more foreign concept, but it behaves like a commodity with a fairly low total market cap, which is exactly what it is - though becoming less and less so, over time, as the total value goes up.  Back in the day, the weekly pump and dump was obvious in the patterns (some well backed person or group was manipulating the market to their benefit, rather successfully if you looked at the behavior), and that's mostly gone because it takes an awful lot more to shift it around than it did back at $30/btc.

If you've got a better description for how it behaves, feel free, though "Damned scamcoin pyramid scheme power wasting criminal use bullshit" is not a useful explanation for it, in terms of any sort of predictive power.

Very clearly demand for btc is going up based on price, and I expect that to continue as the USD gets printed in mass quantities (it works fine, right up until it stops working, and plenty of historical fiat currencies have hit that point eventually).

Bitcoin is not a “synthetic digital commodity” or however people are trying to spin it. Commodities are valuable raw materials. Bitcoin is just a stupid data file.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 08:01:13 PM
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If you've got a better description for how it behaves, feel free, though "Damned scamcoin pyramid scheme power wasting criminal use bullshit" is not a useful explanation for it, in terms of any sort of predictive power.

Huh? Thats a great description:”Damned scamcoin pyramid scheme power wasting criminal use bullshit”! I think it predicts what is going on perfectly.  Why are you saying its off limits?

Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 08:07:37 PM
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Earlier observations on risk/reward are relevant here.  You keep your Bitcoin wallet on your gaming PC with tons of pirated games, well... don't be surprised when it gets emptied out.  Keep your bitcoin in an exchange, online, run by God knows who, having repurposed a domain (and presumably some code) for trading Magic the Gathering cards, well... yeah, you may have a bad time of it.

Keep your btc on a halfway secure system, with backups various places, and the risk is pretty low of losing it all.  Distribute as needed to a few different systems, and hold it yourself.  If you're not up for that, well, then, perhaps bitcoin isn't for you, but that you don't feel like dealing with the details doesn't mean there aren't other people who are perfectly fine with those details.

Wow! Thats some money of the Future you got there...
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 27, 2020, 08:14:47 PM
This is going to age well I am sure.  If anyone was wondering if it was too late to get into Bitcoin this thread should answer your question!  P.S. it is never a good idea to preach about something you don’t understand. 

P.P.S. Can’t wait for the “told you so” messages when bitcoin “crashes” down to $60,000 USD in 2021.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 08:23:54 PM
I know what I am talking about. Bitcoin and cryptos are dumb and their hodlers are delusional.

 This was supposed to be an anti-bitcoin thread. I’m just making my contribution. But of course a bunch of bitcoin fanboi trolls decided to try to high-jack it. Sheesh.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 27, 2020, 08:26:25 PM
It’s a forum on education.  They are trying to give you a much needed learning.  Thankless heroes around here. 

To all:  the FIRE community (to which we all undoubtedly belong) has always been extremely hostile to cryptocurrencies.  It doesn’t fit into their(Our) spreadsheets on working 15 years, saving 70% of their income and not taking any risks.  Attaining FI without sacrificing time is frowned upon in the FIRE community.  It ain’t changing! 
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on December 27, 2020, 08:31:55 PM
I agree with the celery guy
Title: Re: Bitcoin is funny money
Post by: Syonyk on December 27, 2020, 08:46:14 PM
The block chain is a stupid creation. It is a solution looking for a problem. Nothing needs to be done on-chain.  It only adds problems, worthless complexity, and inflexibility to everything it touches.

I tend to think a distributed, decentralized ability to agree on a particular history without the ability to easily forge or modify is it is pretty cool, and very obviously a lot of other people have considered so as well, because BTC isn't worth $0, running on a few geek's spare CPU cycles at this point.

The ability to transfer tokens of value around without going through any centralized authority/clearing house is very interesting, especially as we've seen those centralized places repeatedly say, "You know, I don't like your business, so I'm going to simply refuse to do business with you."  If Visa, Mastercard, and PayPal all "independently" decide, at the same time, to blacklist your company, it's quite hard to do business anymore, and regardless of your agreement or not with the companies they've blacklisted, it is a somewhat worrying precedent.  "We've made sure everything goes through us and we'll only serve you if we agree with you!" isn't the sort of power private companies ought to have.

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I am being logical and rational. We just disagree (mostly because I haven’t drunk the kool-aid that you clearly have).

You've not made any argument, so it's hard to say that you're being logical or rational, because you've not offered anything to engage logically or rationally with.  You've just asserted, with no evidence, that it's horrid, and then left it at that.  You've made a halfway interesting thesis statement in your opening to this post ("It is a solution looking for a problem. Nothing needs to be done on-chain.  It only adds problems, worthless complexity, and inflexibility to everything it touches."), but then not done a thing to back it, and quite a few people have found Bitcoin, and blockchain technologies in general, to obviously be worth something to them - or it wouldn't be worth anything, and would have produced a couple interesting research papers as it faded into obscurity.

Bitcoin is not a “synthetic digital commodity” or however people are trying to spin it. Commodities are valuable raw materials. Bitcoin is just a stupid data file.

It behaves a lot more like a commodity than anything else I've found to compare it to.  It's not exactly the same (obviously), but a synthetic digital commodity intended for use as a currency explains quite a bit about it, and the history of how it's been used, abused, and offers a far better guess at the future of it than anything else I've found.  If you've got anything better, or more reasoned to offer, I'm happy to be proven inaccurate, but you're really not offering much of value in this conversation.  "Nuh uh!"  "Isn't."  "Stupid."  etc.

Huh? Thats a great description:”Damned scamcoin pyramid scheme power wasting criminal use bullshit”! I think it predicts what is going on perfectly.  Why are you saying its off limits?

I'm not saying it's off limits, I'm saying it does a horrid job of explaining where Bitcoin has been and how it's behaved, and I expect that means that it will remain a horrible explanation of where it's likely to go.  So, since you feel it's a perfectly good description of it with predictive power, what does that offer in terms of predictive value to you?

My "synthetic digital commodity" explanation would predict that, generally speaking, the cost to mine bitcoin over a long period will remain generally slightly below the value of the bitcoin mined - and most miners won't sell below their cost for long, which, as long as there's demand for bitcoin, means the value is like to rise over time to match the cost of mining, give or take.  However, it's also something that's entirely independent from the global financial system, and serves as a contrarian investment if you're not too happy with the way various countries are managing their finances.  Given the whole "Print, Baby, Print!" approach to US finances, I would expect a continued interest in Bitcoin and metals as a value store, which will tend to push their values up over time.  We've certainly seen gold head uphill in a hurry this year, Bitcoin is heading up in a hurry, and as Congress talks about printing yet more money, I'd expect these trends to generally continue.

What does your model predict?

Wow! Thats some money of the Future you got there...

Cash can be stolen, various bonds over time can be stolen (though they're less popular now for that reason), physical metals can be stolen, I see no particular reason to consider Bitcoin, as a generally anonymous (technically, pseudonymous) token of value to be much different.  The safeguards are different than one would use for the other tokens of value, because it's in a different realm (as much as it pains me, "cyber" does accurately describe the realm Bitcoin and blockchain in general operate in), but they're not particularly hard to apply.  Just different.

If your idea of an ideal financial system is centralized, "safe" bank accounts, where one is required to ask "Bank, May I?" before engaging in any transactions (with the very real chance that those transactions can/will be denied if the bank doesn't like the other party involved), there are plenty of places happy to charge you for the privilege.  Something operating outside that, without any centralized authority required in maintaining the chain of transfers, is something very interesting indeed.  It's not for everyone (as is obvious in this thread of blind assertion), but it offers some things that nothing else offers, it has downsides different from other asset classes, and at the very least, I think it's worth both understanding and paying attention to.
Title: Re: Bitcoin is funny money
Post by: WhiteTrashCash on December 27, 2020, 08:48:33 PM
Think of Bitcoin like a gift card, except it’s a gift card to buy narcotics from North Korea.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 08:54:23 PM
How does one borrow a bitcoin? (And not some crappy escrow thingy. Like loan it out so it can be spent by the debtor).

And more importantly, if one is borrowed and there is a default on the loan, how does a crypto creditor obtain a judgment to recover the bitcoin? How is it enforced?

And suppose there is a couple of hard forks in the meantime before repayment is due? What should the debtor be required to return?
Title: Re: Bitcoin is funny money
Post by: Syonyk on December 27, 2020, 08:55:49 PM
I know what I am talking about. Bitcoin and cryptos are dumb and their hodlers are delusional.

You've offered plenty of assertion, pretty much nothing of actual value.  Postcount++?

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This was supposed to be an anti-bitcoin thread. I’m just making my contribution. But of course a bunch of bitcoin fanboi trolls decided to try to high-jack it. Sheesh.

I'll assume that was somewhat directed at me, since I've certainly put copious amounts of text into the thread so far, but... "fanboi troll"?  I try to keep a reasonably open eye to options out there, and I'll happily go on about the precautions required if one is handling large amounts of bitcoin, but... I mean, we move cash around in armored cars with armed guards, on known routes.  I don't see how precautions for handling a digital commodity/currency are somehow a problem.

And I'm certainly not trying to troll, unless the point of this thread is literally "Bitcoin sux, lol stupid bitcoiners, dumdums," at which point I've misunderstood at least this thread, and will escort myself out.  But it's filled with blindingly incorrect statements, so... on this forum, at least, seemed worth trying to have the discussion.

It’s a forum on education.  They are trying to give you a much needed learning.  Thankless heroes around here. 

*shrug*  I get the impression I'm quite unwelcome here, so should probably take my advice about the internet and stop even trying.  Most of the rest of the internet has lost any concept of nuance and reasoned disagreement, this forum has no particular reason to be any different...

Quote
To all:  the FIRE community (to which we all undoubtedly belong) has always been extremely hostile to cryptocurrencies.  It doesn’t fit into their(Our) spreadsheets on working 15 years, saving 70% of their income and not taking any risks.  Attaining FI without sacrificing time is frowned upon in the FIRE community.  It ain’t changing!

Yeah, I know.  It's a weird blindspot.  I'm not one for dumping everything repeatedly into unproven funds, but if you're at the "saving 70% of your income" point, there are very, very few downsides to keeping a small chunk of your investment (5% or so?) reserved for "This is insane, but..." sort of high risk, potential high reward activities.  If you lose it, and keep your losses contained, it really doesn't make a big difference in terms of timeline to FIRE, but even one or two good wins can really shorten the process - especially if they're early on, and you can then compound those gains for a decade or so.  I've known a number of people in person who do more or less that, and their failures on that front tend to make for good stories, while their successes more than make up for the losses.  Not everyone can do that, but if you've got your ear to the ground in certain spaces and can make heads or tails of vague rumors and news in your industry, well... a $100k payday is a $100k payday.

Anyway, sorry.  I mis-understood the point of this thread, and will go on my way, so... sorry for wasting everyone's time.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 27, 2020, 08:56:14 PM
It won’t be Bitcoin. Of this I am certain. Bitcoin has already failed as a currency.

Bitcoin nearly 4x since.

Investing in crytpo is God's way of telling you that you have too much money.

Bitcoin nearly 9x since.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 27, 2020, 08:59:55 PM
I know what I am talking about. Bitcoin and cryptos are dumb and their hodlers are delusional.

You've offered plenty of assertion, pretty much nothing of actual value.  Postcount++?

Quote
This was supposed to be an anti-bitcoin thread. I’m just making my contribution. But of course a bunch of bitcoin fanboi trolls decided to try to high-jack it. Sheesh.

I'll assume that was somewhat directed at me, since I've certainly put copious amounts of text into the thread so far, but... "fanboi troll"?  I try to keep a reasonably open eye to options out there, and I'll happily go on about the precautions required if one is handling large amounts of bitcoin, but... I mean, we move cash around in armored cars with armed guards, on known routes.  I don't see how precautions for handling a digital commodity/currency are somehow a problem.

And I'm certainly not trying to troll, unless the point of this thread is literally "Bitcoin sux, lol stupid bitcoiners, dumdums," at which point I've misunderstood at least this thread, and will escort myself out.  But it's filled with blindingly incorrect statements, so... on this forum, at least, seemed worth trying to have the discussion.

It’s a forum on education.  They are trying to give you a much needed learning.  Thankless heroes around here. 

*shrug*  I get the impression I'm quite unwelcome here, so should probably take my advice about the internet and stop even trying.  Most of the rest of the internet has lost any concept of nuance and reasoned disagreement, this forum has no particular reason to be any different...

Quote
To all:  the FIRE community (to which we all undoubtedly belong) has always been extremely hostile to cryptocurrencies.  It doesn’t fit into their(Our) spreadsheets on working 15 years, saving 70% of their income and not taking any risks.  Attaining FI without sacrificing time is frowned upon in the FIRE community.  It ain’t changing!

Yeah, I know.  It's a weird blindspot.  I'm not one for dumping everything repeatedly into unproven funds, but if you're at the "saving 70% of your income" point, there are very, very few downsides to keeping a small chunk of your investment (5% or so?) reserved for "This is insane, but..." sort of high risk, potential high reward activities.  If you lose it, and keep your losses contained, it really doesn't make a big difference in terms of timeline to FIRE, but even one or two good wins can really shorten the process - especially if they're early on, and you can then compound those gains for a decade or so.  I've known a number of people in person who do more or less that, and their failures on that front tend to make for good stories, while their successes more than make up for the losses.  Not everyone can do that, but if you've got your ear to the ground in certain spaces and can make heads or tails of vague rumors and news in your industry, well... a $100k payday is a $100k payday.

Anyway, sorry.  I mis-understood the point of this thread, and will go on my way, so... sorry for wasting everyone's time.

Right on.  I'm on track to FIRE in 7-years, WITHOUT any crypto and at a 3% withdrawal amount, at the ripe old age of 39-40.  I'm very conservative and only ever invested in crypto amounts I will not miss (too much). 
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 27, 2020, 09:01:33 PM
It won’t be Bitcoin. Of this I am certain. Bitcoin has already failed as a currency.

Bitcoin nearly 4x since.

Investing in crytpo is God's way of telling you that you have too much money.

Bitcoin nearly 9x since.

Exactly... it has failed as a currency. A currency is a unit of account and medium of exchange. Anything that has increased 4x within a year is not a viable currency since this level of appreciation represents incredible deflation (in terms of bitcoin). Why spend it? Keep hodling!
Title: Re: Bitcoin is funny money
Post by: HPstache on December 27, 2020, 09:01:48 PM
Don't underestimate millenials... if they want to accept it as money, it will be money.  I'm tired of being on the wrong side of millenial opinions... and I AM one!
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 27, 2020, 09:18:53 PM
Quote
The last point I'd add is that gold and silver are exactly the same as bitcoin in so many ways. So if you are into gold and/or silver as part of your portfolio you could just use bitcoin. Personally I think investing in gold and/or silver is just as stupid.

Wrong.

Gold and silver are real and exist, have chemical properties, and have had value for thousands of years. Bitcoin, i.e. blockchain, is just a computer data file that has existed for almost twelve years. So basically they are nothing alike.

I’m always surprised how people are capable of ignoring the obvious when trying to make a point.

You are completely wrong. Does technology exist. What about data in databases. The blockchain is a fantastic tech creation. It exists. If anything I'd argue Bitcoin is a significantly better money alternative than gold and/or silver.

A lot more transactions would be completed today via Bitcoin than gold and/or silver.

Try to be logical and rational when making a point. Imagine trying to make out that in today's economy only physical assets have value. That is completely and utterly delusional.

The block chain is a stupid creation. It is a solution looking for a problem. Nothing needs to be done on-chain.  It only adds problems, worthless complexity, and inflexibility to everything it touches.

I am being logical and rational. We just disagree (mostly because I haven’t drunk the kool-aid that you clearly have).

I haven't drunk any kool-aid. Your argument wasn't logical. You stated that metals have some intrinsic value which they don't. I mean they have a tiny tiny little bit of intrinsic value but that has basically nothing at all to do with the price or gold and/or silver. They are speculative artifacts.

You are wrong and completely wrong.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 27, 2020, 09:22:49 PM
It won’t be Bitcoin. Of this I am certain. Bitcoin has already failed as a currency.

Bitcoin nearly 4x since.

Investing in crytpo is God's way of telling you that you have too much money.

Bitcoin nearly 9x since.

Exactly... it has failed as a currency. A currency is a unit of account and medium of exchange. Anything that has increased 4x within a year is not a viable currency since this level of appreciation represents incredible deflation (in terms of bitcoin). Why spend it? Keep hodling!

You are really really struggling here. Try and understand there is a speculative component to cryptos just like there is a speculative component to gold and/or silver. It's the same thing dude. One difference is the cryptos are definitely a better means of exchange.

I'm not investing in cryptos or currencies or gold and/or silver because I don't invest in cash alternatives. They are means of exchange. Sure gold and/or silver go up and down just like bitcoin. None of that makes them wise investment decisions to have in your portfolio unless you are just after diversification. To me it's not a rational investment option but if you are into gold and/or silver you could easily use cryptos as an alternative.

You need to get some better arguments. Like maybe completely start over.
Title: Re: Bitcoin is funny money
Post by: Telecaster on December 27, 2020, 09:29:16 PM
The block chain is a stupid creation. It is a solution looking for a problem. Nothing needs to be done on-chain.  It only adds problems, worthless complexity, and inflexibility to everything it touches.

I am being logical and rational. We just disagree (mostly because I haven’t drunk the kool-aid that you clearly have).

Blockchain itself has some intriguing uses.  It is essentially a distributed ledger, right?  So for things you want keep track of  it might make some sense.  If you could identify the provenance of a painting (at least since the blockchain was created) that would be a positive.  Same with property transactions and it isn't hard to thing of other things that you want a provenance for.  Autographs, etc. 

It goes off the rails when you try to use it as money.  Money is a medium of exchange, a unit of account, and a store of value.

Bitcoin meets those definitions only if you squint really, really hard.  Most places don't take Bitcoin.  So kinda fails as a medium of exchange. If they do accept Bitcoin, the price is almost always denominated in dollars.  So kinda fails as unit of account.  You can't get a mortgage denominated in Bitcoin.  You might be able to pay in Bitcoin but it is denominated in dollars.  The final criteria is still a question mark, but at best Bitcoin isn't a very stable store of value.

Bitcoin proponents often say Bitcoin is better than gold.  That is an amazingly low bar, and we don't even know if it is true.  Gold has value among collectors, and also there is also demand for industrial uses and for jewelry.  Bitcoin has value among collectors.  That doesn't seem even as good as gold, much less better. 
Title: Re: Bitcoin is funny money
Post by: BrokenBiscuits on December 28, 2020, 01:50:18 AM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

Do you have index funds? Can you also not buy grocery’s by showing your index fund balance?
Do you own a house in part or in full? Can you also not buy grocery’s by letting the shopkeeper know this?
Title: Re: Bitcoin is funny money
Post by: Telecaster on December 28, 2020, 02:40:07 AM
Do you have index funds? Can you also not buy grocery’s by showing your index fund balance?
Do you own a house in part or in full? Can you also not buy grocery’s by letting the shopkeeper know this?

No one is claiming that owning an index fund or home equity is the same as money. 

Similarly, owning Bitcoin isn't the same as money.  This is quite obvious.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on December 28, 2020, 07:15:48 AM
I'd rather buy frozen concentrated orange juice futures than bitcoin
Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on December 28, 2020, 10:18:14 AM
Based on my reading the recommendation is to use one of the big exchanges with a history that might stretch back ten whole years now! Make the exchange, then get the Bitcoin off the exchange and in to a cold wallet ASAP. Make sure you understand how to secure the wallet and the key. Don’t lose the key or you lose everything. Don’t get hacked or you lose everything. Then, when you go to make the exchange back to regular currency you have another risk point.

Yup.  Entirely correct.

Earlier observations on risk/reward are relevant here.  You keep your Bitcoin wallet on your gaming PC with tons of pirated games, well... don't be surprised when it gets emptied out.  Keep your bitcoin in an exchange, online, run by God knows who, having repurposed a domain (and presumably some code) for trading Magic the Gathering cards, well... yeah, you may have a bad time of it.

Keep your btc on a halfway secure system, with backups various places, and the risk is pretty low of losing it all.  Distribute as needed to a few different systems, and hold it yourself.  If you're not up for that, well, then, perhaps bitcoin isn't for you, but that you don't feel like dealing with the details doesn't mean there aren't other people who are perfectly fine with those details.

Quote
Cash in banks and investments with fidelity/vanguard/etc. have a whole regulatory/legal regime around them to protect you from fraud and theft.

Sure, and some would argue that said system is also nicely designed to protect the profit of banks and investment groups, keeping them from any risk of loss from the sort of idiotic decisions that would ruin individual investors, and may wish not to support that as much. ;)

Though it hardly seems to stop fraud and theft, it's just done in a different way from those places.

Quote
The infrastructure around cryptocurrency still seemed to be in the Wild West stage when I briefly looked into it.

Yeah.  It is.  We're into the third generation or so, and it's far better than the first and second generation, but... still not really anything trustworthy with large sums of money for extended periods of time.  Fortunately, you don't need to trust them with large sums of money for extended periods of time. ;)

Quote
I have no interest in becoming a computer security expert. I also don’t have much interest in digging through company histories to figure out which cryptocurrency exchanges are actually run well vs which are incompetent vs which are run by criminals who will run off to Thailand with all of their customer’s assets and then fake their deaths in order to steal all their money.

Ok.  So Bitcoin isn't for you.

Fair enough. I don’t have a problem if other people want to speculate on it, as long as they understand what they are getting in to. As you said - I decided it wasn’t for me.

I’m blown away when I hear the stories of people putting significant chunks of their net worth into cryptocurrencies with basically zero understanding of the underlying mechanism or risks.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 28, 2020, 10:34:12 AM
Most people don’t use Bitcoin as a currency.  It is much more an asset than anything.  That is certainly how institutional buyers place it in their portfolios.  See Michael Saylor.  No one buys bitcoin to buy groceries with it next week and that’s not a problem because no one buys gold to buy next weeks groceries either.  Unlike other assets, you can certainly use it as a currency if you wish.  You’re free to do that.  Who cares if a store doesn’t accept it directly if you can instantly buy your groceries with it anywhere that accepts credit/debit cards.  The same thing is said of my checking account when I travel overseas; I swipe my card, USD leaves my account and foreign monies enter the vendors account.  This doesn’t make the USD any less valuable because a coffee shop in Oslo wants to be paid in Krones.  These arguments against the value of Bitcoin are meritless.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on December 28, 2020, 12:01:20 PM
It's monopoly money
Title: Re: Bitcoin is funny money
Post by: the_gastropod on December 28, 2020, 12:56:00 PM
Blockchain itself has some intriguing uses.  It is essentially a distributed ledger, right?  So for things you want keep track of  it might make some sense.  If you could identify the provenance of a painting (at least since the blockchain was created) that would be a positive.  Same with property transactions and it isn't hard to thing of other things that you want a provenance for.  Autographs, etc. 

At first glance, this may seem pedantic, but I think it's an important clarification. A component of a blockchain is a Merkle Tree. Merkle Trees have been a thing in Computer Science since the late 1970s. Virtually all blockchain enthusiasm is about how neat Merkle Trees are (this talk about ledgers included). The only thing a blockchain gives you over a Merkle Tree is deliberate inefficiency to prevent the double-spending problem from allowing untrusted writers to the database. Blockchain is only usable in a completely digital sense. In the physical world, physics prevents double s pending, and there tend to be property laws and a common sense of "trust" in the legal system. Anyone talking about using blockchain to track physical goods either doesn't know what they're talking about or is trying to ride the hype wave to sell you something.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 28, 2020, 01:00:05 PM
Most people don’t use Bitcoin as a currency.  It is much more an asset than anything.  That is certainly how institutional buyers place it in their portfolios.  See Michael Saylor.  No one buys bitcoin to buy groceries with it next week and that’s not a problem because no one buys gold to buy next weeks groceries either.  Unlike other assets, you can certainly use it as a currency if you wish.  You’re free to do that.  Who cares if a store doesn’t accept it directly if you can instantly buy your groceries with it anywhere that accepts credit/debit cards.  The same thing is said of my checking account when I travel overseas; I swipe my card, USD leaves my account and foreign monies enter the vendors account.  This doesn’t make the USD any less valuable because a coffee shop in Oslo wants to be paid in Krones.  These arguments against the value of Bitcoin are meritless.

Don’t try to change the subject with your army of strawmen!

This thread was started in order to discuss the fact that bitcoin isn’t real money. You admit that it’s not. On this we agree.

But then you go on to discuss value, how institutional investors have decided to speculate on it, and engage in whataboutisms regarding foreign currency conversion.  why?

None of this changes the fact that bitcoin isn’t money. And it never will be.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on December 28, 2020, 01:02:23 PM
[...] Who cares if a store doesn’t accept it directly if you can instantly buy your groceries with it anywhere that accepts credit/debit cards.  The same thing is said of my checking account when I travel overseas; I swipe my card, USD leaves my account and foreign monies enter the vendors account.  This doesn’t make the USD any less valuable because a coffee shop in Oslo wants to be paid in Krones.  These arguments against the value of Bitcoin are meritless.

If it was completely normal for the USD/SEK exchange rate to change by ~100% every 2 months, that would absolutely make USD less valuable as a currency.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on December 28, 2020, 01:03:28 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings
Title: Re: Bitcoin is funny money
Post by: forgerator on December 30, 2020, 04:23:57 PM
It won’t be Bitcoin. Of this I am certain. Bitcoin has already failed as a currency.

Bitcoin nearly 4x since.

Investing in crytpo is God's way of telling you that you have too much money.

Bitcoin nearly 9x since.

Exactly... it has failed as a currency. A currency is a unit of account and medium of exchange. Anything that has increased 4x within a year is not a viable currency since this level of appreciation represents incredible deflation (in terms of bitcoin). Why spend it? Keep hodling!

I think we are way past the argument of Bitcoin being a good currency (its not). It however is an excellent store of value and no one can deny that.
Title: Re: Bitcoin is funny money
Post by: forgerator on December 30, 2020, 04:25:25 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings

how about let's put a pin in this and revisit on Dec 2021. Shall we?
Title: Re: Bitcoin is funny money
Post by: HPstache on December 30, 2020, 04:35:54 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings

how about let's put a pin in this and revisit on Dec 2021. Shall we?

Set a reminder.  That's what I do.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 30, 2020, 05:56:55 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings

how about let's put a pin in this and revisit on Dec 2021. Shall we?

I don't look at any investments with such a tiny time frame. The problem with bitcoin is that it might go gangbusters for 10 years but then it'll be worthless.
Title: Re: Bitcoin is funny money
Post by: Telecaster on December 30, 2020, 06:15:14 PM
I think we are way past the argument of Bitcoin being a good currency (its not). It however is an excellent store of value and no one can deny that.

Depends on what you mean by "excellent store of value."  If you bought Bitcoin back in 2017-18 you would have found that Bitcoin by 2019 you had lost 2/3 - 4/5 of value. 

Losing that much value in that short if time I would place the "epically shitty store of value" category.   
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 30, 2020, 08:29:25 PM
I can't view Bitcoin as a store of wealth. What value does it have other than speculation ? That is why I won't invest in it or gold or silver or currencies. I may speculate in these artifacts.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 31, 2020, 05:25:26 AM
Gold and silver, per se, are not artifacts. They are chemical elements. Although artifacts can be made of gold and silver. However, bitcoin and fiat currency are artifacts.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on December 31, 2020, 09:05:31 AM
IMO, most of the posts above are talking about the present and past. The future of blockchain technology looks very different.

China is on the verge of launching a digital yuan, which would have a solid shot at becoming the world's next reserve currency. The US treasury / federal reserve and the EU are also advancing plans to digitize their currencies. Paper bills and metal coins are already rapidly disappearing, and they will be antique shop items as soon as we switch over.

Why do governments want to move to digital currencies? It would make tax evasion and crime extremely difficult if every transaction was tracked in a blockchain and tied back to an authorized account. Our costly income tax and VAT systems would suddenly become 100% efficient. QE and QT could be accomplished in individual wallets instead of via the rather indirect open market programs attempted up until now. Economic metrics would be available instantaneously, and monetary interventions would have instant effect or could be automated. It's sort of a libertarian nightmare because we'd have zero economic privacy, but it would also solve many social problems and economic inefficiencies.

The case for the current crop of cryptos is that people will be able to use them someday to directly transact, save, or invest in a tax-free, anonymous, and inflation-proof way. Regardless of the fact that all these hopes are somewhere between questionable and flat wrong, I want us all to notice how they are in conflict with the objectives of governments.

Do you really think governments will allow people to make money tax-free if they just pay each other in crypto instead of national currency (taxes are already due on crypto profits realized in dollars)? Do you really think they won't subpoena / investigate / arrest anyone who tries to trade or launder through crypto (see recent cases and crypto asset seizures)? And do you really think inflation will be a serious problem for savers when digital national currencies create a world of real-time metrics and real-time QE/QT (inflation hasn't been a problem for the past 40 years because of improved access to economic information and improved intervention). Due to the conflict with government objectives, I can foresee cryptos being banned someday, as was once done for private ownership of large sums of gold. If you think cryptos will win the battle with governments, try posting some criticism in China and imagine how much harder it would be to operate a secret crypto node or to exchange crypto with digitalized national currencies undetected.

In the interim next 10 years, before the ban, expect several rounds of restrictive legislation, requiring citizens to carefully account for, report, and pay taxes on crypto transactions or face jail time (most people who have profited from crypto are already guilty of tax evasion). These will function to deflate the bubble so that the elimination of private cryptos doesn't face as much resistance.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 09:26:43 AM
I see the term "intrinsic value" thrown around all the time, especially when talking about bitcoin. That term makes no sense and has been bastardized so much from its original use and is now used as a means to claim things have zero value, when the market is actually claiming the complete opposite.

I see the "no intrinsic value" argument leveled against bitcoin all the time. But the reality is there is no such thing as "intrinsic" value. Things in our world only have value because humans value them. Outside of what humans value, the object simply is what it is. "Value" is completely subjective to humans and only measured by what humans determine it to be. Saying something has "intrinsic value" makes absolutely no sense. Once you realize this, then you'll understand why this argument falls apart. It is a way for a person to claim something has zero value in their own subjective viewpoint without offering up a reasoned response as to why they think it doesn't have value in everyone else's eyes.

We as frugal anti-risk taking mustachians put our money into investments and savings that offer varying degrees of value to human life all the time without nary the thought about "intrinsic value". For example, take the company VISA. A lot of people here have no problem having some of their investment money in the company VISA. The value that the company VISA provides to humans is the ability to transact with merchants and people all over the world. It allows people to transaction over the internet, in person, and without the need to carry physical cash with them all the time. We're OK with giving our money to this company because we believe that in the future, this will still be a need for humans to perform. With any reasoned risk analysis, we'd be almost assuredly on the right side with out investment here. Humans in 10 or 20 years will still probably value this solution that VISA provides. Will it vary greatly with the tech being offered or the methods used to provide this service to humans? Absolutely, there probably won't be too many people that would claim the VISA of today will match identically the VISA of tomorrow. However, if the demand for humans to transact over the internet, in person, easily without the need to carry physical cash on them everywhere they go suddenly went to zero, then the likelihood of VISA existing as a company would be very small (large corporations are not agile ones). So we as investors are trading and investing in VISA stock on the entire premise that demand for VISA's services will continue into the future. It's a good bet, but it is still a bet that we're making.

We do that with every company we invest in. While we often make the claim that investing in companies is good because they provide returns and profits. At the end of the day the entire reason they're providing returns in profits has more to do with the fact that the company is providing a demanded service to humans and less to do with the fact that they're an "efficiently" run company that provides profits for investors. If demand dries up for the service that a company provides, no matter how efficiently run that company is, it isn't going to survive.

So what does all of this have to do with bitcoin? Yes, bitcoin is not a company that provides profits/dividends and returns it to investors. But it is a service that can and does provide value to humans. With bitcoin there is absolutely zero supply elasticity to increased demand. Name anything else in this world that has absolutely zero supply elasticity in reaction to an increase in demand. In order for bitcoin to accommodate an increase in demand, the price must go up. Now, just like we ultimately do with any investment we make, it comes down to determining whether we think there will be more or less demand for such a service for humans in the future. Before you can do that, you must understand what that "service" to humanity is.

Bitcoin is completely apolitical. No single person or government or entity can control bitcoin. There are thousands of nodes running the blockchain database all around the world. This database is made immutable by the largest aggregate computational power on earth. There will only ever be 21 million bitcoins mined on this network with ~18.5 million already circulated (and a large portion already lost for good). It is a completely finite digital asset, but is infinitely divisible. Due to its apolitical nature and robust security, it allows people to move value anywhere in the world without requiring any two parties to trust each other or another third-party; this is a first for humanity. With gold, a vast majority of its market value comes from its scarcity and apolitical nature and its long history backs up the premise that it can be used as a store of value that is resistant to geopolitical strife and monetary policy changes. These same properties can be seen within bitcoin. One can try and argue that it isn't a store of value because of its volatility, reasoned analysis will find that volatility is not a property inherent to bitcoin (the larger the market cap and liquidity in the market, the lower volatility will become). On top of this value however, bitcoin provides additional benefits that gold doesn't.

1) Can be independently verified without expensive equipment
2) Can be easily digitally transmitted
3) Requires no third-party trust
4) Completely fungible (without expensive equipment)
5) Highly divisible
6) Completely decentralized
7) Highly portable
8) Can't be counterfeited

Bitcoin can and will be different things to many people. Nassim Nicholas Taleb talks about the power of the minority. The minority is typically what moves markets. For example, even though vegans might only make up 1% of the market, they often dictate where large groups of people go to eat. If there are two restaurants next to each other and one offers a vegan option and the other doesn't, then the one restaurant without vegan options loses the business of the entire group simply because they failed to cater to that 1%. This is why even that 1% of people can often force the market in a direction completely opposite of the majority.

If there is a small percentage of people on the planet that find value in bitcoin where nothing else can provide that same value, then that small market will continue to support the broader speculative market for bitcoin. Even if only 5% of the world uses bitcoin for the properties it provides, that 5% will make it infeasible for governments to ban and also make it competitively advantageous for countries to support that market in the global economy. Banks at much smaller sizes become "too big to fail" due to their intertwined nature in the economy. Bitcoin, if it already isn't there, is becoming extremely close to that tipping point as more and more institutions are putting bitcoin in their reserves. The bitcoin network moves over $2 billion dollars in value every single day.

One of my favorite quotes comes from Hal Finney (one of the original developers who worked on bitcoin and has since passed away):

"Every day that goes by and bitcoin hasn't collapsed due to legal or technical problems, that brings new information to the market. It increases the chances of bitcoin's eventual success and justifies a higher price."

With all of this said, I'd love to hear from critics of bitcoin with some actual reasoned analysis on why they think bitcoin will fail. By "fail", I simply mean demand for bitcoin and its completely unique set of properties will completely dry up in the next 10 years. Each day that goes by that the bitcoin network continues to operate, more and more people and companies will trust having their money backed by this secure computer network.

In my opinion, given today's monetary policy climate (over 30% of USD in circulation have been put in circulation in 2020), I feel it is risky to NOT have any exposure to bitcoin at all. For a forum that claims to value diversification as a means of risk mitigation, I find it odd that so many here overlook this glaring fault in their diversified portfolios. For what it is worth, MassMutual, an insurance company that has been around for almost 200 years, has the sole job of managing risk. This company has looked at bitcoin and decided they should put $100 million on their reserves into bitcoin. I'm sure they've done their regulatory, legal, market, and technical research more than most people here who still don't understand how a blockchain works. If that isn't a signal that bitcoin is a safer bet than most people here are claiming, then I don't know what is.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on December 31, 2020, 09:57:22 AM
The crackdown begins.

https://apple.news/AhKjhxEHiRoujymFa9SQmjw (https://apple.news/AhKjhxEHiRoujymFa9SQmjw)
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 31, 2020, 10:38:59 AM
Quote
On top of this value however, bitcoin provides additional benefits that gold doesn't.

1) Can be independently verified without expensive equipment gold provides this, bitcoin does not
2) Can be easily digitally transmitted gold does not provide this, this was the original purpose of a bank note, though. Keep all the gold in a vault and transact with paper notes giving one the right to be paid in gold “on demand”
3) Requires no third-party trust gold does not require this, but bitcoin does
4) Completely fungible (without expensive equipment) gold has this, but bitcoin does not since every bitcoin or unspent transaction output is separately addressable and traceable
5) Highly divisible yes gold, no on bitcoin since there is no finer division than a santoshi
6) Completely decentralized yes on gold, no on bitcoin since bitcoin is still centralized by the largest mining pool working in concert
7) Highly portable yes on gold, no on bitcoin because bitcoin requires a network connected device in order to submit transaction requests to the mining pool to be included in the next block
8) Can't be counterfeited yes on both, bitcoins held at an exchange can be reported to the “owner” while they have already been transferred out. Until the heist is discovered, the extra bitcoins reported to the user base of the exchange are counterfeit

Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 10:40:04 AM
The crackdown begins.

https://apple.news/AhKjhxEHiRoujymFa9SQmjw (https://apple.news/AhKjhxEHiRoujymFa9SQmjw)

"Crackdown"

If by crackdown you simply mean align money service businesses that handle cryptocurrencies with the regulations for MSBs in the traditional finance world, then sure.

https://home.treasury.gov/news/press-releases/sm1216
https://public-inspection.federalregister.gov/2020-28437.pdf

All the new regulations propose is that MSBs that transmit crypto-currencies must report transactions that exceed $10k to FINCEN similar to how banks must do so today in the form of CTRs. They also require KYC of their customers (which all do today anyway) if transmitting funds in excess of $3000. These are much the same regulations that have been in place in the traditional finance world since the 1970's. Seems odd for you to call it a "crackdown" when the traditional finance world has been operating under these same compliance regulations for 50 years. Does that mean I like these regulations? No. I've worked in the finance industry for 15+ years and I think the Bank Secrecy Act fails to accomplish what it sets out to do.

But this isn't a crackdown on crypto-currencies like you're claiming and I think your previous post in regards to "crackdowns" is wildly off the mark as well. The fact that you think bitcoin is here to allow people to evade taxes is laughable. So the growing number of institutions looking to put bitcoin on their balance sheets are doing so in order to evade taxes? Never mind the fact that a large amount of bitcoin is held in custodial accounts that are just as prone to tax reporting as any other custodied asset.

If you read my previous post, you'll understand why governments will be much more likely to align with bitcoin rather than ostracize it. There are even some local government municipalities that have either already put some bitcoin in their treasuries or now actively seeking to do so. In fact, bitcoin could prove to align quite nicely to government MMT fiscal policies as a means to manage uncontrollable debt.

The fact that you claim that inflation hasn't been a problem for the last 40 years tells me you simply are taking a look at CPI and going by what those numbers tell you without actually doing any further research on the matter. But, that's another discussion entirely.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 11:00:58 AM
Quote
On top of this value however, bitcoin provides additional benefits that gold doesn't.

1) Can be independently verified without expensive equipment gold provides this, bitcoin does not
2) Can be easily digitally transmitted gold does not provide this, this was the original purpose of a bank note, though. Keep all the gold in a vault and transact with paper notes giving one the right to be paid in gold “on demand”
3) Requires no third-party trust gold does not require this, but bitcoin does
4) Completely fungible (without expensive equipment) gold has this, but bitcoin does not since every bitcoin or unspent transaction output is separately addressable and traceable
5) Highly divisible yes gold, no on bitcoin since there is no finer division than a santoshi
6) Completely decentralized yes on gold, no on bitcoin since bitcoin is still centralized by the largest mining pool working in concert
7) Highly portable yes on gold, no on bitcoin because bitcoin requires a network connected device in order to submit transaction requests to the mining pool to be included in the next block
8) Can't be counterfeited yes on both, bitcoins held at an exchange can be reported to the “owner” while they have already been transferred out. Until the heist is discovered, the extra bitcoins reported to the user base of the exchange are counterfeit

1) A metal verifier tool (the best true way to determine metal authenticity without damaging or altering the metal) costs about $1000. A bitcoin node can be run on computer hardware as cheap as $50 and can be used to verify every bitcoin in circulation.
2) You're right, gold does not provide this and relying on third-parties to transmit IOUs is often not an alternative.
3) You're argument that gold does not require this is not a valid argument against the value of bitcoin providing this benefit.
4) For gold to be completely fungible, you must smelt it down and verify its purity, and stamp it. Not something that just anyone can do. Yes, UTXOs can be tracked, but every UTXO can be made easily fungible independently without trusted third-parties and without expensive equipment.
5) No, gold is limited to the useful physical transmissible amount possible. The smallest division is not a satoshi. You can go smaller than satoshis. The lightning network already does this and uses millisatoshis (one thousandth of a satoshi).
6) Almost all gold is stored in centralized vaults. Miners don't control the network and bitcoin mining has been getting more and more decentralized as time goes on. To understand why miners don't control the bitcoin network, read here: https://medium.com/hackernoon/bitcoin-miners-beware-invalid-blocks-need-not-apply-51c293ee278b (https://medium.com/hackernoon/bitcoin-miners-beware-invalid-blocks-need-not-apply-51c293ee278b)
7) No, gold itself is not highly portable. It is extremely heavy. Gold IOUs are portable, but again rely on trusted third-parties to do so. Bitcoin is highly portable and is simply information. Any information (in this case private keys), even in its physical form (seed words) can be transmitted in ways where your imagination is the only limit. (hidden with steganography in a photograph for example).
8) What you're describing is not counterfeiting. That's call theft.

I suggest you read up more on bitcoin as it is clear by your remarks to these points I've made that you misunderstand it to a great extent.
Title: Re: Bitcoin is funny money
Post by: Northman on December 31, 2020, 11:27:16 AM
All these bitcoin believers here with a big mouth now that its surging, but all quite when shit hits the fan. The more they read about it, the more they trust it... the psychology of bonding.

Bitcoin has no future. It has the slowest transaction network I have seen. The technology sucks and all those forks to make it faster didn't succeed. Institutional investors don't believe in it, they just take advantage of the hype. When it goes bust, they will take the profit that you have put in before you even notice. Blockchain is great, but bitcoin is just not.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 11:38:21 AM
All these bitcoin believers here with a big mouth now that its surging, but all quite when shit hits the fan. The more they read about it, the more they trust it... the psychology of bonding.

Bitcoin has no future. It has the slowest transaction network I have seen. The technology sucks and all those forks to make it faster didn't succeed. Institutional investors don't believe in it, they just take advantage of the hype. When it goes bust, they will take the profit that you have put in before you even notice. Blockchain is great, but bitcoin is just not.

The fact that you say it is "slow" tells me you don't understand the technology or what a blockchain's purpose is. Read this posting I made that addresses this to learn more:

https://forum.mrmoneymustache.com/investor-alley/bitcoin-are-we-still-out/msg2757464/#msg2757464

A clear tell of anyone who doesn't understand the technology or how it works is when someone says "blockchain is great, but bitcoin is not". I don't mean to direct this at you specifically, but more at the broader public because this was a phrase that was thrown around extensively during the 2017 hype period and, while it hasn't been used as much frequently, still seems to persist somewhat.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 31, 2020, 12:11:12 PM
blockchain is worthless.  What is the point of a computer data file that can never be changed or corrected?  Why would anyone want to perform financial transactions in such a medium?  Why would anyone want to submit legal title of a piece of art, or commodities, or laden goods to such a system?  Why would anyone want to engage with a system where the access, right, or title to the valuable item can irrevocably be lost or high-jacked by loosing or stealing the private keys? 

The benefit to using ordinary modern digital communication and recording systems for these transactions, as opposed to block chain, is that when mistakes are made, they can be corrected by agreement of the parties.  And if the parties refuse to agree the disagreement can then be taken to a court of law in a competent jurisdiction and the disagreement can be settled and remedies can be enforced.  The blockchain just doesn't admit of correction of mistakes either agreed to or otherwise.

Once written to, blockchain is basically the worlds slowest, bloated, resource intensive, data-dilute form of read only memory.
Title: Re: Bitcoin is funny money
Post by: Northman on December 31, 2020, 12:19:18 PM
All these bitcoin believers here with a big mouth now that its surging, but all quite when shit hits the fan. The more they read about it, the more they trust it... the psychology of bonding.

Bitcoin has no future. It has the slowest transaction network I have seen. The technology sucks and all those forks to make it faster didn't succeed. Institutional investors don't believe in it, they just take advantage of the hype. When it goes bust, they will take the profit that you have put in before you even notice. Blockchain is great, but bitcoin is just not.

The fact that you say it is "slow" tells me you don't understand the technology or what a blockchain's purpose is. Read this posting I made that addresses this to learn more:

https://forum.mrmoneymustache.com/investor-alley/bitcoin-are-we-still-out/msg2757464/#msg2757464

A clear tell of anyone who doesn't understand the technology or how it works is when someone says "blockchain is great, but bitcoin is not". I don't mean to direct this at you specifically, but more at the broader public because this was a phrase that was thrown around extensively during the 2017 hype period and, while it hasn't been used as much frequently, still seems to persist somewhat.

Not a newbie to bitcoin. You might think people that read about it are falling in love with bitcoin. Love is blind, what can I say. You will hate it when it breaks your heart.

Transaction are slow. We all know the scalability issues it has. It's nothing new:
https://en.m.wikipedia.org/wiki/Bitcoin_scalability_problem
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 12:22:52 PM
blockchain is worthless.  What is the point of a computer data file that can never be changed or corrected?  Why would anyone want to perform financial transactions in such a medium?  Why would anyone want to submit legal title of a piece of art, or commodities, or laden goods to such a system?  Why would anyone want to engage with a system where the access, right, or title to the valuable item can irrevocably be lost or high-jacked by loosing or stealing the private keys? 

The benefit to using ordinary modern digital communication and recording systems for these transactions, as opposed to block chain, is that when mistakes are made, they can be corrected by agreement of the parties.  And if the parties refuse to agree the disagreement can then be taken to a court of law in a competent jurisdiction and the disagreement can be settled and remedies can be enforced.  The blockchain just doesn't admit of correction of mistakes either agreed to or otherwise.

Once written to, blockchain is basically the worlds slowest, bloated, resource intensive, data-dilute form of read only memory.

Nothing you just said makes any sense whatsoever. Rather than provide a long post correcting many of the misrepresentations of the technology you just posted (some of which I've already addressed), just about anything that could be written on bitcoin and/or blockchain has already been written somewhere on the internet. So instead I'll just point you to this resource where you can read up further and education yourself on the matter. This is really a great collection of information:

https://www.lopp.net/bitcoin-information.html
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 12:24:07 PM
All these bitcoin believers here with a big mouth now that its surging, but all quite when shit hits the fan. The more they read about it, the more they trust it... the psychology of bonding.

Bitcoin has no future. It has the slowest transaction network I have seen. The technology sucks and all those forks to make it faster didn't succeed. Institutional investors don't believe in it, they just take advantage of the hype. When it goes bust, they will take the profit that you have put in before you even notice. Blockchain is great, but bitcoin is just not.

The fact that you say it is "slow" tells me you don't understand the technology or what a blockchain's purpose is. Read this posting I made that addresses this to learn more:

https://forum.mrmoneymustache.com/investor-alley/bitcoin-are-we-still-out/msg2757464/#msg2757464

A clear tell of anyone who doesn't understand the technology or how it works is when someone says "blockchain is great, but bitcoin is not". I don't mean to direct this at you specifically, but more at the broader public because this was a phrase that was thrown around extensively during the 2017 hype period and, while it hasn't been used as much frequently, still seems to persist somewhat.

Not a newbie to bitcoin. You might think people that read about it are falling in love with bitcoin. Love is blind, what can I say. You will hate it when it breaks your heart.

Transaction are slow. We all know the scalability issues it has. It's nothing new:
https://en.m.wikipedia.org/wiki/Bitcoin_scalability_problem

The fact that you responded with this remark and link tells me you didn't read the post of mine that I linked to....
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on December 31, 2020, 12:35:16 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings

how about let's put a pin in this and revisit on Dec 2021. Shall we?

Sure if you want to embarrass yourself
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on December 31, 2020, 02:34:10 PM
I bet this thread gets several approving nods at the annual elevator operator or horse and buggy conventions.

What a dumpster fire.

I wonder if the anti-BTC folks are just angry that they don't get "it."  It must be frustrating to see other people excited about something, but you think it's the biggest fraud in the world.

Probably similar to how the Brits felt about their upstart cousin at the turn of the 1900s.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 03:19:00 PM
I'll post one more article that addresses common criticisms of bitcoin for those people that still just don't seem to get it and continue to post inaccurate or misinformed claims about bitcoin. This is an article by Fidelity (an institution many here probably invest with).

https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms (https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms)

You don't need to invest in something and no one here is asking you to save money with bitcoin. But continuing to spout false claims about bitcoin is not going to help anyone.
Title: Re: Bitcoin is funny money
Post by: Sunder on December 31, 2020, 03:35:52 PM
I generally avoid Bitcoin threads because of the debates like this. But I have been struck by both the level of knowledge and the level of misinformation in this thread. Usually it's just misinformation and speculation. I would like to set up my credentials to make comment on this thread. It probably means little to most people, because I could be making it up, but hopefully it will make some people take me seriously enough to cross check their information.

Firstly, I am no Bitcoin or Crypto expert, and don't claim to be. However, for about 5 years, I worked in Cybercrime and Fraud prevention and I was invited by my state's police intelligence to provide a briefing session on the use of Bitcoin in the criminal underground. As a result of that briefing session, I was invited to a working group of financial institutions to discuss the use of Bitcoin and blockchains in general.

Secondly, I hold no bitcoin. I will explain later why.

But on from that. A few comments to make:

1. Firstly, the currency almost all of us use are "fiat" money. That is, they are created by decree, and otherwise has no value. If the reserve bank suddenly declared that all $100 notes were not legal tender, could not be banked, and spending them were a crime, what value do you think they'd have? Perhaps in a pandemic, the equivalent of an hour's work in exchange for a stack large enough to replace toilet paper for a month? Bitcoin is the same, except, rather than a government decreeing the value of piece of cotton (US) or polymer (AUS), it's done by public consensus and that consensus is verified cryptographically.

2. Secondly, Bitcoin is inherently a deflationary "currency", or an inflationary "Asset". Where as more dollars are printed every year, the number of Bitcoins remain the same. Each year however, people do lose cryptographic keys, which means any value on the ledger assigned to that key is lost permanently. This means as long as the ledger exists, there will be fewer Bitcoins around. So kind of like collecting rare cars, or stamps or coins, as each year each one is lost or destroyed, you could be quick to jump to the conclusion "Doesn't this mean that Bitcoin will always appreciate over the long term"? And... That question is meaningless. Appreciate against what? The SUPPLY of bitcoin will always dwindle, so if the demand increases, yes, you'd be right. But if a couple major currencies wrote into law that Crypto Exchanges were illegal, and banks and credit card companies couldn't deal with them at all, then although the supply of bitcoin has dropped, the demand would drop even further.

3. Thirdly, as a consensus based system, if you can get 50.000000000000001% of the compute power on the network, then you can sign any transaction you want, effectively making the currency worthless. Think that's unlikely? Five companies in China control more than 50% of the hashing power. Do you think China is above the nationalisation of private assets? You should read a bit more history ;)

So that's the end of my factual side of things. Here's my opinion instead.

At my peak, I owned two whole bitcoins. At the time, worth $80. When I had to give my banking details to an unknown exchange to cash them out, I said "forget it", and gave them both to a mate who ended up making over $300k out of bitcoins. Oh well, my loss, his gain.

Knowing that bitcoins are a deflationary currency, would I be mad not to invest at least a small part of my portfolio, say 5% in Bitcoin? Without being too exact, let's call that $30k. I consider whether I would keep $30k of cash at home. Would I keep $30k of gold at home? Would I keep $30k of bonds at home? Yet keeping it on a secured USB key cold, that's still what I would be doing. The risks of keeping it on a live system would be foolish to say the least, and I've been both on the red team (Ethical hacker), and blue team (Incident response). I KNOW how to secure IT, and I'd be afraid to keep that much "cash" on my PC.

Would I keep $30k of credits in an unregulated eCommerce store? No, I wouldn't. Would I keep that much cash in a regulated financial institution like Paypal, or a licensed bank? - Only because I have little choice, but even then I have a hardened PC, and set some pretty strict limits on everything. Even if someone had a gun to my head, all my passwords, two factor authentication and could make me say anything to the bank, they couldn't transfer more than $25k a day. 

Is that reason enough to turn down probably 20-30% gain a year? Probably not. Everything in life is risk, and one of the greatest risks -  especially in a low interest rate environment during QE, is doing nothing. You guarantee you will lose a percentage of all your savings every year. So why don't I get in?

As someone else mentioned before, Bitcoin is not anonymous. In fact, it's the opposite. It's public. As part of work with police intelligence, we tried to do a "X degrees of separation" study. We obtained a list of all the bitcoin wallets we knew to be involved in ransomware, in Silk Road, and other dodgy uses, and we looked on the very public ledger, to see how much of the Bitcoins being transferred around, had some kind of close relationship with a criminal activity. It's hard to know the reliability of the study, because Bitcoins are laundered through both "tumblers" to hide their provenance, and legitimate exchanges. However, the answer was "Almost all of it". When you buy a Bitcoin from a legitimate exchange, it has transferred real cash to a person in exchange for Bitcoin that was very recently received from a wallet associated with ransomware, or used to buy drugs or weapons on Silk Road or similar.

In some cases, it was direct. That is, the exchange is either unaware, or willfully unaware that they are receiving the proceeds of crime. More often it took 2 or 3 steps before it got to a legitimate exchange, but this can be explained by Bitcoin tumblers, or moving to smaller, lower risk wallets, or paying out to members of criminal syndicates.

In other words, the relationship between Legit Bitcoin Exchanges and criminals were pretty short. Crime pays, because innocent people were willing to part with cash to allow criminals to launder money. I just didn't want to be a part of that. I guess that's just me though. Every time a tradie offers a significant discount for cash I know they're avoiding tax, and if I can (they haven't started work), I'll refuse their offer. If I can't, I'll insist on paying by bank transfer, then report them to the Australian Tax Office. Far easier now I have a bank account they can trace.

Pretty scary ethic to stand by though. One time, even though he had no idea I planned to report him, I had one tradie get angry and start threatening me. The job was $3k, and I told him I don't carry that much cash. He said I needed to get in his car and he'd drive me to the ATM, and I explained my daily withdraw limit was $1k. He then insisted I bring my wife, and she could take out $1k too and he'd come back for the rest. At that point I told him he was making me uncomfortable, and he could watch me do a direct transfer, or I could call the police, because I wasn't getting in a car with anyone. He backed down at that.

Anyway. Interesting to see the different view points on here. All valid - but not all, to me at least justified very well.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 31, 2020, 04:01:59 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings

how about let's put a pin in this and revisit on Dec 2021. Shall we?

Here is the problem.  BTC works in cycles and this current bullrun began right on schedule.  By December 2021, we will most likely be in the bear market.  That said, that bear will probably "crash" down to $50k or more, but its still going to stink to see our BTC drop from 6 digits.  However, this bull market may be different as its driven by institutional buyers.  Noone knows.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on December 31, 2020, 04:08:19 PM
3. Thirdly, as a consensus based system, if you can get 50.000000000000001% of the compute power on the network, then you can sign any transaction you want, effectively making the currency worthless. Think that's unlikely? Five companies in China control more than 50% of the hashing power. Do you think China is above the nationalisation of private assets? You should read a bit more history ;)

So that's the end of my factual side of things. Here's my opinion instead.

I just wanted to make a very important correction here (coincidentally right before you state that it's the end of your factual side of things).   :)

Miners do not have the ability to sign any transaction they want. Even if they control 100% of the hash rate on the network, that power doesn't give them the ability to sign any transaction they want. To sign a transaction, you need the private keys behind the UTXO/address. So if I own 1 bitcoin and only I own the private keys to that bitcoin, then only I can spend that bitcoin. It doesn't matter how much hash rate any miner or mining pool control, nothing will change that fact. What a 51% percent attack could theoretically do is a double spend. This would involve actually having bitcoin they control the private keys to and sending them to someone in exchange for something else, when the transaction is accepted, they create blocks with their mining power that sends bitcoin to an address they control as opposed to the original intended recipient of the transaction. This is why it is ALWAYS important as a recipient of bitcoin in a transaction to wait for confirmations of a transaction before exchange goods or considering the transaction final. This is why exchanges typically wait for transactions to have 6 or so confirmations before allowing withdrawals or trades to take place on that bitcoin.

Finally, while this is all good in theory, there are several things that should also be discussed with regards to a 51% attack and why miners are much more likely to act in good faith as opposed to try and attack the network with double spends. 1) Double spends by rewriting blocks are very apparent. Orphaned blocks don't typically happen and it would be very apparent if there were an orphaned block that contained a double spend in it. Getting away with a 51% attack, because it is such an overt attack, would reduce the confidence in the network greatly and thus the price would suffer. So by compromising the network in such a way that the price suffers because they destroyed the security of the network, they would end up destroying their own value that they just worked so hard to produce by mining.

So such an attack, rather than looking to extract value out of bitcoin, would be more likely to be done by a nation state to try and kill bitcoin outright. But doing so would require acquiring more electricity than a small country, more computing power than even the top 500 supercomputers on the planet combined, and operating all this on a continuous basis (extremely costly), just in an attempt to destroy bitcoin. Finally, EVEN if that took place, because as I said, such an attack is very overt, the defense against an attack from a network perspective is extremely easy and is just a small change in code. If it were such an existential threat like this, you can be sure the network would defend itself. So in this case, the cost to attack it is extremely high, while the cost to defend it is very minimal.

For more information on why miners do not control the network, read this article that I linked to earlier that explains in more detail.

https://medium.com/hackernoon/bitcoin-miners-beware-invalid-blocks-need-not-apply-51c293ee278b (https://medium.com/hackernoon/bitcoin-miners-beware-invalid-blocks-need-not-apply-51c293ee278b)
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 31, 2020, 04:14:12 PM
I think we are way past the argument of Bitcoin being a good currency (its not). It however is an excellent store of value and no one can deny that.

Depends on what you mean by "excellent store of value."  If you bought Bitcoin back in 2017-18 you would have found that Bitcoin by 2019 you had lost 2/3 - 4/5 of value. 

Losing that much value in that short if time I would place the "epically shitty store of value" category.

There was only a 3 month period in which you could have bought Bitcoin and ever have it dip below your basis.  BTC went nuts in September 2017 and went from 4k to 19.5k before having a sharp crash (which was still exponentially higher than it was at the start of the year.  Sucks to buy during that three month period but if they held it they would be quite significantly today.  There are ways to avoid getting crushed by crashes - DCA.  DCA in through the 2017 and you never would have lost money.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on December 31, 2020, 04:17:26 PM
blockchain is worthless.  What is the point of a computer data file that can never be changed or corrected?  Why would anyone want to perform financial transactions in such a medium?  Why would anyone want to submit legal title of a piece of art, or commodities, or laden goods to such a system?  Why would anyone want to engage with a system where the access, right, or title to the valuable item can irrevocably be lost or high-jacked by loosing or stealing the private keys? 

The benefit to using ordinary modern digital communication and recording systems for these transactions, as opposed to block chain, is that when mistakes are made, they can be corrected by agreement of the parties.  And if the parties refuse to agree the disagreement can then be taken to a court of law in a competent jurisdiction and the disagreement can be settled and remedies can be enforced.  The blockchain just doesn't admit of correction of mistakes either agreed to or otherwise.

Once written to, blockchain is basically the worlds slowest, bloated, resource intensive, data-dilute form of read only memory.

You are literally the only person I have ever heard that said Blockchain is worthless.  Even the Bitcoin bashers on CNBC and Marketwatch praise blockchain. 
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on December 31, 2020, 04:34:43 PM
Wow lots of people here really angry about bitcoin LMAO.  Ask yourself this, what is the bigger risk at this point, owning Bitcoin or not owning any Bitcoin?  I can't imagine owning zero bitcoin, I don't actually think I could sleep at night if I owned no bitcoin.  For me it feels too risky to not have any bitcoin.
Title: Re: Bitcoin is funny money
Post by: celerystalks on December 31, 2020, 06:42:08 PM
blockchain is worthless.  What is the point of a computer data file that can never be changed or corrected?  Why would anyone want to perform financial transactions in such a medium?  Why would anyone want to submit legal title of a piece of art, or commodities, or laden goods to such a system?  Why would anyone want to engage with a system where the access, right, or title to the valuable item can irrevocably be lost or high-jacked by loosing or stealing the private keys? 

The benefit to using ordinary modern digital communication and recording systems for these transactions, as opposed to block chain, is that when mistakes are made, they can be corrected by agreement of the parties.  And if the parties refuse to agree the disagreement can then be taken to a court of law in a competent jurisdiction and the disagreement can be settled and remedies can be enforced.  The blockchain just doesn't admit of correction of mistakes either agreed to or otherwise.

Once written to, blockchain is basically the worlds slowest, bloated, resource intensive, data-dilute form of read only memory.

You are literally the only person I have ever heard that said Blockchain is worthless.  Even the Bitcoin bashers on CNBC and Marketwatch praise blockchain.

Well perhaps you should get out of your crypto echo chamber.

Lots of people think blockchain is worthless.
Title: Re: Bitcoin is funny money
Post by: Sunder on December 31, 2020, 08:16:19 PM

Miners do not have the ability to sign any transaction they want. Even if they control 100% of the hash rate on the network, that power doesn't give them the ability to sign any transaction they want. To sign a transaction, you need the private keys behind the UTXO/address. So if I own 1 bitcoin and only I own the private keys to that bitcoin, then only I can spend that bitcoin. It doesn't matter how much hash rate any miner or mining pool control, nothing will change that fact.

I think you're right. For some reason, I thought they could sign into the block a bad hash. My apologies.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on December 31, 2020, 11:57:06 PM
Gold and silver, per se, are not artifacts. They are chemical elements. Although artifacts can be made of gold and silver. However, bitcoin and fiat currency are artifacts.

In effect they are the same thing. They are used as speculative tools rather than a means of exchange or for any intrinsic purpose.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on January 01, 2021, 12:01:01 AM
Quote
On top of this value however, bitcoin provides additional benefits that gold doesn't.

1) Can be independently verified without expensive equipment gold provides this, bitcoin does not
2) Can be easily digitally transmitted gold does not provide this, this was the original purpose of a bank note, though. Keep all the gold in a vault and transact with paper notes giving one the right to be paid in gold “on demand”
3) Requires no third-party trust gold does not require this, but bitcoin does
4) Completely fungible (without expensive equipment) gold has this, but bitcoin does not since every bitcoin or unspent transaction output is separately addressable and traceable
5) Highly divisible yes gold, no on bitcoin since there is no finer division than a santoshi
6) Completely decentralized yes on gold, no on bitcoin since bitcoin is still centralized by the largest mining pool working in concert
7) Highly portable yes on gold, no on bitcoin because bitcoin requires a network connected device in order to submit transaction requests to the mining pool to be included in the next block
8) Can't be counterfeited yes on both, bitcoins held at an exchange can be reported to the “owner” while they have already been transferred out. Until the heist is discovered, the extra bitcoins reported to the user base of the exchange are counterfeit

You are pretty funny. Arguing gold has a purpose other than speculation but Bitcoin has no purpose. I mean you have a tiny point in that gold is used in jewellery but that doesn't equate to it's value.

If you want to invest in gold and/or silver and/or currencies and cryptos be my guest. I can understand the diversification benefits for a trivial amount of your portfolio. Personally I don't invest in something that has no intrinsic value.

Companies produce profits. I'm betting on that.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 01, 2021, 06:36:47 AM
All I can say is that this has been a great debate. I think this sums it up:

Predictably the bitcoin folks wrote long windy mostly inaccurate essays trying to convert normal folks to their flawed economic religion. Generally these essays were riddled with straw men, weasel words, bald faced lies, attempts to invert the burden of proof and persuasion, and obvious lack of comprehension of basic economic principals. These folks have a tough time talking about their crypto idol with folks who are not true-believers because they presume everyone has accepted all of their premises. But everyone has not. (Thank the Lloyd).

The bitcoin/crypto skeptics, nevertheless, kept it cool and tried to help educate these misguided souls. We were mostly straight shooters who put forth legitimate criticisms, tried to correct errors of fact, asked serious questions (most of which went ignored). At the end of the day I give us credit for once again debunking this toxic economic ideology. Victory was ours.

Thanks @Pomegranate12 for starting this well needed anti-bitcoin thread.

Point anti-bitcoin.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 01, 2021, 08:55:03 AM
All I can say is that this has been a great debate. I think this sums it up:

Predictably the bitcoin folks wrote long windy mostly inaccurate essays trying to convert normal folks to their flawed economic religion. Generally these essays were riddled with straw men, weasel words, bald faced lies, attempts to invert the burden of proof and persuasion, and obvious lack of comprehension of basic economic principals. These folks have a tough time talking about their crypto idol with folks who are not true-believers because they presume everyone has accepted all of their premises. But everyone has not. (Thank the Lloyd).

The bitcoin/crypto skeptics, nevertheless, kept it cool and tried to help educate these misguided souls. We were mostly straight shooters who put forth legitimate criticisms, tried to correct errors of fact, asked serious questions (most of which went ignored). At the end of the day I give us credit for once again debunking this toxic economic ideology. Victory was ours.

Thanks @Pomegranate12 for starting this well needed anti-bitcoin thread.

Point anti-bitcoin.

It must be so exhausting from all the winning down there.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on January 01, 2021, 03:26:15 PM
All I can say is that this has been a great debate. I think this sums it up:

Predictably the bitcoin folks wrote long windy mostly inaccurate essays trying to convert normal folks to their flawed economic religion. Generally these essays were riddled with straw men, weasel words, bald faced lies, attempts to invert the burden of proof and persuasion, and obvious lack of comprehension of basic economic principals. These folks have a tough time talking about their crypto idol with folks who are not true-believers because they presume everyone has accepted all of their premises. But everyone has not. (Thank the Lloyd).

The bitcoin/crypto skeptics, nevertheless, kept it cool and tried to help educate these misguided souls. We were mostly straight shooters who put forth legitimate criticisms, tried to correct errors of fact, asked serious questions (most of which went ignored). At the end of the day I give us credit for once again debunking this toxic economic ideology. Victory was ours.

Thanks @Pomegranate12 for starting this well needed anti-bitcoin thread.

Point anti-bitcoin.

It must be so exhausting from all the winning down there.

Dude has some logical reasoning problems. He has a strawman argument and he is holding to it but when the flaws get pointed out he says oh in that case it's different.

In life I've learnt to be guided by principles and logic. celerystalks doesn't use principles and logic when trying to argue his point. Then he says he has won the debate.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on January 01, 2021, 03:58:43 PM
I'm sure all the folks making absolute bank out of Bitcoin on this bullrun are really upset that celery stick man has 'won' the debate.  They'll be sitting in their lambos crying lmao.
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 01, 2021, 05:07:13 PM
He has a strawman argument and he is holding to it...

"Strawman argument" is a stronger fallacy than what's being used here, which I'd call more "argument by assertion."

"Bitcoin sucks.  You're all losers.  You'll cry in your computers, for sure!  So it sucks."

There are plenty of valid criticisms of bitcoin, few of which have made an appearance here, and few of which have any real impact on decisions made to hold or not.
Title: Re: Bitcoin is funny money
Post by: BicycleB on January 01, 2021, 05:37:57 PM
@Syonyk, @Northman, @Sunder, @lifeanon269, @ChpBstrd - very informative comments, thanks for posting.

Title: Re: Bitcoin is funny money
Post by: chevy1956 on January 01, 2021, 05:48:13 PM
I'm sure all the folks making absolute bank out of Bitcoin on this bullrun are really upset that celery stick man has 'won' the debate.  They'll be sitting in their lambos crying lmao.

This still isn't a good reason to bet on bitcoin. Traders have a concept called passing the hot potato. The guy who gets left with it in the end loses. So sure people make bank until they don't.

It's a speculative tool which is fine for diversification purposes within your portfolio if you are that way inclined. Personally I don't bet on completely speculative assets. My future prediction is that for cryptos to become a more utilized means of exchange the speculation will have to stop or be constrained significantly. Cryptos purpose which to me is just really money is very different to it's value as a speculative asset. I remember learning about money years ago while studying economics and you don't actually want money to be something that increases or decreases significantly due to speculation. It sort of goes against the principle of money.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 01, 2021, 06:23:29 PM
https://medium.com/@kaistinchcombe/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100

https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/

https://www.forbes.com/sites/naeemaslam/2018/08/31/nouriel-roubini-says-blockchain-is-useless-all-icos-are-scam/

https://glennchan.wordpress.com/2018/02/20/blockchain-is-a-useless-technology/

Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 01, 2021, 07:03:23 PM
It's a speculative tool which is fine for diversification purposes within your portfolio if you are that way inclined. Personally I don't bet on completely speculative assets. My future prediction is that for cryptos to become a more utilized means of exchange the speculation will have to stop or be constrained significantly. Cryptos purpose which to me is just really money is very different to it's value as a speculative asset. I remember learning about money years ago while studying economics and you don't actually want money to be something that increases or decreases significantly due to speculation. It sort of goes against the principle of money.

Answer this question for yourself. How do you bootstrap a new currency from a valuation of $0 to being used widespread by people without price speculation being involved along the way? In fact, the entire premise of speculation is actually a benefit for adoption because without the opportunity for people to speculate or earn money by being early adopters of such a new ecosystem, then there would be no reason for someone to switch from using USD to using a brand new currency that is worth $0 or pennies that isn't accepted anywhere. The ONLY reason for anyone to decide to pick some up would be for the opportunity to make money based on the idea that it WILL become something some day. Bitcoin has no organization or corporate marketing to help push adoption (at least early on) and so it doesn't have the benefit of partnerships or guarantees in anyway. Over time (as has been historically shown with bitcoin so far), volatility will go down.

In this way, bitcoin has already been a massive success. 15 years ago if anyone would've ever guessed that a digital currency that was created by an anonymous person originally worth $0 and organically distributed among users on the internet would ever become an asset with a market cap worth over half a trillion dollars, you'd think they were insane for such a prediction. And yet here we are...


Volatility was also addressed in this article by Fidelity that I linked to earlier:
https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms (https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms)
Title: Re: Bitcoin is funny money
Post by: MilesTeg on January 01, 2021, 07:21:28 PM
Bitcoin, and all cryptos, are a joke.

No one with half a brain cell would think these things are worth dabbling in.

They are an asset bubble scam, and at that they are definitely not a joke.
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 01, 2021, 07:44:50 PM
They'll be sitting in their lambos crying lmao.

I would hope people on this forum, at least, would put Bitcoin/crypto gains to better use than lambos.

very informative comments, thanks for posting.

*shrug*  Obviously in the minority, "deluded" opinion here, that Bitcoin isn't a pure scam, that it's interesting and worth paying attention to.  You can safely write off my writings as the rantings of an environmentally disastrous nutcase who ought be ignored.

This still isn't a good reason to bet on bitcoin. Traders have a concept called passing the hot potato. The guy who gets left with it in the end loses. So sure people make bank until they don't.

And the potato will remain hot far longer than you can remain in denial?  To badly paraphrase a comment on shorts...

Isn't that part of investing, though?  Figuring out when things are likely to be "no longer hot"?  Abusing history badly, buggy whip and horse drawn carriage manufacturers were probably solid investments, up until they weren't.  Paying attention to trends and adjusting asset mixes is just part of it, and while I know the consensus is "Put it all in index funds!" around here, there are large gains to be had outside that, if one pays attention.

Quote
...and you don't actually want money to be something that increases or decreases significantly due to speculation. It sort of goes against the principle of money.

Which is why I consider it a "synthetic digital commodity" at this point, instead of money.

They are an asset bubble scam, and at that they are definitely not a joke.

Asset bubble, perhaps.  Scam?  Enough people have decided that they value Bitcoin that it's pretty hard to call it a scam at this point.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 01, 2021, 07:48:19 PM
https://www.benzinga.com/markets/cryptocurrency/20/07/16856255/if-blockchain-cant-serve-gamers-its-useless
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 01, 2021, 08:16:19 PM
What the fuck do "gamers" have to do with Bitcoin?

"Gamer": A manboy who hasn't gotten over the fact that they have to face reality, not a synthetic, digital world in which they are Lords, Kings, Knights, and other such things, because the difficulty is adapted to their incompetence.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on January 01, 2021, 08:29:16 PM
Answer this question for yourself. How do you bootstrap a new currency from a valuation of $0 to being used widespread by people without price speculation being involved along the way?

I understand this point but the flip point which I'm making is still valid. No one is going to use Cryptos as a means of exchange if the value keeps going up the way it has been. Maybe better put it will only be used sporadically.

It's financial value now is the greater fool theory. Until that changes cryptos can't become a legitimate currency alternative.

I could be wrong but I really doubt it.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 01, 2021, 08:45:10 PM
I understand this point but the flip point which I'm making is still valid. No one is going to use Cryptos as a means of exchange if the value keeps going up the way it has been. Maybe better put it will only be used sporadically.

It's financial value now is the greater fool theory. Until that changes cryptos can't become a legitimate currency alternative.

I could be wrong but I really doubt it.

For sure, I agree with you on the point that for a money to be widely used as a medium of exchange currency, you're not going to want high volatility. All I'm saying is that on the road to becoming a widely used medium of exchange currency with low volatility, there is no way to avoid speculation driven volatility in its infancy. So its less of a fault of bitcoin in that manner and more of a simple matter of growing pains.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 01, 2021, 08:45:22 PM
What the fuck do "gamers" have to do with Bitcoin?


The article explains it...

But the short answer appears to be: virtually nothing. 
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 01, 2021, 08:48:49 PM


For sure, I agree with you on the point that for a money to be widely used as a medium of exchange currency, you're not going to want high volatility. All I'm saying is that on the road to becoming a widely used medium of exchange currency with low volatility, there is no way to avoid speculation driven volatility in its infancy. So its less of a fault of bitcoin in that manner and more of a simple matter of growing pains.

Huh? This is pure speculative nonsense.  It's, like, just your opinion, man..

My understanding is that the opposite is true: people choose to use something as money because it provides a stable value.
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 01, 2021, 08:59:12 PM
But the short answer appears to be: virtually nothing.

So why bother linking it?  It was a rubbish article, with a crap premise, poorly written.

Like most of your posts in this thread.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 01, 2021, 09:01:05 PM
But the short answer appears to be: virtually nothing.

So why bother linking it?  It was a rubbish article, with a crap premise, poorly written.

Like most of your posts in this thread.

Oh, my. ::clutches pearls::
Title: Re: Bitcoin is funny money
Post by: MilesTeg on January 02, 2021, 12:55:48 AM

Asset bubble, perhaps.  Scam?  Enough people have decided that they value Bitcoin that it's pretty hard to call it a scam at this point.

Yes. It will never function as a viable currency given its setup. With something like 90% of all bitcoins that will ever be already "mined", in order to become an actual currency used by more than a token few it would have to undergo massive deflation. People who own 1 bitcoin would suddenly have the equivalent of trillions of USD.

It's 100% about the asset bubble.
Title: Re: Bitcoin is funny money
Post by: Finntastic on January 02, 2021, 02:02:42 AM
I'm one of the stupid ones and currently my portfolio is 18% crypto's mainly BTC and besides Gold 6.5% of my portfolio it's the only one that is performing well. My company has also been accepting BTC since 2016 and at somepoint it was 3rd most common currency after EUR and USD but might have dropped behind GBP last year.

Here in Thailand it's not yet widely accepted. Sure I can have my lunch and coffees paying with BTC, but not gasoline or pay my electricity bills or taxes withit (well I guess if I use 3rd party payment processor but that's where the fun stops as we are then in contact with the "old world" and it's goodbuy anonymity).

Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on January 02, 2021, 05:40:13 AM
Who would honestly want to pay for something with BTC when it's likely to  be worth 10 times as much in a few years.  It's never going to be used as a currency because it keeps going up in value.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 02, 2021, 11:41:28 AM
Answer this question for yourself. How do you bootstrap a new currency from a valuation of $0 to being used widespread by people without price speculation being involved along the way?

One way is to issue and/or retire currency as needed in order to maintain a target inflation rate. This is how fiat currencies operate, and also how the USD-pegged cryptos work. Another way is to have the currency be backed by some other asset with a known, relatively stable value. This is how national currencies worked on the gold standard, and the USD-pegged cryptos work on a similar premise (backed by fiat currency rather than a tangible asset). These systems are far from perfect, but they do result in currency with a much more stable value than BTC has ever experienced. Don't throw up your hands and say it can't be done, without first looking at history to see how this problem has been addressed in the past. Every existing currency was new once.

Quote
In fact, the entire premise of speculation is actually a benefit for adoption because without the opportunity for people to speculate or earn money by being early adopters of such a new ecosystem, then there would be no reason for someone to switch from using USD to using a brand new currency that is worth $0 or pennies that isn't accepted anywhere. The ONLY reason for anyone to decide to pick some up would be for the opportunity to make money based on the idea that it WILL become something some day.

This is complete nonsense. I purchase different currencies to facilitate transactions I want to perform (if the person I want to do business with wants payment in that currency), not because I expect the currency itself to go up in value. Shouldn't the usefulness of blockchain technology be sufficient to spur adoption without needing to promise people great riches just from owning a few of your new tokens? A currency that people expect to keep increasing in value is one that nobody will want to use in commerce except as a last resort. Why spend your currency now when it will be worth twice as much next year? What is BTC's answer to this problem? At what point will the value stabilize enough that people have less incentive to hold at all costs and more incentive to exchange their BTC for the goods and services they require? At what price would you say "you know what, I think BTC is overvalued right now"? How do you determine that price?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 02, 2021, 01:08:45 PM
One way is to issue and/or retire currency as needed in order to maintain a target inflation rate. This is how fiat currencies operate, and also how the USD-pegged cryptos work. Another way is to have the currency be backed by some other asset with a known, relatively stable value. This is how national currencies worked on the gold standard, and the USD-pegged cryptos work on a similar premise (backed by fiat currency rather than a tangible asset). These systems are far from perfect, but they do result in currency with a much more stable value than BTC has ever experienced. Don't throw up your hands and say it can't be done, without first looking at history to see how this problem has been addressed in the past. Every existing currency was new once.

Perhaps I wasn't clear enough, but you misunderstood the proposition I was setting. The entire point of bitcoin is to remain decentralized. So there is no way to bootstrap a decentralized currency in such way without speculation being involved. All of the possibilities you've proposed all involved a central party that either must adjust the supply based on whatever metric some central party so chooses, or back the currency with some other unrelated asset held in a centralized account that can't be audited by the general public. Like you yourself said, it would be no different than how fiat currency are today or have been in the past and is one of the very problems that bitcoin set out to solve. Bitcoin solved the byzantine generals problem in computing and that can't be understated as a historic feat.

This is complete nonsense. I purchase different currencies to facilitate transactions I want to perform (if the person I want to do business with wants payment in that currency), not because I expect the currency itself to go up in value. Shouldn't the usefulness of blockchain technology be sufficient to spur adoption without needing to promise people great riches just from owning a few of your new tokens? A currency that people expect to keep increasing in value is one that nobody will want to use in commerce except as a last resort. Why spend your currency now when it will be worth twice as much next year? What is BTC's answer to this problem? At what point will the value stabilize enough that people have less incentive to hold at all costs and more incentive to exchange their BTC for the goods and services they require? At what price would you say "you know what, I think BTC is overvalued right now"? How do you determine that price?

No it is not complete non-sense. Speculation was very much a talked about idea for bitcoin by Satoshi Nakamoto and others as a feature to spurn adoption in the early days. They talked about how even for people who didn't think much of the currency, it still might be worth picking up a few in the event that it does end up taking off. It is called an asymmetric bet. When your upside is such much more massive than your downside, it can be beneficial to pick some up even if you don't think it will become of anything. If the USD in all its digital forms is perfectly sufficient in the developed world for purchasing goods and transacting in our daily lives, there really isn't too much of a need to use something else to buy our daily coffees. Like I said in my other posts, buying retail goods with some form of digital currency was never a technological hurdle for humanity:

https://forum.mrmoneymustache.com/investor-alley/bitcoin-are-we-still-out/msg2757464/#msg2757464 (https://forum.mrmoneymustache.com/investor-alley/bitcoin-are-we-still-out/msg2757464/#msg2757464)

In fact, the "first mover advantage" of our world's fiat currencies can have an extreme network effect that would prevent other currencies from being used as a medium of exchange simply due to the network effect that is such an important feature for a medium of exchange. If everyone is using the USD (digital or otherwise) as their currency, then it can be very difficult to get other people to use something else...unless there is some type of incentive to do so. And since it was never a technological hurdle for humanity to use a digital currency like the USD to pay for retail goods, that incentive must come in the form of something else...like a monetary benefit for being an early adopter.

Finally, in regards to the deflationary properties, a few things I want to point out.

1) Bitcoin will not always go up in such a remarkable fashion as you've seen historically. It is doing this because the market is so minuscule in comparison to the larger economy. The liquidity in the world's bitcoin exchanges is very small and only takes a few million dollars to move the price of bitcoin thousands. As I've said before, there is no supply elasticity for bitcoin to react to increased demand. The amount of people in the world that own bitcoin is still very small (a few percent at most). So it is still very early in regards to what would be considered bitcoin adoption. Since the greater economy is so much larger than the bitcoin market, there can be massive inflows or outflows of money into or out of bitcoin at once which can move the price drastically. This won't always be the case. If bitcoin were to become adopted, even if as just a replacement for gold's use as a safe haven asset, then the amount of money that could flow into or out of bitcoin at any given time would be tamed greatly. As has already been seen historical for bitcoin, its volatility has gone down over time and will continue to go down as the market grows.

2) It just simply isn't true that a deflationary currency would result in people not spending any money at all. People still need goods, food, and shelter to survive. Consumerism, as sad as it may be, is just part of inherent human nature. The problem with our economy and monetary policies of today however is that they exacerbate the problem of consumerism even more. Why save or wait to purchase goods tomorrow if my money isn't going to have the same purchasing power tomorrow as it does today. People are incentivized to buy things today rather than save money. Our entire economy is built around consumption. A brand new iPhone, even though it will be cheaper to buy if you waited 2 years, is still bought in crowded lines the day it comes out at a much more expensive price. While that is not an example of currency deflation, it is an example of human nature in that same price scenario. It reminds me of a MrMoneyMustache article that was written back in 2012 that I often think about. I feel bitcoin aligns with this greatly.

https://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/ (https://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/)

Bitcoin won't always be going up in drastic price swings like it is today. At some point instead it will only grow as our economy does. At which point it becomes a much greater store of value. While it won't get rid of human nature's desire for consumption, at the very least our monetary policy and economy won't also exacerbate the problem by incentivizing these bad habits that humans inherently have. This very much is inline with Mr. Money Mustache's thoughts and teachings about frugality and I'm surprise so many of this forum don't understand this.
Title: Re: Bitcoin is funny money
Post by: forgerator on January 02, 2021, 01:21:11 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings

how about let's put a pin in this and revisit on Dec 2021. Shall we?

Sure if you want to embarrass yourself

yes I'm so very embarrassed already watching my btc stack priced at $33k . I'm sure I'll be even more embarrassed EOY....
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 02, 2021, 01:50:28 PM
One way is to issue and/or retire currency as needed in order to maintain a target inflation rate. This is how fiat currencies operate, and also how the USD-pegged cryptos work. Another way is to have the currency be backed by some other asset with a known, relatively stable value. This is how national currencies worked on the gold standard, and the USD-pegged cryptos work on a similar premise (backed by fiat currency rather than a tangible asset). These systems are far from perfect, but they do result in currency with a much more stable value than BTC has ever experienced. Don't throw up your hands and say it can't be done, without first looking at history to see how this problem has been addressed in the past. Every existing currency was new once.

Perhaps I wasn't clear enough, but you misunderstood the proposition I was setting. The entire point of bitcoin is to remain decentralized. So there is no way to bootstrap a decentralized currency in such way without speculation being involved. All of the possibilities you've proposed all involved a central party that either must adjust the supply based on whatever metric some central party so chooses, or back the currency with some other unrelated asset held in a centralized account that can't be audited by the general public. Like you yourself said, it would be no different than how fiat currency are today or have been in the past and is one of the very problems that bitcoin set out to solve. Bitcoin solved the byzantine generals problem in computing and that can't be understated as a historic feat.

A central bank is not required to have a variable money supply. The BTC protocol already has varying supply! It manufactures new coins out of thin air according to a fixed schedule. They could have just as easily designed it to introduce new coins at a variable rate based on the current exchange rate between BTC and a weighted average of national fiat currencies.

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In fact, the "first mover advantage" of our world's fiat currencies can have an extreme network effect that would prevent other currencies from being used as a medium of exchange simply due to the network effect that is such an important feature for a medium of exchange. If everyone is using the USD (digital or otherwise) as their currency, then it can be very difficult to get other people to use something else...unless there is some type of incentive to do so. And since it was never a technological hurdle for humanity to use a digital currency like the USD to pay for retail goods, that incentive must come in the form of something else...like a monetary benefit for being an early adopter.

Yes, network effects definitely exist with fiat currencies. These are generally a good thing. The less we have to convert our currencies, the more convenient our lives are. There needs to be some compelling reason to switch people off of the existing currencies. If the benefits of decentralization and technological advancement that BTC provides aren't enough motivation on their own to get people to use it, why even bother making a new currency? Surely it should have some reason to exist beyond making the early adopters rich?

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As has already been seen historical for bitcoin, its volatility has gone down over time and will continue to go down as the market grows.

lol. The value has changed by 10% today. This is not unusual for BTC, and is also completely unacceptable for a unit of currency that you're going to write down in a contract you're using to agree on a price you'll pay for something in the future.

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It just simply isn't true that a deflationary currency would result in people not spending any money at all.

No, but if you have part of your wealth in a stable-ish inflationary currency and part of your wealth in a highly deflationary currency, you're going to spend the inflationary currency first. That's what I meant by saying that Bitcoins will only be spent as a last resort.

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The problem with our economy and monetary policies of today however is that they exacerbate the problem of consumerism even more. Why save or wait to purchase goods tomorrow if my money isn't going to have the same purchasing power tomorrow as it does today. People are incentivized to buy things today rather than save money.

Yes, you've hit on the problem with hyperinflation. People treat their currency like a hot potato and spend it as soon as possible. This is not really a problem with a currency that has low rates of inflation. Yes, you will see the purchasing power of your currency decline a bit if you hold it for years and years, but that's not sufficient motivation to spend all your money right away. It is sufficient motivation to invest in productive assets instead of hoarding cash under your mattress, which is generally a good thing!

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Bitcoin won't always be going up in drastic price swings like it is today. At some point instead it will only grow as our economy does.

At what point will the value stabilize enough that people have less incentive to hold at all costs and more incentive to exchange their BTC for the goods and services they require? At what price would you say "you know what, I think BTC is overvalued right now"? How do you determine that price?

Care to make a prediction here? At what exchange rate will we ultimately determine is the fair, stable USD value for a BTC? How do you arrive at this number?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 02, 2021, 02:39:37 PM
A central bank is not required to have a variable money supply. The BTC protocol already has varying supply! It manufactures new coins out of thin air according to a fixed schedule. They could have just as easily designed it to introduce new coins at a variable rate based on the current exchange rate between BTC and a weighted average of national fiat currencies.

You just said that a central bank is not necessary, but then followed up with your countering solution to bitcoin's current solution today to be pegged to central banking. I feel like you're missing the entire point of bitcoin (decentralization). Any reliance on a central authority by requiring a peg to those central authorities defeats the entire purpose of bitcoin. Nevermind the fact that your solution doesn't make any sense from a technological feasibility standpoint.

Yes, network effects definitely exist with fiat currencies. These are generally a good thing. The less we have to convert our currencies, the more convenient our lives are. There needs to be some compelling reason to switch people off of the existing currencies. If the benefits of decentralization and technological advancement that BTC provides aren't enough motivation on their own to get people to use it, why even bother making a new currency? Surely it should have some reason to exist beyond making the early adopters rich?

There are many benefits to using bitcoin, many of which have already been discussed. While some of these benefits are available today, many of these benefits don't come to fruition until bitcoin is widely adopted however. It is the chicken and the egg situation.

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lol. The value has changed by 10% today. This is not unusual for BTC, and is also completely unacceptable for a unit of currency that you're going to write down in a contract you're using to agree on a price you'll pay for something in the future.

I've already linked to articles here that address this, perhaps you missed it or didn't read it. Cherry picking volatile days for bitcoin in the middle of a bull market isn't going to back your argument. You'd have to look at long term volatility over time and it is true that volatility has decreased over time. This was addressed in Fidelity's article on bitcoin criticisms here:

https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms (https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms)

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No, but if you have part of your wealth in a stable-ish inflationary currency and part of your wealth in a highly deflationary currency, you're going to spend the inflationary currency first. That's what I meant by saying that Bitcoins will only be spent as a last resort.

This is part of the role of money that is misunderstood by a lot of people (talking people in general here). I hear all the time from people who say that someone who spent 10,000 BTC (worth $20) to buy a pizza must regret their decision. But money is really just a store of one's productive work value. If I must work 30 minutes to earn $20, then that $20 represents a half hour of my production at the time I earn it. It is my decision at any given point what I want to do with my money. If my prerogative is to work 30 minutes to buy a pizza, then it doesn't really matter what currency I use as a medium of exchange to purchase that pizza. That pizza still requires me to work for 30 minutes to acquire it. What each individual must decide for themselves is how much of their productive work they wish to use for consumption today versus consumption tomorrow. The only regret one might have in purchasing goods is their time preference in acquiring those goods. Does one choose to purchase the good today or does one wish to wait to purchase the good tomorrow. As frugal workers on this forum, many of us choose to have low time preferences for all the things we purchase; favoring savings over short term purchases.

The only hurdle then in deciding which currency to use in a medium of exchange then is the friction involved in using a given currency. For bitcoin, since a person isn't yet likely earning bitcoin as wages, then they must use the dollars they did earn as wages to acquire some bitcoin which is likely going to cost them fees in exchange rates. Is it worth it to the person to decide to move their wages into bitcoin to use as a medium of exchange at the cost of 1-5% in exchange fees simply to use it as a medium of exchange? For most people the answer is no. But this decision isn't an inherent problem to bitcoin itself and will likely go away if someone simply decides to take wages in the form of bitcoin. In time I suspect there will be more and more people who might choose to do so for varying reasons. At that time then the friction of using bitcoin as a medium of exchange diminishes greatly and it becomes more a decision about their time preference in how much of their wages is for short term spending versus long term savings (one's savings rate).

Long story short, while good money does chase out bad in the greater economy, from an individual's perspective it is more simply about the friction involved with using any given currency than anything else. The time preference an individual has is unique to the individual. Bitcoin does I feel promote a low time preference which overall I think is a good thing for the world. A large number of people introduced to bitcoin have become savers today that never would have been saving money had they not been introduced to bitcoin. Nothing wrong with that given the atrocious savings rates of most Americans out there.

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Care to make a prediction here? At what exchange rate will we ultimately determine is the fair, stable USD value for a BTC? How do you arrive at this number?

No, I don't care to make predictions. The market is unpredictable and its that market that predicts what a fair value is. The economy is so completely complicated and the world at large is so complicated. I don't think anyone could've predicted that in 2020 there would've been a pandemic, though experts did predict that at some point there would be one. So it is much easier to make macro predictions for possible future outcomes, but predicting things with a precise timeline and value at that particular time is futile and not something I care to engage in. I'm fascinated by technology and economics and bitcoin scratches both of those itches for me. It will certainly be interesting to see what it goes in the future. Nothing is certain.

Cheers
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 02, 2021, 07:20:52 PM
A central bank is not required to have a variable money supply. The BTC protocol already has varying supply! It manufactures new coins out of thin air according to a fixed schedule. They could have just as easily designed it to introduce new coins at a variable rate based on the current exchange rate between BTC and a weighted average of national fiat currencies.

You just said that a central bank is not necessary, but then followed up with your countering solution to bitcoin's current solution today to be pegged to central banking. I feel like you're missing the entire point of bitcoin (decentralization). Any reliance on a central authority by requiring a peg to those central authorities defeats the entire purpose of bitcoin. Nevermind the fact that your solution doesn't make any sense from a technological feasibility standpoint.

I just threw out a USD peg as an example of a choice they could have made instead of having a money supply that is fixed or even decreasing as people forget their keys. Instead of USD they could peg it to gold or Honolulu real estate or corn futures or any number of other things, in a decentralized manner, according to a protocol agreed upon in advance. You are asserting without evidence that this would be technically infeasible. I disagree. The network operates on consensus. Someone tries to sign a block claiming to have mined the wrong number of new bitcoins, and it will be rejected because it breaks the protocol. Right now the correct number of new bitcoins per block operates on a simple fixed algorithm, so you'd need to add in a mechanism to use the current exchange rates instead of that fixed number. The tricky bit would be to come to a consensus on what that rate is, but I'd think it should be possible to have the nodes monitor a number of different exchange rates that are trusted by consensus on the network. New data sources could be added by a consensus of miners agreeing they're valid, or removed in the same way if one becomes untrustworthy.

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There are many benefits to using bitcoin, many of which have already been discussed. While some of these benefits are available today, many of these benefits don't come to fruition until bitcoin is widely adopted however. It is the chicken and the egg situation.

Again, if these benefits are so compelling, shouldn't people have enough motivation to switch without the speculative profit angle?

History is littered with dead technologies that were marginally better than the competition on some technical metrics but never gained enough adoption to overcome the incumbent players. Eventually someone comes along and invents something that is so obviously better than the old thing that people finally switch. BTC has been around for a decade now, and I still lack a reason to pay anyone with it. I own some BTC that I mined in the early days, but it just sits there unused. I never come across a scenario in my lifestyle where it seems like the best way to pay anyone for anything I want or need. What am I doing wrong?

Maybe some cryptocurrency takes the world by storm and we all start using it, but it seems like BTC has maybe had more than long enough to prove itself and it just isn't the one.

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I've already linked to articles here that address this, perhaps you missed it or didn't read it. Cherry picking volatile days for bitcoin in the middle of a bull market isn't going to back your argument. You'd have to look at long term volatility over time and it is true that volatility has decreased over time. This was addressed in Fidelity's article on bitcoin criticisms here:

https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms (https://www.fidelitydigitalassets.com/articles/addressing-bitcoin-criticisms)

I read the article. I saw the volatility graph. I'll grant that the volatility shown in that graph is lower recently than it was in the very early days, but since about 2014 I don't see any meaningful downward trend. Volatility was pretty flat in 2014-16, crept higher in 2017-18, then went back down to about where it was in 2014-15. An ongoing trend is not evident in the data presented.

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Care to make a prediction here? At what exchange rate will we ultimately determine is the fair, stable USD value for a BTC? How do you arrive at this number?

No, I don't care to make predictions. The market is unpredictable and its that market that predicts what a fair value is.

To the moon, right? When we can't even begin to use logic to put a fair price on an asset, isn't that a problem? Some Dutch tulip traders might have some lessons for you.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 02, 2021, 08:31:23 PM
I just threw out a USD peg as an example of a choice they could have made instead of having a money supply that is fixed or even decreasing as people forget their keys. Instead of USD they could peg it to gold or Honolulu real estate or corn futures or any number of other things, in a decentralized manner, according to a protocol agreed upon in advance. You are asserting without evidence that this would be technically infeasible. I disagree. The network operates on consensus. Someone tries to sign a block claiming to have mined the wrong number of new bitcoins, and it will be rejected because it breaks the protocol. Right now the correct number of new bitcoins per block operates on a simple fixed algorithm, so you'd need to add in a mechanism to use the current exchange rates instead of that fixed number. The tricky bit would be to come to a consensus on what that rate is, but I'd think it should be possible to have the nodes monitor a number of different exchange rates that are trusted by consensus on the network. New data sources could be added by a consensus of miners agreeing they're valid, or removed in the same way if one becomes untrustworthy.

That's my entire point that you're not understanding. Pegging to anything else in the real world is going to create a reliance on something that is centralized. Where are prices determined for a given trading pair? On exchanges which are centralized entities? What if an exchange goes out of business? Who decides what exchanges are utilized and what exchanges aren't? You don't think that trying to get global consensus on such a thing using corporate entities that are established based on individual national legal frameworks would be a problem? Not to mention the most important part that you're missing...when bootstrapping a brand new currency that doesn't exist yet (which is what this entire discussion was about) ...there are no exchanges in existence to pull trading pair prices from! If you're insisting that using centralized authorities (even in aggregate) is a viable solution for determining a monetary policy of a decentralized currency, then you're missing the point of bitcoin entirely.

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Again, if these benefits are so compelling, shouldn't people have enough motivation to switch without the speculative profit angle?

History is littered with dead technologies that were marginally better than the competition on some technical metrics but never gained enough adoption to overcome the incumbent players. Eventually someone comes along and invents something that is so obviously better than the old thing that people finally switch. BTC has been around for a decade now, and I still lack a reason to pay anyone with it. I own some BTC that I mined in the early days, but it just sits there unused. I never come across a scenario in my lifestyle where it seems like the best way to pay anyone for anything I want or need. What am I doing wrong?

Maybe some cryptocurrency takes the world by storm and we all start using it, but it seems like BTC has maybe had more than long enough to prove itself and it just isn't the one.

The internet took several decades before it became widely adopted. The same things you're saying today about bitcoin, you'd could have just as easily been saying about the internet in its earliest forms. "There is no reason for me to use it, there is no useful information on it, no one else is using it, etc, etc."

It is not that you're doing anything wrong though. It's just that you're writing off technology that really is pretty technically ground-breaking simply on the merits that it lacks widespread adoption a decade into its life. Like I said, there is a lot of friction at the moment to using bitcoin as a medium of exchange currency. Most merchants don't accept bitcoin as a form of payment. There are still scaling issues that need to be worked out. The lightning network is still in its infancy. For most people, acquiring bitcoin requires purchasing it from an exchange/broker which inquires fees. This creates large amounts of friction where you'd likely want to recoup those fees in capital gains before deciding to spend it. There are some benefits however. Some places provide a discount when making purchases with bitcoin (Bitrefill, Fold, Purse.io, etc). There are security benefits to using bitcoin. There is no need to give credit card details over the internet when making purchases with bitcoin. This makes purchasing things with bitcoin much more secure, since you're "pushing" funds to the merchant instead of the merchant "pulling" funds from your account. The will reduce the overall systemic costs of fraud in the economy (which are upwards of 5-10%).

However, like I said, many of these benefits won't be fully realized unless bitcoin is widely accepted. This entire discussion stemmed from the concept that speculation was an inherent benefit to help drive adoption and, so far, that seems to be the case. I'd be willing to bet that after several bull-run cycles, there will be more and more people that own bitcoin and are getting paid in bitcoin. This has historically held true so far and I have little reason to suggest that wouldn't be the case with a continued increase in demand. If you're getting paid in bitcoin and all the merchants you interact with accept bitcoin as a form of payment, then there is little friction there to using bitcoin as a means of payment.


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I read the article. I saw the volatility graph. I'll grant that the volatility shown in that graph is lower recently than it was in the very early days, but since about 2014 I don't see any meaningful downward trend. Volatility was pretty flat in 2014-16, crept higher in 2017-18, then went back down to about where it was in 2014-15. An ongoing trend is not evident in the data presented.

https://bitcoinist.com/looking-at-bitcoin-volatility-over-the-years/ (https://bitcoinist.com/looking-at-bitcoin-volatility-over-the-years/)

I'm not arguing that bitcoin isn't volatile relative to fiat currencies, especially during cyclic periods like we're in today shortly after a 4-year halving. These first 3 halving events were very large ones. It was only until this most recent one (from 12.5 to 6.25/block) that we ended up going below the Feds' target for USD inflation rate. So we were still seeing large dramatic changes in the inflation rate that causes large supply shocks on the market. The next halving takes us to 3.125/block and after that we'll continue see less and less meaningful halving events. At that point there won't be as much of a supply shock to the market and these events will come with much less fanfare than they do today to the point where they're barely even noticed by the market. Likely in 10 years the market will have greatly stabilized at the volatility will have decreased greatly because there won't be these supply shocks that are taking place every 4 years like we're currently seeing.

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To the moon, right? When we can't even begin to use logic to put a fair price on an asset, isn't that a problem? Some Dutch tulip traders might have some lessons for you.

So are you arguing that the market is not efficient and that somehow you know better that all the market participants and that the market is somehow completely wrong about what the price of bitcoin currently is? I'm not saying there won't be irrational exuberance taking place at any given time or there won't be corrections (sometimes large ones). But, taking an objective historical look at bitcoin's price, you can hardly argue that bitcoin is ALWAYS in a bubble and that throughout its entire history all bitcoin market participants have ALWAYS been wrong. I mean it with all due respect, but anyone who compares bitcoin to tulips and the bubble that took place with tulip bulbs in the 1600's immediately loses credibility. If you really think there is a comparison between the single tulip bubble in the mid-1600s and the continuous bull-bear cycles that bitcoin has seen that have correlated with its supply halvings, then rather than suggesting that dead tulip traders have a lesson for people, why not present said lesson yourself to everyone here?

Perhaps rather than looking at the bitcoin high prices of each year (which is measuring those exuberant highs), maybe you should be looking at the yearly low prices for bitcoin. Since that is measuring a more concrete bottom support price for bitcoin, you'll find a much tamer and gradual bitcoin price increase annually. But hindsight is 20/20 and it is easy to call the bottom with hindsight analysis at the end of the day. If that's where you want to look to find more "rational" fair prices for bitcoin, so be it. But I don't think you're going to have much of an argument claiming that 11 years in and entering a new bull cycle after demolishing the previous all time high that the market is not efficient enough to determine what the price of it is and that it's always been wrong even after 3 "bubbles". Write a bitcoin obituary if you wish, but you'll have to add it to the pile:

https://99bitcoins.com/bitcoin-obituaries/ (https://99bitcoins.com/bitcoin-obituaries/)
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 02, 2021, 10:40:31 PM
Hey I'm just trying to help you guys.  Cash out now and count your blessings

how about let's put a pin in this and revisit on Dec 2021. Shall we?

Sure if you want to embarrass yourself

yes I'm so very embarrassed already watching my btc stack priced at $33k . I'm sure I'll be even more embarrassed EOY....

Keep talking and you will really be embarrassed when Bitcoin crashes down to a low of $50,000 in 2022.

BTC up 26% since this thread was made 1 week ago. 
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 03, 2021, 01:17:05 AM
I just threw out a USD peg as an example of a choice they could have made instead of having a money supply that is fixed or even decreasing as people forget their keys. Instead of USD they could peg it to gold or Honolulu real estate or corn futures or any number of other things, in a decentralized manner, according to a protocol agreed upon in advance. You are asserting without evidence that this would be technically infeasible. I disagree. The network operates on consensus. Someone tries to sign a block claiming to have mined the wrong number of new bitcoins, and it will be rejected because it breaks the protocol. Right now the correct number of new bitcoins per block operates on a simple fixed algorithm, so you'd need to add in a mechanism to use the current exchange rates instead of that fixed number. The tricky bit would be to come to a consensus on what that rate is, but I'd think it should be possible to have the nodes monitor a number of different exchange rates that are trusted by consensus on the network. New data sources could be added by a consensus of miners agreeing they're valid, or removed in the same way if one becomes untrustworthy.

That's my entire point that you're not understanding. Pegging to anything else in the real world is going to create a reliance on something that is centralized. Where are prices determined for a given trading pair? On exchanges which are centralized entities? What if an exchange goes out of business? Who decides what exchanges are utilized and what exchanges aren't? You don't think that trying to get global consensus on such a thing using corporate entities that are established based on individual national legal frameworks would be a problem? Not to mention the most important part that you're missing...when bootstrapping a brand new currency that doesn't exist yet (which is what this entire discussion was about) ...there are no exchanges in existence to pull trading pair prices from! If you're insisting that using centralized authorities (even in aggregate) is a viable solution for determining a monetary policy of a decentralized currency, then you're missing the point of bitcoin entirely.

I disagree with you that the use of data from multiple active exchanges would somehow break the decentralization of the protocol. Every node on the network would still have a say in accepting or rejecting new blocks proposed to be added to the chain. Changes in the set of good data sources for determining the currency creation rate would need to be publicized widely, and would not take effect until adopted by the majority of miners, just as any changes to the protocol already have to do. I don't intend to dive too far into the weeds on this. There are surely plenty of edge cases to consider, and the people who stand to profit from greater stability should work those out and make it happen. To your point that this system doesn't work for a brand new currency without an established market, of course it doesn't! Use whatever system you like to get the first currency units into existence. Once a robust marketplace forms you can feed that data back into your system to adjust the money supply as needed to reduce the volatility. You don't need to be stuck with a deflationary spiral forever just because you had one once.

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The internet took several decades before it became widely adopted. The same things you're saying today about bitcoin, you'd could have just as easily been saying about the internet in its earliest forms. "There is no reason for me to use it, there is no useful information on it, no one else is using it, etc, etc."

The evolution of the internet is actually a great analogy here. There are lots of internet technologies that came and went before we landed on the World Wide Web that eventually saw wide adoption. Just as one example, the Gopher protocol (https://en.wikipedia.org/wiki/Gopher_(protocol)) came out a few years before the Web as a way to share linked information over TCP/IP networks. A lot of what you can do with it is similar to what you could do with early websites, but it had some limitations that prevented it from winning wide adoption in the end. Betting on BTC isn't just betting that digital currencies will become widely used someday. I actually think that's reasonably likely myself! You're also betting that the BTC implementation of the digital currency concept will prove to be less like Gopher (promising technology with a few ultimately fatal flaws) and more like the Web (flexible enough to adapt to everyone's needs). On that point I have a very healthy amount of skepticism.

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https://bitcoinist.com/looking-at-bitcoin-volatility-over-the-years/ (https://bitcoinist.com/looking-at-bitcoin-volatility-over-the-years/)

(https://bitcoinist.com/wp-content/uploads/2020/10/newplot-980x466.png)

This is basically the same graph from your other article! Am I supposed to look at that red line and see a clear downward trend?

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I'm not arguing that bitcoin isn't volatile relative to fiat currencies, especially during cyclic periods like we're in today shortly after a 4-year halving. These first 3 halving events were very large ones. It was only until this most recent one (from 12.5 to 6.25/block) that we ended up going below the Feds' target for USD inflation rate. So we were still seeing large dramatic changes in the inflation rate that causes large supply shocks on the market. The next halving takes us to 3.125/block and after that we'll continue see less and less meaningful halving events. At that point there won't be as much of a supply shock to the market and these events will come with much less fanfare than they do today to the point where they're barely even noticed by the market. Likely in 10 years the market will have greatly stabilized at the volatility will have decreased greatly because there won't be these supply shocks that are taking place every 4 years like we're currently seeing.

"Supply shocks?" Nearly 90% of the BTC that will ever exist (according to current protocol) already exists. For every 20,000 BTC that existed yesterday, not even 20,001 BTC exists today. Changes in supply cannot explain any significant portion of recent volatility.

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So are you arguing that the market is not efficient and that somehow you know better that all the market participants and that the market is somehow completely wrong about what the price of bitcoin currently is?

On the contrary! I have no earthly idea how to reason about what a bitcoin should be worth. That's why I'm not buying them. I was hoping you could enlighten me with the thought process you use to decide about this. If it doubled in value next month would you be buying or selling? Why? What about if it halved in value?
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 03, 2021, 07:04:04 AM
I think the reason bitcoin proponents get so emotional over cryptos is because the know deep down that failure of ever more people to change their minds about it and give in represents an existential threat to the viability of the project.

People who own stocks are not bothered by those who choose not to own any. Sure we may try to help educate from time to time. But I don’t need an ever expanding pool of buyers to make my investment grow. The growth of this investment happens naturally due to business growth (although changing investor sentiment does cause some short term volatility).

Bonds are a contract for a fixed income over a number of years between the issuer and the investor. Although most bonds trade on the open market, an ever expanding pool, again, is not required to make the investment productive.

Gold. That is a tricky one. I own some. I understand why others don’t. That being said humanity has had (and still has) a long-term fascination for the stuff.  People seem to instantly understand its value without any coaxing.  And further, those who own some gold usually would prefer a long term stable, steady rise in price, since this naturally represents the stable value of gold versus the inflation inherent in modern fiat currencies. A massive shift in sentiment towards gold resulting in huge short term increase its price is not a good thing.

Cash.  Sure there is an argument that the value of fiats are just our imagination. Or another argument is, in most cases, they are just another form of digital currency — so why allow the government to have a monopoly on it. To answer this, governments have monopolies on fiats because government has a monopoly on the use of force. I would say that fiats have value because the government finds them acceptable to settle debts.   So if I fail to pay taxes or owe someone else money the government or private party gets a judgement against me for the debt.  Let’s say I just ignore this, perhaps even on the premise that fiat currency is imaginary and so judgments issued in it are meaningless to people who do not believe in fiat currencies.  In this case, the government is authorized to use its force to take enough property (houses, cars, boats, jewelry, stocks, bonds,etc) to settle that debt. But, the government also provides the option of using its own fiat currency to satisfy these debts and thereby protecting property from seizure and limiting the use of government force. So in that sense it has value. And for individuals who have no debts, fiat currency still has value since there are enough others who do have such debts to provide deep liquid markets for government backed fiat currency.


But cryptos. The price rests solely on sentiment. And growth is obtained only through winning converts and growing positive sentiment.  Cryptos do not represent a share in a productive business. Cryptos promise no yield. Cryptos have not been a stable store of value for thousands years. And, cryptos do not represent a limit on a government’s use of force to seize property. Cryptos advance solely on the euphoria that new converts feel when they “get it” in terms of the technology and/or that purchasers feel when the stated value of their wallet increases.  Who doesn’t remember the rush we all got when we finally understood something deeply technical in school or work that many others struggled to understand? Who doesn’t love seeing the reporter value of their accounts go up at the end of a trading day? These things are pleasing. But, they do not form the basis of a new form of money. Because beyond these feelings, there is nothing of value really there.

Moreover, to the extent cryptos do represent any advantage over fiat money, these advantages are touted as making them better. But the better a money is, the more likely it is to be driven out of circulation by worse forms of money. This is known as Gresham’s law. Simply stated, bad money drives out the good. It has been this way always. Debased coins were spent before higher content coins. Fiat currency has driven out commodity money currency. Worn physical currency usually is spent before shiny/crisp new currency.  Electronic traceable but secure transactions have taken over instead of more anonymous physical cash transaction. Credit card processed transactions (which are worse for merchants due to processing fees and chargebacks) have taken over for most modern electronic transactions.  So if cryptos are in fact “better”, this would represent an uphill battle against Gresham’s law. If people really want to create a digital currency to take over, it has to be a worse form of money than credit card processed transactions, so people choose to spend it first.

Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 03, 2021, 08:08:06 AM
I disagree with you that the use of data from multiple active exchanges would somehow break the decentralization of the protocol. Every node on the network would still have a say in accepting or rejecting new blocks proposed to be added to the chain. Changes in the set of good data sources for determining the currency creation rate would need to be publicized widely, and would not take effect until adopted by the majority of miners, just as any changes to the protocol already have to do. I don't intend to dive too far into the weeds on this. There are surely plenty of edge cases to consider, and the people who stand to profit from greater stability should work those out and make it happen. To your point that this system doesn't work for a brand new currency without an established market, of course it doesn't! Use whatever system you like to get the first currency units into existence. Once a robust marketplace forms you can feed that data back into your system to adjust the money supply as needed to reduce the volatility. You don't need to be stuck with a deflationary spiral forever just because you had one once.

It is amazing that after (what I'm assuming is) just a few hours of thought, you've solved the byzantine generals problem in computing that has been a problem since the dawn of computing. Just going by some of your suggestions tells me you don't understand the entire reason why bitcoin exists.

The evolution of the internet is actually a great analogy here. There are lots of internet technologies that came and went before we landed on the World Wide Web that eventually saw wide adoption. Just as one example, the Gopher protocol (https://en.wikipedia.org/wiki/Gopher_(protocol)) came out a few years before the Web as a way to share linked information over TCP/IP networks. A lot of what you can do with it is similar to what you could do with early websites, but it had some limitations that prevented it from winning wide adoption in the end. Betting on BTC isn't just betting that digital currencies will become widely used someday. I actually think that's reasonably likely myself! You're also betting that the BTC implementation of the digital currency concept will prove to be less like Gopher (promising technology with a few ultimately fatal flaws) and more like the Web (flexible enough to adapt to everyone's needs). On that point I have a very healthy amount of skepticism.

You do understand that bitcoin was not the first digital cryptocurrency, right? There were plenty of ones that came before it, but they were all susceptible to attack and had faults of their own. Bitcoin drew inspiration from several of them and some were even referenced in the original bitcoin whitepaper. Digi-cash, b-money, BitGold, HashCash, etc.

You're not understanding a critical aspect of security (my field is Information Security). I see people make the claim that "Bitcoin could be the next MySpace to Facebook", but this misses a critical point with regards to security. We don't use cutting edge technology when trying to secure things. The encryption protocols (SHA,RSA, AES, etc) in use today are protocols that have been around for decades and vetted by the greater public before the world is confident in their robustness in securing the world's most confidential data. The entire point of bitcoin is guaranteeing security through its protocols and decentralization. The longer bitcoin is in existence without fault, the more confident people get in having their money secured by the network. Consequently, the longer it is in existence and operational, the higher of a price is justified for that security that it provides. You're not going to have a brand new crypto-currency that doesn't have the same history as bitcoin that suddenly out of the blue the world will feel confident moving billions of dollars into it. That's just not going to happen and I'm absolutely confident in that. Barring a complete failure in the security of the bitcoin network (something I'm also confident won't happen), you're not going to see a sudden switch to a "newer and better" cryptocurrency. If there were a sudden complete failure in the security of the bitcoin network, people certainly won't be quick to put money into another new one.

"Supply shocks?" Nearly 90% of the BTC that will ever exist (according to current protocol) already exists. For every 20,000 BTC that existed yesterday, not even 20,001 BTC exists today. Changes in supply cannot explain any significant portion of recent volatility.

I don't think you're understand how price is determine in markets. It isn't how much bitcoin that has been put into circulation that determines the price. The liquidity of that bitcoin is what does. It doesn't matter if all bitcoin have been mined or only 10% has been mined, it is the liquidity that determines how much the price swings. If I buy bitcoin and send it to cold storage not ever to be touched for 10 years, that bitcoin is taken out of circulation and doesn't contribute at all to market liquidity. How much bitcoin is actually liquid on exchanges is what really matters. If 99% of bitcoin is stored away in cold storage and only 1% is available for sale on exchanges, then it isn't going to take much money to chew through that liquid bitcoin for sale for the price to swing way up. Throughout 2020, the available bitcoin available on exchanges around the world has dropped by 20% and continues to drop. Glassnode, a chain analysis company, performed an analysis that showed that about 78% of bitcoin in circulation is considered "illiquid".

For example, on one of the most liquid exchanges in America (Gemini), there is only about 400 liquid bitcoin in sell orders from here until a price of $36,000. That means that an additional influx of only about $14 million will be enough to move the price of bitcoin thousands of dollars higher.

Also, miners (who produce new supply of bitcoin) generally sell this bitcoin to market since they're a business and must pay bills for infrastructure and electricity. So, given demand being equal, a halving in this new supply of bitcoin means that there will be much less new bitcoin being brought to market which means there is a supply shock to the market. This causes the price to go up (with equal demand), and thus with the price rising it brings in new demand and can bring massive price swings to the upside because of this large disparity between demand and supply.

So yes, this is a supply shock and I don't think you really grasp how scarce bitcoin is. It isn't about how much bitcoin has been mined that matters, like you claimed. People simply look at the price being tens of thousands of dollars without fully realizing how scarce and illiquid bitcoin really is. Again, there is no supply elasticity here.

On the contrary! I have no earthly idea how to reason about what a bitcoin should be worth. That's why I'm not buying them. I was hoping you could enlighten me with the thought process you use to decide about this. If it doubled in value next month would you be buying or selling? Why? What about if it halved in value?

It seems to me though that you're applying selective critique to bitcoin about what the price should be. By just about every measure imaginable, the stock market should not be at the prices it should be at today. Do you suggest to people that they should stop contributing to their 401k's or stop investing in the stock market until there there is a crash that brings things back in line with metrics that are more inline with history? No, I don't think you would, nor would I. We continue to invest in the stock market through massive overvaluations and massive crashes (fire sale!). We do so because we have a fundamental belief that over the long term (a decade or more), the value of the market will be greater in the future.

My point is that we don't apply any sort of fundamental price analysis to the stock market as to what a price should be. In fact, we actively discourage such a thing. TA active traders simply haven't been shown to be good at their jobs over the long term. Warren Buffet issued a bet to active traders to see if they could be the market against a passive investment strategy. The end result after 10 years was simply that active traders couldn't beat the market. Trying to reconcile what "fair price" should be against what the market is telling at any given point in time is a futile effort. It doesn't matter if the market is stocks, gold, bitcoin, or anything else. Active trading is a futile effort.

The truth of the matter is that I purchase bitcoin no differently than how I purchase or invest in anything else. I just passively invest each month on a regular basis regards of whether or not it goes way up or way down with full confidence that demand for bitcoin will be higher in 10 years than it is today. And it doesn't seem like I'm alone in that risk analysis. As I've said before, MassMutual an insurance company that has been in business for almost 200 years and whose sole business industry is about risk management, can look at bitcoin at decide that they should put $100 million of their reserves in bitcoin. If you feel that you've done more legal, regulatory, technical, and market risk analysis than this company and feel confident in being opposingly bearish on the matter, more power to you.

I'm not trying to convince anyone to buy bitcoin here. The only reason why I even initially entered this thread and the other one in this forum was because I saw so many blatantly incorrect statements being made about bitcoin that it was clear that many of the most harshest critics that I was reading here didn't seem to have much knowledge on the matter. Misinformation isn't going to help anyone whether you want to save money with bitcoin or not.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 03, 2021, 01:11:11 PM
I disagree with you that the use of data from multiple active exchanges would somehow break the decentralization of the protocol. Every node on the network would still have a say in accepting or rejecting new blocks proposed to be added to the chain. Changes in the set of good data sources for determining the currency creation rate would need to be publicized widely, and would not take effect until adopted by the majority of miners, just as any changes to the protocol already have to do. I don't intend to dive too far into the weeds on this. There are surely plenty of edge cases to consider, and the people who stand to profit from greater stability should work those out and make it happen. To your point that this system doesn't work for a brand new currency without an established market, of course it doesn't! Use whatever system you like to get the first currency units into existence. Once a robust marketplace forms you can feed that data back into your system to adjust the money supply as needed to reduce the volatility. You don't need to be stuck with a deflationary spiral forever just because you had one once.

It is amazing that after (what I'm assuming is) just a few hours of thought, you've solved the byzantine generals problem in computing that has been a problem since the dawn of computing. Just going by some of your suggestions tells me you don't understand the entire reason why bitcoin exists.

The Bitcoin protocol has already solved this problem. They have an existing procedure (https://galea.medium.com/bitcoin-development-who-can-change-the-core-protocol-478b8ac5fe43) for gaining consensus about proposed changes to the protocol. I'm suggesting that if they care about price volatility, adopting a different method of increasing the money supply in response to real-world exchange rates could do that. Protocol changes would be needed for this, and they would likely need to occur more frequently than what has happened in the past in order to keep the list of exchange rate providers fresh, but the procedure for adopting such changes already exists. Just use that.

Quote
You do understand that bitcoin was not the first digital cryptocurrency, right? There were plenty of ones that came before it, but they were all susceptible to attack and had faults of their own. Bitcoin drew inspiration from several of them and some were even referenced in the original bitcoin whitepaper. Digi-cash, b-money, BitGold, HashCash, etc.

Sure, and Gopher wasn't the first attempt at providing information over computer networks either. It was an iteration on what came before, and it took another few iterations before the technology became broadly useful to the general public. Maybe in an alternate history the people behind Gopher would have recognized the shortcomings of their system compared to HTTP/HTML and improved Gopher to eventually win in the marketplace. They did not. Bitcoin has a number of flaws. People are working hard on inventing better technology, usually on alternative blockchains. Will the people behind Bitcoin be able to tell the worthwhile advancements apart from the useless ones, and adopt the good ones into their own protocol before the new coin overtakes them in popularity? Maybe! It could just as easily (perhaps even more easily) go otherwise. The new thing would obviously need to prove itself to be secure before it gets adopted widely, but that doesn't seem like an insurmountable barrier to me.

Quote
I don't think you're understand how price is determine in markets...

I understand perfectly well how prices are determined in exchanges. Per Coinmarketcap (https://coinmarketcap.com/currencies/bitcoin/), the overall trading volume across multiple exchanges was nearly 2.4 million BTC in the past 24 hours. Obviously some coins were traded multiple times and most were not traded at all, but the miners selling their 900 new BTC each day to pay their electric bills make up a tiny fraction of the overall trading volume. Halve it again and that's a difference of 450 out of 2.4 million.

Quote
It seems to me though that you're applying selective critique to bitcoin about what the price should be. By just about every measure imaginable, the stock market should not be at the prices it should be at today. Do you suggest to people that they should stop contributing to their 401k's or stop investing in the stock market until there there is a crash that brings things back in line with metrics that are more inline with history? No, I don't think you would, nor would I. We continue to invest in the stock market through massive overvaluations and massive crashes (fire sale!). We do so because we have a fundamental belief that over the long term (a decade or more), the value of the market will be greater in the future.

I'm not being selective at all. Stocks have actual metrics you can look at. You can look at the earnings of a company, look at some expert projections of where those earnings are headed in the future, and make a decision for yourself about whether the current price is a fair multiple of the earnings you're buying. Yes those metrics aren't as favorable at the moment as they have been in past years, but the prices are still low enough that it's a reasonable bet to say that they will be higher in a decade or two. I was hoping you would have some numbers you could point out to say why my BTC would need to be worth $X in order to facilitate a transaction volume of Y in Z years (and what evidence we have to suggest about the odds of the transaction volume actually being that large at that time), but so far all you've given is an appeal to trust in the wisdom of the crowds on this one.
Title: Re: Bitcoin is funny money
Post by: Channel-Z on January 03, 2021, 01:45:21 PM
Fidelity sent me a survey last month on Bitcoin (I have no idea how to buy it or use it). PayPal, which I had not logged onto in years, is advertising quite prominently the ability to purchase four different cryptocurrencies. Institutions are clearly trying to get more people on board.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 03, 2021, 01:51:40 PM
End times prophecy 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 03, 2021, 02:21:43 PM
The Bitcoin protocol has already solved this problem.


That was my entire point. What you're not understanding is that along with the blockchain, proof-of-work, and digital signatures, it's monetary policy is a part of the solution to the byzantine generals problem. The solutions you're suggesting would be a step back in that regard and would result in a high likelihood of a byzantine fault. Pointless arguing more on this...

I understand perfectly well how prices are determined in exchanges. Per Coinmarketcap (https://coinmarketcap.com/currencies/bitcoin/), the overall trading volume across multiple exchanges was nearly 2.4 million BTC in the past 24 hours. Obviously some coins were traded multiple times and most were not traded at all, but the miners selling their 900 new BTC each day to pay their electric bills make up a tiny fraction of the overall trading volume. Halve it again and that's a difference of 450 out of 2.4 million.

If you understood then you wouldn't have said what you previously said in regards to circulating supply.
Quote
For every 20,000 BTC that existed yesterday, not even 20,001 BTC exists today. Changes in supply cannot explain any significant portion of recent volatility.
And now your follow up argument is confusing trading volume with liquidity. Trading volume has little to do with liquidity. You can have massive amounts of trading volume taking place with low amounts of liquidity and likewise you can have massive amounts of liquidity in the market with minimal trading volume. Take a look at Liquidity-Book for further evidence:

https://coin360.com/liquidity-book (https://coin360.com/liquidity-book)

On a large number of exchanges you can't even place an order for an order of 250 bitcoin. There just isn't enough liquidity for that. Claiming that 900 new BTC is a fraction of the liquidity on exchanges is patently a false claim. That 900 additional BTC mined each day is added every single day. Some of it will be brought to market and add to the liquidity on these exchanges while a large percentage of it will be taken off the market and put in cold storage. A change of 1800 additional bitcoin to market liquidity every single day down to 900 is a massive change. Add in the metrics that show that more and more bitcoin is becoming illiquid on a daily basis and yes, there is a supply shortage of bitcoin taking place at the same time that demand for it is increasing. This is such a basic market phenomenon that if you don't understand this, then I'm not going to take the time to explain it further.

I'm not being selective at all. Stocks have actual metrics you can look at. You can look at the earnings of a company, look at some expert projections of where those earnings are headed in the future, and make a decision for yourself about whether the current price is a fair multiple of the earnings you're buying. Yes those metrics aren't as favorable at the moment as they have been in past years, but the prices are still low enough that it's a reasonable bet to say that they will be higher in a decade or two. I was hoping you would have some numbers you could point out to say why my BTC would need to be worth $X in order to facilitate a transaction volume of Y in Z years (and what evidence we have to suggest about the odds of the transaction volume actually being that large at that time), but so far all you've given is an appeal to trust in the wisdom of the crowds on this one.

Except you are. You want me to name precise metrics, but by all measure any metric you use for the stock market would be telling you to sell. Price to earnings ratios, while historically used to measure whether a stock is overvalued. At current P/E ratios, the entire stock market is at historically high ratios. https://www.multpl.com/s-p-500-pe-ratio (https://www.multpl.com/s-p-500-pe-ratio) Much of the reason for this is the massive inflows of new money into the markets by the Fed. So past measurements aren't holding up to today's new economic environments.

You claim that you can look at "expert projections on where those earnings are headed in the future"....Ya, there is a name for that. It's called speculation. There are also "expert projections" about what experts see as new institutional investments flowing into bitcoin. More and more companies are looking to put bitcoin on their balance sheets. We know this is true due to the growing institutional adoption and massive swing in sentiment among these institutions. Furthermore, there are other metrics that align and validate this hypothesis of institutional adoption. Google searches for bitcoin hasn't budged. The 2017 rally was largely driven by retail investors and that was clearly visible in the large spike in Google searches. Google searches today for bitcoin haven't budged up at all. Also, active on-chain addresses is still very low at the moment compared with previous bull cycles. More active on-chain addresses is indicative of retail adoption. So this also validates the idea that institutional and high net-worth individuals are picking up bitcoin for cold storage. Volatility is also on par with volatility in past bull cycles (2013 and 2017), but this volatility is almost exclusively on the upside. We haven't had very much downside volatility which also lends to the idea that institutions are picking up bitcoin with little thoughts about cashing out in the short-term as opposed to day-traders looking to capitalize on volatility to cash out during short-term spikes.

There are plenty of future projections for bitcoin that use varying degrees of speculation and comparisons to other assets and commodities. At the end of the day, just like with expert predictions about stocks, it's all speculation. Personally I do think bitcoin will continue to compete with gold as JP Morgan is predicting. Millennials simply prefer bitcoin over gold and since they're the ones with future money being moved in the future economy, I feel comfortable making the claim that will likely be true. But, again it's speculation and I'm not going to get in price predictions. At the end of the day, we'll see who's right here.
Title: Re: Bitcoin is funny money
Post by: Sunder on January 03, 2021, 02:31:37 PM
What the fuck do "gamers" have to do with Bitcoin?

"Gamer": A manboy who hasn't gotten over the fact that they have to face reality, not a synthetic, digital world in which they are Lords, Kings, Knights, and other such things, because the difficulty is adapted to their incompetence.

You're part of a Luddite mindset. 20 years ago, adult gamers might have been unfavourably described as you have described them, and there may have been some truth to that.

These days, with the complexity and social nature of games requiring genuine leadership, teamwork, strategic thinking, and perseverance, companies, government agencies and even military are developing games as recruitment tools.

As the article stated, nearly a third of the world games. I've been in the C-suite for a few years, responsible for multiple teams through middle managers. And you might be surprised not only how many senior and middle managers game, but how many prioritise gaming: actively schedule it into their calendar.
Title: Re: Bitcoin is funny money
Post by: effigy98 on January 03, 2021, 09:38:24 PM
You have to ask why did banks like JPMorgan changed their mind from hating bitcoin to loving it now? There is something VERY different about crypto this time around.

Tin foil hat time...

- Government crypto currency is going to hurt banks. Better to back bitcoin then the digital fed coin.
- Somehow, governments needs to transfer money to the younger generations to get them motivated to put down the video games and go be productive, have kids, etc and keep this system going. However, if they piss off the old people who vote, that will make them lose their jobs, so they are going to keep up free money to people making under 75k or whatever. You could inflate the things that the younger folks like (tech stocks, crypto) and deflate the assets of the older people (bond yields, zombie companies, old school companies) and do a less confrontational wealth transfer that way, which will probably result in younger people spending again on stuff other than video games and being involved in society due to a wealth effect.
- International companies are pissed off paying a bank to hold their money, wouldn't you be??? They want to go somewhere like gold or bitcoin or buybacks that does not have this "cost". Most seem to be doing buybacks but others want the money available if needed so that leaves gold or bitcoin if they don't want cash. The ONLY thing imo that is holding the united states back from negative interest is not having a fedcoin because they are scared that we are going to remove the 3% of REAL dollars in the banks so the house of cards falls over due to that 3% of cash being the backing of the fractional reserve for the other 97% of virtual borrowed money that really doesn't exist anymore then bitcoins do.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on January 03, 2021, 10:06:54 PM
You have to ask why did banks like JPMorgan changed their mind from hating bitcoin to loving it now? There is something VERY different about crypto this time around.

Tin foil hat time...

- Government crypto currency is going to hurt banks. Better to back bitcoin then the digital fed coin.
- Somehow, governments needs to transfer money to the younger generations to get them motivated to put down the video games and go be productive, have kids, etc and keep this system going. However, if they piss off the old people who vote, that will make them lose their jobs, so they are going to keep up free money to people making under 75k or whatever. You could inflate the things that the younger folks like (tech stocks, crypto) and deflate the assets of the older people (bond yields, zombie companies, old school companies) and do a less confrontational wealth transfer that way, which will probably result in younger people spending again on stuff other than video games and being involved in society due to a wealth effect.
- International companies are pissed off paying a bank to hold their money, wouldn't you be??? They want to go somewhere like gold or bitcoin or buybacks that does not have this "cost". Most seem to be doing buybacks but others want the money available if needed so that leaves gold or bitcoin if they don't want cash. The ONLY thing imo that is holding the united states back from negative interest is not having a fedcoin because they are scared that we are going to remove the 3% of REAL dollars in the banks so the house of cards falls over due to that 3% of cash being the backing of the fractional reserve for the other 97% of virtual borrowed money that really doesn't exist anymore then bitcoins do.

Interesting ideas.

#1 is a fascinating possibility. A world of fedcoin instead of cryptocurrency might cut banks out of a lot of transactions. What do we need VISA and their 2-3% surcharges for it we can just have a government debit card? So maybe the banks do have an interest. But more likely, they see this as another opportunity to perform a middleman function and charge for it.

#2 seems implausible, because you'd have to find someone in government who cares about wealth being transferred to the younger generations. This is not a political issue in the U.S; nobody cares about the young because the young don't vote. There might be a natural market crowding out effect as the old who hold most money inflate certain assets, leaving the young to speculate on crypto.

#3 I have yet to see crypto appearing on mainstream corporate balance sheets. It's too risky to hold or to borrow in crypto, as this asset class has a history of murdering both the longs and the shorts. CFOs want stability, not a wildcard. Negative rates might push corporations to look for ways to reduce interest paid on their cash deposits, but I suspect they'd just hold less cash and rely more on banks to provide guaranteed revolving lines of credit. Yet that puts the onus on banks to pay negative rates and hold enough cash to supply those revolvers. Both will lose money in the end. There could also be more pressure for mergers, low-returning projects, and other wastes of capital. But I don't see any CFO's saying "I bought $10M of bitcoin so we could save $50,000 in interest per year on our cash"; the shareholders would ask WTF are you gambling our company?
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 04, 2021, 12:09:12 AM
On a large number of exchanges you can't even place an order for an order of 250 bitcoin. There just isn't enough liquidity for that.

So you're saying that even though the trading volume is 2.5 million BTC per day, you can't buy 250 of them? It's just the same 249 BTC trading back and forth 10,000 times a day? Seems like a good business for the exchanges and their fees. For the rest of us...not so much. For comparison, the daily trading volume of VTI is about 3.5 million shares per day and the market has no problem whatsoever filling an order for several hundred shares.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 04, 2021, 06:14:32 AM
So you're saying that even though the trading volume is 2.5 million BTC per day, you can't buy 250 of them? It's just the same 249 BTC trading back and forth 10,000 times a day? Seems like a good business for the exchanges and their fees. For the rest of us...not so much. For comparison, the daily trading volume of VTI is about 3.5 million shares per day and the market has no problem whatsoever filling an order for several hundred shares.

No...just no. It is apparent at this point that you've just completely dismissed bitcoin based on your fundamental misunderstanding of things and you have no care at all about actually learning new things before commenting. My posts aren't here to convince you really, but as I said more to help those who do wish to learn something new that are reading this thread to hopefully spur some curiosity and help them on their path to learning what you clearly care not to.

If you honestly do wish to learn, then I suggest just pulling up exchange market data and watching what takes place on the market and how ask/bid orders are filled and learn what market depth is and how liquidity helps determine price discovery. Market depth is important to understand where the market stands at any given time. It is basically where two opposing forces meet, sellers and buyers. Here is a good dashboard where you can view exchange market data without the need of creating an account anywhere:

https://tradeblock.com/markets/gmni/xbt-usd/5m/ (https://tradeblock.com/markets/gmni/xbt-usd/5m/)

On to your post...First off, why are you comparing the market of a scarce asset to a mutual fund? They have extremely different market dynamics. No, it isn't just the same 250 btc being traded that accounts for all the trade volume. The liquidity that makes up the market depth is just what consists on the order book that has varying types of ask/bid orders. Limit orders create liquidity while market orders take liquidity out of the order book. Generally there are lower fees for orders that generate liquidity since liquidity is a good thing and exchanges want to entice people to generate liquidity with their bitcoin holdings.

https://www.gemini.com/fees/marketplace#section-order-types (https://www.gemini.com/fees/marketplace#section-order-types)

The thing to understand about liquidity is that it is not static. It is constantly ebbing and flowing as the market changes. For example, there might be about 1000 btc on the order book up to a price of say $40,000, but if those orders start getting filled closer to a market price of $40k, then many people might start taking down their limit orders and moving them to a higher price. Conversely, there might be people who have their bitcoin in a wallet and they don't plan on selling bitcoin until it reaches $40k (maybe that was their intended cash out price when they originally bought bitcoin). So as bitcoin reaches a price of $40k, that person might now bring their bitcoin to market to sell it which will create liquidity that wasn't there before.

Also, as the unit price of bitcoin goes up, naturally the liquidity also generally goes up since there is simply more value per unit of bitcoin. Someone selling one unit of bitcoin @ $30k obviously adds $30k of liquidity to the market where as selling 1 btc at $100k will add $100k of liquidity to the market. So liquidity is constantly changing and as the market grows, there is more liquidity which means the market depth is much larger. When there is more market depth, there is more value in the market which means that volatility goes down because it takes more money to move the price of bitcoin. This is why it is widely understood that as the market for bitcoin grows and as the price of bitcoin gets higher, volatility will also go down (as discussed in the Fidelity article I linked to earlier).

So why is it that trade volume not just the same 250 btc (or however much liquidity we're talking about) being traded around? Because the liquidity that makes up the order book are just the market maker orders. There are lots of orders that take liquidity from the market and these have to come from somewhere. Generally they come from people's bitcoin wallets that are on the exchanges themselves. You can get a general idea of how much bitcoin is on these exchanges at Viewbase.com. You can also get an idea of the trending data for this which is showing that more and more bitcoin is moving off exchanges and into cold storage somewhere (further exacerbating the supply shortage I talked about):

https://www.viewbase.com/coin/bitcoin (https://www.viewbase.com/coin/bitcoin)

For example, there is about 806k bitcoin stored on Coinbase (which is about $25 billion). A lot of this is the bitcoin that gets traded on a daily basis. The market liquidity on the order book is just what soaks up market orders and where price discovery largely happens. Even though there might not be many limit orders on an exchange at the moment for a bitcoin price of $100k, you can be sure that some of that 806k bitcoin stored in bitcoin wallets on Coinbase will come to market should the bitcoin price rise to $100k. That's just how the market functions and the nature of human trading behavior.

My point about liquidity wasn't that if you wanted to purchase 250 or 300 bitcoin on an exchange that you can't. The market will generally gladly sell you that much bitcoin. The point I was making about liquidity is that if you were to place an order that large, because bitcoin is a scarce asset, doing so will likely make the price of bitcoin move greatly. We see this all the time in the market where bitcoin will be resting at a certain price and then all of a sudden the price spikes $1k dollars. This is usually because a very large order was filled soaking up large amounts of limit orders and also causing new bitcoin to come to market as the price rises. And like I mentioned, as the unit price of bitcoin rises, liquidity does too. That 900 bitcoin mined each day also is valued more now which means that as it comes to market, it is now adding greater liquidity to the market than it was previously. Eventually the market stabilizes again until greater demand comes in or leaves. Suggesting that the bitcoin halving events don't cause a supply shock to the market is a fundamental misunderstanding of these market dynamics. History has continuously shown that these events are not and cannot be priced in before hand since it is an active change to the market equilibrium and the price discovery that is taking place every single day.

Also, the problem if you're looking to fill a very large order is that generally you want to maintain as low of a cost basis on your purchase as possible. So buying $1 billion in bitcoin right off the market is going to cause the price to sky rocket which won't be good for your purchases. So it is usually best to average your purchasing out over several days (this is what MicroStrategy did) or find an OTC trader you can purchase from at an agreed upon price so that you don't shake the markets with your bulk purchase.

It is clear you can purchase more than just 250 bitcoin as many companies have done so. You can see here a list of some of the companies that have publicly announced adding bitcoin to their balance sheets.

https://bitcointreasuries.org/index.html (https://bitcointreasuries.org/index.html)

For example, MicroStrategy has over 70k bitcoin in their reserves worth over $2 billion. They made their first round of purchasing over the course of five days so that they didn't shake up the markets which would allow them to get the best cost basis for their acquisition. Otherwise, had they purchased all their bitcoin up front, they would've chewed through the order book liquidity and the price would've sky rocketed.

https://cointelegraph.com/news/coinbase-executed-microstrategy-s-425m-bitcoin-purchase-in-september-2020 (https://cointelegraph.com/news/coinbase-executed-microstrategy-s-425m-bitcoin-purchase-in-september-2020)

You don't get these same market dynamics with an asset that isn't scarce in some way and many of the market dynamics for bitcoin are completely unique to bitcoin because of the very fact that there is no supply elasticity to additional market demand. The only way to add additional supply liquidity to the market to meet additional demand is to increase the price. And when there is a large halving event like what has taken place with the first 3 so far, it really does create a shock to the market. It is akin to having half of the world's oil producers just shut down overnight and stop producing oil. Given the same amount of demand, the price is obviously going to go up. There is no way around that market reality. The flip side of a commodity that is producible though is that as the price rises, there are new economically viable production possibilities that could arise that might not have been economical with lower prices. Oil reserves that weren't economically feasible to drill previously at lower prices might suddenly be at new higher prices. The same goes for gold. You don't have that reactivity in the market with bitcoin. The supply is what it is and there is no changing it.

I sincerely hope this helps anyone who is genuinely curious about the bitcoin market. I write these posts not to convince anyone about bitcoin or to buy it, but more to counter the endless misinformation and false info that is posted here that might prevent someone that is genuinely curious about learning from going down the right path.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 04, 2021, 07:21:11 AM
@lifeanon269 is there anything that would cause you to change your views on cryptos?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 04, 2021, 08:31:51 AM
@lifeanon269 is there anything that would cause you to change your views on cryptos?

Cryptos? 99%+ of cryptos are junk at best and scams at worst. I talked about blockchain technology in this post of mine here:

https://forum.mrmoneymustache.com/investor-alley/bitcoin-are-we-still-out/msg2757464/#msg2757464 (https://forum.mrmoneymustache.com/investor-alley/bitcoin-are-we-still-out/msg2757464/#msg2757464)

Most of the cryptocurrencies out there have no real use case or they're simply using blockchain tech when there really is no need to. Many of them are horribly centralized (in which case, why use a blockchain?). Many of them pre-mine their tokens for a few insiders to have prior to the tokens being released to market. Often there are shady dealings taking place with pay-for-play activity where payments are given to exchanges as favor for getting tokens listed (which drives retail speculation). Then that allows insiders to dump their pre-mined tokens on the general public. I've seen this way too often. If you read the SEC lawsuit against Ripple, there is a whole slew of allegations with shady dealings being made all with the intention of misleading investors.

Often times there are tokens that are created where there is almost zero need for a token to be used at all. The projects latched on to the "blockchain" buzz word hype just to make money. If you're diversifying a crypto-currency portfolio out of bitcoin and into other tokens, I feel you're actually increasing your risk while at the same time reducing your returns (almost all alt-coins trail bitcoin in gains historically).

This is why I only believe bitcoin actually has a use case today. The idea that you can say "blockchain, but not bitcoin" is a misunderstanding of the benefits that a blockchain provides. You can't separate the two. It is like saying "well the world wide web is great, but not the internet." I feel if there ever were some great benefit to a new token or crypto-currency that is out there, it will instead just be adopted by bitcoin as a side-chain because why have that use case be backed the the security of a much more inferior network when it could be backed by the bitcoin network's security instead? We're already starting to see this happen. This (among other reasons I've mentioned before) is why I don't see bitcoin being the "MySpace to Facebook".

Aside from the technical aspects, I feel bitcoin fills a crucial role in the economy at an especially critical time in history. The monetary policies of central banks around the world are not sustainable and there is no sign of them correcting. We're approaching negative interest rate territory and regardless of your thoughts on the matter, it can at least be agreed upon that it is uncharted territory for monetary policy. There simply aren't many additional tools left at the Fed's disposal for correcting or assisting with future market instabilities. The problem is that the Fed has now supporting such an expansive economy that should there be future corrections without the proper tools in place to assist, the crash could be much worse than it otherwise would've been.

The government uses a bogus CPI metric to determine what inflation is, but there is no single inflation number for every person (different people use and desire different goods and assets). So it is skewed lower than what reality is to claim that inflation doesn't exist (~2%) so that the metric can continue to support their monetary policy objectives. But, in reality, inflation is out of control for a lot of people. For the most part, inflation hits scarce assets the hardest because you have an increasing supply of money chasing a finite supply of goods or commodities). Another problem with inflation is the cantillon effect where because money from the fed is infused into the banking sector, the wealthy generally has first access to this new influx of money and can use it first before this supply is fully circulated in the economy. This means they have access to additional buying power before inflation takes full effect. This exacerbates wealth inequality.

I'm not an economic doomsayer by any means. I fully believe the economy will continue to grow just fine and I will always continue to invest in the economy through the highs and the lows. But that doesn't mean I don't recognize the faults in our economy and the glaring issues that many are ignoring with the trends around the world with regards to expansive monetary policy. In this regard, I think bitcoin has tremendous value in the world and has arrived at preciously the right time. I feel it will provide a great check against governments who might wish to push the boundaries with certain policy decisions. There is an ever growing cohort of corporations and business as well that are sitting on massive stock piles of cash that are also recognizing this fact with little recourse on what to do to prevent their stock piles from melting away at 10% annually (bonds are trash, can't invest in stocks/securities, cash is trash, etc). I feel it is just a matter of time before more and more companies start putting a little of their cash reserves into bitcoin to help them manage risk.

So, personally, I feel bitcoin is the only cryptocurrency that has a use case and legitimate secure network in place in today's world. The longer time goes on, the more people and businesses will trust putting their money into bitcoin (even just a small percentage) as a check against concerning monetary policy. Remember, bitcoin is global and there are many other nations in the world that don't have the same economic strength and positioning in the world that the USA has. It won't take the US dollar failing for bitcoin to fill a great need for many people in the world. Personally, I don't think governments should have a monopoly on money and even if bitcoin solely exists as a check against fiat currencies without fully replacing them (I don't see fiat currencies going away because of bitcoin), then bitcoin will have its worthwhile place in the world. Whether people eventually get to be paid in bitcoin and purchase their morning lattes with bitcoin is a secondary effect to all of this. Like I've always said, paying for retail goods with some form of digital currency tech was never a technological hurdle for humanity. Bitcoin doesn't need to fill that role to be successful, but if it does at some point, then all the merrier.

Cheers
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 04, 2021, 01:11:51 PM
Dude...I already told you I knew how trading markets worked. You don't need to write a novel explaining an order book to me, or how people might change their orders based on price changes, or how extremely low liquidity can cause high volatility.

I made the comparison to VTI because they're both scarce assets, with similar market cap, that trade on exchanges that work on basically the same principle. In both cases there's a large majority of shares sitting on the sidelines owned by buy-and-hold investors, with some active trading going on with a much smaller fraction of the shares.

The difference is that with BTC it's apparently impossible to buy a few million USD worth without eating up a significant fraction of the liquidity in the market and causing great changes in the price; stock ETFs with a similar market cap absolutely do not have that problem.

The more I learn from you about the current state of the BTC marketplace the less confidence I have that it's anywhere close to being the commonly-used currency it will need to become to justify the price.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 04, 2021, 03:05:01 PM
Dude...I already told you I knew how trading markets worked.

Apologies, but forgive me if your previous two posts had objectively false claims in them then and made no sense that led me to believe otherwise. Anyway, like I said, if you found no value in my posts, ignore them. Others may find value.

Quote
So you're saying that even though the trading volume is 2.5 million BTC per day, you can't buy 250 of them? It's just the same 249 BTC trading back and forth 10,000 times a day? Seems like a good business for the exchanges and their fees. For the rest of us...not so much. For comparison, the daily trading volume of VTI is about 3.5 million shares per day and the market has no problem whatsoever filling an order for several hundred shares.

Quote
I understand perfectly well how prices are determined in exchanges. Per Coinmarketcap, the overall trading volume across multiple exchanges was nearly 2.4 million BTC in the past 24 hours. Obviously some coins were traded multiple times and most were not traded at all, but the miners selling their 900 new BTC each day to pay their electric bills make up a tiny fraction of the overall trading volume. Halve it again and that's a difference of 450 out of 2.4 million. For every 20,000 BTC that existed yesterday, not even 20,001 BTC exists today. Changes in supply cannot explain any significant portion of recent volatility.

---
Quote
I made the comparison to VTI because they're both scarce assets, with similar market cap, that trade on exchanges that work on basically the same principle. In both cases there's a large majority of shares sitting on the sidelines owned by buy-and-hold investors, with some active trading going on with a much smaller fraction of the shares.

VTI is not a scarce asset. Vanguard can easily create additional shares to meet new demand. In fact, one of the functions of an ETF is the creation and redemption process to allow the fund to be traded like a stock and at the same time meet demand to keep the ETF share price inline with the fund's underlying value. Comparing this ETF process with an actual scarce asset like bitcoin is silly. Market capitalization comparisons have nothing to do with this, so I'm not sure why you continue to make that comparison.

Quote
The difference is that with BTC it's apparently impossible to buy a few million USD worth without eating up a significant fraction of the liquidity in the market and causing great changes in the price; stock ETFs with a similar market cap absolutely do not have that problem.

Well duh, welcome to what scarcity looks like! Again, comparing bitcoin to stocks is a silly exercise.

Quote
The more I learn from you about the current state of the BTC marketplace the less confidence I have that it's anywhere close to being the commonly-used currency it will need to become to justify the price.

Bitcoin doesn't need to be used as a medium of exchange currency to have value. See my convo with celerystalks.

Again, I'm not here to convince you, just dispel objectively false or misleading claims and it seems like you're full of them. I don't care to debate this anymore with you.

But I will leave with a slide deck from SkyBridge Capital that has a decent overview of bitcoin today for those who wish to learn more.

https://files.constantcontact.com/4e269f68301/49e4cc09-f9ef-48a2-a5e5-944ed5c7da95.pdf (https://files.constantcontact.com/4e269f68301/49e4cc09-f9ef-48a2-a5e5-944ed5c7da95.pdf)
Title: Re: Bitcoin is funny money
Post by: Telecaster on January 04, 2021, 05:12:59 PM
Except you are. You want me to name precise metrics, but by all measure any metric you use for the stock market would be telling you to sell. Price to earnings ratios, while historically used to measure whether a stock is overvalued. At current P/E ratios, the entire stock market is at historically high ratios. https://www.multpl.com/s-p-500-pe-ratio (https://www.multpl.com/s-p-500-pe-ratio) Much of the reason for this is the massive inflows of new money into the markets by the Fed. So past measurements aren't holding up to today's new economic environments.

You claim that you can look at "expert projections on where those earnings are headed in the future"....Ya, there is a name for that. It's called speculation. There are also "expert projections" about what experts see as new institutional investments flowing into bitcoin. More and more companies are looking to put bitcoin on their balance sheets. We know this is true due to the growing institutional adoption and massive swing in sentiment among these institutions. Furthermore, there are other metrics that align and validate this hypothesis of institutional adoption. Google searches for bitcoin hasn't budged. The 2017 rally was largely driven by retail investors and that was clearly visible in the large spike in Google searches. Google searches today for bitcoin haven't budged up at all. Also, active on-chain addresses is still very low at the moment compared with previous bull cycles. More active on-chain addresses is indicative of retail adoption. So this also validates the idea that institutional and high net-worth individuals are picking up bitcoin for cold storage. Volatility is also on par with volatility in past bull cycles (2013 and 2017), but this volatility is almost exclusively on the upside. We haven't had very much downside volatility which also lends to the idea that institutions are picking up bitcoin with little thoughts about cashing out in the short-term as opposed to day-traders looking to capitalize on volatility to cash out during short-term spikes.

There are plenty of future projections for bitcoin that use varying degrees of speculation and comparisons to other assets and commodities. At the end of the day, just like with expert predictions about stocks, it's all speculation. Personally I do think bitcoin will continue to compete with gold as JP Morgan is predicting. Millennials simply prefer bitcoin over gold and since they're the ones with future money being moved in the future economy, I feel comfortable making the claim that will likely be true. But, again it's speculation and I'm not going to get in price predictions. At the end of the day, we'll see who's right here.

The part in bold really isn't true though.  The higher the initial price for any productive asset--stocks, bonds, rental real estate, etc.--the lower the future return.  Stock prices (and bond prices and most real estate too, for that matter) are high.   But that doesn't necessarily mean "sell." It means expect lower returns in the future.

As an aside, not all metrics say S&P500 is overvalued right now.  Many people have heard of Robert Schiller's CAPE ratio.     Schiller has also developed a lesser known metric called Excess CAPE Yield which takes into account interest rates and inflation.   The ECY shows that appear to be reasonably valued right now.  Recent article here (https://americanconsequences.com/making-sense-of-sky-high-stock-prices/).  Warren Buffett has made similar comments.  Basically, the lower the interest rate the easier it is for companies to compound earnings, so high multiples would be justified. 

Buying a share of stock gives you a claim to a portion of the future earnings.  Future earnings can't be known for sure of course, but they can be estimated and there lots of tools to do so.  In the short term, stock prices are driven by supply and demand, but in the long term it always comes back to earnings.  In the short term I have no idea what stock prices will do, but I'm confident in ten years prices will be higher than they are today.  This is not rank speculation.  There are sound reasons to believe this.  Primarily that the ROE of the S&P500 has remained remarkably close to 12% for decades trending up and down in a fairly narrow band. 

The price of an unproductive asset like say gold or fine art, however is set strictly by supply and demand.  I have no idea what the price of gold or that Matisse will be ten years from now, and neither does anyone else.  It is logical to assume gold will have some value because people have always like gold, but there is literally no way to predict the price.

Which brings us to Bitcoin.  Bitcoin's price is set by supply and demand, just like gold.  As long as people want to own Bitcoin, it will have value.  Just like gold.  But that presents a nearby insurmountable problem for use as currency.    As long as we have had recorded monetary transactions, the economy has operated on credit.  Buy now, pay later.  Or maybe pay now, and get delivery later.  Do some work for me, I'll pay you in two weeks.  Buy a house now, I'll pay you over 30 years.  But that can't work with Bitcoin because the price doesn't stay the same and there is no real way to predict the price or know how much or which way the price will move.   Up above you predicted that as (if) Bitcoin increases in market cap the volatility will decrease.  There is a certain logic to that, but the market cap say the S&P 500 is what? 100 times larger than Bitcoin and it is still too volatile to use for short term savings. 

If you want to trade it, or just like the idea of owning it, knock yourself out!   But there is no reason to believe it will have widespread use as currency.   
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 04, 2021, 06:21:13 PM
VTI is not a scarce asset.

Sure it is. Look up scarcity in an economics textbook. The supply of VTI shares is not infinite. That is why they have value. The fact that a thing can be created by consuming other scarce resources (shares of publicly traded companies) does not make that thing non-scarce.

Quote
Again, comparing bitcoin to stocks is a silly exercise.

On that, we are in violent agreement. Stocks have actual reason to have value now. Bitcoin is based on hope and prayer that it will someday find enough utility to justify the valuation. There is no comparison.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 04, 2021, 07:41:48 PM
The part in bold really isn't true though.  The higher the initial price for any productive asset--stocks, bonds, rental real estate, etc.--the lower the future return.  Stock prices (and bond prices and most real estate too, for that matter) are high.   But that doesn't necessarily mean "sell." It means expect lower returns in the future.

Fair enough. I probably shouldn't have used the word "sell". That would imply opportunity costs of better risk-adjusted options elsewhere and I don't think that's really the case with stocks, even in today's environment. Like I said, you're not going to see me selling.

Quote
As an aside, not all metrics say S&P500 is overvalued right now.  Many people have heard of Robert Schiller's CAPE ratio.     Schiller has also developed a lesser known metric called Excess CAPE Yield which takes into account interest rates and inflation.   The ECY shows that appear to be reasonably valued right now.  Recent article here (https://americanconsequences.com/making-sense-of-sky-high-stock-prices/).  Warren Buffett has made similar comments.  Basically, the lower the interest rate the easier it is for companies to compound earnings, so high multiples would be justified.

The problem with any measure that is modeled on inflation adjustments is that we really are in uncharted territory with regards to monetary policy. This is a really good article by Lyn Alden:

https://www.lynalden.com/money-printing/ (https://www.lynalden.com/money-printing/)

Quote
Which brings us to Bitcoin.  Bitcoin's price is set by supply and demand, just like gold.  As long as people want to own Bitcoin, it will have value.  Just like gold.  But that presents a nearby insurmountable problem for use as currency.    As long as we have had recorded monetary transactions, the economy has operated on credit.  Buy now, pay later.  Or maybe pay now, and get delivery later.  Do some work for me, I'll pay you in two weeks.  Buy a house now, I'll pay you over 30 years.  But that can't work with Bitcoin because the price doesn't stay the same and there is no real way to predict the price or know how much or which way the price will move.   Up above you predicted that as (if) Bitcoin increases in market cap the volatility will decrease.  There is a certain logic to that, but the market cap say the S&P 500 is what? 100 times larger than Bitcoin and it is still too volatile to use for short term savings. 

If you want to trade it, or just like the idea of owning it, knock yourself out!   But there is no reason to believe it will have widespread use as currency.

Like I said, bitcoin doesn't need to be used as a widespread currency to have value and I don't foresee it being used as a widespread currency any time soon (<10 years). However unlike gold or the stock market, the lack of supply reaction with bitcoin will actually be its strength for stability in the future as opposed to the contributor to volatility like it is today.

The reason for the volatility today is obviously because it is such a small market. I don't think that's controversial at all. But, I do believe there is a possibility for greater stability with bitcoin at a larger market cap (even if its smaller than the S&P 500). While I don't think it is valid to compare the stock market with bitcoin (businesses are always in wild flux, thus volatility is inherent to the market regardless of its size). A business that exceeds its quarterly earnings receives a massive influx of investors on the news. Conversely, an earnings miss causes investors to flee. There is always an ever changing flow of news and outcomes that take place with business. This isn't the case with bitcoin. It's supply is static. So as its market cap increases and volatility decreases, there won't be regular news cycles every quarter that causes vary degrees of cash flow positive or negative. Bitcoin is what it is and everyone knows what to expect from its monetary policy.

The problem is that there is the dichotomy between fiat currencies and bitcoin. Fiat currencies will always be debased and inflated (that was one of the chief reasons bitcoin was created). Because of this dichotomy, that means there will always be an infinite supply of fiat currency to flow into bitcoin. So, like you said, even if bitcoin were to reach a large market cap size, there will always be an disparate and increasing amount of fiat currency cash flow that could enter the bitcoin market. Essentially by virtue of inflating fiat currencies, you will always continue to be increasing the size of the bitcoin market. However, at larger market cap sizes, due to the stability of bitcoin's supply rate in the future, the rate of deflation of bitcoin's value will likely be highly correlated with the rate of inflation of fiat currencies. The rate of deflation for bitcoin would likely be slightly higher than the rate of inflation of fiat currencies (accounting for the rate of lost bitcoin annually) So I don't think the comparison to stock market volatility is an apt comparison here. So you say it is insurmountable for bitcoin to achieve stability and thus could never be used for credit or lending, but I disagree with that.

That being said, I think there are several use cases of currency and bitcoin can fill some of those roles without being required to fill all of those roles. I think it is important to separate currency uses cases. A currency doesn't need to be used as credit to be useful as a medium of exchange for many people around the world. As I talked about earlier, often times the choice to use a given currency in a transaction comes down to friction. There could be many people in the world where the friction to use bitcoin might be less than using any other legal tender, digital or otherwise. This can take place and likely will take place (it already is in small niche cases around the world), without the requirement of bitcoin being used as credit and lending. There is also the use case of cross-border payments and friction in this environment is inherent to fiat currencies that are generally confined to national borders. Whether it is simply remittances or actual commerce.

Ultimately, bitcoin's value for the foreseeable future will always be denominated in fiat terms. But I don't think that is in any way a hindrance for bitcoin.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 04, 2021, 08:16:16 PM
Sure it is. Look up scarcity in an economics textbook. The supply of VTI shares is not infinite. That is why they have value. The fact that a thing can be created by consuming other scarce resources (shares of publicly traded companies) does not make that thing non-scarce.

But you were comparing the market cap of VTI as a means of explaining why additional demand for VTI doesn't cause an increase in the share price like it does for bitcoin. That was where the original discussion arose from. The problem with your argument is that VTI (the ETF) is not scarce in regards to demand. The entire point of the ETF is to trade according to the value of its underlying, not to trade at a premium for simply being an ETF. Especially for VTI, Vanguard does its best to ensure its share price is inline with its NAV. This means that if there is an influx of demand for the VTI (causing an increase in the ETF's market cap), then Vanguard (or whoever the authorized participant is) steps in to issue additional shares to keep the share price of the ETF inline with the underlying value. Because the share price is based on the value of the underlying NAV and that underlying is the total stock market and thus the comparison you were making about why increased demand doesn't cause a large increase in share price is an apples to oranges comparison here even with similar market cap sizes. What you should be doing is comparing the share price of the ETF with the market cap of the entire underlying, since that is where the ETF share price comes from. This explains why VTI as an ETF for the total stock market can fulfill orders and meet demand without a large increase in its share price even if the ETF were to have a similar market cap to bitcoin.

See below:

I made the comparison to VTI because they're both scarce assets, with similar market cap, that trade on exchanges that work on basically the same principle. In both cases there's a large majority of shares sitting on the sidelines owned by buy-and-hold investors, with some active trading going on with a much smaller fraction of the shares.

The difference is that with BTC it's apparently impossible to buy a few million USD worth without eating up a significant fraction of the liquidity in the market and causing great changes in the price; stock ETFs with a similar market cap absolutely do not have that problem.

So you're saying that even though the trading volume is 2.5 million BTC per day, you can't buy 250 of them? It's just the same 249 BTC trading back and forth 10,000 times a day? Seems like a good business for the exchanges and their fees. For the rest of us...not so much. For comparison, the daily trading volume of VTI is about 3.5 million shares per day and the market has no problem whatsoever filling an order for several hundred shares.
Title: Re: Bitcoin is funny money
Post by: Lady Stash on January 05, 2021, 06:05:25 AM
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

A year ago I agreed with you.  Now I'm betting Bitcoin (or something like it) will become an international currency. 

In the US, we already have a stable currency that's accepted around the world.  In developing countries, there's a non-zero risk of significant currency devaluation and a non-zero cost to switch currency.  Bitcoin can address both problems.  If I live in Venezuela or another country where my currency is actively losing value and I can't trade it for a stable currency because the government is limiting supply then something like bitcoin becomes extremely valuable. 

Obviously it's not accepted widely yet, but once bitcoin reaches critical mass and stabilizes it has properties that can't be matched by a local currency.  It can't be devalued by a government and isn't subject to local hyper-inflation.  It's free to spend anywhere in the world - no money change costs. 

The biggest risk to adoption I can see is that governments outlaw bitcoin to keep control of their currencies and enforce anti-money laundering policies and financial sanctions.



Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 05, 2021, 04:40:14 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

Bitcoin is up 41% since this post.  Its going to disappear.  Just wait guys.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on January 05, 2021, 06:41:58 PM
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

A year ago I agreed with you.  Now I'm betting Bitcoin (or something like it) will become an international currency. 

In the US, we already have a stable currency that's accepted around the world.  In developing countries, there's a non-zero risk of significant currency devaluation and a non-zero cost to switch currency.  Bitcoin can address both problems.  If I live in Venezuela or another country where my currency is actively losing value and I can't trade it for a stable currency because the government is limiting supply then something like bitcoin becomes extremely valuable. 

Obviously it's not accepted widely yet, but once bitcoin reaches critical mass and stabilizes it has properties that can't be matched by a local currency.  It can't be devalued by a government and isn't subject to local hyper-inflation.  It's free to spend anywhere in the world - no money change costs. 

The biggest risk to adoption I can see is that governments outlaw bitcoin to keep control of their currencies and enforce anti-money laundering policies and financial sanctions.

I'm not sure it Bitcoin will come good but it could and I think it'd be great. It is miles away from getting to that level yet. The problem is it might not happen in our lifetimes and bitcoin may be replaced by something better. I view an international digital currency that is easily transferred, safe and secure as being a big step forward in relation to money or better put a means of exchange.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on January 05, 2021, 06:46:08 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

Bitcoin is up 41% since this post.  Its going to disappear.  Just wait guys.

I find this argument pretty stupid. The price going up and up is solely about an asset bubble and how people react to asset bubbles. We've seen this throughout history. We know it's irrational but it's really irrational when we are talking about a medium of exchange.

I like the idea of cryptos and I still feel they could be a gamechanging technology.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 05, 2021, 07:02:41 PM
Bitcoin will not be allowed to succeed
Satoshis ???  Come on why not just buy a bag of magic beans
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 05, 2021, 07:28:32 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

Bitcoin is up 41% since this post.  Its going to disappear.  Just wait guys.

28 percent
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 05, 2021, 07:47:18 PM
I'm gonna bring this thread back up when it crashes to oblivion
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 05, 2021, 09:48:18 PM
I'm gonna bring this thread back up when it crashes to oblivion

Yeah, when it crashes down to $35,000 in 9 months, go ahead.  It is not dropping below $15,000 again. 
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 05, 2021, 10:05:47 PM
Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

Bitcoin is up 41% since this post.  Its going to disappear.  Just wait guys.

I find this argument pretty stupid. The price going up and up is solely about an asset bubble and how people react to asset bubbles. We've seen this throughout history. We know it's irrational but it's really irrational when we are talking about a medium of exchange.

I like the idea of cryptos and I still feel they could be a gamechanging technology.

The point is that he told everyone to "cash out now".  Had anyone listened to him they would have missed out on 41% (now 42%) gains.  Bitcoin is speculative and it will continue to be so for the near future.  However, that doesn't mean you shouldn't hold any in your portfolio.  I personally hold very little in my portfolio (less than 5% of my income has gone into it over the years).  I think its quite short-sighted not to invest a small amount, say 1% of your income, into Bitcoin.  It has its ups and downs (it may drop 70% from its high) but if you look at the use case of Bitcoin and see the changes in the markets you cannot legitimately say it will "disappear".  In fact, it has a clear track record of regaining loss ground and then some after its drastic drops.
Title: Re: Bitcoin is funny money
Post by: chevy1956 on January 06, 2021, 12:13:36 AM
The point is that he told everyone to "cash out now".  Had anyone listened to him they would have missed out on 41% (now 42%) gains.  Bitcoin is speculative and it will continue to be so for the near future.  However, that doesn't mean you shouldn't hold any in your portfolio.  I personally hold very little in my portfolio (less than 5% of my income has gone into it over the years).  I think its quite short-sighted not to invest a small amount, say 1% of your income, into Bitcoin.  It has its ups and downs (it may drop 70% from its high) but if you look at the use case of Bitcoin and see the changes in the markets you cannot legitimately say it will "disappear".  In fact, it has a clear track record of regaining loss ground and then some after its drastic drops.

I agree that holding some bitcoin isn't a bad idea as part of a diversified portfolio. I said earlier if you hold gold and/or silver or even any currency I think bitcoin may be the best option for that part of your portfolio. I'd much rather invest in bitcoin than gold.
Title: Re: Bitcoin is funny money
Post by: CuboCube on January 06, 2021, 02:05:23 AM
Bitcoin does have an awful lot of shady people propagating it; bitcoin is not what it supposed to be. And once you have it, you immediately want to onboard others. It's the most cunning inadvertent pyramid scheme ever, if you will. Let's see how this Tether thing works out on the 15th of january. (https://www.coindesk.com/nyag-tether-bitfinex-loan-documents-coming-weeks, https://en.wikipedia.org/wiki/Tether_(cryptocurrency))
The Billion-Dollar Bitcoin Scam - Ordinary Things: https://youtu.be/YCuGpfMSmck
Bitcoin - Unmasking Satoshi Nakamoto - Barely Sociable: https://youtu.be/XfcvX0P1b5g
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on January 06, 2021, 06:18:07 AM
There's also no counter-weight to the optimism.  If someone thinks Tesla is overpriced, they can short the stock or buy PUT options.  If someone who doesn't own Bitcoin thinks it is about to fall ... you can't short it in your brokerage account.  There's no options to buy.  So the only people who can express their views are buyers.

Even if Bitcoin isn't funny money... if you see a lot of press about Bitcoin, and many threads on forums... it's probably because the price has run up a lot (which it has).  So when everyone is trying to get you interested (in this case in Bitcoin), that's probably not the best time or price to buy.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 06, 2021, 06:29:01 AM
There's also no counter-weight to the optimism.  If someone thinks Tesla is overpriced, they can short the stock or buy PUT options.  If someone who doesn't own Bitcoin thinks it is about to fall ... you can't short it in your brokerage account.  There's no options to buy.  So the only people who can express their views are buyers.

Even if Bitcoin isn't funny money... if you see a lot of press about Bitcoin, and many threads on forums... it's probably because the price has run up a lot (which it has).  So when everyone is trying to get you interested (in this case in Bitcoin), that's probably not the best time or price to buy.

That is not true.  People have been shorting Bitcoin since 2017.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 06, 2021, 06:44:51 AM
There's also no counter-weight to the optimism.  If someone thinks Tesla is overpriced, they can short the stock or buy PUT options.  If someone who doesn't own Bitcoin thinks it is about to fall ... you can't short it in your brokerage account.  There's no options to buy.  So the only people who can express their views are buyers.

Even if Bitcoin isn't funny money... if you see a lot of press about Bitcoin, and many threads on forums... it's probably because the price has run up a lot (which it has). So when everyone is trying to get you interested (in this case in Bitcoin), that's probably not the best time or price to buy.

Bitcoin is down 1.45% since you made this comment. Obviously represents a buying opportunity from recent highs.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 06, 2021, 07:06:02 AM
There's also no counter-weight to the optimism.  If someone thinks Tesla is overpriced, they can short the stock or buy PUT options.  If someone who doesn't own Bitcoin thinks it is about to fall ... you can't short it in your brokerage account.  There's no options to buy.  So the only people who can express their views are buyers.

Even if Bitcoin isn't funny money... if you see a lot of press about Bitcoin, and many threads on forums... it's probably because the price has run up a lot (which it has).  So when everyone is trying to get you interested (in this case in Bitcoin), that's probably not the best time or price to buy.

Ya, that's not true. You can short bitcoin on several exchange/broker websites (BitMex probably being the largest). I track many of the larger transactions that take place and there were several very large liquidated shorts that just took place after bitcoin just breached $35k ($6.4M, $2.4M, and $1.3M). In fact, short squeezes in bitcoin are often what cause many of the larger upside swings. Long story short though is that not many choose to short bitcoin because it is absolutely stupid to do so with something that is so lopsided toward buy demand and who's upside is so tremendously high.

Also, for what its worth, in regards to "many threads on forums", let's not forget that this one was started by a bear. Seems like bears are just as likely to come out of the wood work when prices go high as bulls are.
Title: Re: Bitcoin is funny money
Post by: Telecaster on January 07, 2021, 12:45:01 PM
The biggest risk to adoption I can see is that governments outlaw bitcoin to keep control of their currencies and enforce anti-money laundering policies and financial sanctions.

Governments keep control of their currencies by simply requiring that taxes be paid in the local currency.  Taxes themselves are an obstacle to widespread Bitcoin adoption because if the price goes up before you buy something you owe capital gains tax. You can bet if Bitcoin use becomes significant at all, governments will make sure to collect capital gains and applicable sales taxes.  And all those taxes need to be paid in local currency.   On the flip side, if the price goes down before your purchase you can carry the loss forward but that becomes an accounting hassle. 

Perhaps a bigger obstacle is the United States and many other countries require wages be paid in legal tender.  The reason for this is in the Jim Crow south, poor blacks (and poor whites, it should be said) were paid in script which could only be redeemed at the company store.  This kept people in poverty because their money was worthless to anyone except their employer, tying them to their jobs.   Because this is worker protection/civil rights issue, I can't imagine a circumstance where this law would be repealed.  If you can only use Bitcoin to buy stuff but not pay wages I don't see a road to widespread use.

And of course there is the volatility problem.   Bitcoin's price is set by supply and demand.  I don't see how the laws of supply and demand will stop applying in the future, regardless of market cap.   Because of the volatility, you can't  to buy or sell on credit (or technically you could, but it would be risky).   Which is how most stuff is bought and sold, at at least one point in the transaction. 

Maybe I'm wrong, but those are some strong headwinds.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on January 07, 2021, 01:10:25 PM
The biggest risk to adoption I can see is that governments outlaw bitcoin to keep control of their currencies and enforce anti-money laundering policies and financial sanctions.

Governments keep control of their currencies by simply requiring that taxes be paid in the local currency.  Taxes themselves are an obstacle to widespread Bitcoin adoption because if the price goes up before you buy something you owe capital gains tax. You can bet if Bitcoin use becomes significant at all, governments will make sure to collect capital gains and applicable sales taxes.  And all those taxes need to be paid in local currency.   On the flip side, if the price goes down before your purchase you can carry the loss forward but that becomes an accounting hassle. 

Perhaps a bigger obstacle is the United States and many other countries require wages be paid in legal tender.  The reason for this is in the Jim Crow south, poor blacks (and poor whites, it should be said) were paid in script which could only be redeemed at the company store.  This kept people in poverty because their money was worthless to anyone except their employer, tying them to their jobs.   Because this is worker protection/civil rights issue, I can't imagine a circumstance where this law would be repealed.  If you can only use Bitcoin to buy stuff but not pay wages I don't see a road to widespread use.

And of course there is the volatility problem.   Bitcoin's price is set by supply and demand.  I don't see how the laws of supply and demand will stop applying in the future, regardless of market cap.   Because of the volatility, you can't  to buy or sell on credit (or technically you could, but it would be risky).   Which is how most stuff is bought and sold, at at least one point in the transaction. 

Maybe I'm wrong, but those are some strong headwinds.

The issue of volatility is a barrier to adoption. Crypto is having a hard time transitioning from speculative investment to store of value and trading token. The more cryptos skyrocket and crash, the less likely a business is to accept them (because the cryptocurrency could crash the moment he receives it) or use them for procurement (because the cryptocurrency could skyrocket the moment he pays it). This uncertainty is intolerable when one's margins are single-digit and one is in debt.

That said, there are now cryptos whose function is to hedge the price of cryptos vs. dollars via contracts.

The following course might be a good investment of time for both enthusiasts and skeptics:

https://www.coursera.org/learn/blockchain-business-models (https://www.coursera.org/learn/blockchain-business-models)
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on January 07, 2021, 01:19:50 PM
There's also no counter-weight to the optimism.  If someone thinks Tesla is overpriced, they can short the stock or buy PUT options.  If someone who doesn't own Bitcoin thinks it is about to fall ... you can't short it in your brokerage account.  There's no options to buy.  So the only people who can express their views are buyers.

Ya, that's not true. You can short bitcoin on several exchange/broker websites (BitMex probably being the largest). I track many of the larger transactions that take place and there were several very large liquidated shorts that just took place after bitcoin just breached $35k ($6.4M, $2.4M, and $1.3M). In fact, short squeezes in bitcoin are often what cause many of the larger upside swings. Long story short though is that not many choose to short bitcoin because it is absolutely stupid to do so with something that is so lopsided toward buy demand and who's upside is so tremendously high.
I said "you can't short it in your brokerage account", and BitMex is not a brokerage.  If someone buys PUT options on TSLA, that goes to the CBOE... there's a well established system of what happens to enforce the contracts.

BitMex is registered in an island off the coast of Africa.  To quote Wikipedia:
"BitMEX was founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed, with financing from family and friends."
...
"On October 1, 2020, Hayes, Reed, Delo, and Gregory Dwyer were indicted on charges of violating the U.S. Bank Secrecy Act and conspiracy to violate that law, arising from allegations that the four failed to implement anti-money laundering measures"
https://en.wikipedia.org/wiki/BitMEX
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 07, 2021, 05:26:37 PM
I said "you can't short it in your brokerage account", and BitMex is not a brokerage.  If someone buys PUT options on TSLA, that goes to the CBOE... there's a well established system of what happens to enforce the contracts.

BitMex is registered in an island off the coast of Africa.  To quote Wikipedia:
"BitMEX was founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed, with financing from family and friends."
...
"On October 1, 2020, Hayes, Reed, Delo, and Gregory Dwyer were indicted on charges of violating the U.S. Bank Secrecy Act and conspiracy to violate that law, arising from allegations that the four failed to implement anti-money laundering measures"
https://en.wikipedia.org/wiki/BitMEX

No, you can't short bitcoin in your typical brokerage account.

Your original point was simply that you were implying that there is no downwards pressure on bitcoin to counteract all the demand, when there is. There are several places you can short bitcoin.

https://99bitcoins.com/short-sell-bitcoin/ (https://99bitcoins.com/short-sell-bitcoin/)
https://www.investopedia.com/news/short-bitcoin/ (https://www.investopedia.com/news/short-bitcoin/)

Not sure why you're going on about BitMex. That's not my argument. I've never used them and they've never had any of my business. I've just seen, time after time, shorts get liquidated on these exchanges from alerts that I get. The primary reason why there aren't many shorts is because you have to be batshit crazy to short bitcoin. Even if you're the biggest bear and think bitcoin will go to $0 someday, shorting bitcoin would be an absolutely reckless move with your money.
Title: Re: Bitcoin is funny money
Post by: Northman on January 08, 2021, 05:38:42 AM
I don't think it's a good advice adding BTC to your portfolio or any crypto for that matter for folks reading on this forum on their way to achieve FIRE. It's a very risky asset that can easily drop 80% or more without any reason. Use your common sense and think about it. There is only a small amount of people making a (huge) profit. It's the ones that gotten in before you did AND are lucky enough getting out at the right time. The later you get into this game, the more likely you will lose. It's driven by pure speculation on its price. People screaming it will go to 500k or more (mostly by those already holding BTC). But the truth is that nobody holds that cristal ball and knows what will happen. It's just as likely it will drop to 200. Be warned!
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 08, 2021, 05:59:40 AM
Is it obvious to anyone else that with the wild swings and very shallow market, that bitcoin is basically a pump and dump scam?

It seems to me that these run-ups have a certain rehearsed quality to them. Things are quite, miners and other hard core crypto enthusiasts accumulate positions. Then there is a burst of online chatter: Articles in online tech journals, an army of crypto enthusiasts reactivate on forums to discuss all the merits of cryptos and bitcoin in particular.  There is a scramble of n00bs or people who missed the last one to buy in driving up the price. Then the activity dies down and the price crashes. Rinse and repeat in about 18 months or so..
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 08, 2021, 08:38:19 AM
Bro Bro can I borrow 20 satoshis ???   My Tesla model 27 is in the shop with a busted flux capacitor
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on January 08, 2021, 09:09:08 AM
Your original point was simply that you were implying that there is no downwards pressure on bitcoin to counteract all the demand, when there is. There are several places you can short bitcoin.
You're right that I exaggerated in my original post, saying there was "no place" to short bitcoin.  But I didn't expect mainstream investment choices to be put on a par with websites like the one you gave as an example.

Not sure why you're going on about BitMex. That's not my argument. I've never used them and they've never had any of my business.
Because you brought it up, and cited it as the biggest example:

You can short bitcoin on several exchange/broker websites (BitMex probably being the largest)

The amount of money invested in Bitcoin is dwarfed by the mainstream investment houses and markets.  There's trusted brokerages in the U.S. like Vanguard, Fidelity and Schwab - all of which must abide by strict U.S. laws.  There's a big gap between that and websites who remain in poorly regulated locations.
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 08, 2021, 10:02:00 AM
I don't think it's a good advice adding BTC to your portfolio or any crypto for that matter for folks reading on this forum on their way to achieve FIRE. It's a very risky asset that can easily drop 80% or more without any reason.

Sure, so don't put all your assets in it.  But I've been hearing this same refrain for the last decade, and the reality has been that anyone with a small chunk of their assets in BTC has done exceedingly well on that class.

If you put $1000 in at the first "insane, bubble, tulip mania, this is stupid, it'll crash to 0!" peak in late 2013, even if you sold it on the swing up at $30k in late 2020, 3000% in 7 years ain't half bad.  And if you lost that entire $1000, well... OK.  Shouldn't be a big deal.

On the path to FIRE, I think there absolutely is a place for a small portion of assets held in high risk assets.  I'm aware it's a minority opinion around here, but once you're well enough established on the path, tossing a few grand into high risk shouldn't meaningfully impact your FIRE time if it fails totally, and could very well accelerate you substantially if it succeeds.

Is it obvious to anyone else that with the wild swings and very shallow market, that bitcoin is basically a pump and dump scam?

That various groups have used bitcoin for pump and dump stuff has been obvious since the very, very early days, when anyone with $50k could swing the price all over the place on the common exchanges.

It's nothing unique to bitcoin.  Any low market cap asset is subject to these sort of swings, and they happen regularly.  As the market cap increases, and trading depth increases, it becomes harder and harder to accomplish that sort of thing.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 08, 2021, 10:44:58 AM
You're right that I exaggerated in my original post, saying there was "no place" to short bitcoin.  But I didn't expect mainstream investment choices to be put on a par with websites like the one you gave as an example.

Not sure why you're going on about BitMex. That's not my argument. I've never used them and they've never had any of my business.
Because you brought it up, and cited it as the biggest example:

You can short bitcoin on several exchange/broker websites (BitMex probably being the largest)

The amount of money invested in Bitcoin is dwarfed by the mainstream investment houses and markets.  There's trusted brokerages in the U.S. like Vanguard, Fidelity and Schwab - all of which must abide by strict U.S. laws.  There's a big gap between that and websites who remain in poorly regulated locations.

Where did I put mainstream investment choices on par with bitcoin exchanges? I don't recall making that comparison anywhere at all. Care to quote me where I did?

Ya, I simply cited it as one example. I didn't cite it as an all high and mighty example of ethics. I mean, by that measure, there probably aren't too many banks that would fit that bill. Considering banks like Deutsche Bank considers the billions in fines they pay every year for money laundering an other illicit activity as just a cost of doing business (because that business is much more lucrative than the fine), I wouldn't exactly hold banks up as a pillar of good. At any rate, again, that was never my argument.

Again, I never compared bitcoin exchanges to the likes of Vanguard, Fidelity, or Schwab (feel free to quote me) and I've mentioned numerous times that the market for bitcoin is extremely small in comparison with the rest of the economy. That was never in dispute nor was it ever an argument of mine. I was simply saying that there certainly is some downward pressure on bitcoin because of shorting that takes place. This is empirical truth since there have been numerous short squeezes that have taken place that have caused the price to skyrocket further higher. If a short squeeze can cause the price to push even higher, then it stands to reason that the downward pressure from that short was equivalent. At the end of the day, while you may consider going long as being reckless, I think we can at least agree that going short is even more so.

Ya, that's not true. You can short bitcoin on several exchange/broker websites (BitMex probably being the largest). I track many of the larger transactions that take place and there were several very large liquidated shorts that just took place after bitcoin just breached $35k ($6.4M, $2.4M, and $1.3M). In fact, short squeezes in bitcoin are often what cause many of the larger upside swings. Long story short though is that not many choose to short bitcoin because it is absolutely stupid to do so with something that is so lopsided toward buy demand and who's upside is so tremendously high.

Also, for what its worth, in regards to "many threads on forums", let's not forget that this one was started by a bear. Seems like bears are just as likely to come out of the wood work when prices go high as bulls are.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 08, 2021, 11:12:50 AM
I don't think it's a good advice adding BTC to your portfolio or any crypto for that matter for folks reading on this forum on their way to achieve FIRE. It's a very risky asset that can easily drop 80% or more without any reason.

Sure, so don't put all your assets in it.  But I've been hearing this same refrain for the last decade, and the reality has been that anyone with a small chunk of their assets in BTC has done exceedingly well on that class.

To further add to this, investing is all about one's risk appetite. There was an analysis that was performed that looked at returns and risk of investments. The comparison was between a portfolio that consisted of 99% cash and 1% bitcoin versus a 100% S&P500 stock portfolio. The 99% cash with 1% bitcoin portfolio not only outperformed the stock portfolio over the course of 10 years and also for any 4-year period, but also carried less risk.

This is what I feel people who aren't understanding about such a asymmetric investment like this. Not only do I see people on here make completely false remarks in regards to what bitcoin is, how it works, or what it is trying to accomplish, but I feel like people aren't grasping its potential place in one's portfolio not only to help increase your returns, but also to help reduce your risk. I'm not saying that you should get out of stocks and go 99% cash and 1% bitcoin. But to realize that a 1% holding of bitcoin in your portfolio can help you not only diversify into one of the only apolitical assets in the world, but carries much higher upside than the minimal downside that it risks in your overall portfolio. There is a reason why a growing number of institutions are putting some on their balance sheets. It isn't so they can gamble with their stockholders money, it is because they've done the risk analysis and are now understanding that bitcoin is different from what they previously understood it to be. They now understand there is a place for it and the market is being re-priced accordingly.

There have been rushes for land in the American west to carve out a piece of land for future generations since it is scarce and limited. There was a rush for gold in the 1800s during the California gold rush since it is scarce and limited. There was a rush for valuable domain names on the internet since they're scarce and limited. And now there is a rush for bitcoin on the world's first decentralized monetary network because it is scarce and limited.

Feel free to continue to criticize bitcoin and show that you don't understand why society might value a completely decentralized monetary network that isn't controlled by a single government. In my opinion, there will continue to be a growing desire for a global asset that isn't influenced by the whim of any single government or entity. There is absolutely value in that and clearly the market is realizing this.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on January 08, 2021, 01:26:17 PM

Sure, so don't put all your assets in it.  But I've been hearing this same refrain for the last decade, and the reality has been that anyone with a small chunk of their assets in BTC has done exceedingly well on that class.

If you put $1000 in at the first "insane, bubble, tulip mania, this is stupid, it'll crash to 0!" peak in late 2013, even if you sold it on the swing up at $30k in late 2020, 3000% in 7 years ain't half bad.  And if you lost that entire $1000, well... OK.  Shouldn't be a big deal.

On the path to FIRE, I think there absolutely is a place for a small portion of assets held in high risk assets.  I'm aware it's a minority opinion around here, but once you're well enough established on the path, tossing a few grand into high risk shouldn't meaningfully impact your FIRE time if it fails totally, and could very well accelerate you substantially if it succeeds.

The issue with this approach is that there are hundreds of thousands of sketchy or low-probability investment opportunities around us at all times. There are over 2,000 cryptocurrencies now, and new ones being launched regularly. At least 99% of these won't survive, right? A millionaire allocating 100% to speculation would run out of money long before scratching the surface. This is not even counting penny stocks, options, futures, gambles, MLM schemes, pump-and-dumps, forex opportunities, or emails from Nigerian princes. Spending a few grand on lotto tickets might seem rational in hindsight when those certain lotto tickets win, but without hindsight it gets a little harder to make money speculating on what other people will speculate on in the future.

https://coinmarketcap.com/all/views/all/ (https://coinmarketcap.com/all/views/all/)
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 08, 2021, 01:42:06 PM
FFS.  I'm not saying to make the bulk of your investing in weird, speculative weeds.  Just that keeping a bit of it around doesn't really do much harm.

I know people who put some pocket change in TSLA back in the day because they thought the company would fail, but generally believed in the concept, and it's been pretty nice to them.  If it went to 0, well... OK.  It hasn't.  Same, winding back further, with Apple in the early 2000s, Microsoft, etc.  "I think this has a chance of doing well, even though it's unproven" is worth a small fraction of one's investing, IMO.

I can't tell other people what to invest in, and I'm certainly not advocating going nuts with the concept, but "Eh, seems promising, worth a shot!" stuff has a place.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on January 08, 2021, 02:16:34 PM
FFS.  I'm not saying to make the bulk of your investing in weird, speculative weeds.  Just that keeping a bit of it around doesn't really do much harm.

I know people who put some pocket change in TSLA back in the day because they thought the company would fail, but generally believed in the concept, and it's been pretty nice to them.  If it went to 0, well... OK.  It hasn't.  Same, winding back further, with Apple in the early 2000s, Microsoft, etc.  "I think this has a chance of doing well, even though it's unproven" is worth a small fraction of one's investing, IMO.

I can't tell other people what to invest in, and I'm certainly not advocating going nuts with the concept, but "Eh, seems promising, worth a shot!" stuff has a place.

I get making investments in companies making products that you notice other people buying like Windows computers, Apple phones, Netflix subscriptions, Amazon boxes, Salesforce at work, Zoom calls, etc. In these cases, one has a reason to believe the stock will rise - reasons that are not yet on the balance sheet or income statement. Great product experiences are the closest we'll get to insider information because the Wall Street analysts are not yet aware.

The simpler version of speculation is "tossing a few grand into high risk" and that's the part I can't get behind. Such a mentality would fall right into the hands of people who set up high-risk ventures just to extract profit and then get out. E.g. one path to riches is to set up a publicly traded company with a compelling narrative, sell one's equity to the public, go bankrupt, and repeat. I'll wade into risk if I see a reason, but not for the sake of it. Will I miss a lot of opportunities that way? Sure. Won't lose money either.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 08, 2021, 02:26:47 PM

Sure, so don't put all your assets in it.  But I've been hearing this same refrain for the last decade, and the reality has been that anyone with a small chunk of their assets in BTC has done exceedingly well on that class.

If you put $1000 in at the first "insane, bubble, tulip mania, this is stupid, it'll crash to 0!" peak in late 2013, even if you sold it on the swing up at $30k in late 2020, 3000% in 7 years ain't half bad.  And if you lost that entire $1000, well... OK.  Shouldn't be a big deal.

On the path to FIRE, I think there absolutely is a place for a small portion of assets held in high risk assets.  I'm aware it's a minority opinion around here, but once you're well enough established on the path, tossing a few grand into high risk shouldn't meaningfully impact your FIRE time if it fails totally, and could very well accelerate you substantially if it succeeds.

The issue with this approach is that there are hundreds of thousands of sketchy or low-probability investment opportunities around us at all times. There are over 2,000 cryptocurrencies now, and new ones being launched regularly. At least 99% of these won't survive, right? A millionaire allocating 100% to speculation would run out of money long before scratching the surface. This is not even counting penny stocks, options, futures, gambles, MLM schemes, pump-and-dumps, forex opportunities, or emails from Nigerian princes. Spending a few grand on lotto tickets might seem rational in hindsight when those certain lotto tickets win, but without hindsight it gets a little harder to make money speculating on what other people will speculate on in the future.

https://coinmarketcap.com/all/views/all/ (https://coinmarketcap.com/all/views/all/)

And this is probably the typical response that I hear and my biggest piece of advice to anyone who says something along these lines when speaking about bitcoin would be to understand the fundamental difference between bitcoin and the rest of the cryptocurrency market. There is zero comparison and if you're making that comparison, then I feel the biggest improvement to one's knowledge on the subject would be to understand why bitcoin is different from the rest.

I wrote a little bit on the subject here in this post:

https://forum.mrmoneymustache.com/investor-alley/bitcoin-is-funny-money/msg2765416/#msg2765416 (https://forum.mrmoneymustache.com/investor-alley/bitcoin-is-funny-money/msg2765416/#msg2765416)

At the end of the day it comes down to what the benefits of a blockchain provide the world and the fact that bitcoin is the simplest form of a blockchain's benefit. There is nothing fancy about what bitcoin does, but that is what makes it the best and most secure blockchain. It's proof-of-work mechanism is the simplest form of proving that electricity was spent on a certain amount of computational security. Its blockchain database is about as decentralized as it can be across the world and is scaled in a way so that it can remain that way. There will always be newfound ideas that come about with other crypto-currencies. At the end of the day, if they're economically worthwhile projects that will end up having lots of money flowing into them, they'll be better served by being backed by bitcoin's secure network as opposed to a lesser one that is much more susceptible to attack. No one is going to want to store billions of dollars backed by a computer network that only takes millions of dollars to attack.

So with bitcoin it all comes down to confidence. If everyone has no confidence in the security of the network, its value is $0. If everyone has confidence in the security of the network, then its value has no upper bounds. What confidence does the bitcoin network provide?

1) Confidence in being able to receive bitcoin at any time of day. Anyone can generate a bitcoin address that can be used for receiving bitcoin. There are countless free and open source wallets that can be used today and features and UI are always improving.
2) Confidence in being able to hold bitcoin. Holding bitcoin has large improvements over gold, silver, real estate, or other commodities and assets. At the end of the day, the private keys to your bitcoin are just data and there are countless ways you can store that data securely, both physically and virtually. Bitcoin's fixed 21 million supply cap provides confidence that what you are holding won't ever be diluted.
3) Confidence in being able to send bitcoin. A global decentralized peer-to-peer network allows anyone to send value to anyone in the world without interference from any third-party or government power.

There are many other things, but at its basic level, these 3 things are what bitcoin's security provides confidence in. So long as people have confidence in and value these 3 things, the value of bitcoin will continue to grow.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 10, 2021, 06:52:53 AM
Bitcoin is not currency, if it succeeds it will be the new Gold
Ethereum will be used as currency if it succeeds because its programable

Both have stupid names though
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 10, 2021, 08:19:16 AM
Bitcoin is not currency, if it succeeds it will be the new Gold
Ethereum will be used as currency if it succeeds because its programable

Both have stupid names though

Everyone has been saying Bitcoin is more akin to gold than to the USD since long before the last bull run.  Saying that is not a slight.

Ethereum won't be used as a currency either.  It is actually less like the USD than Bitcoin.  Ethereum is more akin to an asset with hyper-utility. 

If you are only looking for a digital currency then you will have to look elsewhere.  Perhaps something like Litecoin.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 10, 2021, 08:32:51 AM
Bitcoin is not currency, if it succeeds it will be the new Gold
Ethereum will be used as currency if it succeeds because its programable

Both have stupid names though

Everyone has been saying Bitcoin is more akin to gold than to the USD since long before the last bull run.  Saying that is not a slight.

Ethereum won't be used as a currency either.  It is actually less like the USD than Bitcoin.  Ethereum is more akin to an asset with hyper-utility. 

If you are only looking for a digital currency then you will have to look elsewhere.  Perhaps something like Litecoin.
C’mon man! Have we al forgotten about dogecoin already ? I thought that one had potential. A real underdog story, if you will.
Title: Re: Bitcoin is funny money
Post by: Roland of Gilead on January 10, 2021, 09:41:33 AM
Doesn't a bitcoin transaction have a stupid high energy cost?  If bitcoin were used today to purchase gas/groceries, the power grid would go down lol.
Title: Re: Bitcoin is funny money
Post by: Dgmp on January 10, 2021, 09:55:13 AM
Kindly recommend you inform yourself much better then the questions in this thread.

Some of us agree with enough of of the broad thesis to continue to allocate some net worth to bitcoin as a hedge, and some as a speculation.

Regardless of what you do, you should be a lot more informed then the questions posted earlier in this thread.  These two podcasts are excellent and I recommend you listen.

The thesis that drives some companies to put some reserves in bitcoin and what that means for the rest of us:
https://podcasts.apple.com/us/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000503270615

The next layer of tech on top of bitcoin to facilitate payments today, the market forces against this, and the thesis on immediate use cases where this adds value and may win out:

https://podcasts.apple.com/us/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000504476029

One way or another central bank digital currencies are coming, and with that Alone you should spend some time on these topics.

Of course bitcoin  is fraught with risk and not for everyone, but IMO its good to have an informed point of view and make your own decisions.

Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 10, 2021, 10:54:43 AM
Doesn't a bitcoin transaction have a stupid high energy cost?  If bitcoin were used today to purchase gas/groceries, the power grid would go down lol.

No, that's not how it works.
Title: Re: Bitcoin is funny money
Post by: Roland of Gilead on January 10, 2021, 06:14:45 PM
Doesn't a bitcoin transaction have a stupid high energy cost?  If bitcoin were used today to purchase gas/groceries, the power grid would go down lol.

No, that's not how it works.

Really?

"The average energy consumption for one single Bitcoin transaction in 2020 was 741 kilowatt-hours. This was significantly more compared to the cumulative 100,000 VISA transactions with only an energy consumption of 149 kilowatt-hours. Bitcoin is more energy intensive per single transaction than 100,000 VISA transactions."

https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/ (https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/)


Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 10, 2021, 06:58:42 PM
Doesn't a bitcoin transaction have a stupid high energy cost?  If bitcoin were used today to purchase gas/groceries, the power grid would go down lol.

No, that's not how it works.

Really?

"The average energy consumption for one single Bitcoin transaction in 2020 was 741 kilowatt-hours. This was significantly more compared to the cumulative 100,000 VISA transactions with only an energy consumption of 149 kilowatt-hours. Bitcoin is more energy intensive per single transaction than 100,000 VISA transactions."

https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/ (https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/)

Yes, because a credit card transaction and Bitcoin's cryptocurrency ecosystem are objectively not comparable.  One is entirely dependent upon an entire banking system (that consumes exponentially more energy than itself) and the other is its own self-sufficient banking system.  If you compare all the energy that a VISA transaction actually depends upon to Bitcoin's ecosystem then you would find Bitcoin is actually more energy efficient. See this article:  https://hackernoon.com/the-bitcoin-vs-visa-electricity-consumption-fallacy-8cf194987a50

Additionally, another factor you are not accounting for is that a significant portion of the energy used to mine Bitcoin is actually green that would have been wasted.  Many of the largest Bitcoin mining farms are in areas that receive cheap, green hydroelectric power.

Finally, if your only objection to Bitcoin is its energy consumption then you should know that you are not alone in your concerns and, fortunately, there are alternatives to Bitcoin that use exponentially less energy because they do not rely on a Proof-of-Work ("POW") system to secure their network.  Proof-of-Stake ("POS") coins have been since almost as long as Bitcoin and they are very popular.  Even some coins that are currently POW are in the process of becoming POS, like the number 2 largest cryptocurrency: Ethereum.
Title: Re: Bitcoin is funny money
Post by: scottish on January 10, 2021, 07:32:02 PM
How about the fact that the entire Bitcoin network can only handle around 5 transactions per second.   Anyone think that's a concern?

I do agree that Merkle trees were a good invention.   That's why Linus Torvalds built them into git back in 2005.     

Personally, I think the whole proof of work thing sucks due to its ridiculous energy consumption demands as the hash space fills up.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on January 10, 2021, 08:18:41 PM
Doesn't a bitcoin transaction have a stupid high energy cost?  If bitcoin were used today to purchase gas/groceries, the power grid would go down lol.

No, that's not how it works.

Really?

"The average energy consumption for one single Bitcoin transaction in 2020 was 741 kilowatt-hours. This was significantly more compared to the cumulative 100,000 VISA transactions with only an energy consumption of 149 kilowatt-hours. Bitcoin is more energy intensive per single transaction than 100,000 VISA transactions."

https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/ (https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/)


The energy used depends more on the current BTC price than the transaction volume. The mining aspect acts as a sort of lottery system. Each miner has a chance of computing the right hash value and being rewarded with a few BTC attached to the next block. This chance is inversely proportional to the number of other miners. As the price of BTC increases, the expected value of the gain from mining also increases, which in turn brings in more miners and brings the expected value back down again. The limiting factors are the price of electricity and the price of hardware. If you have ways of getting cheap electricity or cheap circuit boards, you have an advantage in the mining game. The protocol could handle the same transaction volume with many fewer miners wasting electricity, but the incentive structure built into the network ensures that electricity usage will increase as the price does.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 10, 2021, 08:18:49 PM
How about the fact that the entire Bitcoin network can only handle around 5 transactions per second.   Anyone think that's a concern?

I do agree that Merkle trees were a good invention.   That's why Linus Torvalds built them into git back in 2005.     

Personally, I think the whole proof of work thing sucks due to its ridiculous energy consumption demands as the hash space fills up.

No concerns about the Bitcoin transactions speed.  VISA can process 45,000 transactions per second and Bitcoin's lightning network, already available if you want to use it, allows billions of transactions to happen per second/instantaneously.  The lightning network is also extraordinarily cheap to use.  It is cost efficient to send pennies to people on the lightning network (cheaper than VISA).  It's not yet widely used but it is available if you want to use it.  Eventually, nearly all transactions will happen on the lightning network I think. 
Title: Re: Bitcoin is funny money
Post by: Telecaster on January 10, 2021, 08:31:39 PM

Yes, because a credit card transaction and Bitcoin's cryptocurrency ecosystem are objectively not comparable.  One is entirely dependent upon an entire banking system (that consumes exponentially more energy than itself) and the other is its own self-sufficient banking system.  If you compare all the energy that a VISA transaction actually depends upon to Bitcoin's ecosystem then you would find Bitcoin is actually more energy efficient. See this article:  https://hackernoon.com/the-bitcoin-vs-visa-electricity-consumption-fallacy-8cf194987a50

Bitcoin is more energy efficient....unless you divide by the number of transactions.   Then even by the author's very questionable assumptions, Bitcoin is several orders of magnitude less energy efficient.   

And it might be worth noting that bank branches themselves don't process transactions.  That's done elsewhere, so he's double counting.  Bank branches mostly do consumer banking like mortgages and car loans. 

Note in many places in the world transactions are processed entirely bypassing the traditional banking system:

https://en.wikipedia.org/wiki/M-Pesa

That's supposed to be Bitcoin's big advantage right?   But people are using other services to do the same thing.  In the case of M-Pesa specifically, users gets lots of banking services that Bitcoin can't provide. 

Quote
Additionally, another factor you are not accounting for is that a significant portion of the energy used to mine Bitcoin is actually green that would have been wasted. 

Who told you that?  Clearly someone who doesn't understand the power grid. 

Electricity prices, while generally tightly regulated, are still ultimately set by supply and demand.  Bitcoin miners using green energy have stressed the power grid and caused higher prices for consumers.  Read on:

The PUDs largely have done away with cheap power for miners. In Grant County, for example, power costs for “blockchain” miners will automatically increase up to twofold whenever miners are using or have requested to use 5% or more of the district’s power.


https://www.seattletimes.com/business/technology/sunday-buzz-soaring-bitcoin-prices-put-central-washington-electrical-utilities-on-alert/

A bit of explanation is in order.  Despite what whoever told you that the green power would have been wasted, in the Columbia Basin at least, the excess power beyond what was needed by local customers was sold at at premium rates in other states.   Those premium rates kept power cheap for the local customers.   When Bitcoin mining took off in a big way in the Columbia Basin,  utilities ran out of power to sell elsewhere, and at times had to buy expensive power off the grid.  This raised everyone's utility rates, including stable, job producing industries like aluminum and data centers who require cheap power.    The solution was that all the utility districts decided to put the Bitcoin miners at the front of the line for the rate increases.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 10, 2021, 09:06:53 PM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 10, 2021, 09:33:42 PM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

I'm glad you bought the dip.  Congrats.  We only need to drop another 30% to be where we were 2-weeks ago when you made this thread.  I would love to see it - really would.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 10, 2021, 10:03:08 PM

And it might be worth noting that bank branches themselves don't process transactions.  That's done elsewhere, so he's double counting.  Bank branches mostly do consumer banking like mortgages and car loans. 

Note in many places in the world transactions are processed entirely bypassing the traditional banking system:

He isn't double counting.  VISA doesn't operate in a vacuum and neither do your transactions.  Even if your local bank branch doesn't process the VISA payment they play an essential role in the transaction (credit reporting, credit applications, payments, ect).  Bitcoin is its own ecosystem where it satisfies/replaces the entire role of the bank and VISA in a transaction.  It isn't debatable.



Quote
Quote
Additionally, another factor you are not accounting for is that a significant portion of the energy used to mine Bitcoin is actually green that would have been wasted.
 

Who told you that?  Clearly someone who doesn't understand the power grid. 

Electricity prices, while generally tightly regulated, are still ultimately set by supply and demand.  Bitcoin miners using green energy have stressed the power grid and caused higher prices for consumers.  Read on:

The PUDs largely have done away with cheap power for miners. In Grant County, for example, power costs for “blockchain” miners will automatically increase up to twofold whenever miners are using or have requested to use 5% or more of the district’s power.


https://www.seattletimes.com/business/technology/sunday-buzz-soaring-bitcoin-prices-put-central-washington-electrical-utilities-on-alert/

A bit of explanation is in order.  Despite what whoever told you that the green power would have been wasted, in the Columbia Basin at least, the excess power beyond what was needed by local customers was sold at at premium rates in other states.   Those premium rates kept power cheap for the local customers.   When Bitcoin mining took off in a big way in the Columbia Basin,  utilities ran out of power to sell elsewhere, and at times had to buy expensive power off the grid.  This raised everyone's utility rates, including stable, job producing industries like aluminum and data centers who require cheap power.    The solution was that all the utility districts decided to put the Bitcoin miners at the front of the line for the rate increases.

This article disagrees with you:  https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 11, 2021, 04:07:59 AM

And it might be worth noting that bank branches themselves don't process transactions.  That's done elsewhere, so he's double counting.  Bank branches mostly do consumer banking like mortgages and car loans. 

Note in many places in the world transactions are processed entirely bypassing the traditional banking system:

He isn't double counting.  VISA doesn't operate in a vacuum and neither do your transactions.  Even if your local bank branch doesn't process the VISA payment they play an essential role in the transaction (credit reporting, credit applications, payments, ect).  Bitcoin is its own ecosystem where it satisfies/replaces the entire role of the bank and VISA in a transaction.  It isn't debatable.



Quote
Quote
Additionally, another factor you are not accounting for is that a significant portion of the energy used to mine Bitcoin is actually green that would have been wasted.
 

Who told you that?  Clearly someone who doesn't understand the power grid. 

Electricity prices, while generally tightly regulated, are still ultimately set by supply and demand.  Bitcoin miners using green energy have stressed the power grid and caused higher prices for consumers.  Read on:

The PUDs largely have done away with cheap power for miners. In Grant County, for example, power costs for “blockchain” miners will automatically increase up to twofold whenever miners are using or have requested to use 5% or more of the district’s power.


https://www.seattletimes.com/business/technology/sunday-buzz-soaring-bitcoin-prices-put-central-washington-electrical-utilities-on-alert/

A bit of explanation is in order.  Despite what whoever told you that the green power would have been wasted, in the Columbia Basin at least, the excess power beyond what was needed by local customers was sold at at premium rates in other states.   Those premium rates kept power cheap for the local customers.   When Bitcoin mining took off in a big way in the Columbia Basin,  utilities ran out of power to sell elsewhere, and at times had to buy expensive power off the grid.  This raised everyone's utility rates, including stable, job producing industries like aluminum and data centers who require cheap power.    The solution was that all the utility districts decided to put the Bitcoin miners at the front of the line for the rate increases.

This article disagrees with you:  https://www.coindesk.com/the-last-word-on-bitcoins-energy-consumption

Cool unbiased source
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 11, 2021, 04:17:26 AM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

I'm glad you bought the dip.  Congrats.  We only need to drop another 30% to be where we were 2-weeks ago when you made this thread.  I would love to see it - really would.
Ok :)
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 11, 2021, 08:22:54 AM
Currently at 32 K something
Too risky for me
Everyone has their risk tolerance.  It seems like all driven by speculation and mob mentality which is not how I invest so not for me
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 11, 2021, 08:39:19 AM
Currently at 32 K something
Too risky for me
Everyone has their risk tolerance.  It seems like all driven by speculation and mob mentality which is not how I invest so not for me

I can totally respect that it is too risky for you.  However, it is noteworthy that Bitcoin was in the $25k range when you made this thread and a correction was thus not only expected but welcomed. 

Bitcoin is too risky for me as well.  That’s why I never put in more than 3% of my disposable income into it in any year.  My cost basis is under $6k.  No one is advocating to go all in on it.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 11, 2021, 08:49:29 AM
Currently at 32 K something
Too risky for me
Everyone has their risk tolerance.  It seems like all driven by speculation and mob mentality which is not how I invest so not for me

I can totally respect that it is too risky for you.  However, it is noteworthy that Bitcoin was in the $25k range when you made this thread and a correction was thus not only expected but welcomed. 

Bitcoin is too risky for me as well.  That’s why I never put in more than 3% of my disposable income into it in any year.  My cost basis is under $6k.  No one is advocating to go all in on it.

Would you consider selling your bitcoin before the ETF's are formed ?
It will drive the price down
To me bitcoin is trading and not investing 
Title: Re: Bitcoin is funny money
Post by: billy on January 11, 2021, 08:52:16 AM
I'm looking at cryptocurrency interest accounts where you put your money into a stable coin and receive interest in return with no lock up period. Celsius, Nexo, Blockfi, and Crypto.com interest accounts look interesting. Nexo shows that they insure custodial assets, so with an all stable coin holding example there's no risk in this account?
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 11, 2021, 08:57:50 AM
I'm looking at cryptocurrency interest accounts where you put your money into a stable coin and receive interest in return with no lock up period. Celsius, Nexo, Blockfi, and Crypto.com interest accounts look interesting. Nexo shows that they insure custodial assets, so with an all stable coin holding example there's no risk in this account?
I would stay away from those
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 11, 2021, 09:12:44 AM
I'm looking at cryptocurrency interest accounts where you put your money into a stable coin and receive interest in return with no lock up period. Celsius, Nexo, Blockfi, and Crypto.com interest accounts look interesting. Nexo shows that they insure custodial assets, so with an all stable coin holding example there's no risk in this account?

I don’t know enough of those but I subscribe to the “not your keys not your coins” ideology so I wouldn’t touch.  I also would rather have cash (ew) than a stable coin but that’s because I am suspicious of stable coins. Like do they REALLY have billions of dollars in some vault?  That is needlessly risky to me.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 11, 2021, 09:24:52 AM
Alright I've said my peace. 

Good luck !!
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 11, 2021, 09:30:29 AM
Currently at 32 K something
Too risky for me
Everyone has their risk tolerance.  It seems like all driven by speculation and mob mentality which is not how I invest so not for me

I can totally respect that it is too risky for you.  However, it is noteworthy that Bitcoin was in the $25k range when you made this thread and a correction was thus not only expected but welcomed. 

Bitcoin is too risky for me as well.  That’s why I never put in more than 3% of my disposable income into it in any year.  My cost basis is under $6k.  No one is advocating to go all in on it.

Would you consider selling your bitcoin before the ETF's are formed ?
It will drive the price down
To me bitcoin is trading and not investing

I consider selling some Bitcoin all the time.  I never plan on selling all but I definitely encourage everyone to take profits.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 11, 2021, 07:43:52 PM
How about the fact that the entire Bitcoin network can only handle around 5 transactions per second.   Anyone think that's a concern?

I do agree that Merkle trees were a good invention.   That's why Linus Torvalds built them into git back in 2005.     

Personally, I think the whole proof of work thing sucks due to its ridiculous energy consumption demands as the hash space fills up.

Yea its not a legitimate thing, price target may be around 0 dollars 
Title: Re: Bitcoin is funny money
Post by: scottish on January 13, 2021, 03:33:47 PM
How about the fact that the entire Bitcoin network can only handle around 5 transactions per second.   Anyone think that's a concern?

I do agree that Merkle trees were a good invention.   That's why Linus Torvalds built them into git back in 2005.     

Personally, I think the whole proof of work thing sucks due to its ridiculous energy consumption demands as the hash space fills up.

No concerns about the Bitcoin transactions speed.  VISA can process 45,000 transactions per second and Bitcoin's lightning network, already available if you want to use it, allows billions of transactions to happen per second/instantaneously.  The lightning network is also extraordinarily cheap to use.  It is cost efficient to send pennies to people on the lightning network (cheaper than VISA).  It's not yet widely used but it is available if you want to use it.  Eventually, nearly all transactions will happen on the lightning network I think.

Yeah, I read up on Lightning.     Thanks for that, they have some interesting ideas.

The way it works is it creates a bunch of automated contracts between pairs of users.    Say you buy coffee from starbucks every day.  (not mustachian!).   You can set up a "payment channel" which is a peer to peer connection of sorts with starbucks and put some money in it, maybe $100 worth of BTC.    Every time you go to starbucks, they debit your payment channel.

The novel part of lighting comes when you want to make a small payment to a vendor to whom you don't have a payment channel.   The network will try to find someone who does have a payment channel with the vendor.   Then you pay someone, and they pay starbucks.    This works recursively, so you can have a fairly long payment chain.

I didn't study it in detail from there, but it sounds like they're trying to borrow from routing in ad hoc networking to find connections to the vendor that you're trying to pay.

These micropayments are all aggregated and eventually pushed back to the real block chain.

Good marks to the lightning team for doing something about scalability!    But...

The 3 big problems with Bitcoin as it is today are:
1.  If you lose your private keys, you're screwed.
2.  If your private keys are compromised, you're screwed.
3.  The bitcoin network itself doesn't scale.

Lightning tries to improve #3.    But it exposes a much larger attack surface by doing it, making #2 worse.

And...   there's no guarantee the lightning network will actually scale globally.    The risk areas are
1.  Ad hoc routing just doesn't work very well. 
2.  The network performance will depend heavily on a bunch of stochastic behaviour on the part of its users.

This will be an interesting experiment, but it's not a clear solution to the tribulations of BitCoin.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 13, 2021, 07:38:44 PM
Yeah, I read up on Lightning.     Thanks for that, they have some interesting ideas.

The way it works is it creates a bunch of automated contracts between pairs of users.    Say you buy coffee from starbucks every day.  (not mustachian!).   You can set up a "payment channel" which is a peer to peer connection of sorts with starbucks and put some money in it, maybe $100 worth of BTC.    Every time you go to starbucks, they debit your payment channel.

The novel part of lighting comes when you want to make a small payment to a vendor to whom you don't have a payment channel.   The network will try to find someone who does have a payment channel with the vendor.   Then you pay someone, and they pay starbucks.    This works recursively, so you can have a fairly long payment chain.

I didn't study it in detail from there, but it sounds like they're trying to borrow from routing in ad hoc networking to find connections to the vendor that you're trying to pay.

These micropayments are all aggregated and eventually pushed back to the real block chain.

Good marks to the lightning team for doing something about scalability!    But...

The 3 big problems with Bitcoin as it is today are:
1.  If you lose your private keys, you're screwed.
2.  If your private keys are compromised, you're screwed.
3.  The bitcoin network itself doesn't scale.

Lightning tries to improve #3.    But it exposes a much larger attack surface by doing it, making #2 worse.

And...   there's no guarantee the lightning network will actually scale globally.    The risk areas are
1.  Ad hoc routing just doesn't work very well. 
2.  The network performance will depend heavily on a bunch of stochastic behaviour on the part of its users.

This will be an interesting experiment, but it's not a clear solution to the tribulations of BitCoin.

Just a couple of notes on the lightning network. This comes from experience as I have been running a lightning node for 2 years now.

Lightning network is already scaling the bitcoin network. I am not sure what you mean by: "ad hoc routing just doesn't work very well". I can honestly say that after using the Lightning Network for 2 years and using it to do most of my online retail purchasing, I've only had a couple transactions fail due to routing after the thousands and thousands that I've sent. Since there are inherent privacy gains when transacting on the lightning network due to its onion routing properties, there is no true measure of how many transactions are taking place on the network. However, just with my node alone, I've notice a massive uptick in the number of transactions that are being routing through it each month by other users. For the first year and a half, I saw at most a handful of transactions routed each month. Now, consistently over the last 6 months or so I've been seeing 200+ transactions being routing through it. The size of these transactions have also been consistently getting larger with many transactions in the $200-$500 range. Every transaction that takes place on the lightning network is a transaction that doesn't need to take up block space on-chain.

One of the biggest mistakes in critiquing bitcoin is people thinking that people will be paying for coffee with on-chain bitcoin transactions. This is not the evolved design intention of bitcoin. It is intentionally designed not to scale by the number of transactions so that instead the network can scale outward and remain as decentralized as possible. Bitcoin is a settlement layer much like the infrastructure in traditional banking. The on-chain settlement layer is to be used as a settlement layer for aggregated transactions on secondary and tertiary layers in the financial system. Similar to how a central banking and federal reserves settle balances between financial institutions that are closer to the citizens that are transacting. Banking customers will transact with the bank and then the bank will settle those the net balance of those transactions with a clearing house, fedwire, reserve bank or other financial institution. This is a decent article that explains what this layered financial system will look like on the bitcoin network which will allow it to scale. https://medium.com/galoymoney/lightning-as-a-retail-payment-system-part-1-7463c46342ef (https://medium.com/galoymoney/lightning-as-a-retail-payment-system-part-1-7463c46342ef)

There will be many layers to the bitcoin network with the bitcoin blockchain acting as the secure final settlement layer to it all. For example, the Liquid Network is a side-chain that allows for instant and scalable transactions to take place between exchanges that allows instant settlement between traders and exchanges while still being backed by the same bitcoin blockchain security.

Furthermore, there will likely be interoperability between many of these layers using what is called atomic or submarine swaps. This will allow value that is stored on one layer/network to be instantly exchange for value that is on another layer/network. We are already seeing many of these services crop up in unique and interesting ways. For example, a new bitcoin wallet called Muun allows the user to seamlessly send and receive both bitcoin on-chain and bitcoin on Lightning network with just one balance using submarine swaps all while staying completely non-custodial. Therefore the user doesn't need worry about managing lightning channels or balances. They can send bitcoin to a lightning network invoice and bitcoin they have in their Muun wallet will go through a trustless submarine swap service that will pay the lightning invoice.

Technology in bitcoin is ever changing and there are constant improvements in both scalability solutions and user interface. One of the last things I am concerned about with bitcoin is that there won't ever be an improvement in scaling or user interface improvements that will carry the technology into the future.

This brings me to another point about usability and security. There was a recently publish NYTs article (not going to bother linking to it) the other day that focused on the failures of people storing their bitcoin in the earlier days when its value was practically worthless (so they didn't bother with even basic security) and when backup technologies were nascent. To call such failures a failure of bitcoin itself ignores the improvements made in the technology since the early days as well as the ingenuity of humans to problem solve in the future. Yes, bitcoin requires a lot of personal responsibility when it comes to security if you choose to minimize trust on third-parties (which you should). That means it is important to educate one's self on the technology that you're working with before ever taking on large sums of money. But, there are actually a lot of technologies that are very unique to bitcoin in the financial world that could open up new pathways for improved security benefits. Things like multi-sig and timelock contracts can be used to help secure funds using third-party services without giving up full ownership of your keys. Yes, backing up your keys or seed words requires a lot of personal responsibility, but there are a lot of options out there these days to help with this such as hardware wallets, encrypted backups, cold storage hardware, and using multiple backup solutions to ensure fault tolerance and minimize user error.

As far as proof-of-work and its energy use, I don't think it is appropriate to villanize energy use that isn't inherently clean or dirty one way or the other. I feel that by pointing blame and energy usage in industries that aren't inherently dirty or clean takes blame off of the industries that need to be much more pressured to clean up and reduce their emissions like the fossil fuel industry. In fact, that is what the fossil fuel industry specifically wants people to do; put blame on other industries for their energy use because it takes the spotlight off of them. We need to focus our efforts on cleaning up our energy grid by reducing our fossil fuel dependence. By virtue of a clean energy grid means that bitcoin also becomes a clean technology (emissions-wise). Yes, we also need to reduce our energy consumption as a whole (especially with urgency), but bitcoin as an industry can actually help accomplish that goal for energy industry in several ways.

For one, the energy market inherently lacks arbitrage. We don't have an economical way of transporting energy from one market that carries an abundance to another market with unsatisfied demand. Furthermore, energy solutions that are put in place to provide energy to a market are often scaled based on future needs as opposed to today's demand. Bitcoin can be used as a means to economically transfer the value of that energy that is produced and allow that value to be brought to market in the global economy. This allows for renewable energy to be bootstrapped with immediate economic return. There are also now solutions that can be used to help reduce inefficiencies in the energy market such as gas vent flaring which emits larges amounts of greenhouse gases. There is a company that deploys bitcoin miners at these vents and then allows those vents to produce energy that can then be brought to market in the form of bitcoin as opposed to being wastefully vented. Bitcoin as a form of energy market arbitrage is an extremely valuable thing that I feel is under-recognized. The idea that bitcoin will someday consume all the energy in the world is a fallacy and grossly ignores all the countless ways humans waste energy in this world that actually does take place in markets with demand that produce no value to human life.

I hope some find this interesting. Bitcoin is far from being perfect and there are certainly a lot of problems that still need to be solved (like the risk of DoS attacks on Lightning nodes). But I don't think it is appropriate to make a claim that bitcoin is a failure (speaking generally here) because of the problems it faces today. I have no doubt that there will continue to be ingenious solutions as the technology matures that will both provide greater security for those that use it while also scaling to allow more people to take part.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 13, 2021, 08:11:48 PM
How about the fact that the entire Bitcoin network can only handle around 5 transactions per second.   Anyone think that's a concern?

I do agree that Merkle trees were a good invention.   That's why Linus Torvalds built them into git back in 2005.     

Personally, I think the whole proof of work thing sucks due to its ridiculous energy consumption demands as the hash space fills up.

No concerns about the Bitcoin transactions speed.  VISA can process 45,000 transactions per second and Bitcoin's lightning network, already available if you want to use it, allows billions of transactions to happen per second/instantaneously.  The lightning network is also extraordinarily cheap to use.  It is cost efficient to send pennies to people on the lightning network (cheaper than VISA).  It's not yet widely used but it is available if you want to use it.  Eventually, nearly all transactions will happen on the lightning network I think.

Yeah, I read up on Lightning.     Thanks for that, they have some interesting ideas.

The way it works is it creates a bunch of automated contracts between pairs of users.    Say you buy coffee from starbucks every day.  (not mustachian!).   You can set up a "payment channel" which is a peer to peer connection of sorts with starbucks and put some money in it, maybe $100 worth of BTC.    Every time you go to starbucks, they debit your payment channel.

The novel part of lighting comes when you want to make a small payment to a vendor to whom you don't have a payment channel.   The network will try to find someone who does have a payment channel with the vendor.   Then you pay someone, and they pay starbucks.    This works recursively, so you can have a fairly long payment chain.

I didn't study it in detail from there, but it sounds like they're trying to borrow from routing in ad hoc networking to find connections to the vendor that you're trying to pay.

These micropayments are all aggregated and eventually pushed back to the real block chain.

Good marks to the lightning team for doing something about scalability!    But...

The 3 big problems with Bitcoin as it is today are:
1.  If you lose your private keys, you're screwed.
2.  If your private keys are compromised, you're screwed.
3.  The bitcoin network itself doesn't scale.

Lightning tries to improve #3.    But it exposes a much larger attack surface by doing it, making #2 worse.

And...   there's no guarantee the lightning network will actually scale globally.    The risk areas are
1.  Ad hoc routing just doesn't work very well. 
2.  The network performance will depend heavily on a bunch of stochastic behaviour on the part of its users.

This will be an interesting experiment, but it's not a clear solution to the tribulations of BitCoin.

Regarding the "three big problems"
1. This is true.  There are steps you can take to mitigate the chances of this happening.  Tips for securely storing private keys/seeds are all over the Internet so I won't get into it here.
2. This is true.  Like the above though, there are things you can do to completely prevent anyone from getting your keys.  The easiest is to buy a hardware wallet ($60), store your private keys offline, and NEVER EVER UNDER ANY CIRCUMSTANCES type your seed phrase on any keyboard.  Fairly simple but unfortunately it is not uncommon for people to fall for phishing tricks.
3. Lightning network should fix this.  In the year its been running there hasn't been any setbacks with it as far as I can tell.  People that use it seem to be having no issues. 

I don't understand how using the Lightning Network will make it more likely that your keys will get compromised.  Can you fill me in on that?
Title: Re: Bitcoin is funny money
Post by: forgerator on January 14, 2021, 11:45:45 AM
And back to $40k we are ...
Title: Re: Bitcoin is funny money
Post by: HPstache on January 14, 2021, 12:27:06 PM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

Quoting for irony.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 14, 2021, 01:57:00 PM
Quoting for irony.

Haha. What do you expect from a guy with such nuanced debate arguments such as these...

Bro Bro can I borrow 20 satoshis ???   My Tesla model 27 is in the shop with a busted flux capacitor

Yea its not a legitimate thing, price target may be around 0 dollars 

I would stay away from those

Would you consider selling your bitcoin before the ETF's are formed ?
It will drive the price down
To me bitcoin is trading and not investing 

Can I go to the grocery store and hand the cashier some bitcoins to pay for my food ?
How about at the gas station
You use money to buy goods and services. 
Bitcoin is funny money and will disappear
It's not a wise long term investment 
Cash out now

I'd rather buy frozen concentrated orange juice futures than bitcoin

I'm gonna bring this thread back up when it crashes to oblivion

Sure if you want to embarrass yourself

End times prophecy

Bitcoin will not be allowed to succeed
Satoshis ???  Come on why not just buy a bag of magic beans
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 14, 2021, 05:28:51 PM
Quoting for irony.

Beat me to it. :p
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on January 14, 2021, 07:21:51 PM
Quoting for irony.

Haha. What do you expect from a guy with such nuanced debate arguments such as these...

I'd rather buy frozen concentrated orange juice futures than bitcoin
[/quote]
In all fairness, orange juice went from 1.19 to 1.24 since 12/28. The January futures contract would have printed dollars with massive leverage. OJ has been on a tear lately and maybe @Pomegranate12 knows a thing or two about it, being a pomegranate and all.

 https://www.bbc.com/news/technology-52030133 (https://www.bbc.com/news/technology-52030133)

Thanks folks, I’ll be here all week.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 15, 2021, 06:33:48 AM
https://www.cnbc.com/2021/01/12/kevin-oleary-on-why-he-wont-invest-in-bitcoin-btc.html
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 15, 2021, 07:14:56 AM
https://www.cnbc.com/2021/01/12/kevin-oleary-on-why-he-wont-invest-in-bitcoin-btc.html

Who cares what Kevin O'Leary says?  He is all over the place when it comes to Bitcoin.  He is sometimes a Bitcoin bull and other times a bear and we know he owns Bitcoin.  I think he just plays a Bitcoin bear on TV because there are old videos of him from 2013 where he made a good case for investing in Bitcoin.  He talked about putting 3% of his networth in Bitcoin back then!  He just wants to keep you poor.  Search it on Youtube.

Peter Schiff is another one to look out for.  He has always been a Bitcoin bear for his selfish business reasons (he owns a business that depends on interest in gold investments).  He is rightfully afraid that Bitcoin will replace gold as a primary store of value and has been calling for Bitcoin's demise for nearly a decade while its just continued to go higher and higher and higher, ect.

Dave Ramsey is another but isn't worth the time because he doesn't even try to understand anything other than his baby steps. 
Title: Re: Bitcoin is funny money
Post by: BiggerFishToFI on January 15, 2021, 09:00:03 AM
Just bought 8k of plain old index funds this morning... yawn.

Might I regret not "investing" in bitcoin in the future? Maybe.

Do I need to invest in bitcoin to become financially independent in just a few more years? Nope.

Maybe I'll buy a small amount in a few years, after I'm FI, only if nobody is talking about it.  'Be Fearful When Others Are Greedy and Greedy When Others Are Fearful' etc.

Seems like most of the bitcoin bears I run into have longer FI timelines and are just hoping to strike it rich.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 15, 2021, 09:47:31 AM
And back to $40k we are ...

And back to 35 K we are

So china is mining most of the bitcoins.   

I can see no way countries are gonna allow this to take hold

They will release their own version of Crypto's 

Title: Re: Bitcoin is funny money
Post by: Stimpy on January 15, 2021, 11:18:57 AM
And back to $40k we are ...

And back to 35 K we are

So china is mining most of the bitcoins.   

I can see no way countries are gonna allow this to take hold

They will release their own version of Crypto's

China already has developed their own(Still in testing but developed non the less), and I suspect others won't be terribly far behind....

https://www.investopedia.com/understanding-chinas-digital-yuan-5090699
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 15, 2021, 12:43:27 PM
And back to 35 K we are

If people here were day trading Bitcoin, I'm sure they'd be interested in the swings.  I don't get the impression anyone in this thread is doing that.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 15, 2021, 05:10:18 PM
And back to $40k we are ...

And back to 35 K we are

So china is mining most of the bitcoins.   

I can see no way countries are gonna allow this to take hold

They will release their own version of Crypto's

"back to 35 K".  So the moral of the story is don't buy Bitcoin because you know its going to crash.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 15, 2021, 05:36:38 PM
And back to $40k we are ...

And back to 35 K we are

So china is mining most of the bitcoins.   

I can see no way countries are gonna allow this to take hold

They will release their own version of Crypto's

"back to 35 K".  So the moral of the story is don't buy Bitcoin because you know its going to crash.

Yup rocky road down to 400 bucks per coin
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 15, 2021, 05:55:16 PM
Yup rocky road down to 400 bucks per coin

By when?

You can pick your timeline within the next few years, say... $50 on it?
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 15, 2021, 09:10:08 PM
Yup rocky road down to 400 bucks per coin

By when?

You can pick your timeline within the next few years, say... $50 on it?
Stop gambling dude
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 15, 2021, 09:34:29 PM
Stop gambling dude

So, not confident enough in your predictions to put your money where your mouth is, got it.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 15, 2021, 09:41:45 PM
Stop gambling dude

So, not confident enough in your predictions to put your money where your mouth is, got it.

Yes let me make a bet with my hard earned money with some random dude on the internet who is never gonna pay up
*Logical*
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on January 16, 2021, 03:29:49 AM
IF you really think Bitcoin is a bad investment and is definitely going to crash and never recover you can short it using futures.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 16, 2021, 08:01:31 AM
IF you really think Bitcoin is a bad investment and is definitely going to crash and never recover you can short it using futures.

Yes, do it.  I dare you.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 17, 2021, 10:51:04 AM
Why are Bitcoin fanboys so adamant that its gonna succeed
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 17, 2021, 11:26:05 AM
Why are Bitcoin fanboys so adamant that its gonna succeed

... why do people who think Bitcoin is going to succeed think it's going to succeed?  If someone thinks it's rubbish, "fanboy" probably isn't a useful description of that particular person.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on January 17, 2021, 01:25:04 PM
Why are Bitcoin fanboys so adamant that its gonna succeed

Why are people who don't own any bitcoin always so angry about bitcoin?
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 17, 2021, 02:33:04 PM
Why are Bitcoin fanboys so adamant that its gonna succeed

Why are people who don't own any bitcoin always so angry about bitcoin?

Because phony stuff like this makes people loose their hard earned money
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 17, 2021, 02:38:04 PM
https://www.fool.ca/2021/01/15/warren-buffett-avoid-bitcoin-like-rat-poison/ (https://www.fool.ca/2021/01/15/warren-buffett-avoid-bitcoin-like-rat-poison/)
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on January 17, 2021, 03:27:24 PM
Why are Bitcoin fanboys so adamant that its gonna succeed

Why are people who don't own any bitcoin always so angry about bitcoin?

Because phony stuff like this makes people loose their hard earned money

Who's lost their money on bitcoin?  I'd like to meet this person.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on January 17, 2021, 03:34:04 PM
https://www.fool.ca/2021/01/15/warren-buffett-avoid-bitcoin-like-rat-poison/ (https://www.fool.ca/2021/01/15/warren-buffett-avoid-bitcoin-like-rat-poison/)
Buffet was also famously 20 years behind tech.  It's not his core competency.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 17, 2021, 05:34:21 PM
Why are Bitcoin fanboys so adamant that its gonna succeed

Why are people who don't own any bitcoin always so angry about bitcoin?

Two types of BTC haters.  Those with financial interest that are challenged by crytpo (e.g. goldbugs (Peter Schiff) and bank owners (Warren Buffet)) and those that are jealous others have made money in it (e.g. Pomegranate12).  Its not to late!  Just put 1% of your annual investment income into BTC/Eth.  When it crashes you will survive and there is precedent that it will rebound higher and outperform the rest of your portfolio.

EDIT:

https://www.fool.ca/2021/01/15/warren-buffett-avoid-bitcoin-like-rat-poison/ (https://www.fool.ca/2021/01/15/warren-buffett-avoid-bitcoin-like-rat-poison/)

I saw this after I name dropped Warren Buffet.  He is an old timer that invests in coca cola and bank of america.  He has a direct financial interest in fiat.
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 17, 2021, 05:44:28 PM
Because phony stuff like this makes people loose their hard earned money

At what point, or set of conditions, would you consider it "not phony"?

I mean, fiat currencies, which you seem to be a fan of, were considered pretty sketchy by an awful lot of people, for quite a long while...
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 17, 2021, 07:19:55 PM
https://www.youtube.com/watch?v=wfhC7ks4vlc (https://www.youtube.com/watch?v=wfhC7ks4vlc)
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 17, 2021, 07:48:52 PM
Governments will crush it. 
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 17, 2021, 07:49:35 PM
Why are Bitcoin fanboys so adamant that its gonna succeed

Why are people who don't own any bitcoin always so angry about bitcoin?

Because phony stuff like this makes people loose their hard earned money

Who's lost their money on bitcoin?  I'd like to meet this person.

True facts: when a bitcoin is bought, at that point the money is gone. So basically everybody who owns one. Since there is no underlying value, they are just hoping they will be able to sell at some later point in time to a greater fool and get some money back.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 17, 2021, 08:05:06 PM
Why are Bitcoin fanboys so adamant that its gonna succeed

Why are people who don't own any bitcoin always so angry about bitcoin?

Because phony stuff like this makes people loose their hard earned money

Who's lost their money on bitcoin?  I'd like to meet this person.

True facts: when a bitcoin is bought, at that point the money is gone. So basically everybody who owns one. Since there is no underlying value, they are just hoping they will be able to sell at some later point in time to a greater fool and get some money back.

Exactly
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on January 17, 2021, 10:14:12 PM
https://www.youtube.com/watch?v=wfhC7ks4vlc (https://www.youtube.com/watch?v=wfhC7ks4vlc)
I see your legacy-titan-with-much-to-lose, and raise you the incoming SEC chair teaching an MIT graduate course called Blockchain and Money
https://www.youtube.com/playlist?app=desktop&list=PLUl4u3cNGP63UUkfL0onkxF6MYgVa04Fn
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 18, 2021, 05:43:02 AM
(https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcT244JZPQJeqAQ65e3xWxzda8QpZqAXEGKGaQ&usqp=CAU)
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on January 18, 2021, 05:56:41 AM
(https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcT244JZPQJeqAQ65e3xWxzda8QpZqAXEGKGaQ&usqp=CAU)

Feels more like this honestly

(https://thesupacoowackiestblogintheuniverse.files.wordpress.com/2014/11/super-mario-world-coins.jpg)
Title: Re: Bitcoin is funny money
Post by: CupcakeGuru on January 18, 2021, 07:13:09 AM
The reason I won't "invest" in bitcoin is there is no recourse.

Assets
If I die, my house will go to my spouse by joint tenants in common
If I die, my brokerage accounts go to my spouse and kids by beneficiaries designations
If I die, my car goes to my brother by my will
If I die, my bank accounts go to my mother by joint account holder

Bitcoin
If I die, bitcoin is lost
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 18, 2021, 07:33:31 AM
The reason I won't "invest" in bitcoin is there is no recourse.

Assets
If I die, my house will go to my spouse by joint tenants in common
If I die, my brokerage accounts go to my spouse and kids by beneficiaries designations
If I die, my car goes to my brother by my will
If I die, my bank accounts go to my mother by joint account holder

Bitcoin
If I die, bitcoin is lost

Only if you have major trust issues and never told another soul where they can find your keys.  You can also get exposure to Bitcoin through custodial services or even through a brokerage account/IRA through GBTC if you don't paying a premium. 
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 18, 2021, 09:08:59 AM
Bitcoin
If I die, bitcoin is lost

Under what logic?  An in-your-brain-only passphrase based wallet (which, by the way, are terrible ideas in the first place, because human brains aren't very random)?

Keep a copy of your private keys somewhere, and your bitcoin will pass on just as well as your other accounts.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 18, 2021, 02:43:55 PM
Bitcoin is part of the end times prophecy 
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 18, 2021, 05:24:27 PM
Bitcoin is part of the end times prophecy

... are you OK?

But, sure.  Where is Bitcoin related to end times prophecy?
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 18, 2021, 06:10:24 PM
Bitcoin is part of the end times prophecy

... are you OK?

But, sure.  Where is Bitcoin related to end times prophecy?

I'm just being silly, life is too short to be serious all the time
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on January 18, 2021, 06:39:51 PM
The reason I won't "invest" in bitcoin is there is no recourse.

Assets
If I die, my house will go to my spouse by joint tenants in common
If I die, my brokerage accounts go to my spouse and kids by beneficiaries designations
If I die, my car goes to my brother by my will
If I die, my bank accounts go to my mother by joint account holder

Bitcoin
If I die, bitcoin is lost

This is why I like my bitcoin.  It's just for me it's not for anyone else.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 18, 2021, 06:52:14 PM
Why can't bitcoin people and anti bitcoin people get along.  Lets all just get along
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 18, 2021, 07:11:03 PM
Why can't bitcoin people and anti bitcoin people get along.  Lets all just get along

Because you're nonsensically shitting on every pro-bitcoin person in this thread with bizarre non-sequiturs.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 18, 2021, 07:37:39 PM
Why can't bitcoin people and anti bitcoin people get along.  Lets all just get along
I apologize if I did that
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 18, 2021, 07:38:10 PM
Why can't bitcoin people and anti bitcoin people get along.  Lets all just get along

Because you're nonsensically shitting on every pro-bitcoin person in this thread with bizarre non-sequiturs.

I apologize if I did that
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 19, 2021, 07:14:22 AM
Why can't bitcoin people and anti bitcoin people get along.  Lets all just get along

Because bitcoin people are suffering from a debilitating delusion.

Hate to break it it the bitcoin people, but this thing is never gonna take hold. At a certain point we’ll run out of greater fools and the whole thing falls off a cliff.

There is no enterprise value. There is no intellectual property. There is no state power. There are no trade secrets. There are no way to correct mistakes. There are no way to loan bitcoins. Nobody accepts them.  Those that tried to stopped. The price fluctuates wildly on thin trading.  Every use case has been debunked.

Once bitcoin people admit they are wrong, they can be reintegrated. Until then, they will be outsiders who worship false idols of a rogue economic religion. 
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 19, 2021, 08:28:10 PM
Blockchain I don't have an issue with. 
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 19, 2021, 08:39:34 PM
Whats going to happen is Blockchain will be modified and regulated and Bitcoin and Ethereum will be replaced with a US version of Crypto.  Unfortunately it will be regulated.  In the mean time FOMO and Hype will influence these digital items.  I mean digitally mining code to get digital tokens its all nonsense, think about that for a second some dude who still cannot be identified accurately came up with this and it has gained value do to hype and nothing else.  Literally who invented it. 
https://www.investopedia.com/tech/three-people-who-were-supposedly-bitcoin-founder-satoshi-nakamoto/ (https://www.investopedia.com/tech/three-people-who-were-supposedly-bitcoin-founder-satoshi-nakamoto/)
Call it gambling but please don't call it investing in Bitcoin.  Digital currency will succeed Bitcoin will not
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 21, 2021, 07:39:50 AM
Down to 31, they won’t let it succeed

 https://www.google.com/amp/s/markets.businessinsider.com/amp/news/bitcoin-price-cryptocurrency-should-be-curtailed-terrorism-concerns-yellen-2021-1-1029985692 (https://www.google.com/amp/s/markets.businessinsider.com/amp/news/bitcoin-price-cryptocurrency-should-be-curtailed-terrorism-concerns-yellen-2021-1-1029985692)
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 21, 2021, 09:11:43 AM
Prediction: Bitcoin will outlive Yellen.
Title: Re: Bitcoin is funny money
Post by: effigy98 on January 21, 2021, 01:28:06 PM
Just having a few percentage points in GBTC instead of the cash portion for the Golden Butterfly portfolio really helped returns. I love uncorrelated asset classes!
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 21, 2021, 06:17:55 PM
Bitcoin down to 28 something
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 21, 2021, 06:19:06 PM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

I'm glad you bought the dip.  Congrats.  We only need to drop another 30% to be where we were 2-weeks ago when you made this thread.  I would love to see it - really would.

Ok :)
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 21, 2021, 06:58:31 PM
Prediction: Bitcoin will outlive Yellen.

See the thing is it can’t.  It’s bad for the United States
Title: Re: Bitcoin is funny money
Post by: Telecaster on January 21, 2021, 07:32:42 PM
Prediction: Bitcoin will outlive Yellen.

See the thing is it can’t.  It’s bad for the United States

It isn't bad for the United States.  Bitcoin is not used as currency (except as the tiniest of tiniest of rounding errors in the economy) and can never be used as currency.  It is simply a collectable that is sometimes used for money laundering.  I fully expect the money laundering aspect will be looked into, but other than that there is nothing inherently "bad" about it, just like their is nothing "bad" about speculating in race horses or fine art.  It usually doesn't work out for the speculator, but that doesn't make it bad for the country.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 21, 2021, 08:26:07 PM
China has 65 percent of the hash rate right now
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 21, 2021, 08:30:34 PM
China has 65 percent of the hash rate right now

All that computing power and energy consumption going to something completely useless and worthless. It’s mind boggling.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on January 21, 2021, 09:53:33 PM
China has 65 percent of the hash rate right now

All that computing power and energy consumption going to something completely useless and worthless. It’s mind boggling.

Creating so much pollution for no good reason


https://www.google.com/amp/s/www.rferl.org/amp/iran-smog-bitcoin-mining/31049437.html
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 21, 2021, 10:12:17 PM
China has 65 percent of the hash rate right now

All that computing power and energy consumption going to something completely useless and worthless. It’s mind boggling.

Creating so much pollution for no good reason


https://www.google.com/amp/s/www.rferl.org/amp/iran-smog-bitcoin-mining/31049437.html

Wow. All this pollution as millions of computers furiously unwrap digital Wonka bars looking for the next golden ticket.

Does anyone know what it would take to stop all mining and archive the ledger as it is?
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 22, 2021, 09:28:21 AM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

I'm glad you bought the dip.  Congrats.  We only need to drop another 30% to be where we were 2-weeks ago when you made this thread.  I would love to see it - really would.

Ok :)

You’re just creating a record that is going to get rubbed in your face when Bitcoin hits a new ATH.  You may think it’s worthless but no individual gets to decide that and a lot of people/institutions clearly think differently.  That’s why Bitcoin is up 15% in just three weeks.  To each their own.
Title: Re: Bitcoin is funny money
Post by: vand on January 22, 2021, 09:35:06 AM
Get out, boys, the bell has been rung:

https://www.forbes.com/sites/billybambrough/2021/01/13/lindsay-lohan-records-video-predicting-100000-bitcoin-and-10000-ethereum-is-2017s-celebrity-crypto-mania-back/?sh=5401cb7c2cf3

Title: Re: Bitcoin is funny money
Post by: GuitarStv on January 22, 2021, 09:45:22 AM
Linday Lohan has never led my investments wrong before.
Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on January 23, 2021, 06:59:26 PM
Here’s an interesting article. The author believes a big portion of bitcoin’s price increase over the last year can be explained by cash flows from Tether. https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3

The author also believes that there is a good chance that the people who created Tether are committing fraud and using it to launder money. I see from this and other articles that Tether is under investigation by the New York AG.

What do people think about this and its implications for Bitcoin?
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 23, 2021, 07:09:29 PM
Here’s an interesting article. The author believes a big portion of bitcoin’s price increase over the last year can be explained by cash flows from Tether. https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3

The author also believes that there is a good chance that the people who created Tether are committing fraud and using it to launder money. I see from this and other articles that Tether is under investigation by the New York AG.

What do people think about this and its implications for Bitcoin?

Whaaaahh!?

People would use crypto currencies to commit financial crimes?

I’m shocked! Shocked, I tell you!
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on January 23, 2021, 10:07:14 PM
Here’s an interesting article. The author believes a big portion of bitcoin’s price increase over the last year can be explained by cash flows from Tether. https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3

The author also believes that there is a good chance that the people who created Tether are committing fraud and using it to launder money. I see from this and other articles that Tether is under investigation by the New York AG.

What do people think about this and its implications for Bitcoin?
In my view, their claim is more serious.  Most purchases of Bitcoin are in Tether, which then determines the price of Bitcoin.  If the Southern District of New York determines Tether needs to be shut down, that causes Tether demand to evaporate - but it also takes Bitcoin demand down with it.  Their strongest argument, in my view, is comparing assets in the Bahamas vs Tether assets.  Tether's bank accounts are in the Bahamas, and the Bahamas reported overall inflows of $600M from all banks.  The problem is that Tether Ltd issued billions in new Tether... so where's the money?  It's not in their banks in the Bahamas.
(On wikipedia, Tether Ltd started backing USD with loans to other companies in 2019.  That could explain the disparity .. but that makes the situation murkier)

What actions can a U.S. court take against a company incorporated in Hong Kong, like Tether Ltd?  If the court case can't do much, and people don't panic, I'm not sure what happens.  Regardless of the outcome of the court case, if people panic, they could create a "bank run" on Tether: they sell Bitcoin to get Tether, then sell Tether for USD.  That would doubly hurt Bitcoin: you have people selling at any price .. and once they're gone, most Bitcoin demand (selling Tether to buy Bitcoin) dries up at the same time.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 23, 2021, 11:19:58 PM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale. 
Title: Re: Bitcoin is funny money
Post by: CloudLiu on January 24, 2021, 07:59:10 AM
Bitcoin is 21 century tulip bubble. Stay away as far as possible. It can't be used as store of value. Its value is not stable. It's not a currency. It's a virtual commodity which is powered by wasting more and more electricity doing unproductive work.  We better use that electricity to  power our transportation.

If bitcoin becomes too powerful, world governments will take it down, just as e-gold was taken down.  They can do so by cracking down miners and exchange services.

The only useful purpose bitcoin is if someone has something to hide: e.g. illegal activities, money laundering, terrorism funding.
We are not going to take bitcoin in every day business transactions when it can drop 30% next week.



Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on January 24, 2021, 09:57:03 AM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale.

That’s a fascinating comment about banks committing fraud all the time and only getting a slap on the wrist. Off the top of my head I can’t think of any cases I’ve heard about. Do you have any specific examples?

I did a quick google search and only came up with examples of people trying to defraud banks. I also found lots of examples of people who were committing crimes who got caught because banks are required to report suspicious transactions. I found a few examples of low level bank employees getting caught trying to defraud banks, but no cases where banks defrauded the people who had deposits in the bank.

Arguing that Bitcoin is a good choice because it reduces your exposure to fraud doesn’t seem to be supported by anything I’ve seen.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 24, 2021, 12:35:00 PM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale.

That’s a fascinating comment about banks committing fraud all the time and only getting a slap on the wrist. Off the top of my head I can’t think of any cases I’ve heard about. Do you have any specific examples?

I did a quick google search and only came up with examples of people trying to defraud banks. I also found lots of examples of people who were committing crimes who got caught because banks are required to report suspicious transactions. I found a few examples of low level bank employees getting caught trying to defraud banks, but no cases where banks defrauded the people who had deposits in the bank.

Arguing that Bitcoin is a good choice because it reduces your exposure to fraud doesn’t seem to be supported by anything I’ve seen.

Google Wells Fargo fraud. 
Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on January 24, 2021, 01:55:37 PM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale.

That’s a fascinating comment about banks committing fraud all the time and only getting a slap on the wrist. Off the top of my head I can’t think of any cases I’ve heard about. Do you have any specific examples?

I did a quick google search and only came up with examples of people trying to defraud banks. I also found lots of examples of people who were committing crimes who got caught because banks are required to report suspicious transactions. I found a few examples of low level bank employees getting caught trying to defraud banks, but no cases where banks defrauded the people who had deposits in the bank.

Arguing that Bitcoin is a good choice because it reduces your exposure to fraud doesn’t seem to be supported by anything I’ve seen.

Google Wells Fargo fraud.

Interesting. In the Wikipedia page on that I see that the impact on customers totaled about $2,000,000 over 85,000 accounts, or an average impact of $23.50 per customer. I also see that the penalties to Wells Fargo totaled $3,000,000,000. That seems like a pretty significant penalty to me, not a “slap on the wrist”. Furthermore, it does not seem like the impacts to any one customer were life-changing.

How does the scale of that one instance of fraud compare to typical fraud rates and impacts for cryptocurrency? Here’s an article I found with a quick search that claims cryptocurrency theft and fraud topped $4.4 billion in 2019. https://currency.com/biggest-cryptocurrency-scams-of-2019

If you consider the total activity in cryptocurrency is a tiny fraction of fiat currency, it still seems that your risk of fraud is orders of magnitude higher with cryptocurrency.

Do you have any examples of bank fraud where any individuals lost significant percentages of their assets?
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 24, 2021, 02:24:40 PM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale.

That’s a fascinating comment about banks committing fraud all the time and only getting a slap on the wrist. Off the top of my head I can’t think of any cases I’ve heard about. Do you have any specific examples?

I did a quick google search and only came up with examples of people trying to defraud banks. I also found lots of examples of people who were committing crimes who got caught because banks are required to report suspicious transactions. I found a few examples of low level bank employees getting caught trying to defraud banks, but no cases where banks defrauded the people who had deposits in the bank.

Arguing that Bitcoin is a good choice because it reduces your exposure to fraud doesn’t seem to be supported by anything I’ve seen.

Google Wells Fargo fraud.

Interesting. In the Wikipedia page on that I see that the impact on customers totaled about $2,000,000 over 85,000 accounts, or an average impact of $23.50 per customer. I also see that the penalties to Wells Fargo totaled $3,000,000,000. That seems like a pretty significant penalty to me, not a “slap on the wrist”. Furthermore, it does not seem like the impacts to any one customer were life-changing.

How does the scale of that one instance of fraud compare to typical fraud rates and impacts for cryptocurrency? Here’s an article I found with a quick search that claims cryptocurrency theft and fraud topped $4.4 billion in 2019. https://currency.com/biggest-cryptocurrency-scams-of-2019

If you consider the total activity in cryptocurrency is a tiny fraction of fiat currency, it still seems that your risk of fraud is orders of magnitude higher with cryptocurrency.

Do you have any examples of bank fraud where any individuals lost significant percentages of their assets?
Should we consider the fraud as against the customers? Or against the investing public who were mislead to believe that the company was growing and firming customer relationships much faster than they actually were?
Title: Re: Bitcoin is funny money
Post by: onecoolcat on January 24, 2021, 02:32:15 PM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale.

That’s a fascinating comment about banks committing fraud all the time and only getting a slap on the wrist. Off the top of my head I can’t think of any cases I’ve heard about. Do you have any specific examples?

I did a quick google search and only came up with examples of people trying to defraud banks. I also found lots of examples of people who were committing crimes who got caught because banks are required to report suspicious transactions. I found a few examples of low level bank employees getting caught trying to defraud banks, but no cases where banks defrauded the people who had deposits in the bank.

Arguing that Bitcoin is a good choice because it reduces your exposure to fraud doesn’t seem to be supported by anything I’ve seen.

Google Wells Fargo fraud.

Interesting. In the Wikipedia page on that I see that the impact on customers totaled about $2,000,000 over 85,000 accounts, or an average impact of $23.50 per customer. I also see that the penalties to Wells Fargo totaled $3,000,000,000. That seems like a pretty significant penalty to me, not a “slap on the wrist”. Furthermore, it does not seem like the impacts to any one customer were life-changing.

How does the scale of that one instance of fraud compare to typical fraud rates and impacts for cryptocurrency? Here’s an article I found with a quick search that claims cryptocurrency theft and fraud topped $4.4 billion in 2019. https://currency.com/biggest-cryptocurrency-scams-of-2019

If you consider the total activity in cryptocurrency is a tiny fraction of fiat currency, it still seems that your risk of fraud is orders of magnitude higher with cryptocurrency.

Do you have any examples of bank fraud where any individuals lost significant percentages of their assets?

Interesting.  You think a $3b settlement, paid over the course of a decade, to a financial institution worth well over $100b is a significant sum.  Since you like articles, here is one that calls the settlement a slap on the wrist:  https://www.msn.com/en-us/money/companies/democrats-slam-243-billion-wells-fargo-settlement-as-slap-on-the-wrist/ar-BB10kQum

It's also interesting how this went from comparing the frauds of a digitalized stable coin to banks to talking about random cryptocurrency exit scams and hacks.  Since we are going there, exit scams didn't start with OneCoin (which is not even a cryptocurrency btw because it never even had a blockchain).  Bernie Maddoff exit scammed more than the entire market caps of 99% of all cryptocurrency's combined (not including the top 10 coins).  Also, people get their credit card info hacked all the time so, again, compromised wallets is nothing unique to cryptocurrencies.

Do you also think gift cards are only used for fraud because some Nigerian Prince has a multi-million dollar scam going on where old folks send them apple cards?
Title: Re: Bitcoin is funny money
Post by: Telecaster on January 24, 2021, 06:35:08 PM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale.

I was under the impression the SEC does not regulate cryptocurrency.  Is that incorrect? 
Title: Re: Bitcoin is funny money
Post by: Telecaster on January 24, 2021, 06:39:32 PM

Interesting.  You think a $3b settlement, paid over the course of a decade, to a financial institution worth well over $100b is a significant sum.  Since you like articles, here is one that calls the settlement a slap on the wrist:  https://www.msn.com/en-us/money/companies/democrats-slam-243-billion-wells-fargo-settlement-as-slap-on-the-wrist/ar-BB10kQum

It's also interesting how this went from comparing the frauds of a digitalized stable coin to banks to talking about random cryptocurrency exit scams and hacks.  Since we are going there, exit scams didn't start with OneCoin (which is not even a cryptocurrency btw because it never even had a blockchain).  Bernie Maddoff exit scammed more than the entire market caps of 99% of all cryptocurrency's combined (not including the top 10 coins).  Also, people get their credit card info hacked all the time so, again, compromised wallets is nothing unique to cryptocurrencies.

Do you also think gift cards are only used for fraud because some Nigerian Prince has a multi-million dollar scam going on where old folks send them apple cards?

Good point. Because banks aren't regulated enough, we should trust all crypto currencies without reservation. 
Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on January 24, 2021, 07:44:30 PM
Tether is probably a scam.  Everyone in crypto has felt this way since 2017.  It will be a good thing for Bitcoin in the long run for Tether to get shut down.  Bitcoin was crash with it (temporarily) and will inevitably recover.  I don’t think Tether will get shut down though because banks get caught doing fraud all the time and they just get a slap on the wrist and continue finding new ways to commit fraud.  The SEC or whatever will just fine Tether and they will continue to operate.  It will still spook the market though.

I haven’t bought bitcoin since March when it was $4,000.  I would definitely buy bitcoin if Tether gets busted/fined because I think it’s a good thing and it would create a nice sale.

That’s a fascinating comment about banks committing fraud all the time and only getting a slap on the wrist. Off the top of my head I can’t think of any cases I’ve heard about. Do you have any specific examples?

I did a quick google search and only came up with examples of people trying to defraud banks. I also found lots of examples of people who were committing crimes who got caught because banks are required to report suspicious transactions. I found a few examples of low level bank employees getting caught trying to defraud banks, but no cases where banks defrauded the people who had deposits in the bank.

Arguing that Bitcoin is a good choice because it reduces your exposure to fraud doesn’t seem to be supported by anything I’ve seen.

Google Wells Fargo fraud.

Interesting. In the Wikipedia page on that I see that the impact on customers totaled about $2,000,000 over 85,000 accounts, or an average impact of $23.50 per customer. I also see that the penalties to Wells Fargo totaled $3,000,000,000. That seems like a pretty significant penalty to me, not a “slap on the wrist”. Furthermore, it does not seem like the impacts to any one customer were life-changing.

How does the scale of that one instance of fraud compare to typical fraud rates and impacts for cryptocurrency? Here’s an article I found with a quick search that claims cryptocurrency theft and fraud topped $4.4 billion in 2019. https://currency.com/biggest-cryptocurrency-scams-of-2019

If you consider the total activity in cryptocurrency is a tiny fraction of fiat currency, it still seems that your risk of fraud is orders of magnitude higher with cryptocurrency.

Do you have any examples of bank fraud where any individuals lost significant percentages of their assets?
Should we consider the fraud as against the customers? Or against the investing public who were mislead to believe that the company was growing and firming customer relationships much faster than they actually were?

If I was going to put a significant amount of money into an asset, the biggest risk I would evaluate us the risk of losing the investment. In the case of Wells Fargo’s fraudulent activity, it looks like the direct victims lost relatively small amounts of money. They also had restitution through the criminal and civil penalties that Wells Fargo was subjected to.

All the stories I see about cryptocurrency fraud end with the fraud victims not having any way to be made whole.
Title: Re: Bitcoin is funny money
Post by: Syonyk on January 24, 2021, 08:49:14 PM
Bitcoin is 21 century tulip bubble. Stay away as far as possible.

You're welcome to do that, though it's certainly not behaved as a weird "one and done" bubble.  One might point to the various tech and housing bubbles as well, but... bubbles are mostly obvious in retrospect.  Or, around the time the mainstream media starts going on about how they can't possibly fail, new normal, etc.  That's typically a good time to diversify out some.

Quote
It can't be used as store of value. Its value is not stable.

It's certainly more volatile than metals, but it really depends on what one is looking for in a store of value.  Bitcoin remains nominally dependent on a working internet, though one could certainly keep it working on alternate comms systems.  But it's certainly an interestingly diversified value store for the short term, at least.  It just has... quite a bit of volatility.

Quote
It's not a currency. It's a virtual commodity which is powered by wasting more and more electricity doing unproductive work.  We better use that electricity to  power our transportation.

"Wasting" is a value judgement.  Obviously you don't think Bitcoin is of any value, so energy spent on it is a waste.  Those who value a decentralized ledger without any central controls might not consider it nearly so wasteful.  Certainly it's more interesting than selling ads on repackaged content...

Quote
If bitcoin becomes too powerful, world governments will take it down, just as e-gold was taken down.  They can do so by cracking down miners and exchange services.

World governments can't even keep The Pirate Bay offline, and that's run by a couple of drunken fucknuts (by their own admission).  You can certainly cause problems by putting screws into the exchanges, but even then, individual exchange remains, and flat out banning things rarely works as hoped for.  Treating it as any other commodity in terms of exchange makes reasonable sense.

Quote
We are not going to take bitcoin in every day business transactions when it can drop 30% next week.

Yet, presumably, you do take dollars, which decrease in value on a pretty regular schedule?  Not quite as volatile, but they also very rarely go up in value.  A few trillion printed here, a few trillion handed out there, I mean... at some point, that starts to look like an awful lot of money.

All the stories I see about cryptocurrency fraud end with the fraud victims not having any way to be made whole.

It's a different class of assets, with different risks.  If you've got a $100 in your wallet that gets stolen, it's pretty hard to get that back as well.  On the flip side, it's reasonably unlikely that carrying a chunk of value in bitcoin across the country is going to be taken by police during a speeding ticket, either.  Understand the asset class and act accordingly.  If you value having all your assets in a centralized institution that has insurance, go for it.  If you'd rather trend in the riskier waters of cryptocurrencies, go for it.  Someone putting $10k in back at $200/coin in 2015 could very well be comfortably retired on that, 5 years later.  Not guaranteed, but depending on where you are, the loss of $10k isn't terribly meaningful either.

In any case, I'm out of this thread.  Clearly minds are made up, and there's no particular point in an actual discussion when both sides are firmly entrenched.

Or, in the spirit of meaningless assertions that this thread seems to be, "Two Bitcoins Good, Four Bitcoins Better!"
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on January 25, 2021, 05:45:09 AM
Here’s an interesting article. The author believes a big portion of bitcoin’s price increase over the last year can be explained by cash flows from Tether. https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3

The author also believes that there is a good chance that the people who created Tether are committing fraud and using it to launder money. I see from this and other articles that Tether is under investigation by the New York AG.

What do people think about this and its implications for Bitcoin?

This article and tether FUD in general has long been debunked. There are several crucial mistakes that the author makes in their interpretation of what is taking place in the markets. The first mistake is using coinmarketcap in their analysis and using the volume reported on that as some indication for where real trading activity is taking place. This slidedeck to the SEC explains further in detail.

https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf (https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf)

So the very foundation of the author's thesis here is built on using faulty trading volume data to begin with. Not to mention the author lacks understanding of the markets he's talking about. For example, one of the exchanges he specifically mentions (ByBit) in a conversation with one of his friends "Bob" is actually a derivatives exchange and it is clear from the conversion that he has with Bob that he thinks a derivatives exchanges operates the same as a buy/sell spot exchange.

There have also been several studies that have shown that issuance of Tether has not driven the price of bitcoin.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3175876 (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3175876)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3508006 (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3508006)

Finally, one of the only reasons people move bitcoin to these offshore exchanges is to trade in obscure crypto-currencies that can't be purchased anywhere else. Nobody is moving money to these exchanges to buy bitcoin since you can buy bitcoin legally just about anywhere. If there was any collapse of Tether, it would result in a massive flood toward bitcoin since it is the only way off these exchanges and it is the de facto reserve currency for the entire cryptocurrency market. So, at least in the short term, if there were a Tether scare, demand for real on-chain bitcoin would spike because of a move to get money off these exchanges. And since, as shown, the trading volume on these exchanges has little to do with actual bitcoin spot prices, I don't think the long term impact to bitcoin is significant in any meaningful way.

Let's face it, Grayscale alone bought more bitcoin than was mined in all of Q4 2020 and continues to do so. PayPal, Square and other institutions are also buying up way more bitcoin than in being mined. None of these massive buys taking place use or care about Tether and they're real acquisitions of bitcoin. To claim that derivative trading on some offshore exchange is what is driving up the price is just a misrepresentation of the trend that is taking place currently in the bitcoin market.
Title: Re: Bitcoin is funny money
Post by: celerystalks on January 25, 2021, 05:59:25 AM


Let's face it, Grayscale alone bought more bitcoin than was mined in all of Q4 2020 and continues to do so. PayPal, Square and other institutions are also buying up way more bitcoin than in being mined. None of these massive buys taking place use or care about Tether and they're real acquisitions of bitcoin. To claim that derivative trading on some offshore exchange is what is driving up the price is just a misrepresentation of the trend that is taking place currently in the bitcoin market.

This is sort of a worrying development for these companies.

Companies that thrusts themselves into bitcoin seems to get devoured from the inside by it.  Think overstock.com and longblockchain (formerly long island iced tea).  Really, this is getting quite silly.




Title: Re: Bitcoin is funny money
Post by: exmmmer on February 02, 2021, 08:18:09 AM
(https://www.evernote.com/l/AAN_PHjzWGZBJY2Hu_wJhDVfMafHBNlgJ3sB/image.png)
Title: Re: Bitcoin is funny money
Post by: Father Dougal on February 04, 2021, 11:10:54 AM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on February 04, 2021, 12:27:53 PM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.
It was all their reserve, so no impact on operations.  They had low debt, and are paying 75 bps on the bonds (arguably too much as the bond offering was like 50% oversubscribed), which they can finance with cash flows.  The results speak for themselves.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 04, 2021, 12:30:52 PM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.

Or what happens if the private keys get lost or stolen? How many people know the keys or where it is that they are stored?
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on February 04, 2021, 12:33:59 PM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.

Or what happens if the private keys get lost or stolen? How many people know the keys or where it is that they are stored?
With a billion dollars at stake there are going to be plenty of precautions.  Bitcoin has something called multi-sig, where you need like 3 of 5 people to do the transaction (or 2 of 3, or really X of Y, doesn't matter).  They aren't the only one's doing this, and there are plenty of institutional and custody solutions.  It's not as scary as one person only controls the billion.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 04, 2021, 04:16:34 PM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.

Or what happens if the private keys get lost or stolen? How many people know the keys or where it is that they are stored?
With a billion dollars at stake there are going to be plenty of precautions.  Bitcoin has something called multi-sig, where you need like 3 of 5 people to do the transaction (or 2 of 3, or really X of Y, doesn't matter).  They aren't the only one's doing this, and there are plenty of institutional and custody solutions.  It's not as scary as one person only controls the billion.

Bitcoin has native support for multi-sig?
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on February 04, 2021, 04:32:25 PM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.

Or what happens if the private keys get lost or stolen? How many people know the keys or where it is that they are stored?
With a billion dollars at stake there are going to be plenty of precautions.  Bitcoin has something called multi-sig, where you need like 3 of 5 people to do the transaction (or 2 of 3, or really X of Y, doesn't matter).  They aren't the only one's doing this, and there are plenty of institutional and custody solutions.  It's not as scary as one person only controls the billion.

Bitcoin has native support for multi-sig?
Yes, post 2012/2013, that support was added.  There are numerous hardware wallets that now support it also.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 04, 2021, 05:01:10 PM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.

Or what happens if the private keys get lost or stolen? How many people know the keys or where it is that they are stored?
With a billion dollars at stake there are going to be plenty of precautions.  Bitcoin has something called multi-sig, where you need like 3 of 5 people to do the transaction (or 2 of 3, or really X of Y, doesn't matter).  They aren't the only one's doing this, and there are plenty of institutional and custody solutions.  It's not as scary as one person only controls the billion.

Bitcoin has native support for multi-sig?
Yes, post 2012/2013, that support was added.  There are numerous hardware wallets that now support it also.

Source ?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 04, 2021, 05:54:46 PM
Source ?

Do you not believe him? Multi-sig has been around in bitcoin for quite some time and there are many solutions out there that support multi-sig today. Multi-sig has been around since early 2012 ever since support for the new address type with pay-2-script-hash (P2SH) came about. More information about multi-sig with bitcoin can be found here:

https://en.bitcoin.it/wiki/Multisignature (https://en.bitcoin.it/wiki/Multisignature)
Title: Re: Bitcoin is funny money
Post by: Father Dougal on February 05, 2021, 03:13:45 AM
The MicroStrategy story is amazing. They are a listed business intelligence company (with quarterly revenue of about $130m, I think) that is also effectively borrowing in US$ and then putting a billion dollars of cash into Bitcoin. A fall in US$ value of Bitcoin could wipe out the company's equity, right? Or maybe I'm missing something. I wonder what the convenants are on their $650m of convertible debt. The mind boggles.

Still, I suppose the shareholders are ok with it. And it's worked out well for them so far.
It was all their reserve, so no impact on operations.  They had low debt, and are paying 75 bps on the bonds (arguably too much as the bond offering was like 50% oversubscribed), which they can finance with cash flows.  The results speak for themselves.

The operations and interest bill of this company are a bit of a sideshow compared to its position in Bitcoin. I went scurrying back to its balance sheet and cash flow (because I’m a bit of a finance nerd and I love this stuff!), and I was very surprised at what I found. (Please do not take this as a criticism of Bitcoin. It’s just such an unusual position for a company to be in, and so directly related to Bitcoin and its volatility, that I thought it would be interesting to see what you all thought.)

At the end of 2019, MSTR was a software and service company with about $500m in cash and no debt. Its share price had been fairly stable (and underperforming the NASDAQ) for around 20 years since falling from a dotcom spike in 2000.

Cash flow from operations in 2020 was about $50m from its normal business.

In 2020 MSTR raised convertible debt of $650m. With the proceeds of this and the $500m of balance sheet cash, MSTR bought $1.125bn of Bitcoin, which is currently held at about $1bn on the balance sheet (average carrying value of about $15,000).

So, at BTC of about $35,000, MSTR is sitting on a gain of about $1.6bn. So, about 30 years of 2020 cash from operations of their normal business. As this has happened, the share price has soared.

What we have here is a geared play on BTC. Shareholders of MSTR might not borrow dollars to invest in BTC; but the company is doing it in their behalf. If BTC falls back to where it was on 31 Dec 2019 ($7,250), the gain will swing to a loss of $550m. That loss will have to be booked as an impairment in the accounts and could wipe out shareholders’ equity (technical insolvency). If the BTC price keeps rising, MSTR shareholders will get a huge benefit. But, in one further twist, the debt issued is convertible to MSTR shares at $397 per share, so BTC gains (which will of course be reflected in the share price) will be diluted for existing shareholders.

It’s actually the debt holders of MSTR that are getting the real exposure to any further rise in BTC price. This is a way to effectively buy an option on BTC. They have exposure to the geared play on BTC via a put option on the share price. That’s probably why the debt is so cheap (but let’s not forget, even with 0.75% interest rate, that’s nearly $5m per year for a company generating $50m cash from operations).

Let’s hope they don’t lose the keys! (Just kidding! Calm down everyone.) So, I think that the above figures are more or less right (I’m sure you’ll tell me if they’re not!), and all the above is factual. But subjectively, this makes me very uneasy. A cynical person might say that a company has been hijacked and used as a BTC speculation scheme. The average shareholder will be very happy with the run up in the share price without perhaps fully understanding the risks being taken.
Title: Re: Bitcoin is funny money
Post by: Syonyk on February 05, 2021, 06:15:02 PM
Or what happens if the private keys get lost or stolen? How many people know the keys or where it is that they are stored?

"Oh no!  What about this totally catastrophic thing I just thought about that I'm sure people who literally do crypto design and development for a living never thought of???"

Seriously, multi-party crypto key is a long since solved problem that, in a very real way, makes the modern internet work.  Look into the signing ceremonies for things like the root signing certs for major SSL providers.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on February 06, 2021, 01:59:09 AM
I did do a bit of a double-take when I discovered it was MicroStrategy making this BTC play. They were one of the top competitors to a previous employer of mine back in the day. Now it seems that the software is a secondary endeavor to the BTC investment strategy. Kinda weird.
Title: Re: Bitcoin is funny money
Post by: Syonyk on February 06, 2021, 11:00:34 AM
So, uh... BTC is back at US$40k. :p

The whole "It Begins!" meme really did not age well.
Title: Re: Bitcoin is funny money
Post by: Painters Brush on February 06, 2021, 11:22:01 AM
I think it's hilarious that the hedge against fiat currency is a virtual fiat currency.

I'm not saying that traders can't make money trading this but if I were motivated to hedge against fiat currency, I'd definitely choose hard assets.

Years ago when this phenomenon started I remember wondering if I should throw a thousand dollars into bitcoin but then the idea was chastened by the thought of how I would explain that to my wife. LOL
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 06, 2021, 02:18:15 PM
I think it's hilarious that the hedge against fiat currency is a virtual fiat currency.

I'm not saying that traders can't make money trading this but if I were motivated to hedge against fiat currency, I'd definitely choose hard assets.

Years ago when this phenomenon started I remember wondering if I should throw a thousand dollars into bitcoin but then the idea was chastened by the thought of how I would explain that to my wife. LOL

Sorry for your loss.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on February 06, 2021, 02:34:14 PM
It's amazing that the most vocal experts on bitcoin are always the people who don't own any and don't actually know anything about how it works.
Title: Re: Bitcoin is funny money
Post by: Syonyk on February 06, 2021, 03:12:59 PM
I think it's hilarious that the hedge against fiat currency is a virtual fiat currency.

Um.  What, exactly, are you using to determine what is or isn't a fiat currency?

Bitcoin most definitely isn't.  Synthetic commodity, yes.  Synthetic commodity currency, matter of opinion that has been several pages of this thread.  But it's most assuredly not a fiat currency by any reasonable definition.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 06, 2021, 03:53:03 PM
I think it's hilarious that the hedge against fiat currency is a virtual fiat currency.

Um.  What, exactly, are you using to determine what is or isn't a fiat currency?

Bitcoin most definitely isn't.  Synthetic commodity, yes.  Synthetic commodity currency, matter of opinion that has been several pages of this thread.  But it's most assuredly not a fiat currency by any reasonable definition.

Bitcoins are not commodities. Commodities are fungible economic goods, i.e. scarce raw materials. Bitcoin are not economic goods. They are not raw materials for anything.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 06, 2021, 03:59:00 PM
The dirty secret about bitcoin, and about dollars and euros and renminbi, and gold and silver and gold-plated latinum, is they are ALL funny money.

Money isn't real.   It's a medium of exchange of goods and services.

Bitcoin has no inherent value, unless people exchanging goods and services agree to assign it a value as a means of exchange.   The day people decide it's worthless, it's worthless.

The US dollar has no inherent value, unless people exchanging goods and services agree to assign it a value as a means of exchange.  The day people decide it's worthless, it's worthless.

Gold has no inherent value, unless people exchanging goods and services agree to assign it a value as a means of exchange.   The day people decide it's worthless, it's worthless.

The U.S. dollar has value because creditors (including the U.S. government) are legally required to accept it to settle debts. Accordingly a debtor supplying U.S. dollars act as limit to the government’s use of force to seize other property that the debtor may have. In that sense U.S. dollars have real value.

Gold is a scarce luxury metal used throughout to make jewelry (as well as some minor industrial uses). Given that human desire for luxuries is unlimited and cannot be satisfied demand for gold will never disappear.
Title: Re: Bitcoin is funny money
Post by: Syonyk on February 06, 2021, 04:28:14 PM
Money isn't real.   It's a medium of exchange of goods and services.

{Bitcoin, The US Dollar, Gold} has no inherent value, unless people exchanging goods and services agree to assign it a value as a means of exchange.   The day people decide it's worthless, it's worthless.

Sure, and that sort of useless reduction isn't helpful at all, beyond "Oh, look how cynical I am, I don't believe in anything!" signaling.

Bitcoins are not commodities. Commodities are fungible economic goods, i.e. scarce raw materials. Bitcoin are not economic goods. They are not raw materials for anything.

They're not raw materials for anything (beyond low frictional transfer of value without government meddling, which apparently has some value to it), but otherwise behave closer to a commodity than anything else.

I mean, 8 pages or whatever in, obviously you're not going to change your opinion or post anything of value beyond short snippets about how silly it is, and how you think other people ought not be involved in it, changing absolutely nobody's mind in the process.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 06, 2021, 06:19:41 PM
Money isn't real.   It's a medium of exchange of goods and services.

{Bitcoin, The US Dollar, Gold} has no inherent value, unless people exchanging goods and services agree to assign it a value as a means of exchange.   The day people decide it's worthless, it's worthless.

Sure, and that sort of useless reduction isn't helpful at all, beyond "Oh, look how cynical I am, I don't believe in anything!" signaling.

Bitcoins are not commodities. Commodities are fungible economic goods, i.e. scarce raw materials. Bitcoin are not economic goods. They are not raw materials for anything.

They're not raw materials for anything (beyond low frictional transfer of value without government meddling, which apparently has some value to it), but otherwise behave closer to a commodity than anything else.

I mean, 8 pages or whatever in, obviously you're not going to change your opinion or post anything of value beyond short snippets about how silly it is, and how you think other people ought not be involved in it, changing absolutely nobody's mind in the process.

Why should I change my mind? No one has provided sufficient answers to my questions.. and they won’t by the way because they point to fatal flaws in Bitcoin and cryptos.

Also the title of this thread indicates that it is against Bitcoin. So I am just staying on topic. Trying to set people straight when I can. But the Bitcoin proponents get really angry when they are proven wrong. Sigh.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 06, 2021, 06:22:57 PM
https://youtu.be/aWhXF-Uc5sY
Title: Re: Bitcoin is funny money
Post by: Painters Brush on February 07, 2021, 10:36:25 AM

Um.  What, exactly, are you using to determine what is or isn't a fiat currency?

Bitcoin most definitely isn't.  Synthetic commodity, yes.  Synthetic commodity currency, matter of opinion that has been several pages of this thread.  But it's most assuredly not a fiat currency by any reasonable definition.

Investopedia:
Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for commodity money.
Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on February 07, 2021, 11:21:21 AM

Um.  What, exactly, are you using to determine what is or isn't a fiat currency?

Bitcoin most definitely isn't.  Synthetic commodity, yes.  Synthetic commodity currency, matter of opinion that has been several pages of this thread.  But it's most assuredly not a fiat currency by any reasonable definition.

Investopedia:
Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for commodity money.

And non-fiat money is government issued currency that is backed by a physical commodity, such as gold or silver. The value of non-fiat money is derived from the relationship between supply and demand of the physical commodity and the stability of the issuing government. Question: Does anyone have any current examples of non-fiat money? Do any economies of any size still base their currency on gold or silver? If they do, how has that worked out?

Title: Re: Bitcoin is funny money
Post by: Syonyk on February 07, 2021, 02:20:07 PM
Investopedia:
Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver...

I rest my point.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 08, 2021, 06:08:22 AM
Tesla announced in an SEC filing that they've acquired $1.5 billion in bitcoin and will also soon begin accepting bitcoin as a form of payment for their products.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm (https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm)


...but I'm sure bitcoin is just a fad even though there are hundreds of companies adding it to their balance sheets and some of the biggest hedge funds acquiring it.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 08, 2021, 06:19:51 AM
Tesla announced in an SEC filing that they've acquired $1.5 billion in bitcoin and will also soon begin accepting bitcoin as a form of payment for their products.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm (https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm)


...but I'm sure bitcoin is just a fad even though there are hundreds of companies adding it to their balance sheets and some of the biggest hedge funds acquiring it.

This is a Nothingburger.

Tesla is one of the most overhyped stocks on the market. Their vast retail investor base doesn’t care about business fundamentals. They want a good narrative. Buying into Bitcoin provides that.

With Apple entering the market with a self driving EV and Will Ferrell advertising GM’s EV during the Super Bowl, we may quickly see that this maneuver is Tesla’s jump-the-shark moment.

Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on February 08, 2021, 07:08:41 AM
Phenomenal news for bitcoin.  Elon Musk most influential businessman in the world.  Nocoiners in an absolute shambles right now.
Title: Re: Bitcoin is funny money
Post by: tarheeldan on February 08, 2021, 09:22:58 AM
I love Elon but on some things I really don't agree with him.  I know he wanted to disrupt banking with X.com back in the day, and this BTC buy goes along with that,  but such a volatile asset isn't the way, it's an uphill adoption battle

I'm more interested in Diem, formerly Libra. Facebook is looking bad in the media, so that hurts,  but they still have a massive userbase. (FB, Instagram, Whatsapp). It's dollar-pegged, not to a global currency basket like Libra, which sucks but better than stupid volatile
Title: Re: Bitcoin is funny money
Post by: firemane on February 08, 2021, 10:50:42 AM
It's amazing that the most vocal experts on bitcoin are always the people who don't own any and don't actually know anything about how it works.

I have been messing with crypto a little bit since 2016ish so I’m not totally against it, but this argument never makes sense to me.

Anytime someone says something about Bitcoin they get brigades with kids saying “you just don’t understand!!!.” Its just p2p networking with asymmetric encryption and no type of escrow to prevent fraud. What is there to “understand!!!”
Title: Re: Bitcoin is funny money
Post by: firemane on February 08, 2021, 11:16:22 AM
Tesla announced in an SEC filing that they've acquired $1.5 billion in bitcoin and will also soon begin accepting bitcoin as a form of payment for their products.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm (https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm)


...but I'm sure bitcoin is just a fad even though there are hundreds of companies adding it to their balance sheets and some of the biggest hedge funds acquiring it.

This is a Nothingburger.

Tesla is one of the most overhyped stocks on the market. Their vast retail investor base doesn’t care about business fundamentals. They want a good narrative. Buying into Bitcoin provides that.

With Apple entering the market with a self driving EV and Will Ferrell advertising GM’s EV during the Super Bowl, we may quickly see that this maneuver is Tesla’s jump-the-shark moment.

I don’t own any tsla unfortunately but I don’t think “bro” investing is going away anytime soon. It’s kind of scary to me that p/e’s aren’t rly a thing anymore, but at the same time perhaps it could be a good thing long term as more people are interested in throwing money into the market


Edit: I wonder if any older mustachians had said something similar to exactly what I just said in the dotcom bubble
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on February 08, 2021, 11:52:40 AM
Edit: I wonder if any older mustachians had said something similar to exactly what I just said in the dotcom bubble

The dotcom bubble was much worse because nobody had ever seen anything like it. As it dragged on year after year, it made a lot of people question their sanity. A steady stream of retail investors were capitulating and buying into it, and they looked good to their friends for a year or two. It was torture to watch them and NOT be in yahoo or IBM. The financial advisors people relied on back then capitulated too, and tried to prove their worth by getting people in on tech IPOs. Nobody knew what would happen next, and that was the big difference.
Title: Re: Bitcoin is funny money
Post by: firemane on February 08, 2021, 01:42:33 PM
Edit: I wonder if any older mustachians had said something similar to exactly what I just said in the dotcom bubble

The dotcom bubble was much worse because nobody had ever seen anything like it. As it dragged on year after year, it made a lot of people question their sanity. A steady stream of retail investors were capitulating and buying into it, and they looked good to their friends for a year or two. It was torture to watch them and NOT be in yahoo or IBM. The financial advisors people relied on back then capitulated too, and tried to prove their worth by getting people in on tech IPOs. Nobody knew what would happen next, and that was the big difference.

Thanks for the insight. I can see how that would be nerve wracking
Title: Re: Bitcoin is funny money
Post by: HPstache on February 08, 2021, 10:59:26 PM
Props to BTC , approaching 50k.  Suddenly the insane calls for the $100k in 5 years are looking much better than the down to $1 calls.  I feel like crap for getting out early...
Title: Re: Bitcoin is funny money
Post by: Northman on February 09, 2021, 05:07:08 AM
Tesla announced in an SEC filing that they've acquired $1.5 billion in bitcoin and will also soon begin accepting bitcoin as a form of payment for their products.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm (https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm)


...but I'm sure bitcoin is just a fad even though there are hundreds of companies adding it to their balance sheets and some of the biggest hedge funds acquiring it.

Well I guess we should all buy into BTC now because Elon said so. Maybe buy some Dogecoin as well.

No matter how many companies add BTC to their sheets, BTC's fundamental is just its price... in USD. And it's unsustainable unfortunately. Maybe the price increase drags on for a while on "good news", but at some point there will be a big selloff in the -90% numbers. People want profit before it's to late... in USD, not bitcoin. Investors (fans) optimism turns into pessimism and suddenly the future of bitcoin looks dark.
Title: Re: Bitcoin is funny money
Post by: talltexan on February 09, 2021, 06:21:40 AM
A -20% day is possible on any day for Bitcoin. The minor currencies seem to be much more volatile.

But if you've been in them for any length of time, you're probably up right now. So why not take out your original stake and only leave the profit at risk?
Title: Re: Bitcoin is funny money
Post by: firemane on February 09, 2021, 06:24:45 AM
Props to BTC , approaching 50k.  Suddenly the insane calls for the $100k in 5 years are looking much better than the down to $1 calls.  I feel like crap for getting out early...

I had AMD as a penny and sold at around $8 per share.... it happens
Title: Re: Bitcoin is funny money
Post by: Syonyk on February 09, 2021, 08:46:38 AM
I'm more interested in Diem, formerly Libra. Facebook is looking bad in the media, so that hurts,  but they still have a massive userbase. (FB, Instagram, Whatsapp). It's dollar-pegged, not to a global currency basket like Libra, which sucks but better than stupid volatile

Ah, they renamed themselves.  I'd seen something about Diem the other day and it sounded exceedingly similar to Libra.

I personally don't think "Facebook having more control and data" is a good idea in any form, though.
Title: Re: Bitcoin is funny money
Post by: bermudasq on February 09, 2021, 09:16:29 AM
I have 5% of my holdings in crypto and I'm just as confident in my crypto as I am in any of my other riskier assets, principally stock options.  Just hit $1 mil net worth today (whoohoo) largely based on MMM principals (which is why I'm browsing the forums today), but I'm still in the asset accumulation stage, so I'm keeping my fingers in lots of pies.  I personally think BTC is going to $1 million in ten years, and people will start trading a smaller unit of BTC, but I know I'm in the tiny minority.  If it goes to $0, it's not a big deal.  Diversification is key.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 09, 2021, 10:27:29 AM
Bitcoin can go to zero if nobody uses it, and nobody invests in it (like when it's inventor first mined a million Bitcoin).  But the S&P 500 can't go to zero - the companies assets are worth trillions.  I think those are different risk categories.

In the past 5 days, BTC-USD has gone up +26.52%.  The main news story I see is Elon Musk directing Tesla to buy $1.5 billion BTC, and allowing their cars to be purchased with BTC.  It's even the story on crypto websites, so there doesn't seem to be something else driving it - just a purchase that already happened.  The market cap of BTC-USD (according to Yahoo Finance) is $869 billion, which means the 26.5% rise added $180 billion of value.

Tesla had $28 billion in sales last year - will 3% of that be in Bitcoin this year?  Buying less than $1 billion in Teslas, with BTC, means BTC is worth $180 billion more?
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 09, 2021, 11:14:52 AM
A -20% day is possible on any day for Bitcoin. The minor currencies seem to be much more volatile.

But if you've been in them for any length of time, you're probably up right now. So why not take out your original stake and only leave the profit at risk?

There WILL be multiple 30-40% drops before Bitcoin goes to $100k and that is A-OK.  Just put up with a few “IT HAS BEGUN” memes from nocoiners and then laugh your way all the way to bank with the funny money when it averages 200% gains over the next couple years (even if it dumps 70% from the top).
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 09, 2021, 11:19:45 AM
Bitcoin can go to zero if nobody uses it, and nobody invests in it (like when it's inventor first mined a million Bitcoin).  But the S&P 500 can't go to zero - the companies assets are worth trillions.  I think those are different risk categories.

In the past 5 days, BTC-USD has gone up +26.52%.  The main news story I see is Elon Musk directing Tesla to buy $1.5 billion BTC, and allowing their cars to be purchased with BTC.  It's even the story on crypto websites, so there doesn't seem to be something else driving it - just a purchase that already happened.  The market cap of BTC-USD (according to Yahoo Finance) is $869 billion, which means the 26.5% rise added $180 billion of value.

Tesla had $28 billion in sales last year - will 3% of that be in Bitcoin this year?  Buying less than $1 billion in Teslas, with BTC, means BTC is worth $180 billion more?

Make no mistake, an S&P 500 company revealing it invested a portion of its cash reserves into BITCOIN, and also to reveal plans to accept it as a currency, is a MASSIVE story.  It’s a tremendous vote of confidence and just further supports the clear direction of where this thing is going. 
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 09, 2021, 12:27:47 PM
Bitcoin can go to zero if nobody uses it, and nobody invests in it (like when it's inventor first mined a million Bitcoin).  But the S&P 500 can't go to zero - the companies assets are worth trillions.  I think those are different risk categories.

In the past 5 days, BTC-USD has gone up +26.52%.  The main news story I see is Elon Musk directing Tesla to buy $1.5 billion BTC, and allowing their cars to be purchased with BTC.  It's even the story on crypto websites, so there doesn't seem to be something else driving it - just a purchase that already happened.  The market cap of BTC-USD (according to Yahoo Finance) is $869 billion, which means the 26.5% rise added $180 billion of value.

Tesla had $28 billion in sales last year - will 3% of that be in Bitcoin this year?  Buying less than $1 billion in Teslas, with BTC, means BTC is worth $180 billion more?

Make no mistake, an S&P 500 company revealing it invested a portion of its cash reserves into BITCOIN, and also to reveal plans to accept it as a currency, is a MASSIVE story.  It’s a tremendous vote of confidence and just further supports the clear direction of where this thing is going.

Well, yeah, except for the fact that it's Elon Musk.   At a certain point, the wizard is going to be seen very differently than he seems to be right now, though admittedly that certain point is not today.

Regardless of what Elon’s legacy will be, which I’m not going to predict, I think TSLA is just the first of many S&P 500 companies that will do the prudent thing and put a portion of their cash reserves into Bitcoin.  In my opinion, it is too risky for these tech companies not to have a small stake in Bitcoin right now. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 09, 2021, 12:40:04 PM
Well I guess we should all buy into BTC now because Elon said so. Maybe buy some Dogecoin as well.

No matter how many companies add BTC to their sheets, BTC's fundamental is just its price... in USD. And it's unsustainable unfortunately. Maybe the price increase drags on for a while on "good news", but at some point there will be a big selloff in the -90% numbers. People want profit before it's to late... in USD, not bitcoin. Investors (fans) optimism turns into pessimism and suddenly the future of bitcoin looks dark.

It is funny that people say "all bitcoin supporters ever say is that the critics just don't get it" and yet there are comments like these that continue to be posted and said all over the place that clearly just don't get it. Bitcoin's fundamentals aren't its price. It's price is a result of its fundamentals. Nothing about its price makes bitcoin "unsustainable". That's not to say there isn't speculation taking place, but if you think speculation is bitcoin's "fundamentals", then you're mistaken in that regard.

What makes bitcoin important is that it gives anyone the freedom to receive bitcoin at any time of day without compromising the right to your privacy and without discrimination. What makes bitcoin important is that it gives anyone the freedom to hold bitcoin no matter who your are without anyone else having the ability to dilute the supply of what it is you're holding. Holding bitcoin has vast improvements over many things today, both physical and digital. What makes bitcoin important is that it gives anyone the freedom to send that bitcoin to anyone anywhere in the world across a global decentralized network without interference from any third-party.

The fact that its price is rising doesn't mean that its "fundamentals" is price discovery alone, but that its remarkable price discovery in the market is the greater and greater realization from many across the entire world that having a monetary network with those [real] fundamentals that I mentioned above is incredibly valuable because there is nothing else like it in existence.
Title: Re: Bitcoin is funny money
Post by: tarheeldan on February 09, 2021, 12:46:12 PM
All the Altcoins would beg to differ
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 09, 2021, 01:55:08 PM
All the Altcoins would beg to differ

If you understand why pyrite is not gold even though they're both metals but don't understand why altcoins are not bitcoin despite both being "cryptocurrencies", then I suggest you do more research. I've written plenty about that already, in fact, here on these forums.
Title: Re: Bitcoin is funny money
Post by: bermudasq on February 09, 2021, 02:28:21 PM
All the Altcoins would beg to differ

In the current cycle, ETH is due to increase at a faster rate than BTC in the near term.  Its price usually increases shortly after a BTC run. Its 'fundamentals' are strong as well.  It's a building block upon which many partners and relationships are stacked. 
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on February 09, 2021, 02:31:05 PM
Every investment class seems very expensive right now.  So I hold my nose and buy anyway.  Similarly with crypto although I believe its credibility is rising. 

As long as the supply of paper currency(including the world reserve currency) is accelerating, in a low-interest environment, there is little reason to believe that bitcoin(or any scarce asset class) will drop in price.

It's a matter of relative confidence, and I believe crypto is looking better by the day. 

It may still get neutered through regulation though.  I am holding $BIGG.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 09, 2021, 02:50:38 PM
All the Altcoins would beg to differ

If you understand why pyrite is not gold even though they're both metals but don't understand why altcoins are not bitcoin despite both being "cryptocurrencies", then I suggest you do more research. I've written plenty about that already, in fact, here on these forums.

Pyrite isn’t a metal. It’s a metal sulfide. I suggest you do more research.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 09, 2021, 02:55:21 PM
Every investment class seems very expensive right now.  So I hold my nose and buy anyway.  Similarly with crypto although I believe its credibility is rising. 

As long as the supply of paper currency(including the world reserve currency) is accelerating, in a low-interest environment, there is little reason to believe that bitcoin(or any scarce asset class) will drop in price.

It's a matter of relative confidence, and I believe crypto is looking better by the day. 

It may still get neutered through regulation though.  I am holding $BIGG.

Bitcoin will absolute sustain big drops in the short term.  It happens multiple times every bull run so you have to expect it.  It’s a natural part of Bitcoins growth; it comes with the volatility.  As such, I fully expect we will experience drops of 30-40% again in 2021.  Does that mean you shouldn’t buy?  Absolutely not.  You should follow the same advise as you do with your Ira/401k/brokerage accounts - DCA in through the highs and lows.
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on February 09, 2021, 03:29:03 PM
Every investment class seems very expensive right now.  So I hold my nose and buy anyway.  Similarly with crypto although I believe its credibility is rising. 

As long as the supply of paper currency(including the world reserve currency) is accelerating, in a low-interest environment, there is little reason to believe that bitcoin(or any scarce asset class) will drop in price.

It's a matter of relative confidence, and I believe crypto is looking better by the day. 

It may still get neutered through regulation though.  I am holding $BIGG.

Bitcoin will absolute sustain big drops in the short term.  It happens multiple times every bull run so you have to expect it.  It’s a natural part of Bitcoins growth; it comes with the volatility.  As such, I fully expect we will experience drops of 30-40% again in 2021.  Does that mean you shouldn’t buy?  Absolutely not.  You should follow the same advise as you do with your Ira/401k/brokerage accounts - DCA in through the highs and lows.

Interesting, we shall see.  I would be surprised by a 30% drop in anything right now, except some non-USD currencies I guess.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 09, 2021, 03:48:28 PM
Pyrite isn’t a metal. It’s a metal sulfide. I suggest you do more research.

I stand corrected, but that's beside the point I was making. Looks like it is a sulfide mineral. But I don't claim to be an expert geologist and would not dare debate such things that I don't know anything about. So that's about as far as I would take it and would yield to just about anyone on geological matters since just about anyone would have more expertise than I. But again, that doesn't change the point I was making which was more a half attempt at an analogy to illustrate the greater point even if I missed on the specifics on the geology side of said analogy.
Title: Re: Bitcoin is funny money
Post by: effigy98 on February 09, 2021, 05:08:27 PM
Thank you FUNNY MONEY for hitting my FI number today.
Title: Re: Bitcoin is funny money
Post by: bermudasq on February 10, 2021, 07:51:35 AM
Thank you FUNNY MONEY for hitting my FI number today.

Congratulations!  The surge in my crypto portfolio took me over the $1 million mark yesterday.  But, I'm not selling.  ETH could hit $5k or more in this bull cycle.  Same price structure as BTC when BTC had the same number of active addresses.  And BTC is heading to the moon in the next ten years.
Title: Re: Bitcoin is funny money
Post by: talltexan on February 10, 2021, 02:08:59 PM
I remember early 2018 when Ether was worth about 0.1 Bitcoin. Since then it's been outrun by Bitcoin to the tune 3x. Do you expect it to close that gap?
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on February 10, 2021, 03:44:39 PM
I remember early 2018 when Ether was worth about 0.1 Bitcoin. Since then it's been outrun by Bitcoin to the tune 3x. Do you expect it to close that gap?
Ethereum doesn't have a fixed quantity iirc. 
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 10, 2021, 06:30:53 PM
I remember early 2018 when Ether was worth about 0.1 Bitcoin. Since then it's been outrun by Bitcoin to the tune 3x. Do you expect it to close that gap?

I do.  So much is built on Ethereum and once people really realize it it could surpass Bitcoin.

I remember early 2018 when Ether was worth about 0.1 Bitcoin. Since then it's been outrun by Bitcoin to the tune 3x. Do you expect it to close that gap?
Ethereum doesn't have a fixed quantity iirc.

Ethereum may become deflationary in the future.  Wouldn't that be something?
Title: Re: Bitcoin is funny money
Post by: Dgmp on February 13, 2021, 04:29:45 PM
Can someone explain the eth prospect to me.

I was trying to play with Stablecoins to switch across exchanges, and omg the network fees coinbase said i had to pay to send USDC was unreasonable.

I’m assuming the fees tie to the price of eth, and therefore the eth value proposition goes down as the eth price goes up?  Am I understanding this right?

Long bitcoin 💎 🙌
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 13, 2021, 06:31:01 PM
Can someone explain the eth prospect to me.

I was trying to play with Stablecoins to switch across exchanges, and omg the network fees coinbase said i had to pay to send USDC was unreasonable.

I’m assuming the fees tie to the price of eth, and therefore the eth value proposition goes down as the eth price goes up?  Am I understanding this right?

Long bitcoin 💎 🙌

It is very expensive to send Eth right now.  A transaction cost the equivalent of $5.  Eth has solutions to its scalability problem in development/testing (Eth2).  Eth2 will make transfers quicker and cheaper.  It also converts it to a POS coin which means it uses significantly less energy to maintain the network (no more miners).  Eth2 is already live if you opt in but your coins are effectively locked up until they hit the switch and make it the main chain (I don't know if this is the correct terminology for what they are doing).  The only reason anyone would opt in right now is that you can stake Ether on it right now; you get a headstart on staking.  The switch will be hit within the next 1-2 years.  Until then, Eth will continue to have scalability problems.  That said, I expect it to outperform Bitcoin this bullrun.

Title: Re: Bitcoin is funny money
Post by: Dgmp on February 13, 2021, 06:52:29 PM
But...won’t that drive the price of eth down then?  Is not price of eth tied to fundamentally the fees people are willing to pay to transact?
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 13, 2021, 07:12:26 PM
But...won’t that drive the price of eth down then?  Is not price of eth tied to fundamentally the fees people are willing to pay to transact?

It doesn't help the price but the thing about Ethereum is that it was never really intended to be used to pay and transact in the traditional sense.  Coins like Bitcoin (which has its own scalability problems) or Litecoin are more suitable for that.  Ethereum introduced "smart contracts" which opened the doors to all kinds of "decentralized applications", or dapps, that could be built on top of it.  For this reason Ethereum is more of a valuable business/financial tool.  Ethereum was the first to do what it does but it now has real solid competition from Cardano and Polkadot, both of which are top altcoins that were founded by influential Ethereum developers.  The thing is, if Ethereum/Cardano/Polkadot can do a fraction of what everyone is sure they will do then there is more than enough space for each of these projects to see near limitless growth. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 17, 2021, 06:29:35 AM
But...won’t that drive the price of eth down then?  Is not price of eth tied to fundamentally the fees people are willing to pay to transact?

It doesn't help the price but the thing about Ethereum is that it was never really intended to be used to pay and transact in the traditional sense.  Coins like Bitcoin (which has its own scalability problems) or Litecoin are more suitable for that.  Ethereum introduced "smart contracts" which opened the doors to all kinds of "decentralized applications", or dapps, that could be built on top of it.  For this reason Ethereum is more of a valuable business/financial tool.  Ethereum was the first to do what it does but it now has real solid competition from Cardano and Polkadot, both of which are top altcoins that were founded by influential Ethereum developers.  The thing is, if Ethereum/Cardano/Polkadot can do a fraction of what everyone is sure they will do then there is more than enough space for each of these projects to see near limitless growth. 

I just don't see the value in Ethereum. It is just an inherently bad design decision to try and create a "world computer" where script processing for every manner of dapp is done by a global network. There is no need for the processing of an application for say a collectible to be performed in the same capacity as a decentralized exchange.

Bitcoin's approach to decentralized applications just makes way more sense. Take for example the Bisq decentralized exchange. It is one of the best decentralized exchanges out there and it runs its DAO secured by the bitcoin network using the op_return opcode and all other Bisq specific data is contained, processed and stored by the Bisq peer-to-peer network. This is a much more scalable design to a decentralized application as well as being much more secure (it is backed by the most secure blockchain). The op_return data can also be pruned from bitcoin nodes which keeps the blockchain data minimal and scalable. There just simply isn't any need to have separate applications' data be stored and processed by the same database and network. It isn't a scalable design decision and there will always be inherent problems with that decision. Anchor your data for the security and then run your own P2P network for the decentralization. You get the security of the most secure blockchain on the planet while maintaining scalability and functionality of whatever your application requires on its own P2P network.

Also, Bisq exchange is amazing if anyone hasn't used it yet. You keep all your personal data confidential and safe and you can buy/sell bitcoin directly P2P. I've been using it a lot lately and it has been working great. Definitely the ideal way to buy and sell bitcoin without giving up your personal data to a centralized company.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 17, 2021, 08:18:40 AM
Bitcoin can go to zero if nobody uses it, and nobody invests in it (like when it's inventor first mined a million Bitcoin).  But the S&P 500 can't go to zero - the companies assets are worth trillions.  I think those are different risk categories.

In the past 5 days, BTC-USD has gone up +26.52%.  The main news story I see is Elon Musk directing Tesla to buy $1.5 billion BTC, and allowing their cars to be purchased with BTC.  It's even the story on crypto websites, so there doesn't seem to be something else driving it - just a purchase that already happened.  The market cap of BTC-USD (according to Yahoo Finance) is $869 billion, which means the 26.5% rise added $180 billion of value.

Tesla had $28 billion in sales last year - will 3% of that be in Bitcoin this year?  Buying less than $1 billion in Teslas, with BTC, means BTC is worth $180 billion more?

Make no mistake, an S&P 500 company revealing it invested a portion of its cash reserves into BITCOIN, and also to reveal plans to accept it as a currency, is a MASSIVE story.  It’s a tremendous vote of confidence and just further supports the clear direction of where this thing is going.
Well, yeah, except for the fact that it's Elon Musk.   At a certain point, the wizard is going to be seen very differently than he seems to be right now, though admittedly that certain point is not today.
Regardless of what Elon’s legacy will be, which I’m not going to predict, I think TSLA is just the first of many S&P 500 companies that will do the prudent thing and put a portion of their cash reserves into Bitcoin.  In my opinion, it is too risky for these tech companies not to have a small stake in Bitcoin right now.
Elon Musk ordered workers back to work during lockdowns, in violation of a government mandate.  Other S&P 500 companies did not follow his lead.  He tweeted "Gamestonk" to cheer on buying GameStop, which was probably a factor in the stock rising $200 overnight.  Anyone who bought that day, near $350, has lost up to 87% of their investment... is this the person to follow for investing advice?

Putting "cash reserves into Bitcoin" is the very opposite of being prudent.  Cash reserves must be there for anticipated short term spending.  Will you grant that Bitcoin is highly volatile?  It's the very opposite of what is desired in cash reserves.

Although we disagree, I am curious about why you say "it is too risky for these tech companies not to have a small stake in Bitcoin right now".  What risk do Google and Apple take if they don't buy Bitcoin?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 17, 2021, 03:03:40 PM
Ignoring the anecdotes over Musk's behavior since I don't think that's pertinent here, I think it mostly comes down to game theory.

I would probably disagree with the idea that cash reserves are for short term spending as that is rarely the case, especially with large cap corporations. Apple has been sitting on hundreds of billions of cash for almost a decade now. Short term spending usually comes from revenue generated and cash reserves are purposed for acquisitions, strategic market pivots, and things like that. Most of those things are rarely short-term spending ventures and more larger strategic goals for the company that takes years to develop.

I don't think anyone argues against the fact that bitcoin is volatile.

So it really comes down to game theory. Is it a risk for Google or Apple to put some of their reserves into bitcoin? Absolutely. But, if one of them does take the risk, then it lowers the competitive risk for other competing companies to do the same. Mass Mutual put $100 million into bitcoin and by doing so lowered the risk for other insurance companies to do the same. After doing so, there was growing interest from other insurance companies to make the same play.

A recent survey of CFOs found that about 5% plan to buy bitcoin in 2021 with about 11% claiming to do so by 2024. That means that as more and more companies put a portion of their reserves into bitcoin, it lowers the risk for other companies in their competing market to make the same play. Then it becomes a risk against NOT putting a portion of reserves into bitcoin if this trend continues because such a trend would result in an unavoidable rise in price. So that means now your competition is gaining dominance in your market by such a move and as CFO you'd have to recognize that risk. Shareholders would also be questioning the reluctance to do so against a growing back drop of companies purchasing bitcoin. So again, it isn't so much about what the initial risk of putting money into bitcoin is but against the game theory risk of your competitors gaining a market growth advantage through such a move.

Tesla's purchase has already gained about $700 million on their purchase. Microstrategy's gains are even more absurd. The competitive advantage gained by growing your cash reserves to such an extend over such a short period of time can't be understated and from a game theory perspective, that's what masks such a move "too risky not to do." It isn't that bitcoin isn't a risk, but that by not doing so against your competitor's move to do so, puts you at a competitive disadvantage.

The same goes for simply just moving into the bitcoin market in general. Originally when Square moved into the space, it forced PayPal's hand at doing the same after seeing Square's profits. Look at all the banks now jumping in. It is a cascade of capitulation from once stout critics of the technology now making moves to enter the market.

Game theory is a hell of a drug.
Title: Re: Bitcoin is funny money
Post by: effigy98 on February 17, 2021, 10:59:24 PM
We have something like -15% real interest rates on that cash (due to inflation).

It makes no sense for these companies to hold cash.

They see these choices
Title: Re: Bitcoin is funny money
Post by: talltexan on February 18, 2021, 05:56:26 AM
One other option for companies holding cash: pay a dividend to their share-holders.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on February 18, 2021, 01:34:47 PM
Ignoring the anecdotes over Musk's behavior since I don't think that's pertinent here, I think it mostly comes down to game theory.

I would probably disagree with the idea that cash reserves are for short term spending as that is rarely the case, especially with large cap corporations. Apple has been sitting on hundreds of billions of cash for almost a decade now. Short term spending usually comes from revenue generated and cash reserves are purposed for acquisitions, strategic market pivots, and things like that. Most of those things are rarely short-term spending ventures and more larger strategic goals for the company that takes years to develop.

I don't think anyone argues against the fact that bitcoin is volatile.

So it really comes down to game theory. Is it a risk for Google or Apple to put some of their reserves into bitcoin? Absolutely. But, if one of them does take the risk, then it lowers the competitive risk for other competing companies to do the same. Mass Mutual put $100 million into bitcoin and by doing so lowered the risk for other insurance companies to do the same. After doing so, there was growing interest from other insurance companies to make the same play.

A recent survey of CFOs found that about 5% plan to buy bitcoin in 2021 with about 11% claiming to do so by 2024. That means that as more and more companies put a portion of their reserves into bitcoin, it lowers the risk for other companies in their competing market to make the same play. Then it becomes a risk against NOT putting a portion of reserves into bitcoin if this trend continues because such a trend would result in an unavoidable rise in price. So that means now your competition is gaining dominance in your market by such a move and as CFO you'd have to recognize that risk. Shareholders would also be questioning the reluctance to do so against a growing back drop of companies purchasing bitcoin. So again, it isn't so much about what the initial risk of putting money into bitcoin is but against the game theory risk of your competitors gaining a market growth advantage through such a move.

Tesla's purchase has already gained about $700 million on their purchase. Microstrategy's gains are even more absurd. The competitive advantage gained by growing your cash reserves to such an extend over such a short period of time can't be understated and from a game theory perspective, that's what masks such a move "too risky not to do." It isn't that bitcoin isn't a risk, but that by not doing so against your competitor's move to do so, puts you at a competitive disadvantage.

The same goes for simply just moving into the bitcoin market in general. Originally when Square moved into the space, it forced PayPal's hand at doing the same after seeing Square's profits. Look at all the banks now jumping in. It is a cascade of capitulation from once stout critics of the technology now making moves to enter the market.

Game theory is a hell of a drug.

Obviously, if Bitcoin continues to rise, companies that put cash into it will profit the most. But who gets a competitive advantage if Bitcoin tanks?
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 18, 2021, 03:15:09 PM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

Friendly reminder that today is February 18, 2021 and the price of 1 Bitcoin is $51,907, or, as I like to call it, more than twice of what it was when you made this thread on December 26, 2020 ($25,282).
Title: Re: Bitcoin is funny money
Post by: HPstache on February 18, 2021, 03:21:33 PM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

Friendly reminder that today is February 18, 2021 and the price of 1 Bitcoin is $51,907, or, as I like to call it, more than twice of what it was when you made this thread on December 26, 2020 ($25,282).

Boom!  Roasted.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on February 18, 2021, 03:28:34 PM
It's always important to remember that markets can remain irrational far longer than you can remain liquid.  :P
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on February 18, 2021, 04:01:14 PM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

Friendly reminder that today is February 18, 2021 and the price of 1 Bitcoin is $51,907, or, as I like to call it, more than twice of what it was when you made this thread on December 26, 2020 ($25,282).

Yes, and Dogecoin has increased more than tenfold in that same amount of time. That's the real currency of the future right there.
Title: Re: Bitcoin is funny money
Post by: talltexan on February 19, 2021, 06:57:58 AM
Maybe instead of focusing on how little sense crypto- currency makes, we should be spending more time thinking about how little sense plain old US Dollar currency makes. Our movement is about finding ways--new skills, new habits, new patterns of problem-solving--that enable a dramatic increase in the quality of life completely apart from financial movements. Mustachians will be fine no matter what currency people are using.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 19, 2021, 08:20:24 AM
Obviously, if Bitcoin continues to rise, companies that put cash into it will profit the most. But who gets a competitive advantage if Bitcoin tanks?

That was my entire point. If companies are continuing to put money into bitcoin, its price will continue to go up. You can't have increased demand result in a decrease in price. The cause and effect here is that companies continuing to put money into bitcoin results in its price rising. So the game theory side of it is that if a company continues to see their competitors put money into bitcoin (thus causing its price to rise), it becomes a risk to also not put money into bitcoin because you're losing out on a major competitive edge by becoming an increasingly less valuable company against your competitors.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on February 19, 2021, 08:56:53 AM
Game theory is a hell of a drug.
Great post above.  The game theory aspect of bitcoin is what people miss when they start to learn about the space.  Thinking through everything that can happen almost makes it inevitable.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 19, 2021, 09:22:25 AM
lifeanon269 - A different poster claimed Tesla's example was one others would follow, so the CEO of Tesla's behavior is relevant to that claim.  Other CEOs don't imitate Tesla.  Your example of Mass Mutual is more compelling, actually.

The other poster was also the one who claimed companies have a "risk" in not buying Bitcoin.  You made a case for Bitcoin being less risky once other CEOs have bought it - but you didn't explain why Google or Apple face a risk if they don't buy Bitcoin.  Most of Google's ad revenue comes from advertising, not users.  Facebook is creating a competing cryptocurrency to Bitcoin.  I don't see the risk tech companies face in ignoring Bitcoin.

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.

How can people use Bitcoin?  With a credit card, you can pay for an international ticket, pay for a hotel in another country, go dining and shopping.  All on the same credit card.  If Bitcoin can do that, it's by greatly restricting which places you visit - credit cards are far more useful than Bitcoin.  Other than HODL, what can Bitcoin do?
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 19, 2021, 09:35:49 AM
This bull run just started.  There will be 30-40% crashes throughout this run but that is normal in crypto bullruns.  We just had our first one in January 2021 when OP made the “it has started meme”.  Everyone who has been in this for some knew it was going to bite him in the butt because we expected it.  In 2017 there were 7 similar drops in its bull run.  I don’t know when the real crash will happen which will lead us to an extended bear market (where prices will be higher than its previous cycles high mind you) but I would guess it’s got some time.  I would say sometime shortly after July 2021.  Many people say this cycle is different because there is institutional buying and ETFs on the horizon.  I don’t know but I think a crash is more likely than a multi year bull run. 

In conclusion, I expect big dips in the short term, a overall continued rally through atleast July 2021, followed by a crash sometime thereafter.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 19, 2021, 10:13:38 AM
lifeanon269 - A different poster claimed Tesla's example was one others would follow, so the CEO of Tesla's behavior is relevant to that claim.  Other CEOs don't imitate Tesla.  Your example of Mass Mutual is more compelling, actually.

The other poster was also the one who claimed companies have a "risk" in not buying Bitcoin.  You made a case for Bitcoin being less risky once other CEOs have bought it - but you didn't explain why Google or Apple face a risk if they don't buy Bitcoin.  Most of Google's ad revenue comes from advertising, not users.  Facebook is creating a competing cryptocurrency to Bitcoin.  I don't see the risk tech companies face in ignoring Bitcoin.

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.

How can people use Bitcoin?  With a credit card, you can pay for an international ticket, pay for a hotel in another country, go dining and shopping.  All on the same credit card.  If Bitcoin can do that, it's by greatly restricting which places you visit - credit cards are far more useful than Bitcoin.  Other than HODL, what can Bitcoin do?

My point about risk (as I stated in my prior post) was in regards to companies that are in the same competing market. That's the entire concept of game theory. There is little risk to Google or Apple not investing in bitcoin if none of their competitors are investing in bitcoin. But that changes if a competitor decides to do so or they decide to entire into a market where their competitors are already in bitcoin (P2P payments industry?).

As far as your "top is in" point, it seems like you're basing your point on "feeling alone". Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.

https://twitter.com/100trillionUSD/status/1362481800174579720?s=20 (https://twitter.com/100trillionUSD/status/1362481800174579720?s=20)

Ignoring past behavior, claiming the top is in ignores what future demand looks like. According to NYDIG, as claimed by Ross Stevens, their orderbook sees about $26 billion in additional demand for this year (compared with $5 billion currently for them today). They also just filed for a bitcoin ETF a couple days ago and list Morgan Stanley as a participant. I think if you look at the market and what the future demand looks like, claiming that the "top is in" today is horribly off base from reality.

As far as using bitcoin, if you want to book a flight to anywhere in the world with bitcoin, feel free:

https://www.cheapair.com/blog/book-your-flights-on-cheapair-with-bitcoin-virtual-currency/ (https://www.cheapair.com/blog/book-your-flights-on-cheapair-with-bitcoin-virtual-currency/)
https://www.expedia.com/Checkout/BitcoinTermsAndConditions (https://www.expedia.com/Checkout/BitcoinTermsAndConditions)

I think once you get outside your bubble here in America where we have common access to robust financial services, you'll realize that many around the world do not and are rapidly finding that bitcoin provides a new avenue for access to the global economy and financial markets in the world that didn't exist previously for them:

https://www.statista.com/chart/18345/crypto-currency-adoption/ (https://www.statista.com/chart/18345/crypto-currency-adoption/)
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 19, 2021, 10:55:51 AM
It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.
As far as your "top is in" point, it seems like you're basing your point on "feeling alone". Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.
I'm not sure why you put "feeling alone" in quotes.  You're not quoting me, and I provided reasons and data for my views.  Are you going to claim the market caps of Visa and Mastercard are feelings?  I compared them to Bitcoin, which is less useful than either credit card.

What is your source for the assumption all crashes must follow a previous "path"?

That is even disproven by your own example: the 2013 crash was deeper than the 2017 crash.  Put another way, the 2017 crash did not follow "2013's path".


How can people use Bitcoin?  With a credit card, you can pay for an international ticket, pay for a hotel in another country, go dining and shopping.  All on the same credit card.  If Bitcoin can do that, it's by greatly restricting which places you visit - credit cards are far more useful than Bitcoin.  Other than HODL, what can Bitcoin do?
As far as using bitcoin, if you want to book a flight to anywhere in the world with bitcoin, feel free
That puts you in a foreign country with no food.  I said plane ticket, hotel, dining and shopping.  You can't buy a ticket at the United Airlines counter of the airport - you have to use specific websites.  Similarly, almost no restaurants accept Bitcoin, but almost all accept Visa or Mastercard.  Credit cards are more useful than Bitcoin.


I think once you get outside your bubble here in America where we have common access to robust financial services, you'll realize that many around the world do not and are rapidly finding that bitcoin provides a new avenue for access to the global economy and financial markets in the world that didn't exist previously for them:
https://www.statista.com/chart/18345/crypto-currency-adoption/
Tell me more about the "bubble" I live in.  What were you saying earlier about saying things based on "feeling alone"?
I'm actually a Nigerian Price who needs 50 Bitcoin to re-claim my throne...

As to the assumption that getting outside America will reveal a lack of "robust financial services", is that how you describe Germany and Switzerland?  China and Japan appear on that list, two of the largest economies in the world.  Most of that list is countries that have financial services - including the largest economies in the world.  It doesn't really prove your point about financial services being lacking.

And also, if I may point out, 2/3rds of Bitcoin is mined in China.  But instead of having the highest use of Bitcoin, only 7% of Chinese in the survey have "used or owned cryptocurrency".  That's an interesting disparity to me.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 19, 2021, 11:20:45 AM
I'm not sure why you put "feeling alone" in quotes.  You're not quoting me, and I provided reasons and data for my views.  Are you going to claim the market caps of Visa and Mastercard are feelings?  I compared them to Bitcoin, which is less useful than either credit card.

What is your source for the assumption all crashes must follow a previous "path"?

That is even disproven by your own example: the 2013 crash was deeper than the 2017 crash.  Put another way, the 2017 crash did not follow "2013's path".

Your only data point was in regards to a comparison between the market caps of MasterCard and VISA versus bitcoin, which is an odd comparison considering bitcoin doesn't compete with either of those. Other than that singular data point you presented, the only other evidence for "the top is in" is using past performance in past bubbles to falsely claim such (because if you did compare it to past bubbles then by that measure the top is NOT in).

That puts you in a foreign country with no food.  I said plane ticket, hotel, dining and shopping.  You can't buy a ticket at the United Airlines counter of the airport - you have to use specific websites.  Similarly, almost no restaurants accept Bitcoin, but almost all accept Visa or Mastercard.  Credit cards are more useful than Bitcoin.

The only reason why I mentioned those services was because you happened to bring it up. Again, bitcoin is not competing with VISA or Mastercard. But there are options out there to pay with bitcoin for certain services. But the payments options for bitcoin still have a long way to go because the payment scaling rails just aren't there just yet. Bitcoin is the base layer for this financial system. You can't have scaling payment rails unless that base layer sees validation first. The fact that you continue to say things like "credit cards are more useful than bitcoin", tells me you don't get it and don't understand where bitcoin's main utility lies (hint: it's not payments).


Tell me more about the "bubble" I live in.  What were you saying earlier about saying things based on "feeling alone"?
I'm actually a Nigerian Price who needs 50 Bitcoin to re-claim my throne...

As to the assumption that getting outside America will reveal a lack of "robust financial services", is that how you describe Germany and Switzerland?  China and Japan appear on that list, two of the largest economies in the world.  Most of that list is countries that have financial services - including the largest economies in the world.  It doesn't really prove your point about financial services being lacking.

And also, if I may point out, 2/3rds of Bitcoin is mined in China.  But instead of having the highest use of Bitcoin, only 7% of Chinese in the survey have "used or owned cryptocurrency".  That's an interesting disparity to me.

Huh? My point wasn't about Germany, Switzerland, China, Japan, or the USA. They all have fairly low adoption rates so far as shown in that chart.

It largely has to do with the network effect for these countries that drives more P2P usage. China has banned the use of bitcoin in its country (but allows mining) and so its citizens haven't used it much and China also has a fairly robust economy with decent reliable financial services. Nigeria has banned financial institutions from dealing with bitcoin, but allows its citizens to use it and given Nigeria's economic struggles over the last year, bitcoin use in the country has exploded with a lot of P2P usage. Most of the countries in that list that have larger adoption rates have economies that have been struggling a lot lately (Nigeria, Vietnam, Philippines, Turkey, Peru).

https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory (https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory)
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 19, 2021, 02:36:14 PM
Quote
The only reason why I mentioned those services was because you happened to bring it up. Again, bitcoin is not competing with VISA or Mastercard. But there are options out there to pay with bitcoin for certain services. But the payments options for bitcoin still have a long way to go because the payment scaling rails just aren't there just yet. Bitcoin is the base layer for this financial system. You can't have scaling payment rails unless that base layer sees validation first. The fact that you continue to say things like "credit cards are more useful than bitcoin", tells me you don't get it and don't understand where bitcoin's main utility lies (hint: it's not payments).

Wait, what?

I thought bitcoin was touted as being a virtual currency, i.e. to be used to make payments... Wouldn’t that necessarily put it in competition with other payment networks like those operated by Visa or MC?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 19, 2021, 03:32:42 PM
Wait, what?

I thought bitcoin was touted as being a virtual currency, i.e. to be used to make payments... Wouldn’t that necessarily put it in competition with other payment networks like those operated by Visa or MC?

Bitcoin is both a currency and a monetary network all in one. That contrasts to our current financial system where the currency and the monetary network are not coupled together. Our current financial system operates in layers (Central banking > Settlement > FIs > Payments/P2P). The peer-2-peer payment systems (Venmo, Paypal, CashApp, etc) can't operate without the other layers in the financial system. The settlement layer (eg, Fedwire) is used to settle balances between financial institutions. This is not done in real-time, but usually daily, weekly, or monthly. It is much easier to settle large amounts of money in this way. So ultimately, millions of transactions that take place in the payments/P2P layers, get settled as larger transactions together in the settlements layer.

Bitcoin's main benefit is that its blockchain decentralized across thousands of nodes in the world. Without this decentralization, it has no other benefit over traditional financial solutions in the world that scale much better due to their centralized properties. Therefore, bitcoin will also have these same layered properties that our current financial system has. Bitcoin, at its base layer competes more with central banking and the settlement layer of our current financial system where large payments that require large amounts of security settle to this base layer. These larger settlements will, however, consist of millions and millions of smaller payment and peer to peer transactions (see the lightning network). Bitcoin's payments layer is still very new and therefore it just simply doesn't have much adoption yet (it's only been on mainnet for a little over 2 years). So bitcoin's payments layer just isn't there yet to compete with VISA or Venmo or these other applications at this layer of our financial system. It's base layer is however great for settling larger transactions that might be more akin to remittance payments, ACH transactions, wire transfers, FedWire settlements between institutions, etc as comparatively it competes with those very well.

It is important to understand this to avoid pigeon-holing bitcoin's technology into preconceived notions about what it should be doing as opposed to understanding the benefits of what the technology is and what its benefits actually are and building on those benefits to create new infrastructure around it.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 19, 2021, 05:31:17 PM
Wait, what?

I thought bitcoin was touted as being a virtual currency, i.e. to be used to make payments... Wouldn’t that necessarily put it in competition with other payment networks like those operated by Visa or MC?

Bitcoin is both a currency and a monetary network all in one. That contrasts to our current financial system where the currency and the monetary network are not coupled together. Our current financial system operates in layers (Central banking > Settlement > FIs > Payments/P2P). The peer-2-peer payment systems (Venmo, Paypal, CashApp, etc) can't operate without the other layers in the financial system. The settlement layer (eg, Fedwire) is used to settle balances between financial institutions. This is not done in real-time, but usually daily, weekly, or monthly. It is much easier to settle large amounts of money in this way. So ultimately, millions of transactions that take place in the payments/P2P layers, get settled as larger transactions together in the settlements layer.

Bitcoin's main benefit is that its blockchain decentralized across thousands of nodes in the world. Without this decentralization, it has no other benefit over traditional financial solutions in the world that scale much better due to their centralized properties. Therefore, bitcoin will also have these same layered properties that our current financial system has. Bitcoin, at its base layer competes more with central banking and the settlement layer of our current financial system where large payments that require large amounts of security settle to this base layer. These larger settlements will, however, consist of millions and millions of smaller payment and peer to peer transactions (see the lightning network). Bitcoin's payments layer is still very new and therefore it just simply doesn't have much adoption yet (it's only been on mainnet for a little over 2 years). So bitcoin's payments layer just isn't there yet to compete with VISA or Venmo or these other applications at this layer of our financial system. It's base layer is however great for settling larger transactions that might be more akin to remittance payments, ACH transactions, wire transfers, FedWire settlements between institutions, etc as comparatively it competes with those very well.

It is important to understand this to avoid pigeon-holing bitcoin's technology into preconceived notions about what it should be doing as opposed to understanding the benefits of what the technology is and what its benefits actually are and building on those benefits to create new infrastructure around it.

You're wasting your breath.  Although you are more elegant with your words, hes been told this before and doesn't care.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 19, 2021, 05:58:47 PM
Quote
You're wasting your breath.  Although you are more elegant with your words, hes been told this before and doesn't care.

Thanks. Keep trolling’!


Might I remind you this is an antiBitcoin thread.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on February 19, 2021, 08:42:39 PM
Wait, what?

I thought bitcoin was touted as being a virtual currency, i.e. to be used to make payments... Wouldn’t that necessarily put it in competition with other payment networks like those operated by Visa or MC?

Bitcoin is both a currency and a monetary network all in one.

It doesn't serve either purpose very well at the moment. A currency needs relative stability in value so I can quote you a price in that currency, and if you pay me next week or next month I know I'm getting basically what I asked for, and you're paying basically what you expected. A monetary network needs to be able to perform transactions quickly and cheaply. Bitcoin doesn't really do this very well at the moment either.

Quote
Bitcoin's main benefit is that its blockchain decentralized across thousands of nodes in the world. Without this decentralization, it has no other benefit over traditional financial solutions in the world that scale much better due to their centralized properties.

Agreed. Centralization can be quite efficient where it works. A decentralized approach necessarily needs to introduce inefficiencies to maintain the security of the network in the face of untrustworthy actors. For this decentralized network to take hold, it therefore needs to have obvious advantages that outweigh the inefficiencies. So yeah, we shouldn't use Bitcoin to buy groceries. I get it. The centralized payment networks work quite well for this purpose and Bitcoin can't really hope to compete. Seems we're in agreement there.

Quote
Therefore, bitcoin will also have these same layered properties that our current financial system has. Bitcoin, at its base layer competes more with central banking and the settlement layer of our current financial system where large payments that require large amounts of security settle to this base layer. These larger settlements will, however, consist of millions and millions of smaller payment and peer to peer transactions (see the lightning network). Bitcoin's payments layer is still very new and therefore it just simply doesn't have much adoption yet (it's only been on mainnet for a little over 2 years). So bitcoin's payments layer just isn't there yet to compete with VISA or Venmo or these other applications at this layer of our financial system.

Okay, but will the payments layer ever achieve widespread adoption? What fraction of payment transactions cannot be accomplished efficiently in the existing system and would be significantly faster/cheaper/more predictable if Bitcoin was used as the base layer instead? Either Bitcoin is unsuitable for most everyday transactions (and we're wrong to measure it on that basis), or we should expect it to be a strong competitor against Visa et al. once the infrastructure is in place. You can't have it both ways.

Quote
It is important to understand this to avoid pigeon-holing bitcoin's technology into preconceived notions about what it should be doing as opposed to understanding the benefits of what the technology is and what its benefits actually are and building on those benefits to create new infrastructure around it.

The phrase "preconceived notions" doesn't really fit here. The technology does what it does. Its capabilities can be demonstrated and evaluated based on their relative advantages and disadvantages to existing alternatives. I have an open mind about this. You say people are working on building infrastructure to make it more useful, and I believe you. What's the "killer app" that would cause some significant fraction of the world's financial transactions to be denominated in BTC or transacted over the Bitcoin network instead of using incumbent currencies and payment networks?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 20, 2021, 07:31:43 AM
It doesn't serve either purpose very well at the moment. A currency needs relative stability in value so I can quote you a price in that currency, and if you pay me next week or next month I know I'm getting basically what I asked for, and you're paying basically what you expected. A monetary network needs to be able to perform transactions quickly and cheaply. Bitcoin doesn't really do this very well at the moment either.

Again, I feel this is pigeonholing bitcoin and money into certain classifications that it must meet before you consider it money. But bitcoin is different than anything before it. Money can have many properties, but just because it is missing a few of them, doesn't make it not money. It doesn't make a good unit of account yet because of its volatility, but there is no long term stability without short term volatility. However, what it lacks in being a unit of account, it makes up for as a global medium of exchange with no borders, a store of value that cannot be deluted, every unit as fungible as the last, extremely divisible, uniform, portable, growingly acceptable, and infinitely durable.

While it lacks being a unit of account, modern technology today allows for its unit of account to be measured at any point in the day against a stable unit of account (US dollar) that all parties can agree on. Back in the days when gold coins were used as a medium of exchange, gold was not a great unit of account either. Barter between two parties generally just agreed upon a price and that price varied greatly from transaction to transaction among different parties. The world is different today with modern technology. I don't think anyone is naive to think that bitcoin is going to replace the US dollar. Therefore I don't think it is very crucial to be a unit of account with modern technology available when bitcoin has just about every other property of good sound money. Also, being a unit of account is not an inherent problem for bitcoin, as I said: there is no long term stability without short term volatility.

Okay, but will the payments layer ever achieve widespread adoption? What fraction of payment transactions cannot be accomplished efficiently in the existing system and would be significantly faster/cheaper/more predictable if Bitcoin was used as the base layer instead? Either Bitcoin is unsuitable for most everyday transactions (and we're wrong to measure it on that basis), or we should expect it to be a strong competitor against Visa et al. once the infrastructure is in place. You can't have it both ways.

I have no reason to believe that the payment layers for bitcoin will not be accepted just as its base layer is. If the base layer is widely accepted, it will stand to reason that the payments layer will be as well. If enough people own bitcoin, they'll want to use it as well. What can't be accomplished today under the current fiat system? Global payments. Bitcoin is global and no fiat system will be able to do global payments as well as bitcoin. Borders are inherent to the fiat system and that will always carry with it friction whereas bitcoin has no borders and is friction-less in this regard (see LNStrike for example). If you're a web developer in Iran and you want to get paid for some work that you did online for someone, bitcoin is the easiest way to do so. Bitcoin is the easiest way to enter the global market online. There is no internet money and bitcoin fills this role and it is sorely needed in a world economy that takes place more and more online around the world. I'm not sure what you mean by "can't have it both ways". It is good for payments, it just has some developments and acceptance to go before it's fully there. It seems like you're chalking it up to a problem that can't be solved when that just isn't the case. It is like making the claim that the internet will never stream videos well in the year 2000 and yet here we are in 2021...

The phrase "preconceived notions" doesn't really fit here. The technology does what it does. Its capabilities can be demonstrated and evaluated based on their relative advantages and disadvantages to existing alternatives. I have an open mind about this. You say people are working on building infrastructure to make it more useful, and I believe you. What's the "killer app" that would cause some significant fraction of the world's financial transactions to be denominated in BTC or transacted over the Bitcoin network instead of using incumbent currencies and payment networks?

I just leave you with this recent YouTube video put together by the Human Rights Foundation: https://youtu.be/xLYYh4aPXAM

There is no better "killer app" than this.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 20, 2021, 08:13:21 AM
I'm not sure why you put "feeling alone" in quotes.  You're not quoting me, and I provided reasons and data for my views.  Are you going to claim the market caps of Visa and Mastercard are feelings?  I compared them to Bitcoin, which is less useful than either credit card.

What is your source for the assumption all crashes must follow a previous "path"?

That is even disproven by your own example: the 2013 crash was deeper than the 2017 crash.  Put another way, the 2017 crash did not follow "2013's path".

Your only data point was in regards to a comparison between the market caps of MasterCard and VISA versus bitcoin, which is an odd comparison considering bitcoin doesn't compete with either of those. Other than that singular data point you presented, the only other evidence for "the top is in" is using past performance in past bubbles to falsely claim such (because if you did compare it to past bubbles then by that measure the top is NOT in).
You're claiming crashes are predictable and must follow "past bubbles"?  You've said this in your earlier post, as well, saying the crash has to follow the "path" of the prior crash.  I pointed out you were wrong with your own data - that 2017 did not follow the "path" of 2013.  So the data you used, shows you're incorrect.  Yet you're still making exact comparisons, saying until we reach the 20x multiple of 2017, Bitcoin can't crash.


That puts you in a foreign country with no food.  I said plane ticket, hotel, dining and shopping.  You can't buy a ticket at the United Airlines counter of the airport - you have to use specific websites.  Similarly, almost no restaurants accept Bitcoin, but almost all accept Visa or Mastercard.  Credit cards are more useful than Bitcoin.
The only reason why I mentioned those services was because you happened to bring it up. Again, bitcoin is not competing with VISA or Mastercard. But there are options out there to pay with bitcoin for certain services. But the payments options for bitcoin still have a long way to go because the payment scaling rails just aren't there just yet.
I completely disagree with the claim Bitcoin isn't competing with Visa and Mastercard.  Why did Bitcoin rally after Elon Musk said Bitcoin could be used to buy Teslas?  Consider which Businesses would advertise they accept Bitcoin ... those same businesses advertise they accept Visa and Mastercard.  They are competitors for how people pay for goods and services.

What percent of Chinese citizens used or know about Chinese yuan?  What percent of U.S. citizens held or know about U.S. dollars?  The answer is a rounding error from 100%, while for Bitcoin it's 6-7%.  Bitcoin also competes with people spending dollars, or saving their money in dollars.


Tell me more about the "bubble" I live in.  What were you saying earlier about saying things based on "feeling alone"?
I'm actually a Nigerian Price who needs 50 Bitcoin to re-claim my throne...

As to the assumption that getting outside America will reveal a lack of "robust financial services", is that how you describe Germany and Switzerland?  China and Japan appear on that list, two of the largest economies in the world.  Most of that list is countries that have financial services - including the largest economies in the world.  It doesn't really prove your point about financial services being lacking.

And also, if I may point out, 2/3rds of Bitcoin is mined in China.  But instead of having the highest use of Bitcoin, only 7% of Chinese in the survey have "used or owned cryptocurrency".  That's an interesting disparity to me.
Huh? My point wasn't about Germany, Switzerland, China, Japan, or the USA. They all have fairly low adoption rates so far as shown in that chart.
Your chart had nothing to do with your point.  You talked about unbanked countries, and then linked to a chart where half the countries were the largest economies in the world.

When are you going to reveal the data you used to decide what bubble I live in?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 20, 2021, 09:44:54 AM
You're claiming crashes are predictable and must follow "past bubbles"?  You've said this in your earlier post, as well, saying the crash has to follow the "path" of the prior crash.  I pointed out you were wrong with your own data - that 2017 did not follow the "path" of 2013.  So the data you used, shows you're incorrect.  Yet you're still making exact comparisons, saying until we reach the 20x multiple of 2017, Bitcoin can't crash.

Show me (quote me) where I said that crashes will follow past bubbles prior to your post where you compared today's price to past bubbles. I never said anything like that and in fact in my very response to you I said that doing so is a flawed approach. All I did was simply showed how even if one were to make the comparison that you first brought up, you're analysis was wrong.

Quote
Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles).

I completely disagree with the claim Bitcoin isn't competing with Visa and Mastercard.  Why did Bitcoin rally after Elon Musk said Bitcoin could be used to buy Teslas?  Consider which Businesses would advertise they accept Bitcoin ... those same businesses advertise they accept Visa and Mastercard.  They are competitors for how people pay for goods and services.

Bitcoin didn't rally because people were suddenly (maybe) going to buy Teslas with bitcoin some day. It rallied because one of the largest auto manufacturers, an S&P500 company, just revealed that they had purchased $1.5 billion worth of bitcoin for their cash reserves. That's a pretty large validation for the market as a store of value.

Your chart had nothing to do with your point.  You talked about unbanked countries, and then linked to a chart where half the countries were the largest economies in the world.

When are you going to reveal the data you used to decide what bubble I live in?

The only reason why the chart included countries like Japan, US, Germany, etc was to show a comparison between those and the other countries where bitcoin usage is sky-rocketing. It's almost like you didn't even read the article that went along with the chart...

It's not even worth arguing with you if you're 1) going to put words in my mouth and 2) not read the articles I linked to and make faulty arguments based on your misinterpretation of a chart within said article.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 20, 2021, 08:56:59 PM
Here's what you said:

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.
As far as your "top is in" point, it seems like you're basing your point on "feeling alone". Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.
Here's our paragraphs:  I said `probably also reaching "the top is in"`, and you said "If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here".

Why would you say Bitcoin must follow the same path when it crashes?
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 21, 2021, 01:09:13 AM
I think I'll summarize my views, so both lifeanon269 and I can move on.

Bitcoin is a virtual currency that can be sent from one account to another.  And I claim nobody sends something of value for nothing - I claim it is used to buy goods and services.  That is the same role credit cards play in peoples lives, so Bitcoin competes with credit cards.

In 2017 I watched the market cap of Bitcoin pass the market cap of one of the credit card companies.  That, combined with a 20x increase in price, looked like a bubble had inflated and was ready to pop.  Bitcoin did go through a correction, which happens every few years.

To me, 2021 looks similar.  History doesn't repeat, but it rhymes.  Bitcoin started 2020 at $7200, and is now $56,300 - an increase of 8x.  This time, Bitcoin is more valuable than Visa and Mastercard combined.  If it hits $60,000 you can add PayPal to that list.  Bitcoin is worse than those other companies for buying goods and services.

Last year it become unclear if Bitcoin can diversify a stock and bond portfolio.  Bitcoin peaked before Covid on Feb 13 ($10.4k), a week before the stock market on Feb 20 ($172.43/sh VTI).  It hit a low in mid-day trading Friday, March 13 ($4.1k) about 10 days before the market did on March 23 ($109.49/sh VTI).  You could lose -61% with Bitcoin or -37% in the stock market a week apart.  Bitcoin did not diversify against the crash in March 2020.

Multiple people cite an S&P 500 company endorsing Bitcoin - both times failing to mention the CEO was Elon Musk.  The same Elon Musk who lied about a takeover bid of Tesla, and the SEC got involved.  The same CEO who demanded his workers ignore government restrictions and go to work during a pandemic (the U.S. has had 500k deaths from Covid-19).  The same CEO who tweeted support for retail investors to buy Gamestop, which has lost 90% of it's value since that tweet.  I think we need to separate Elon Musk's business resume (Tesla, SpaceX, ...) from his behavior and antics.  His support of Bitcoin isn't part of his business resume.  When someone mentions "an S&P 500 company supports Bitcoin", keep in mind who they've left out of that comment.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on February 21, 2021, 02:42:47 AM
It doesn't make a good unit of account yet because of its volatility, but there is no long term stability without short term volatility.

Citation needed. How does stability later require volatility now? If you're looking at two assets, one that's pretty stable now and one that's pretty volatile, which one would you expect to be more likely to be stable next year or ten years from now? I wouldn't intuitively guess that it's the currently-volatile one, but I'm happy to see some studies showing otherwise.

Quote
However, what it lacks in being a unit of account, it makes up for as a global medium of exchange with no borders, a store of value that cannot be deluted, every unit as fungible as the last, extremely divisible, uniform, portable, growingly acceptable, and infinitely durable.

That's an interesting opinion, but I don't agree that the benefits you lay out exceed the drawback of being unusable for accounting. If it's too volatile to use it as a unit of account, you won't want to hold it for long if you're using it as money (if you're using as an investment it's a different story). You'll buy exactly what you need immediately before you send it to your trading partner, who will in turn want to sell it as soon as they can. Incidentally, for such transactions where the Bitcoin is only used as an intermediary, the BTC to fiat exchange rate is essentially irrelevant. It makes no difference to these people whether their $1,000 briefly turned into 0.02 BTC or 0.000002 BTC or 2,000 BTC before it turned back into €825 on the other side. What matters is the transaction fee, the speed of converting between the two fiat currencies involved, and the volatility risk inherent in the intervening time.

Once you're converting from fiat to Bitcoin to a different fiat again as quickly as possible, why use Bitcoin at all? Why not convert directly from Currency X to Currency Y without using Currency BTC in between? The answer, of course, is that such services invite government regulation on both sides. The main benefit of the decentralized network is that it's beyond the direct control of governments and is therefore useful to facilitate transactions that local governments might not permit. We've already agreed that the decentralization comes with costs that tend to make centralized services cheaper in cases where they can be used. But if the main use of Bitcoin in your country is to make transactions your government doesn't like, and they know it, why would they permit you to exchange it to local currency at all? This is not merely idle speculation. Many countries prohibit the operation of crypto-to-fiat trading exchanges to various degrees. Maybe nobody's stopping you from receiving a payment in BTC, but then what? You're probably going to need to hold that BTC for a while until you can find some way to spend it. That's where the volatility is killer.

Quote
What can't be accomplished today under the current fiat system? Global payments.

Every time I've used a Visa card to purchase an item from a foreign merchant (who received payment in their local currency) would seem to disprove this, as would every time I've used my US ATM card when traveling to get cash in the foreign country. The transaction fees I pay to do so have been less than the current fee to record a transaction on Bitcoin's blockchain. These networks do have to comply with government regulations on both sides so I can't exactly use my credit card to pay someone in Cuba. That just gets us back to the problem that if your main selling point is the ability to do illicit transactions with impunity, and your decentralized network is too expensive to use for mundane transactions, you're going to need to convert from one currency to the other at some point, and your government might not want to make that easy for you to do.

Quote
I'm not sure what you mean by "can't have it both ways". It is good for payments, it just has some developments and acceptance to go before it's fully there.

On the one hand you say that it's wrong to criticize Bitcoin for its lack of acceptance among general merchants, because that's just not what it's for and people who make this criticism just don't understand. On the other hand you say that it actually will be useful for this purpose in the future and we need to be patient. Which is it? Does the value of Bitcoin depend on its utility for mundane payments (either now or in the future), or doesn't it?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 21, 2021, 08:18:39 AM

Citation needed. How does stability later require volatility now?

Read Nassim Nicholas Taleb's acclaimed book Antifragile. It is an excerpt from that book.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 21, 2021, 08:35:59 AM
Here's what you said:

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one yearThose are similar conditions I saw right before another crash in Bitcoin's value price.
As far as your "top is in" point, it seems like you're basing your point on "feeling alone". Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.
Here's our paragraphs:  I said `probably also reaching "the top is in"`, and you said "If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here".

Why would you say Bitcoin must follow the same path when it crashes?

It's like you didn't even read what you quoted. So I bolded it for you. You're using past analysis to claim the top was in. So I figured, "OK, I'll play you're stupid game" and show you that even if you were to play that game, that type of analysis would show that the top is not in, like you claimed. It's pointless arguing with someone who can't even make sense of what they themselves have written.
Title: Re: Bitcoin is funny money
Post by: JetBlast on February 21, 2021, 10:40:01 AM

Citation needed. How does stability later require volatility now?

Read Nassim Nicholas Taleb's acclaimed book Antifragile. It is an excerpt from that book.

Care to paraphrase for those of us that don't have a copy handy? 
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 22, 2021, 07:48:11 PM
Here's what you said:

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one yearThose are similar conditions I saw right before another crash in Bitcoin's value price.
As far as your "top is in" point, it seems like you're basing your point on "feeling alone". Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.
Here's our paragraphs:  I said `probably also reaching "the top is in"`, and you said "If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here".

Why would you say Bitcoin must follow the same path when it crashes?

It's like you didn't even read what you quoted. So I bolded it for you. You're using past analysis to claim the top was in. So I figured, "OK, I'll play you're stupid game" and show you that even if you were to play that game, that type of analysis would show that the top is not in, like you claimed. It's pointless arguing with someone who can't even make sense of what they themselves have written.
Notice how you don't answer a simple, direct question about "the same path".
Following "the same path" is not analysis, it's a claim that crashes follow identical paths.  You are wrong to say crashes follow identical paths, and wrong to claim that's analysis.  You are inventing your own game: crashes do not follow "the same path" to quote you again, while you refuse to explain why "the same path" is followed by a crash, ever.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 23, 2021, 05:46:12 AM
Notice how you don't answer a simple, direct question about "the same path".
Following "the same path" is not analysis, it's a claim that crashes follow identical paths.  You are wrong to say crashes follow identical paths, and wrong to claim that's analysis.  You are inventing your own game: crashes do not follow "the same path" to quote you again, while you refuse to explain why "the same path" is followed by a crash, ever.

My lord, even when I bold it for you, you still can't understand it. I never made that claim. You did:

Quote
"This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price."

You were using past behavior to make claims about what it is going to do in the future. Which, as I responded is a stupid analysis. And now you're trying to make it out like I was the one making the claim. UNREAL. GTFO. I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.

Once I show you how stupid your narrative was, don't try and push it around and play it off like it was me making that claim while ignoring that even my original statement said it was flawed:

Quote
Even just going on past behavior (which obviously is a flawed approach but that you brought up)

I told myself I wasn't going to respond, but you just keep digging the hole for yourself deeper. Enjoy the last word.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 23, 2021, 09:15:45 AM
Notice how you don't answer a simple, direct question about "the same path".
Following "the same path" is not analysis, it's a claim that crashes follow identical paths.  You are wrong to say crashes follow identical paths, and wrong to claim that's analysis.  You are inventing your own game: crashes do not follow "the same path" to quote you again, while you refuse to explain why "the same path" is followed by a crash, ever.
Try saying "you were wrong to claim crashes follow the path of previous crashes".  Try it... see if you ever admit being wrong.  The reason I have to focus on something you said that is so clearly wrong, is that you never admit being wrong in this discussion.

The 2008 crisis didn't follow a previous path.  Nor the dot-com crash.  The 2017 bitcoin crash did not follow the path of the 2013 crash.  Lots of examples, showing you are wrong to suggest crashes follow the same path.

Each reply, you refuse to say "the same path", which I've quoted over and over.  Crashes do not follow "the same path".  But you can't admit you were wrong on even the smallest point, so you argue other areas, and refuse to address it.

You were wrong to say a crash in Bitcoin has to follow "the same path".
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 23, 2021, 02:53:27 PM
You can have the last word as soon as you stop putting words in my mouth. As a moderator of these forums, such actions should be beneath you.

As you originally stated here in your very first comment, you said:
It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.

Take this sentence that you first made (as quoted above):

Quote
This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.

Is this not using past behavior to attempt to predict future outcomes? Are you not claiming here that future crashes should follow a past crash? Can we not agree that using past behavior to predict future outcomes is a faulty method of prediction as I stated in my direct reply, not once, but twice (bolded below):

As far as your "top is in" point, it seems like you're basing your point on "feeling alone". Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.

So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017). That was the only point I was making. Never once did I ever claim that crashes must follow the same path as previous crashes. Not once did I ever make that claim and the fact you won't quote me where I personally made that claim is extremely telling. Put simply, you are putting words in my mouth and saying I made claims that I never made. In fact, as I just showed above, I made the exact opposite claim by saying that using past behavior to predict future outcomes is a flawed approach.

As for me admitting I am wrong, there is no need for me to admit I am wrong about a claim that I never made. But there are plenty of times that I have admitted being wrong both in this thread and many others in this forum.

I stand corrected

I don't mind being wrong. I don't mind other people having the last word in any given debate. But I'm not going to let someone make false claims about something I said, even if that person is a moderator. Maybe english is a second language for you, so I will give you the benefit of the doubt. I certainly don't know any second language myself, so I fully understand the language barrier if that's coming in play here. But if it is you just plainly ignoring what is visibly written in this chat in clear-as-day English with as much chronologically correct breakdown and quotations being used as possible by myself to help you comprehend what was stated, then I don't know what else I can do. If you do understand what was stated and yet are simply trying to put words in my mouth, then shame on you.

Feel free to have the last word, but if you're going to say that I claimed things I never claimed, then I will correct you on that.
Title: Re: Bitcoin is funny money
Post by: effigy98 on February 23, 2021, 04:24:57 PM
Square invests 5% of balance sheet today in FUNNY MONEY. Stupid companies!
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 23, 2021, 10:39:30 PM
You can have the last word as soon as you stop putting words in my mouth. As a moderator of these forums, such actions should be beneath you.
You can complain to the site moderators if you think my posts as moderator are a problem for me doing my job.

If I quoted you with something you didn't say, show me where I did that.  Show me where I put words in your mouth.


As you originally stated here in your very first comment, you said:
This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.
Is this not using past behavior to attempt to predict future outcomes? Are you not claiming here that future crashes should follow a past crash? Can we not agree that using past behavior to predict future outcomes is a faulty method of prediction as I stated in my direct reply, not once, but twice (bolded below):
I am literally not claiming "future crashes should follow a past path", but am instead claiming "similar conditions" can create a higher probability.


If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here.
This is an exact quote, not words I put in your mouth.  I disagree that future crashes must either "follows 2013's path" or "follows 2017's path".  When I mention "similar conditions", you compare to exact paths from prior crashes.  You cannot refute "similar conditions" by claiming crashes must either "follows 2013's path" or "follows 2017's path".


So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017).
When you start a sentence with "Your analysis" and then quotes, that's putting words in my mouth.  I never said the quoted section that begins with "5x ...".

And again, I said "similar conditions", not "follow the same path" as you claimed above.  I have repeatedly criticized your claim that crashes must either "follows 2013's path" or "follows 2017's path", because I believe crashes do not follow the same exact path.


There is a saying that history doesn't repeat, but it rhymes.  So I can look at "similar conditions" to see if current events rhyme with past events.  You are claiming the only use of historical data is an exact match, that future crashes must "follows 2013's path" or "follows 2017's path".  History doesn't repeat - but again, that does not exclude the possibility that it has similar conditions, that it rhymes.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 24, 2021, 06:16:57 AM
If I quoted you with something you didn't say, show me where I did that.  Show me where I put words in your mouth.

I will show you where you continue to repeatedly do so by using partial quotes around my words and then repeatedly filling in the rest with your words instead of mine.

I am literally not claiming "future crashes should follow a past path", but am instead claiming "similar conditions" can create a higher probability.

You provided only one example of a condition you consider similar (a 5x move). A condition I refuted with 2 examples that directly counter your claim.

If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here.
This is an exact quote, not words I put in your mouth.  I disagree that future crashes must either "follows 2013's path" or "follows 2017's path".  When I mention "similar conditions", you compare to exact paths from prior crashes.  You cannot refute "similar conditions" by claiming crashes must either "follows 2013's path" or "follows 2017's path".

This is the crux of the problem right here. And I believe it is a reading comprehension problem of yours. You're making a claim that I said bitcoin "must" follow a certain path, and yet what you just quoted me as saying doesn't have the word "must" in there anywhere. This is where you are putting words in my mouth. You are partially quoting me using your own quotes around my words and then filling in the rest with your own words that I did not say. In fact, as you can see, I used the word "if" there.

if - conjunction
\ ˈif , əf \
Definition of if:
a: in the event that
b: allowing that
c: on condition that


I am simply providing two examples that directly refute your claim that a 5x move is a condition that signals a crash is imminent. That was your original statement. You only provided the one condition as an example of your "similar conditions". So I simply provided two examples that disprove your claim. I NEVER said that it "must" follow those paths as you repeatedly claim I said and you repeatedly fail to quote me as saying.

You have yet to provide a single example of where a 5x move is a condition right before another crash you saw and I had provided 2 examples that counter that claim (as I showed, both 2013 and 2017 prices moved beyond a mere 5x move). Furthermore, as I quoted myself repeatedly saying numerous times in my original response, using past price behavior to predict future outcomes is a flawed method of analysis (and yet you continue to say I am claiming otherwise). The only condition you provided in your analysis was a 5x price move and simply using price as an indicator is flawed approach. If you'd like to elaborate on additional conditions you feel are prevalent that would signal a crash, then have at it. But so far you have not done so, and so therefore here in this thread you're simply using past price moves to predict future ones. A claim you repeatedly said I made, and yet here you are the one making such a claim without any additional evidence to back it up...

I am sorry if you got called out on your bullshit, but that isn't my problem and you can't put words in my mouth ("must") to make it my problem. Yet you keep digging yourself a bigger hole here.

And again, I said "similar conditions", not "follow the same path" as you claimed above.  I have repeatedly criticized your claim that crashes must either "follows 2013's path" or "follows 2017's path", because I believe crashes do not follow the same exact path.

As I said above, the only condition that you provided in your post was a 5x price move and you directly referred to such condition in your post ("those conditions"). If there are other conditions in which you feel bitcoin's price is headed for a crash, then you have yet to provide them. I also provided two examples which show a 5x price move is not indicative of an imminent crash. Also, as I bolded in the above quote, you again are claiming that I said the price "must" follow a certain path and you have yet to quote me where I said that. I said "IF" it does, then that is how large of a move it would be from today's price. Thus, that directly refutes your claim that because bitcoin moved 5x to where it is now, then that indicates a crash is coming. But, again, I said numerous times, using past price behaviors alone is a faulty method. But so far that is the only condition you've provided in your analysis this entire time and, even then, you have yet to provide any examples yourself.

There is a saying that history doesn't repeat, but it rhymes.  So I can look at "similar conditions" to see if current events rhyme with past events.  You are claiming the only use of historical data is an exact match, that future crashes must "follows 2013's path" or "follows 2017's path".  History doesn't repeat - but again, that does not exclude the possibility that it has similar conditions, that it rhymes.

Again and for the last time, I never said that and you continue to fail to quote me where I said the bolded statement above. I never used the word "must" in my statements, I used the word "if". And the statement was only made to refute your claim that a 5x move is indicative of a crash. Never did I say that the "only use of historical data is an exact match". So now you're doubling down on claiming I said things I never said. At this point, it is a failure of reading comprehension on your part and I'll chalk it up to that as I don't care to argue about something you fail to comprehend. Anyone reading this can easily understand the things that we've said. Words mean things and yet you continue to put a different word in my mouth ("must") that you repeatedly claim I said and yet doesn't appear in my original post at all. You can't just substitute in different words than what someone said that mean two completely different things (if and must). No where did I imply that the price must follow any given historical price trend. No where.

-----
TLDR:

You said bitcoin's current 5x move is indicative of a past condition you saw right before a crash. (but didn't provide any examples).

I said, OK I'll play that stupid game. So I simply said that if bitcoin were to follow either of these two past price moves, then it would be much larger than just a 5x move. So how can you possibly say that a 5x price move is a historical condition indicative of a crash? I provided two conditions on which that is not true and you have not provided any.

You then proceeded to claim that I am saying bitcoin must follow those same paths while failing to quote me as saying such.
-----

This is a failure of reading comprehension on your part and the fact that you continue to double down on it to claim I said things I never said is just sad.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 24, 2021, 06:56:08 AM
So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017).
When you start a sentence with "Your analysis" and then quotes, that's putting words in my mouth.  I never said the quoted section that begins with "5x ...".
You quoted something I did not say - you put words in my mouth, and haven't responded to this.


As I said above, the only condition that you provided in your post was a 5x price move and you directly referred to such condition in your post ("those conditions"). If there are other conditions in which you feel bitcoin's price is headed for a crash, then you have yet to provide them.
You are misquoting me again, here.  I did not post the part you put in quotes, so you are putting words in my mouth: quoted words that I never said.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 24, 2021, 07:06:40 AM
So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017).
When you start a sentence with "Your analysis" and then quotes, that's putting words in my mouth.  I never said the quoted section that begins with "5x ...".
You quoted something I did not say - you put words in my mouth, and haven't responded to this.


As I said above, the only condition that you provided in your post was a 5x price move and you directly referred to such condition in your post ("those conditions"). If there are other conditions in which you feel bitcoin's price is headed for a crash, then you have yet to provide them.
You are misquoting me again, here.  I did not post the part you put in quotes, so you are putting words in my mouth: quoted words that I never said.

@MustacheAndaHalf don’t bother. He’s doing this on purpose.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 24, 2021, 07:08:42 AM
I am simply providing two examples that directly refute your claim that a 5x move is a condition that signals a crash is imminent. That was your original statement. You only provided the one condition as an example of your "similar conditions". So I simply provided two examples that disprove your claim. I NEVER said that it "must" follow those paths as you repeatedly claim I said and you repeatedly fail to quote me as saying.

You have yet to provide a single example of where a 5x move is a condition right before another crash you saw and I had provided 2 examples that counter that claim (as I showed, both 2013 and 2017 prices moved beyond a mere 5x move). Furthermore, as I quoted myself repeatedly saying numerous times in my original response, using past price behavior to predict future outcomes is a flawed method of analysis (and yet you continue to say I am claiming otherwise).
Which is it?  Do your "2 examples" counter my claim because they are factual?  Or is "using past price behavior to predict future outcomes is a flawed method of analysis"?  You're trying to have it both ways.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 24, 2021, 07:10:03 AM
So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017).
When you start a sentence with "Your analysis" and then quotes, that's putting words in my mouth.  I never said the quoted section that begins with "5x ...".
You quoted something I did not say - you put words in my mouth, and haven't responded to this.

I apologize for the slight misquote. I rescind my quotes on that statement. It was not a direct quote you said and I should not have used quotes there. However, my statement still remains even without the quotes. The only condition you provided in your original statement was a price condition (a 5x move). Here is your entire statement directly quoted:

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.

As I said above, the only condition that you provided in your post was a 5x price move and you directly referred to such condition in your post ("those conditions"). If there are other conditions in which you feel bitcoin's price is headed for a crash, then you have yet to provide them.
You are misquoting me again, here.  I did not post the part you put in quotes, so you are putting words in my mouth: quoted words that I never said.

Again, I apologize for leaving out the words "are similar" in my quote to you. I've been rehashing the same thing over with you many times, so it was a quick reference I made and I shouldn't have used quotes there. My point still remains and is unchanged by this correction though. The actual statement was "those are similar conditions", which is still a reference to "those [...] conditions" that you mentioned in your previous statement: "This past year, Bitcoin ran up 5x in one year." (see below):

This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.

The fact that you didn't address anything that I said in my post and instead questioned those two things that don't in any way change the argument I was making is completely telling of the leg you have to stand on here. You have not responded to any of the things I addressed in my post.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 24, 2021, 07:14:15 AM
I am simply providing two examples that directly refute your claim that a 5x move is a condition that signals a crash is imminent. That was your original statement. You only provided the one condition as an example of your "similar conditions". So I simply provided two examples that disprove your claim. I NEVER said that it "must" follow those paths as you repeatedly claim I said and you repeatedly fail to quote me as saying.

You have yet to provide a single example of where a 5x move is a condition right before another crash you saw and I had provided 2 examples that counter that claim (as I showed, both 2013 and 2017 prices moved beyond a mere 5x move). Furthermore, as I quoted myself repeatedly saying numerous times in my original response, using past price behavior to predict future outcomes is a flawed method of analysis (and yet you continue to say I am claiming otherwise).
Which is it?  Do your "2 examples" counter my claim because they are factual?  Or is "using past price behavior to predict future outcomes is a flawed method of analysis"?  You're trying to have it both ways.

I am not having it both ways. YOU brought up past price behavior by referencing a past 5x price move!!!!!!!! hahahahahaha. Did you not read the TLDR summary I posted? You were the first one to bring up past price behaviors by referencing (a still yet uncited) 5x move that preceded a crash. I was merely bringing up two past moves that were counter to your claim. I'm not having it both ways, you are and it is hilarious how much you're in denial now.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 24, 2021, 07:36:12 AM
Here is MustacheAndaHalf's line of thinking:

This past year, gold went up 2% in one year. Those are similar conditions I saw right before another crash in gold's price.

Me:

Wait, first off, we shouldn't be using past price behaviors to predict future outcomes, such analysis is faulty. But even if you were to do that, gold has gone up much more than just 2% in the past (see examples I have provided), so I don't think you can make the claim you are making here.

MustacheAndaHalf:

How dare you claim that gold's price "must" move based on past price paths!! You can't have it both ways!! You can't counter my claim with facts while at the same time claiming that my analysis on price behavior is faulty!!!



....WTF world are you living in that the above makes any sense to you....hahahahaha!!
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 24, 2021, 09:48:54 AM
So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017).
When you start a sentence with "Your analysis" and then quotes, that's putting words in my mouth.  I never said the quoted section that begins with "5x ...".
You quoted something I did not say - you put words in my mouth, and haven't responded to this.

I apologize for the slight misquote. I rescind my quotes on that statement. It was not a direct quote you said and I should not have used quotes there.
I needed to narrow the focus to get any admission like this from you.  Since it's hard to get an admission of wrongdoing from you, I'm only putting forth the clearest cases. 

Unfortunately, your very next post seems to make that apology ring hollow, as you immediately put words in my mouth after apologizing for doing so.

Here is MustacheAndaHalf's line of thinking:

This past year, gold went up 2% in one year. Those are similar conditions I saw right before another crash in gold's price.
...
MustacheAndaHalf:

How dare you claim that gold's price "must" move based on past price paths!! You can't have it both ways!! You can't counter my claim with facts while at the same time claiming that my analysis on price behavior is faulty!!!
You complain about others putting words in your mouth, then apologize when I show clear examples of you doing it.  And immediately after, you're doing it again.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 24, 2021, 10:22:31 AM
So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017).
When you start a sentence with "Your analysis" and then quotes, that's putting words in my mouth.  I never said the quoted section that begins with "5x ...".
You quoted something I did not say - you put words in my mouth, and haven't responded to this.

I apologize for the slight misquote. I rescind my quotes on that statement. It was not a direct quote you said and I should not have used quotes there.
I needed to narrow the focus to get any admission like this from you.  Since it's hard to get an admission of wrongdoing from you, I'm only putting forth the clearest cases. 

Unfortunately, your very next post seems to make that apology ring hollow, as you immediately put words in my mouth after apologizing for doing so.

Here is MustacheAndaHalf's line of thinking:

This past year, gold went up 2% in one year. Those are similar conditions I saw right before another crash in gold's price.
...
MustacheAndaHalf:

How dare you claim that gold's price "must" move based on past price paths!! You can't have it both ways!! You can't counter my claim with facts while at the same time claiming that my analysis on price behavior is faulty!!!
You complain about others putting words in your mouth, then apologize when I show clear examples of you doing it.  And immediately after, you're doing it again.

I am not putting words in your mouth. I didn't "quote" you there for saying those things literally (the only word I quoted was "must" as that was a repeated false claim you made about my statements). I am explaining the situation here and why the statement about bitcoin you made is incorrect. You continue to ignore this and have yet to address it. You have also yet to apologize for misquoting me several times as I have apologized to you. If my analogy about gold (that's what it is, an analogy) is incorrect in anyway, then feel free to explain yourself. Because you have yet to do so. I tried to make the analogy as concise as possible using gold as a particular subject substitute. In fact, the first statement is word-for-word, minus the substitution of "gold".

You claim that it is difficult to admit any wrongdoing from me (even though I've done so several times in this very thread), and yet you have not addressed or admitted to a single one of your faults and have now moved on completely as they've been disregarded.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 24, 2021, 10:54:46 AM
Here is MustacheAndaHalf's line of thinking:

This past year, gold went up 2% in one year. Those are similar conditions I saw right before another crash in gold's price.

Me:

Wait, first off, we shouldn't be using past price behaviors to predict future outcomes, such analysis is faulty. But even if you were to do that, gold has gone up much more than just 2% in the past (see examples I have provided), so I don't think you can make the claim you are making here.

MustacheAndaHalf:

How dare you claim that gold's price "must" move based on past price paths!! You can't have it both ways!! You can't counter my claim with facts while at the same time claiming that my analysis on price behavior is faulty!!!



....WTF world are you living in that the above makes any sense to you....hahahahaha!!

I stand by my recollection of this very conversation, which is why I don't need to apologize for it. If rather than arguing semantics or demanding apologies, you'd like to address anything that you feel you recollect differently, then feel free. But given your original statement below, I am not sure where you can pivot your argument to differently than how I've described in my above analogy:

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.

And you've yet to provide examples as I have with both 2013 and 2017 which counter your point completely about a 5x move being indicative of anything one way or the other. When making a claim about "those are similar conditions", the only conditions you provided in that paragraph are conditions about price (and you fail to provide any specific evidence). Do you not agree with that claim that the only condition you provided was on price? It is pretty clear as day in plain English. This is why I stand by my analogy.

You've also not rescinded your false claim you made claiming I said that past crashes "must" follow 2013 or 2017's path. Again, I never said that. And yet you continue to ignore it...
Title: Re: Bitcoin is funny money
Post by: effigy98 on February 24, 2021, 06:47:19 PM
MicroStrategy now has 4.5 billion funny monies.
Dubai’s IBC Group has committed to over 4.8 billion funny monies.
Bank of New York "buffet stock" Melon has committed to handle custody and trading of funny money
Blackrock is dabbling in funny money
Yellen says funny money is slow and unreliable... feds computer systems go down today and banking system cannot move money around.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 24, 2021, 07:16:14 PM
Yellen says funny money is slow and unreliable... feds computer systems go down today and banking system cannot move money around.

I got a chuckle out of this one today. Literally all of the Fed's services were down today. Account services, central bank, Check21, check adjustments, FedACH, FedCash, FedWire, National Settlement...meanwhile bitcoin is still chugging away producing blocks...
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 25, 2021, 08:56:06 AM
Here you claim that even though I'm not using quote marks, that "put words in my mouth".

Your chart had nothing to do with your point.  You talked about unbanked countries, and then linked to a chart where half the countries were the largest economies in the world.

When are you going to reveal the data you used to decide what bubble I live in?
It's not even worth arguing with you if you're 1) going to put words in my mouth and 2) not read the articles I linked to and make faulty arguments based on your misinterpretation of a chart within said article.


And here, you claim without quotes, it's not putting words in your mouth:

You complain about others putting words in your mouth, then apologize when I show clear examples of you doing it.  And immediately after, you're doing it again.
I am not putting words in your mouth. I didn't "quote" you there for saying those things literally (the only word I quoted was "must" as that was a repeated false claim you made about my statements)

First you claim I'm putting words in your mouth, when I don't use quotes.  Then you claim you're not putting words in my mouth, because you didn't use quotes.  Again, you're trying to have it both ways.
Title: Re: Bitcoin is funny money
Post by: DaKini on February 25, 2021, 09:03:43 AM
We germans have a funny word for the discussion, which also went into englisch: Kindergarden

Back to topic:
MicroStrategy now has 4.5 billion funny monies.
Dubai’s IBC Group has committed to over 4.8 billion funny monies.
Bank of New York "buffet stock" Melon has committed to handle custody and trading of funny money
Blackrock is dabbling in funny money
Yellen says funny money is slow and unreliable... feds computer systems go down today and banking system cannot move money around.
I really have no idea where this is all headed towards. I tought that BTC was already at insane heighs when it was 350, at which point i really had sold if i had bought at 5 or so, when i first heard of it.
There is really alot of FOMO in the marked, and even people which have no clue in investing are talking bitcoins; which suggests to me "the end is near".
There were early Pump&Dump schemes and alot of robbery with BTC which was one of the main reasons i stayed out (and wrote that into my IPS).
We have regulated exchanges here (Börse Stuttgart) where you can go into BTC. But isn't it too late alreay?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 25, 2021, 11:25:40 AM
Here you claim that even though I'm not using quote marks, that "put words in my mouth".

Your chart had nothing to do with your point.  You talked about unbanked countries, and then linked to a chart where half the countries were the largest economies in the world.

When are you going to reveal the data you used to decide what bubble I live in?
It's not even worth arguing with you if you're 1) going to put words in my mouth and 2) not read the articles I linked to and make faulty arguments based on your misinterpretation of a chart within said article.


And here, you claim without quotes, it's not putting words in your mouth:

You complain about others putting words in your mouth, then apologize when I show clear examples of you doing it.  And immediately after, you're doing it again.
I am not putting words in your mouth. I didn't "quote" you there for saying those things literally (the only word I quoted was "must" as that was a repeated false claim you made about my statements)

First you claim I'm putting words in your mouth, when I don't use quotes.  Then you claim you're not putting words in my mouth, because you didn't use quotes.  Again, you're trying to have it both ways.

You were the one that cared about the literalness/semantics about the usage of quotes (""). I never complained about where quotation marks were and weren't used by you. I only at times demanded you quote my posts when I felt that you were making false claims about what I actually said. I cared more about the actual meaning and substance of the statements you were accusing me of making. You said I claimed that past crashes must follow the same path (again, I never said that). I apologize if my use of quotation marks are not always 100% accurate, that's why I usually tend to lean toward quoting the posts themselves more to avoid that mistake. In the future I will avoid using quotation marks all together and simply quote posts instead. However, I am very good about making sure the content I am posting about is accurate and that is what truly matters here. If rather than arguing semantics, you actually care to have a debate on meaning, then I'm all for it.

Here is MustacheAndaHalf's line of thinking:

This past year, gold went up 2% in one year. Those are similar conditions I saw right before another crash in gold's price.

Me:

Wait, first off, we shouldn't be using past price behaviors to predict future outcomes, such analysis is faulty. But even if you were to do that, gold has gone up much more than just 2% in the past (see examples I have provided), so I don't think you can make the claim you are making here.

MustacheAndaHalf:

How dare you claim that gold's price "must" move based on past price paths!! You can't have it both ways!! You can't counter my claim with facts while at the same time claiming that my analysis on price behavior is faulty!!!

I stand by my above recollection of our conversation based on the below posts:

It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.
As far as your "top is in" point, it seems like you're basing your point on "feeling alone". Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.
I'm not sure why you put "feeling alone" in quotes.  You're not quoting me, and I provided reasons and data for my views.  Are you going to claim the market caps of Visa and Mastercard are feelings?  I compared them to Bitcoin, which is less useful than either credit card.

What is your source for the assumption all crashes must follow a previous "path"?

That is even disproven by your own example: the 2013 crash was deeper than the 2017 crash.  Put another way, the 2017 crash did not follow "2013's path".

I'm not sure why you put "feeling alone" in quotes.  You're not quoting me, and I provided reasons and data for my views.  Are you going to claim the market caps of Visa and Mastercard are feelings?  I compared them to Bitcoin, which is less useful than either credit card.

What is your source for the assumption all crashes must follow a previous "path"?

That is even disproven by your own example: the 2013 crash was deeper than the 2017 crash.  Put another way, the 2017 crash did not follow "2013's path".

Your only data point was in regards to a comparison between the market caps of MasterCard and VISA versus bitcoin, which is an odd comparison considering bitcoin doesn't compete with either of those. Other than that singular data point you presented, the only other evidence for "the top is in" is using past performance in past bubbles to falsely claim such (because if you did compare it to past bubbles then by that measure the top is NOT in).
You're claiming crashes are predictable and must follow "past bubbles"?  You've said this in your earlier post, as well, saying the crash has to follow the "path" of the prior crash.  I pointed out you were wrong with your own data - that 2017 did not follow the "path" of 2013.  So the data you used, shows you're incorrect.  Yet you're still making exact comparisons, saying until we reach the 20x multiple of 2017, Bitcoin can't crash.


If you feel that somehow that doesn't match up (with or without quotation marks), then feel free to make some corrections and discuss. You continue to ignore my posts and instead choose to argue semantics rather than the actual conversation being had simply because you got called out on your BS assessment.

Since you seem to be avoiding the substance of the debate, to get past this, let's answer some questions:

Do you agree that your assessment that you posted at February 19, 2021, 09:22:25 AM was simply based on bitcoin's current price based on its historical price and that you didn't refer to any other condition outside of that paragraph? There was nothing else in that paragraph that was anything other than a condition on bitcoin's price history. Do you agree that using price history on its own is a faulty metric for future price predictions? Do you agree that bitcoin's moves in the past in both 2013 and 2017 were much larger moves than just a 5x move?

Do you agree that I never claimed that crashes must follow the same path as past price crashes?

If you can't agree to answer those questions, then I'm not sure you're posting in good faith when you continue to ignore my posts and instead choose to argue semantics. It is a waste of both our time, frankly. If you would like to raise some questions you'd like clarified by myself as well just so we can move on, I'd be glad to do so. But having you ignore my posts and respond with meaningless semantic and frivolous accusations that don't have anything to do with the actual debate we were having is pointless. If you can't answer those questions, then I'm done responding to you.
Title: Re: Bitcoin is funny money
Post by: DaKini on February 25, 2021, 12:33:17 PM
You two might also discuss this privately via forums message.

In my opinion it would be very interesting to continue the previous discussion about Bitcoin.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on February 25, 2021, 12:48:07 PM
You two might also discuss this privately via forums message.

In my opinion it would be very interesting to continue the previous discussion about Bitcoin.

I visited Germany about 15 years ago. My impression was "wow, these people are all so nice and civilized!"
You have proven yourself @DaKini
Now what the hell are you doing on the internet? :))
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 25, 2021, 01:43:09 PM
You two might also discuss this privately via forums message.

In my opinion it would be very interesting to continue the previous discussion about Bitcoin.

That was my intention of my previous post. To steer the discussion back to bitcoin.

I don't really care to discuss things privately with individuals, as people are usually pretty cemented in their ideology one way or the other, so there is no convincing to be had. If you're not going to convince someone, then the debate is pointless unless there is a wider audience than just that one person. As I've said before in this thread:

My posts aren't here to convince you really, but as I said more to help those who do wish to learn something new that are reading this thread to hopefully spur some curiosity and help them on their path to learning

I've written about bitcoin quite a lot in this thread and others and my goal isn't to convince anyone to buy bitcoin, but more just to help people understand better what it is and what it isn't. The person I'm debating with is rarely the one I'm aimed at convincing. It is more to help dispel myths or misinformation so that as others are reading, they can maybe pick up new information they didn't know before and be better armed for when they see that misinformation again. If there is misinformation posted, then that doesn't do anyone any bit of good.

If you are someone who is interested in what I wrote and learning more, then these two posts are good starting points:

...


...
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 25, 2021, 09:29:39 PM
You two might also discuss this privately via forums message.

In my opinion it would be very interesting to continue the previous discussion about Bitcoin.

Bitcoin is funny money.

Title: Re: Bitcoin is funny money
Post by: lutorm on February 26, 2021, 12:52:03 AM
Man wouldn't it have been hilarious if I'd kept the bitcoins I mined when I played with it for a few weeks back in 2010 -- it would have been like 10% of my NW.

I agree with what others are saying that as a means of exchange, that's a failure. A deflationary currency doesn't work, why should I spend anything if I can wait and buy it tomorrow for less?

What we're seeing is speculation, which can happen with anything. Doesn't mean it has any inherent value. Might just as well be baseball cards.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 26, 2021, 02:55:17 AM
I am not putting words in your mouth. I didn't "quote" you there for saying those things literally (the only word I quoted was "must" as that was a repeated false claim you made about my statements)
Here you care about quotes...

You were the one that cared about the literalness/semantics about the usage of quotes (""). I never complained about where quotation marks were and weren't used by you.
... here you claim the quotes don't matter.

It's difficult to debate someone who keeps moving the goalposts.  You assume what I would think on a topic I didn't bring up (gold), which is putting words in my mouth.  Then you claim it's not, because you didn't use quotes.  And then you claim not using quotes doesn't matter.

I assume you're doing this to avoid admitting when you're wrong.  That's why my posts are so focused on inconsistent comments you've made.  Can you avoid making inconsistent comments?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 26, 2021, 06:04:22 AM
I am not putting words in your mouth. I didn't "quote" you there for saying those things literally (the only word I quoted was "must" as that was a repeated false claim you made about my statements)
Here you care about quotes...

That's not me caring about quotes. That was in response to you here (see quoted post below). Maybe you should take things in context rather than partial posting what I've said out of context. Even though it doesn't change the crux of the argument I was making, you were arguing here about the slight misuse of quotation marks, which I apologized for and avoided in the future. I quoted you as saying "those conditions" when instead you said "those are similar conditions"...like seriously dude, come on. If that's your argument response and while ignoring that actual argument being had, that's pretty sad. Derp:

So in review, you claimed that future market behaviors should follow the same path as past behaviors. So my rebuttal was that (as seen above), such methods of predictions are faulty, but even if you were to use such methods of predictions as you had first chosen to do, you were still wrong in your own analysis. Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017).
When you start a sentence with "Your analysis" and then quotes, that's putting words in my mouth.  I never said the quoted section that begins with "5x ...".
You quoted something I did not say - you put words in my mouth, and haven't responded to this.


As I said above, the only condition that you provided in your post was a 5x price move and you directly referred to such condition in your post ("those conditions"). If there are other conditions in which you feel bitcoin's price is headed for a crash, then you have yet to provide them.
You are misquoting me again, here.  I did not post the part you put in quotes, so you are putting words in my mouth: quoted words that I never said.

And again you continue to ignore the actual debate and questions at hand while further derailing the actual thread. Great mod work.

It's difficult to debate someone who keeps moving the goalposts.  You assume what I would think on a topic I didn't bring up (gold), which is putting words in my mouth.  Then you claim it's not, because you didn't use quotes.  And then you claim not using quotes doesn't matter.

I assume you're doing this to avoid admitting when you're wrong.  That's why my posts are so focused on inconsistent comments you've made.  Can you avoid making inconsistent comments?

I'm not assuming what you think about gold. It was an analogy and has nothing to do with what you think about gold. Do you know what an analogy is? Admit I'm wrong about what now? That you continue to derail a thread, make false claims, misrepresent what I've said numerous times, and not once admit you're wrong about something that is actually on topic to the thread that you continue to avoid in all of your posts? Ya...OK...
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 26, 2021, 06:10:50 AM
A deflationary currency doesn't work, why should I spend anything if I can wait and buy it tomorrow for less?

Do you realize that almost all the technology goods we purchase today are deflationary goods and yet people still line up outside of stores day #1 to get the latest and greatest technology even though if they waited just a year or two they could get that same technology for half the price? That is quite the deflationary force and yet consumerism is a hell of a drug to override it. People still love to buy things and not to mention people still need food, clothing, shelter, etc that they would continue to purchase regardless. So I'd say that argument has been proven to not be true in reality. There are more forces in the economy that determine the price of goods other than just whether or not the currency is deflationary or inflationary.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on February 26, 2021, 07:14:23 AM
A deflationary currency doesn't work, why should I spend anything if I can wait and buy it tomorrow for less?

Do you realize that almost all the technology goods we purchase today are deflationary goods and yet people still line up outside of stores day #1 to get the latest and greatest technology even though if they waited just a year or two they could get that same technology for half the price? That is quite the deflationary force and yet consumerism is a hell of a drug to override it. People still love to buy things and not to mention people still need food, clothing, shelter, etc that they would continue to purchase regardless. So I'd say that argument has been proven to not be true in reality. There are more forces in the economy that determine the price of goods other than just whether or not the currency is deflationary or inflationary.

It doesn't really make sense to compare 'deflationary value' of a good with real utility that a person wants to use immediately (like electronics) with something that is without practical value (like bitcoin) that is held only as an 'investment'.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 26, 2021, 07:35:00 AM
A deflationary currency doesn't work, why should I spend anything if I can wait and buy it tomorrow for less?

Do you realize that almost all the technology goods we purchase today are deflationary goods and yet people still line up outside of stores day #1 to get the latest and greatest technology even though if they waited just a year or two they could get that same technology for half the price? That is quite the deflationary force and yet consumerism is a hell of a drug to override it. People still love to buy things and not to mention people still need food, clothing, shelter, etc that they would continue to purchase regardless. So I'd say that argument has been proven to not be true in reality. There are more forces in the economy that determine the price of goods other than just whether or not the currency is deflationary or inflationary.

It doesn't really make sense to compare 'deflationary value' of a good with real utility that a person wants to use immediately (like electronics) with something that is without practical value (like bitcoin) that is held only as an 'investment'.

I wasn't referring to bitcoin. The statement was about a deflationary currency in general.
Title: Re: Bitcoin is funny money
Post by: Telecaster on February 26, 2021, 08:51:23 AM
A deflationary currency doesn't work, why should I spend anything if I can wait and buy it tomorrow for less?

Do you realize that almost all the technology goods we purchase today are deflationary goods and yet people still line up outside of stores day #1 to get the latest and greatest technology even though if they waited just a year or two they could get that same technology for half the price? That is quite the deflationary force and yet consumerism is a hell of a drug to override it. People still love to buy things and not to mention people still need food, clothing, shelter, etc that they would continue to purchase regardless. So I'd say that argument has been proven to not be true in reality.  There are more forces in the economy that determine the price of goods other than just whether or not the currency is deflationary or inflationary.

The part in bold is a non-sequitur.    The very definition of inflation or deflation is if price of goods (and services) is rising or falling.  The primary measure of inflation is the Consumer Price Index, which the measure of prices of a basket of goods and services.  Of course, it is possible that prices in some sectors are going up while prices in another sector are going down at the same time.  But If prices overall are going up there is inflation.  If prices overall are going down there is deflation.  That's the definition.  The definition doesn't care why prices are going up or down, just if they are. 

@lutorm's comment was spot on.   We don't have to speculate how consumers behave in deflationary periods because we know from history what happens.  The Great Depression is a notable example.   Another problem with deflation besides reduction in consumer demand, is that companies have fixed expenses like mortgages and wages.  If the price for their product is going down, then they have to cut fixed expenses which usually means cutting labor.  Again, we do not have to speculate about this.  This is 100% what happens in a deflationary environment. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 26, 2021, 09:49:49 AM
A deflationary currency doesn't work, why should I spend anything if I can wait and buy it tomorrow for less?

Do you realize that almost all the technology goods we purchase today are deflationary goods and yet people still line up outside of stores day #1 to get the latest and greatest technology even though if they waited just a year or two they could get that same technology for half the price? That is quite the deflationary force and yet consumerism is a hell of a drug to override it. People still love to buy things and not to mention people still need food, clothing, shelter, etc that they would continue to purchase regardless. So I'd say that argument has been proven to not be true in reality.  There are more forces in the economy that determine the price of goods other than just whether or not the currency is deflationary or inflationary.

The part in bold is a non-sequitur.    The very definition of inflation or deflation is if price of goods (and services) is rising or falling.  The primary measure of inflation is the Consumer Price Index, which the measure of prices of a basket of goods and services.  Of course, it is possible that prices in some sectors are going up while prices in another sector are going down at the same time.  But If prices overall are going up there is inflation.  If prices overall are going down there is deflation.  That's the definition.  The definition doesn't care why prices are going up or down, just if they are. 

@lutorm's comment was spot on.   We don't have to speculate how consumers behave in deflationary periods because we know from history what happens.  The Great Depression is a notable example.   Another problem with deflation besides reduction in consumer demand, is that companies have fixed expenses like mortgages and wages.  If the price for their product is going down, then they have to cut fixed expenses which usually means cutting labor.  Again, we do not have to speculate about this.  This is 100% what happens in a deflationary environment.

The comment is not spot on though and my comment was not a non-sequiter. As you said, inflation/deflation is not a static nor global measure across the entire economy. Some goods rise in costs for various reasons and some goods lower in costs for various reasons. His comment about a deflationary currency not working because of consumer behavior is not an accurate statement nor does it have any precedent in history to fall back on since we've operated on deflationary currencies for almost our entire history throughout periods of both economic booms and busts. You're confusing periods of 'economic deflation' with a deflationary currency itself (which is what was being discussed here). A deflationary currency itself does not lead to a deflationary economy, because as I mentioned there are more forces in the economy than just whether or not the currency supply is being inflated or deflated. The price of goods depends on much more than just the supply of currency in the economy.

Also, a deflationary economy doesn't necessarily result in a bad or stagnant economy (see 19th century). Your reference to the great depression as an example of deflation, was not caused by the fact that a deflationary currency was used but that monetary policy with deflationary effects exacerbated. What started as an ordinary recession and market crash, turned into a great depression due to poor monetary policy shrinking the money supply and further debt deflation taking place. The is a great deal of consensus that the Fed should not have gone to such extremes with its shrinking of the money supply at the time. But don't mistake poor monetary policy with the fact that deflationary currencies do or don't work given that almost our entire historical precedent is that they do. Furthermore, we've had deflationary economic cycles while at the same time having an inflationary money supply (see Great Recession). Which again refutes your claim while further showing that the economy's status depends on much more than just the currency supply.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on February 26, 2021, 10:15:48 AM
To restate the interesting point.... A currency with built-in deflationary characteristics cannot work because it would always be to one's advantage to trade using an inflationary currency and to hoard the deflationary currency. To be more concrete, if I save 50% of my pay and spend the other 50% (in any currency), it would make sense to save in the deflationary currency and buy groceries, pay rent, and get my cavities filled using the inflationary currency. This is what literally everyone who holds crypto is doing now. They get paid in dollars, convert their savings to crypto, and cover expenses in dollars.

As a result, there is nothing offered for sale in the deflationary currency because there is no demand, and no transactions occur except exchanges with the inflationary currency. The deflationary currency becomes useless as a means of transaction and only functions as a store of value. Thus the deflationary currency fails to meet the definition of a currency and starts to meet the definition of a collectible.

Collectibles such as antiques, PMs, and art hold their value as long as other people maintain a willingness to pay. Generational factors can play a role here, and some things go in and out of favor. Will millennials collect antique cars from the 1960s-70s or antique metal toys from the early 20th century like boomers did? Will today's sneaker heads follow the path of the Benie Baby craze of the 1990s, or will unworn Air Jordans be a good 20 year investment? Good luck guessing. If one could only guess the value of gold one year from now, the options market would reward them with a 100% return. Crypto is an even more obscure collectible.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 26, 2021, 10:33:31 AM
To restate the interesting point.... A currency with built-in deflationary characteristics cannot work because it would always be to one's advantage to trade using an inflationary currency and to hoard the deflationary currency. To be more concrete, if I save 50% of my pay and spend the other 50% (in any currency), it would make sense to save in the deflationary currency and buy groceries, pay rent, and get my cavities filled using the inflationary currency. This is what literally everyone who holds crypto is doing now. They get paid in dollars, convert their savings to crypto, and cover expenses in dollars.

As a result, there is nothing offered for sale in the deflationary currency because there is no demand, and no transactions occur except exchanges with the inflationary currency. The deflationary currency becomes useless as a means of transaction and only functions as a store of value. Thus the deflationary currency fails to meet the definition of a currency and starts to meet the definition of a collectible.

Collectibles such as antiques, PMs, and art hold their value as long as other people maintain a willingness to pay. Generational factors can play a role here, and some things go in and out of favor. Will millennials collect antique cars from the 1960s-70s or antique metal toys from the early 20th century like boomers did? Will today's sneaker heads follow the path of the Benie Baby craze of the 1990s, or will unworn Air Jordans be a good 20 year investment? Good luck guessing. If one could only guess the value of gold one year from now, the options market would reward them with a 100% return. Crypto is an even more obscure collectible.

Again, the discussion was not about bitcoin and it seems like you're unable to unframe your mind from the perspective of bitcoin in this conversation. No one is talking about the characteristics of a future deflationary currency who's market cap is under a trillion dollars and thus still susceptible to large volatility. To further prove this point, bitcoin's price increases don't have anything to do with currency deflation because of the fact that it isn't actually deflationary at the moment:

https://charts.bitcoin.com/btc/chart/inflation#5ma4

It's price increase and volatility merely come from the fact that it has no supply elasticity and it's market size is peanuts compared with the overall economy. There is so much more money on the outside that can flow into bitcoin relative to its own market size, so of course you're going to have wild price swings. This has nothing to do with currency inflation/deflation though since, at the moment, bitcoin is not a deflationary currency (yet).

To state again, there is a difference between inflationary/deflationary currency supply (what was being discussed) and inflation/deflation in the price of goods. Currency competition for use as a medium of exchange has little to do with this conversation either. If I were being paid in a deflationary currency that I felt was going to increase in value in the future, why would I transfer out of that currency to an inflationary currency just temporarily simply to perform an everyday transaction? The choice I use for a medium of exchange has much more to do with friction and cost/ease of use than it does with currency competition and inflationary/deflationary supply aspects.
Title: Re: Bitcoin is funny money
Post by: Telecaster on February 26, 2021, 11:10:46 AM
To further prove this point, bitcoin's price increases don't have anything to do with currency deflation because of the fact that it isn't actually deflationary at the moment:

https://charts.bitcoin.com/btc/chart/inflation#5ma4

Now you are just trolling. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 26, 2021, 11:18:26 AM
To further prove this point, bitcoin's price increases don't have anything to do with currency deflation because of the fact that it isn't actually deflationary at the moment:

https://charts.bitcoin.com/btc/chart/inflation#5ma4

Now you are just trolling.

It is a fact. Do you dispute this? Perhaps you're just not understanding the difference between inflationary/deflationary supply of money versus inflation/deflation in the price of goods (such as what CPI attempts to measure)?
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 26, 2021, 10:24:25 PM
And again you continue to ignore the actual debate and questions at hand while further derailing the actual thread. Great mod work.
Notice how you complain "ignore the actual debate", and then make a comment "Great mod work".  Is that insult sticking to the debate?  You want others to stick to the debate while you type things unrelated to it.

As to "mod work", replying to you is not "mod work".  So your insult is also a nonsense claim.
Title: Re: Bitcoin is funny money
Post by: DaKini on February 27, 2021, 01:56:18 AM
To restate the interesting point.... A currency with built-in deflationary characteristics cannot work because it would always be to one's advantage to trade using an inflationary currency and to hoard the deflationary currency. To be more concrete, if I save 50% of my pay and spend the other 50% (in any currency), it would make sense to save in the deflationary currency and buy groceries, pay rent, and get my cavities filled using the inflationary currency. This is what literally everyone who holds crypto is doing now. They get paid in dollars, convert their savings to crypto, and cover expenses in dollars.

Combined that with the lack of supply inelasticity: isn’t this a nearly surefire environment for the long time frame chart go up in steps, but  always settle at a higher value than the step before; following some form of degressional path in the big picture?
In other words (I’m not a native speaker, please forgive): wouldn’t that mean that the btc/fiat pairs would need to always rise, but with decreasing gains possible (there will always be a fool paying more than you did, but the difference will get smaller and smaller over time); in essence making it a good idea to buy now and hodl till i need it or the gains are so marginally it isn’t worth it anymore?
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on February 27, 2021, 09:40:42 AM
To restate the interesting point.... A currency with built-in deflationary characteristics cannot work because it would always be to one's advantage to trade using an inflationary currency and to hoard the deflationary currency. To be more concrete, if I save 50% of my pay and spend the other 50% (in any currency), it would make sense to save in the deflationary currency and buy groceries, pay rent, and get my cavities filled using the inflationary currency. This is what literally everyone who holds crypto is doing now. They get paid in dollars, convert their savings to crypto, and cover expenses in dollars.

Combined that with the lack of supply inelasticity: isn’t this a nearly surefire environment for the long time frame chart go up in steps, but  always settle at a higher value than the step before; following some form of degressional path in the big picture?
In other words (I’m not a native speaker, please forgive): wouldn’t that mean that the btc/fiat pairs would need to always rise, but with decreasing gains possible (there will always be a fool paying more than you did, but the difference will get smaller and smaller over time); in essence making it a good idea to buy now and hodl till i need it or the gains are so marginally it isn’t worth it anymore?

I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on February 27, 2021, 10:57:01 AM
To restate the interesting point.... A currency with built-in deflationary characteristics cannot work because it would always be to one's advantage to trade using an inflationary currency and to hoard the deflationary currency. To be more concrete, if I save 50% of my pay and spend the other 50% (in any currency), it would make sense to save in the deflationary currency and buy groceries, pay rent, and get my cavities filled using the inflationary currency. This is what literally everyone who holds crypto is doing now. They get paid in dollars, convert their savings to crypto, and cover expenses in dollars.

Combined that with the lack of supply inelasticity: isn’t this a nearly surefire environment for the long time frame chart go up in steps, but  always settle at a higher value than the step before; following some form of degressional path in the big picture?
In other words (I’m not a native speaker, please forgive): wouldn’t that mean that the btc/fiat pairs would need to always rise, but with decreasing gains possible (there will always be a fool paying more than you did, but the difference will get smaller and smaller over time); in essence making it a good idea to buy now and hodl till i need it or the gains are so marginally it isn’t worth it anymore?

I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

That is the dumbest analogy I ever heard.
Title: Re: Bitcoin is funny money
Post by: celerystalks on February 27, 2021, 11:01:33 AM
No here is the dumbest analogy!

Time flies like an arrow, but fruit flies like a banana.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 27, 2021, 04:14:09 PM
I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

Collectibles don't provide a service/benefit to people in the same way a global internet censorship resistance monetary network does though. To ignore this utility I think is an incomplete analysis as to why bitcoin adoption will grow and where its base demand will come from. There is so much more analysis that can be performed to understand the market better other than just its price alone. Also, to your claim earlier where you said that volatility would hurt bitcoin's use as a currency, wouldn't then stagnation further help bitcoin's use as a currency? At the end of the day, bitcoin's volatility comes from the market size differences between the greater economy and bitcoin's and there is no supply elasticity to offset any increase in demand. If that market size difference begins to balance out, then eventually volatility decrease as well. Think about the volatility difference between a penny stock versus a Fortune 500 company. Also, bitcoin's supply halvings will continue to get less and less meaningful which means they'll be less of a shock to the market forces in the future every 4 years.

Not sure if anyone else is interested in macro economics or not, but there is a good macro econ podcast called MacroVoices and this week's guest was Lyn Alden. I think she is a brilliant macro economist and she touches on the above a little bit toward the end.

https://youtu.be/hYAg0OpsjPw (https://youtu.be/hYAg0OpsjPw)

As for the market analysis I mentioned above, here are some interesting points about the current market that I think signals that we're not anywhere near the top.

Coinbase just filed for an IPO with the SEC and released their S-1 report in the process. In this report they provided a historical breakdown of who their investors have been over the years. There is a massive uptick in the number institutional traders that are buying bitcoin compared with the last bullrun. These investors are considered much more "sticky" compared to retail investors that would be much more likely to sell in a sharp downturn.

(https://pbs.twimg.com/media/EvGZrDCXYAU1lL2?format=jpg&name=900x900)

Furthermore, Coinbase filing for an IPO at $100b means that Coinbase will become one of the countries largest financial institutions. For many, one of the biggest risks in bitcoin is the uncertainty of what governments would do against it. The US having one of its largest FI's be a cryptocurrency company is a pretty big signal that bitcoin is here to stay with little risk of a full-on ban from the US. Without a full-on ban from the US, most other free democratic countries would be reluctant to do so either to avoid competitive disadvantages in that growing market.

NYDIG CEO Ross Stevens has stated that they currently have about $6 billion in bitcoin holdings for their clients and they have over $20 billion in additional demand for bitcoin on their orderbooks for the year. This is further evidence of not just growing institutional demand, but future institutional demand. NYDIG also just recently filed for a bitcoin ETF. It is only a matter of time before a bitcoin ETF is approved in the US. Canada's bitcoin ETF has seen massive demand with more on the way:

https://www.coindesk.com/canadas-first-bitcoin-etf-hits-421-8m-aum-in-two-days (https://www.coindesk.com/canadas-first-bitcoin-etf-hits-421-8m-aum-in-two-days)


As I've discussed on these forums, the bitcoin halving that takes place roughly every 4 years creates a massive supply shock to the market which means there is a large amount of price rediscovery that takes place afterward. This is generally what kickstarts each bullrun, but one metric that stands out in this bullrun compared with the previous ones is the number of bitcoins that are leaving exchanges. All this bitcoin that is leaving exchanges means that more and more liquidity is leaving the market and creating a further supply shock with increased demand.

(https://pbs.twimg.com/media/Eu2PxszXEAI6BBf?format=jpg&name=small)

To further illustrate this metric, this chart shows the liquid supply change in bitcoin and there is a massive shift in the amount of liquid bitcoin available throughout this bull market:

(https://pbs.twimg.com/media/EtAHu9gVcAEHO71?format=jpg&name=small)

While there is certainly a lot of speculation that takes place with bitcoin, there is also a lot of usage among people that find value in bitcoin's unique properties. Compared with countries that have stable economies and financial institutions, countries that don't are seeing a surge in bitcoin usage and adoption. Since this is demand that is also considered sticky since they're using bitcoin for a crucial real world need:

https://www.statista.com/chart/18345/crypto-currency-adoption/ (https://www.statista.com/chart/18345/crypto-currency-adoption/)
https://www.youtube.com/watch?v=xLYYh4aPXAM (https://www.youtube.com/watch?v=xLYYh4aPXAM)

Bitcoin's adoption rate is also growing faster than the internet's adoption rate:

(https://pbs.twimg.com/media/Et0WOyyXcAAPQMe?format=jpg&name=small)

When you combine some of these metrics with what is taking place in the bigger macro-economic picture (fiat money printing taking place across the globe), then it is not hard to see growing demand for a hard monetary asset like bitcoin. With a weakening US dollar, the trading pair of BTC/USD will continue to lean toward the stronger BTC side.

I could dig into bitcoin's market analysis all day, but if people are just simply looking at bitcoin's large price tag thinking it can't possibly go higher instead of looking at actual market dynamics, then I think people are missing the big picture. Bitcoin isn't going anywhere any time soon. The risk of it going to zero at this point is extremely small and there are far more indications that the market is just getting started across the world.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 27, 2021, 06:20:36 PM
Here's my original post with bolded words showing uncertainty:
It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.


I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.
Does calling it stupid achieve something?  It's also interesting while calling it stupid, you weren't able to read it correctly.  Where did I say "means a crash is coming"? 

Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017). That was the only point I was making.
Who are you quoting here?  Where did I say "a pending crash for bitcoin"?


But if it is you just plainly ignoring what is visibly written in this chat in clear-as-day English with as much chronologically correct breakdown and quotations being used as possible by myself to help you comprehend what was stated, then I don't know what else I can do. If you do understand what was stated and yet are simply trying to put words in my mouth, then shame on you.
And do you feel shame "plainly ignoring what is visibly written in this chat in clear-as-day English"?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 27, 2021, 07:14:15 PM
Here's my original post with bolded words showing uncertainty:
It's probably also reaching "the top is in"... not for all time, but for now.  Bitcoin goes through crashes every few years, and now seems like higher potential for a crash.  Visa and Mastercard have a combined market cap of about 800 billion, while Bitcoin is more valuable than both combined. This past year, Bitcoin ran up 5x in one year.  Those are similar conditions I saw right before another crash in Bitcoin's value price.


I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.
Does calling it stupid achieve something?  It's also interesting while calling it stupid, you weren't able to read it correctly.  Where did I say "means a crash is coming"? 

Your analysis being that a "5x move means a pending crash for bitcoin" (which obviously is factually incorrect as I showed with 2013 and 2017). That was the only point I was making.
Who are you quoting here?  Where did I say "a pending crash for bitcoin"?

You keep going. Give it a rest. The thread has moved on from your meaningless discussions. You're even rehashing your same complaints at this point. Why the tired rehash? You already brought that misquote up and I already addressed it here and here:

You quoted something I did not say - you put words in my mouth, and haven't responded to this.

I apologize for the slight misquote. I rescind my quotes on that statement. It was not a direct quote you said and I should not have used quotes there.

I'm not misinterpreting anything. Your post was simply about the price of bitcoin and that was the extent of your analysis in that paragraph (contrast that to the analysis I just gave) and you claimed a 5x drop was indicative of a crash (regardless of certainty). Your certainty or uncertainty of that prediction wasn't what my argument to you was about. You also continue to fail to provide the example of the 5x move you were referring to as I asked from you. In the end, it is still a prediction or hunch of yours regardless of your certainty level and the conditions you presented in that paragraph were based on price alone as my questioning to you below pertained to:

Since you seem to be avoiding the substance of the debate, to get past this, let's answer some questions:

Do you agree that your assessment that you posted at February 19, 2021, 09:22:25 AM was simply based on bitcoin's current price based on its historical price and that you didn't refer to any other condition outside of that paragraph? There was nothing else in that paragraph that was anything other than a condition on bitcoin's price history. Do you agree that using price history on its own is a faulty metric for future price predictions? Do you agree that bitcoin's moves in the past in both 2013 and 2017 were much larger moves than just a 5x move?

Do you agree that I never claimed that crashes must follow the same path as past price crashes?

If you can't agree to answer those questions, then I'm not sure you're posting in good faith when you continue to ignore my posts and instead choose to argue semantics. It is a waste of both our time, frankly. If you would like to raise some questions you'd like clarified by myself as well just so we can move on, I'd be glad to do so. But having you ignore my posts and respond with meaningless semantic and frivolous accusations that don't have anything to do with the actual debate we were having is pointless. If you can't answer those questions, then I'm done responding to you.



But if it is you just plainly ignoring what is visibly written in this chat in clear-as-day English with as much chronologically correct breakdown and quotations being used as possible by myself to help you comprehend what was stated, then I don't know what else I can do. If you do understand what was stated and yet are simply trying to put words in my mouth, then shame on you.
And do you feel shame "plainly ignoring what is visibly written in this chat in clear-as-day English"?

When it comes down to it, at least after you post, I make an attempt at addressing your concerns that you present while also presenting my own. You, however, continue to completely ignore my questions to you while you continue to bring up and rehash the same tired and frivolous responses.

Either add something more to the debate, or just let this thread move on as it had already before your last few posts.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 27, 2021, 09:16:18 PM
When it comes down to it, at least after you post, I make an attempt at addressing your concerns that you present while also presenting my own. You, however, continue to completely ignore my questions to you while you continue to bring up and rehash the same tired and frivolous responses.
Instead of sticking with the topic, you resort to insults, which I brought up and you made no "attempt at addressing your concerns".  I disagree that you can insult and expect that to go unanswered, and I doubt anyone would call that on topic.


And again you continue to ignore the actual debate and questions at hand while further derailing the actual thread. Great mod work.
Notice how you complain "ignore the actual debate", and then make a comment "Great mod work".  Is that insult sticking to the debate?  You want others to stick to the debate while you type things unrelated to it.

As to "mod work", replying to you is not "mod work".  So your insult is also a nonsense claim.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on February 27, 2021, 10:04:09 PM
Even just going on past behavior (which obviously is a flawed approach but that you brought up), it is no where near where the previous bubbles popped (2013 and 2017 bubbles). If it follows 2013's path, then we're still more than a 10x move away from the top from here and if it follows 2017's path then we're still a 4x move away from the top from here. So far it is moving closer to 2013's path, but again past analysis is pointless.
I did not claim a "10x move away" or a "4x move away" is required, you did.  Your claim that "past analysis is pointless" is a "stupid analysis" because it's oversimplified to the point of being farcical.  Why does the exact path of 2013 and 2017 matter?


Other than that singular data point you presented, the only other evidence for "the top is in" is using past performance in past bubbles to falsely claim such (because if you did compare it to past bubbles then by that measure the top is NOT in).
Your "stupid analysis" compares 2020 to 2013 and 2017, claiming "by that measure the top is NOT in".  I'm introducing history by comparison, and you only allow it as an exact measure ("10x move away", "4x move away", "by that measure").


You were using past behavior to make claims about what it is going to do in the future. Which, as I responded is a stupid analysis. And now you're trying to make it out like I was the one making the claim. UNREAL. GTFO. I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.

Once I show you how stupid your narrative was, don't try and push it around and play it off like it was me making that claim while ignoring that even my original statement said it was flawed:
You have made a "stupid analysis" of my claim.  If "past analysis is pointless", why do CAPE ratios have some correlation to future stock returns?  Was Nobel laureate Robert Schiller also doing a "stupid analysis" because "past analysis is pointless"?


I am simply providing two examples that directly refute your claim that a 5x move is a condition that signals a crash is imminent. That was your original statement. You only provided the one condition as an example of your "similar conditions". So I simply provided two examples that disprove your claim. I NEVER said that it "must" follow those paths as you repeatedly claim I said and you repeatedly fail to quote me as saying.

You have yet to provide a single example of where a 5x move is a condition right before another crash you saw and I had provided 2 examples that counter that claim (as I showed, both 2013 and 2017 prices moved beyond a mere 5x move).
The words "similar conditions" mean things resemble a past event, not that "a 5x move is a condition".  Similar conditions do not mean a requirement - you are the one claiming "both 2013 and 2017 prices moved beyond a mere 5x move" "directly refute" what I said.

You say both "I NEVER said that it "must" follow those paths" and then "both 2013 and 2017 prices moved beyond a mere 5x move", and you can't connect those two sentences together.  I did not claim a requirement, but you are claiming a "mere 5x move" is "directly refuted" by "both 2013 and 2017".  Each time I explain myself, you come up with some false version of what I claimed, and like the above use insults like "stupid analysis" in your replies.
Title: Re: Bitcoin is funny money
Post by: DaKini on February 28, 2021, 12:42:19 AM
I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

The difference, as i understood is, that btc is like a baseball card that you can cut into arbitrary pieces without the process losing their relative value - satoshis.
So probably that limit does not apply here.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on February 28, 2021, 06:35:32 AM
You were using past behavior to make claims about what it is going to do in the future. Which, as I responded is a stupid analysis. And now you're trying to make it out like I was the one making the claim. UNREAL. GTFO. I then, in turn, simply took your own analysis (using past behavior to predict future outcomes), to show you how even your own stupid analysis (bitcoin running up 5x means a crash is coming) was completely bogus.

Once I show you how stupid your narrative was, don't try and push it around and play it off like it was me making that claim while ignoring that even my original statement said it was flawed:
You have made a "stupid analysis" of my claim.  If "past analysis is pointless", why do CAPE ratios have some correlation to future stock returns?  Was Nobel laureate Robert Schiller also doing a "stupid analysis" because "past analysis is pointless"?

My reference to past analysis was in reference to past price analysis on its own that you performed in your original post. It isn't that deeper past market analysis isn't useful. The entire discussion was about the past price analysis alone that you brought up. CAPE ratios are inherently more than just a price analysis (because its a ratio) that takes into account earnings as well. Had you presented a ratio for your analysis as well, that would've been a completely different analysis, but you didn't. Furthermore, Robert Schiller's work wouldn't have received the acclaim it did if there wasn't past examples that matched up with his ratio analysis.

So again, I ask you to provide some examples and deepen your analysis a little more. I'm sure I and many others here would love to hear it, but you have yet to do so. A simple clarification of your analysis and a more thorough write up of what you meant to say probably would've avoided this entire debate, but it seems like you can't/won't elaborate any further about what you meant. What was the other crash in bitcoin's history that you were referring to? Was it 2011, 2013, or 2017? If you're going to maintain your original analysis as being on price alone without any other additional metrics, then yes, I'm afraid that's a stupid analysis.

The words "similar conditions" mean things resemble a past event

Again, can you provide us with what this past crash event was that you continue to refer to?

I'm afraid I'm just going to ignore your future posts unless you address the questions that I brought up that you continued to ignore *checks notes* 5 times since it was posted:

...to get past this, let's answer some questions:

Do you agree that your assessment that you posted at February 19, 2021, 09:22:25 AM was simply based on bitcoin's current price based on its historical price and that you didn't refer to any other condition outside of that paragraph? There was nothing else in that paragraph that was anything other than a condition on bitcoin's price history. Do you agree that using price history on its own is a faulty metric for future price predictions? Do you agree that bitcoin's moves in the past in both 2013 and 2017 were much larger moves than just a 5x move?

Do you agree that I never claimed that crashes must follow the same path as past price crashes?

If you can't agree to answer those questions, then I'm not sure you're posting in good faith when you continue to ignore my posts and instead choose to argue semantics. It is a waste of both our time, frankly. If you would like to raise some questions you'd like clarified by myself as well just so we can move on, I'd be glad to do so. But having you ignore my posts and respond with meaningless semantic and frivolous accusations that don't have anything to do with the actual debate we were having is pointless. If you can't answer those questions, then I'm done responding to you.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on March 01, 2021, 09:18:43 AM
I think it is more likely cryptocurrencies take the path of other collectibles, and never do become functioning currencies. The price of collectibles does not rise forever even though their supply is constrained. At some point, there are not enough people willing to trade $100 million for an Andy Warhol painting or $50,000 for a baseball card, and so the price stagnates or goes down.

The difference, as i understood is, that btc is like a baseball card that you can cut into arbitrary pieces without the process losing their relative value - satoshis.
So probably that limit does not apply here.

Can you explain the next step in this reasoning? Does the near-infinite divisibility of precious metals mean they can increase in price forever?

If anything, the infinite divisibility of BTC (and, in theory, the ability to do splits like a stock or spin-offs like Bitcoin Cash) would seem to debunk the argument that there’s a limited supply of crypto in the world and we all better get in now or lose the chance to have money in the future. If BTC became a currency it would have to be diluted to meet its economic demand.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 01, 2021, 10:05:20 AM
Can you explain the next step in this reasoning? Does the near-infinite divisibility of precious metals mean they can increase in price forever?

If anything, the infinite divisibility of BTC (and, in theory, the ability to do splits like a stock or spin-offs like Bitcoin Cash) would seem to debunk the argument that there’s a limited supply of crypto in the world and we all better get in now or lose the chance to have money in the future. If BTC became a currency it would have to be diluted to meet its economic demand.

Just because you have infinite divisibility doesn't mean it lessens its scarcity. It just allows it to be disbursed to more wider portions while still maintaining value. You can't delute its supply. It is like if you took 1 pizza and cut it into 8 pieces, then suddenly cut it into 16, then suddenly cut it into 32...

Just because you continue to have more pieces doesn't mean you suddenly have more pizza. It doesn't mean if people find pizza delicious that they still won't crave having a whole slice of it rather than a tiny morsel and therefore would be willing to value having a whole slice greater than a tiny morsel.

Bitcoin doesn't need to be diluted to meet market demand. To meet market demand it's price simply can do up ad infinitum until whatever its current unit supply is meets the economic value of the amount of people that care to own some. If the entire world wishes to own some, then bitcoin's price would simply reflect that demand. Bitcoin's denomination is just a number, so unlike the pizza analogy where a small morsel of pizza would never satiate one's appetite, the tiniest number of bitcoin can fulfill whatever demand the world needs of it. It is just an arbitrary number. The key point though is that bitcoin supply can't be diluted and that fact is one of its biggest features.

Also, spinoffs (or forks) don't have the same value as bitcoin. There are network effects that come from the market that decide this. These market effects also drive where computing power goes and thus where security lies. Because all the hash power lies with bitcoin, then storing larger amounts of money with bitcoin is much more secure. It isn't something that can be replaced by simply forking over software to a new blockchain, so therefore scarcity isn't impacted. Bitcoin, regardless whether it is around in 20 years or not, will only have a supply of 21 million and that won't change.


On another note, ARK Investments just released their Part 2 whitepaper on bitcoin and it is a decent read if anyone wishes to read it:

https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf (https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf)
Title: Re: Bitcoin is funny money
Post by: ice_beard on March 01, 2021, 11:17:43 PM
I haven't followed this discussion, but I personally do think there is a role for an alternative currency at some point, bitcoin won't be it.  Its usage is purposefully inefficient and it's only real value is in its perceived scarcity. 

"This has nothing to do with monetary anything, but is a form of gambling that relies on ever more new gamblers entering the casino and bidding up the price, with more and more gamblers selling each other the bitcoin, all united in the singular purpose of driving up its price so that everyone could get rich."

The most thought provoking part of this article though is the idea that the Fed might actually step in and back up potential future losses since there are now legitimate (but now less legitimate?) institutional investors getting into this racket.

https://wolfstreet.com/2021/02/28/the-big-buy-hype-bitcoin-casino/

Somewhat un-related, but while I'm bashing on bitcoin...

I saw a really interesting fact that Tesla's bitcoin purchase required 1.5x the amount of CO2 to mine it than has been "saved" from the sale of ALL of their "eco-friendly" cars.  This article does not contain these numbers but discusses the at odds position of the purchase.

https://www.theverge.com/2021/2/9/22275243/teslas-bitcoin-purchase-clashes-climate-change-mission
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 02, 2021, 06:58:12 AM
Somewhat un-related, but while I'm bashing on bitcoin...

I saw a really interesting fact that Tesla's bitcoin purchase required 1.5x the amount of CO2 to mine it than has been "saved" from the sale of ALL of their "eco-friendly" cars.  This article does not contain these numbers but discusses the at odds position of the purchase.

https://www.theverge.com/2021/2/9/22275243/teslas-bitcoin-purchase-clashes-climate-change-mission

Probably more than any other topic, I see more misinformation about bitcoin's carbon footprint and its impact on climate change than any other. I'm going to address a few things here. I am someone who is deeply concerned about climate change. I drive an electric vehicle (2014 Nissan Leaf), I am a vegan, my wife and I have decided to have 1 child primarily because of the environmental costs of more, I live frugally and avoid frivolous purchases, and live in a 1000sqft house. But yes, I use bitcoin and I think it has become a scapegoat in environmental/emissions discussions simply because of how easy it is to calculate its energy use compared with the energy use of other things today. For example, dryers in the US alone use about as much energy as bitcoin today and there is little incentive to have dryers use greener forms of energy unlike with bitcoin (which I'll discuss later). Watching videos on Youtube or playing video games uses a lot more energy than bitcoin consumes. I think it is an ineffective game for people to play to start scapegoating the ways humans use energy that is subjective to everyone when in reality all that does is shift focus away from where the blame really lies and where the focus needs to be put: the fossil fuel industry.

Claiming that Tesla's bitcoin purchase offsets the CO2 saved from all their cars is an inaccurate statement. First, with bitcoin's supply schedule, a vast majority of bitcoin in circulation today were mined back when CPUs and GPUs were used and thus the carbon footprint of bitcoin was much lower than it is today. Claiming that Tesla's bitcoin acquisition offsets the CO2 saved from their vehicles is inherently using a flawed approach that takes the amount of bitcoin in their purchase and uses today's carbon footprint of the network.

So then it comes down to the transactions being performed today, which don't equate to how much CO2 the network releases or how much energy it uses. A transaction can consist of any number of bitcoin or any amount of value. To further complicate things, the amount of energy used doesn't equate to how many transactions were processed by the network either. This is probably the most widely spread bit of misinformation out there. I constantly see articles equating the carbon footprint of a VISA transaction compared with a bitcoin transaction and that is a flawed comparison. Bitcoin's energy use isn't equal or dependent on how many transactions it processes.

Also, a single bitcoin transaction can be settling millions of transactions within it because it is more of a settlement layer than it is a payment layer (see lightning network, liquid-btc, batched transactions, transaction pools, etc). For example, I have a small Raspberry Pi at my house than uses about 1KWh of electricity in an entire year that runs a lightning network node on it. This lightning network node of mine has processed thousands of transactions for both myself and others. It did this while only needing a handful of on-chain bitcoin transactions. So in reality, bitcoin's energy use per transaction can scale incredibly well compared with other technology that must increase their energy use in inefficient ways (large datacenters) in order to process more transactions.

As I discussed in the first paragraph, energy is used by almost everything we do and use in our daily lives. A lot of it is much more difficult to calculate than the more transparent energy costs of mining bitcoin. So it goes unnoticed or is not in the forefront of the concerned mind of people who are rightfully worried about climate change. I think arguing about what uses of energy people choose for themselves is a fatal approach to tackling climate. Michael Mann, one of my favorite climate scientists explains it well in this article he wrote back in 2019. None of us are without carbon sin:

https://time.com/5669071/lifestyle-changes-climate-change/ (https://time.com/5669071/lifestyle-changes-climate-change/)

Pointing to those sins distracts from the bigger picture that ultimately where the sin lies is in the energy grid where the true costs of fossil fuels is externalized in the economy. Bitcoin mining isn't inherently dirty. If bitcoin mining uses clean energy, then its carbon footprint is minimal. Therefore it is imperative that our energy grid gets cleaned up. As Michael Mann explains in his article, the best way to do this is to put a price on carbon (through a carbon tax) that internalizes those once externalized costs of carbon. If this were done, then bitcoin would quickly find that mining with fossil fuels would be uneconomical.

That leads us to what type of energy is used with bitcoin and where its incentives lie. Bitcoin mining is inherently incentivized to use the cheapest electricity out there. The bitcoin mining market is also a globally competitive market, so it doesn't matter whether your energy location is relatively cheap locally, what matters is whether your energy is relatively cheap globally. So it levels the playing field in an energy market that has virtually zero arbitrage (electricity can't be transported to new markets).

The problem here then, and one of the biggest reasons why bitcoin's carbon footprint isn't lower than it is, is that China subsidizes a lot of dirty coal power. Much of the bitcoin mining that takes place in China uses cheap hydropower during the rainy season, but miners migrate back and forth between clean hydro during the wet season and dirty coal during the dry season. These miners would not be performing this costly migration if it weren't for the subsidies that are given to the dirty coal industry that makes their coal power so cheap compared with the rest of the global energy market. To further illustrate this, here is Cambridge's study on bitcoin's energy mix:

https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study/ (https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd-global-cryptoasset-benchmarking-study/)

In it, they found that in the US, bitcoin's total energy use was made up of 63% renewables. Meanwhile, in the US renewable energy only makes up about 20% of the energy production/supply. This is direct evidence that shows in the absence of large subsidies for dirty forms of energy, bitcoin will be incentivized to use clean sources of energy and that is without requiring the use of carbon offsets that can be dangerous excuses for large industries to continue to use dirty forms of energy. In fact, with a large push for renewable power in the world, bitcoin mining would likely be one of the first industries to become powered by 100% clean renewable energy without requiring the use of offsets simply because the network is economically incentivized to use the cheapest form of electricity regardless of where it is located. It isn't inherently tied to regional grid compositions unlike the daily use of energy that makes up typical residential, commercial and industrial uses. Bitcoin mining just moves to where ever the cheapest electricity is. For anyone concerned about climate change, putting a cost on carbon should be our number one concern, not scapegoating what subjective uses people like to use the world's energy on.

To further complicate bitcoin's carbon footprint, bitcoin mining can also be used to lower emissions. Bitcoin mining is being used to cut gas flaring that emits dangerous methane into the atmosphere. By stopping gas flares/venting and instead using that stranded and wasted energy to mine bitcoin, it both helps lower emissions that would've otherwise been put into the atmosphere while at the same time creating economic value instead of waste:

https://www.coindesk.com/energy-giant-equinor-to-cut-gas-flaring-with-bitcoin-mining-tie-up-report (https://www.coindesk.com/energy-giant-equinor-to-cut-gas-flaring-with-bitcoin-mining-tie-up-report)

You must also consider the alternative in discussions like these. The petrodollar is a far dirtier money than is bitcoin when it comes to emissions. This article is a good breakdown of the true costs of the petrodollar.

https://climatemoney.substack.com/p/carbon-cost-of-dollars (https://climatemoney.substack.com/p/carbon-cost-of-dollars)

The same is true of gold. The emissions cost of gold mining is far more dirty than mining bitcoin (more than twice as dirty). Yet you don't see scapegoating and harassing of those people who choose to hold gold in their portfolio. So any portion of these markets that bitcoin siphones away will be a net-win when it comes to emissions costs. The financial industry as a whole uses vastly more sums of energy than does bitcoin mining. Considering the fact that bitcoin and currency in general tend to be a zero-sum game (you can only hold value in one at any given time), then it stands to reason that whatever value bitcoin siphons away from these other far dirtier commodities and systems, then the greener as a whole we'll be.

That isn't to say there are environmental costs with bitcoin mining. E-waste, as with any digital industry is a big concern. Thankfully, the lifecycle of ASIC mining equipment has been getting longer and longer lately, but e-waste is still a big concern in this process.

In the end, almost everything we do consumes energy and I don't think it is a valuable argument to claim that some subjective uses are more valuable than others (Christmas lights anyone?). Millions around the world are finding value in bitcoin as it helps them escape strangleholds place on them by authoritarian regimes and fiat's borders. Who am I to judge differently the value in that without being in their shoes? What we should instead really be focused on is cleaning up our energy grid, getting rid of dirty subsidies, and putting a price on carbon.
Title: Re: Bitcoin is funny money
Post by: mjr on March 04, 2021, 04:10:22 PM
A segue from "bitcoin isn't inherently dirty" to "we need to decarbonise our electricity grid" is a hell of a stretch and shows ideological thinking.

Bitcoin is explicity by design very wasteful of energy that could be used on more productive uses.  End of story, there's no getting around that.  Clean energy and climate change issues don't come into it.  Someone who delights in virtue-signalling (I drive an electric vehicle (2014 Nissan Leaf), I am a vegan, my wife and I have decided to have 1 child primarily because of the environmental costs of more, I live frugally and avoid frivolous purchases, and live in a 1000sqft house) should be right onto that waste as an issue.

Comparing power requirements of bitcoin mining for the infintesmal fraction of the population that uses it to all the dryers used in the US is also nonsensical.

Ridiculously slow transaction rates make bitcoin a non-starter.  Add energy use, its volatility, its complexity, its use by criminals and fraudsters and the fact that no government will let any significant part of its economy take place on a pseudonymous platform, let alone KYC/AML restrictions and one must conclude that bitcoin is just another speculative bubble that will ultimately go nowhere.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 04, 2021, 08:14:58 PM
A segue from "bitcoin isn't inherently dirty" to "we need to decarbonise our electricity grid" is a hell of a stretch and shows ideological thinking.

It isn't ideological thinking. Those two things (bitcoin isn't inherently dirty and we need to decarbonize) are not exclusive of each other. In fact, there just facts and were simply stated as such. Not sure how facts are ideological now. If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner. I even shared with you Cambridge's data that plainly showed that bitcoin is incentivized to use clean renewable energy over other sources. Name another industry that can say that.

Bitcoin is explicity by design very wasteful of energy that could be used on more productive uses.  End of story, there's no getting around that.

This is purely a subjective statement spoken from privilege. There is no getting around that. There are a lot of people using bitcoin around the world where it is solving real problems for them with no other possible solutions available. A lot of things use way more energy for way less human value in this world.

https://youtu.be/xLYYh4aPXAM (https://youtu.be/xLYYh4aPXAM)

Someone who delights in virtue-signalling (I drive an electric vehicle (2014 Nissan Leaf), I am a vegan, my wife and I have decided to have 1 child primarily because of the environmental costs of more, I live frugally and avoid frivolous purchases, and live in a 1000sqft house) should be right onto that waste as an issue.

It isn't virtue signaling if you're actually doing those things. Seems like someone likes to throw around buzzwords without actually understanding them:

'The term virtue signaling is often used to accuse someone of trying to win praise for showing support for a social cause without actually doing anything meaningful to advance it.'

Comparing power requirements of bitcoin mining for the infintesmal fraction of the population that uses it to all the dryers used in the US is also nonsensical.

There are over 100 million people using it in the world and growing rapidly (faster than the internet did). Also, bitcoin's power usage doesn't scale based on how many users there are.

Ridiculously slow transaction rates make bitcoin a non-starter.  Add energy use, its volatility, its complexity, its use by criminals and fraudsters and the fact that no government will let any significant part of its economy take place on a pseudonymous platform, let alone KYC/AML restrictions and one must conclude that bitcoin is just another speculative bubble that will ultimately go nowhere.

It is almost like you didn't even read the post I wrote. My Raspberry Pi can process thousands of transactions with bitcoin for a fraction of the power usage used in datacenters today. I suggest you read and understand the technology more.

Also, bitcoin isn't used for illicit activity much. 0.34% of bitcoin use in 2020 was for criminal activity:

https://www.forbes.com/sites/haileylennon/2021/01/19/the-false-narrative-of-bitcoins-role-in-illicit-activity/ (https://www.forbes.com/sites/haileylennon/2021/01/19/the-false-narrative-of-bitcoins-role-in-illicit-activity/)

Bitcoin isn't going to replace the US dollar, nor does it need to to succeed. It also isn't going to be banned by the US. In fact, quite the opposite is taking place. You have municipalities putting bitcoin on their balance sheets. You have politicians in Congress on both sides of the party promoting bitcoin now. You now have bitcoin and blockchain proponents in the SEC, the CFTC and the OCC. Bitcoin and the US dollar (and US government) will get along just fine. You say it is a speculative bubble and yet bubbles usually don't keep coming back like bitcoin has. Perhaps the market is seeing something that you aren't (it's clear you haven't researched much about it)?
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on March 05, 2021, 07:15:33 AM
1)Ridiculously slow transaction rates make bitcoin a non-starter.  2)Add energy use, 3)its volatility, 4)its complexity, 5)its use by criminals and fraudsters and the fact that 6)no government will let any significant part of its economy take place on a pseudonymous platform, 7)let alone KYC/AML restrictions and one must conclude that bitcoin is just another speculative 8)bubble that will ultimately go nowhere.
Added numbers:
1 - Feature, not a bug.  It's not meant to buy a cup of coffee.  It's a reserve asset, store of value.  The market has decided it likes this, given bitcoin's dominance
2 - This is overblown.  A good amount comes from renewables or stranded energy.  But, maybe the whole world should go without AC? or washing machines?  People spend money and energy on things they find valuable.  But if this is the last and best argument against, bitcoin has won.
3 - Volatility is decreasing over time.  How else do you go from 0 to trillions of dollars.  Buy and hold and volatility doesn't matter
4 - There are simple solutions.  Buy on coinbase, paypal, square etc...  It doesn't have to be complicated if you don't want it to be.  But for those that do, this is a feature as it lets you take control.
5- Just not true anymore.  And have you heard about this thing called the US Dollar? 
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.
7 - KYC/AML is fine, and directly contradicts points #6.  If you want to buy on a US exchange, you need to do KYC/AML.  Not even sure what this point is about though.
8 - It's already gotten to 1 Trillion.  There is now lending and borrowing.  Companies are spending billions.  It already is somewhere.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 05, 2021, 07:40:00 AM
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on March 05, 2021, 07:52:37 AM
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.
I don't know about easily.  Congress isn't able to get much of anything done.

If that were to happen, it would mean that bitcoin was so powerful and "right" that the US tried to stop it.  Value would skyrocket.  There'd be no better use case as to prove it's point as why it was needed.  There would be a massive tech brain drain as people left the country.  That would really be the beginning of the end. 
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 05, 2021, 08:10:30 AM
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.
I don't know about easily.  Congress isn't able to get much of anything done.

If that were to happen, it would mean that bitcoin was so powerful and "right" that the US tried to stop it.  Value would skyrocket.  There'd be no better use case as to prove it's point as why it was needed.  There would be a massive tech brain drain as people left the country.  That would really be the beginning of the end.

I'm not sure that enough people in tech care about bitcoin to take the principle (and quite costly) step of abandoning their country over this.  Certainly you didn't see any kind of mass exodus when gold was made illegal to own.

I'm one of those tech workers who doesn't really care about bitcoin so doesn't have a dog in this fight.  My point was simply that yes, the government can pretty easily stop bitcoin if it became a real concern.  (It's not at the moment.)
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on March 05, 2021, 10:01:08 AM
https://www.coindesk.com/frustrating-maddening-all-consuming-bitcoin-energy-debate
Title: Re: Bitcoin is funny money
Post by: crimp on March 05, 2021, 10:17:13 AM
6 - It doesn't have to "let".  How is it going to stop it?  It can't.  Coinbase is going to IPO at 100 billion.  Wyoming and Miami are courting the crypto crowd.  It's capitalism at it's finest.  If bitcoin is a better product then it should win.

There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

I made a brief comment on this up thread, and I believe you're spot on that this is a risk. Assuming that
1) QE / MMT oversteps and leads to inflation, which isn't a foregone conclusion
2) BTC is adopted broadly and proves successful as a hedge against inflation

I wouldn't be that surprised to see the US implement similar legislation forcing BTC underground in order to push investors into poorer investment vehicles. If it were made illegal to possess BTC, and suddenly the public ledger becomes a threat to your liberty, you may start wishing you'd adopted ZCash or Monero or some other currency equipped with cryptography better designed to help you hide your transactions. Even if that doesn't happen in the US, it's certainly reasonable to expect that India and Nigeria won't be the last countries to outlaw or consider outlawing BTC.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 05, 2021, 01:04:29 PM
Ignoring the fact that it seems like (at the moment) there are people from both sides of the aisle (I can name more than half a dozen on each the left and right) in Congress that are in support of bitcoin, I just don't see there being a major push to implement a major ban of bitcoin at any point. Bitcoin is also quickly becoming too big to ban. You have large institutions buying bitcoin as part of their treasuries. The political climate in the US skews toward inaction until further inaction is absolutely impossible. So I don't see there being any preemptive ban of bitcoin in that regard.

The most I see happening is the US taking actions to make sure it can fit nicely into our existing economy and regulatory frameworks. Much to that extent we're already there; bitcoin exchanges today already comply with most of the same KYC/AML regulations that are followed by traditional financial institutions.

As far as the comparison to gold goes, the only way the US was capable of enacting Executive Order 6102 and not have it get thrown out in courts was through a buyback. They paid all gold holders at a rate of $20.67 per troy ounce. Do you really think the US could pay bitcoin holders at a market rate to turn in their bitcoin? Also, you have to take into account the economic climate at the time. We were recovering from the Great Depression. There was a massive tightening of monetary policy just coming out of the Great Depression and the government, being tied to the gold standard, had to find a way to inflate the monetary supply. In other words, they were trying to cause inflation. The revaluation of gold that came about from this EO by pricing gold at $35 played a large role in devaluing the US dollar and increasing inflation. If bitcoin is a hedge against inflation and the US is currently in a cycle of money printing and expanding monetary policy, then a bitcoin buyback program (like EO 6102) is the exact opposite of what they would want to try and accomplish. Buying back massive amounts of bitcoin from its citizens would further exacerbate US dollar inflation by infusing the economy with more US dollars and further devaluing it. It would be direct cash infusion to US citizens that would directly result in further inflation, especially if in this scenario the US is already seeing large inflation rates. This is why the comparison to gold with the EO 6102 is in complete contradiction to what would need to happen for a similar buyback with bitcoin today.

Finally, how does the US ban bitcoin exactly? It is just information on the internet at the end of the day. In China, one of the most authoritarian nations in the world, has banned any financial institution from handling or transacting in bitcoin. This means any bitcoin activity taking place in China is strictly ad hoc peer to peer transactions. Given that, the adoption rate of bitcoin in China is currently estimated at about 7%. What is the adoption rate of bitcoin here in the US without any such strict laws like that? It sits at an estimated 6%. So if bitcoin adoption is actually at a higher rate in a country that has much stricter legal frameworks in place against bitcoin, why do we think that the US is capable of implementing some kind of ban that would have any meaningful impact on bitcoin? There are no bitcoin exchanges in China and yet they have more adoption there than in the US.

In the end, I just don't see the US being both politically motivated against bitcoin nor being politically capable of enacting a bitcoin ban. It's just not happening.

EDIT:

Just wanted to add some additional info in regards to banning bitcoin. Here is what bitcoin volume looks like in Egypt where bitcoin was "banned" in 2018:

https://twitter.com/DocumentingBTC/status/1367889933806014468?s=20 (https://twitter.com/DocumentingBTC/status/1367889933806014468?s=20)
(https://pbs.twimg.com/media/Evu4S2-XYAAo4TK?format=jpg&name=small)

This isn't just anecdotal to Egypt or China either. If you look at adoption rates in just about any country regardless of the legality of bitcoin, you'll see increasing adoption. It is just that if bitcoin was "banned", that adoption moves to peer to peer platforms instead.

https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory (https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory)
Title: Re: Bitcoin is funny money
Post by: Telecaster on March 05, 2021, 05:06:08 PM
There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

I would be surprised to see BTC banned.  Americans were prohibited from owning gold because the dollar backed by gold, and the Federal Reserve was running up on a hard limit on the number of dollars that could be issued.  They needed gold, in other words.   The Federal Reserve doesn't need BTC. 

Some people (not anyone specifically in this thread) suggest that BTC is a threat to the USD.  It isn't.  By law wages and taxes must be paid in USD, and most countries I'm aware have similar laws that taxes and wages must be paid in legal tender.   Even if a business was doing all of its transactions in BTC, you'd still have sell it to buy dollars.  So I don't see any issues there. 


Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on March 05, 2021, 10:37:03 PM
You provided only one example of a condition you consider similar (a 5x move). A condition I refuted with 2 examples that directly counter your claim.
...
You're making a claim that I said bitcoin "must" follow a certain path, and yet what you just quoted me as saying doesn't have the word "must" in there anywhere. This is where you are putting words in my mouth.
...
I am simply providing two examples that directly refute your claim that a 5x move is a condition that signals a crash is imminent. That was your original statement. You only provided the one condition as an example of your "similar conditions". So I simply provided two examples that disprove your claim. I NEVER said that it "must" follow those paths as you repeatedly claim I said and you repeatedly fail to quote me as saying.
...
Also, as I bolded in the above quote, you again are claiming that I said the price "must" follow a certain path and you have yet to quote me where I said that. I said "IF" it does, then that is how large of a move it would be from today's price. Thus, that directly refutes your claim that because bitcoin moved 5x to where it is now, then that indicates a crash is coming.

"A condition I refuted with 2 examples ..."
"... providing two examples that directly refute your claim ..."
"... two examples that disprove your claim ..."
"... directly refutes your claim ..."

https://www.merriam-webster.com/dictionary/refute
To "refute" is "to prove wrong by argument or evidence"

You claim to "refute" and "disprove" my example, but when I talk about what "must" be true, you say I'm wrong to use that word.  How can you refute or disprove with optional examples?

Either your examples must be true, or mine must be true - or you can't use the word "refute" or "disprove".  You're using the wrong words repeatedly, or you're wrong to pick on my use of the word "must".
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 06, 2021, 06:01:58 AM
There has been a lot of comparison between bitcoin and gold.  Does anyone else remember when the US government made it illegal to own gold for a thirty odd year period with the Gold Reserve Act?  It seems to me that if congress decides they don't like Bitcoin, a similar law could pretty easily be passed.  This law was tested and upheld by the Supreme Court, so there's legal precedent on it's side.

I would be surprised to see BTC banned.  Americans were prohibited from owning gold because the dollar backed by gold, and the Federal Reserve was running up on a hard limit on the number of dollars that could be issued.  They needed gold, in other words.   The Federal Reserve doesn't need BTC. 

Some people (not anyone specifically in this thread) suggest that BTC is a threat to the USD.  It isn't.  By law wages and taxes must be paid in USD, and most countries I'm aware have similar laws that taxes and wages must be paid in legal tender.   Even if a business was doing all of its transactions in BTC, you'd still have sell it to buy dollars.  So I don't see any issues there.

Banning bitcoin is easier to justify. Because once it is banned nothing will change economically.  It will just eliminate a large fertile field for financial crimes.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on March 06, 2021, 04:17:01 PM
I could be wrong but it looks to me like Bitcoin is primed for is next big run-up.
Title: Re: Bitcoin is funny money
Post by: JetBlast on March 07, 2021, 11:21:31 AM
If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner.
And what of the infrastructure needed to create that clean energy?  The materials needed to make wind turbines and solar panels have to come from somewhere, as do the materials for transmission infrastructure.  There's environmental impact as well from clearing large areas of land for utility scale solar or wind installation.  You seem to be completely ignoring all the environmental costs that an expanded "clean" grid to power blockchain would entail. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 07, 2021, 02:28:29 PM
If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner.
And what of the infrastructure needed to create that clean energy?  The materials needed to make wind turbines and solar panels have to come from somewhere, as do the materials for transmission infrastructure.  There's environmental impact as well from clearing large areas of land for utility scale solar or wind installation.  You seem to be completely ignoring all the environmental costs that an expanded "clean" grid to power blockchain would entail.

I'm not ignoring that at all. People rode horses while they worked on building cars. They worked by candle light while inventing the light bulb. They used iron while they developed stronger steel. I'm not ignoring the inherent costs that are required to develop a cleaner energy grid. That shouldn't stop us from developing a clean and renewable energy grid.

The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives. If energy is being used in a market for our daily household, commercial, and industrial needs, that energy will cost much higher than the stranded/wasted energy around the globe. Because bitcoin's is competitive on that global scale, only the energy that is stranded/wasted is the energy that is competitive enough to be economical for bitcoin mining (due to the adjusting difficulty level). This will actually help drive larger scale renewable energy and see immediate cost benefits that wouldn't otherwise be seen until years later. You don't build power production for today's needs, you build it for tomorrow's needs. So in the meantime, bitcoin can be used to economize that energy while the market builds around it.

Think of the global energy market as a topographical map. Bitcoin fills in the deep troughs of cheap energy around the world, but it rarely overflows into markets that already have competitive energy needs simply because there is nothing else in the world that can arbitrage those energy troughs around the world.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 07, 2021, 04:23:45 PM
If something just uses electricity, that doesn't make it inherently dirty, so long as you can source your electricity cleanly. And yes, we need to decarbonize our energy grid and by doing that, bitcoin becomes cleaner.
And what of the infrastructure needed to create that clean energy?  The materials needed to make wind turbines and solar panels have to come from somewhere, as do the materials for transmission infrastructure.  There's environmental impact as well from clearing large areas of land for utility scale solar or wind installation.  You seem to be completely ignoring all the environmental costs that an expanded "clean" grid to power blockchain would entail.

I'm not ignoring that at all. People rode horses while they worked on building cars. They worked by candle light while inventing the light bulb. They used iron while they developed stronger steel. I'm not ignoring the inherent costs that are required to develop a cleaner energy grid. That shouldn't stop us from developing a clean and renewable energy grid.

The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives. If energy is being used in a market for our daily household, commercial, and industrial needs, that energy will cost much higher than the stranded/wasted energy around the globe. Because bitcoin's is competitive on that global scale, only the energy that is stranded/wasted is the energy that is competitive enough to be economical for bitcoin mining (due to the adjusting difficulty level). This will actually help drive larger scale renewable energy and see immediate cost benefits that wouldn't otherwise be seen until years later. You don't build power production for today's needs, you build it for tomorrow's needs. So in the meantime, bitcoin can be used to economize that energy while the market builds around it.

Think of the global energy market as a topographical map. Bitcoin fills in the deep troughs of cheap energy around the world, but it rarely overflows into markets that already have competitive energy needs simply because there is nothing else in the world that can arbitrage those energy troughs around the world.

Um. No. This is just nonsense. Bitcoin mining uses a tremendous amount of real energy. This drives up the cost of energy for everything else because it increases demand in view of a scarce supply.  It’s not just mopping up unused scraps of energy in regions where it would otherwise go to waste, so to speak. This is because there is a level of fungibility and transportability to fuel.



Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 07, 2021, 04:53:37 PM
Um. No. This is just nonsense. Bitcoin mining uses a tremendous amount of real energy. This drives up the cost of energy for everything else because it increases demand in view of a scarce supply.  It’s not just mopping up unused scraps of energy in regions where it would otherwise go to waste, so to speak. This is because there is a level of fungibility and transportability to fuel.

This is exactly what is happening. Bitcoin isn't economical in areas that have other uses and competition for that energy. This is coming from someone with experience in bitcoin mining. It just isn't cost effective to mine bitcoin in a market with other energy demands (like your house). It isn't economical to mine bitcoin in areas that have competition for that energy because the competition in bitcoin mining is global while energy markets are restricted regionally. If there is electricity available that is cheap enough to mine bitcoin with, it is because there is a greater supply of electricity available than what the demand is. There is where bitcoin mining concentrates globally. It's basic economics, that's not even controversial. Bitcoin mining runs on incredibly slim margins.

Electricity is not transportable, it doesn't matter whether the fuel is or not. Why would the fungibility of fuel make any difference here? That doesn't come into play here. If you're transporting the fuel to an electricity market that has demand, then the cost of that electricity will make mining bitcoin economically prohibitive. You can't transport that electricity elsewhere. There is no market arbitrage for electricity. Furthermore, if there is an electricity market that doesn't have demand, it will be cheap and you can't transport it elsewhere and this is where bitcoin mining generally takes place.
Title: Re: Bitcoin is funny money
Post by: Telecaster on March 07, 2021, 05:59:20 PM
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 07, 2021, 06:09:14 PM
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer.

That's why I said "for the most part" when typing that sentence, I went back and specifically added "for the most part" because there were a few scenarios that I could think of where that wasn't exactly the case. For example, there is another region in upstate NY that saw their electricity prices rise with increased mining demand.

https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html (https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html)

But these places all have one thing in common...abundant low cost electricity due to an oversupply in the region (and it is almost always renewable energy). If you don't have an oversupply of electricity in the region, you're just not going to see bitcoin mining move into the market and start driving up prices of electricity for existing consumers. That's just not how the bitcoin mining market works (because it is globally competitive). That was ultimately the point I was trying to make.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 08, 2021, 03:02:54 PM
Norwegian billionaire Kjell Inge Røkke and conglomerate Aker ASA have set up a new unit call Seetee that will seek to mine bitcoin sustainably. They also made a purchase of $58 million in bitcoin with plans to acquire more in the future. An excerpt from their statement letter:

"See­tee will establish mining op­er­ations that trans­fer strand­ed or in­ter­mit­tent elec­tric­i­ty with­out sta­ble de­mand lo­cal­ly—wind, so­lar, hy­dro pow­er— to eco­nom­ic as­sets that can be used any­where. Bit­coin is, in our eyes, a load-bal­anc­ing eco­nom­ic bat­tery, and bat­ter­ies are es­sen­tial to the ener­gy tran­si­tion re­quired to reach the tar­gets of the Paris Agreement. Our am­bi­tion is to be a valu­able part­ner in new re­new­able projects."

...It's almost as if what I said earlier were true...

https://www.seetee.io/static/shareholder_letter-6ae7e85717c28831bf1c0eca1d632722.pdf (https://www.seetee.io/static/shareholder_letter-6ae7e85717c28831bf1c0eca1d632722.pdf)
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 09, 2021, 11:22:23 AM
Pretty cool announcement here:

https://www.coindesk.com/bitcoin-moon-lightning-network-visa-e-commerce-merchants (https://www.coindesk.com/bitcoin-moon-lightning-network-visa-e-commerce-merchants)

You can now use bitcoin's lightning network to instantly create one-time use VISA virtual cards for making purchases anywhere VISA is accepted without any fees.
Title: Re: Bitcoin is funny money
Post by: Telecaster on March 09, 2021, 04:44:57 PM
^ This seems like a step backwards, doesn't it? One of the features of Bitcoin is that you don't need a third party to complete the transaction.  This introduces two third parties; Moon and Visa. 
Title: Re: Bitcoin is funny money
Post by: BicycleB on March 09, 2021, 05:16:16 PM
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer.

That's why I said "for the most part" when typing that sentence, I went back and specifically added "for the most part" because there were a few scenarios that I could think of where that wasn't exactly the case. For example, there is another region in upstate NY that saw their electricity prices rise with increased mining demand.

https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html (https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html)

But these places all have one thing in common...abundant low cost electricity due to an oversupply in the region (and it is almost always renewable energy). If you don't have an oversupply of electricity in the region, you're just not going to see bitcoin mining move into the market and start driving up prices of electricity for existing consumers. That's just not how the bitcoin mining market works (because it is globally competitive). That was ultimately the point I was trying to make.

I'm still reading this thread without a fixed BTC opinion re valuation, but on the energy issue, it seems obvious that BTC mining is gobbling energy and hurting the environment. Hydropower in Washington seems like an obvious example. Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 09, 2021, 05:21:47 PM
^ This seems like a step backwards, doesn't it? One of the features of Bitcoin is that you don't need a third party to complete the transaction.  This introduces two third parties; Moon and Visa.

Bitcoin gives us the opportunity to transact without third-parties being involved. Bitcoin's base layer is for large settlement transactions and isn't meant for everyday purchases like what this is to be used for. Lightning network allows for scaling of instant transactions with negligible fees, but that doesn't mean there won't necessarily be commercial third-parties seeking to provide additional value for those transactions. Maybe this is just a bridge toward no third-parties some day in the future even for every day transactions, but even if it isn't that's OK. Just like the base on-chain layer allows for the opportunity to opt-out of central banking, secondary layers like the Lightning network can allow for the opportunity to opt-out of third-party transaction companies too. These opt-out opportunities provide a check against monopolistic abuses that can come from them. But if a third-party company wants to provide transaction services that help scale using bitcoin as an open network to build from in the commercial world and they provide a useful service in the free-market, then I'm all for it. Just so long as I'm not forced to do so if I wish not to. I think that's bitcoin's ultimate goal; having the freedom of choice that doesn't exist today.

Another thing that shouldn't be understated here and might be missed is that the Lightning Network is an open network. That means that any other product or service that is built on this same open network immediately becomes a part of a growing network effect. Every new service built on the Lightning Network can thus interact with every other product and service built on the same. Unlike fragmented products and services like Venmo, CashApp, or PayPal that all have their own competing network effects, the Lightning Network will continue to add to its network effect and it is a service that any individual or company can build on. For example, Jack Mallers who founded LN_Strike (the service used by NFLers to get paid their salary in bitcoin), talks here about how LN_Strike's service, by being built on the Lightning Network, can now immediately also interact with Moon's announced service today:

https://twitter.com/JackMallers/status/1369434546291306497?s=20 (https://twitter.com/JackMallers/status/1369434546291306497?s=20)

This network effect will become more and more apparent as more services build and integrate on the open network that is the Lightning Network. It will become an open network that competing companies will want to integrate with as more commerce takes place there. It is an open and global monetary network that truly scales with instant settlement. As Jack Mallers said and as has been shown in history, open networks win.
Title: Re: Bitcoin is funny money
Post by: Peaksandvalleys on March 09, 2021, 05:32:29 PM
The part that I believe you're missing is that, for the most part, bitcoin's energy use does not compete with energy usage in our daily lives.

This statement is not true, at least not in Washington State and neighboring states. 

Beginning in the 1930s a number of dams were constructed in the Columbia basin by BPA and various utility districts and bonds to finance those dams were paid off decades ago.  The result is the cheapest power in the United States.  Some of the power was used locally for things like aluminum production and agriculture (refrigeration, mostly) but most of it was exported to other areas, primarily California.   Revenue from sales of surplus power have kept rates extremely cheap for local ratepayers. 

In recent years, new industries have moved into the area attracted by cheap power, notably bitcoin mining.  Public utility districts are required by law to provide service to customers in the district and the new demand has been equal to the existing demand.  Which is to say doubled.  The result has been that local utility districts have had to cancel power supply contracts to other utilities, which results in higher prices for those customers as well as less revenue for the Columbia Basin utility districts.    Additionally, a wave of bitcoin miner bankruptcies in 2019 resulted in local utility districts holding the bag for power service upgrades for miner customers who wound up not buying the agreed power that was supposed to pay for the upgrades.   Those costs also get passed along to the retail customer.

That's why I said "for the most part" when typing that sentence, I went back and specifically added "for the most part" because there were a few scenarios that I could think of where that wasn't exactly the case. For example, there is another region in upstate NY that saw their electricity prices rise with increased mining demand.

https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html (https://www.govtech.com/fs/In-Upstate-New-York-the-Bitcoin-Mining-Rush-Has-Gone-Bust.html)

But these places all have one thing in common...abundant low cost electricity due to an oversupply in the region (and it is almost always renewable energy). If you don't have an oversupply of electricity in the region, you're just not going to see bitcoin mining move into the market and start driving up prices of electricity for existing consumers. That's just not how the bitcoin mining market works (because it is globally competitive). That was ultimately the point I was trying to make.

I'm still reading this thread without a fixed BTC opinion re valuation, but on the energy issue, it seems obvious that BTC mining is gobbling energy and hurting the environment. Hydropower in Washington seems like an obvious example. Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.

Absolutely agree. And what am I really getting out of all that energy expenditure?
The ability to do transactions which I already do.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 09, 2021, 05:50:42 PM
Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Not really. The entire reason why it is cheap is because there is more production of electricity than there is demand for it. If it could be "exported" to other areas where there is more demand for it, then the price wouldn't be so cheap. Because electricity can't be transported or stored easily, there is very little arbitrage that takes place in electricity markets. If the electricity is cheap, there is an oversupply in the area and thus mining bitcoin becomes one of the few means of taking that electricity and turning it into economic value that can be used in the economy elsewhere.

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.

I'm not sure what you mean by "the grid extends beyond the cheap zone". Electricity can only be transported so far over transmission lines before you start to receive significant loss and the power being delivered thus costs much greater. I tried to make it clear that there is a desperate need to clean our electric grid of fossil fuel production and get rid of especially dirty forms of generation such as coal. I never made the point that bitcoin's energy consumption has little to no impact on carbon emissions. That was not the point I was making. I was simply stating that pointing the finger and bitcoin when the finger should really be pointed at fossil fuels instead is a mistake (a mistake fossil fuel companies love to see). Nobody is without carbon sin and almost everything we do consume energy in some form. Scapegoating our uses of energy based on each own's personal subjectivity is a futile effort and not productive in the fight against a warming planet. For example, gold has a much higher carbon footprint and yet you never heard people saying don't invest in gold on these forums like you do about bitcoin now that it exists.

As I showed with the Cambridge study, 63% percent of bitcoin's energy consumption in the US comes from renewable sources even though the total renewable production percentage overall in the US is only 20%. That clearly shows an incentive for bitcoin to utilize greener energy. There aren't really any other industries that can make a claim of such powerful incentives to use renewable energy like that. As we continue to green our energy grid, bitcoin will continue to advance its usage of renewable power at a far greater pace than other industries without the use of offsets (that can often simply be an excuse to delay shifts to greener energy).

I'll end with the following excerpt from the Norwegian conglomerate Aker's whitepaper that was just released and it really sums it up nicely:

"If it's a bubble, it dies and it consumes nothing. If it's digital gold, it's more efficient and will emit much less than the asset it disrupts. And if it's really successful, it's because of demand from truly value creating applications that define our future and should be worth the electricity."
Title: Re: Bitcoin is funny money
Post by: BicycleB on March 09, 2021, 08:32:53 PM

Surely, wherever local pricing anomalies exist that create artificially cheap power, some fraction of users will respond by BTC mining. In such cases where the grid extends beyond the cheap zone, more expensive power is generated as a result. Some of that power is likely emitting carbon and worsening climate change. The argument that some of the cheap power used is green and impact is lower than some anti-BTC commenters claim seems plausible. But that's only a matter of degree. To imply that little or no carbon emissions are generated seems highly fanciful.

I'm not sure what you mean by "the grid extends beyond the cheap zone". Electricity can only be transported so far over transmission lines before you start to receive significant loss and the power being delivered thus costs much greater.

In most of the US, power is generated in one location and moved to another. It can be moved for load balancing reasons to assure physical stability, or for financial reasons within the physical contraints. There's a sort of layered grid connecting local power regions to a larger network (you can find many details reading about ISOs and RTOs https://en.wikipedia.org/wiki/Regional_transmission_organization_(North_America) ). Despite the power loss you describe, connections exist for shipping the power around, and a complex system of establishing payment for the power exists. Every decade or two financial scandals emerge from pricing oddities.

It can happen and apparently does that a local producer, for reasons that may involve political or regulatory approval, chooses to set a lower price for local users than they would charge to sell the power elsewhere, over and above the price difference which is caused by transmission losses and the many many other factors affecting the price at which power is sold onto the larger grid. The Washington example was described as doing exactly that - offering a locally preferential lowered price by some sort of preset rule rather than a purely market based system - if I read it correctly. In simple terms, it's a cheap zone, but it's not an island. If extra power is used locally, the rest of the grid doesn't have the extra power available, and thus must generate more power to fill customer needs.

It's possible that there are times when they have little extra power, times when they have lots of extra power, and their lowered prices pertain to the periods when there is so much extra power that it's difficult to sell. In that case, the point that such moments are a better time to mine BTC than other times is supported by the system. Perhaps that's part of what creates the statistic that 63% of BTC energy use renewable instead of the national 20%. Yet it's also possible that once low prices lured miners to the area, they often use renewable energy that would otherwise have been shipped elsewhere, forcing other locations to generate power using fossil fuels. In which case some of the power used in the 63% statistic wouldn't be renewable if viewed at the grid level.

Regardless of detail, even if 63% were renewable, doesn't that mean 37% is still heating the planet?
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on March 10, 2021, 12:46:39 AM
Isn't that power that could have been sold the US's Western grid? Doesn't using it locally at cheap prices cause more expensive, less renewable energy to therefore be generated elsewhere?

Not really. The entire reason why it is cheap is because there is more production of electricity than there is demand for it. If it could be "exported" to other areas where there is more demand for it, then the price wouldn't be so cheap. Because electricity can't be transported or stored easily, there is very little arbitrage that takes place in electricity markets. If the electricity is cheap, there is an oversupply in the area and thus mining bitcoin becomes one of the few means of taking that electricity and turning it into economic value that can be used in the economy elsewhere.

You're ignoring the fact that cheap power is a really nice thing for residents of the area where it's available. There's economic value to being able to run my lights and computers and water heater cheaply because my city's hydroelectric dams provide an abundance of cheap energy. If our electric utility has more capacity than they need to serve the city, they can sell some at wholesale rates to other cities and states, paying part of the fixed cost of maintaining hydroelectric dams and thereby keeping retail rates low within the city. If Bitcoin miners swoop in to use up all the excess capacity and force the price upward, that's not a great outcome for the other electric customers in the area. Here in Seattle our electric rates have basically doubled in the past decade.
Title: Re: Bitcoin is funny money
Post by: DaKini on March 10, 2021, 01:38:02 AM
You can now use bitcoin's lightning network to instantly create one-time use VISA virtual cards for making purchases anywhere VISA is accepted without any fees.
Time to buy VISA?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 10, 2021, 05:59:38 AM
It seems like you both (seattlecyclone and BicycleB) are getting causality mixed up simply for the purpose of scapegoating bitcoin. The electricity markets exist in equilibrium long before bitcoin ever arrives. It doesn't matter whether energy is stranded because of physical transmission constraints or legal/regulatory constraints. That part is irrelevant. The point being is that electricity in a given market is cheap simply because there is an oversupply in the region. Saying that the electricity could be sold off elsewhere had it not been for bitcoin completely ignores the reality that bitcoin didn't exist in that market while those conditions still existed. If any supply can be sold off and therefore the electricity rates are no longer cheap in the area, then bitcoin mining would never be attracted to the area to begin with. Furthermore, electricity rates must continue to be cheap for the duration of mining (otherwise it becomes cost prohibitive).

Bitcoin mining requires cheap electricity and it determines what is and isn't cheap based on a global market for electricity, not a regional one. You're not going to see bitcoin move into an area of cheap electricity and drive up electricity prices to the point where they're not cheap any more because then that would defeat the purpose of mining bitcoin in that location. That's not to say that bitcoin mining won't increase prices in any given area where there are larger mining operations taking place. But to say that it is going to raise costs to the point where electricity isn't considered cheap anymore is a gross exaggeration and a misunderstanding of the economics of bitcoin mining.

Furthermore, bitcoin mining's energy use really only skyrocketed in 2017, going from about 8 TWh in mid-2017 to about 73 TWh in mid-2018. It has since plateaued with a peak in that time of no more than 77 TWh/yr with some significant dips here and there. Bitcoin's energy usage only spiked in 2017-2018, so even though bitcoin has been around for 12 years now, it's only been in the last 3-4 that energy use has grown. The claim that bitcoin mining will begin to consume all electricity (as some hyperbolic articles have claimed) is another misunderstanding of bitcoin mining economics. All bitcoin does is level out the costs of electricity in the electricity markets across the globe. If an area of once abundant electricity begins to see large amounts of population growth, that population growth (and thus demand for electricity) will drive out bitcoin mining naturally. In areas without additional demand, bitcoin mining will take place there, but only to a point where electricity costs are still cheap from a global standpoint. You're not ever going to see bitcoin push an electricity market to prices that would be considered expensive (or even average) from a global standpoint. If a location like Seattle has seen it's electricity prices double in 10 years, perhaps the finger should be pointed elsewhere... *cough*Amazon*cough*  Seems like you still have pretty dirt cheap prices though if you ask me.

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a (https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a)

And yes, the portion of bitcoin mining that does use fossil fuels is heating the planet. That same goes for everything that uses electricity though. That's why we need a price on carbon and doing so would immediately push bitcoin mining to even more renewable power much faster than any other industry. What we can't have is governments continuing to give out subsidies for fossil fuels. Governments worldwide give out $4.5 trillion in fossil fuel subsidies each year. That's inexcusable in a world trying to fight climate change. But that's not a bitcoin problem and bitcoin shouldn't be scapegoated for it either. At the end of the day, it is the energy grid that needs to be cleaned, not bitcoin.

When it comes down to it, the reason why you guys are scapegoating bitcoin for its use of electricity (even though it is clearly incentivized to use renewables) is because you guys don't see value in bitcoin (see video I've posted numerous times from the HRF). It all really boils down to a subjectivity argument on what one believes is a valid use of electricity and what isn't. But from our place of privilege it can be easy to forget that while some are using cloths dryers in the arid western US to dry their cloths as opposed to hanging them up outside, there are many that are legitimately using bitcoin because they don't have an alternative. I'll leave again with this quote that says it succinctly:

"If it's a bubble, it dies and it consumes nothing. If it's digital gold, it's more efficient and will emit much less than the asset it disrupts. And if it's really successful, it's because of demand from truly value creating applications that define our future and should be worth the electricity."
Title: Re: Bitcoin is funny money
Post by: Peaksandvalleys on March 10, 2021, 08:39:06 AM
It seems like you both (seattlecyclone and BicycleB) are getting causality mixed up simply for the purpose of scapegoating bitcoin. The electricity markets exist in equilibrium long before bitcoin ever arrives. It doesn't matter whether energy is stranded because of physical transmission constraints or legal/regulatory constraints. That part is irrelevant. The point being is that electricity in a given market is cheap simply because there is an oversupply in the region. Saying that the electricity could be sold off elsewhere had it not been for bitcoin completely ignores the reality that bitcoin didn't exist in that market while those conditions still existed. If any supply can be sold off and therefore the electricity rates are no longer cheap in the area, then bitcoin mining would never be attracted to the area to begin with. Furthermore, electricity rates must continue to be cheap for the duration of mining (otherwise it becomes cost prohibitive).

Bitcoin mining requires cheap electricity and it determines what is and isn't cheap based on a global market for electricity, not a regional one. You're not going to see bitcoin move into an area of cheap electricity and drive up electricity prices to the point where they're not cheap any more because then that would defeat the purpose of mining bitcoin in that location. That's not to say that bitcoin mining won't increase prices in any given area where there are larger mining operations taking place. But to say that it is going to raise costs to the point where electricity isn't considered cheap anymore is a gross exaggeration and a misunderstanding of the economics of bitcoin mining.

Furthermore, bitcoin mining's energy use really only skyrocketed in 2017, going from about 8 TWh in mid-2017 to about 73 TWh in mid-2018. It has since plateaued with a peak in that time of no more than 77 TWh/yr with some significant dips here and there. Bitcoin's energy usage only spiked in 2017-2018, so even though bitcoin has been around for 12 years now, it's only been in the last 3-4 that energy use has grown. The claim that bitcoin mining will begin to consume all electricity (as some hyperbolic articles have claimed) is another misunderstanding of bitcoin mining economics. All bitcoin does is level out the costs of electricity in the electricity markets across the globe. If an area of once abundant electricity begins to see large amounts of population growth, that population growth (and thus demand for electricity) will drive out bitcoin mining naturally. In areas without additional demand, bitcoin mining will take place there, but only to a point where electricity costs are still cheap from a global standpoint. You're not ever going to see bitcoin push an electricity market to prices that would be considered expensive (or even average) from a global standpoint. If a location like Seattle has seen it's electricity prices double in 10 years, perhaps the finger should be pointed elsewhere... *cough*Amazon*cough*  Seems like you still have pretty dirt cheap prices though if you ask me.

https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a (https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a)

And yes, the portion of bitcoin mining that does use fossil fuels is heating the planet. That same goes for everything that uses electricity though. That's why we need a price on carbon and doing so would immediately push bitcoin mining to even more renewable power much faster than any other industry. What we can't have is governments continuing to give out subsidies for fossil fuels. Governments worldwide give out $4.5 trillion in fossil fuel subsidies each year. That's inexcusable in a world trying to fight climate change. But that's not a bitcoin problem and bitcoin shouldn't be scapegoated for it either. At the end of the day, it is the energy grid that needs to be cleaned, not bitcoin.

When it comes down to it, the reason why you guys are scapegoating bitcoin for its use of electricity (even though it is clearly incentivized to use renewables) is because you guys don't see value in bitcoin (see video I've posted numerous times from the HRF). It all really boils down to a subjectivity argument on what one believes is a valid use of electricity and what isn't. But from our place of privilege it can be easy to forget that while some are using cloths dryers in the arid western US to dry their cloths as opposed to hanging them up outside, there are many that are legitimately using bitcoin because they don't have an alternative. I'll leave again with this quote that says it succinctly:

"If it's a bubble, it dies and it consumes nothing. If it's digital gold, it's more efficient and will emit much less than the asset it disrupts. And if it's really successful, it's because of demand from truly value creating applications that define our future and should be worth the electricity."

The reason people care about the power use is because it is outrageous.
I'll repeat, what am I really getting out of all that energy expenditure?
The ability to do transactions which I already do. The ability to speculate. Yes I know, "no middle man" blah blah blah.
The majority of people involved in the cryptocurrency industry just want to get rich quick. You are NAIVE to believe otherwise. It is a greed driven sector just like many others. Im not going to applaud you for your willingness to look the other way regardless of your internal justification
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 10, 2021, 08:59:45 AM
The reason people care about the power use is because it is outrageous.
I'll repeat, what am I really getting out of all that energy expenditure?
The ability to do transactions which I already do. The ability to speculate. Yes I know, "no middle man" blah blah blah.
The majority of people involved in the cryptocurrency industry just want to get rich quick. You are NAIVE to believe otherwise. It is a greed driven sector just like many others. Im not going to applaud you for your willingness to look the other way regardless of your internal justification

So then where is your outrage over gold who's carbon footprint is a magnitude higher than what bitcoin's is? You're statements are spoken from a position of privilege living in a country that allows you access to services to conduct transactions as you wish. 53% percentage of the human population live under authoritarian rule. Having a global currency with no borders is worth the price of admission.

https://www.washingtonpost.com/news/democracy-post/wp/2017/02/13/why-the-rise-of-authoritarianism-is-a-global-catastrophe/ (https://www.washingtonpost.com/news/democracy-post/wp/2017/02/13/why-the-rise-of-authoritarianism-is-a-global-catastrophe/)

https://www.youtube.com/watch?v=xLYYh4aPXAM (https://www.youtube.com/watch?v=xLYYh4aPXAM)

No one is saying that speculation isn't taking place, so there is no naivety there. It's naive to think that a completely decentralized monetary network that was organically bootstrapped from nothing wouldn't have speculation involved. It is inherent to the system at this stage. But ignoring the good that can come from such a system that clearly people are valuing it for beyond just speculation is showing your privilege simply because the system you happened to be born into is working just fine for you. In this regard, its energy use isn't outrageous as I can name off countless energy expenditures around the world that make bitcoin's energy use look pale in comparison and don't provide humanity any benefit whatsoever. For example, always-on but inactive home devices in the USA alone consume almost twice as much electricity as bitcoin does globally. Bitcoin's energy use is criticized mostly because it is overt and fairly easily calculated.

Again, if bitcoin has no value, it will bust and thus no longer consumes anything. If it is merely a digital gold and siphons any portion of gold's market, then it is a net improvement as far as climate change is concerned. If it ends being successful beyond just a store of value then it becomes something truly valuable to humanity and its energy usage is indeed justified.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 10, 2021, 10:03:37 AM
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.



Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 10, 2021, 10:15:03 AM
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 10, 2021, 10:23:28 AM
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.

Why should I? The title of this thread is “Bitcoin is funny money”. I’m on topic. I am correct. No one has been able to satisfactorily answer my questions (because there are none. Bitcoin is worthless). So, I refuse to cede the ground.

If bitcoin proponents want to have a jircle cerk, why don’t they go somewhere else and  do it.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 10, 2021, 10:30:36 AM
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.

Why should I? The title of this thread is “Bitcoin is funny money”. I’m on topic. I am correct. No one has been able to satisfactorily answer my questions (because there are none. Bitcoin is worthless). So, I refuse to cede the ground.

If bitcoin proponents want to have a jircle cerk, why don’t they go somewhere else and  do it.

Obviously it isn't worthless, it's trading at ~$56900 right now as I type this.  There are thousands and thousands of transactions every day, it's a very robust market with futures, options, margin trading.  The price discovery is very strong.  Clearly not worthless, so you're not correct.  You're wrong.  And you're only going to end up poorer because of it.
Title: Re: Bitcoin is funny money
Post by: Telecaster on March 10, 2021, 10:36:43 AM
Not really. The entire reason why it is cheap is because there is more production of electricity than there is demand for it. If it could be "exported" to other areas where there is more demand for it, then the price wouldn't be so cheap. Because electricity can't be transported or stored easily, there is very little arbitrage that takes place in electricity markets. If the electricity is cheap, there is an oversupply in the area and thus mining bitcoin becomes one of the few means of taking that electricity and turning it into economic value that can be used in the economy elsewhere.

Apologies for again using a local reference but it is one I am familiar with.  That's not how it works in the Columbia Basin which provides about 40% of the hydropower in the United States---so a relevant example.     

Hydropower resources were developed in a major way in the 1930s through the 1950-60s almost entirely by publicly owned companies.  There was very little need for power in the region at the time.   Almost all that generation capacity was created to be exported.  The bonds to finance the dams were paid off decades ago, so the power is super cheap.  In addition, the utility districts make money on the power sales, which lowers local rates.  However the public utilities are obligated by law to sell power preferentially to local users.  So far, so good?

So Bitcoin miners move in to take advantage of the cheap power, and submitted power requests beyond the total generating capacity of the entire utility district.   Obviously that's not possible, so after much haranguing deals got worked out.  But the bottom line is that power consumed by Bitcoin miners cannot be sold to other customers. 

Does this matter?  Yes it does.  Again, local reference but we're talking about millions of consumers so relevant.  Puget Sound Energy is the largest electrical utility in Washington State.  Their largest generation source is hydro power, 100% of which they buy from the Columbia Basin.  Because Columbia Basin hydro producers must sell to bitcoin miners they have to cut sales to PSE.  PSE's next largest generation source is coal, which they own.  After that: natural gas, which they also own.  Both those sources are most expensive than hydro, so the increased costs get directly passed along to the millions of rate payers who live outside of Bitcoin mining districts.  This is not hypothetical.  This is what actually happened. 

Similarly, huge amounts of power from the Columbia gets exported to California, particularly in the spring when flows are high.  If that power can't be exported, it has to be made up from other sources.  Some of those sources are going to be more expensive, carbon based energy. 

As an aside, the way some PUDs have dealt with the Bitcoin problem is to apply surcharges on "high density users."  But that also impacts other big power users like data centers.  Unlike Bitcoin mining, data centers provide good paying skilled jobs in rural areas. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 10, 2021, 11:37:01 AM
Apologies for again using a local reference but it is one I am familiar with.  That's not how it works in the Columbia Basin which provides about 40% of the hydropower in the United States---so a relevant example.     

Hydropower resources were developed in a major way in the 1930s through the 1950-60s almost entirely by publicly owned companies.  There was very little need for power in the region at the time.   Almost all that generation capacity was created to be exported.  The bonds to finance the dams were paid off decades ago, so the power is super cheap.  In addition, the utility districts make money on the power sales, which lowers local rates.  However the public utilities are obligated by law to sell power preferentially to local users.  So far, so good?

So Bitcoin miners move in to take advantage of the cheap power, and submitted power requests beyond the total generating capacity of the entire utility district.   Obviously that's not possible, so after much haranguing deals got worked out.  But the bottom line is that power consumed by Bitcoin miners cannot be sold to other customers. 

Does this matter?  Yes it does.  Again, local reference but we're talking about millions of consumers so relevant.  Puget Sound Energy is the largest electrical utility in Washington State.  Their largest generation source is hydro power, 100% of which they buy from the Columbia Basin.  Because Columbia Basin hydro producers must sell to bitcoin miners they have to cut sales to PSE.  PSE's next largest generation source is coal, which they own.  After that: natural gas, which they also own.  Both those sources are most expensive than hydro, so the increased costs get directly passed along to the millions of rate payers who live outside of Bitcoin mining districts.  This is not hypothetical.  This is what actually happened. 

Similarly, huge amounts of power from the Columbia gets exported to California, particularly in the spring when flows are high.  If that power can't be exported, it has to be made up from other sources.  Some of those sources are going to be more expensive, carbon based energy. 

As an aside, the way some PUDs have dealt with the Bitcoin problem is to apply surcharges on "high density users."  But that also impacts other big power users like data centers.  Unlike Bitcoin mining, data centers provide good paying skilled jobs in rural areas.

But again, Washington continues to have the some of the cheapest electricity in the country (5th cheapest state in the country) even with a boom in bitcoin miners to the region because of their hydro capacity. Furthermore, California is continuing to see a decline in imports from this region as their production of solar and wind continues to climb (with imports declining by double digits percentages year after year).

Also, your facts about PSE's production sources is incorrect. Hydro is not their largest source of electricity. It isn't even second. It is third behind both coal and natural gas:

https://www.pse.com/pages/energy-supply/electric-supply (https://www.pse.com/pages/energy-supply/electric-supply)

At the end of the day, locals to the basin still have cheap electricity and Washington state still continues to have dirt cheap electricity compared with the rest of the country. Also, unlike bitcoin, energy hogs like Amazon and other large commercial and industrial businesses can't as easily locate their energy use based on an optimal energy mix which means they're going to be much more likely to consume dirty energy sources. While bitcoin is incentivized to use cleaner energy, other services today instead opt to make empty promises of being "net zero by 2050" and green-wash their consumption instead. Again, if bitcoin even siphons away a small fraction of the current financial or gold section, it will be a net-win for climate globally.

EDIT: Just wanted to add here is a comparison of electricity prices for Seattle in the period from just before bitcoin mining until now. From 10.8 cents/KWh to 11.4 cents/KWh. I'd be willing to bet that the share of that minor increase that is related to bitcoin mining is negligible.

https://www.bls.gov/regions/west/news-release/2019/averageenergyprices_seattle_20190116.htm (https://www.bls.gov/regions/west/news-release/2019/averageenergyprices_seattle_20190116.htm)
https://www.bls.gov/regions/west/news-release/averageenergyprices_seattle.htm (https://www.bls.gov/regions/west/news-release/averageenergyprices_seattle.htm)
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 10, 2021, 12:26:53 PM
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.

Why should I? The title of this thread is “Bitcoin is funny money”. I’m on topic. I am correct. No one has been able to satisfactorily answer my questions (because there are none. Bitcoin is worthless). So, I refuse to cede the ground.

If bitcoin proponents want to have a jircle cerk, why don’t they go somewhere else and  do it.

Obviously it isn't worthless, it's trading at ~$56900 right now as I type this.  There are thousands and thousands of transactions every day, it's a very robust market with futures, options, margin trading.  The price discovery is very strong.  Clearly not worthless, so you're not correct.  You're wrong.  And you're only going to end up poorer because of it.

Tulip bulbs, my friend. Tulip bulbs.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 10, 2021, 12:59:57 PM
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.

Why should I? The title of this thread is “Bitcoin is funny money”. I’m on topic. I am correct. No one has been able to satisfactorily answer my questions (because there are none. Bitcoin is worthless). So, I refuse to cede the ground.

If bitcoin proponents want to have a jircle cerk, why don’t they go somewhere else and  do it.

Obviously it isn't worthless, it's trading at ~$56900 right now as I type this.  There are thousands and thousands of transactions every day, it's a very robust market with futures, options, margin trading.  The price discovery is very strong.  Clearly not worthless, so you're not correct.  You're wrong.  And you're only going to end up poorer because of it.

Tulip bulbs, my friend. Tulip bulbs.

And the best thing is you can just keep on repeating that, no matter what the price is.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 10, 2021, 01:26:19 PM
Why is it that bitcoin needs an army of bullshit artists to give such a sales pitch all the time?

For that reason alone, people should avoid it.

Why is it that people that don't like bitcoin can never shut up about it?  Go and do something else LMAO.

Why should I? The title of this thread is “Bitcoin is funny money”. I’m on topic. I am correct. No one has been able to satisfactorily answer my questions (because there are none. Bitcoin is worthless). So, I refuse to cede the ground.

If bitcoin proponents want to have a jircle cerk, why don’t they go somewhere else and  do it.

Obviously it isn't worthless, it's trading at ~$56900 right now as I type this.  There are thousands and thousands of transactions every day, it's a very robust market with futures, options, margin trading.  The price discovery is very strong.  Clearly not worthless, so you're not correct.  You're wrong.  And you're only going to end up poorer because of it.

Tulip bulbs, my friend. Tulip bulbs.

And the best thing is you can just keep on repeating that, no matter what the price is.

Price does not equal value.  Lots of things are sold that are worthless.

 Take lottery tickets for example. There is huge demand for them. And, by and large, they are worthless because most people will not break even on lottery ticket purchases over their lifetime.

Tulip bulbs are classic example of price being unhinged from actual value.

Also lets take late 90s tech startups/IPOs. Mostly worthless.

Sub-prime mortgages. Almost took down the whole financial system.

All of these things had in common that the price, for a time, far outstriped any rational assessment of value. Those who understand this can avoid them. Those that can usually end up getting burned.

Now is not different with bitcoin. It is a worthless ledger entry. It doesn’t entitle anyone to anything. The fact that there is novelty in trading them today does not make them intrinsically valuable. So it goes.


Title: Re: Bitcoin is funny money
Post by: Telecaster on March 10, 2021, 01:40:27 PM

Also, your facts about PSE's production sources is incorrect. Hydro is not their largest source of electricity. It isn't even second. It is third behind both coal and natural gas:

https://www.pse.com/pages/energy-supply/electric-supply (https://www.pse.com/pages/energy-supply/electric-supply)


Thanks for the clarification.  However point remains, PSE doesn't generate their own hydro power.  They buy it.  If there isn't available hydro power to buy, they generate it themselves using fossil fuels.  Question:  Have Columbia Basin hydro producers cut back their sales to PSE due to increased demand by Bitcoin miners?  Answer:  Yes they have.

Quote
EDIT: Just wanted to add here is a comparison of electricity prices for Seattle in the period from just before bitcoin mining until now. From 10.8 cents/KWh to 11.4 cents/KWh. I'd be willing to bet that the share of that minor increase that is related to bitcoin mining is negligible.

https://www.bls.gov/regions/west/news-release/2019/averageenergyprices_seattle_20190116.htm (https://www.bls.gov/regions/west/news-release/2019/averageenergyprices_seattle_20190116.htm)
https://www.bls.gov/regions/west/news-release/averageenergyprices_seattle.htm (https://www.bls.gov/regions/west/news-release/averageenergyprices_seattle.htm)

I'd agree with that.  Seattle has its own electrical utility, which obtains a lot power from hydro generated by dams the city owns, all on the west side of the mountains, none on the Columbia.   The rest of it they have to buy.  So power here is cheap, but it isn't Bitcoin cheap.  The price is also influenced by snowpack.  In big snow years they generate a lot more power, so the cost goes down.  Vice versa in dry years.    So you can pay 11.4  cents/KWh or whatever in Seattle or drive over the mountain and pay 2.4 cents/KWh.  If you are a bitcoin miner, you'll drive over the mountain.  In fact, the first miner I'm aware of who did it on a large scale (I'm sure there were others before him, but first one I heard about) did exactly that.  Relocated from Seattle to Wenatchee.  AFAIK, there's never been significant Bitcoin mining here beyond the hobby level.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 10, 2021, 01:43:32 PM
Price does not equal value.  Lots of things are sold that are worthless.

Take lottery tickets for example. There is huge demand for them. And, by and large, they are worthless because most people will not break even on lottery ticket purchases over their lifetime.

Tulip bulbs are classic example of price being unhinged from actual value.

Also lets take late 90s tech startups/IPOs. Mostly worthless.

Sub-prime mortgages. Almost took down the whole financial system.

All of these things had in common that the price, for a time, far outstriped any rational assessment of value. Those who understand this can avoid them. Those that can usually end up getting burned.

Now is not different with bitcoin. It is a worthless ledger entry. It doesn’t entitle anyone to anything. The fact that there is novelty in trading them today does not make them intrinsically valuable. So it goes.

How many of those things have been the best trading asset for 10+ years running? Certainly any market can act irrational for a period of time, but at some point you have to admit that you were wrong about what the market is demanding. Again, no one is saying there isn't a lot of speculation taking place, but behind all that speculation is massively growing demand for censorship resistant decentralized money.

But I do agree with you that price does not equal value. However, in this case I feel you're wrong in which direction it is misaligned. In this case the value is higher than what the market has been pricing it as and you're witnesses the market completely reprice it accordingly.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 10, 2021, 02:49:44 PM
Thanks for the clarification.  However point remains, PSE doesn't generate their own hydro power.  They buy it.  If there isn't available hydro power to buy, they generate it themselves using fossil fuels.  Question:  Have Columbia Basin hydro producers cut back their sales to PSE due to increased demand by Bitcoin miners?  Answer:  Yes they have.

But that's beside the point and it doesn't back up your claim that bitcoin mining in the river basin was driving up costs for PSE customers.

I'd agree with that.  Seattle has its own electrical utility, which obtains a lot power from hydro generated by dams the city owns, all on the west side of the mountains, none on the Columbia.   The rest of it they have to buy.  So power here is cheap, but it isn't Bitcoin cheap.  The price is also influenced by snowpack.  In big snow years they generate a lot more power, so the cost goes down.  Vice versa in dry years.    So you can pay 11.4  cents/KWh or whatever in Seattle or drive over the mountain and pay 2.4 cents/KWh.  If you are a bitcoin miner, you'll drive over the mountain.  In fact, the first miner I'm aware of who did it on a large scale (I'm sure there were others before him, but first one I heard about) did exactly that.  Relocated from Seattle to Wenatchee.  AFAIK, there's never been significant Bitcoin mining here beyond the hobby level.

No one is saying that PSE electricity is as cheap as the electricity near the dams in the river basin where bitcoin mining is taking place. That's precisely why bitcoin miners would choose to locate there. But again, it goes back to the claim that bitcoin mining was driving up electricity rates for customers both inside the river basin and for outside utilities which just wasn't true. Here is another historical rate sheet for Avista, another utility in WA, going way back and there is just not any evidence to back up the claim being made.

https://www.myavista.com/-/media/myavista/content-documents/our-rates-and-tariffs/wa/waeratehist.pdf (https://www.myavista.com/-/media/myavista/content-documents/our-rates-and-tariffs/wa/waeratehist.pdf)

Here is Chelan County's public utility's long term rate planning presentation that shows they haven't increased rates for customers for 8 straight years (2012-2020) and only a 9% increase in total from 2000-2020 (inflation during that time was 40%).

https://www.chelanpud.org/docs/default-source/commission/rates-planning.pdf (https://www.chelanpud.org/docs/default-source/commission/rates-planning.pdf)

Same with Douglas County at the peak of bitcoin mining mania:

https://douglaspud.org/Documents/Feb%20Rates%202018.pdf (https://douglaspud.org/Documents/Feb%20Rates%202018.pdf)


So it doesn't matter whether you're looking at outside utilities or residential customers of the public utilities in the river basin, there is just no data to back up the claim that bitcoin mining was driving up costs for customers. At the end of the day it is a lot of hand-waving over something that isn't as big as it is made out to be.
Title: Re: Bitcoin is funny money
Post by: BicycleB on March 10, 2021, 09:25:45 PM
It seems like you both (seattlecyclone and BicycleB) are getting causality mixed up simply for the purpose of scapegoating bitcoin.

It may seem like it to you, but I'm not scapegoating. In case you haven't noticed, I haven't even taken sides in the great "BTC good, BTC bad" debate. I admit that I just expressed an opinion with a negative implication, but I did not extend from there to generalize "BTC bad". Because I haven't even concluded that. Maybe the utility of BTC is enough to compensate for the pollution; I'm pondering that question. The power causality and the carbon impact seem obvious to me, so they're what I said. Assuming my purpose is scapegoating seems like a unfair negative assumption to me, and hurts my feelings. Isn't assuming negative motivations an attack according to forum policy?

Re causality, I'm expressing the view of causality that numerous professional analysts of power and pricing systems believe, including economists, lawmakers and engineers. I suspect they would say you're the one who has causality mixed up. Your logic path on local power pricing makes sense based on its premises but the premises appear to omit relevant information that logically produces a different result - info that is considered fact by people in the field, and which I mentioned in my reply.

The examples you gave in the post just above seem suggestive in your argument's favor, but it's unclear whether they're enough to disprove the more general principles.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 11, 2021, 05:52:50 AM
It may seem like it to you, but I'm not scapegoating. In case you haven't noticed, I haven't even taken sides in the great "BTC good, BTC bad" debate. I admit that I just expressed an opinion with a negative implication, but I did not extend from there to generalize "BTC bad". Because I haven't even concluded that. Maybe the utility of BTC is enough to compensate for the pollution; I'm pondering that question. The power causality and the carbon impact seem obvious to me, so they're what I said. Assuming my purpose is scapegoating seems like a unfair negative assumption to me, and hurts my feelings. Isn't assuming negative motivations an attack according to forum policy?

Re causality, I'm expressing the view of causality that numerous professional analysts of power and pricing systems believe, including economists, lawmakers and engineers. I suspect they would say you're the one who has causality mixed up. Your logic path on local power pricing makes sense based on its premises but the premises appear to omit relevant information that logically produces a different result - info that is considered fact by people in the field, and which I mentioned in my reply.

The examples you gave in the post just above seem suggestive in your argument's favor, but it's unclear whether they're enough to disprove the more general principles.

Please don't take anything I said personally. I made no personal attacks against you. We're having a good debate and I was merely saying what my perception was. Rereading your original post again I understand your skepticism and that you're withholding judgement. I simply said scapegoating because bitcoin is often singled out as being very harmful for the climate, but in the end that blame is often outsized compared to the blame that should be pointed elsewhere. In reality, bitcoin's energy consumption is only about 0.15% of global electricity consumption and only 0.024% of total energy production.

Furthermore, there seems to be a lack of context when referring to bitcoin's energy use while it is being singled out. For example, in all the threads about gold on these forums, I don't see critics jumping into those threads about gold's carbon footprint even though it is much larger than bitcoin's. And while gold's footprint will likely get higher as reserves are more difficult to reach, at least bitcoin's is incentivized to get better with time. At the end of the day, bitcoin is an alternative. Whether that's an alternative to gold or fiat, it's energy use must be compared with those since you can only hold specific value in one or the other at any given time. In both cases, bitcoin's carbon footprint is lower. I'm not saying that bitcoin doesn't have an impact on the environment, everything we use and do does. But as an alternative to some of the money and stores of value that we have available to us, it can be better as an alternative from that perspective.

It is the same type of faulty scapegoating you see when critics call out electric vehicles and their batteries, solar, or wind power for their negative impacts on the environment without considering the fact that they're alternatives the fossil fuel industry. They're better alternatives and calling out the faults of battery components while not recognizing it as an alternative to fossil fuels is a major lapse in constructive criticism.

The appeal to authority that you made in regard economists, lawmakers, and engineers is hardly a decent rebuttal without the evidence from those authorities to back up the claims being made. That's not to say that there isn't some bitcoin mining out there that is raising the market price for customers in any given region. But there probably hasn't been a bigger concentration bitcoin mining in the world than what there was in the Columbia river basin during its peak in 2017-2018 and as I showed there wasn't any increase in electricity rates for customers. The reality is that the impact of bitcoin's electricity use, because of its decentralized nature, is mostly spread out over the globe and therefore doesn't impact local pricing for customers as much as you'd think. Bitcoin seeks out cheap electricity and usually with cheap electricity comes a heavy supply that has some elasticity to it before pricing needs to respond to increased demand.

At the end of the day, a lot of the criticism for bitcoin's energy use is unwarranted in context. Many of the people criticizing bitcoin for its carbon footprint probably wouldn't hesitate to sit down for a steak dinner even though animal agriculture accounts for about 18% of global emissions. Meanwhile bitcoin only accounts for 0.024% of global energy production and a good portion of that energy is clean. It just seems disingenuous to me with misplaced blame.

I do enjoy a good debate and that is why I engage in them. Frankly, nothing makes me more bullish about bitcoin after seeing some of the other tired arguments against it in this thread (tULiPs?!?!). It is a signal to me that we're still early.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on March 11, 2021, 01:19:10 PM
I simply said scapegoating because bitcoin is often singled out as being very harmful for the climate, but in the end that blame is often outsized compared to the blame that should be pointed elsewhere. [...] Furthermore, there seems to be a lack of context when referring to bitcoin's energy use while it is being singled out. For example, in all the threads about gold on these forums, I don't see critics jumping into those threads about gold's carbon footprint even though it is much larger than bitcoin's.

This thread is about Bitcoin. Talking about Bitcoin's carbon emissions is relevant and on topic. Talking about gold's is not, and is a rather common form of whataboutism from Bitcoin enthusiasts.

Second, even if this were relevant, do you have any sources for this? I did some back-of-the-napkin math, and I think this is incorrect. 198k tons of gold have been mined throughout history, and 2/3 of those have been mined since 1950 [1]. It's estimated that about 0.8 tons of CO2 are emitted per ounce of gold mined [2]. There are 32,000 ounces per ton, meaning a high estimate of CO2 emissions for total gold mining would be 0.8 tons/ounce * 32,000 ounces/ton * 198,000 tons * 2/3 = ~3.4 Billion total tons of CO2 since 1950 or 48M tons annually. Bitcoin is currently responsible for about 90.2M tons of CO2 per year [3].


[1] https://www.gold.org/about-gold/gold-supply/gold-mining/how-much-gold
[2] https://www.spglobal.com/marketintelligence/en/news-insights/blog/greenhouse-gas-and-gold-mines-nearly-1-ton-of-co2-emitted-per-ounce-of-gold-produced-in-2019
[3] https://www.theguardian.com/technology/2021/mar/10/bitcoin-rise-could-leave-carbon-footprint-size-london

And while gold's footprint will likely get higher as reserves are more difficult to reach, at least bitcoin's is incentivized to get better with time.

How do you figure this? As the price rises, so does the incentive to mine. Seems odd to simultaneously believe the price of Bitcoin will increase while its energy-requirements decrease. I know "Proof of Stake!" is the trademarked get-out-of-jail excuse here, but that's been the talking point for the better part of a decade. I ain't buyin' it.

At the end of the day, bitcoin is an alternative. Whether that's an alternative to gold or fiat, it's energy use must be compared with those since you can only hold specific value in one or the other at any given time. In both cases, bitcoin's carbon footprint is lower. I'm not saying that bitcoin doesn't have an impact on the environment, everything we use and do does. But as an alternative to some of the money and stores of value that we have available to us, it can be better as an alternative from that perspective.

Again, do you have any sources to back this up? And, given that it's not replaced either of these things (and looks extremely unlikely to do so), how is it helpful even if what you're saying is true? Lighting a tire fire in my back yard may produce less CO2 than having a kid, but it's still a pretty unnecessary thing to do. Even if someone offered to pay me lots of money to "own" the tire fire!

It is the same type of faulty scapegoating you see when critics call out electric vehicles and their batteries, solar, or wind power for their negative impacts on the environment without considering the fact that they're alternatives the fossil fuel industry. They're better alternatives and calling out the faults of battery components while not recognizing it as an alternative to fossil fuels is a major lapse in constructive criticism.

There's a fundamental difference. A solar farm replaces the need for a coal or oil powerplant. An electric vehicle replaces the need for a ICE vehicle. They're net positive. Bitcoin replaces nothing. Like my tire fire example, it's just damaging with no real upside from a climate perspective.

A more relevant comparison would be flights. They're huge polluters. Most Americans still fly. And maybe you could argue the cost is worth it. But it'd be silly to argue flights are good for the climate because they're not as bad as some other unrelated very bad thing (agriculture? cars?)

The appeal to authority that you made in regard economists, lawmakers, and engineers is hardly a decent rebuttal without the evidence from those authorities to back up the claims being made. That's not to say that there isn't some bitcoin mining out there that is raising the market price for customers in any given region. But there probably hasn't been a bigger concentration bitcoin mining in the world than what there was in the Columbia river basin during its peak in 2017-2018 and as I showed there wasn't any increase in electricity rates for customers. The reality is that the impact of bitcoin's electricity use, because of its decentralized nature, is mostly spread out over the globe and therefore doesn't impact local pricing for customers as much as you'd think. Bitcoin seeks out cheap electricity and usually with cheap electricity comes a heavy supply that has some elasticity to it before pricing needs to respond to increased demand.

Especially in countries with few regulations, like North Korea and China.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 11, 2021, 02:18:51 PM
This thread is about Bitcoin. Talking about Bitcoin's carbon emissions is relevant and on topic. Talking about gold's is not, and is a rather common form of whataboutism from Bitcoin enthusiasts.

I didn't say this thread. I said threads on this forum about gold. I was making the point that members on this forum (and in general) don't point the finger at gold's large carbon footprint when discussing gold, but won't hesitate to remark about bitcoin's the moment a bitcoin thread appears. You can do the searches on this forum yourself if you don't believe me. It isn't whataboutism. Because as I said, it is a zero-sum game. You can only store specific value in one or the other, so it is very relevant to compare the carbon footprints of both.

Second, even if this were relevant, do you have any sources for this? I did some back-of-the-napkin math, and I think this is incorrect. 198k tons of gold have been mined throughout history, and 2/3 of those have been mined since 1950 [1]. It's estimated that about 0.8 tons of CO2 are emitted per ounce of gold mined [2]. There are 32,000 ounces per ton, meaning a high estimate of CO2 emissions for total gold mining would be 0.8 tons/ounce * 32,000 ounces/ton * 198,000 tons * 2/3 = ~3.4 Billion total tons of CO2 since 1950 or 48M tons annually. Bitcoin is currently responsible for about 90.2M tons of CO2 per year [3].


[1] https://www.gold.org/about-gold/gold-supply/gold-mining/how-much-gold
[2] https://www.spglobal.com/marketintelligence/en/news-insights/blog/greenhouse-gas-and-gold-mines-nearly-1-ton-of-co2-emitted-per-ounce-of-gold-produced-in-2019
[3] https://www.theguardian.com/technology/2021/mar/10/bitcoin-rise-could-leave-carbon-footprint-size-london

Yes, I do have a source. Digiconomist developed a new method of determining bitcoin's electricity consumption and thus carbon footprint. They've combined both the economics-based methods and the physics-based methods and combines them to form the Composite Bitcoin Energy Index (CBEI). You can read about their methodologies here:

https://bitcoinmagazine.com/business/introducing-cbei-a-new-way-to-measure-bitcoin-network-electrical-consumption (https://bitcoinmagazine.com/business/introducing-cbei-a-new-way-to-measure-bitcoin-network-electrical-consumption)

As you can see in their findings, Alex De Vries C-BECI results are usually on the higher bound of estimates and it seems like you're grabbing (or at least the article you cited is grabbing) the very highest bound estimate (not surprising for a news outlet to do so).

(https://bitcoinmagazine.com/.image/c_limit%2Ccs_srgb%2Cq_auto:good%2Cw_700/MTc5Mjk3ODExODQ4NDM5NDkx/image-placeholder-title.webp)

At any rate, the composite between all these methods that includes results from University of Cambridge, Judge Business School (JBS), The International Energy Agency (IEA), Electric Power Research Institute (EPRI), Coin Center, CoinShares, Marc Bevand, Hass McCook, and Alex de Vries can be found at the following link. The image above is from the old article describing the methodology to combine all these sources (hence why it isn't current), but the link below is up to date.

https://digiconomist.net/bitcoin-energy-consumption/ (https://digiconomist.net/bitcoin-energy-consumption/)

The current carbon footprint for Bitcoin's energy consumption stands at 37.82Mt CO2e.

For gold's carbon footprint, if we're looking at just the production side of gold, it currently stands at about 125.522Mt CO2e (source: World Gold Council). Why use "back-of-the-napkin" math when you can just cite the World Gold Council?

https://www.nsenergybusiness.com/news/gold-climate-change-net-zero-mining/ (https://www.nsenergybusiness.com/news/gold-climate-change-net-zero-mining/)
(https://www.nsenergybusiness.com/wp-content/uploads/sites/3/2019/10/Gold-industry-GHG-emissions-World-Gold-Council.png)



How do you figure this? As the price rises, so does the incentive to mine. Seems odd to simultaneously believe the price of Bitcoin will increase while its energy-requirements decrease. I know "Proof of Stake!" is the trademarked get-out-of-jail excuse here, but that's been the talking point for the better part of a decade. I ain't buyin' it.

No, you're not going to hear any proof-of-stake argument from me. Proof-of-stake is inherently flawed from a security standpoint and it will never be implemented for bitcoin. Bitcoin is incentivized to use renewables though. As the cost to produce electricity with renewables continues to decline, bitcoin will naturally becomes more and more green. As it stands, it is already way far ahead of any other industry once you take out subsidies for fossil fuels from the equation. In the US, bitcoin's total energy share from renewables stands at 63% while the total production share of renewables is only at 20%. So there are clear incentives to use clean energy. The overall trend in the energy industry is that renewables are getting cheaper and cheaper. As this trend continues, it will be cost prohibitive to mine bitcoin on anything but renewable energy. That's just how the incentives operate. That's not to say that gold's carbon footprint won't decrease either. But it will be a lot more difficult to clean up gold's carbon footprint from mining and heavy machinery. Furthermore, gold will most likely just simply go "net-zero" through offsets instead. But offsets are rather meaningless when it comes to climate change.


Again, do you have any sources to back this up? And, given that it's not replaced either of these things (and looks extremely unlikely to do so), how is it helpful even if what you're saying is true? Lighting a tire fire in my back yard may produce less CO2 than having a kid, but it's still a pretty unnecessary thing to do. Even if someone offered to pay me lots of money to "own" the tire fire!

See my sources above, but I don't see how your tire fire analogy is at all relevant here and it isn't even close to being an accurate analogy. Gold and bitcoin are very much competing assets from a store of value perspective. There are countless surveys with millennials and younger about whether they'd rather own gold or bitcoin and the choice is always a resounding bitcoin in that regard. If bitcoin continues to siphon away investment into gold, and thus gold mining declines, then that will very much be a net-positive when it comes to the environment/emissions.


"If it's a bubble, it dies and it consumes nothing. If it's digital gold, it's more efficient and will emit much less than the asset it disrupts. And if it's really successful, it's because of demand from truly value creating applications that define our future and should be worth the electricity."
(Source: Seetee's Whitepaper: https://www.seetee.io/static/shareholder_letter-6ae7e85717c28831bf1c0eca1d632722.pdf (https://www.seetee.io/static/shareholder_letter-6ae7e85717c28831bf1c0eca1d632722.pdf))
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 11, 2021, 02:43:36 PM
I’m surprised that 10 pages in we still haven’t heard any cogent arguments in favor of bitcoin. Well. Really I’m not actually surprised because there are none. It all boils down to a great fool argument as far as I can tell. There is still nothing to recommend bitcoin over regular money besides the argument that someone will pay more for it in the future. Why? Nobody knows. But we are assured by people, who are themselves heavily “invested” in it, that it will. Go figure.

Title: Re: Bitcoin is funny money
Post by: Wintergreen78 on March 12, 2021, 07:37:41 AM
Bitcoin is about to begin a long decline. As I’ve known all along, cryptokitties will be its downfall. They’re like Bitcoin, but with kittens!

Non-fungible tokens are the new thing. You can collect cryptokitties, digital collages, NBA highlights, and other tchotchkes. Even the Washington Post is writing articles about them now!

https://www.washingtonpost.com/technology/2021/03/12/nft-beeple-christies-blockchain/
Title: Re: Bitcoin is funny money
Post by: Not There Yet on March 13, 2021, 10:56:37 AM
Quote
Non-fungible tokens are the new thing. You can collect cryptokitties, digital collages, NBA highlights, and other tchotchkes.

When I first learned about NFTs, I thought, "Great.  Now we have crypto-Beanie Babies."

Quote
Bitcoin is about to begin a long decline.

I agree.  People will dump Bitcoin and jump on NFTs as "The Next Big Thing".
Title: Re: Bitcoin is funny money
Post by: onecoolcat on March 13, 2021, 11:14:03 AM
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

Friendly reminder that today is March 13, 2021 and the price of 1 Bitcoin is $60,137.  This is a 137% increase over what it was the date you made this thread on December 26, 2020 ($25,282).
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on March 13, 2021, 01:25:12 PM
This is basically a "top is in" thread for btc.
Title: Re: Bitcoin is funny money
Post by: Vienna4ever on March 13, 2021, 02:34:29 PM
Bitcoin is funny money. Why? Because the story keeps changing.

First they said it is like currency and could do microtransactions, that you'd be able to buy a cup of coffee with it. Now it costs enough energy to heat a whole house for a year to make a transaction.

Then they said, oh, it's not currency, it's actually a store of value, like gold , or maybe it is a commodity. I even once heard someone say "it stores the energy made to produce it" - really? can you release the energy from a bitcoin to use it? Back to the store of value argument, what store of value is it if it can't be used for anything. "oh but gold is intrinsically useless". Really? I guess you better tell all those dentists, jewelers, aerospace companies, electronics makers, pharma companies, etc that they are wasting their money and time. The price of gold will never go to zero, because as a commodity, it has intrinsic usefulness for which there will always be some demand for, unlike bitcoin which has none.  Somebody tell me, what can you do with a bitcoin? Yeah yeah, we are all old and out of touch. Or maybe you are young and naive - don't have experience or wisdom -  and haven't seen (or read enough history) to know about bubbles.

"Oh but bitcoin is rare"..  Really are there like a bunch of satoshis? What about the 7000+ other cryptocurrencies (and growing)? If it is so easy to make your own cryptocurrency what then makes bitcoin rare? What's to stop anyone from getting bored with bitcoin and not move on to some other , better crypto? It's like buying the iPhone 1 and then expecting no one to want iPhone 25-XXX.


Asks yourselves, why is CBNC always talking about Bitcoin? Could it be that they are getting paid to constantly run ads by Grayscale Bitcoin Trust?

 
Sure those that got in early made money. But those coming in late will be left holding the bag.

 
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 13, 2021, 02:40:42 PM
Bitcoin is funny money. Why? Because the story keeps changing.

First they said it is like currency and could do microtransactions, that you'd be able to buy a cup of coffee with it. Now it costs enough energy to heat a whole house for a year to make a transaction.

Then they said, oh, it's not currency, it's actually a store of value, like gold , or maybe it is a commodity. I even once heard someone say "it stores the energy made to produce it" - really? can you release the energy from a bitcoin to use it? Back to the store of value argument, what store of value is it if it can't be used for anything. "oh but gold is intrinsically useless". Really? I guess you better tell all those dentists, jewelers, aerospace companies, electronics makers, pharma companies, etc that they are wasting their money and time. The price of gold will never go to zero, because as a commodity, it has intrinsic usefulness for which there will always be some demand for, unlike bitcoin which has none.  Somebody tell me, what can you do with a bitcoin? Yeah yeah, we are all old and out of touch. Or maybe you are young and naive - don't have experience or wisdom -  and haven't seen (or read enough history) to know about bubbles.

"Oh but bitcoin is rare"..  Really are there like a bunch of satoshis? What about the 7000+ other cryptocurrencies (and growing)? If it is so easy to make your own cryptocurrency what then makes bitcoin rare? What's to stop anyone from getting bored with bitcoin and not move on to some other , better crypto? It's like buying the iPhone 1 and then expecting no one to want iPhone 25-XXX.


Asks yourselves, why is CBNC always talking about Bitcoin? Could it be that they are getting paid to constantly run ads by Grayscale Bitcoin Trust?

 
Sure those that got in early made money. But those coming in late will be left holding the bag.

Have fun staying poor.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 13, 2021, 04:12:57 PM
Bitcoin is funny money. Why? Because the story keeps changing.

As someone who's been involved with it from early on, I can tell you that the story hasn't changed one bit. It has always been the arguments against it that have constantly been changing as it continued to gain adoption.

And if you really think that because there are a myriad of other cryptocurrencies out there then that somehow invalidates bitcoin's scarcity, then I suggest you do more research.

Start with this article perhaps:

https://www.lynalden.com/bitcoins-network-effect/ (https://www.lynalden.com/bitcoins-network-effect/)
Title: Re: Bitcoin is funny money
Post by: onecoolcat on March 13, 2021, 06:44:04 PM
Bitcoin is funny money. Why? Because the story keeps changing.

As someone who's been involved with it from early on, I can tell you that the story hasn't changed one bit. It has always been the arguments against it that have constantly been changing as it continued to gain adoption.

And if you really think that because there are a myriad of other cryptocurrencies out there then that somehow invalidates bitcoin's scarcity, then I suggest you do more research.

Start with this article perhaps:

https://www.lynalden.com/bitcoins-network-effect/ (https://www.lynalden.com/bitcoins-network-effect/)

I got a chuckle out of that comment too! 
Title: Re: Bitcoin is funny money
Post by: effigy98 on March 13, 2021, 09:26:03 PM
Top is in 61k! Maybe I will get a MicroStrategy tattoo soon. MicroStrategy position is larger than my grandpa index funds now... Maybe its time to rebalance.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 14, 2021, 05:57:59 AM
Bitcoin is nothing. When someone “owns” a bitcoin they own nothing. The money used to buy the bitcoin is immediately transferred to the seller where, I assume, it is promptly spent on base consumption. So there is no investment in bitcoin because money is not put to productive endeavors nor does it represent a static pattern of higher value gained through human achievement such as fine art.

Bitcoin is valueless because, assuming one had enough money, it would not be worth it to own them all...at any price.  Once someone owns them all the whole thing ends.  The same cannot be said for a real investment. Ownership of all stock in a company would entitle one to all of the future earnings of the company or to liquidate the assets. Ownership of all of a bond issue of a company would entitle one to a stream of income and return of principal upon maturity. Real estate provides real tangible benefits which can be enjoyed by the owner or rented out. Ownership of more real estate provides more rights.  Ownership of virtually all of the real estate rights in a given locale turns someone into a lord in the traditional sense.

Further, the price of a bitcoin is a silly thing. This is just the price at which the last one traded at.  But they cannot all be sold at this price. If everyone tried to get out on short notice, there would be no buyers and the price would disappear. Miners would quickly withdraw and the whole thing could vanish.  Sure a rush for the exits could happen in any asset but eventually someone will ride in and begin buying based their understanding of the underlying or intrinsic value. This is the essence of value investing. This is how markets right themselves after volatility. People stop panicking and recover a sense of value. But since there is no underlying value to bitcoin there should be no belief that a market collapse would eventually stop and then turn around in all cases. It is possible to loose everything with bitcoin.
Title: Re: Bitcoin is funny money
Post by: Vienna4ever on March 14, 2021, 02:05:30 PM

Have fun staying poor.

The kool-aid is strong in this one.

Title: Re: Bitcoin is funny money
Post by: Vienna4ever on March 14, 2021, 02:11:14 PM

As someone who's been involved with it from early on, I can tell you that the story hasn't changed one bit. It has always been the arguments against it that have constantly been changing as it continued to gain adoption.

https://bitcoinmagazine.com/technical/bitcoin-now-useless-micropayments-solutions-are-coming1

Quote from: lifeanon269
And if you really think that because there are a myriad of other cryptocurrencies out there then that somehow invalidates bitcoin's scarcity, then I suggest you do more research.

Start with this article perhaps:

https://www.lynalden.com/bitcoins-network-effect/ (https://www.lynalden.com/bitcoins-network-effect/)

Thanks I will read that. Lyn Alden is very bright and good at explaining things.

I would like to see her and Peter Schiff both on Clubhouse giving arguments for and against bitcoin. So far Peter Schiff has crushed the bitcoiners arguments.

And celerystalks latest post makes excellent points.



Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 14, 2021, 04:53:55 PM
https://bitcoinmagazine.com/technical/bitcoin-now-useless-micropayments-solutions-are-coming1
-----------------------------
Excerpt from your article:

"While the level of censorship resistance offered by Bitcoin’s permissionless payment network has obvious value, it’s also rather expensive. The system must remain decentralized in order for this resistance to censorship to remain intact. The cost of operating a full node increases as more transactions are processed on the network, and some users already see the costs related to full node operation as too high."
...
"Bitcoin payments were much cheaper in the past because demand for block space was much lower. Users are now essentially bidding on the right to have their transactions included in the next block. Large-value transfers and payments that necessitate a certain degree of censorship resistance will tend to outbid lower-value, everyday payments such as the purchase of a cup of coffee."

-----------------------------


The entire premise of bitcoin from day one was its decentralized nature. Without that, it has no advantage over current monetary systems offered today. The base layer blockchain simply can't scale to incorporate the entire world's everyday payments. That was always the case even though early on people were able to do so simply because of lack of transaction activity. Here is a statement from Hal Finney, one of the first users of bitcoin:

(https://pbs.twimg.com/media/D8eLgPsWkAEsgO1?format=jpg&name=900x900)

It was widely understood from early on that bitcoin just wasn't going to scale for everyday payments while still maintaining a level of decentralization required for security of the system. That's where secondary payment layers come in, but those need to be developed after the base layer blockchain and thus it takes time and won't be available from day one. Technical hurdles and technical progress doesn't mean the story has changed. The Lightning Network is live and seeing great progress and this is where micro-payments can be made while still being backed by the security of the base layer.


I would like to see her and Peter Schiff both on Clubhouse giving arguments for and against bitcoin. So far Peter Schiff has crushed the bitcoiners arguments.

And celerystalks latest post makes excellent points.

Do you wish to share some of Peter Schiff's arguments he's made that you feel have crushed bitcoiner arguments? Because I honestly haven't really seen many valid arguments from him and he seems to more simply troll the community nowadays. I honestly wouldn't be surprised if he actually owns a decent amount of bitcoin and just has spates with bitcoiners for the attention.

As far as celerystalks arguments go...ya I wasn't going to respond to those because frankly nothing he wrote made any sense whatsoever. I'm so glad to hear from him though that stocks and bonds can't go to zero ever...Phew!!

The price is just what the last one was traded at?...you mean like how every market operates?? haha. You can't sell every bitcoin at a given price?? Again, you mean like everything that is publicly traded?? For example, Jeff Bezos' net worth shouldn't technically be considered the value of his entire stock holdings at Amazon because there is no way for him to actually capitalize on his entire stock holdings at the current given market price. That's just basics fundamentals of supply and demand.

Furthermore, as mentioned in ARK's Bitcoin letter they released a little while back, Bitcoin is actually more liquid than most publicly traded equities with bid-ask spreads below 0.0001% on many exchanges around the world while the average US equity spread is roughly 0.035%. (Source on page 19: https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf (https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf))

There are some other interesting bits in the paper as well that are unrelated to the discussion but worth point out. For example on page 11, it shows how bitcoin has near zero correlation to the S&P500, gold, oil, bonds, emerging currencies, real estate, BoA, Apple, and Tesla. This suggests it marches to the beat of its own drum and is the only major asset with consistently low correlations to traditional asset classes. It amazes me that people can't get over their own odd inhibitions and recognize bitcoin as a legit asset that can play a valid risk reduction role with potential massive upside even with just a 1% allocation. Every day that the bitcoin network continues to operate and produce blocks is another day that proves its anti-fragile status and thus justifies a higher price in the market.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 14, 2021, 07:13:41 PM
Quote
Every day that the bitcoin network continues to operate and produce blocks is another day that proves its anti-fragile status and thus justifies a higher price in the market.

Ahh yes. Past performance guarantees future success. How could I have forgotten this age old investment premise..
Title: Re: Bitcoin is funny money
Post by: marcus_aurelius on March 14, 2021, 07:30:03 PM
I have been reading a lot about the pros and cons of Bitcoin. I find plenty to agree with in both camps, and have come to the conclusion that no one knows how Bitcoin is going to play out. It could hit $500K or zero tomorrow, and both results will seem obvious the day after.

At the same time, I want to profit from the long tail chance that it might go up in value, so I bought 1 Bitcoin and 8 Etherium for ~$6K a few years ago. I think it’s worth $70K today but I’m not selling or adding to my position. I still continue to agree with people in the pro and con camps.

My advice to people is — determine the amount of money you are 100% comfortable with losing, and buy some Bitcoin with that just to get some exposure to it. Your amount could be $50, $500 or $50,000 -- whatever you're OK with losing. I think it gives you vast potential upside with limited downside. Don't fool yourself -- know that this is pure speculation, not an investment, and hold your position for at least 5-10 years. Good luck!
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 14, 2021, 08:10:14 PM
Quote
Every day that the bitcoin network continues to operate and produce blocks is another day that proves its anti-fragile status and thus justifies a higher price in the market.

Ahh yes. Past performance guarantees future success. How could I have forgotten this age old investment premise..

Has nothing to do with past performance in price, if that's what you're suggesting. It has to do with security.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on March 14, 2021, 08:19:35 PM
Quote
Every day that the bitcoin network continues to operate and produce blocks is another day that proves its anti-fragile status and thus justifies a higher price in the market.

Ahh yes. Past performance guarantees future success. How could I have forgotten this age old investment premise..

Has nothing to do with past performance in price, if that's what you're suggesting. It has to do with security.

Stop wasting your time with his bad faith arguments and feign ignorance.
Title: Re: Bitcoin is funny money
Post by: mjr on March 14, 2021, 08:22:53 PM
I'm still laughing hysterically at the riposte to the woefully inadequate transaction rate argument that there will be multiple banks acting as secondary networks backed by bitcoin.

Bitcoin itself has no inherent value, now people are dreaming of a whole secondary financial network built on a foundation not even as strong as shifting sand...

It's just subprime mortgages all over again, layer upon layer of greedy folk looking to make an easy dollar.  Prudence and ethics would forbid me from getting involved, let alone common sense.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 14, 2021, 08:38:21 PM
Quote
Every day that the bitcoin network continues to operate and produce blocks is another day that proves its anti-fragile status and thus justifies a higher price in the market.

Ahh yes. Past performance guarantees future success. How could I have forgotten this age old investment premise..

Has nothing to do with past performance in price, if that's what you're suggesting. It has to do with security.

Stop wasting your time with his bad faith arguments and feign ignorance.

I’m one of the few actual contributors to the discussion here. The topic of this thread is that bitcoin is funny money. Remember?
Title: Re: Bitcoin is funny money
Post by: BicycleB on March 14, 2021, 10:21:58 PM
bitcoin has near zero correlation to the S&P500, gold, oil, bonds, emerging currencies, real estate, BoA, Apple, and Tesla. This suggests it marches to the beat of its own drum and is the only major asset with consistently low correlations to traditional asset classes. It amazes me that people can't get over their own odd inhibitions and recognize bitcoin as a legit asset that can play a valid risk reduction role with potential massive upside even with just a 1% allocation.

This seems to me to be one of the best arguments in favor.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 14, 2021, 10:47:55 PM
bitcoin has near zero correlation to the S&P500, gold, oil, bonds, emerging currencies, real estate, BoA, Apple, and Tesla. This suggests it marches to the beat of its own drum and is the only major asset with consistently low correlations to traditional asset classes. It amazes me that people can't get over their own odd inhibitions and recognize bitcoin as a legit asset that can play a valid risk reduction role with potential massive upside even with just a 1% allocation.

This seems to me to be one of the best arguments in favor.

So does placing a wager on a roulette wheel or a horse race.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 14, 2021, 10:54:44 PM
https://www.reuters.com/article/us-india-cryptocurrency-ban-idUSKBN2B60R0

India is waking up to smell the coffee. These cryptos are a direct threat to government sovereignty. They are like a perpetual wild west with no hope of ever being tamed.  An inability to be placed under the rule of law is not a bug, it is an inherent feature of cryptos, especially bitcoin.
Title: Re: Bitcoin is funny money
Post by: mjr on March 15, 2021, 12:08:53 AM
As has been said on this very thread, BTC has no long-term future.  Governments will just not allow it to become ubiquitous in the economy.

Too bad, so sad.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 15, 2021, 02:50:14 AM
https://www.reuters.com/article/us-india-cryptocurrency-ban-idUSKBN2B60R0

India is waking up to smell the coffee. These cryptos are a direct threat to government sovereignty. They are like a perpetual wild west with no hope of ever being tamed.  An inability to be placed under the rule of law is not a bug, it is an inherent feature of cryptos, especially bitcoin.

I love these posts.  So Bitcoin is not only worthless, a bubble, irrelevant, has no actual use and is headed for zero, but it is also simultaneously a direct threat to government sovereignty and a perpetual wild west with no hope of ever being tamed.

LMAO.
Title: Re: Bitcoin is funny money
Post by: mjr on March 15, 2021, 05:11:11 AM
What a facile post.  No one disputes that the underlying technology is real and that its design gives it some characteristics of a global currency.

Indeed, it's entirely possible that central banks will one day create sovereign cryptocurrencies, no argument from me on that.  But they won't be anonymous and they'll be better designed to scale.

It's just bitcoin that won't ever get up to be the currency/store-of-value (pick one, it keeps changing) that the speculators want it to be.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 05:12:21 AM
I'm still laughing hysterically at the riposte to the woefully inadequate transaction rate argument that there will be multiple banks acting as secondary networks backed by bitcoin.

Well this is embarrassing...

https://www.coindesk.com/kraken-crypto-exchange-secures-bank-charter-under-wyoming-law (https://www.coindesk.com/kraken-crypto-exchange-secures-bank-charter-under-wyoming-law)
Title: Re: Bitcoin is funny money
Post by: talltexan on March 15, 2021, 08:03:08 AM
I have been reading a lot about the pros and cons of Bitcoin. I find plenty to agree with in both camps, and have come to the conclusion that no one knows how Bitcoin is going to play out. It could hit $500K or zero tomorrow, and both results will seem obvious the day after.

At the same time, I want to profit from the long tail chance that it might go up in value, so I bought 1 Bitcoin and 8 Etherium for ~$6K a few years ago. I think it’s worth $70K today but I’m not selling or adding to my position. I still continue to agree with people in the pro and con camps.

My advice to people is — determine the amount of money you are 100% comfortable with losing, and buy some Bitcoin with that just to get some exposure to it. Your amount could be $50, $500 or $50,000 -- whatever you're OK with losing. I think it gives you vast potential upside with limited downside. Don't fool yourself -- know that this is pure speculation, not an investment, and hold your position for at least 5-10 years. Good luck!

Sincere question: if your 1 Bitcoin declines in value from $55,000 today to $6,000 at a moment when you sell it, have you lost $49,000 or zero?

It traded over $60,000 over the weekend, you could have sold 0.1 BTC and gotten your principal back. I think the mental accounting matters a great deal.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 15, 2021, 08:09:12 AM
I'm still laughing hysterically at the riposte to the woefully inadequate transaction rate argument that there will be multiple banks acting as secondary networks backed by bitcoin.

Well this is embarrassing...

https://www.coindesk.com/kraken-crypto-exchange-secures-bank-charter-under-wyoming-law (https://www.coindesk.com/kraken-crypto-exchange-secures-bank-charter-under-wyoming-law)

I agree, Wyoming is going to have egg on their face when this fails. And it will fail spectacularly.

A bank-type thing that can’t loan money? It makes all of its money off of charging lots of fees. What a popular idea. I’m surprised we don’t have tons more of those.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 09:51:32 AM
I agree, Wyoming is going to have egg on their face when this fails. And it will fail spectacularly.

A bank-type thing that can’t loan money? It makes all of its money off of charging lots of fees. What a popular idea. I’m surprised we don’t have tons more of those.

Nothing like turning something to a complete 180 here and then making ignorant remarks about what an SPDI's purpose is. An SPDI is simply prohibited from lending out money using customer deposits since their primary purpose is fiduciary custodialship. An SPDI never hold's legal ownership over the funds that it holds in custody. Therefore if they're ever to go out of business, those funds must be returned to the customer (a good thing). Therefore there is no need for FDIC insurance and why lending out customer funds is not allowed. It's essentially the opposite of fractional reserve banking. I think it is a good thing to have alternative banking options in the world with different regulatory requirements to meet the demands of different types of customers, so I don't see that as a bad thing here.

http://wyomingbankingdivision.wyo.gov/home/areas-of-regulation/laws-and-regulation/special-purpose-depository-institution (http://wyomingbankingdivision.wyo.gov/home/areas-of-regulation/laws-and-regulation/special-purpose-depository-institution)
Title: Re: Bitcoin is funny money
Post by: marcus_aurelius on March 15, 2021, 10:57:04 AM
I have been reading a lot about the pros and cons of Bitcoin. I find plenty to agree with in both camps, and have come to the conclusion that no one knows how Bitcoin is going to play out. It could hit $500K or zero tomorrow, and both results will seem obvious the day after.

At the same time, I want to profit from the long tail chance that it might go up in value, so I bought 1 Bitcoin and 8 Etherium for ~$6K a few years ago. I think it’s worth $70K today but I’m not selling or adding to my position. I still continue to agree with people in the pro and con camps.

My advice to people is — determine the amount of money you are 100% comfortable with losing, and buy some Bitcoin with that just to get some exposure to it. Your amount could be $50, $500 or $50,000 -- whatever you're OK with losing. I think it gives you vast potential upside with limited downside. Don't fool yourself -- know that this is pure speculation, not an investment, and hold your position for at least 5-10 years. Good luck!

Sincere question: if your 1 Bitcoin declines in value from $55,000 today to $6,000 at a moment when you sell it, have you lost $49,000 or zero?

It traded over $60,000 over the weekend, you could have sold 0.1 BTC and gotten your principal back. I think the mental accounting matters a great deal.

Unless it reaches $500K or above, I won't sell it. Even if it reaches that sum, I will sell just a little to get some profit. Like I said, no one knows how this is going to end. The bottom line is I will sleep well at night even if I lose every cent.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 15, 2021, 12:12:13 PM
I agree, Wyoming is going to have egg on their face when this fails. And it will fail spectacularly.

A bank-type thing that can’t loan money? It makes all of its money off of charging lots of fees. What a popular idea. I’m surprised we don’t have tons more of those.

Nothing like turning something to a complete 180 here and then making ignorant remarks about what an SPDI's purpose is. An SPDI is simply prohibited from lending out money using customer deposits since their primary purpose is fiduciary custodialship. An SPDI never hold's legal ownership over the funds that it holds in custody.


Legally speaking it is probably actually the converse of this. If it is set up like a custodial trust, the spdi would probably have legal title to the assets under their custodianship since thee assets would be in the name of the spdi and under their immediate discretion and control. But they wouldn’t have equitable title since the economic benefit of the crypto would inure to another, the bendiciary. Distinction smishtintions.  Lack of comprehension has never stopped a crypto enthusiast from attempting to seem knowledgable or profound.

Quote
Therefore if they're ever to go out of business, those funds must be returned to the customer (a good thing).

And if those funds disappear or cannot be accessed? I mean this is a problem even when real money is involved. But I fail to see how cryptos make it better.  And it doesn’t require a lot of imagination to see how the nature of cryptos could make it a lot lot worse.

Quote
Therefore there is no need for FDIC insurance and why lending out customer funds is not allowed. It's essentially the opposite of fractional reserve banking. I think it is a good thing to have alternative banking options in the world with different regulatory requirements to meet the demands of different types of customers, so I don't see that as a bad thing here.
No FDIC! Hot damn! Who ever benefited from a thing like that! Certainly not the banks themselves nor their customers.

So basically the spdi is analogous to the structure of every other hot storage exchange that has been ripped of over the last decade except they have a piece of paper from Wyoming banking regulators? How long have these SPDI things been around again?

Quote

http://wyomingbankingdivision.wyo.gov/home/areas-of-regulation/laws-and-regulation/special-purpose-depository-institution (http://wyomingbankingdivision.wyo.gov/home/areas-of-regulation/laws-and-regulation/special-purpose-depository-institution)

Ahh yes. Less than two years. Thats why we’ve all never heard of them. To me this is just another attempt to launder the legitimacy of cryptos with an appeal to authority. In this some weird form of government permission. And I’m sure there is probably safe harbor or some limit on liability worked in there for when these spdi/exchanges eventually default on their obligations. That will be handy because prior to this poor defenseless crypto exchange operators,  who either lost or stole client money, were subjected to harsh criminal and civil penalties when the cash, bitcoins and/ other cryptos they held mysteriously went poof.

Title: Re: Bitcoin is funny money
Post by: BicycleB on March 15, 2021, 12:54:28 PM
After enough repetition, even slow people like me start forming opinions. Mine are roughly:
1. Like @marcus_aurelius, can't tell whether the endgame is up or down.
2. Like him (him?) also, suspect that some small dip in the pool is risky but might be worthwhile.
3. "Small" balances the real risk of zero versus the possibility of the large upside.
4. Unclear whether the balance is positive or negative, but am guessing it's close enough to zero that it's a harmless-ish adventure in small doses.
5. As said previously, can see some benefit from volatile non-correlation separate from longterm rise or fall.
6. Harvesting 5 requires some rebalancing.
7. Can't tell when to rebalance but assume that, similar to stocks, anywhere from quarterly to annually is good enough.
8. I don't see that case for it as being strong enough to think most people SHOULD do it, but am guessing it's good enough for a diverse-portfolio type of investor to "reasonably" do it.
9. So - funny money camp, I guess I have opened my mouth and removed all doubt that I am a fool.
10. Still nervous about the price. Seems high! Now that I opened my trap, I can only assume BTC is poised to plummet. :)

At this point laziness and implementation details are the only remaining barrier. May report back at some point, but as one of the laziest forum members IRL, don't hold your breath.
Title: Re: Bitcoin is funny money
Post by: Jacob F on March 15, 2021, 01:09:13 PM
I agree, Wyoming is going to have egg on their face when this fails. And it will fail spectacularly.

A bank-type thing that can’t loan money? It makes all of its money off of charging lots of fees. What a popular idea. I’m surprised we don’t have tons more of those.

Nothing like turning something to a complete 180 here and then making ignorant remarks about what an SPDI's purpose is. An SPDI is simply prohibited from lending out money using customer deposits since their primary purpose is fiduciary custodialship. An SPDI never hold's legal ownership over the funds that it holds in custody.


Legally speaking it is probably actually the converse of this. If it is set up like a custodial trust, the spdi would probably have legal title to the assets under their custodianship since thee assets would be in the name of the spdi and under their immediate discretion and control. But they wouldn’t have equitable title since the economic benefit of the crypto would inure to another, the bendiciary. Distinction smishtintions.  Lack of comprehension has never stopped a crypto enthusiast from attempting to seem knowledgable or profound.

Quote
Therefore if they're ever to go out of business, those funds must be returned to the customer (a good thing).

And if those funds disappear or cannot be accessed? I mean this is a problem even when real money is involved. But I fail to see how cryptos make it better.  And it doesn’t require a lot of imagination to see how the nature of cryptos could make it a lot lot worse.

Quote
Therefore there is no need for FDIC insurance and why lending out customer funds is not allowed. It's essentially the opposite of fractional reserve banking. I think it is a good thing to have alternative banking options in the world with different regulatory requirements to meet the demands of different types of customers, so I don't see that as a bad thing here.
No FDIC! Hot damn! Who ever benefited from a thing like that! Certainly not the banks themselves nor their customers.

So basically the spdi is analogous to the structure of every other hot storage exchange that has been ripped of over the last decade except they have a piece of paper from Wyoming banking regulators? How long have these SPDI things been around again?

Quote

http://wyomingbankingdivision.wyo.gov/home/areas-of-regulation/laws-and-regulation/special-purpose-depository-institution (http://wyomingbankingdivision.wyo.gov/home/areas-of-regulation/laws-and-regulation/special-purpose-depository-institution)

Ahh yes. Less than two years. Thats why we’ve all never heard of them. To me this is just another attempt to launder the legitimacy of cryptos with an appeal to authority. In this some weird form of government permission. And I’m sure there is probably safe harbor or some limit on liability worked in there for when these spdi/exchanges eventually default on their obligations. That will be handy because prior to this poor defenseless crypto exchange operators,  who either lost or stole client money, were subjected to harsh criminal and civil penalties when the cash, bitcoins and/ other cryptos they held mysteriously went poof.

Starting your post with "legally speaking probably"..... clearly sets the stage. Ever realized that even the vanguard mutual fund account is not FDIC insured either? Its a custodial account, which means the title always remains with the customer. Hot damn! Needless to say that your post just contributed to global warming without generating any value :D
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 15, 2021, 01:34:23 PM
Quote
Starting your post with "legally speaking probably"..... clearly sets the stage. Ever realized that even the vanguard mutual fund account is not FDIC insured either? Its a custodial account, which means the title always remains with the customer. Hot damn! Needless to say that your post just contributed to global warming without generating any value :D

Wow! Another legal scholar! Sorry, pal, but you are just wrong

 First a brokerage such as vanguard is insured via SIPC. This sort of equivalent to the FDIC except it insures the account holders ownership interest in the securities but not necessarily their value.

 Further for things like stocks that people hold in their brokerage accounts the legal title to the securities are  is placed in “street name” in registration with the transfer agent for the stock. It is the equitable and beneficial title which is held by the account owner and represented in their brokerage account and which is established their brokerage account agreement and the fiduciary duty’s owed to them by the brokerage house.

I know learning is hard. But thanks for playing..
 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 01:38:14 PM
Legally speaking it is probably actually the converse of this. If it is set up like a custodial trust, the spdi would probably have legal title to the assets under their custodianship since thee assets would be in the name of the spdi and under their immediate discretion and control. But they wouldn’t have equitable title since the economic benefit of the crypto would inure to another, the bendiciary. Distinction smishtintions.  Lack of comprehension has never stopped a crypto enthusiast from attempting to seem knowledgable or profound.

It is almost like you don't read anything that is linked to here, then you claim others have a lack of comprehension.

"SPDI banks can hold digital assets but will never have legal ownership over those assets. This means that even if a SPDI bank goes bankrupt, those assets have to be returned to customers, whereas a trust company can have its assets claimed by a judge during bankruptcy."

https://www.occ.treas.gov/publications-and-resources/publications/comptrollers-handbook/files/custody-services/pub-ch-custody-services.pdf (https://www.occ.treas.gov/publications-and-resources/publications/comptrollers-handbook/files/custody-services/pub-ch-custody-services.pdf)

No, they're not like a trust company at all and the entire legal framework provided by the state of Wyoming was entirely built for this purpose, so saying "Legally speaking it is probably actually the converse of this", just shows your unwillingness to understand, read, and learn when others are providing you information. A custody service bank is very different from a trust company. I've worked in the financial industry for 15+ years and the current institution I work for just received its trust charter in my state a couple years ago, so I am familiar with the regulatory process required to become one.

No FDIC! Hot damn! Who ever benefited from a thing like that! Certainly not the banks themselves nor their customers.

Since traditional banks operate under a fractional reserve banking, this means that a customer's deposits in such a bank is directly dependent on the health of the financial institution. Only a small fraction of deposits are actually backed by cash and this is where FDIC insurance comes in. If you have a custodial bank regulatory framework that prohibits fractional reserves like that, then there is no need for insurance such as that provided by FDIC or NCUA. That doesn't stop the institution from having their own insurance to protect the business from theft, breaches, or other things like that (those things are not covered under FDIC or NCUA anyways). But keep going with your ignorance.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on March 15, 2021, 02:28:55 PM
It is almost like you don't read anything that is linked to here, then you claim others have a lack of comprehension.

"SPDI banks can hold digital assets but will never have legal ownership over those assets. This means that even if a SPDI bank goes bankrupt, those assets have to be returned to customers, whereas a trust company can have its assets claimed by a judge during bankruptcy."

And how exactly do you expect this requirement to be enforced if they don't actually have the assets on hand anymore? Suppose a rogue employee finds a way to empty a huge customer account, sends the money out of the reach of Wyoming authorities, and skips town. This is obviously illegal, and the bank would have a legal obligation to make the customer whole, but a legal obligation is only as good as the assets backing it up. If the bank can't make good on its obligation, where does that leave us?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 03:54:37 PM
And how exactly do you expect this requirement to be enforced if they don't actually have the assets on hand anymore? Suppose a rogue employee finds a way to empty a huge customer account, sends the money out of the reach of Wyoming authorities, and skips town. This is obviously illegal, and the bank would have a legal obligation to make the customer whole, but a legal obligation is only as good as the assets backing it up. If the bank can't make good on its obligation, where does that leave us?

First off, FDIC insurance wouldn't protect a traditional financial institution from such breaches as you described either. That's where private insurance comes in. Furthermore, the lack of fractional reserve banking means that they're not required to be insured by the FDIC, but by having a valid bank charter from Wyoming, they are authorized to obtain it if they desired. Finally, the SPDI regulatory framework requires a certain level of private insurance to protect the funds held in custody for their customers.

See here:
https://www.wyoleg.gov/Legislation/2019/hb0074 (https://www.wyoleg.gov/Legislation/2019/hb0074)
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 04:19:06 PM
Suppose a rogue employee finds a way to empty a huge customer account, sends the money out of the reach of Wyoming authorities, and skips town.

I also wanted to address this specifically. The SPDI legal framework specifically requires institutions to only hold online enough funds to meet the transactional demands of its customers and all other deposit funds must be held offline in cold storage. These means that it will not be possible for a single inside employee to have access to all the funds in deposit at the institution (multi-signature). This is usually common practice at most large cryptocurrency exchanges now, but it is good to see it is called out as a regulatory requirement in this SPDI framework by Wyoming.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on March 15, 2021, 05:13:14 PM
Maybe this is a stupid question, but what is the value prop of using a blockchain-backed cryptocurrency stored at a government-regulated and legally insured bank? Isn’t the entire purpose of cryptocurrency to skirt the need for government authority / law /etc? Isn’t the entire purpose to be able to avoid trusting a 3rd party?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 05:54:08 PM
Maybe this is a stupid question, but what is the value prop of using a blockchain-backed cryptocurrency stored at a government-regulated and legally insured bank? Isn’t the entire purpose of cryptocurrency to skirt the need for government authority / law /etc? Isn’t the entire purpose to be able to avoid trusting a 3rd party?

I suppose it depends on what your reason is for buying bitcoin. Bitcoin is different things to different people. If you're simply purchasing bitcoin as an uncorrelated asset that can't be diluted by any central entity, then having a third-party custodial ship that will still expose you to those properties of the asset in your portfolio will suffice. There is obviously third-party risk that is inherent with any custodial account. So due diligence is required.

If you want to take advantage of the censorship resistant and full decentralization and privacy aspects of bitcoin, then yes I would suggest taking control of your own private keys and hosting your own full node that is a part of the network. That also then requires personal responsibility and understanding of all the underlying technology that is absolutely a hurdle for many.

Information security is always a trade-off balancing act between convenience and security. So its important to do your own personal assessment and threat modeling as to where you see the greatest risk with your finances and what solutions would be best. In the end, bitcoin offers additional solutions that never existed before, but with them are definitely trade-offs that need to be considered.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 15, 2021, 05:55:49 PM
Maybe this is a stupid question, but what is the value prop of using a blockchain-backed cryptocurrency stored at a government-regulated and legally insured bank? Isn’t the entire purpose of cryptocurrency to skirt the need for government authority / law /etc? Isn’t the entire purpose to be able to avoid trusting a 3rd party?

The government charter is just a clever ruse. The section of the Wyoming banking code and regulations here was drafted tailor fit to regulate crypto exchanges to basically do what they already do. Its not a generic piece of legislation that crypto exchanges have finally found a way to fully comply with. It will not end up regulating crypto exchanges. Crypto exchanges will continue to do whatever they want, and if they are in violation of the regulations they will either ignore them or send someone in to have them changed. Basically the crypto exchanges will regulate the regulators. The point of this farce is to give the crypto exchanges a government entity to point to that has blessed the exchanges and also provide limitations on liability when customers are ripped off.
Title: Re: Bitcoin is funny money
Post by: Jacob F on March 15, 2021, 07:27:17 PM
Quote
Starting your post with "legally speaking probably"..... clearly sets the stage. Ever realized that even the vanguard mutual fund account is not FDIC insured either? Its a custodial account, which means the title always remains with the customer. Hot damn! Needless to say that your post just contributed to global warming without generating any value :D

Wow! Another legal scholar! Sorry, pal, but you are just wrong

 First a brokerage such as vanguard is insured via SIPC. This sort of equivalent to the FDIC except it insures the account holders ownership interest in the securities but not necessarily their value.

 Further for things like stocks that people hold in their brokerage accounts the legal title to the securities are  is placed in “street name” in registration with the transfer agent for the stock. It is the equitable and beneficial title which is held by the account owner and represented in their brokerage account and which is established their brokerage account agreement and the fiduciary duty’s owed to them by the brokerage house.

I know learning is hard. But thanks for playing..

For someone who is so well versed in legal matters as you are, it must have been a rough day mixing up FDiC and SPIC. My apologies for pointing out the faux pas.

You are still wrong on the ownership topic as well, as you point out yourself that the spic insures against ownership losses, hence the customer must own the securities to be insured.
The street name is only assigned to the broker for the time of transfer of title and only represents a very limited timeframe and does not constitute ownership. Its only holding position on behalf of the customer.

Any subsequent change in ownership after purchasing stocks, e.g., would also automatically trigger tax implications.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 07:35:05 PM
Crypto exchanges will continue to do whatever they want, and if they are in violation of the regulations they will either ignore them or send someone in to have them changed. Basically the crypto exchanges will regulate the regulators.

Banning bitcoin is easier to justify. Because once it is banned nothing will change economically.  It will just eliminate a large fertile field for financial crimes.

https://www.reuters.com/article/us-india-cryptocurrency-ban-idUSKBN2B60R0

India is waking up to smell the coffee. These cryptos are a direct threat to government sovereignty. They are like a perpetual wild west with no hope of ever being tamed.  An inability to be placed under the rule of law is not a bug, it is an inherent feature of cryptos, especially bitcoin.


Wait, I'm so confused, what is your narrative exactly again? Will governments all over the world ban bitcoin or will bitcoin "regulate the regulators." I can't even keep your arguments straight anymore.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 15, 2021, 08:43:28 PM
Quote
Quote
Starting your post with "legally speaking probably"..... clearly sets the stage. Ever realized that even the vanguard mutual fund account is not FDIC insured either? Its a custodial account, which means the title always remains with the customer. Hot damn! Needless to say that your post just contributed to global warming without generating any value :D

Wow! Another legal scholar! Sorry, pal, but you are just wrong

 First a brokerage such as vanguard is insured via SIPC. This sort of equivalent to the FDIC except it insures the account holders ownership interest in the securities but not necessarily their value.

 Further for things like stocks that people hold in their brokerage accounts the legal title to the securities are  is placed in “street name” in registration with the transfer agent for the stock. It is the equitable and beneficial title which is held by the account owner and represented in their brokerage account and which is established their brokerage account agreement and the fiduciary duty’s owed to them by the brokerage house.

I know learning is hard. But thanks for playing..

For someone who is so well versed in legal matters as you are, it must have been a rough day mixing up FDiC and SPIC. My apologies for pointing out the faux pas.


I didn’t make a mistake.

Let me google SIPC for you. Oh, look first hit is the Wikipedia article that explains it.

https://en.m.wikipedia.org/wiki/Securities_Investor_Protection_Corporation

Quote
You are still wrong on the ownership topic as well, as you point out yourself that the spic insures against ownership losses, hence the customer must own the securities to be insured.
The street name is only assigned to the broker for the time of transfer of title and only represents a very limited timeframe and does not constitute ownership. Its only holding position on behalf of the customer.

Any subsequent change in ownership after purchasing stocks, e.g., would also automatically trigger tax implications.

Yes holding the the position by registering the securities in their own name while agreeing that the client has the equitable or beneficial ownership in them. This is evidenced by providing trade confirmations and statements to the client establishing the beneficial ownership. But there is no Domesday Book in the sky where all of the stocks in the clients brokerage account are recorded in the clients name. It is between the client and broker. That beneficial ownership is the ownership interest which is insured. If the client had the securities registered in their own name directly with the transfer agent, they would not be “in” the brokerage account and there would be no insurance unless the transfer agent had some sort of bond or E&O policy. Registration directly with the transfer agent used to be more common with paper certificates, where brokers would give the client the option of direct registration at the time the trade was placed. But there is no point 8n direct registration these days where most transfer agents use ledger entry.

And this is all a fascinating discussion btw and I am happy to help educate you. It also proves how complicated the holdings of financial assets in modern banking are and why it pays to be skeptical that a a rag tag bunch of crypto enthusiasts are going to reinvent money.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 15, 2021, 08:58:02 PM
Crypto exchanges will continue to do whatever they want, and if they are in violation of the regulations they will either ignore them or send someone in to have them changed. Basically the crypto exchanges will regulate the regulators.

Banning bitcoin is easier to justify. Because once it is banned nothing will change economically.  It will just eliminate a large fertile field for financial crimes.

https://www.reuters.com/article/us-india-cryptocurrency-ban-idUSKBN2B60R0

India is waking up to smell the coffee. These cryptos are a direct threat to government sovereignty. They are like a perpetual wild west with no hope of ever being tamed.  An inability to be placed under the rule of law is not a bug, it is an inherent feature of cryptos, especially bitcoin.


Wait, I'm so confused, what is your narrative exactly again? Will governments all over the world ban bitcoin or will bitcoin "regulate the regulators." I can't even keep your arguments straight anymore.

State and local and even some unsophisticated national governments may attempt to regulate them. At some point though sovereign governments will realize their mistake and sill ban them.

Industries regulating the regulators is a phenomenon known as regulatory capture.  And the industries that have successfully manages it do exactly what you just did earlier.. they point to the existence of government regulatory framework that they are ostensibly subject to as a justification and for legitimacy of the industry and what it does. And when people get screwed by the industry (which is part of the crypto business model as far as I can tell) the industry just blames the regulators for failure of oversight.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 15, 2021, 09:15:12 PM
State and local and even some unsophisticated national governments may attempt to regulate them. At some point though sovereign governments will realize their mistake and sill ban them.

Industries regulating the regulators is a phenomenon known as regulatory capture.  And the industries that have successfully manages it do exactly what you just did earlier.. they point to the existence of government regulatory framework that they are ostensibly subject to as a justification and for legitimacy of the industry and what it does. And when people get screwed by the industry (which is part of the crypto business model as far as I can tell) the industry just blames the regulators for failure of oversight.

I just find it amazing that you can go between arguments of, bitcoin being a dead valueless technology and that governments will ban it, so easily. Seems odd that governments would feel the need to ban something that is so valueless and a technology that is so pointless.

Also this:

https://quillette.com/2021/02/21/can-governments-stop-bitcoin/ (https://quillette.com/2021/02/21/can-governments-stop-bitcoin/)
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 15, 2021, 09:23:13 PM
State and local and even some unsophisticated national governments may attempt to regulate them. At some point though sovereign governments will realize their mistake and sill ban them.

Industries regulating the regulators is a phenomenon known as regulatory capture.  And the industries that have successfully manages it do exactly what you just did earlier.. they point to the existence of government regulatory framework that they are ostensibly subject to as a justification and for legitimacy of the industry and what it does. And when people get screwed by the industry (which is part of the crypto business model as far as I can tell) the industry just blames the regulators for failure of oversight.

I just find it amazing that you can go between arguments of, bitcoin being a dead valueless technology and that governments will ban it, so easily. Seems odd that governments would feel the need to ban something that is so valueless and a technology that is so pointless.

Also this:

https://quillette.com/2021/02/21/can-governments-stop-bitcoin/ (https://quillette.com/2021/02/21/can-governments-stop-bitcoin/)

Governments often ban gambling or require it to be subject to government monopoly like state run lotteries. Gambling is popular, can produce spectacular gains for some individuals on some rare occasions, but it also has no value for society and is a net drain. Go figure. Bitcoin is basically the same thing. A wildly erratic net drain on society.
Title: Re: Bitcoin is funny money
Post by: effigy98 on March 15, 2021, 11:57:25 PM
RIOT blockchain... it is raining money now in the crypto portfolio. Florida even buying this thing for the government. Crazy times we live in. More rebalance... only two places that seem reasonable right now is some commodities and emerging markets. Everything is expensive with this 25% inflation! I really don't think Bitcoin is going up, it is more like dollar is going DOWN (and fast), but since every country is doing the same, it "appears" that is not the case. I think there are more people and companies then you know buying in to escape the system to protect themselves from having their wealth inflated away.
Title: Re: Bitcoin is funny money
Post by: blue_green_sparks on March 16, 2021, 07:05:11 AM
I was considering buying a little bitcoin and noticed my broker offers 6% interest on this coin and no trade fees. BTC costs $11 to sell. Tempting, but I couldn't know less. Ah... I feel so old.

USDC is a fully collateralized US dollar stablecoin. It is an Ethereum powered coin and is the brainchild of CENTRE, an open source project bootstrapped by contributions from Circle and Coinbase. USDCs are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency in a 1 USDC:1 USD ratio
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 16, 2021, 07:55:47 AM
I was considering buying a little bitcoin and noticed my broker offers 6% interest on this coin and no trade fees. BTC costs $11 to sell. Tempting, but I couldn't know less. Ah... I feel so old.

USDC is a fully collateralized US dollar stablecoin. It is an Ethereum powered coin and is the brainchild of CENTRE, an open source project bootstrapped by contributions from Circle and Coinbase. USDCs are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency in a 1 USDC:1 USD ratio

I'm willing to let you get in on the ground floor of my new cryptocurrency - buttcoin.  It uses the same blockchain technology as bitcoin and ethereum.  PM me for an address to send your money to so you don't miss out!  As we all know, the sky is the limit and nobody loses with blockchain!
Title: Re: Bitcoin is funny money
Post by: blue_green_sparks on March 16, 2021, 08:35:04 AM
I was considering buying a little bitcoin and noticed my broker offers 6% interest on this coin and no trade fees. BTC costs $11 to sell. Tempting, but I couldn't know less. Ah... I feel so old.

USDC is a fully collateralized US dollar stablecoin. It is an Ethereum powered coin and is the brainchild of CENTRE, an open source project bootstrapped by contributions from Circle and Coinbase. USDCs are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency in a 1 USDC:1 USD ratio

I'm willing to let you get in on the ground floor of my new cryptocurrency - buttcoin.  It uses the same blockchain technology as bitcoin and ethereum.  PM me for an address to send your money to so you don't miss out!  As we all know, the sky is the limit and nobody loses with blockchain!
It does seem to defeat the purpose of crypto in general, to rely on the dollar as a backing, LOL. I am curious where the 6% interest comes from. Thanks, you can keep your buttcoin and I don't care where, LOL.
Title: Re: Bitcoin is funny money
Post by: crimp on March 16, 2021, 08:46:07 AM
I was considering buying a little bitcoin and noticed my broker offers 6% interest on this coin and no trade fees. BTC costs $11 to sell. Tempting, but I couldn't know less. Ah... I feel so old.

USDC is a fully collateralized US dollar stablecoin. It is an Ethereum powered coin and is the brainchild of CENTRE, an open source project bootstrapped by contributions from Circle and Coinbase. USDCs are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency in a 1 USDC:1 USD ratio

I'm willing to let you get in on the ground floor of my new cryptocurrency - buttcoin.  It uses the same blockchain technology as bitcoin and ethereum.  PM me for an address to send your money to so you don't miss out!  As we all know, the sky is the limit and nobody loses with blockchain!
It does seem to defeat the purpose of crypto in general, to rely on the dollar as a backing, LOL. I am curious where the 6% interest comes from. Thanks, you can keep your buttcoin and I don't care where, LOL.

Most of the entities doing this high-interest thing (BlockFI, etc) with cryptocurrency are doing loans with cryptocurrency as collateral. Usually they offer something akin to margin loans in which the folks who are crypto-rich and cash poor stake their cryptocurrency for a loan without having to sell the underlying BTC/ETH/whatever.
Title: Re: Bitcoin is funny money
Post by: DaKini on March 16, 2021, 09:20:11 AM
wow, that sounds scary.
Title: Re: Bitcoin is funny money
Post by: effigy98 on March 16, 2021, 09:26:44 AM
This is great for crypto holders. I can finance something and pay zero taxes without selling down the crypto. I can get interest on my crypto paid from profits from the borrowers. The risk is you don't control your crypto while its on their platforms (not your keys). Up to 8% dividend is pretty amazing at blockfi and I have moved some in with no issues. Making enough to cover all bills in just interest. The only other source I have found with this kind of dividend and limited downside is NUSI (NASDAQ 100 collar strategy) which I use in ROTH which also can cover all bills. We have some great options to make consistent money in markets like these even if they go up and down.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 16, 2021, 10:07:47 AM
This is great for crypto holders. I can finance something and pay zero taxes without selling down the crypto. I can get interest on my crypto paid from profits from the borrowers. The risk is you don't control your crypto while its on their platforms (not your keys). Up to 8% dividend is pretty amazing at blockfi and I have moved some in with no issues. Making enough to cover all bills in just interest. The only other source I have found with this kind of dividend and limited downside is NUSI (NASDAQ 100 collar strategy) which I use in ROTH which also can cover all bills. We have some great options to make consistent money in markets like these even if they go up and down.

Sounds like a great scheme to get rich.  And quick!

:P
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on March 16, 2021, 02:20:50 PM
I was considering buying a little bitcoin and noticed my broker offers 6% interest on this coin and no trade fees. BTC costs $11 to sell. Tempting, but I couldn't know less. Ah... I feel so old.

USDC is a fully collateralized US dollar stablecoin. It is an Ethereum powered coin and is the brainchild of CENTRE, an open source project bootstrapped by contributions from Circle and Coinbase. USDCs are issued by regulated and licensed financial institutions that maintain full reserves of the equivalent fiat currency in a 1 USDC:1 USD ratio

I'm willing to let you get in on the ground floor of my new cryptocurrency - buttcoin.  It uses the same blockchain technology as bitcoin and ethereum.  PM me for an address to send your money to so you don't miss out!  As we all know, the sky is the limit and nobody loses with blockchain!

Hey, if you can't trust strangers on the internet, who can you trust, after all?

IMO, the cryptos that will do best will be like Dogecoin and have a meme association. For example:

Pirate Chain (symbol ARRR) https://coinmarketcap.com/currencies/pirate-chain/ (https://coinmarketcap.com/currencies/pirate-chain/)
Burger Swap https://coinmarketcap.com/currencies/burger-swap/ (https://coinmarketcap.com/currencies/burger-swap/)
DAD https://coinmarketcap.com/currencies/dad/ (https://coinmarketcap.com/currencies/dad/)
Duck Dime https://coinmarketcap.com/currencies/duckdaodime/ (https://coinmarketcap.com/currencies/duckdaodime/)
BnkToTheFuture https://coinmarketcap.com/currencies/bnktothefuture/ (https://coinmarketcap.com/currencies/bnktothefuture/)
Bird.Money https://coinmarketcap.com/currencies/bird-money/ (https://coinmarketcap.com/currencies/bird-money/)
TurtleCoin https://coinmarketcap.com/currencies/turtlecoin/ (https://coinmarketcap.com/currencies/turtlecoin/)
Pepemon Pepeballs https://coinmarketcap.com/currencies/pepemon-pepeballs/ (https://coinmarketcap.com/currencies/pepemon-pepeballs/)
Pizza https://coinmarketcap.com/currencies/pizza/ (https://coinmarketcap.com/currencies/pizza/)
and of course
Name Changing Token https://coinmarketcap.com/currencies/name-changing-token/ (https://coinmarketcap.com/currencies/name-changing-token/)

I mean, brag about bitcoin all you want. Did it 40x since early December like Bird.Money? Didn't think so.
Title: Re: Bitcoin is funny money
Post by: Vienna4ever on March 16, 2021, 07:11:49 PM
Why You Should Put All of Your Money in Bitcoin
https://www.youtube.com/watch?v=g-zIbVEjVpQ (https://www.youtube.com/watch?v=g-zIbVEjVpQ)
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on March 17, 2021, 05:20:35 PM
$btc really likes it when J Powell speaks!
Title: Re: Bitcoin is funny money
Post by: mjr on March 19, 2021, 03:26:54 PM
Why You Should Put All of Your Money in Bitcoin
https://www.youtube.com/watch?v=g-zIbVEjVpQ (https://www.youtube.com/watch?v=g-zIbVEjVpQ)

Rofl
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 21, 2021, 07:49:47 PM
The "governments will ban bitcoin" narrative gets weaker by the day it seems.

https://www.theblockcrypto.com/linked/98916/hester-peirce-2021-turning-point-crypto-speech (https://www.theblockcrypto.com/linked/98916/hester-peirce-2021-turning-point-crypto-speech)

Excerpt:

SEC commissioner Hester Peirce remarked during a virtual conference appearance last week that "evidence-based rulemaking is not yet the norm in crypto-regulation" as part of a wider exploration of the topic.

Peirce spoke on March 15 during an event organized by the British Blockchain Association. According to a transcript of her speech, Peirce once again outlined an expansive and positive viewpoint on cryptocurrencies, noting in her speech authorities perhaps spend too much time focusing on the "illicit" use of the technology compared to its potential benefits.

"Perhaps, government officials should pause to consider the flip side of crypto—its value in protecting people from illicit activity," Peirce said. "Because of its ability to reach people without intermediaries and its ease of storage, transport, and access, crypto can be an important part of the survival story of people living under the threat of harm by their families, people in their communities, or repressive governments."

This line of thinking, according to Peirce, is reflective of a broader issue in the realm of crypto regulation in the U.S. today:

"The disproportionate focus on illicit uses and the underestimation of the protective uses of crypto is one example of how evidence-based rulemaking is not yet the norm in crypto-regulation. We can do better, and I hope that this year will mark a turning point for the United States, which in turn may spur other countries similarly to take a more sensible approach to crypto regulation. The SEC faces several challenges and corresponding opportunities in regulating blockchain-based assets and technologies. While the specifics will not be the same for other jurisdictions, some of the general regulatory principles likely are applicable despite jurisdictional differences."
Title: Re: Bitcoin is funny money
Post by: DaKini on March 22, 2021, 01:47:23 AM
As i have read from the election programe of the green party here in germany, there are already plans in the drawer for the EZB to create a digital Euro.
The programme directly states that the government will not tolerate private cryptocurrencies to destabilize the financial markets, which, in my opinion reads as "as soon as we have the e-€, we will ban private cryptos" or something along that line. Maybe not directly ban, but at least hinder it from beeing adopted by regulated entities like banks.
Title: Re: Bitcoin is funny money
Post by: Jacob F on March 22, 2021, 06:45:27 AM
As i have read from the election programe of the green party here in germany, there are already plans in the drawer for the EZB to create a digital Euro.
The programme directly states that the government will not tolerate private cryptocurrencies to destabilize the financial markets, which, in my opinion reads as "as soon as we have the e-€, we will ban private cryptos" or something along that line. Maybe not directly ban, but at least hinder it from beeing adopted by regulated entities like banks.

This does not surprise me at all. This is right up the alley for the Green Party in Germany. No choice for the population, socialist policy mixed with green paint, together into the "alternativlose Fiskalunion". Germany has had several complete devaluations of their currency in the last 200 years. Lets see whether the Michel actually wakes up this time before its too late.
Title: Re: Bitcoin is funny money
Post by: [a]bort on March 23, 2021, 09:39:34 AM
Bitcoin might be a speculative bubble, but it will always have first mover advantage and be a poster child for blockchain tech, hard to say where it will be 10+ years from now. But I think even the stingiest of Bitcoin naysayers should re-evaluate their stance on other crypto currencies, there's a lot of potentially disruptive tech being built and they all issue a token to reward participants.

For example decentralized derivatives exchanges are just starting and growing. It's a big market. https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2020/
I truly believe that people staking their money on DeFi platforms earning what we would now consider huge APYs will become the norm. Your Money or Your Life will need another rewrite.

I also see a huge opportunity in investing in the tokens for platforms that facilitate the NFT-ization of video game items.

My point is even if you don't see the value in bitcoin you shouldn't dismiss the entire space, there's lots of interesting projects that you can be an early investor in.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on March 23, 2021, 02:18:23 PM
I also see a huge opportunity in investing in the tokens for platforms that facilitate the NFT-ization of video game items.

Can you expand on this? Are you suggesting that game developers will allow their players to use a blockchain to sell rare in-game items to other players? What's in it for the game developer? If they even wanted to condone the sale of in-game items (most don't), why would they prefer a blockchain to a centralized marketplace of their own making where they can profit from transaction fees?
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 23, 2021, 02:46:57 PM
Can you expand on this?

Seems to be the age old wisdom that in a gold rush the people who usually get rich are selling shovels.
Title: Re: Bitcoin is funny money
Post by: [a]bort on March 23, 2021, 03:14:25 PM
I also see a huge opportunity in investing in the tokens for platforms that facilitate the NFT-ization of video game items.

Can you expand on this? Are you suggesting that game developers will allow their players to use a blockchain to sell rare in-game items to other players? What's in it for the game developer? If they even wanted to condone the sale of in-game items (most don't), why would they prefer a blockchain to a centralized marketplace of their own making where they can profit from transaction fees?

A cut to the developer would be baked into the smart contract. I believe Enjin gives the developers 20% of all transactions. Imagine a truly unique one of a kind mount in World of Warcraft that was awarded to the first player to hit a level cap or something. It could be sold over and over again and each time Blizzard get's 20%. A centralized marketplace could be built to do this but AAA game studios do not have a good reputation when it comes to not screwing people over and I'm sure they have their own more practical reasons why they wouldn't build an exchange of their own (infrastructure, maintenance, government regulation).
Title: Re: Bitcoin is funny money
Post by: effigy98 on March 24, 2021, 12:48:50 AM
Can you expand on this?

Seems to be the age old wisdom that in a gold rush the people who usually get rich are selling shovels.

True. I sold 20 video cards I bought 4 years ago for more than double what I paid for them yesterday on ebay. It is pretty insane times we live in... but there is no inflation... nothing to see here. CPI 2%... right...
Title: Re: Bitcoin is funny money
Post by: effigy98 on March 24, 2021, 12:54:30 AM
This is great for crypto holders. I can finance something and pay zero taxes without selling down the crypto. I can get interest on my crypto paid from profits from the borrowers. The risk is you don't control your crypto while its on their platforms (not your keys). Up to 8% dividend is pretty amazing at blockfi and I have moved some in with no issues. Making enough to cover all bills in just interest. The only other source I have found with this kind of dividend and limited downside is NUSI (NASDAQ 100 collar strategy) which I use in ROTH which also can cover all bills. We have some great options to make consistent money in markets like these even if they go up and down.

Sounds like a great scheme to get rich.  And quick!

:P

Ya kind of like people of working age in the 80s when they got paid this thing called interest for over 8%, at a bank, for saving. I guess they were all get rich types too. Not all of us are that old and had those opportunities.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on March 24, 2021, 05:37:08 AM
I also see a huge opportunity in investing in the tokens for platforms that facilitate the NFT-ization of video game items.
Apps sell in-game items, which generate money for the game developer.  An NFT means the player spends once, and uses the same item repeatedly - costing the developer money.  Players aren't going to pay double or triple for an item that can be used in 2-3 different games.

I also don't see the incentive for games to accept NFT game items found in their competitors games.  Rather than accept some complex arrangement to split the money, game developers will want to have only their own in-game items, and keep all the money spent.  Not really seeing their incentive to adopt NFT game items - at least, not long term.

Some game, like an IPO, will add "NFT game item" to it's description to draw more attention and money to the game.  But long term I expect them not to be used, since the financial incentives currently favor not using them.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 24, 2021, 06:00:51 AM
A cut to the developer would be baked into the smart contract. I believe Enjin gives the developers 20% of all transactions. Imagine a truly unique one of a kind mount in World of Warcraft that was awarded to the first player to hit a level cap or something. It could be sold over and over again and each time Blizzard get's 20%. A centralized marketplace could be built to do this but AAA game studios do not have a good reputation when it comes to not screwing people over and I'm sure they have their own more practical reasons why they wouldn't build an exchange of their own (infrastructure, maintenance, government regulation).

A blockchain's sole benefit is to provide decentralization and immutability among that decentralized architecture. There is absolutely zero benefit that a blockchain provides when it comes to gaming. Video games are inherently centralized services. They're developed by a centralized entity, hosted by a centralized entity, paid to a centralized entity, etc. Name one single benefit that a blockchain can provide such an architecture. Nothing is stopping the developer from suddenly changing the in-game economy however they like even if they're using a blockchain. There are plenty of games today that have healthy in-game economies that also extend to the real world as well. Truly unique items are still developed in-house by the developer and supported by the developer and you don't need a blockchain to have such items in a game. You say that games studios don't have a good reputation, but adding a blockchain to a studio without a good reputation doesn't change anything here. Nothing is stopping that game studio from someday dropping support for any such system in their game. No, a blockchain will not provide any benefit here.
Title: Re: Bitcoin is funny money
Post by: celerystalks on March 29, 2021, 09:03:35 PM
And now nobody cares about bitcoin again. See you guys in 18-24 months for the next scheduled dump.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 29, 2021, 10:41:17 PM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on March 30, 2021, 12:56:52 AM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 30, 2021, 01:41:18 AM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

What's my point?  Well I guess my point is it's hardly a surprise a supply-capped asset like bitcoin has increased rapidly in value vs the US$ in the last 12 months, something like 35% of all US$ have been created in that time, plucked out thin air.  Picking bitcoin is hardly a terrible choice, it's the best performed asset of the last decade after all.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 30, 2021, 05:37:39 AM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 30, 2021, 08:09:59 AM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

That's kinda the purpose that a minimum wage serves though, isn't it?  It's a great equalizer.  As inflation eats away at the profits of the rich, the minimum wage is supposed to rise.  This should reduce the income inequality between the richest and the poorest.

Unless the richest band together to rail against the thought of increasing minimum wage.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 30, 2021, 08:36:02 AM
That's kinda the purpose that a minimum wage serves though, isn't it?  It's a great equalizer.  As inflation eats away at the profits of the rich, the minimum wage is supposed to rise.  This should reduce the income inequality between the richest and the poorest.

Unless the richest band together to rail against the thought of increasing minimum wage.

Could you elaborate more on the bolded? Sure raw material and capital costs go up with inflation, but that is a secondary effect that occurs after monetary inflation takes place. First monetary inflation must take place by expanding the money supply, then once there is more money chasing fewer or the same amount of goods, then price inflation takes place. In the mean time you have the cantillon effect taking place where those with access to money first (the rich) receive the benefits of an expanding monetary supply before price inflation takes effect. Therefore all this benefits the rich in the end. Sure, minimum wage increases are great to help offset the impacts of price inflation on the poor, but this is always one of the last effects to take place in the economy long after monetary expansion has taken place.

That's all just domestically as well. That doesn't even touch upon the global impacts of said currency game theory in the sense that minimum wage increases in one location that are implemented to offset domestic price inflation simply drive the lower wage jobs elsewhere in the global economy where worker protections and fair trade isn't enforced as well as they are domestically. Obviously this goes beyond just monetary policy at this point and I'm not saying there are any easy answers either. But portraying minimum wage (even when keeping pace with price inflation) as the great equalizer in an inflationary monetary economy couldn't be further from the truth, IMHO.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on March 30, 2021, 12:45:56 PM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

One could argue that the people living paycheck-to-paycheck are unaffected by inflation if their wages go up alongside their expenses. E.g. This year I earn $500/week and spend $500/week. In five years I earn $700/week and spend $700/week to live the same lifestyle.

The wealthy people (ahem) who have hoards of money stored away are the ones losing purchasing power, so they are hurt worse by inflation. An multi-year outbreak of high inflation would lower wealth inequality. Likewise, the last few decades of low inflation have allowed wealth inequality to expand.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 30, 2021, 01:08:05 PM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

One could argue that the people living paycheck-to-paycheck are unaffected by inflation if their wages go up alongside their expenses. E.g. This year I earn $500/week and spend $500/week. In five years I earn $700/week and spend $700/week to live the same lifestyle.

The wealthy people (ahem) who have hoards of money stored away are the ones losing purchasing power, so they are hurt worse by inflation. An multi-year outbreak of high inflation would lower wealth inequality. Likewise, the last few decades of low inflation have allowed wealth inequality to expand.

Yes, this is basically the argument I was making.  For someone with no savings, inflation doesn't matter at all - as long as there's enough to eat.
Title: Re: Bitcoin is funny money
Post by: Jacob F on March 30, 2021, 02:51:35 PM
Yes, this is basically the argument I was making.  For someone with no savings, inflation doesn't matter at all - as long as there's enough to eat.

This is true, but only with some very basic mathematical assumptions of no savings for the poor and full inflation impact on the rich. The history of countries in hyperinflation shows that especially the poorest suffer most, as the wealthier people have ways to shield their wealth.

Bitcoin would be a way for the poor to be able to shield and hedge some of their income and savings as well. Payments in bitcoin also enable cross border labor transactions etc. that would further transform and democratize the global labor market as cross-border payments are no longer an issue.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 30, 2021, 02:57:29 PM
Yes, this is basically the argument I was making.  For someone with no savings, inflation doesn't matter at all - as long as there's enough to eat.

There are several arguments I'd make as to why that isn't true. I already alluded to some earlier. But wage increases as a result of monetary supply expansion and the resulting price inflation are usually a result of several orders of effects after the fact. Therefore there has already been price inflation in the economy impacting their ability to put food on the table even when wage increases are being received.

Also, whether or not there is actual price inflation (that which CPI attempts to measure) does not mean there wasn't inflation in the economy (expanding money supply). There are many factors that come into play that determine whether or not you'll see price inflation. For example, high private debt levels, aging demographics, technology advances and productivity increases, wealth concentration, commodity oversupply, outsourcing, etc. These are all deflationary effects in the economy that can counteract an inflationary money supply. Many of these things are great things that are taking place in the economy, but whose impact on the economy is barely felt because of an expanding money supply. So when you have an inflationary money supply, that means you can have people advancing technology and productivity measures, but because of a greater supply of money (that the poor rarely are able to take advantage of), that means you have people developing these things and unable to capitalize on the greater good that these things can provide society. There should be no reason why we have such a high advancement in technology with people still working 40-50+ hour weeks just to barely put food on the table. Because we have an ever increasing supply of money, it is robbing people of today's productivity and technology advancements that could be used to provide them wealth in the future. If the supply of money were static, these deflationary forces would be felt to a much greater extent in the economy which means the work that today's lower-middle class puts in today would still have purchasing power into the future as well.

Saying that inflation doesn't matter at all ignores all the orders of effects that take place that lead up to price inflation. It is also important to distinguish between monetary inflation and price inflation of goods. One is the cause of the other. Also, even if price inflation isn't seen doesn't mean there hasn't been monetary inflation that still impacts people's lives even if it isn't directly felt in the price of goods. Saying that just because you're working 40 hours a week to earn $500 dollars and spend $500 dollars and then in the future that turns to $700 earned and spent on the same goods ignores the fact that you just spent years working 40 hours a week that went toward productivity advancements and technology improvements over time that, in all reality, should mean you shouldn't have to work as much for that same amount of money. This is ultimately where the poor lose out. Instead of them being the beneficiaries of their work, inflation robs them of this.

Meanwhile, with monetary inflation, that means that all scarce assets (stocks, real estate, precious metals, commodities, etc), rise in price and the rich who are highly invested in these asset classes can capitalize on these price increases. There is a reason why P/E ratios are out of whack and real estate prices are soaring. This is where wealth inequality is really exacerbated. The poor can't capitalize on these asset classes like the rich can. So the rich get richer, but the poor, who are really helping drive our economy with new tech and productivity, barely can get food on the table while continuing to work 40+ hours a week.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 30, 2021, 04:57:22 PM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

That's kinda the purpose that a minimum wage serves though, isn't it?  It's a great equalizer.  As inflation eats away at the profits of the rich, the minimum wage is supposed to rise.  This should reduce the income inequality between the richest and the poorest.

Unless the richest band together to rail against the thought of increasing minimum wage.

Are you serious?  The dollar is devaluing and all this stimulus washing through the economy is flowing straight into asset prices like stocks, property and crypto.  The rich have made a killing out of this, meanwhile the poor get thrown a bone like $1400 and think they have a good deal.  The poor have been robbed and they don't even know it.  There is a huge wealth transfer going on where the rich are printing trillions of dollars and awarding it to themselves.
Title: Re: Bitcoin is funny money
Post by: mjr on March 30, 2021, 05:49:32 PM
Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

It's not perfect, but it's the best we have.

You're denigrating fiat money systems backed by the GDP of first-world nations because of "unnecessary risk" while advocating bitcoin ?!  That's beyond funny.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 30, 2021, 06:09:18 PM
Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

It's not perfect, but it's the best we have.

You're denigrating fiat money systems backed by the GDP of first-world nations because of "unnecessary risk" while advocating bitcoin ?!  That's beyond funny.

I'm not one to let perfect be the enemy of good. So I'm not suggesting we scrap fiat currencies. And fiat currencies don't just exist in a first-world bubble. The US dollar is probably the least likely fiat currency to fail. That doesn't mean there won't (there has been) be a whole host of fiat currencies that do fail. 1.2 billion people in the world are experiencing double-digit inflation.

https://news.bitcoin.com/1-2-billion-people-live-under-double-digit-inflation-many-have-found-escape-in-bitcoin-says-hrfs-alex-gladstein/ (https://news.bitcoin.com/1-2-billion-people-live-under-double-digit-inflation-many-have-found-escape-in-bitcoin-says-hrfs-alex-gladstein/)

Saying that's the best we have so there's no sense in seeking better options is ridiculous and fatalistic. I think it is OK if there are competing currencies out there (there always has been currency competition) and letting things play out. Let the risk takers take risk where they can afford to and let it all play out. I'm also not advocating for people who have little to no savings start putting money into bitcoin. I'm mustachian after all. Which, coincidentally is one of the reasons I am so pro-bitcoin. I feel bitcoin and frugality go hand-in-hand with that savings-first mentality.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 30, 2021, 06:52:23 PM
You're denigrating fiat money systems backed by the GDP of first-world nations because of "unnecessary risk" while advocating bitcoin ?!  That's beyond funny.

There is more risk to not being in crypto than being in it.  This year I've turned 8k into 80k.  Limited downside, unlimited upside.
Title: Re: Bitcoin is funny money
Post by: StashingAway on March 30, 2021, 06:55:31 PM
There is more risk to not being in crypto than being in it.  This year I've turned 8k into 80k.  Limited downside, unlimited upside.

That's a silly way to ignore one of the basics of economics: opportunity cost. There's limited downside to putting 8k into anything. But you can't put 8k into everything.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 30, 2021, 06:58:00 PM
There is more risk to not being in crypto than being in it.  This year I've turned 8k into 80k.  Limited downside, unlimited upside.

That's a silly way to ignore one of the basics of economics: opportunity cost. There's limited downside to putting 8k into anything. But you can't put 8k into everything.

But you can put 8k into the best performing asset of the last decade.  That's probably a good place to start.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 30, 2021, 07:36:58 PM
There is more risk to not being in crypto than being in it.  This year I've turned 8k into 80k.  Limited downside, unlimited upside.

That's a silly way to ignore one of the basics of economics: opportunity cost. There's limited downside to putting 8k into anything. But you can't put 8k into everything.

But you can put 8k into the best performing asset of the last decade.  That's probably a good place to start.

Sounds like a great scheme to get rich!  And quick!
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on March 30, 2021, 11:30:30 PM
There is more risk to not being in crypto than being in it.  This year I've turned 8k into 80k.  Limited downside, unlimited upside.

That's a silly way to ignore one of the basics of economics: opportunity cost. There's limited downside to putting 8k into anything. But you can't put 8k into everything.

But you can put 8k into the best performing asset of the last decade.  That's probably a good place to start.

(https://www.bogleheads.org/w/images/d/dc/Callan_Periodic_Table_of_Investment_Returns.png)

In the past 20 years, we have not once had the same asset class on the top of this list two years in a row. As often as not, the top-performing asset class falls to the bottom half of the list the next year. The logic behind "buy this investment because it did great over the past few years" just doesn't hold up.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 31, 2021, 12:14:34 AM
There is more risk to not being in crypto than being in it.  This year I've turned 8k into 80k.  Limited downside, unlimited upside.

That's a silly way to ignore one of the basics of economics: opportunity cost. There's limited downside to putting 8k into anything. But you can't put 8k into everything.

But you can put 8k into the best performing asset of the last decade.  That's probably a good place to start.

(https://www.bogleheads.org/w/images/d/dc/Callan_Periodic_Table_of_Investment_Returns.png)

In the past 20 years, we have not once had the same asset class on the top of this list two years in a row. As often as not, the top-performing asset class falls to the bottom half of the list the next year. The logic behind "buy this investment because it did great over the past few years" just doesn't hold up.

That's a great chart but it looks like they've left Bitcoin off the list?  Do you have any idea why they would have done that?  Anyway I found an annual return chart for bitcoin.

(https://i.imgur.com/Zlc9lFN.png)

So it looks like Bitcoin would have topped that list in 2011, 2012, 2013, 2015, 2016, 2017, 2019 and 2020.  Pretty amazing don't you think?
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on March 31, 2021, 12:37:45 AM
That's a great chart but it looks like they've left Bitcoin off the list?  Do you have any idea why they would have done that?
Bitcoin didn't exist at all for half that chart's history, and only in the past six months did it have a market cap more than 1% of the S&P 500. The chart also omits gold and hedge funds and frozen orange juice concentrate futures. They don't track everything, nor do they try.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 31, 2021, 06:01:40 AM
That's a silly way to ignore one of the basics of economics: opportunity cost. There's limited downside to putting 8k into anything. But you can't put 8k into everything.

Either way, this entire discussion misses the entire point. Out of all the arguments you could make against bitcoin, opportunity cost is NOT one of them. In fact, opportunity cost would be the last argument I'd bring up. It is the best performing asset over the last decade hands down. Even a portfolio of 1% bitcoin and 99% cash would yield you both higher returns and less risk than a portfolio 100% in an S&P500 index. Opportunity cost is just really not a great argument. There are a lot of benefits to holding some bitcoin and there are many ways that you can also reduce any downside risk you might carry. It has near zero correlation to just about every major asset class out there (S&P500, gold, oil, bonds, emerging currencies, real estate, BoA, Apple, and Tesla [1]). I just can't think of a good opportunity cost argument to be had here and the discussion above strayed from attempting to make one, IMO. What's the opportunity cost of not holding any bitcoin at all though? ...Quite a lot apparently.

[1]: https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf (https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf)
Title: Re: Bitcoin is funny money
Post by: StashingAway on March 31, 2021, 06:16:45 AM
That's a silly way to ignore one of the basics of economics: opportunity cost. There's limited downside to putting 8k into anything. But you can't put 8k into everything.

Either way, this entire discussion misses the entire point. Out of all the arguments you could make against bitcoin, opportunity cost is NOT one of them. In fact, opportunity cost would be the last argument I'd bring up. It is the best performing asset over the last decade hands down. Even a portfolio of 1% bitcoin and 99% cash would yield you both higher returns and less risk than a portfolio 100% in an S&P500 index. Opportunity cost is just really not a great argument. There are a lot of benefits to holding some bitcoin and there are many ways that you can also reduce any downside risk you might carry. It has near zero correlation to just about every major asset class out there (S&P500, gold, oil, bonds, emerging currencies, real estate, BoA, Apple, and Tesla [1]). I just can't think of a good opportunity cost argument to be had here and the discussion above strayed from attempting to make one, IMO. What's the opportunity cost of not holding any bitcoin at all though? ...Quite a lot apparently.

[1]: https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf (https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARKinvest_091729_Whitepaper_Bitcoin_II_An%20Investment.pdf)

It doesn't miss the point. It IS the point. Hindsight is 2020, so using that as a means to justify your portfolio puts you in line with most financial scammers (as well as the greats). Basically, it can't account for survivorship bias.. There was a time when beanie babies would outperform your entire portfolio.

I am a bit disappointed in bitcoin/crypto. I have various wallets with some funds... I want to spend it because I was hoping it would be currency. It's so unstable that it doesn't lend itself toward that mechanism. Bank transfers are much better in most of the developed world. Right now it's just a speculation machine.

If you have bitcoin, are you actually going to sell/spend it? Most people who are pushing the "making money on crypto" are market timing; selling highs and buying lows, etc. If I have 8k and put it into bitcoin, then I can easily double or triple that in a year at this rate. But here's the problem: if I sell, I'm out of the game. So my opportunity cost is that my $ is tied up in an asset that I don't want to sell. Or I can buy some pavers and grill and make a patio and enjoy my backyard. For long term investment, it is best to diversify, so some in crypto makes sense (like I have). But if crypto starts at 1% of my portfolio and then grows to 10%, the general diversification advise would be to re-balance and sell 90% of it... which puts you back out of the game, so to speak.

In other words, it's no different than timing the market; tulips, beanie babies, enron, (the failed ones), apple, tesla, etc. Success isn't proof of wise decisions with the market. It's only proof of variability.

 
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on March 31, 2021, 06:30:21 AM
^^ Hear the folks?  The best argument against bitcoin is that the investment grows so much that you then have to sell in order to rebalance your portfolio or enjoy the gains by converting them into luxury items.  This is the main problem with crypto, it just makes so much gain that it doesn't work as an investment!  LMAO!
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 31, 2021, 07:13:41 AM
It doesn't miss the point. It IS the point. Hindsight is 2020, so using that as a means to justify your portfolio puts you in line with most financial scammers (as well as the greats). Basically, it can't account for survivorship bias.. There was a time when beanie babies would outperform your entire portfolio.

I am a bit disappointed in bitcoin/crypto. I have various wallets with some funds... I want to spend it because I was hoping it would be currency. It's so unstable that it doesn't lend itself toward that mechanism. Bank transfers are much better in most of the developed world. Right now it's just a speculation machine.

If you have bitcoin, are you actually going to sell/spend it? Most people who are pushing the "making money on crypto" are market timing; selling highs and buying lows, etc. If I have 8k and put it into bitcoin, then I can easily double or triple that in a year at this rate. But here's the problem: if I sell, I'm out of the game. So my opportunity cost is that my $ is tied up in an asset that I don't want to sell. Or I can buy some pavers and grill and make a patio and enjoy my backyard. For long term investment, it is best to diversify, so some in crypto makes sense (like I have). But if crypto starts at 1% of my portfolio and then grows to 10%, the general diversification advise would be to re-balance and sell 90% of it... which puts you back out of the game, so to speak.

In other words, it's no different than timing the market; tulips, beanie babies, enron, (the failed ones), apple, tesla, etc. Success isn't proof of wise decisions with the market. It's only proof of variability.

It's not hindsight 20/20. It is a delusion that people continue to disregard an asset that is valued at over $1 trillion dollars and continues to be the best performing asset for over a decade as something that is just going to go away tomorrow. Is it really survivorship bias when its been a decade running? Seems like the bias is among those that continue to conclude that its a fad without any solid argument based in reality. Continuing to disregard it as a fad is the biggest mistake that no-coiners make. Anyone that relegates bitcoin into a comparison between tulips and beanie babies immediately loses credibility in a genuine discussion on the matter.

If I have bitcoin am I actually going to spend it? Yes, I do. All my online purchases are made with bitcoin. Almost all of them are made using the lightning network to spend it directly with the merchant or through services like Moon, Fold, Bitrefill, etc. Amazon, my grubhub/doordash orders, anything I get online delivered; I make all those orders using bitcoin so that I don't need to have any credit cards exposed online. It provides me much greater data privacy and I love that.

Your argument that if you sell you're out of the game doesn't really make any sense at all. What's the actual argument you're trying to make by stating such? What do you mean by "Most people who are pushing the "making money on crypto" are market timing."? I don't market time at all and I would say that most bitcoin holders advocate for the opposite. There is a reason why there is a "HODL" meme that has widespread use in the community. It's because they advocate that people buy and hold as a long term investment instead of trying to time the market. It's literally the exact opposite of market timing. There are even services like SwanBitcoin that allows you to make regular automatic purchases and they don't even allow you to sell. It's just an easy way to DCA your purchasing to set and forget.

Also, in all honestly (as someone who's worked in the financial industry for 15+ years), even in the developed world I don't think bank transfers are as easy as making a bitcoin transaction. Services like Venmo, PayPal, and CashApp are great at these things. However traditional financial institutions lag far behind these services when it comes to peer to peer transacting. There are a few services like Zelle and PopMoney that have tried to bridge that gap, but their penetration in the market lags and even then (at least with PopMoney) it still takes a day to transfer funds. On top of that these services have pretty restrictive transfer limits (just a few thousand dollars a month) that makes them pretty limited in what they can do. This is the area that is ripe for disruption with traditional financial institutions. It is why Venmo, PayPal, and CashApp have had such success in getting the market penetration they've made so far, but in the end I think cryptocurrencies with their open network nature will win this market.

Quote
So my opportunity cost is that my $ is tied up in an asset that I don't want to sell.

Huh?? This doesn't even make sense. I don't think you understand what opportunity cost is...
Title: Re: Bitcoin is funny money
Post by: JetBlast on March 31, 2021, 08:41:41 AM
I don't market time at all and I would say that most bitcoin holders advocate for the opposite. There is a reason why there is a "HODL" meme that has widespread use in the community. It's because they advocate that people buy and hold as a long term investment instead of trying to time the market. It's literally the exact opposite of market timing.


The meme has widespread use because the community loves seeing the price of bitcoin rise, which only happens if there's more buying interest than selling interest.  It's in their financial interest if everyone else holds their coins instead of selling.  Just like reading r/wallstreetbets when GameStop was sent into the short squeeze.  People gave high minded reasons about remaking the system, taking down wall street fat cats, etc... but it was all naked financial self interest.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 31, 2021, 09:02:56 AM
The meme has widespread use because the community loves seeing the price of bitcoin rise, which only happens if there's more buying interest than selling interest.  It's in their financial interest if everyone else holds their coins instead of selling.  Just like reading r/wallstreetbets when GameStop was sent into the short squeeze.  People gave high minded reasons about remaking the system, taking down wall street fat cats, etc... but it was all naked financial self interest.

No, the meme came about because of a guy who mis-typed "hold" after admitting he sucks at day trading.

https://bitcointalk.org/index.php?topic=375643.0 (https://bitcointalk.org/index.php?topic=375643.0)

So rather than day trading and trying to time the market, he decided to HODL. The existence of the HODL meme is in direct contrast to trying to time the market. It was around as a meme well before r/wallstreetbets took off virally earlier this year. You're applying too much thought about "remaking the system" when it is just a simple meme the espouses holding bitcoin for the long term rather than trying to time the market (which is what my original point was). And yes, that's in self interest...isn't that the point of most personal investments?
Title: Re: Bitcoin is funny money
Post by: StashingAway on March 31, 2021, 09:52:48 AM

Huh?? This doesn't even make sense. I don't think you understand what opportunity cost is...

You should jump into the Tesla thread: they are saying that people who aren't invested in Tesla are deluded and that the .5T net worth of the company proves that it's a valuable asset. Its the exact same stuff. It's been the same stuff since the history of investing. From a more geological time scale, there is no difference.

Re: Opportunity cost.

I can put $8K into bitcoin. That 8K could also go toward something else. Like a patio that I can actually enjoy today. Or tuition, which is a different kind of investment in my future. Or a house that I am buying this month, which I will need a down payment on so that I may live with a roof over my head. Or Tesla. Those are all opportunity costs to having $ in bitcoin.
Title: Re: Bitcoin is funny money
Post by: StashingAway on March 31, 2021, 10:18:06 AM
The meme has widespread use because the community loves seeing the price of bitcoin rise, which only happens if there's more buying interest than selling interest.  It's in their financial interest if everyone else holds their coins instead of selling.  Just like reading r/wallstreetbets when GameStop was sent into the short squeeze.  People gave high minded reasons about remaking the system, taking down wall street fat cats, etc... but it was all naked financial self interest.

No, the meme came about because of a guy who mis-typed "hold" after admitting he sucks at day trading.

https://bitcointalk.org/index.php?topic=375643.0 (https://bitcointalk.org/index.php?topic=375643.0)

So rather than day trading and trying to time the market, he decided to HODL. The existence of the HODL meme is in direct contrast to trying to time the market. It was around as a meme well before r/wallstreetbets took off virally earlier this year. You're applying too much thought about "remaking the system" when it is just a simple meme the espouses holding bitcoin for the long term rather than trying to time the market (which is what my original point was). And yes, that's in self interest...isn't that the point of most personal investments?

That's not a fair representation of JetBlast's points. He wasn't talking about the origins of the meme, he's talking about it's current usage. And I tend to agree with him: it's said as a rally cry, often tongue in cheek. It's popular because people are having fun throwing money at the market. It keeps everyone playing, the same for any hobby.

Some people are experts and really, really good at what they do in their free time. I belong to motorcycle forums; they have the same kind of camaraderie. Some people build a unique bike from the ground up and know more than most mechanics do (similar to how there are many smart people in WSB and crypto). And some are novices. Some actually are professionals (those who develop and speak about crypto). But all share a jargon with each other that is fun and recognizable. It's analogous to any hobby. Some people feel that motorcycles are the answer to traffic, and thus many of the world's problems. Some people think that everyone should sew their own clothes. And some think that using non-fiat currency is the answer to to everything.

There's nothing wrong with this: in fact I'd say it's one of the essential characteristic of what it means to be a human! But it seems that sometimes things get taken a bit too seriously and then it's difficult to see the forest for the trees.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 31, 2021, 11:22:45 AM
That's not a fair representation of JetBlast's points. He wasn't talking about the origins of the meme, he's talking about it's current usage. And I tend to agree with him: it's said as a rally cry, often tongue in cheek. It's popular because people are having fun throwing money at the market. It keeps everyone playing, the same for any hobby.

Some people are experts and really, really good at what they do in their free time. I belong to motorcycle forums; they have the same kind of camaraderie. Some people build a unique bike from the ground up and know more than most mechanics do (similar to how there are many smart people in WSB and crypto). And some are novices. Some actually are professionals (those who develop and speak about crypto). But all share a jargon with each other that is fun and recognizable. It's analogous to any hobby. Some people feel that motorcycles are the answer to traffic, and thus many of the world's problems. Some people think that everyone should sew their own clothes. And some think that using non-fiat currency is the answer to to everything.

There's nothing wrong with this: in fact I'd say it's one of the essential characteristic of what it means to be a human! But it seems that sometimes things get taken a bit too seriously and then it's difficult to see the forest for the trees.

I agree with you in regards to camaraderie, but my counterpoint was that I feel that in spirit of its origins, it is still much more commonly used as a counter to timing the market. Whenever you hear someone tell someone to just HODL, they're telling them to stop trying to time the market and just buy and hold for the long term. That's precisely the point of the message of the meme; contrary to the original argument that was being made by yourself which was:

Quote
Most people who are pushing the "making money on crypto" are market timing; selling highs and buying lows, etc.

I just don't think that's an accurate representation. That's not to say there aren't a lot of people who are out there pushing it as a get rich quick scheme, but I would say that a majority involved in the bitcoin community are those that truly want to push the technology forward and see it more from a long-game perspective rather than a day trading one.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on March 31, 2021, 02:37:18 PM
I just don't think that's an accurate representation. That's not to say there aren't a lot of people who are out there pushing it as a get rich quick scheme, but I would say that a majority involved in the bitcoin community are those that truly want to push the technology forward and see it more from a long-game perspective rather than a day trading one.

Then what's the hangup with bitcoin?  It's not the most technologically advanced cryptocurrency, nor is it the most forward looking technology in the sector.  From a long-game perspective, it's main benefit seems to have been only that it was first and has name recognition.
Title: Re: Bitcoin is funny money
Post by: StashingAway on March 31, 2021, 02:39:59 PM
I agree with you in regards to camaraderie, but my counterpoint was that I feel that in spirit of its origins, it is still much more commonly used as a counter to timing the market. Whenever you hear someone tell someone to just HODL, they're telling them to stop trying to time the market and just buy and hold for the long term. That's precisely the point of the message of the meme...

Hmmm. This might be a perception issue, then. The meme as I interpret it (and use it myself, I do participate in various crypto forums), is often used tongue in cheek or in ambiguous ways intentionally. It works because the original intent was the basic market advice, but it can be applied in many ways like "pull yourself up by your bootstraps", where it could be serious or not depending on the circumstances that it is used. Sort of a Poe's law type of thing. But that's my interpretation.


That's not to say there aren't a lot of people who are out there pushing it as a get rich quick scheme, but I would say that a majority involved in the bitcoin community are those that truly want to push the technology forward and see it more from a long-game perspective rather than a day trading one.

Most people that I personally come across who are trying to tell me the benefits of bitcoin quickly and prominently tell me how much money can be made in the space. I know that's not the baseline point of the technology, and I'm not in a country with destabilized currency lie Venesuela. But you can't tell me that the most exciting and talked about aspect of crypto is how much money there is in it. I have this conversation quite often, and I stand by my guns here... people trying to get others into the space will say things like, "I funded my vacation by selling some bitcoin," etc. This buying and selling only mathematically works from market timing. It's kind of a personal sticking point for me (but not directed at you, perhaps it's just me trying to figure it out).
Title: Re: Bitcoin is funny money
Post by: Telecaster on March 31, 2021, 03:27:45 PM
But you can put 8k into the best performing asset of the last decade.  That's probably a good place to start.

I would say a better place to start would be to but $8K into the best performing asset of the next decade. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on March 31, 2021, 04:25:44 PM
Then what's the hangup with bitcoin?  It's not the most technologically advanced cryptocurrency, nor is it the most forward looking technology in the sector.  From a long-game perspective, it's main benefit seems to have been only that it was first and has name recognition.

I don't think there is any "hangup" with bitcoin. I would say this is a bit of a myth in regards to bitcoin not being technologically advanced or forward looking. That's generally a description that comes from alt-coins that try to position themselves as "the next bitcoin" by saying they have technological improvements over bitcoin as their main selling point. Generally they're trying to sell snake oil as there is very little reason to ever own 99.9% of cryptocurrencies out there.

Yes, bitcoin moves slowly and deliberately because it has a $1+ trillion market sitting on its shoulders. You can't move fast and break things when an industry this large depends on it. You can't just implement any change in the network since what gives bitcoin its value is its strong security and consensus that is anti-fragile and resistant to attack (something no other cryptocurrency can claim). Even with changes that have widespread support from the network such as Taproot has a hard time finding consensus in how to even agree upon implementing it (LOT=True versus LOT=False).

That being said, there are a lot of technological advancements being made with it that go unnoticed. Lightning Network was implemented as a side chain after the Segregated Witness upgrade that allows for scalability and its growth has been exponential over the last couple years. Blockstream's federated sidechain Liquid was implemented on mainnet and as seen some growth with some exchanges and some NFTs have been implemented on it as well. Numerous implementations of coinjoin networks have been implemented as a means to improve privacy. Neutrino has been released that allows for a more lightweight implementation of verifying the blockchain. Schnorr signatures are being worked on to improve privacy and further refine signature aggregation. Microsoft just released their live implementation of a new decentralized identity service that runs on the bitcoin network called ION. This will greatly help improve data privacy and identity ownership on the internet. Mining improvements with things like BetterHash and StratumV2 help improve mining decentralization. There are DAOs implemented on the bitcoin network like the Bisq decentralized exchange that allows for peer-to-peer exchanges without requiring KYC. The reality is that while it is difficult to make changes in the base layer of bitcoin because of its anti-fragile security, it is actually relatively easy to implement new technologies as sidechains or other layers in the protocol that don't require mass consensus to implement. This is where real-world feature sets will be implemented anyway.

This is just the tip of the iceberg as far as the technology improvements taking place on the bitcoin network. The truth of the matter is that the reason that alt-coins push the idea that "bitcoin is old tech and we have better tech and will replace it" narrative is because that's the only thing the can say to try and overcome bitcoin's 1st mover advantage and supreme network effect. At the end of the day, in order to overcome an incumbent's superior network effect, a competitor must be 10x better, but no alt-coin is 10x better than bitcoin. When it comes down to it, anything an alt-coin can do or any idea that is come up with will simply be implemented on the bitcoin network as well since that is where the security is.
Title: Re: Bitcoin is funny money
Post by: StashingAway on March 31, 2021, 04:55:38 PM
But you can put 8k into the best performing asset of the last decade.  That's probably a good place to start.

I would say a better place to start would be to but $8K into the best performing asset of the next decade.

Exactly. Or put 8K into the best performing asset of the next week. Then sell and do it again the following week, ad nauseum.
Title: Re: Bitcoin is funny money
Post by: EverythingisNew on April 02, 2021, 04:32:26 AM
Cryptocurrency is not legal US tender. The only legal tender in the US is the US dollar in all forms. Cryptocurrency will never become mainstream because the US government will shut it down. We already have laws that discourage businesses from accepting foreign currency. To accept foreign currency you have to record the person’s government ID information and keep the transaction record for a certain number of years. Your business can be accused of money laundering, so it’s very rare in the US for companies to go through this trouble. Very rare to find a company that accepts Euros or Pesos in  the US. The same will be true for cryptocurrency. It’s even worse because cryptocurrency is not legal tender anywhere!
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on April 02, 2021, 05:39:10 AM
Cryptocurrency is not legal US tender. The only legal tender in the US is the US dollar in all forms. Cryptocurrency will never become mainstream because the US government will shut it down. We already have laws that discourage businesses from accepting foreign currency. To accept foreign currency you have to record the person’s government ID information and keep the transaction record for a certain number of years. Your business can be accused of money laundering, so it’s very rare in the US for companies to go through this trouble. Very rare to find a company that accepts Euros or Pesos in  the US. The same will be true for cryptocurrency. It’s even worse because cryptocurrency is not legal tender anywhere!

S&P500 stocks are not legal US tender either but there's still a lot of money to be made out of them.  Don't make the mistake of thinking that the ability to buy a cup of coffee with bitcoin has anything to do with its performance as an investment.  The last thing most bitcoin holders want to do with their bitcoin is spend it anyway.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 02, 2021, 06:39:06 AM
Cryptocurrency is not legal US tender. The only legal tender in the US is the US dollar in all forms. Cryptocurrency will never become mainstream because the US government will shut it down. We already have laws that discourage businesses from accepting foreign currency. To accept foreign currency you have to record the person’s government ID information and keep the transaction record for a certain number of years. Your business can be accused of money laundering, so it’s very rare in the US for companies to go through this trouble. Very rare to find a company that accepts Euros or Pesos in  the US. The same will be true for cryptocurrency. It’s even worse because cryptocurrency is not legal tender anywhere!

Legal tender is just when a jurisdictional court requires that a form of money be accepted as a form of payment for a monetary debt. That doesn't stop two parties from being able to exchange goods using whatever the two parties agree upon. Obviously laws varying in various countries, but being labeled as legal tenders isn't what determines whether or not two parties can agree to use a form of money or not. Here is a breakdown of where bitcoin is legal and not:

https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory (https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory)

It has pretty good widespread legality, especially in democratic nations. The argument that bitcoin is going to be banned by governments gets weaker by the day. You now have Coinbase going public on April 14th and is set to become one of the largest financial institutions in the country. The industry of bitcoin is a part of our economic fabric now. You have an SEC commissioner (Hester Pierce) saying that a delayed bitcoin ETF has consequences and that we're overdue for one. There are over a dozen ETF proposals filed with the SEC currently. It's only a matter of a short time before one is approved. The US is simply not in a position to legally outlaw something like bitcoin (it's just information after all) as it would present a whole host of 1st amendment violations. Especially with an extremely conservative leaning supreme court. There is also no precedent for such a move.

Also, the gold buyback that took place in the early 1930's was done in order to cause inflation so that they could later raise the price of gold under the Gold Reserve Act. We're in a completely different economy at the moment and there just isn't the capital available for such a buyback today without causing massive inflation. The threat in today's economy is inflation, so a buyback would be the exact opposite of a policy the government would want to implement.

Put simply, the window to ban bitcoin by the US was closed a long time ago. Bitcoin is a part of our economy now and it is only going to get more and more intertwined as more and more products and industries develop in the space. All of the biggest institutions have some sort of exposure to bitcoin now and that exposure is growing by the day. Also, if the US is permitting bitcoin and growing the industry like it is, then from a global competitive standpoint, other allied democratic countries are going to want to allow bitcoin and compete in the industry as well. Game theory is going to be a force that ensures bitcoin is widely accepted across the globe.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on April 02, 2021, 10:52:19 AM
Then what's the hangup with bitcoin?  It's not the most technologically advanced cryptocurrency, nor is it the most forward looking technology in the sector.  From a long-game perspective, it's main benefit seems to have been only that it was first and has name recognition.

I don't think there is any "hangup" with bitcoin. I would say this is a bit of a myth in regards to bitcoin not being technologically advanced or forward looking. That's generally a description that comes from alt-coins that try to position themselves as "the next bitcoin" by saying they have technological improvements over bitcoin as their main selling point. Generally they're trying to sell snake oil as there is very little reason to ever own 99.9% of cryptocurrencies out there.

OK.  Non-bitcoin crypto is snake oil, and bitcoin is technologically advanced/forward looking.


Yes, bitcoin moves slowly and deliberately because it has a $1+ trillion market sitting on its shoulders. You can't move fast and break things when an industry this large depends on it. You can't just implement any change in the network since what gives bitcoin its value is its strong security and consensus that is anti-fragile and resistant to attack (something no other cryptocurrency can claim). Even with changes that have widespread support from the network such as Taproot has a hard time finding consensus in how to even agree upon implementing it (LOT=True versus LOT=False).

Bitcoin is a slow moving, difficult to change technological innovator?  Like . . . uh . . . no other tech innovator then?

That being said, there are a lot of technological advancements being made with it that go unnoticed. Lightning Network was implemented as a side chain after the Segregated Witness upgrade that allows for scalability and its growth has been exponential over the last couple years. Blockstream's federated sidechain Liquid was implemented on mainnet and as seen some growth with some exchanges and some NFTs have been implemented on it as well. Numerous implementations of coinjoin networks have been implemented as a means to improve privacy. Neutrino has been released that allows for a more lightweight implementation of verifying the blockchain. Schnorr signatures are being worked on to improve privacy and further refine signature aggregation. Microsoft just released their live implementation of a new decentralized identity service that runs on the bitcoin network called ION. This will greatly help improve data privacy and identity ownership on the internet. Mining improvements with things like BetterHash and StratumV2 help improve mining decentralization. There are DAOs implemented on the bitcoin network like the Bisq decentralized exchange that allows for peer-to-peer exchanges without requiring KYC. The reality is that while it is difficult to make changes in the base layer of bitcoin because of its anti-fragile security, it is actually relatively easy to implement new technologies as sidechains or other layers in the protocol that don't require mass consensus to implement. This is where real-world feature sets will be implemented anyway.

This is just the tip of the iceberg as far as the technology improvements taking place on the bitcoin network. The truth of the matter is that the reason that alt-coins push the idea that "bitcoin is old tech and we have better tech and will replace it" narrative is because that's the only thing the can say to try and overcome bitcoin's 1st mover advantage and supreme network effect. At the end of the day, in order to overcome an incumbent's superior network effect, a competitor must be 10x better, but no alt-coin is 10x better than bitcoin. When it comes down to it, anything an alt-coin can do or any idea that is come up with will simply be implemented on the bitcoin network as well since that is where the security is.

So, the main benefit to bitcoin is that it was there first and to overcome the 'being firstness' would require something to be ten times better?  So there's not anywhere near as much drive to innovate tech.  But bitcoin is very technologically advanced!  And forward looking!

Crystal clear.  :P
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 02, 2021, 11:29:04 AM
I can't tell how much is tongue-in-cheek here or not. So I'll just address it literally anyways.

OK.  Non-bitcoin crypto is snake oil, and bitcoin is technologically advanced/forward looking.

Yes, 99.9% of crypto-currencies out there are snake-oil at best and out right scams at worst. That's not really an exaggeration either. There are thousands of crypto-currencies out there and a vast majority of them are not traded on regulated exchanges. That doesn't mean there aren't cool ideas that exist outside of bitcoin. There are. But that doesn't change the reality of what a vast majority of other cryptocurrencies are. If you understand what a blockchain is and its benefits are, it becomes immediately apparent that a vast majority of crypto-currencies don't bring anything new or exciting to the table and frankly have no business being a blockchain at all (because they're completely centralized projects).

Bitcoin is a slow moving, difficult to change technological innovator?  Like . . . uh . . . no other tech innovator then?

Bitcoin's consensus mechanism is unlike any other out there. It is anti-fragile and resistant to change. It is the only one that has been attacked in the way that it has been and has withstood those attacks. Even Ethereum, the #2 crypto-currency by market-cap has been re-written several times and has been forked in ways that resulted it the altered non-backward compatible chain becoming the dominant one. Also, comparing bitcoin's anti-fragile consensus mechanisms to any other technology innovator in the traditional sense ignores the ease of which any centralized entity can change at a whim given enough forcing. You can't do that with bitcoin. But there is a big difference between the rigidity and anti-fragility of the consensus mechanism versus the rate at which you can innovate with a technology by building on top of it. Bitcoin's security is based on the former while its innovation comes from the latter.

So, the main benefit to bitcoin is that it was there first and to overcome the 'being firstness' would require something to be ten times better?  So there's not anywhere near as much drive to innovate tech.  But bitcoin is very technologically advanced!  And forward looking!

Crystal clear.  :P

If that was your take away after reading about some of the new technologies coming out was that bitcoin's advantage is simply that it was first, then I don't know what to tell you. I am not even sure what half your statement meant. I guess there are simply some people that can't be convinced even when shown otherwise. It is clear to me that you're just passing judgement on something that you obviously are not quite up to speed on, that's fine. I only try and give accurate info on the space since it is an area that I spend a lot of time on.

Also, the idea that an incumbent with a superior network effect requires a "10x improvement" in order to be unseated by a competitor is not a new concept. It has been studied a lot when it comes to network effects and it is not unique to bitcoin. Here is a good article with an overview of network effects that covers everything from shipping, social media, payment networks, and the telephone:

https://www.lynalden.com/bitcoins-network-effect/ (https://www.lynalden.com/bitcoins-network-effect/)


...I also forgot to mention the Sphinx chat app that runs on the lightning network. It supports podcasting that allows you to stream satoshis to the content the content creator per minute that you listen. So it opens up new avenues of revenue possibilities and allows people to instantly sent micropayments to people in the chat and put paywalls behind messages that are sent and received. It's a pretty cool app that has a lot of new possibilities. The Breez wallet app is doing something similar with podcasting too. Pretty cool stuff really.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on April 02, 2021, 01:10:11 PM
I was wrong
Title: Re: Bitcoin is funny money
Post by: WhiteTrashCash on April 02, 2021, 01:24:25 PM
I did my one and only purchase of cryptocurrency when I was a kid. I bought a pack of Topps trading cards for a dollar and got a gold J.T. Snow rookie card in the pack. I immediately went to the local card shop and sold the card for its book value of $8. A couple days later, the card's value collapsed to only $1 and I was banned from the card shop. However, I used the proceeds from the sale to purchase a paperback copy of the Star Wars novel "Dark Force Rising" by Timothy Zahn.

That was the only time I dabbled in cryptocurrency, because these things are so volatile. It's like gambling. These days I just invest in index funds so I can have guaranteed profit.
Title: Re: Bitcoin is funny money
Post by: StashingAway on April 02, 2021, 01:55:39 PM
I did my one and only purchase of cryptocurrency when I was a kid. I bought a pack of Topps trading cards for a dollar and got a gold J.T. Snow rookie card in the pack. I immediately went to the local card shop and sold the card for its book value of $8. A couple days later, the card's value collapsed to only $1 and I was banned from the card shop. However, I used the proceeds from the sale to purchase a paperback copy of the Star Wars novel "Dark Force Rising" by Timothy Zahn.

Small world, I just finished the 3+2 series. The novels hold up pretty well!
Title: Re: Bitcoin is funny money
Post by: mjr on April 02, 2021, 02:53:41 PM
Bitcoin is a part of our economy now and it is only going to get more and more intertwined as more and more products and industries develop in the space

Bitcoin could disappear tomorrow and the economy wouldn't stumble in the slightest and 99% of the population wouldn't blink an eye.

A bunch of speculators would have done their dough.  Happens every day.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on April 02, 2021, 07:11:00 PM
Bitcoin is a part of our economy now and it is only going to get more and more intertwined as more and more products and industries develop in the space

Bitcoin could disappear tomorrow and the economy wouldn't stumble in the slightest and 99% of the population wouldn't blink an eye.

A bunch of speculators would have done their dough.  Happens every day.

And yet here we are, BTC sitting just under US$60k and millions of people achieving financial freedom with crypto by doubling, tripling or even 10x or 20x their dough.  Actually happens every day.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on April 02, 2021, 08:13:25 PM
Bitcoin is a part of our economy now and it is only going to get more and more intertwined as more and more products and industries develop in the space

Bitcoin could disappear tomorrow and the economy wouldn't stumble in the slightest and 99% of the population wouldn't blink an eye.

A bunch of speculators would have done their dough.  Happens every day.

Your talking points are so old they are going through puberty.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on April 02, 2021, 08:49:58 PM
Bitcoin could disappear tomorrow and the economy wouldn't stumble in the slightest and 99% of the population wouldn't blink an eye.

A bunch of speculators would have done their dough.  Happens every day.

IDK. Bitcoin has a $1.1T "market cap", much of which is owned by investors who also own stocks and real estate, particularly in the U.S. and much of which was traded for dollars by those investors within the past couple of years.

Anyone who thought in the late '90s that the imminent blowup of the dot-com/telecom bubble would be limited to dot-com/telecom stocks (ahem) was rapidly proven wrong when the entire market was torpedoed by the collapse of that one sector. As investors and funds lost piles of money on tech stocks, they had to liquidate non-tech stocks to rebalance or cap their losses. The same thing happened in '08 with mortgages. A crypto blowup would be at least as bad, particularly since almost nobody in crypto is hedged.
Title: Re: Bitcoin is funny money
Post by: WillWork4Mustache on April 03, 2021, 07:25:59 PM
I usually avoid discussing bitcoin with people as I find most people unsurprisingly uniformed. Reminds me of trying to explain the internet 30years ago (not comparing the technology as bitcoin is not revolutionary like the internet). I distinctly remember conversations with people who said it was stupid, the information sharing had no purpose, if they wanted to transmit information they could pick up the phone or mail them. They had a 1000 reasons why the technology would never be needed. Today they sit on the internet all day checking stock prices and placing orders like some armchair daytrader. What I find interesting is when I bring up that conversation today, they still believe they were right, somehow that was a different internet, and what casually entered their life little by little over the years is some new useful different type of internet.

I'm no expert, but i have been a developer on some cryptocurrencies, implemented cross-chain transactions, coded miners and mining pools, so I have some of the basics of how it works. I've been lucky enough to work with some people who are experts and listened to their visionary ideas of where it's going, honestly some of the possibilities of distributed consensus is mind blowing for me. But in general, a couple of years ago I gave up on talking with people who have such strong opinions on technology but can't understand how it works.

However @celerystalks made me change my mind. While I disagree with much of his/her posts, i respect the consistency of them. Two posts stuck out the most for me.

1st is saying blockchain is worthless because it is inefficient. This correlates to saying democracy is worthless because a dictator could make all the same decisions but much quicker. While i can see your point, a dictatorship has many advantages, it's important to look at the times the two systems might make different decisions to understand if it's worth the extra overhead of consensus. I believe even the most ardent dictator at times could see some use case for democracy, perhaps asking his advisors to vote on a decision he is unsure of, or what his/her family wants for dinner. Surely there must be some value in it, while we have both forms of government in the world, why would anyone want democracy?

2nd is saying that if you buy all the shares of a company eventually you own that company. This honestly opened my eyes a bit, even though I like comparing bitcoin to a stock for many of the similarities, this is strikingly different. A company can go on making money regardless of the owners but if someone bought every bitcoin it would essentially become valueless as everyone would just move on. I like looking at the extreme cases as that's where you generally find problems, and that certainly is a problem. Thanks for opening my eyes to this.

As for my take, I like blockchain, I like bitcoin, I think it's a great way for everyday people to transfer money, I don't think it's a currency, and I don't think it solved the Byzantine Generals problem.

I think Funny Money is a good name for it, it is a lot like money, but different in a few consequential ways.

-WW4M
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on April 03, 2021, 10:06:05 PM
1st is saying blockchain is worthless because it is inefficient. This correlates to saying democracy is worthless because a dictator could make all the same decisions but much quicker.
Just because pets.com failed, doesn't mean all internet companies failed.

Bitcoin's Blockchain uses cpu power as proof of work, which is why it spends much more energy than Etherium's blockchain.  Saying that Bitcoin is inefficient does not mean all blockchains share the same problem.  That criticism is specific to Bitcoin, not common to all virtual currencies, as you claim.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 04, 2021, 02:21:05 PM
Bitcoin's Blockchain uses cpu power as proof of work, which is why it spends much more energy than Etherium's blockchain.  Saying that Bitcoin is inefficient does not mean all blockchains share the same problem.  That criticism is specific to Bitcoin, not common to all virtual currencies, as you claim.

It is always painfully obvious when someone makes a post but doesn't quite understand what they're talking about. Ethereum uses proof of work as well and always has (Ethash). They've been looking to switch to proof of stake, but its been in the works for a long time. Proof-of-stake has way too many security issues to work out and leads to centralization of the network. The reason why Ethereum uses less energy is because there is simply less incentives and money to mine it than mining bitcoin. In fact, Ethereum is even less energy efficient than bitcoin in the sense that there is way less value in the network/market compared to how much energy it consumes. It consumes about 32.38TWh of electricity annually (compared to bitcoin's 93TWh) and has a carbon footprint of 13.38Mt CO2 annually (compared to 44.31Mt CO2 for bitcoin). Bitcoin's market cap is more than 4 times larger currently.

https://digiconomist.net/ethereum-energy-consumption/ (https://digiconomist.net/ethereum-energy-consumption/)
https://digiconomist.net/bitcoin-energy-consumption/ (https://digiconomist.net/bitcoin-energy-consumption/)
Title: Re: Bitcoin is funny money
Post by: onecoolcat on April 04, 2021, 02:46:28 PM
Bitcoin's Blockchain uses cpu power as proof of work, which is why it spends much more energy than Etherium's blockchain.  Saying that Bitcoin is inefficient does not mean all blockchains share the same problem.  That criticism is specific to Bitcoin, not common to all virtual currencies, as you claim.

It is always painfully obvious when someone makes a post but doesn't quite understand what they're talking about. Ethereum uses proof of work as well and always has (Ethash). They've been looking to switch to proof of stake, but its been in the works for a long time. Proof-of-stake has way too many security issues to work out and leads to centralization of the network. The reason why Ethereum uses less energy is because there is simply less incentives and money to mine it than mining bitcoin. In fact, Ethereum is even less energy efficient than bitcoin in the sense that there is way less value in the network/market compared to how much energy it consumes. It consumes about 32.38TWh of electricity annually (compared to bitcoin's 93TWh) and has a carbon footprint of 13.38Mt CO2 annually (compared to 44.31Mt CO2 for bitcoin). Bitcoin's market cap is more than 4 times larger currently.

https://digiconomist.net/ethereum-energy-consumption/ (https://digiconomist.net/ethereum-energy-consumption/)
https://digiconomist.net/bitcoin-energy-consumption/ (https://digiconomist.net/bitcoin-energy-consumption/)

I've heard, from my Ethereum mining friend, that Ethereum is switching to POS in June.  IDK if this is true.

I don't know how much a security threat there really is from POS coins.  Cardano is a pure POS coin and it touts itself as being completely decentralized as of the past month.  Polkadot has a system in place to slash bad actors staked amounts to decentivize bad conduct on the network.  Seems to me that POS has come a long way in security.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 04, 2021, 03:40:31 PM
I've heard, from my Ethereum mining friend, that Ethereum is switching to POS in June.  IDK if this is true.

I don't know how much a security threat there really is from POS coins.  Cardano is a pure POS coin and it touts itself as being completely decentralized as of the past month.  Polkadot has a system in place to slash bad actors staked amounts to decentivize bad conduct on the network.  Seems to me that POS has come a long way in security.

Yes, ETH2.0 is supposedly coming out some time this year, which includes a switch to PoS. A lot of question marks with it still and whether a successful switch happens.

The problem with proof-of-stake is that in inevitably leads to centralization. The incentives are really not much different than our current financial system today. The more money you have, the more "political" control in the network you have. The real-world capital requirement is a huge key part of PoW's security model. Whereas with PoS, simply owning a token is enough to exert some control in the network, with PoW you need to invest in real world capital resources and energy in order to earn something back. Many people store their funds on centralized custodial services (like exchanges). This means that with PoS those centralized authorities could exert an outsized influence on the network with other peoples' money through staking. Something like the S2X attack that was attempted on the bitcoin network and thwarted by user resistance with economic validating nodes, with centralized entities that hold large amounts of funds like what would take place in a PoS network would've yield much different results and an attack like that would be much more likely to be successful. With PoW, it isn't enough to just have a lot of money, you need to be able to risk that money, acquire enough electricity, acquire enough computing hardware, and sustain an attack with it. With PoS, you can have your cake and eat it too.

Money in essence is easy to come by. Especially in today's world. The rich have extremely easy access to funds through cheap debt and leverage and for nation-state actors...money printing. That means that the rich could easily exert more force against the network. PoW systems inherently have some protections against this.

Another problem with PoS is in its distribution. Cardano, for example, was mostly distributed in Japan and an organization (IOHK) holds are large stake in it. Bitcoin has one of the most fair distributions possible and it very likely can't be duplicated today. It was circulated for over 2 years before it even had a price and people could freely acquire some on the internet. There was no premine. It's creator was anonymous and went dark early in its life. Having a fair distribution is even more critical in a PoS network to ensure decentralization.

This doesn't even touch on the technical aspects of PoS such as bribing attacks, long range attacks, nothing-at-stake attacks, etc that various PoS networks attempt to address in various ways.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on April 04, 2021, 11:59:54 PM
Bitcoin's Blockchain uses cpu power as proof of work, which is why it spends much more energy than Etherium's blockchain.  Saying that Bitcoin is inefficient does not mean all blockchains share the same problem.  That criticism is specific to Bitcoin, not common to all virtual currencies, as you claim.
It is always painfully obvious when someone makes a post but doesn't quite understand what they're talking about. Ethereum uses proof of work as well and always has (Ethash). They've been looking to switch to proof of stake, but its been in the works for a long time
My main point was that proof of stake protocols exist, and that Bitcoin being inefficient does not mean all cryptos are inefficient.  It's also interesting how you ignore even more "painfully obvious" comments on the topic at hand:

1st is saying blockchain is worthless because it is inefficient. This correlates to saying democracy is worthless because a dictator could make all the same decisions but much quicker.
Title: Re: Bitcoin is funny money
Post by: MustacheAndaHalf on April 05, 2021, 12:07:50 AM
It's also "painfully obvious" when posters equate a normal brokerage account with an offshore crypto exchange caught violating U.S. banking laws, like your best example "Bitmex" back in this post:

There's also no counter-weight to the optimism.  If someone thinks Tesla is overpriced, they can short the stock or buy PUT options.  If someone who doesn't own Bitcoin thinks it is about to fall ... you can't short it in your brokerage account.  There's no options to buy.  So the only people who can express their views are buyers.

Ya, that's not true. You can short bitcoin on several exchange/broker websites (BitMex probably being the largest). I track many of the larger transactions that take place and there were several very large liquidated shorts that just took place after bitcoin just breached $35k ($6.4M, $2.4M, and $1.3M). In fact, short squeezes in bitcoin are often what cause many of the larger upside swings. Long story short though is that not many choose to short bitcoin because it is absolutely stupid to do so with something that is so lopsided toward buy demand and who's upside is so tremendously high.
I said "you can't short it in your brokerage account", and BitMex is not a brokerage.  If someone buys PUT options on TSLA, that goes to the CBOE... there's a well established system of what happens to enforce the contracts.

BitMex is registered in an island off the coast of Africa.  To quote Wikipedia:
"BitMEX was founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed, with financing from family and friends."
...
"On October 1, 2020, Hayes, Reed, Delo, and Gregory Dwyer were indicted on charges of violating the U.S. Bank Secrecy Act and conspiracy to violate that law, arising from allegations that the four failed to implement anti-money laundering measures"
https://en.wikipedia.org/wiki/BitMEX
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 05, 2021, 06:18:09 AM
My main point was that proof of stake protocols exist, and that Bitcoin being inefficient does not mean all cryptos are inefficient.  It's also interesting how you ignore even more "painfully obvious" comments on the topic at hand:

1st is saying blockchain is worthless because it is inefficient. This correlates to saying democracy is worthless because a dictator could make all the same decisions but much quicker.

Well you were wrong in what you posted. If you're going to make a point, regardless of what that point is, you should post information that is actually factual. Also, how do you even know he was referring to energy usage? He didn't say anything about energy usage at all. He also didn't say bitcoin specifically, he said blockchains. Blockchains are inefficient databases architectures. That's because they're broadcast networks. They must be in order to maintain decentralization. That means inefficiency is inherent to being a blockchain. If a blockchain isn't decentralized it has no benefits over a typical relational database like SQL. Therefore it is inefficient by design in the sense that you can't allow for every transaction in the world that could be broadcast confirmed on a blockchain. It's simply not feasible. Doesn't matter whether the consensus mechanism is PoW or PoS, the same holds true.

Anyways, in regards to energy usage (if that's indeed what is meant by "inefficient" here), bitcoin has several downward pressures applied to it from an energy consumption perspective. While price currently provides an upward forcing in the amount of energy it consumes, things like ASIC efficiency increases, the difficulty adjustment, and the block reward halvings provide downward forcings on that energy usage. I don't think it is accurate to call bitcoin inefficient from an energy usage standpoint. First off, a vast majority of bitcoins in circulation were mined at a time when energy usage was small and mined with CPU/GPUs. Therefore the ratio between the amount of energy spent per unit of value for bitcoin is very small and its large energy consumption during the production period of bitcoin's life will be very fleeting.

This is because of bitcoin's supply halvings that take place every 4 years. In order for the price to have a continued upward pressure on its energy usage, the price would need to continue to be exponential well into the future to counteract the newly created supply being cut in half every 4 years. So either bitcoin becomes extremely valuable in the future and thus provides humanity a lot of value for its energy use in comparison, or miners begin to derive a majority of their revenues from fees rather than block subsidy. A combination of both those things is likely to occur, but it is only a matter of time before miners will derive a majority of their revenue from fees as bitcoin transitions into a fee based mining incentive structure.

Bitcoin profit margins are typically pretty slim due to the intense global competition involved. Therefore as the market continues to move to a fee based incentive, bitcoin's energy usage will be as a direct result of economic activity that takes place on the bitcoin blockchain. Every fee paid to conduct a transaction will result in a nearly equivalent amount of the cheapest global energy consumed. There is no monetary system that can come close to even claiming such an efficiency. Bitcoin will not need to deal with any of the losses of energy found in traditional systems such as lost productivity, bureaucratic waste, poor governance, logistics, regulatory overhead, etc. If I need to spend a $100 fee to send a bitcoin transaction, that $100 fee will result in nearly $100 of some of the cheapest energy on the planet being consumed to confirm my transaction. Furthermore, 1 transaction on the bitcoin network does not equal 1 payment. Bitcoin's base layer is a settlement layer. 1 transaction likely equals many payments (potentially thousands or millions) as a transaction can consist of many batched transactions or a settlement transactions for the lightning network settling many millions of transactions. The efficiency here at the base layer from an energy standpoint is something that will actually be pretty outstanding as time goes on.

Furthermore, due to mining competition, ASIC efficiency increases, and the difficulty adjustment, mining bitcoin must take place with the cheapest electricity found globally. That means that as renewable energy continues to become the dominant cheap form of energy in all global markets, bitcoin mining's transition to an all renewable network will take place faster than any other industry so long as fossil fuel subsidies aren't increased to keep pace with renewable advancements.

IMO, because of the above features of bitcoin, I don't think it is fair to call bitcoin inefficient from an energy perspective. I feel it is actually quite efficient in that regard.


It's also "painfully obvious" when posters equate a normal brokerage account with an offshore crypto exchange caught violating U.S. banking laws, like your best example "Bitmex" back in this post:

There's also no counter-weight to the optimism.  If someone thinks Tesla is overpriced, they can short the stock or buy PUT options.  If someone who doesn't own Bitcoin thinks it is about to fall ... you can't short it in your brokerage account.  There's no options to buy.  So the only people who can express their views are buyers.

Ya, that's not true. You can short bitcoin on several exchange/broker websites (BitMex probably being the largest). I track many of the larger transactions that take place and there were several very large liquidated shorts that just took place after bitcoin just breached $35k ($6.4M, $2.4M, and $1.3M). In fact, short squeezes in bitcoin are often what cause many of the larger upside swings. Long story short though is that not many choose to short bitcoin because it is absolutely stupid to do so with something that is so lopsided toward buy demand and who's upside is so tremendously high.
I said "you can't short it in your brokerage account", and BitMex is not a brokerage.  If someone buys PUT options on TSLA, that goes to the CBOE... there's a well established system of what happens to enforce the contracts.

BitMex is registered in an island off the coast of Africa.  To quote Wikipedia:
"BitMEX was founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed, with financing from family and friends."
...
"On October 1, 2020, Hayes, Reed, Delo, and Gregory Dwyer were indicted on charges of violating the U.S. Bank Secrecy Act and conspiracy to violate that law, arising from allegations that the four failed to implement anti-money laundering measures"
https://en.wikipedia.org/wiki/BitMEX

Haha, you literally dug up a post from 4 months ago. I'm flattered that you remember all my posts like that. I really am. But can I ask that if you're going to dig up old posts like that, can you at least quote the entire conversation?

No, you can't short bitcoin in your typical brokerage account.

Your original point was simply that you were implying that there is no downwards pressure on bitcoin to counteract all the demand, when there is. There are several places you can short bitcoin.

https://99bitcoins.com/short-sell-bitcoin/ (https://99bitcoins.com/short-sell-bitcoin/)
https://www.investopedia.com/news/short-bitcoin/ (https://www.investopedia.com/news/short-bitcoin/)

You're right that I exaggerated in my original post, saying there was "no place" to short bitcoin.  But I didn't expect mainstream investment choices to be put on a par with websites like the one you gave as an example.

I wasn't equating BitMex to traditional mainstream financial brokers. I was simply countering your factually incorrect claim that there is nowhere to short bitcoin or that there isn't any downward pressure on bitcoin's price like you insinuated by saying: "There's also no counter-weight to the optimism." That's not true at all and there have been many short squeezes throughout bitcoin's life where the price has skyrocketed in the matter of an hour as shorters get liquidated to the tune of millions/billions of dollars. Therefore it stands to reason that if there is a major price movement upwards due to shorts getting liquidated, that means there was that amount of downward pressure being applied to the market while those shorts were in play.

No you can't short bitcoin in your typical mainstream brokerage account. I never equated the places you can short bitcoin at to your traditional mainstream brokerage. But at the same time you also can't buy actual bitcoin at market price at your typical brokerage either, so I am not sure what point you're trying to make by pointing that out when there really isn't unequal balance in the market in that regard. Many of the places you can actually buy bitcoin at you can also short bitcoin and I provided a couple links with references in that post from 4 months ago that you conveniently left out.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 05, 2021, 09:08:30 AM

However @celerystalks made me change my mind. While I disagree with much of his/her posts, i respect the consistency of them. Two posts stuck out the most for me.

1st is saying blockchain is worthless because it is inefficient. This correlates to saying democracy is worthless because a dictator could make all the same decisions but much quicker. While i can see your point, a dictatorship has many advantages, it's important to look at the times the two systems might make different decisions to understand if it's worth the extra overhead of consensus. I believe even the most ardent dictator at times could see some use case for democracy, perhaps asking his advisors to vote on a decision he is unsure of, or what his/her family wants for dinner. Surely there must be some value in it, while we have both forms of government in the world, why would anyone want democracy?


I don't follow the analogy between blockchain/cryptos and forms of government.

By and large, money is defined as have these three attributes: (1) medium of exchange, (2) unit of account, and (3) store of value.  Currently fiat money isn't really true money.  It is a form of currency since it acts as a medium of exchange and a unit of account and is a reasonable short term store of value.  But long term, fiat money will inevitably loose value to inflationary practices of government. 

Blockchain and bitcoin and cryptos in general are not money (which is essentially the point of this thread, I might add).  Although a handful of bonafide transactions of goods/services for crypto do take place, cryptos are not really used as a medium of exchange IRL.  Further, cryptos are not used as a unit of account.  They are too volatile and there is no foreseeable way to quell the volatility.  No one would state their accounts and business records and P&L and cashflow statements in terms of bitcoin because they would all be meaningless nonsense 48 hrs later.  Some have argued that cryptos are a store of value.  I find this hard to believe since they have only existed for 12 years and nothing of tangible value is conveyed when they are bought.  It seems to be based on the greater fool principal to me.

As to the analogy with governments.  This analogy is not really apropos because there is no agreement on what the purpose of government is and therefore its definition, the way there is with money. So, first we would need to agree on the purpose of government to define its critical attributes.  In Western societies republics dominate.  This means that the government exists and is operated for the benefit of the citizens and is based on the principal of the consent of the governed. Even vestigial Western monarchies have adopted republican principals.  So in a republic, democracy is paramount since the polls provide for a way fo the governed to select and give their consent to their government officials and determine the policy of the government.  Is it sloppy and inefficient as compared to other forms of government? Perhaps, but only if the goal of government is efficiency.  In a dictatorship, for example, the government is run for the benefit of the dictator and so the citizens and subjects of the dictatorship serve the dictator.  Here, the dictator, being the only one who is truly enfranchised, would likely put importance on the goal of efficiency of decision making. And as you point out a dictator might use a democratic process as a collaborative exercise with a team of advisors (or more likely as a way to set up scape goats if they are need needed later).  But really, since the goals of the different forms of governments are different, they cannot be a good analogy for the comparison between fiat and crypto since both fiat and crypto purport to be money and serve the same goal.
Title: Re: Bitcoin is funny money
Post by: StashingAway on April 05, 2021, 05:01:46 PM
Blockchain and bitcoin and cryptos in general are not money (which is essentially the point of this thread, I might add).  Although a handful of bonafide transactions of goods/services for crypto do take place, cryptos are not really used as a medium of exchange IRL.  Further, cryptos are not used as a unit of account.  They are too volatile and there is no foreseeable way to quell the volatility.  No one would state their accounts and business records and P&L and cashflow statements in terms of bitcoin because they would all be meaningless nonsense 48 hrs later.  Some have argued that cryptos are a store of value.  I find this hard to believe since they have only existed for 12 years and nothing of tangible value is conveyed when they are bought.  It seems to be based on the greater fool principal to me.

This is really concise and I think articulates what I've been trying to put my finger on for a while following this thread. Blockchain and crypto are great technology and coming online with some interesting and perhaps eventually essential uses. But currently they aren't useful in the way you described regarding stability of currency. I have a couple of wallets, but I don't want to spend them... which is is counter toward what *I* understand the end use to be.
Title: Re: Bitcoin is funny money
Post by: mjr on April 05, 2021, 09:28:34 PM
Bitcoin is a part of our economy now and it is only going to get more and more intertwined as more and more products and industries develop in the space

Bitcoin could disappear tomorrow and the economy wouldn't stumble in the slightest and 99% of the population wouldn't blink an eye.

A bunch of speculators would have done their dough.  Happens every day.

Your talking points are so old they are going through puberty.

Basic truths are ageless
Title: Re: Bitcoin is funny money
Post by: mjr on April 05, 2021, 09:31:19 PM

And yet here we are, BTC sitting just under US$60k and millions of people achieving financial freedom with crypto by doubling, tripling or even 10x or 20x their dough.  Actually happens every day.

Yes, it's called gambling.  Even gambling can be said to be part of the economy, because it's taxed and regulated.  Not so cryptos.  It's just people passing money to each other for an asset with no instrinsic value.  I just laugh at your quoting 10x, 20x.  There's no value being added to support those gains, it ends only one way.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on April 05, 2021, 10:13:29 PM

And yet here we are, BTC sitting just under US$60k and millions of people achieving financial freedom with crypto by doubling, tripling or even 10x or 20x their dough.  Actually happens every day.

Yes, it's called gambling.  Even gambling can be said to be part of the economy, because it's taxed and regulated.  Not so cryptos.  It's just people passing money to each other for an asset with no instrinsic value.  I just laugh at your quoting 10x, 20x.  There's no value being added to support those gains, it ends only one way.

We're 12 years in and still waiting for it to end that one way.  Any day now right?  What if we're still going after 20 years?  When do you actually admit you were wrong and missed out on 1000000000000000000000% gains?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 06, 2021, 06:35:29 AM
By and large, money is defined as have these three attributes: (1) medium of exchange, (2) unit of account, and (3) store of value.  Currently fiat money isn't really true money.  It is a form of currency since it acts as a medium of exchange and a unit of account and is a reasonable short term store of value.  But long term, fiat money will inevitably loose value to inflationary practices of government. 

Blockchain and bitcoin and cryptos in general are not money (which is essentially the point of this thread, I might add).  Although a handful of bonafide transactions of goods/services for crypto do take place, cryptos are not really used as a medium of exchange IRL.  Further, cryptos are not used as a unit of account.  They are too volatile and there is no foreseeable way to quell the volatility.  No one would state their accounts and business records and P&L and cashflow statements in terms of bitcoin because they would all be meaningless nonsense 48 hrs later.  Some have argued that cryptos are a store of value.  I find this hard to believe since they have only existed for 12 years and nothing of tangible value is conveyed when they are bought.  It seems to be based on the greater fool principal to me.

None of the critiques you mentioned in regards to bitcoin are inherent properties of bitcoin though. In fact, all of the things you mentioned are all things that will likely be solved with time as it continues to be adopted. Usage as a medium of exchange continues to grow and there is no reason to believe that trend will suddenly reverse. Crypto currencies are not used as a unit of account but that doesn't mean that someday they won't be. That's not an inherent property against bitcoin but merely a sign of how mainstream something is or isn't. It's not mainstream at all so it stands to reason that it won't be used as a unit of account anywhere. It's also very volatile so it doesn't quite make sense to price goods in bitcoin, but volatility is also a property of its small market in comparison to the overall economy. There is a lot of money sitting on the outside of bitcoin and with a lack of supply elasticity, it doesn't take much to swing the price of bitcoin. But that too is a problem that can and likely will be solved with time. As far as being a store of value goes, so far it has been a pretty good store of value, but as you said, it has only been around for 12 years, so that too will just simply require time to solve. Every day that bitcoin exists and continues to produce blocks is another validation that bitcoin is here to stay and justifies its price in the market.

Finally, while you mention 3 common properties of money, they're not the only properties that are commonly found with money. For example, money also can have some of these properties as well:

-verifiable
-fungibility
-portability
-durable
-divisible
-scarce
-counterfeit resistance

Bitcoin excels as all of these other properties as well that can help cement it as a good sound source of money. It also adds a few new properties that are very important in this new age we live in like programmability and decentralization. After all, humans throughout history have used many various forms of money that haven't had any of the above properties of money that you and I both mentioned. Shells, beads, jewelry, metals, stones, etc. Fiat currencies after all have only existed in human history for a short period of time. People will use whatever currency that suits their needs best and to ignore bitcoin's sound properties as a form of money ignores large parts of the history of money.

Bitcoin is absolutely a paradigm shift and if you keep forcing new ideas into concrete definitions of what you think something should be, you're going to get left behind.
Title: Re: Bitcoin is funny money
Post by: Log on April 06, 2021, 07:18:01 AM
Cryptocurrency is not legal US tender. The only legal tender in the US is the US dollar in all forms. Cryptocurrency will never become mainstream because the US government will shut it down. We already have laws that discourage businesses from accepting foreign currency. To accept foreign currency you have to record the person’s government ID information and keep the transaction record for a certain number of years. Your business can be accused of money laundering, so it’s very rare in the US for companies to go through this trouble. Very rare to find a company that accepts Euros or Pesos in  the US. The same will be true for cryptocurrency. It’s even worse because cryptocurrency is not legal tender anywhere!

I'm still pretty undecided/non-ideological about cryptocurrencies, but the US putting some ban or overly-burdensome regulations on crypto would by no means destroy it. Likely it would deal a great blow to the values of these things in the short-term, but those who are ideologically committed to crypto and the whole DeFi movement would simply take their business to more crypto-friendly jurisdictions, and the space would continue to grow without the US getting a slice of the pie. Eventually, the US would just be harming itself, and then the crypto market would have another big boom whenever the US rescinded this regulation.

People saying the blockchain is the next innovation on par with the internet are probably deluding themselves. People saying cryptocurrency will disappear any day now are also probably deluding themselves.

Even if you remain ideologically committed to only investing in productive assets like stocks or real estate, that doesn't mean everyone agrees with you. Just because gold is basically worthless in a productive sense doesn't mean the market agrees with that assessment. As long as people agree Bitcoin is worth something, it will be worth something, and I don't think that's going away.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 06, 2021, 08:04:17 AM

None of the critiques you mentioned in regards to bitcoin are inherent properties of bitcoin though. In fact, all of the things you mentioned are all things that will likely be solved with time as it continues to be adopted. Usage as a medium of exchange continues to grow and there is no reason to believe that trend will suddenly reverse. Crypto currencies are not used as a unit of account but that doesn't mean that someday they won't be. That's not an inherent property against bitcoin but merely a sign of how mainstream something is or isn't. It's not mainstream at all so it stands to reason that it won't be used as a unit of account anywhere. It's also very volatile so it doesn't quite make sense to price goods in bitcoin, but volatility is also a property of its small market in comparison to the overall economy. There is a lot of money sitting on the outside of bitcoin and with a lack of supply elasticity, it doesn't take much to swing the price of bitcoin. But that too is a problem that can and likely will be solved with time. As far as being a store of value goes, so far it has been a pretty good store of value, but as you said, it has only been around for 12 years, so that too will just simply require time to solve. Every day that bitcoin exists and continues to produce blocks is another validation that bitcoin is here to stay and justifies its price in the market.

Finally, while you mention 3 common properties of money, they're not the only properties that are commonly found with money. For example, money also can have some of these properties as well:

-verifiable
-fungibility
-portability
-durable
-divisible
-scarce
-counterfeit resistance

Bitcoin excels as all of these other properties as well that can help cement it as a good sound source of money. It also adds a few new properties that are very important in this new age we live in like programmability and decentralization. After all, humans throughout history have used many various forms of money that haven't had any of the above properties of money that you and I both mentioned. Shells, beads, jewelry, metals, stones, etc. Fiat currencies after all have only existed in human history for a short period of time. People will use whatever currency that suits their needs best and to ignore bitcoin's sound properties as a form of money ignores large parts of the history of money.

Bitcoin is absolutely a paradigm shift and if you keep forcing new ideas into concrete definitions of what you think something should be, you're going to get left behind.

Your analysis relies too heavily on what you imagine bitcoin to be in the future to be taken very seriously.  This is probably why you spend so much time here selling the dream and have such strong reactions to people spreading, as I believe you called it once, FUD.  Because if more and more people don't buy into your vision of the future, it becomes obvious that bitcoin has no real present value. 

You correctly point out some other attributes of things that are used as often used as money: fungibility, portability, divisibility.  However, the definition of money is that it used as a medium of exchange, a unit of account, and a store of value.  This is not my definition, it is the definition. Without those three properties, a thing is not money. It's as simple as that. Simply being fungible, portable, divisible does not enhance the case for bitcoin being money any more than it does for beach sand. 
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 06, 2021, 08:25:41 AM
Your analysis relies too heavily on what you imagine bitcoin to be in the future to be taken very seriously.  This is probably why you spend so much time here selling the dream and have such strong reactions to people spreading, as I believe you called it once, FUD.  Because if more and more people don't buy into your vision of the future, it becomes obvious that bitcoin has no real present value. 

You correctly point out some other attributes of things that are used as often used as money: fungibility, portability, divisibility.  However, the definition of money is that it used as a medium of exchange, a unit of account, and a store of value.  This is not my definition, it is the definition. Without those three properties, a thing is not money. It's as simple as that. Simply being fungible, portable, divisible does not enhance the case for bitcoin being money any more than it does for beach sand.

None of those things you critiqued bitcoin on are inherent properties to bitcoin though. Do you not agree with that? All of those things are simply growing pains.

-It isn't used much as a medium of exchange
-It isn't used as a unit of account because it is too volatile
-It isn't a store of value because it has only been around for 12 years

Not a single on of those things you mentioned is an inherent property of bitcoin and all of those things simply have time as a remedy.

To discount bitcoin on those merits alone is a gross misunderstand of and/or bias against bitcoin.

I am not basing my analysis on what I imagine bitcoin will be in the future. I am basing my analysis on the actual properties bitcoin holds and the fact that in its 12 short years it is already one of the largest currencies in the world. You say more and more people aren't buying into my "vision of the future", but in reality the opposite is taking place. More and more people are recognizing bitcoin for what it is. Bitcoin is already one of the 3rd largest currencies in the world and even if you choose to base it on M1 or M2 supply it still ranks as one of the largest in the world. I am not sure why you continue to be in delusion about this. Bitcoin doesn't care whether or not you choose to categorize it as money or not based on your or anyone's personal rigid definition. Do people in Russia who use the Ruble care whether or not you consider their currency money when they go to purchase goods with it? No they don't. Bitcoin is a larger currency than the Russian Ruble and nobody cares whether or not you consider it a good medium of exchange when they purchase goods with it. There is more economic activity taking place with bitcoin than there is taking place on a majority of fiat currencies around the world.

https://decrypt.co/39425/bitcoin-is-3rd-largest-world-currency (https://decrypt.co/39425/bitcoin-is-3rd-largest-world-currency)
https://fiatmarketcap.com/ (https://fiatmarketcap.com/)

Wake up. Bitcoin is here to stay.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 06, 2021, 08:53:57 AM
None of those things you critiqued bitcoin on are inherent properties to bitcoin though. Do you not agree with that? All of those things are simply growing pains.

According to you..

Quote
-It isn't used much as a medium of exchange
-It isn't used as a unit of account because it is too volatile
-It isn't a store of value because it has only been around for 12 years

Not a single on of those things you mentioned is an inherent property of bitcoin and all of those things simply have time as a remedy.

You hope. 

I agree that bitcoin doesn't fit the definition of money or currency.

Quote
To discount bitcoin on those merits alone is a gross misunderstand of and/or bias against bitcoin.

I am not basing my analysis on what I imagine bitcoin will be in the future. I am basing my analysis on the actual properties bitcoin holds and the fact that in its 12 short years it is already one of the largest currencies in the world. You say more and more people aren't buying into my "vision of the future", but in reality the opposite is taking place. More and more people are recognizing bitcoin for what it is. Bitcoin is already one of the 3rd largest currencies in the world and even if you choose to base it on M1 or M2 supply it still ranks as one of the largest in the world. I am not sure why you continue to be in delusion about this. Bitcoin doesn't care whether or not you choose to categorize it as money or not based on your or anyone's personal rigid definition. Do people in Russia who use the Ruble care whether or not you consider their currency money when they go to purchase goods with it? No they don't. Bitcoin is a larger currency than the Russian Ruble and nobody cares whether or not you consider it a good medium of exchange when they purchase goods with it. There is more economic activity taking place with bitcoin than there is taking place on a majority of fiat currencies around the world.

https://decrypt.co/39425/bitcoin-is-3rd-largest-world-currency (https://decrypt.co/39425/bitcoin-is-3rd-largest-world-currency)
https://fiatmarketcap.com/ (https://fiatmarketcap.com/)

Wake up. Bitcoin is here to stay.

No. You have to still haven't proven that bitcoin is a money.  We don't accept this conclusion.  You can't admit that bitcoin does not meet the criteria for being money and then go about calling it money and and currency.  This is the logical fallacy of begging the question also called assuming the conclusion.

Further regarding the Ruble: it is currency.  In fact you point out that people use it to purchase goods.  So arguably it is acting as a medium of exchange as well as a unit of account.  Assuming that it also acts as a reasonable store of value it meets the definition of money.

The "economic activity" in bitcoin and cryptos is essentially all speculation.  People trading fiat for cryptos, going for a wild ride, and then trading back to fiat again. It is not productive economic activity that causes a rational allocation of goods and services within the economy.  The money is not being traded for a thing that leaves the purchaser better off today.  It is sterile economic activity, and therefore a net negative on society. 

Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 06, 2021, 09:26:53 AM
None of those things you critiqued bitcoin on are inherent properties to bitcoin though. Do you not agree with that? All of those things are simply growing pains.

According to you..

You failed to answer the question I asked. All those things you critiqued bitcoin on are not inherent properties of bitcoin. Do you not agree with that??

No. You have to still haven't proven that bitcoin is a money.  We don't accept this conclusion.  You can't admit that bitcoin does not meet the criteria for being money and then go about calling it money and and currency.  This is the logical fallacy of begging the question also called assuming the conclusion.

Further regarding the Ruble: it is currency.  In fact you point out that people use it to purchase goods.  So arguably it is acting as a medium of exchange as well as a unit of account.  Assuming that it also acts as a reasonable store of value it meets the definition of money.

The "economic activity" in bitcoin and cryptos is essentially all speculation.  People trading fiat for cryptos, going for a wild ride, and then trading back to fiat again. It is not productive economic activity that causes a rational allocation of goods and services within the economy.  The money is not being traded for a thing that leaves the purchaser better off today.  It is sterile economic activity, and therefore a net negative on society. 

How does one "prove" that bitcoin is a money? Given your rigid definitions you could make the argument that nothing is money by critiquing various aspects of anything that people actually choose to use as money. You ignore the history of what money is and what has been used as money. If no money is perfect then why are you biased at casting a rigid definition of money toward bitcoin and not all other forms of money that have been used throughout human history?

Earlier you claimed that currently fiat currencies are not money and now you're claiming that the Ruble is a currency. It seems like you're either arguing semantics and trying to force things into conformity of what you feel money is based on your own personal viewpoints.

No, contrary to what you want to believe, there is a lot of real economic activity that takes place with bitcoin. Billions of dollars of economic activity each year takes place. Merchant services like Coinbase and BitPay alone are doing multi-billion dollars in activity each year and that doesn't even account for the more open and adhoc exchange of goods and service that takes place either directly between customer and merchant or with open source merchant solutions like BTCPayServer for which there isn't much data for. Coinbase alone has over 8000 merchants using their services for selling goods. That's probably more companies than there are in a large chunk of the countries that have their own fiat currencies. If billions of real economic activity that takes place with bitcoin doesn't constitute economic activity to you, then that must mean that a large amount of the currencies on this list are not real money to you contrary to what the people might think who actually use them. Just because bitcoin doesn't have borders and there isn't an "economic center" to its usage doesn't mean there isn't any.

https://fiatmarketcap.com/ (https://fiatmarketcap.com/)

At the end of the day, you're going to have to continue to move the goalposts of your money definition in order to continue to keep bitcoin out of your definition. That seems to be a 'you' problem rather than a problem for the growing number of people every day that choose to use bitcoin.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 06, 2021, 09:43:44 AM
None of those things you critiqued bitcoin on are inherent properties to bitcoin though. Do you not agree with that? All of those things are simply growing pains.

According to you..

You failed to answer the question I asked. All those things you critiqued bitcoin on are not inherent properties of bitcoin. Do you not agree with that??

I agree that bitcoin is not money.  If you have an argument, go ahead and make it. 

Quote

No. You have to still haven't proven that bitcoin is a money.  We don't accept this conclusion.  You can't admit that bitcoin does not meet the criteria for being money and then go about calling it money and and currency.  This is the logical fallacy of begging the question also called assuming the conclusion.

Further regarding the Ruble: it is currency.  In fact you point out that people use it to purchase goods.  So arguably it is acting as a medium of exchange as well as a unit of account.  Assuming that it also acts as a reasonable store of value it meets the definition of money.

The "economic activity" in bitcoin and cryptos is essentially all speculation.  People trading fiat for cryptos, going for a wild ride, and then trading back to fiat again. It is not productive economic activity that causes a rational allocation of goods and services within the economy.  The money is not being traded for a thing that leaves the purchaser better off today.  It is sterile economic activity, and therefore a net negative on society. 

How does one "prove" that bitcoin is a money? Given your rigid definitions you could make the argument that nothing is money by critiquing various aspects of anything that people actually choose to use as money. You ignore the history of what money is and what has been used as money. If no money is perfect then why are you biased at casting a rigid definition of money toward bitcoin and not all other forms of money that have been used throughout human history?


This is not my definition.  It's the definition of money.

Quote

Earlier you claimed that currently fiat currencies are not money and now you're claiming that the Ruble is a currency. It seems like you're either arguing semantics and trying to force things into conformity of what you feel money is based on your own personal viewpoints.


Yes. Fiats suffer from being a bad longterm store of value, the store of value being one of the three criteria for being money.  When most legal tender was in the form of commodity money, it was true money since the precious metal provided a backing.  But today fiat money is really a currency, which means that it is a medium of exchange and a unit of account but lacks a bit in the store of value department.

This is not an emotional argument on my part. It's not based on my feelings. I think you are projecting.  You seem to feel very strongly about bitcoin and when your feelings are challenged, you seem to have big emotions. 

In some sense every rational argument is an argument based in semantics. Semantics being the meaning conveyed words and language.  If we are trying to approach truth, we need to define the words we use and be precise in our arguments and speech in order to understand what is meant.  But if someone were just making emotional appeals or bullshitting, I could understand why they would feel boxed in by things like definitions.

Quote
No, contrary to what you want to believe, there is a lot of real economic activity that takes place with bitcoin. Billions of dollars of economic activity each year takes place. Merchant services like Coinbase and BitPay alone are doing multi-billion dollars in activity each year and that doesn't even account for the more open and adhoc exchange of goods and service that takes place either directly between customer and merchant or with open source merchant solutions like BTCPayServer for which there isn't much data for. Coinbase alone has over 8000 merchants using their services for selling goods. That's probably more companies than there are in a large chunk of the countries that have their own fiat currencies. If billions of real economic activity that takes place with bitcoin doesn't constitute economic activity to you, then that must mean that a large amount of the currencies on this list are not real money to you contrary to what the people might think who actually use them. Just because bitcoin doesn't have borders and there isn't an "economic center" to its usage doesn't mean there isn't any.

https://fiatmarketcap.com/ (https://fiatmarketcap.com/)
No this is not real economic activity in bitcoin or cryptos.  All of the goods and services are priced in fiat currency.  The bitcoin is converted to fiat first. Or to the extent a small handful of bartered transactions are occurring in bitcoin is based on as if the transaction were occurring in fiat.  So the fiat currency is still being used as the unit of account.

Quote

At the end of the day, you're going to have to continue to move the goalposts of your money definition in order to continue to keep bitcoin out of your definition. That seems to be a 'you' problem rather than a problem for the growing number of people every day that choose to use bitcoin.

I am not moving goal posts on the definition of money.  I think you are projecting again.  It is the bitcoin folk who are continually cooking up new justifications for continuing their mass delusion.
Title: Re: Bitcoin is funny money
Post by: HPstache on April 06, 2021, 10:00:23 AM
I was wrong

It's only doubled since you started this thread...
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 06, 2021, 11:24:07 AM
I am not moving goal posts on the definition of money.  I think you are projecting again.  It is the bitcoin folk who are continually cooking up new justifications for continuing their mass delusion.

My point about you moving goal posts or that you have very rigid criteria before you feel that you would consider bitcoin money is that by all measures bitcoin does meet your criteria for being money, but you won't admit it.

https://en.wikipedia.org/wiki/Money (https://en.wikipedia.org/wiki/Money)

"The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money."

People are using it as a medium of exchange. People are using it as a store of value. And there are people and businesses out there pricing their goods in bitcoin and using it as a unit of account. To ignore this and continue to claim that bitcoin is not or can't be money means you're going to have to move your goalposts in your argument or engage in semantic gymnastics.

At the end of the day, bitcoin doesn't really care whether you call it money or not. It's here to stay and will continue to rise up the charts of currencies in our world.
Title: Re: Bitcoin is funny money
Post by: mjr on April 06, 2021, 03:36:23 PM

And yet here we are, BTC sitting just under US$60k and millions of people achieving financial freedom with crypto by doubling, tripling or even 10x or 20x their dough.  Actually happens every day.

Yes, it's called gambling.  Even gambling can be said to be part of the economy, because it's taxed and regulated.  Not so cryptos.  It's just people passing money to each other for an asset with no instrinsic value.  I just laugh at your quoting 10x, 20x.  There's no value being added to support those gains, it ends only one way.

We're 12 years in and still waiting for it to end that one way.  Any day now right?  What if we're still going after 20 years?  When do you actually admit you were wrong and missed out on 1000000000000000000000% gains?

Ha.  So now you've gone from 10x gains to 1000000000000000000000% gains.  Bitcoin truly is magical.  Unlimited, exponential growth from a bunch of Chinese miners computing hashes.

Boy, do I look silly.
Title: Re: Bitcoin is funny money
Post by: Pomegranate12 on April 06, 2021, 04:13:35 PM
I was wrong

It's only doubled since you started this thread...

Yup so I was double wrong ?  Wrong wrong wrong
Title: Re: Bitcoin is funny money
Post by: StashingAway on April 06, 2021, 05:17:33 PM
People are using it as a medium of exchange. People are using it as a store of value. And there are people and businesses out there pricing their goods in bitcoin and using it as a unit of account.

But MOST people are using it to 10x or 20x their portfolio. As can be seen in this thread. The only reason for most people to own crypto right now is FOMO or if you don't have access to stable currency.

It's exciting to make a wallet and see that $$ grow. And for those really into the tech, they figure out ways to spend it. But most people don't even own crypto. And of those who do, most aren't actually spending it or even using it as a store of value. They are using it as a growth fund. Right now it's not much different than collecting stamps.
Title: Bitcoin is feudal money
Post by: ChpBstrd on April 07, 2021, 08:21:47 AM
Gosh, it sure is gonna suck when the other 99.9% of the planet has to buy bitcoins at $1,000,000,000,000 each from the 0.1% of us who had the foresight to YOLO our portfolios and HODL. They'll have no other choice because all the other currencies such as the US Dollar (est. 1792), Japanese Yen (est. 1871), Swiss Franc (est. 1850) and British Pound (est. 928 AD) will have become obsolete collectibles because they are not blockchains. They'll wonder why for some reason none of the world's governments ever made their currencies blockchains, despite the clear benefit of being able to track and trace every single unit of currency owned by every single individual and the complete elimination of financial privacy.

Plus, because of the massive brand awareness Bitcoin has built in the last few years, it's not like someone could just start a new cryptocurrency at any time and build massive brand awareness within a few years.

Nope. There's no escaping the requirement that the entire world trade vast amounts of their hard-earned resources to the early speculators who own most Bitcoin and the computer hackers who steal it from them. Neither Doge Coin nor any of its thousands of competitors in existence now or in the future will save late adopters from the inevitable obligation they face: to hand over our stocks, properties, and any re-sellable clothing to the online gamblers who in the late 2010s piled their wealth into an internet meme that ended up creating So Much Value.

The crypto-skeptics will beg on the street corner for someone to give them a few billionths of a bitcoin to buy ramen noodles, and this will get harder every day because of the deflation designed into Bitcoin. That's the price one pays for being a late adopter who lacks a healthy FOMO. Despite all these hardships, the world will stick to Bitcoin as its new reserve currency, governments will agree to this despite the revolts that always accompany wealth re-appropriation schemes, and perhaps a few late adopters get jobs building the nuclear power plants required every few miles to power the servers.

At least we won't have to deal with 2% inflation any more like we did in the dollar era. Ugh. Those were the worst of times. Now, whoever can hoard their Bitcoins and spend nothing eventually gets rich! When everyone does this, the savings rate goes through the roof, accelerating deflation, and we all get rich because trading in the economy grinds to a halt. I suppose we'll use something to barter with for the bare essentials so that we don't have to spend our rapidly appreciating Bitcoins, but we'll cross that bridge when we get there.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 07, 2021, 08:22:59 AM
But MOST people are using it to 10x or 20x their portfolio. As can be seen in this thread. The only reason for most people to own crypto right now is FOMO or if you don't have access to stable currency.

It's exciting to make a wallet and see that $$ grow. And for those really into the tech, they figure out ways to spend it. But most people don't even own crypto. And of those who do, most aren't actually spending it or even using it as a store of value. They are using it as a growth fund. Right now it's not much different than collecting stamps.

My argument wasn't in regards to what a majority of people are doing with it nor do I think it really matters what a majority of people are doing. I think it rarely matters what a majority of people are doing. The minority is what drives markets. When there is one vegan in a group, it causes that group to search for restaurants that offer options for that 1 vegan to eat. Therefore the entire restaurant industry thus has incentives to start offering options for vegans because if you lose the business of that one vegan, you lose the business of the entire group. There are examples all throughout our economy of minorities that drive markets.

Jewelry and industrial use makes up a small percentage of usage of all the gold that exists on the planet. A vast majority of gold is just sitting in storage somewhere as a store of wealth. Look at the derivatives market which is said to be over a quadrillion dollars. It dwarfs the size of any market that involves the actual underlying. People love to gamble money, there is no denying that. But just because people love to gamble money doesn't discredit the real world use that comes from the minority that actual uses the underlying for where its true value lies.

Ultimately it doesn't matter whether or not people choose to speculate over something, but whether or not that speculation is justified based on its truly unique real world properties that many people (even if they're a minority) find truly life changing.

It reminds me of this quote/post from Satoshi Nakamoto in which he contemplates over a thought experiment about a base metal with a magical set of properties.

Original link:

https://bitcointalk.org/index.php?topic=583.msg11405#msg11405 (https://bitcointalk.org/index.php?topic=583.msg11405#msg11405)

"As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:
- boring grey in colour
- not a good conductor of electricity
- not particularly strong, but not ductile or easily malleable either
- not useful for any practical or ornamental purpose

and one special, magical property:
- can be transported over a communications channel

If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.

Maybe it could get an initial value circularly as you've suggested, by people foreseeing its potential usefulness for exchange.  (I would definitely want some)  Maybe collectors, any random reason could spark it.

I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value.  But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something.

(I'm using the word scarce here to only mean limited potential supply)"
Title: Re: Bitcoin is funny money
Post by: GuitarStv on April 07, 2021, 08:50:10 AM
Magical thinking certainly does seem to be fundamental in support of bitcoin.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 07, 2021, 08:57:36 AM
Magical thinking certainly does seem to be fundamental in support of bitcoin.

So does hyperbolic non-nuanced retorts in critique of it. Am I right GuitarStv and ChpBstrd? Haha   ;-)
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on April 07, 2021, 11:00:03 AM
Magical thinking certainly does seem to be fundamental in support of bitcoin.

So does hyperbolic non-nuanced retorts in critique of it. Am I right GuitarStv and ChpBstrd? Haha   ;-)

IDK, I think my post accurately laid out the scenario that is expected by the true believers who see Bitcoin as the world's next reserve currency, i.e. many of the people holding or buying at $50,000/coin at a time when there is still almost no economic trade in Bitcoin other than speculation. For the thesis to hold, all the people using dollars or other fiat currencies would someday have to trade their currency, investments, and properties for forever-appreciating Bitcoin or else be stuck holding nearly worthless fiat tokens like the USD.

Those who were once rich in fiat currency would become poor in Bitcoin and those who were once poor in currency but held a few Bitcoin would be made into the world's new ultra-rich. Then, because deflation is built in to Bitcoin (for now anyway), all those holders of Bitcoin would be willing to get off the wealth escalator and spend their Bitcoin on stuff, keeping the economy going despite crushing deflation. And we'll all choose this future, even the people who would lose all their wealth from it.

Either one believes this scenario, or one is making a greater-fool trade. Is there a more "nuanced" third position?
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 07, 2021, 11:39:34 AM
IDK, I think my post accurately laid out the scenario that is expected by the true believers who see Bitcoin as the world's next reserve currency, i.e. many of the people holding or buying at $50,000/coin at a time when there is still almost no economic trade in Bitcoin other than speculation. For the thesis to hold, all the people using dollars or other fiat currencies would someday have to trade their currency, investments, and properties for forever-appreciating Bitcoin or else be stuck holding nearly worthless fiat tokens like the USD.

Those who were once rich in fiat currency would become poor in Bitcoin and those who were once poor in currency but held a few Bitcoin would be made into the world's new ultra-rich. Then, because deflation is built in to Bitcoin (for now anyway), all those holders of Bitcoin would be willing to get off the wealth escalator and spend their Bitcoin on stuff, keeping the economy going despite crushing deflation. And we'll all choose this future, even the people who would lose all their wealth from it.

Either one believes this scenario, or one is making a greater-fool trade. Is there a more "nuanced" third position?

Yes, there absolutely a more nuanced third position. You're presenting a false dichotomy.

You see this is entirely my point. I don't know a single bitcoiner who believes or feels that bitcoin should or could somehow replace every single thing that holds economic value in the world. That's such a preposterous claim to make. You're basically claiming that people that value bitcoin and are proponents of it don't have houses, or own businesses of their own, don't own stocks, don't own land, etc. That's beyond hyperbole. I own a house, I own stocks, and yet I still feel bitcoin holds a lot of value to humans that can't be found elsewhere (decentralized global censorship resistant money).

Why do you feel that bitcoin is in such a zero-sum game with virtually everything in the world and/or why do you feel that such a position is held by bitcoin proponents? Can you cite such an example that was made here in this thread?

Even if bitcoin were to become some world reserve currency (I doubt it would be in my lifetime), what makes you think it would absorb all other currencies? At no time human history has there ever been one single currency used by humans. The US dollar is largely a reserve currency in the world, but that doesn't stop other currencies from existing. Bitcoin is basically a reserve currency for all other crypto-currencies that trade in and out of the eco-system and yet that doesn't stop other currencies from coming and going.

I'm not sure why you can't pull yourself away from such a stark false dichotomy that you're presenting in this scenario of yours. Has gold pulled all economic value away from business and properties in the world? No? OK, then. Why do you think that just because something is super scarce that suddenly everything else that has its own value for its own reasons suddenly loses that value? I own a home because I value a roof over my head. I don't hold a delusion that bitcoin can provide that same value to me, nor do I know any prominent bitcoiner who does either. But you can't ignore bitcoin's actual real value in the world simply because you choose to instead present a false dichotomy like you are.

For some reason you find it hard to believe there is a much more likely, non-extreme, scenario where bitcoin finds ever growing niche use-cases throughout the world such as cross-border payments and remittances (fiat currency inherently has borders), store a wealth against failing fiat currencies (over half the world lives under an authoritarian regime), hedge against inflation, privacy use cases, programmatic internet currency, censorship resistance for funding social justice movements, charity donations, etc.

The reality is that bitcoin will exist in our world and continue to find a growing number of people finding value in it while at the same time everything else in our world continues to be valued like it always has.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 07, 2021, 12:22:49 PM
Quote

If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.

Maybe it could get an initial value circularly as you've suggested, by people foreseeing its potential usefulness for exchange.  (I would definitely want some)  Maybe collectors, any random reason could spark it.

So basically the case for value for bitcoin has always rested on circular reasoning: That if it acquired value it would be useful to transfer wealth. And "circularly" it could gain value if people believe that it would be useful in the future for exchange.

Sigh...

What has changed since then? Nothing. Bitcoin and all cryptos are still, and always will be, air castles.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 07, 2021, 12:30:04 PM
That if it acquired value it would be useful to transfer wealth.

You realize you're commenting on something that was said back in 2009, correct? I would say it acquired value since then...
Title: Re: Bitcoin is funny money
Post by: TheAnonOne on April 07, 2021, 12:31:39 PM
Quote

If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.

Maybe it could get an initial value circularly as you've suggested, by people foreseeing its potential usefulness for exchange.  (I would definitely want some)  Maybe collectors, any random reason could spark it.

So basically the case for value for bitcoin has always rested on circular reasoning: That if it acquired value it would be useful to transfer wealth. And "circularly" it could gain value if people believe that it would be useful in the future for exchange.

Sigh...

What has changed since then? Nothing. Bitcoin and all cryptos are still, and always will be, air castles.

"All Crypto" makes you look a little silly.

Some are APIs delivering data (Chainlink) others are exchanges (like DOT) yet others are games (like MANA). There's an entire DEFI space delivering actual products to users now, NFTs doing ... whatever they do (very early there...) and yet more single use chains and tokens for tracking different one-off things.

Crypto stopped being only about coins way back around 2016/2017.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on April 07, 2021, 03:52:48 PM
Yes, there absolutely a more nuanced third position. You're presenting a false dichotomy.

You see this is entirely my point. I don't know a single bitcoiner who believes or feels that bitcoin should or could somehow replace every single thing that holds economic value in the world. That's such a preposterous claim to make. You're basically claiming that people that value bitcoin and are proponents of it don't have houses, or own businesses of their own, don't own stocks, don't own land, etc. That's beyond hyperbole. I own a house, I own stocks, and yet I still feel bitcoin holds a lot of value to humans that can't be found elsewhere (decentralized global censorship resistant money).

Why do you feel that bitcoin is in such a zero-sum game with virtually everything in the world and/or why do you feel that such a position is held by bitcoin proponents? Can you cite such an example that was made here in this thread?

Even if bitcoin were to become some world reserve currency (I doubt it would be in my lifetime), what makes you think it would absorb all other currencies? At no time human history has there ever been one single currency used by humans. The US dollar is largely a reserve currency in the world, but that doesn't stop other currencies from existing. Bitcoin is basically a reserve currency for all other crypto-currencies that trade in and out of the eco-system and yet that doesn't stop other currencies from coming and going.

I'm not sure why you can't pull yourself away from such a stark false dichotomy that you're presenting in this scenario of yours. Has gold pulled all economic value away from business and properties in the world? No? OK, then. Why do you think that just because something is super scarce that suddenly everything else that has its own value for its own reasons suddenly loses that value? I own a home because I value a roof over my head. I don't hold a delusion that bitcoin can provide that same value to me, nor do I know any prominent bitcoiner who does either. But you can't ignore bitcoin's actual real value in the world simply because you choose to instead present a false dichotomy like you are.

For some reason you find it hard to believe there is a much more likely, non-extreme, scenario where bitcoin finds ever growing niche use-cases throughout the world such as cross-border payments and remittances (fiat currency inherently has borders), store a wealth against failing fiat currencies (over half the world lives under an authoritarian regime), hedge against inflation, privacy use cases, programmatic internet currency, censorship resistance for funding social justice movements, charity donations, etc.

The reality is that bitcoin will exist in our world and continue to find a growing number of people finding value in it while at the same time everything else in our world continues to be valued like it always has.

The question is what makes Bitcoin worth a trillion dollars?

The niche use-cases and cross-border payments? I could use any cryptocurrency for those purposes. Or, with Western Union, I can securely send any one of dozens of currencies virtually anywhere in the globe except apparently Cuba and Venezuela.

https://www.westernunion.com/us/en/web/send-money/start (https://www.westernunion.com/us/en/web/send-money/start)

WU can send money to several dicey places like Somalia, Afghanistan, and El Salvador. Then there's PayPal, Transferwise, Moneygram, etc. all established in the real world already meeting the needs of anyone who wants to transfer money across borders. All these firms have evolved to be very efficient transmitters of secure information/wealth. Are these services somehow harder to use than a crypto website?

As a store of wealth, dollars offer much less volatility and risk than any crypto, and show every sign of continuing to do so. A crypto wallet simply does not compare to a bank account in terms of safety, liquidity, investment options, ability to hedge inflation, or value as collateral. Meanwhile, fintech and banking are rushing to expand into whatever unbanked voids still exist in the world. Additionally, one can hedge one's exposure to fluctuations between fiat currencies through a well-established futures market, as compared to the tiny and purely speculative futures market for Bitcoin. There is nobody writing contracts to buy tanker loads of oil or ore in Bitcoin because nobody knows if Bitcoin will be 20% up or 20% down next month.

Meanwhile Bitcoin is still a volatile speculation even after a decade+ of existence and a $1T market cap. Most services, businesses, or standards take off when some set of customers "find value" but crypto remains only a toy of speculators, even after all these years.

The main people currently "finding value" in Bitcoin are young American male speculators with a few tens of thousands of dollars to gamble and ransomware hackers. To expand this user base and justify its price, Bitcoin has to *** i.e. MUST *** outcompete the existing systems for making payments and preserving wealth. There is no "coexist". Bitcoin transfers and wealth storage would have to be less costly and less risky than existing worldwide systems and Bitcoin will have to displace those existing systems or it is pointless. WU has a market cap that is 1% the size of Bitcoin and is already doing Bitcoin's main use case, processing 1M transfers a day for real economic purposes as opposed to investment speculation.

There is no plausible scenario where companies like Western Union and PayPal continue to dominate financial transaction services, Bitcoin remains a distant last in real-world usage, AND Bitcoin keeps rising in the long-term. Likewise, there is no plausible scenario where Bitcoin becomes less volatile than the USD, AND it is not used by hundreds of millions of people for everyday transactions around the world like the USD.
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 07, 2021, 04:35:12 PM
Are these services somehow harder to use than a crypto website?


Ok. Well this tells me everything I need to know. As I was reading it, I was going to say you sound like someone who either A) has never used WU, B) has never used bitcoin, or C) both of those are true.

I don't mean any offense by that (honestly), and yes, it is an assumption being made by me. But I'd rather debate someone that at least understands the technology or has used it before.

I've also address some of the things in your post in my past posts, so if you're genuinely curious you can read those posts. One thing I find odd is the number of people so adamantly against bitcoin that spend so much time arguing against it. I don't think there is much in this world that I am so against that I've spent as much time arguing against it.

The beautiful thing is that bitcoin is free and open and no one is forced to use it and at the same time bitcoin allows anyone to use it without discrimination. In this regard, the market will decide, and so far it has.

Cheers, best to you.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 08, 2021, 09:01:48 AM
Are these services somehow harder to use than a crypto website?


Ok. Well this tells me everything I need to know. As I was reading it, I was going to say you sound like someone who either A) has never used WU, B) has never used bitcoin, or C) both of those are true.

I don't mean any offense by that (honestly), and yes, it is an assumption being made by me. But I'd rather debate someone that at least understands the technology or has used it before.
Who cares about technology?  I would prefer to debate with some who understands economic fundamentals.  Basic economic knowledge is something completely and utterly lacking in just about every crypto enthusiast.  Perhaps there is something pathological about understanding cryptos that crowds out understanding traditional economics.  Bitcoin proponents seem to have a strongly held belief that what the economy has is a computer problem that needs to be solved with some sort of cryptographically verified trust solution.  It just isn't.  Cryptos are a solution looking for a problem. 

Quote
I've also address some of the things in your post in my past posts, so if you're genuinely curious you can read those posts. One thing I find odd is the number of people so adamantly against bitcoin that spend so much time arguing against it. I don't think there is much in this world that I am so against that I've spent as much time arguing against it.

Bitcoin skeptics come to a thread started on the topic of bitcoins being funny money and share their ideas with each other about why they remain skeptical and this is odd to you? I think the only thing that is odd is why you can't leave alone.  There are many other fora devoted towards bitcoin optimism.  I generally avoid these since bitcoin skepticism would be seen as trolling.  Well, what you are doing in this thread could be perceived that way.  Instead of making rational arguments you come here and sell a vision of the future... that still just needs more time (obviously).  You complain that you are being boxed in by "false dichotomies" and the "rigid" things like "definitions."  Why even bother? This isn't adding anything. 

And good lord do you seem to spend a lot of time here.  I count perhaps a half dozen or so skeptics who are having a true discussion. On topic I might add.  And then there is mostly you posting short romance novels about your love of cryptos and their blossoming future. 

I generally keep my typing time short for each post.  Perhaps 15-20 minutes.  I type about 75 WPM.  So even a longer post is not very time consuming for me.

Quote

The beautiful thing is that bitcoin is free and open and no one is forced to use it and at the same time bitcoin allows anyone to use it without discrimination. In this regard, the market will decide, and so far it has.

Cheers, best to you.

To paraphrase Ben Graham: In the sort term, the market is a voting machine.  In the long term, it is a weighing machine.  Fools rush in and get carried away by the recent run-up in a worthless item and use this as proof that it is legit.   

Cheers, au revoir!
Title: Re: Bitcoin is funny money
Post by: lifeanon269 on April 08, 2021, 10:23:14 AM
Who cares about technology?  I would prefer to debate with some who understands economic fundamentals.  Basic economic knowledge is something completely and utterly lacking in just about every crypto enthusiast.  Perhaps there is something pathological about understanding cryptos that crowds out understanding traditional economics.  Bitcoin proponents seem to have a strongly held belief that what the economy has is a computer problem that needs to be solved with some sort of cryptographically verified trust solution.  It just isn't.  Cryptos are a solution looking for a problem. 

I love a good debate. Otherwise I wouldn't be debating. But a good debate to me is when I'm engaged with someone that has an equal or greater understanding of the subject than I. So when someone makes a comment that demonstrates their lack of understanding of something while at the same time engaging in hyperbolic critiques against the subject at hand. It's like having an electrician get in a debate against someone who is anti-electricity and that person who is anti-electricity continues to confused amps, volts, and watts throughout the conversation. While debate is good, its a waste of time for someone to engage in such a debate when there is a lack of good faith willingness to understand on one side.

Bitcoin skeptics come to a thread started on the topic of bitcoins being funny money and share their ideas with each other about why they remain skeptical and this is odd to you? I think the only thing that is odd is why you can't leave alone.  There are many other fora devoted towards bitcoin optimism.  I generally avoid these since bitcoin skepticism would be seen as trolling.  Well, what you are doing in this thread could be perceived that way.  Instead of making rational arguments you come here and sell a vision of the future... that still just needs more time (obviously).  You complain that you are being boxed in by "false dichotomies" and the "rigid" things like "definitions."  Why even bother? This isn't adding anything.

One of the reasons why I engage in debates with those that are against bitcoin is because I want to understand what the counterpoints are to it. I am involved in other bitcoin communities, but if I only involved myself within those, then I would be confining myself to an echo-chamber and that wouldn't do me any good. Nothing makes me more bullish than hearing nothing but poor arguments against bitcoin and well reasoned arguments for it. So I am engaging in debate not just to educate others on the subject (not necessarily those I am directly engaged with), but also to help keep myself from being inside an echo chamber (if only more people did this, right?).

My point about those being so adamantly against bitcoin and posting continuously about it was more that the position seems to be more about that it is useless technology rather than that it is something actually bad for the world. I have no problem with people who are strong advocates for correcting things they see as bad in the world (human rights, the environment, war, etc, etc). But it really does seem odd to me that so many that are anti-bitcoin spend so much time being anti-bitcoin and yet don't take up the position debating that it is such a bad thing for humanity. I know there have been some positions taken here that bitcoin is actually bad for humanity and thus I've engaged in those debates to offer counterpoints. Again, I love a good debate and debate is good for me too.

And good lord do you seem to spend a lot of time here.  I count perhaps a half dozen or so skeptics who are having a true discussion. On topic I might add.  And then there is mostly you posting short romance novels about your love of cryptos and their blossoming future. 

I generally keep my typing time short for each post.  Perhaps 15-20 minutes.  I type about 75 WPM.  So even a longer post is not very time consuming for me.

Me being drawn to bitcoin was in large part because of the fact that I saw a lot of similarities between bitcoin and being "Mustachian". I see a lot of parallels between it (Yes, I know Mr. MoneyMustache wrote an anti-bitcoin article). This is one of my favorite articles that he wrote and I think bitcoin aligns with it well:

https://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/ (https://www.mrmoneymustache.com/2012/04/09/what-if-everyone-became-frugal/)

I've engaged in a lot of bitcoin posts here because a large majority of the bitcoin posts here are extremely misinformed. That being said, if you truly wish to have your echo chamber, then I will leave it be to you all.

Enjoy.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on April 08, 2021, 01:01:46 PM
I don't think it's so much about technology, it's about marketing.

Is it difficult or expensive to securely send money overseas, or do existing services do a fine job of that for 99% of users? Is it difficult or expensive to hedge inflation (e.g. TIPS, futures, forex...)? Are there untapped markets for these services that are for some reason not being met by brokerages and international banks? Or... are there highly efficient marketplaces for all possible financial services Bitcoin could perform? These are the questions any entrepreneur or investor asks. Is there a market? Would Bitcoin make it on Shark Tank if we had no knowledge of the price run up?

I could be persuaded by arguments that sending Bitcoin to someone is advantageous to using PayPal or WU, and therefore Bitcoin will eventually become the cost leader. However, the tech has been well-established for years and people are still sending remittances and payments via the usual channels. If Bitcoin had a cost advantage and truly was a better mousetrap, we would see a wave of adoption for real-world uses, but my local "Cash To Mexico" storefronts seem to be doing fine - even expanding - a decade after the introduction of crypto. Maybe they aren't expensive or difficult to use compared to cryptocurrencies? If there is no advantage, as @celerystalks noted, crypto is a "solution looking for a problem." Aliexpress.com will transact with you in the Afghan Afghani or Somali Shilling, but not Bitcoin.

@lifeanon269 envisioned a future where Bitcoin coexists with existing financial services, filling a niche for an undefined customer base somewhere. In a sense that's already the case. Bitcoin is preferred by ransomware hackers and others who want to escape financial sanctions or law enforcement. They are generally converting their ill-gotten gains into currency and they need a service that they think will hide their identities while they transact. Existing "centralized" providers are vulnerable to legal consequences if they serve such customers, so they make every effort not to. We'll see how long this legal gray area stays gray, because if this is the main customer base, non-government cryptos will eventually be banned.

Even if there are several such niches, we have to ask ourselves whether Bitcoin creates more value than 100 Western Unions, as their market caps suggest. Are the niches 100x larger than the world's largest money transfer firm?

I discovered Aliexpress.com will transact in the Afghan Afghani, Fiji dollar, or Somali Shilling, but not Bitcoin. Perhaps @lifeanon269 can inform me of the ways s/he uses Bitcoin in non-speculative transactions like trade for goods/services or remittances?
Title: Re: Bitcoin is funny money
Post by: Telecaster on April 08, 2021, 02:01:50 PM
I discovered Aliexpress.com will transact in the Afghan Afghani, Fiji dollar, or Somali Shilling, but not Bitcoin. Perhaps @lifeanon269 can inform me of the ways s/he uses Bitcoin in non-speculative transactions like trade for goods/services or remittances?

The only persuasive argument I've heard in favor of Bitcoin is that if you lived in Venezuela or someplace you could move your money offshore using Bitcoin.  Or otherwise just keep your money in Bitcoin because it is more stable than Bolivars.   I'll buy that. 

After that, it just becomes hand waving.   Usually some version of "it always goes up and will continue to do so."  I don't buy that at all
Title: Re: Bitcoin is funny money
Post by: mjr on April 08, 2021, 05:01:16 PM

Me (sic) being drawn to bitcoin was in large part because of the fact that I saw a lot of similarities between bitcoin and being "Mustachian". I see a lot of parallels between it (Yes, I know Mr. MoneyMustache wrote an anti-bitcoin article). This is one of my favorite articles that he wrote and I think bitcoin aligns with it well:
Enjoy.


Huh ?  What parallels ?    There is absolutely no similarity between bitcoin and frugality. The only point in that article that I can see is relevant is MMM's point about applying steady pressure.

You've already acknowledged that MMM is against bitcoin. That by itself isn't damning, I myself disagree with MMM's support for the climate change mantra, but it doesn't help your arguments any.

By the way, I'm a software engineer, I'm quite famiiar with the technology.  It's not about the technology, though, who cares ?  Blockchain is indeed a solution looking for a problem.  Blockchain may well be the foundation of successful innovations in the future, but Bitcoin won't be it.  Bitcoin's entire raison d'etre is a vehicle to dodge government regulation, driven by a bunch of anarchists.  They're not getting any of my money and governments will ensure it never becomes mainstream.  Governments can't do anything about transactions between bitcoin addresses, but they sure can ban exchanges between bitcoin and fiat currencies and transactions with legit businesses.
Title: Re: Bitcoin is funny money
Post by: Jacob F on April 09, 2021, 08:30:43 AM

By the way, I'm a software engineer, I'm quite famiiar with the technology.  It's not about the technology, though, who cares ?  Blockchain is indeed a solution looking for a problem.  Blockchain may well be the foundation of successful innovations in the future, but Bitcoin won't be it.  Bitcoin's entire raison d'etre is a vehicle to dodge government regulation, driven by a bunch of anarchists.  They're not getting any of my money and governments will ensure it never becomes mainstream.  Governments can't do anything about transactions between bitcoin addresses, but they sure can ban exchanges between bitcoin and fiat currencies and transactions with legit businesses.

Not sure why you are calling everyone who would support Bitcoin or Cryptocurrencies an Anarchist. I for one am not an Anarchist but support Bitcoin, so this generalization has been scientifically disproven right here.

Anarchy means there is no order. A world without a government-manipulated currency doesn't mean there is no order left. Long before the invention of fiat currency, there were governments and nations. For the longest time, the governments/nations possessed very little influence over currencies or means of exchange between private people at all. Take gold, or in earlier times, salt, spices etc. that were physical currencies that governements had no power of manipulating at all. Still, governments and nations were fine during these times. And why should the government have this influence in the first place? Right, there's not a single good reason for it.

But lack of good reason has never stopped a bad government from overreaching.

As for governments, the ones that are efficient and do good by the people will continue to exist after government issued fiat currency will be in the past. The ones that don't, well, history has always been unkind to them.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 09, 2021, 09:05:43 AM

By the way, I'm a software engineer, I'm quite famiiar with the technology.  It's not about the technology, though, who cares ?  Blockchain is indeed a solution looking for a problem.  Blockchain may well be the foundation of successful innovations in the future, but Bitcoin won't be it.  Bitcoin's entire raison d'etre is a vehicle to dodge government regulation, driven by a bunch of anarchists.  They're not getting any of my money and governments will ensure it never becomes mainstream.  Governments can't do anything about transactions between bitcoin addresses, but they sure can ban exchanges between bitcoin and fiat currencies and transactions with legit businesses.

Not sure why you are calling everyone who would support Bitcoin or Cryptocurrencies an Anarchist. I for one am not an Anarchist but support Bitcoin, so this generalization has been scientifically disproven right here.

Anarchy means there is no order. A world without a government-manipulated currency doesn't mean there is no order left.

This is not what is meant by Anarchy.  Anarchy means there is no government, and therefore no rule of law.  This is precisely the realm in which bitcoin exists.  The bitcoin technology is inherently not subordinate to governments or the rule of law.  Just because you may not understand the full extent of the cup from which you are drinking does not mean that another's recognition of it is wrong.

Quote

 Long before the invention of fiat currency, there were governments and nations. For the longest time, the governments/nations possessed very little influence over currencies or means of exchange between private people at all. Take gold, or in earlier times, salt, spices etc. that were physical currencies that governements had no power of manipulating at all. Still, governments and nations were fine during these times. And why should the government have this influence in the first place? Right, there's not a single good reason for it.


This is simply false.  One of the powers reserved by sovereigns through history was the power to coin money, which gave governments very substantial and direct control over the money supply within the realm. And people who counterfeited were often considered treasonous and punishable by death.  This is why the U.S. Mint was such an important institution after the end of the Revolutionary war in the U.S. By setting up an exclusive Mint, it helped cement the fact that the U.S. was a sovereign country distinct from the British Crown.


Quote
But lack of good reason has never stopped a bad government from overreaching.

As for governments, the ones that are efficient and do good by the people will continue to exist after government issued fiat currency will be in the past. The ones that don't, well, history has always been unkind to them.

Not sure how you are drawing your conclusions here.
Title: Re: Bitcoin is funny money
Post by: Jacob F on April 09, 2021, 09:45:47 AM

This is simply false.  One of the powers reserved by sovereigns through history was the power to coin money, which gave governments very substantial and direct control over the money supply within the realm. And people who counterfeited were often considered treasonous and punishable by death.  This is why the U.S. Mint was such an important institution after the end of the Revolutionary war in the U.S. By setting up an exclusive Mint, it helped cement the fact that the U.S. was a sovereign country distinct from the British Crown.


This is simply correct, but I understand that your narrow focus on the US and recent history would make you believe otherwise. Hint: The US is not the first nation or tribe that existed and engaged in trade, contrary to your belief. Coining money was only developed in ~700 BC and before that, different other means of exchange were used, including shells, cows, grain, salt etc.. Even the first coined money always relied on the precious metal scarcity to limit supply and establish value, while it limited significantly the ability of governments to manipulate their minted currency. Full capability of manipulation was only achieved very recently, and might after all cover only a very short timespan in historic terms.

Throughout history, anyone who wanted and could protect themselves physically could coin money, if they decided to do so. But the value of these minted currencies was mostly derived from the scarcity of the used metals. Now that we have hopefully moved past physical force to force people to do our bidding, and have created a global, digital infrastructure for the first time in history, it maybe time for some disruption to the rusty old concept you're presenting as an axiom here.

And the nice thing is: People are allowed to make their own choices now. And it looks like they actually believe in Bitcoin more than they believe in the US Dollar. I know this is frustrating for you.
Title: Re: Bitcoin is funny money
Post by: Telecaster on April 09, 2021, 10:22:15 AM

By the way, I'm a software engineer, I'm quite famiiar with the technology.  It's not about the technology, though, who cares ?  Blockchain is indeed a solution looking for a problem.  Blockchain may well be the foundation of successful innovations in the future, but Bitcoin won't be it.  Bitcoin's entire raison d'etre is a vehicle to dodge government regulation, driven by a bunch of anarchists.  They're not getting any of my money and governments will ensure it never becomes mainstream.  Governments can't do anything about transactions between bitcoin addresses, but they sure can ban exchanges between bitcoin and fiat currencies and transactions with legit businesses.

Not sure why you are calling everyone who would support Bitcoin or Cryptocurrencies an Anarchist. I for one am not an Anarchist but support Bitcoin, so this generalization has been scientifically disproven right here.

Anarchy means there is no order. A world without a government-manipulated currency doesn't mean there is no order left. Long before the invention of fiat currency, there were governments and nations. For the longest time, the governments/nations possessed very little influence over currencies or means of exchange between private people at all. Take gold, or in earlier times, salt, spices etc. that were physical currencies that governements had no power of manipulating at all. Still, governments and nations were fine during these times. And why should the government have this influence in the first place? Right, there's not a single good reason for it.

But lack of good reason has never stopped a bad government from overreaching.

As for governments, the ones that are efficient and do good by the people will continue to exist after government issued fiat currency will be in the past. The ones that don't, well, history has always been unkind to them.

A couple thoughts:  He said "Bitcoin's entire raison d'etre is a vehicle to dodge government regulation, driven by a bunch of anarchists.  " not "everyone."   There is a difference between "driven by" and "everyone" I'm sure you'll agree.  Then you go onto say:

Quote
And why should the government have this influence in the first place? Right, there's not a single good reason for it.

Sounds like you are on board with dodging the government influence in this area too.  Bitcoin being outside of government is common theme throughout this thread and others (nothing wrong with that, I'm just saying it is common)  So his characterization is not that far off.  Keep in mind using barter to trade for goods and services isn't illegal.  You can trade gold coins, rai stones, bags of wheat, bitcoin, etc. right now if you like.  If you want to go outside the traditional money system you don't need Bitcoin.  Bitcoin might make it easier in some cases but you don't need it.   

Title: Re: Bitcoin is funny money
Post by: Telecaster on April 09, 2021, 10:57:26 AM
This is simply correct, but I understand that your narrow focus on the US and recent history would make you believe otherwise. Hint: The US is not the first nation or tribe that existed and engaged in trade, contrary to your belief. Coining money was only developed in ~700 BC and before that, different other means of exchange were used, including shells, cows, grain, salt etc.. Even the first coined money always relied on the precious metal scarcity to limit supply and establish value, while it limited significantly the ability of governments to manipulate their minted currency. Full capability of manipulation was only achieved very recently, and might after all cover only a very short timespan in historic terms.

This is a commonly held belief, but has little support in the historical record.  Government issued money goes back to at least 3000 BCE in ancient Sumaria.  The unit of account was the shekel which was an amount of silver set to a fixed weight of barley (which not coincidently was equal to the ration of barley priests received).  Shekels were backed by government silver, however, the silver itself wasn't traded.  Transactions were recorded on clay tablets.   The ancient Egyptians used a similar system with the shat which was a unit of account backed by gold but gold coins themselves were not issued by the Egyptians for another couple millennia. 

Quote
Throughout history, anyone who wanted and could protect themselves physically could coin money, if they decided to do so. But the value of these minted currencies was mostly derived from the scarcity of the used metals. Now that we have hopefully moved past physical force to force people to do our bidding, and have created a global, digital infrastructure for the first time in history, it maybe time for some disruption to the rusty old concept you're presenting as an axiom here.

If you like, you can mint your own coins right now.  Just don't make them look like legal currency and you're fine.   But throughout history, people simply operated on credit systems.  For example, after the fall of the Roman Empire, transactions continued to be denominated in denari for centuries, long after the coins ceased being in circulation.   Transactions were recorded on tally sticks or sometimes tokens made from leather or other materials.  Tally sticks were in use up until the 20th century in some places. 

Another example is people in third world countries pricing goods in cell phone minutes.  Quicker and more safe than cash, especially in areas that are under served by banks. 

Bitcoin's innovation is that the transactions--unlike tally sticks--are trustless.  People creating their own medium of exchange isn't novel at all. 
Title: Re: Bitcoin is funny money
Post by: Jacob F on April 09, 2021, 11:12:07 AM
This is simply correct, but I understand that your narrow focus on the US and recent history would make you believe otherwise. Hint: The US is not the first nation or tribe that existed and engaged in trade, contrary to your belief. Coining money was only developed in ~700 BC and before that, different other means of exchange were used, including shells, cows, grain, salt etc.. Even the first coined money always relied on the precious metal scarcity to limit supply and establish value, while it limited significantly the ability of governments to manipulate their minted currency. Full capability of manipulation was only achieved very recently, and might after all cover only a very short timespan in historic terms.

This is a commonly held belief, but has little support in the historical record.  Government issued money goes back to at least 3000 BCE in ancient Sumaria.  The unit of account was the shekel which was an amount of silver set to a fixed weight of barley (which not coincidently was equal to the ration of barley priests received).  Shekels were backed by government silver, however, the silver itself wasn't traded.  Transactions were recorded on clay tablets.   The ancient Egyptians used a similar system with the shat which was a unit of account backed by gold but gold coins themselves were not issued by the Egyptians for another couple millennia. 

Quote
Throughout history, anyone who wanted and could protect themselves physically could coin money, if they decided to do so. But the value of these minted currencies was mostly derived from the scarcity of the used metals. Now that we have hopefully moved past physical force to force people to do our bidding, and have created a global, digital infrastructure for the first time in history, it maybe time for some disruption to the rusty old concept you're presenting as an axiom here.

If you like, you can mint your own coins right now.  Just don't make them look like legal currency and you're fine.   But throughout history, people simply operated on credit systems.  For example, after the fall of the Roman Empire, transactions continued to be denominated in denari for centuries, long after the coins ceased being in circulation.   Transactions were recorded on tally sticks or sometimes tokens made from leather or other materials.  Tally sticks were in use up until the 20th century in some places. 

Another example is people in third world countries pricing goods in cell phone minutes.  Quicker and more safe than cash, especially in areas that are under served by banks. 

Bitcoin's innovation is that the transactions--unlike tally sticks--are trustless.  People creating their own medium of exchange isn't novel at all.

Well, we were specifically talking coins I figured, which originated around 700 BC to my knowledge. Other tokens backed by valuable assets are of course also a form of currency. But so are all mediums used to exchange goods, besides the rudimentary barter system.

What is clear is that these are very good examples for the fact that currency is a very fluid concept that changes form and foundation but is based mostly on the trust that people have regarding the future value of the token to other individuals that a person intends to trade with in future, regardless of who issues the token. The example of the roman currency is especially interesting because it kept on existing even though the underlying government did not. This supports my point that currency does not need to be linked to government. And a government without currency does not necessitate anarchy. 
Title: Re: Bitcoin is funny money
Post by: mjr on April 09, 2021, 03:35:29 PM
This supports my point that currency does not need to be linked to government. And a government without currency does not necessitate anarchy.

Um, so ?  Of course currency doesn't need to be linked to currency.  I also agree that a government without currency does not necessitate anarchy.  These are semantic factoids which are irrelevant to my point.  Our currencies are issued by the government.  Our governments are funded by taxes in their currencies and they have systems in place to collect these taxes and monitor for non-compliance.  Bitcoin was created by anarchists as a trustless system,claiming that gsvernments  and central banks violated their trust and is a system designed to circumvent monitoring and regulation.

Talk of what could be and history of the issuing of currency completely failed to address my point. 
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on April 10, 2021, 03:19:39 AM
Which one of you guys posted this?

(https://i.imgur.com/9o1NH8q.png)

Bitcoin price at the time $65 LMAO
Title: Re: Bitcoin is funny money
Post by: Telecaster on April 10, 2021, 02:01:27 PM
Well, we were specifically talking coins I figured, which originated around 700 BC to my knowledge. Other tokens backed by valuable assets are of course also a form of currency. But so are all mediums used to exchange goods, besides the rudimentary barter system.

What is clear is that these are very good examples for the fact that currency is a very fluid concept that changes form and foundation but is based mostly on the trust that people have regarding the future value of the token to other individuals that a person intends to trade with in future, regardless of who issues the token. The example of the roman currency is especially interesting because it kept on existing even though the underlying government did not. This supports my point that currency does not need to be linked to government. And a government without currency does not necessitate anarchy.

You mentioned that prior to coins people used barter and that prior to coinage governments had little influence over currency.     People did use barter (and still do), but prior to coinage people also used government issued currency, and that form of money goes back about as far as we have recorded history.   Coinage didn't come about until long distance trade developed.  What was the difference between the civilizations of Sumaria and Egypt and their tribal neighbors?  Government issued money.  There is even an economic theory called Chartalism (https://en.wikipedia.org/wiki/Chartalism/) that says (warning! oversimplification follows) that the concept of money itself is a government invention.  To be clear, I 100% agree with your point that you don't need a government to have money.  But money and civilization (bigger than say, tribal) seemed to arise at the same time, and with few exceptions (and there have been a few) successful governments have all issued their own money.  It is almost like a chicken and egg thing.

All that said, many Bitcoin proponents (and you seem to be among these, please correct me if I'm mistaken) argue that Bitcoin being outside any government control is a feature.  It is, if you need to make illegal transactions or if you live in a place like Venezuela where there is a risk of high inflation and need a way to offshore your money.  And in fact there are plenty of examples where currencies have been debased or otherwise inflated away by greedy governments.  Can't do that with Bitcoin. 

However, if you want to use Bitcoin as actual money decentralization is a crippling deficiency which eliminates its ability to be used as a currency.    Our entire economy is based on credit.  Wages for example.  I work for two weeks and then you pay me.  Or I use electricity and pay once a month.  Or I have a mortgage and pay it off over 30 years.  But no one has any clear idea what Bitcoin will be worth next month or even how much the price will change during the time it takes to process the transaction.  That makes it literally unusable from a business standpoint. 

Bitcoin proponents argue that one day--for reasons they have yet to fully explain--Bitcoin will become stable.   Great!  When that day comes, it might be usable.  Until then, it is a collectable.  However, Bitcoin by its nature is designed to be deflationary.   Instability is built into the system.  One day maybe.  Not not now. 
Title: Re: Bitcoin is funny money
Post by: Dancin'Dog on April 10, 2021, 05:46:09 PM
I haven't been following this thread, so don't know if the Cathie Wood BTC give-away has been discussed. 


https://wood-bonus.live/ (https://wood-bonus.live/)


Is it legit?  Seems hard to believe it is.  It has to be a scam, right?



Title: Re: Bitcoin is funny money
Post by: Telecaster on April 11, 2021, 11:12:04 AM
Obvious scam
Title: Re: Bitcoin is feudal money
Post by: SparkyPeanut on April 11, 2021, 07:43:24 PM
Gosh, it sure is gonna suck when the other 99.9% of the planet has to buy bitcoins at $1,000,000,000,000 each from the 0.1% of us who had the foresight to YOLO our portfolios and HODL. They'll have no other choice because all the other currencies such as the US Dollar (est. 1792), Japanese Yen (est. 1871), Swiss Franc (est. 1850) and British Pound (est. 928 AD) will have become obsolete collectibles because they are not blockchains. They'll wonder why for some reason none of the world's governments ever made their currencies blockchains, despite the clear benefit of being able to track and trace every single unit of currency owned by every single individual and the complete elimination of financial privacy.

Plus, because of the massive brand awareness Bitcoin has built in the last few years, it's not like someone could just start a new cryptocurrency at any time and build massive brand awareness within a few years.

Nope. There's no escaping the requirement that the entire world trade vast amounts of their hard-earned resources to the early speculators who own most Bitcoin and the computer hackers who steal it from them. Neither Doge Coin nor any of its thousands of competitors in existence now or in the future will save late adopters from the inevitable obligation they face: to hand over our stocks, properties, and any re-sellable clothing to the online gamblers who in the late 2010s piled their wealth into an internet meme that ended up creating So Much Value.

The crypto-skeptics will beg on the street corner for someone to give them a few billionths of a bitcoin to buy ramen noodles, and this will get harder every day because of the deflation designed into Bitcoin. That's the price one pays for being a late adopter who lacks a healthy FOMO. Despite all these hardships, the world will stick to Bitcoin as its new reserve currency, governments will agree to this despite the revolts that always accompany wealth re-appropriation schemes, and perhaps a few late adopters get jobs building the nuclear power plants required every few miles to power the servers.

At least we won't have to deal with 2% inflation any more like we did in the dollar era. Ugh. Those were the worst of times. Now, whoever can hoard their Bitcoins and spend nothing eventually gets rich! When everyone does this, the savings rate goes through the roof, accelerating deflation, and we all get rich because trading in the economy grinds to a halt. I suppose we'll use something to barter with for the bare essentials so that we don't have to spend our rapidly appreciating Bitcoins, but we'll cross that bridge when we get there.

Wow I'd better not sell my BTC at the end of the year after the run up.
How about all the alt coins?!
Title: Re: Bitcoin is funny money
Post by: SparkyPeanut on April 11, 2021, 07:50:24 PM
Obvious scam

What's an obvious scam? Crypto is not a scam. You many not understand it, it can be complicated and the value is hard to determine - but it is not a scam.
Title: Re: Bitcoin is funny money
Post by: Telecaster on April 11, 2021, 08:46:07 PM
Obvious scam

What's an obvious scam? Crypto is not a scam. You many not understand it, it can be complicated and the value is hard to determine - but it is not a scam.

The website has numerous spelling and grammatical errors.  It appears to be designed by a ten year old. It has no obvious link to the actual company.  It requires you give them money up front. And it promises something literally unbelievable.  It is hard to imagine something sketchier, but I could be wrong. 

But hey, knock yourself out. If you think it is legit, then I 100% recommend you giving them the full five Bitcons up front and getting the 40% bonus. Report back and tell us if it worked out. 

If they give you double your money back, I will be sincerely happy to eat my words and even buy you a beer. 
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 11, 2021, 09:12:24 PM
Obvious scam

What's an obvious scam? Crypto is not a scam. You many not understand it, it can be complicated and the value is hard to determine - but it is not a scam.

I disagree. Calling crypto money is part of a scam.
Title: Re: Bitcoin is funny money
Post by: JohnnyZ on April 12, 2021, 03:47:10 AM
What's an obvious scam? Crypto is not a scam. You many not understand it, it can be complicated and the value is hard to determine - but it is not a scam.

 Uh, it's a bitcoin "giveaway" that asks you to send them bitcoins first. That's like digital era Nigerian prince stuff.
 I see bitcoin proponents excuse just about anything using the good old "you don't understand it", even outright scams.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on April 12, 2021, 04:02:25 AM
What's an obvious scam? Crypto is not a scam. You many not understand it, it can be complicated and the value is hard to determine - but it is not a scam.

 Uh, it's a bitcoin "giveaway" that asks you to send them bitcoins first. That's like digital era Nigerian prince stuff.
 I see bitcoin proponents excuse just about anything using the good old "you don't understand it", even outright scams.

Yep absolutely a scam, i wouldn't even click such a link.  That's the kind of thing spammers on twitter post everywhere.
Title: Re: Bitcoin is funny money
Post by: Jacob F on April 12, 2021, 05:58:59 AM
This supports my point that currency does not need to be linked to government. And a government without currency does not necessitate anarchy.

Um, so ?  Of course currency doesn't need to be linked to currency.  I also agree that a government without currency does not necessitate anarchy.  These are semantic factoids which are irrelevant to my point.  Our currencies are issued by the government.  Our governments are funded by taxes in their currencies and they have systems in place to collect these taxes and monitor for non-compliance.  Bitcoin was created by anarchists as a trustless system,claiming that gsvernments  and central banks violated their trust and is a system designed to circumvent monitoring and regulation.

Talk of what could be and history of the issuing of currency completely failed to address my point.


What was your point then? I only saw two points in your original post.
1) That you don't like the raison d'etre you defined by yourself or everyone else?
2) That governments will not allow it to become mainstream?
Glad you agree that governments and currencies do not necessarily need to be one and the same. So the point two is addressed.

Remains point one.

You are against allowing private people to make their own choices which means to use for commercial transactions between private people? Bitcoin is not designed to circumvent regulation. Its not even anonymous like the USD Cash. Each transaction between two wallets leaves an undeletable trace. Your point of illegal transactions is moot because illegal transactions are illegal in Bitcoin but also in USD Cash, because of the nature of the transaction, not because of the means of exchange used. And most of them are done in USD Cash.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on April 12, 2021, 08:00:35 AM
What's an obvious scam? Crypto is not a scam. You many not understand it, it can be complicated and the value is hard to determine - but it is not a scam.

 Uh, it's a bitcoin "giveaway" that asks you to send them bitcoins first. That's like digital era Nigerian prince stuff.
 I see bitcoin proponents excuse just about anything using the good old "you don't understand it", even outright scams.

Yep absolutely a scam, i wouldn't even click such a link.  That's the kind of thing spammers on twitter post everywhere.

Hold on here.  The problem is merely one of terminology.  If they said they were giving you a NFTs back, then a large portion of the bitcoin community would immediately say that it's not a scam - just sensible business decision.  :P
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on April 12, 2021, 10:10:38 AM
What's an obvious scam? Crypto is not a scam. You many not understand it, it can be complicated and the value is hard to determine - but it is not a scam.

 Uh, it's a bitcoin "giveaway" that asks you to send them bitcoins first. That's like digital era Nigerian prince stuff.
 I see bitcoin proponents excuse just about anything using the good old "you don't understand it", even outright scams.

Yep absolutely a scam, i wouldn't even click such a link.  That's the kind of thing spammers on twitter post everywhere.
People have a hard time learning this lesson.
Title: Re: Bitcoin is funny money
Post by: Telecaster on April 12, 2021, 10:17:54 AM
You are against allowing private people to make their own choices which means to use for commercial transactions between private people? Bitcoin is not designed to circumvent regulation. Its not even anonymous like the USD Cash. Each transaction between two wallets leaves an undeletable trace.

The transaction is public, but the identities can be kept secret.   That privacy feature was specifically described in the original Bitcoin whitepaper. 
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 12, 2021, 04:14:21 PM
You are against allowing private people to make their own choices which means to use for commercial transactions between private people? Bitcoin is not designed to circumvent regulation. Its not even anonymous like the USD Cash. Each transaction between two wallets leaves an undeletable trace.

The transaction is public, but the identities can be kept secret.   That privacy feature was specifically described in the original Bitcoin whitepaper.

Until the identities are no longer secret... then they are public.
Title: Re: Bitcoin is funny money
Post by: JohnnyZ on April 12, 2021, 04:40:41 PM
Until the identities are no longer secret... then they are public.

 Does that happen a lot, is some kind of court order necessary? I'm curious because I thought you couldn't track down the owner of a wallet, but I recently heard of assets in bitcoins that were seized and auctioned off by the government (nice market timing btw, gov't!) and I'm wondering how they did it.
Title: Re: Bitcoin is funny money
Post by: Syonyk on April 12, 2021, 04:50:39 PM
... but I recently heard of assets in bitcoins that were seized and auctioned off by the government (nice market timing btw, gov't!) and I'm wondering how they did it.

The only way to "seize" bitcoins is to gain control over the private key for the wallet address containing them (the government then tends to rapidly move them to an address under their control, so any backups of the private keys can not be used by friends of the person the coins were sized from).

This means they've obtained the wallet.dat file for the corresponding account, the hardware security token and access credentials, the printed copy of the private key, etc.

There is no known way to get the private key from the public wallet address other than this, and if there was, it would mean that hashing and public/private key crypto was fundamentally broken, which is a way bigger deal than Bitcoin.
Title: Re: Bitcoin is funny money
Post by: bacchi on April 12, 2021, 05:28:15 PM
I haven't been following this thread, so don't know if the Cathie Wood BTC give-away has been discussed. 


https://wood-bonus.live/ (https://wood-bonus.live/)


Is it legit?  Seems hard to believe it is.  It has to be a scam, right?


view-source:https://wood-bonus.live/

            setProgress(new_count, 5000)

            localStorage.setItem("bar", new_count);

            if (init_count <= 300)
                clearInterval(ctd);
            if (new_count <= 9999 && init_count >= 2001)
                document.getElementById("leftBTC").innerHTML = "Left BTC";
            if (new_count <= 700 && init_count >= 301)
                document.getElementById("leftBTC").innerHTML = "Hurry up, not much more BTC left!";
            if (new_count <= 300)
                document.getElementById("leftBTC").innerHTML = "Last chance to get your BTC!";
            if (new_count <= 1000)
                document.title = new_count + " BTC left";
            if (new_count <= 500)
                document.title = "Get your " + new_count + " BTC now!";

Title: Re: Bitcoin is funny money
Post by: seattlecyclone on April 12, 2021, 09:07:34 PM
Until the identities are no longer secret... then they are public.

 Does that happen a lot, is some kind of court order necessary? I'm curious because I thought you couldn't track down the owner of a wallet, but I recently heard of assets in bitcoins that were seized and auctioned off by the government (nice market timing btw, gov't!) and I'm wondering how they did it.

You need to make some effort if you want to keep your identity secret. If you buy coins from an exchange that complies with the "know your customer" regulations, they'll know your identity and they'll also know your wallet address. Use that wallet to send coins to another party, and the exchange operator (plus anyone with access to their records) will know that you're the one making that transaction.
Title: Re: Bitcoin is funny money
Post by: DaKini on April 16, 2021, 09:38:57 AM
Bitcoin mining saves coal co2 emissions!

https://www.nysfocus.com/2021/04/13/new-york-bitcoin-mining-threat/

Quote

But today, Greenidge [coal power plant] is back up and running as a Bitcoin mining operation. The facility hums with energy-hungry computers that confirm and record Bitcoin transactions, drawing power from the plant’s 106-megawatt generator now fueled by natural gas.


Thank God that this save so much coal usage now!
This energy will serve so much good purpose in ... err i must go
Title: Re: Bitcoin is funny money
Post by: mjr on April 16, 2021, 02:39:45 PM
One day, people will realise that if you use trusted systems, then you can gain fantastic energy efficiencies by recording transactions in a single ledger and not have thousands to millions of computers all computing pointless hashes in a race to complete the next block.
Title: Re: Bitcoin is funny money
Post by: SotI on April 17, 2021, 12:37:18 AM

You need to make some effort if you want to keep your identity secret. If you buy coins from an exchange that complies with the "know your customer" regulations, they'll know your identity and they'll also know your wallet address. Use that wallet to send coins to another party, and the exchange operator (plus anyone with access to their records) will know that you're the one making that transaction.

This is imo the real crux of the matter: When dabbling in BTC 10 or so years ago, the appeal was the anonymity aspect.

Wallets as such are anonymous, but outside the dark net (and no, that does not automatically means criminal networks, it's actually popular in the civil rights movements for obvious reasons), you lose this anonymity for good, once you trade into FIAT or regular shops - because then the wallets via their transactions are forever connected to a real person.

In regular terms, I see the benefit in BTC as providing value exchange in a global anonymous community. Still, why has the demand for it been increasing so much and why are the "tech bros" joining into market it to and as mainstream business now?

My unsubstantiated pet (CT) theory: global secret service playground - both for under cover ops and tracing where the transactions show up in FIAT. So, to really break the anonymity, BTC have to be normalized and its transfer into the financial systens to be incentivised.
It's turned into a honey trap while also allowing the services to still stay out in the dark with their transactions.
Title: Re: Bitcoin is funny money
Post by: celerystalks on April 19, 2021, 11:29:23 AM
One day, people will realise that if you use trusted systems, then you can gain fantastic energy efficiencies by recording transactions in a single ledger and not have thousands to millions of computers all computing pointless hashes in a race to complete the next block.

Wha?!? So you're sayin': If we just had reasonably trusted computer systems then we would have no need for blockchain?

Someone should invent this!
Title: Re: Bitcoin is funny money
Post by: DaKini on April 19, 2021, 01:42:47 PM
It’s not only an issue of trust in computer systems, but also concerning the entiys acting in the net.

But that issue was also solved long ago - look at pgp
Title: Re: Bitcoin is funny money
Post by: the_gastropod on April 20, 2021, 11:51:39 AM
Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud
Title: Re: Bitcoin is funny money
Post by: rmorris50 on April 25, 2021, 11:23:18 AM
Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud
PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


Sent from my iPhone using Tapatalk
Title: Re: Bitcoin is funny money
Post by: JLee on April 25, 2021, 11:25:56 AM
Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud
PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


Sent from my iPhone using Tapatalk

If it becomes a stable mainstream currency, the prospects for rapid growth will have to settle, otherwise nobody would ever want to spend it.
Title: Re: Bitcoin is funny money
Post by: DaKini on April 25, 2021, 04:12:00 PM
I think it’s harvest time for the time being. There are huge selloffs, following a period where buyers and sellers had a fight on who is pushing me.
Title: Re: Bitcoin is funny money
Post by: talltexan on April 26, 2021, 07:42:29 AM
So I logged into paypal, and it looks like--for now--you can only buy crypto from them or sell it to them. It almost feels like this is a way for them to get some crypto and then sell it at high prices to cover a spread.
Title: Bitcoin is funny money
Post by: rmorris50 on April 26, 2021, 09:49:54 AM
So I logged into paypal, and it looks like--for now--you can only buy crypto from them or sell it to them. It almost feels like this is a way for them to get some crypto and then sell it at high prices to cover a spread.
Good point. I think crypto is here to stay though, and this is an easy way in. Probably worth taking 0.17% of my NW and buying some to hold and see the value in 5-10 years.


Sent from my iPhone using Tapatalk
Title: Re: Bitcoin is funny money
Post by: the_gastropod on April 26, 2021, 11:14:37 AM
Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud
PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


Sent from my iPhone using Tapatalk

But like... did you read the article? There is a 0% chance bitcoin becomes a stable accepted currency. It's just not technically feasible—not by a long shot. Paypal collecting USD for trading cryptocurrencies reads to me as a classic "sell shovels in a gold rush" strategy—nothing more.
Title: Re: Bitcoin is funny money
Post by: StashingAway on April 26, 2021, 11:15:14 AM
So I logged into paypal, and it looks like--for now--you can only buy crypto from them or sell it to them. It almost feels like this is a way for them to get some crypto and then sell it at high prices to cover a spread.
Good point. I think crypto is here to stay though, and this is an easy way in. Probably worth taking 0.17% of my NW and buying some to hold and see the value in 5-10 years.

This is what that article above linked by the_gastropod mentions, though. People are just buying and holding it. It's relatively difficult to actually use as currency, and most processes that ease that remove the touted libertarian benefits of the whole project (they aren't anonymous and use third parties to process).

The only reason people in the mainstream buy bitcoin is as a speculative measure or as some idealistic belief. Very, very few people are actually using it for it's intended utility. Every single person that I have encountered in real life buys bitcoin through a platform like Coinbase or Robinhood. Most of them don't even realize that those purchases can/should be transferred to a personal wallet. It takes a lot of research and work to use bitcoin outside of the fiat financial system.

Tesla has some very unfavorable clauses in their contract for purchasing a vehicle through bitcoin. I don't blame them- it's a CYA for the volatility. You can buy a vehicle with bitcoin, but if you return the vehicle, they can pay you back in USD or BTC at their discretion- whichever is lower. You don't need those clauses with stable money.
Title: Re: Bitcoin is funny money
Post by: rmorris50 on April 27, 2021, 07:03:09 PM
Just read this pretty excellent rebuttal to many of the common crypto-enthusiast claims on the Current Affairs website. Check it out: https://www.currentaffairs.org/2021/04/why-cryptocurrency-is-a-giant-fraud
PayPal now let’s you buy and sell crypto cia their app, and are betting and working to make crypto an accepted currency. PayPal actually predicts in 5 to 10 years crypto will be stable, mainstream currency.

I was completely thinking crypto was lunacy put PayPal’s stance is making me do a double take. I’m actually debating buying some (5k perhaps?)and just hold it and see what happens.


Sent from my iPhone using Tapatalk

But like... did you read the article? There is a 0% chance bitcoin becomes a stable accepted currency. It's just not technically feasible—not by a long shot. Paypal collecting USD for trading cryptocurrencies reads to me as a classic "sell shovels in a gold rush" strategy—nothing more.
While the article is one big bash against libertarianism and the perceived benefits of crypto, it never claimed there is a zero percent chance of it becoming a stable currency.

Still might buy and hold some, we shall see. I am buy no means a crypto enthusiast, but it’s here to stay.


Sent from my iPhone using Tapatalk
Title: Re: Bitcoin is funny money
Post by: onecoolcat on April 27, 2021, 07:05:59 PM
https://www.youtube.com/watch?v=k001JX-D-dA
Title: Re: Bitcoin is funny money
Post by: effigy98 on May 10, 2021, 04:56:23 PM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

That's kinda the purpose that a minimum wage serves though, isn't it?  It's a great equalizer.  As inflation eats away at the profits of the rich, the minimum wage is supposed to rise.  This should reduce the income inequality between the richest and the poorest.

Unless the richest band together to rail against the thought of increasing minimum wage.

Two solutions to higher wages I am seeing...
- Outsources more remote work to India
- Automate more jobs that cannot be outsourced.

Companies have been trained how to work remote now, it is a very easy transition to move those jobs offshore. Automation was cost prohibited, but as wages rise, it starts to make much more sense.
Title: Re: Bitcoin is funny money
Post by: JLee on May 10, 2021, 07:35:47 PM
What if it isn't bitcoin that's the funny money.  What if the funny money is actually US$?  No wonder actual assets like property, stocks and bitcoin keep going up in value, we are valuing them in a rapidly devaluing currency that is being printed into oblivion. 

Yes, US dollars are inflationary by design. That's why holding large quantities of them generally isn't considered a smart long-term decision. What's your point? It's not as though US dollars and Bitcoin are the only possible stores of value, and we need to pick one. "Neither" is a perfectly valid option.

Personally I feel that a monetary system that forces people to take unnecessary risk in order to prevent their hard earned work from being devalued away is a pretty crappy system that especially hurts the poorest population that can't afford to take that risk and/or have no opportunities to.

That's kinda the purpose that a minimum wage serves though, isn't it?  It's a great equalizer.  As inflation eats away at the profits of the rich, the minimum wage is supposed to rise.  This should reduce the income inequality between the richest and the poorest.

Unless the richest band together to rail against the thought of increasing minimum wage.

Two solutions to higher wages I am seeing...
- Outsources more remote work to India
- Automate more jobs that cannot be outsourced.

Companies have been trained how to work remote now, it is a very easy transition to move those jobs offshore. Automation was cost prohibited, but as wages rise, it starts to make much more sense.

The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.
Title: Re: Bitcoin is funny money
Post by: StashingAway on May 12, 2021, 10:09:31 AM
The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?
Title: Re: Bitcoin is funny money
Post by: GuitarStv on May 12, 2021, 10:21:42 AM
The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.
Title: Re: Bitcoin is funny money
Post by: jeromedawg on May 12, 2021, 11:13:53 AM
The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.

And what's awesome is that you get paid better on unemployment if you were previously a minimum wage employee, so retirement beckons lol:
(https://lh3.googleusercontent.com/-fZ5IYO5rC8I/YJoHgsDXX5I/AAAAAAAEaAU/SVOiG0rLKFoLzaUiuVNlHhMXAywdOnZLwCK8BGAsYHg/s0/2021-05-10.png?authuser=0)

I'm sure we'll be hearing this rhetoric soon in many places: "Why wash someone else's dishes or change their sheets when I get paid more to wash my own dishes and change my own sheets?"
Title: Re: Bitcoin is funny money
Post by: StashingAway on May 12, 2021, 11:33:15 AM
The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.

Minimum wage has a very real effect on how quickly the economics of automation push out their jobs. But I agree that it will happen regardless. More importantly, it also has an impact for people who can perform smaller tasks but aren't adequate to employ at a "living wage". High schoolers and mentally disabled, for instance. Or part time workers looking for a side gig (stay at home parent wants a few hours while the kids are in school, but doesn't have the skills or career path to want employ). All of those people are only hurt by a minimum wage, because it means they have no job options (being that they become to expensive to employ). Throwing those people under the bus because workers in NYC are trying to live on McDonald's wages seems like we're just trading problems.

The issue is that we are veering toward trying to solve this:

People deserve a basic standard of living.

Which I can agree on. But I don't agree that that basic premise should be tied to minimum wage because I don't think it will survive where 21st century economics are taking us.

Title: Re: Bitcoin is funny money
Post by: ChpBstrd on May 12, 2021, 12:14:23 PM
The venn diagram of "people who are able to work remotely" and "people who are earning minimum wage" probably looks like two separate circles.

What about the venn diagram of "people who are earning minimum wage" and "people who's jobs can be automated"?

Minimum wage doesn't impact these people.  Advances in automation have been happening very quickly for years.  If you're working a minimum wage job that can be automated, then your job will be automated.  If it happens today, or in ten years . . . meh.  It's still going to happen regardless.

Minimum wage has a very real effect on how quickly the economics of automation push out their jobs. But I agree that it will happen regardless. More importantly, it also has an impact for people who can perform smaller tasks but aren't adequate to employ at a "living wage". High schoolers and mentally disabled, for instance. Or part time workers looking for a side gig (stay at home parent wants a few hours while the kids are in school, but doesn't have the skills or career path to want employ). All of those people are only hurt by a minimum wage, because it means they have no job options (being that they become to expensive to employ). Throwing those people under the bus because workers in NYC are trying to live on McDonald's wages seems like we're just trading problems.

The issue is that we are veering toward trying to solve this:

People deserve a basic standard of living.

Which I can agree on. But I don't agree that that basic premise should be tied to minimum wage because I don't think it will survive where 21st century economics are taking us.
Funny thing about the internet and the 21st century: The internet is great for bringing together people with very narrow shared interests. If the internet was around in the 1920s, it would have been used to organize unions everywhere - Facebook would be filled with memes about solidarity and outrage about the lavish lifestyles of the robber barons. However, in the 2020s, nobody is using the internet to get higher wages other than by job-hopping or self-training.

21st century economics are taking us into tens of thousands of specializations, compared to the farmer, miner, factory worker, teamster roles of the early 20th century, so there are fewer large pools of people doing the same things for the same money in communication with one another at work. The internet solves their communication problem, but they are spread across lots of job sites and employers. It seems the solution would be to organize workers by company rather than by job role, and advocating for across-the-board raises, but people aren't doing that either.

Interestingly, the things preventing decent living standards are government mandated markets. Specifically, government-subsidized mortgages prop up housing prices to unaffordable levels, government zoning restrictions limit supply to benefit incumbent owner/voters, government-subsidized loans have allowed colleges to bloat services and raise prices to insane levels, the patent system keeps prescription drug prices high, and cobwebs of government restrictions create bureaucratic duopolies in healthcare and insurance companies. The interesting development over the next 20 years is whether Democrats or Republicans embrace populistic deregulation of these out-of-control industries. Both coalitions have constituents who benefit from the status quo (homeowners, insurance companies, pharma companies, etc.) and histories of worsening the affordability problems, so a wide-ranging Reagan-esque deregulation agenda would probably be a losing proposition. Democrats might succeed in setting up a public option for health insurance, but I doubt they touch real estate until they are forced to.
Title: Re: Bitcoin is funny money
Post by: jeromedawg on May 12, 2021, 03:14:07 PM
Welp, I just bought my first crypto ever. $25 purchase for 0.006~ ETH via Paypal, but mostly because you get $25 from Paypal for spending at least $25 or more on your first crypto purchase with them. 58 cent transaction fee. I'll cross my fingers and hope it goes up to $25.58 before selling. LOL
Title: Re: Bitcoin is funny money
Post by: BicycleB on May 12, 2021, 05:13:29 PM
Big money, big money!
Title: Re: Bitcoin is funny money
Post by: onecoolcat on May 12, 2021, 06:11:49 PM
Big money, big money!

Quoted for posterity.  Bitcoin is at $47,500 (down 17%) following a tweet by Elon Musk re environmental impacts of Bitcoin mining; Tesla no longer to accept Bitcoin as payment for vehicles.
Title: Re: Bitcoin is funny money
Post by: talltexan on May 13, 2021, 09:25:16 AM
That statement by Musk is so transparently cynical because he's not citing anything he shouldn't have known before Tesla committed more than $1 billion of cash to Bitcoin earlier in the year.

I'm sorry that it's down, but I do not think anyone with familiarity with the currency can complain about a 20% drop that happens in six hours.
Title: Re: Bitcoin is funny money
Post by: Telecaster on May 13, 2021, 09:37:11 AM
That statement by Musk is so transparently cynical because he's not citing anything he shouldn't have known before Tesla committed more than $1 billion of cash to Bitcoin earlier in the year.

It is obviously bullshit.  He is just now becoming aware of the environmental costs?  That's "puppy ate my homework" level of BS.   

The real reasons are far more likely that it was a big pain to accept Bitcoin and no one was doing it anyway. 
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on May 13, 2021, 09:41:20 AM
That statement by Musk is so transparently cynical because he's not citing anything he shouldn't have known before Tesla committed more than $1 billion of cash to Bitcoin earlier in the year.

I'm sorry that it's down, but I do not think anyone with familiarity with the currency can complain about a 20% drop that happens in six hours.

It's not a pump and dump scam by a Twitter influencer if they have a good reason.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on May 13, 2021, 10:35:20 AM
It was a publicity stunt.  Elon is planning something but I don’t know what it is.  I just hope it’s something helpful, like to push his solar agenda, as opposed to pumping Dogecoin again.  He is a double-edged blade, that is for sure.  In the end, I suspect that this is not the end of the bull run.  Things in crypto have just been absolutely nuts this cycle so another cooling off period is not a bad thing (especially for Ethereum which was $200 last year and is sitting at $3800 now).
Title: Re: Bitcoin is funny money
Post by: the_gastropod on May 13, 2021, 12:05:02 PM
The real reasons are far more likely that it was a big pain to accept Bitcoin and no one was doing it anyway.

While that's also probably true, I suspect he was facing having Tesla stock dropped from ESG funds. Elon does not care one iota about the environment, but he sure does care about money. He did the math, and assessed the loss of being dropped from ESG to be greater than what his pump-and-dump money printing machine could produce.
Title: Re: Bitcoin is funny money
Post by: Telecaster on May 13, 2021, 03:39:57 PM
Here's a good reason to own Bitcoin.  If you are victim of a ransomeware attack, you can use it to pay off the attack.

https://finance.yahoo.com/news/colonial-pipeline-paid-hackers-nearly-141548661.html
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 14, 2021, 06:23:19 AM
Here's a good reason to own Bitcoin.  If you are victim of a ransomeware attack, you can use it to pay off the attack.

https://finance.yahoo.com/news/colonial-pipeline-paid-hackers-nearly-141548661.html
Wasn't bitcoin.  Bitcoin is not "difficult-to-trace" - that's a common misconception.  You may not know who has it, but it can still be tracked and often is.
Title: Re: Bitcoin is funny money
Post by: JLee on May 14, 2021, 08:36:17 AM
Here's a good reason to own Bitcoin.  If you are victim of a ransomeware attack, you can use it to pay off the attack.

https://finance.yahoo.com/news/colonial-pipeline-paid-hackers-nearly-141548661.html
Wasn't bitcoin.  Bitcoin is not "difficult-to-trace" - that's a common misconception.  You may not know who has it, but it can still be tracked and often is.

https://www.nytimes.com/2021/05/13/technology/colonial-pipeline-ransom.html

"Colonial Pipeline paid 75 Bitcoin, or roughly $5 million, to hackers."
Title: Re: Bitcoin is funny money
Post by: talltexan on May 14, 2021, 09:50:18 AM
Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.
Title: Re: Bitcoin is funny money
Post by: JLee on May 14, 2021, 10:15:54 AM
Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.

Do you work there or something..? I have seen no news reports of this.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on May 14, 2021, 10:18:04 AM
Seems relevant... https://krebsonsecurity.com/2021/05/darkside-ransomware-gang-quits-after-servers-bitcoin-stash-seized/
Title: Re: Bitcoin is funny money
Post by: talltexan on May 14, 2021, 12:01:23 PM
Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.

Do you work there or something..? I have seen no news reports of this.

I don't have inside information, simply putting forward a theory because the Bitcoin ledger is fully transparent, and I can't see how a bad actor would accept a payment there and have any ability to use it.
Title: Re: Bitcoin is funny money
Post by: crimp on May 14, 2021, 01:38:51 PM
Colonial pipeline could have reported the transaction in Bitcoin, but what they actually did was use their Bitcoin to buy an alternative currency--such as monero--to carry out the transfer.

Do you work there or something..? I have seen no news reports of this.

I don't have inside information, simply putting forward a theory because the Bitcoin ledger is fully transparent, and I can't see how a bad actor would accept a payment there and have any ability to use it.

More likely: they accept Bitcoin at a public address. They then send this Bitcoin through a mixing service (read: money launderer) hosted in a favorable jurisdiction. The transactions are still in the ledger, but it takes significantly more work (i.e. cooperation from the mixing service) to determine the mappings of input transactions to output transactions with confidence.

Why not just use ZCash/Monero? My guess is customer service. The decision makers responsible for making payments are much more likely to be able to follow the (simpler) instructions to buy Bitcoin than to be able to obtain your favorite privacy alt-coin.
Title: Re: Bitcoin is funny money
Post by: DaKini on May 19, 2021, 07:10:49 AM
Time for popcorn!
-20%, compared to yesterday. Coinbase website not reachable from here.
Title: Re: Bitcoin is funny money
Post by: Northman on May 19, 2021, 08:24:23 AM
Wow a touch at 30k today. Over -50% from ATH. The chart looks now exactly like this (we are just at the fear stage):

https://transportgeography.org/contents/chapter3/transportation-and-economic-development/bubble-stages/
Title: Re: Bitcoin is funny money
Post by: simonsez on May 19, 2021, 10:57:41 AM
Elon does not care one iota about the environment
He tried to sit down with the Biden administration to initiate talks about a carbon tax but was turned away due to the idea being too politically difficult right now.  He talked about this on Rogan admitting it would hurt his bottom line on SpaceX.

Title: Re: Bitcoin is funny money
Post by: DaKini on May 23, 2021, 10:44:25 AM
Cryptos still on the decline. Is this the avalanche?
Title: Re: Bitcoin is funny money
Post by: GuitarStv on May 23, 2021, 03:59:52 PM
Cryptos still on the decline. Is this the avalanche?

As long as they're above zero people are massively overpaying.
Title: Re: Bitcoin is funny money
Post by: JLee on May 23, 2021, 04:05:40 PM
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.
Title: Re: Bitcoin is funny money
Post by: Telecaster on May 23, 2021, 04:38:48 PM
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read. 
Title: Re: Bitcoin is funny money
Post by: GuitarStv on May 23, 2021, 04:54:26 PM
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read.

Agreed!
Title: Re: Bitcoin is funny money
Post by: boarder42 on May 23, 2021, 06:42:09 PM
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read.

Agreed!

Been telling my good friends for years it's more like the tulip bubble.  When you own companies adding value I don't have to place bets on what currency may supplant the dollar bc the value of what i own will just pivot to a different currency and still have similar buying power.

This is a great article I have no idea what's true in it but if it is it makes alot of sense.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on May 23, 2021, 09:40:38 PM
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3


This is well worth the read.

That was a great read.

Agreed!

Been telling my good friends for years it's more like the tulip bubble.  When you own companies adding value I don't have to place bets on what currency may supplant the dollar bc the value of what i own will just pivot to a different currency and still have similar buying power.

This is a great article I have no idea what's true in it but if it is it makes alot of sense.

I never understood the comparison to tulip mania.  I think its more akin to the Dot Com Bubble but in the future it will have its own name because nothing is really a good comparable.  I mean, what other asset blows up every 3 years and then crashes to a higher low?  When more regulation comes it might look more a Dot Com bubble and knock out all the scam coins (the majority of coins).  Prices will suffer initially but regulations ultimately bring confidence so it the long-run its a win.
Title: Re: Bitcoin is funny money
Post by: DaKini on May 24, 2021, 05:14:34 AM
What is the current state of matters re tether?
Title: Re: Bitcoin is funny money
Post by: talltexan on May 24, 2021, 07:50:59 AM
So is the smarter play to design a long strategy for benefiting from the tether-originating high and low cycles (variation means profitability)? Or to design a short strategy to aggressively attack this transparently bogus peg to the USD that tether is claiming?
Title: Re: Bitcoin is funny money
Post by: BicycleB on May 24, 2021, 08:04:40 AM
What is the current state of matters re tether?

I wondered that too!

After scanning a few results from Googling "tether may 2021 cryto":
-Tether made a settlement "recently" with New York State Attorney General's office
-Settlement included some increased disclosure
-Tether admitted it's not backed by 100% reserves
-Tether stated it's got 74% of its coins backed (at the time of the settlement, I guess)
-Tether stated that most of its reserves are in commercial paper, not cash (which in theory might explain the variance between the Bahamas cash amount and the amount needed to fulfill the 74% claim)
-Actual cash (not the claimed commercial paper) apparently constituted only 2.9% of Tether stablecoins' notional value

Thoughts:
-As commenters on Twitter point out, obviously this means Tether is at best operating as an unregulated bank using fractional reserves, thus vulnerable to bank runs
-If the theory that it's a scam is true, implying that there's not really any any commercial paper, the Ponzi scheme is pretty thin!
-If NY AG verified that the commercial paper is real, the reserves are much better and it might not be a pure scam; but unregulated and vulnerable to runs on the "bank" is still not, well, a very "stable" coin :)

See section "Tether is exposed":
https://www.fool.com/investing/2021/05/20/crypto-crash-bitcoin-ethereum-and-dogecoin-are-plu/
(article links to a Financial Times underlying article, but I think underlying is paywalled)
Title: Re: Bitcoin is funny money
Post by: scottish on May 24, 2021, 10:11:09 AM
So is the smarter play to design a long strategy for benefiting from the tether-originating high and low cycles (variation means profitability)? Or to design a short strategy to aggressively attack this transparently bogus peg to the USD that tether is claiming?

Better play is to stay the f**k away from the whole mess.    Tether is probably just one of several running scams around cryptocurrencies.

When things finally collapse, they're going to collapse very quickly.   So unless you're doing it for entertainment...
Title: Re: Bitcoin is funny money
Post by: Telecaster on May 24, 2021, 11:10:22 AM
-Tether stated that most of its reserves are in commercial paper, not cash (which in theory might explain the variance between the Bahamas cash amount and the amount needed to fulfill the 74% claim)
-Actual cash (not the claimed commercial paper) apparently constituted only 2.9% of Tether stablecoins' notional value

Google tells me Tether's market cap is $58 billion.  I'm skeptical they are holding anything close to the amount of commercial paper they claim.  That's a whopping amount of money.   
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 24, 2021, 12:28:42 PM
This scam stuff is just old an uninformed.  But, I'm sure y'all know better than NYAG or the millions of people who are actually putting their money into Tether.

Congrats MMM, you cracked the case.
Title: Re: Bitcoin is funny money
Post by: JLee on May 24, 2021, 12:33:48 PM
This scam stuff is just old an uninformed.  But, I'm sure y'all know better than NYAG or the millions of people who are actually putting their money into Tether.

Congrats MMM, you cracked the case.

Well, millions of people are idiots. Do you have any proof or evidence of your assertions to share with the class?
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 24, 2021, 12:38:34 PM
I think NYAG covered all of that.  BicycleB gave a nice summary.

Saying it's a scam is not a logical conclusion of you not understanding it or seeing the value
Title: Re: Bitcoin is funny money
Post by: JLee on May 24, 2021, 12:57:19 PM
I think NYAG covered all of that.  BicycleB gave a nice summary.

Saying it's a scam is not a logical conclusion of you not understanding it or seeing the value

Are we reading the same thing?

What is the current state of matters re tether?

I wondered that too!

After scanning a few results from Googling "tether may 2021 cryto":
-Tether made a settlement "recently" with New York State Attorney General's office
-Settlement included some increased disclosure
-Tether admitted it's not backed by 100% reserves
-Tether stated it's got 74% of its coins backed (at the time of the settlement, I guess)
-Tether stated that most of its reserves are in commercial paper, not cash (which in theory might explain the variance between the Bahamas cash amount and the amount needed to fulfill the 74% claim)
-Actual cash (not the claimed commercial paper) apparently constituted only 2.9% of Tether stablecoins' notional value

Thoughts:
-As commenters on Twitter point out, obviously this means Tether is at best operating as an unregulated bank using fractional reserves, thus vulnerable to bank runs
-If the theory that it's a scam is true, implying that there's not really any any commercial paper, the Ponzi scheme is pretty thin!
-If NY AG verified that the commercial paper is real, the reserves are much better and it might not be a pure scam; but unregulated and vulnerable to runs on the "bank" is still not, well, a very "stable" coin :)

See section "Tether is exposed":
https://www.fool.com/investing/2021/05/20/crypto-crash-bitcoin-ethereum-and-dogecoin-are-plu/
(article links to a Financial Times underlying article, but I think underlying is paywalled)
Quote from: https://www.fool.com/investing/2021/05/20/crypto-crash-bitcoin-ethereum-and-dogecoin-are-plu/
That's how it was supposed to work. We now know it doesn't always work that way.

Stablecoin leader Tether (CRYPTO:USDT) has long claimed that each individual tether was backed 1:1 by traditional currencies. It later admitted to tethers being only 74% backed by fiat equivalents.

Things got even worse after Tether was forced to supply more information about its reserves as part of its recent settlement with the New York Attorney General's Office. Tether now says its reserves were less than 10% backed by cash and treasury bills, with roughly half of its reserves comprised of commercial paper from undisclosed companies.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 24, 2021, 01:16:30 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.
Title: Re: Bitcoin is funny money
Post by: JLee on May 24, 2021, 01:22:15 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.

The first post to say scam in the context of Tether was the very post you refer to as proof in your claim that it isn't a scam. Ironic, isn't it?
Title: Re: Bitcoin is funny money
Post by: the_gastropod on May 24, 2021, 01:26:17 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.

I guess we'll all learn at some point. But if you think it's legit that Tether holds more corporate paper than Vanguard, your spidy-sense for fraud is clearly less sensitive than mine. I'd also urge you to check out the graph of the price of USDT over the past ~1.5 months, which includes the period of time the NYAG was investigating them. You can see it yourself here (https://coinmarketcap.com/currencies/tether/). If this looks legit to you, well.... that's interesting.

Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 24, 2021, 01:40:55 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.

The first post to say scam in the context of Tether was the very post you refer to as proof in your claim that it isn't a scam. Ironic, isn't it?
The medium article calls it a fraud. There are a number of things the author doesn't understand (e.g. printing in round numbers, correlation and not causation, the deposit account structure).

And oh BTW, Tether just printed another 3B in the past few days.

I don't even care about Tether, but the same false arguments come up again and again.
Title: Re: Bitcoin is funny money
Post by: JLee on May 24, 2021, 01:44:38 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.

The first post to say scam in the context of Tether was the very post you refer to as proof in your claim that it isn't a scam. Ironic, isn't it?
The medium article calls it a fraud. There are a number of things the author doesn't understand (e.g. printing in round numbers, correlation and not causation, the deposit account structure).

And oh BTW, Tether just printed another 3B in the past few days.

I don't even care about Tether, but the same false arguments come up again and again.

Then debunk it instead of handwaving ;)
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 24, 2021, 01:45:13 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.

I guess we'll all learn at some point. But if you think it's legit that Tether holds more corporate paper than Vanguard, your spidy-sense for fraud is clearly less sensitive than mine. I'd also urge you to check out the graph of the price of USDT over the past ~1.5 months, which includes the period of time the NYAG was investigating them. You can see it yourself here (https://coinmarketcap.com/currencies/tether/). If this looks legit to you, well.... that's interesting.
There might be a scale issue here.  Most of the time it trades in the 99-101 range.  It's not perfect, but that's good enough for most people.  I don't know why it was more flat for a month there.  NYAG has been on them for years.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 24, 2021, 01:48:00 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.

The first post to say scam in the context of Tether was the very post you refer to as proof in your claim that it isn't a scam. Ironic, isn't it?
The medium article calls it a fraud. There are a number of things the author doesn't understand (e.g. printing in round numbers, correlation and not causation, the deposit account structure).

And oh BTW, Tether just printed another 3B in the past few days.

I don't even care about Tether, but the same false arguments come up again and again.

Then debunk it instead of handwaving ;)
https://bitcoinmagazine.com/markets/debunking-misconceptions-from-the-bit-short-inside-cryptos-doomsday-machine
https://danheld.substack.com/p/dont-fear-tether
https://medium.com/@nic__carter/assessing-bitcoins-liquidity-with-coinlib-data-is-indefensible-3e5fdad51646
Title: Re: Bitcoin is funny money
Post by: JLee on May 24, 2021, 02:05:39 PM
Saying there are risks in Tether is different than calling it a scam.

In the past few days, another 3B was printed.  So they took in 3B in deposits, and then do what they do to earn the yield.  It's not quite fractional reserve, as they aren't creating extra money based on deposits - it's that the deposits are not 100% sitting in a bank somewhere.  I agree, they are unregulated and vulnerable to a run.  Still doesn't make it a scam though.

And in the volatility, the peg has been maintained.  So, pretty stable all things considered.

The first post to say scam in the context of Tether was the very post you refer to as proof in your claim that it isn't a scam. Ironic, isn't it?
The medium article calls it a fraud. There are a number of things the author doesn't understand (e.g. printing in round numbers, correlation and not causation, the deposit account structure).

And oh BTW, Tether just printed another 3B in the past few days.

I don't even care about Tether, but the same false arguments come up again and again.

Then debunk it instead of handwaving ;)
https://bitcoinmagazine.com/markets/debunking-misconceptions-from-the-bit-short-inside-cryptos-doomsday-machine
https://danheld.substack.com/p/dont-fear-tether
https://medium.com/@nic__carter/assessing-bitcoins-liquidity-with-coinlib-data-is-indefensible-3e5fdad51646

From your first link:
Quote
Again, Tether Limited is a black box and we cannot say for certain how it manages its business

From your second link:
Quote
I want to note that I feel weird defending Tether and Bitfinex. I don’t particularly like either company, as they’ve done a ton of shady things over the years. I am not vouching for the long term durability of either company.

The third link basically seems to be saying "offshore crypto stuff is so shady that we can't trust the numbers to be accurate."

If not definitively fraud, this absolutely reeks of the potential. They surely didn't get an $18.5 million fine (https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf) by being on the up and up.
Title: Re: Bitcoin is funny money
Post by: JAYSLOL on May 27, 2021, 10:13:04 PM
Honestly we must be getting near peak crypto bubble, I literally can’t go anywhere without hearing about crypto from the 20-30 year olds with entry level jobs crowd including people I work with, yesterday three kids stocking shelves at the grocery store, the attendant at the gas station and a customer, and people I know on Facebook who I wouldn’t peg as experienced investors. 
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on May 27, 2021, 11:19:18 PM
Honestly we must be getting near peak crypto bubble, I literally can’t go anywhere without hearing about crypto from the 20-30 year olds with entry level jobs crowd including people I work with, yesterday three kids stocking shelves at the grocery store, the attendant at the gas station and a customer, and people I know on Facebook who I wouldn’t peg as experienced investors.

So you're annoyed the inexperienced plebs have a seat at the table?  To me that's its strength.
Title: Re: Bitcoin is funny money
Post by: DaKini on May 28, 2021, 02:01:00 AM
So you're annoyed the inexperienced plebs have a seat at the table?  To me that's its strength.

Strength? If random people buy an asset because "it always goes up"?
For me it's pretty obvious from the chart, that we are currently in the milking phase, where the last round of fresh money is moving from those plebs up the pyramid.
Title: Re: Bitcoin is funny money
Post by: JAYSLOL on May 28, 2021, 03:34:07 AM
Honestly we must be getting near peak crypto bubble, I literally can’t go anywhere without hearing about crypto from the 20-30 year olds with entry level jobs crowd including people I work with, yesterday three kids stocking shelves at the grocery store, the attendant at the gas station and a customer, and people I know on Facebook who I wouldn’t peg as experienced investors.

So you're annoyed the inexperienced plebs have a seat at the table?  To me that's its strength.

Not annoyed, I find it sad to be honest.  Too many people who aren't in a position to lose money likely will, including a bunch of people I know who are getting in late and really deep.  I have no skin in the game (anymore, I did play with it years ago to learn about it, but have no desire to continue).  People can do whatever they want with their money, it doesn't annoy me.  I'm not offended by newbies getting into investing (which crypto isn't, I'd be kind calling it speculation), but when everyone including the guy who pumps gas (or shines shoes?) has plied on the latest trend it doesn't usually end well.  I think you might be mistaking "strength" for "whats good for me, since i got in earlier"
Title: Re: Bitcoin is funny money
Post by: talltexan on May 28, 2021, 07:08:23 AM
My system told me to buy this morning, so I put some in (although less than the system said to do). Hoping for one more "puff" at the cigar.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 28, 2021, 07:32:43 AM
Honestly we must be getting near peak crypto bubble, I literally can’t go anywhere without hearing about crypto from the 20-30 year olds with entry level jobs crowd including people I work with, yesterday three kids stocking shelves at the grocery store, the attendant at the gas station and a customer, and people I know on Facebook who I wouldn’t peg as experienced investors.
I see you your blue-collar and raise you white-collar with Ray Dalio, Carl Icahn and Stanley Druckenmiller.

Come for the memes and gainz, stay for the financial freedom.
Title: Re: Bitcoin is funny money
Post by: JAYSLOL on May 28, 2021, 08:13:49 AM
Honestly we must be getting near peak crypto bubble, I literally can’t go anywhere without hearing about crypto from the 20-30 year olds with entry level jobs crowd including people I work with, yesterday three kids stocking shelves at the grocery store, the attendant at the gas station and a customer, and people I know on Facebook who I wouldn’t peg as experienced investors.
I see you your blue-collar and raise you white-collar with Ray Dalio, Carl Icahn and Stanley Druckenmiller.

Come for the memes and gainz, stay for the financial freedom.

Financial freedom on the backs of the guys stocking the grocery store shelves?  Nah, I’ll pass.  The memes sure are fun though
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 28, 2021, 08:33:02 AM
Honestly we must be getting near peak crypto bubble, I literally can’t go anywhere without hearing about crypto from the 20-30 year olds with entry level jobs crowd including people I work with, yesterday three kids stocking shelves at the grocery store, the attendant at the gas station and a customer, and people I know on Facebook who I wouldn’t peg as experienced investors.
I see you your blue-collar and raise you white-collar with Ray Dalio, Carl Icahn and Stanley Druckenmiller.

Come for the memes and gainz, stay for the financial freedom.

Financial freedom on the backs of the guys stocking the grocery store shelves?  Nah, I’ll pass.  The memes sure are fun though
I think you misunderstood.  Financial freedom for them also.

The screws on the middle-class have been tightening the last 50 years.  That grocery worker likely works 32 hours a week (not 40, to get around labor laws), does not have a set schedule, and is making less in real wages than 30 years ago.  Their savings have been continually debased in favor of the rich.

So, yeah, them gambling on stupid shit is a symptom of the broader economic problem.  Perhaps they stick with Bitcoin, because the current system certainly isn't working for them.
Title: Re: Bitcoin is funny money
Post by: JAYSLOL on May 28, 2021, 04:46:10 PM
Honestly we must be getting near peak crypto bubble, I literally can’t go anywhere without hearing about crypto from the 20-30 year olds with entry level jobs crowd including people I work with, yesterday three kids stocking shelves at the grocery store, the attendant at the gas station and a customer, and people I know on Facebook who I wouldn’t peg as experienced investors.
I see you your blue-collar and raise you white-collar with Ray Dalio, Carl Icahn and Stanley Druckenmiller.

Come for the memes and gainz, stay for the financial freedom.

Financial freedom on the backs of the guys stocking the grocery store shelves?  Nah, I’ll pass.  The memes sure are fun though
I think you misunderstood.  Financial freedom for them also.

The screws on the middle-class have been tightening the last 50 years.  That grocery worker likely works 32 hours a week (not 40, to get around labor laws), does not have a set schedule, and is making less in real wages than 30 years ago.  Their savings have been continually debased in favor of the rich.

So, yeah, them gambling on stupid shit is a symptom of the broader economic problem.  Perhaps they stick with Bitcoin, because the current system certainly isn't working for them.

So it’ll just be someone else further down that loses their shirt.  Crypto is a zero sum game, there’s no value being created by owning the coin itself (yes I get the that use of the coin provides a certain value, but holding it doesn’t create value the way actual stocks or real estate would).  I agree there are economic issues with everything from labour rights, wages, economic inequality etc.  I fail to see how someone facing the brunt of those issues is better off risking what little they can accumulate into crypto.
Title: Re: Bitcoin is funny money
Post by: SoBurntImCharred on May 28, 2021, 06:28:36 PM
This forum has been great for me. I've gone from an extreme negative net worth and crippling feelings of despair to incorporating sound personal finance principles and working towards financial independence. The advice on this forum has been right about almost everything; but in my humble opinion, is dead wrong about Bitcoin. Ultimately, investments are a personal choice, and I live with the consequences, but I sure wish I would've investigated Bitcoin more when I was interested in it years ago.

Bitcoin has a tremendous use case as a store of wealth and an unseizable asset. It is not intended to create value, but rather to store value. If you are expecting it to create value, then you are thinking like a short-term speculator. In the long term, Bitcoin will take a big bite out of the market capitalization of gold, bonds, and other wealth-preserving assets. It is not intended to perform like an equity. The volatility associated with it currently is a simple reflection of the risk/reward relationship playing out for early adopters.

Not a single person that has ever held Bitcoin for a four-year span has ever lost money. Institutional money is piling into the space. The days of considering Bitcoin a ponzi scheme are over.

I hope newbies reading this forum feel compelled to do a little digging and consider alternate opinions. In particular, read the humanitarian cases for Bitcoin written by Alex Gladstein. As a forum that is designed to advocate for sound financial management, I would hope that we'd be able to call out our government's mismanagement when appropriate.

Cheers
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on May 28, 2021, 07:45:37 PM
Bitcoin has a tremendous use case as a store of wealth and an unseizable asset. It is not intended to create value, but rather to store value. If you are expecting it to create value, then you are thinking like a short-term speculator. In the long term, Bitcoin will take a big bite out of the market capitalization of gold, bonds, and other wealth-preserving assets. It is not intended to perform like an equity.

I suspect the use case for crypto as a store of wealth is related to the low - now negative - real yield on safe assets like 10 year treasuries. These treasury assets are no longer "safe" when they guarantee a loss of purchasing power, and when bond convexity means huge losses in the event of small interest rate increases. I wonder how the enthusiasm for crypto would hold up if we returned to 2% - 4% real yields on treasuries like we had in the not too distant past. 

(https://www.mymoneyblog.com/wordpress/wp-content/uploads/2019/08/Screen-Shot-2019-08-27-at-4.21.00-PM.png)

But yes, 99% of crypto investors are not in it as an alternative to treasuries, they're into it for speculation. And no, I'm under no illusions about the lack of real returns on safe assets being a rationale for their speculation - "it went up astronomically in the past" is a good enough rationale for most.
Title: Re: Bitcoin is funny money
Post by: JAYSLOL on May 28, 2021, 10:47:08 PM
See, this is what confuses me about crypto, the argument that people will use it as a store of wealth.  No, I don’t think they will.  Literally nobody I’ve met is in crypto to store their wealth, they’re in it to go “to the moon”, so the moment a coin becomes a store of wealth rather than speculation/gambling my guess is they’re all out.  That goes for everyone from the teenager that doesn’t have much wealth to store anyways, right on up to the institutional investors, a company taking a stake in a coin isn’t going to bother if it just means preserving their capital, they’re only in it to ride the bubble upwards.  Bubble isn’t expanding anymore?  They’ll find another place to park their capital
Title: Re: Bitcoin is funny money
Post by: effigy98 on May 28, 2021, 11:00:00 PM
Literally nobody I’ve met is in crypto to store their wealth

I store a part of my wealth in crypto... Dollar cost average on an automated schedule over 5 years. Get massive interest payments from BlockFi which is larger then my cost basis of the original crypto by a large margin... But I guess NOBODY stores their wealth in crypto. I also know a lot of people who do the same, but I live in a tech hub so maybe that is the difference.

What really convinced me to do this was the power of diversified asset classes as in the https://portfoliocharts.com/portfolio/golden-butterfly/. You add a little BTC and ETH (say 6%) to your asset allocation and it really improves your risk / reward ratio. The volatility actually becomes a benefit as you rebalance when assets drift too much. You can backtest this with something like GBTC and get an idea why it is so valuable on portfoliovisualizer as an uncorrelated asset class. You have the moon potential as well, but that is just gravy imo.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on May 29, 2021, 07:00:58 AM
Literally nobody I’ve met is in crypto to store their wealth
Hi, nice to meet you.

I have a diversified portfolio of stocks, real estate, gold, art and bitcoin (but no bonds, as ChpBstrd rightly pointed out, we've been in a 40 year rate downtrend).  All working to store my wealth, and rotating amongst them as situations demand.

Do I think Bitcoin is going up?  Yes.  Would I hold it even if it wasn't?  Yes.  Why?  Sovereignty.  The same way that holding a gold coin in your hand feels magical, holding Bitcoin represents freedom.

And, be careful of no true Scotsman arguments: https://en.wikipedia.org/wiki/No_true_Scotsman
Title: Re: Bitcoin is funny money
Post by: scottish on May 29, 2021, 08:08:17 AM
Except I can bathe in my gold coins and feel their sensuous touch on my skin.

Can't do that with a crypto token!
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on May 29, 2021, 10:50:47 AM
The unseizability is largely overrated anyway. If you write down your private key somewhere that physical medium can be seized. If you don't, nobody can take it from you but they can kill you and your coins will die with you. Or if you're ordered to turn over your coins to another party to repay your creditors a judge isn't going to be too pleased with you if you say "no." If you'd rather sit in jail for contempt of court than hand over your coins I guess that's an option available to you, but it's not a great option.
Title: Re: Bitcoin is funny money
Post by: SoBurntImCharred on May 29, 2021, 12:16:35 PM
Thanks for the thoughtful responses.

ChpBstrd, I agree that a 4%+ real yield on safe assets would diminish the appeal of Bitcoin to some degree by those seeking a safe haven. I think a general criticism of our financial system right now is that it overly penalizes savers to the benefit of investors/speculators. Look no further than our obsession with sequence of return risk, or the political discourse surrounding the economy on any given day. An updated chart shows real yields that have been struggling to break 1% over the last decade and are currently negative. https://www.yardeni.com/pub/nomrealyield.pdf (https://www.yardeni.com/pub/nomrealyield.pdf)

To those that would discount its value due to being mostly unseizable, I would again strongly suggest that you search for Alex Gladstein's commentary, starting with the following: https://bitcoinmagazine.com/culture/check-your-financial-privilege (https://bitcoinmagazine.com/culture/check-your-financial-privilege). From the article:

"The critics cited above are all wealthy citizens of advanced economies, where they benefit from liberal democracy, property rights, free speech, a functioning legal system and relatively stable reserve currencies like the dollar or pound.

In reality, only 13% of our planet’s population is born into the dollar, euro, Japanese yen, British pound, Australian dollar, Canadian dollar or Swiss Franc. The other 87% are born into autocracy or considerably less trustworthy currencies. 4.3 billion people live under authoritarianism, and 1.2 billion people live under double- or triple-digit inflation.

Critics in the dollar bubble miss the bigger global picture: that anyone with access to the internet can now participate in Bitcoin, a new money system with equal rules for all participants, running on a network that does not censor or discriminate, used by individuals who do not need to show a passport or an ID and held by citizens in a way that is hard to confiscate and impossible to debase."

Other common objections to Bitcoin, both of which I've harbored at some point in my personal past and have had to reconcile, include (1) the moral/ethical concerns of a currency that can operate outside of regulatory reach and (2) the environmental impact of its proof-of-work model. Without turning this post into more of a novel, please consider the amount of crime conducted in US dollars, the despair imposed on lower classes by an economic system that hollows out our economy, the needless wars that we've been involved with for decades at great human and capital cost, the energy requirements of a military industrial complex and banking system that perpetuate the current system, and the benefits of an alternate system that could economically incentive green energy development in any remote region with an internet connection.

I readily admit that all of the above will make me appear as just another shill. I also acknowledge extreme volatility that requires caution. I only suggest entertaining the idea that Bitcoin has worth beyond being viewed as a 21st century tulip.
Title: Re: Bitcoin is funny money
Post by: SoBurntImCharred on May 29, 2021, 12:32:26 PM
Would I hold it even if it wasn't?  Yes.  Why?  Sovereignty.  The same way that holding a gold coin in your hand feels magical, holding Bitcoin represents freedom.

Bitcoin is FreedomCoin, and I'm bullish on freedom long-term.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on May 29, 2021, 04:41:02 PM
If you don't, nobody can take it from you but they can kill you and your coins will die with you.

I think this is usually seen as a feature, not a bug.  People who hold bitcoin benefit when there's less bitcoin . . . so as people die and their keys/coins are lost they win.  This is the scenario that a bitcoin 'investor' should be rooting for.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on May 29, 2021, 04:46:18 PM
If you don't, nobody can take it from you but they can kill you and your coins will die with you.

I think this is usually seen as a feature, not a bug.  People who hold bitcoin benefit when there's less bitcoin . . . so as people die and their keys/coins are lost they win.  This is the scenario that a bitcoin 'investor' should be rooting for.

Other people's bitcoins disappearing is a feature. My bitcoins disappearing instead of passing on to my heirs is a bug. :-)

There is a fundamental problem here, because everything you might do to ensure your coins can pass along to your intended recipients (such as writing the private key down in multiple places they're sure to find it) will also make it more likely for the key to fall into the wrong hands and for your coins to be irrevocably stolen.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on May 29, 2021, 04:53:08 PM
If you don't, nobody can take it from you but they can kill you and your coins will die with you.

I think this is usually seen as a feature, not a bug.  People who hold bitcoin benefit when there's less bitcoin . . . so as people die and their keys/coins are lost they win.  This is the scenario that a bitcoin 'investor' should be rooting for.

Other people's bitcoins disappearing is a feature. My bitcoins disappearing instead of passing on to my heirs is a bug. :-)

There is a fundamental problem here, because everything you might do to ensure your coins can pass along to your intended recipients (such as writing the private key down in multiple places they're sure to find it) will also make it more likely for the key to fall into the wrong hands and for your coins to be irrevocably stolen.

Every person who owns bitcoin belives himself to be smarter than every other person who owns bitcoin though . . . so this is really going to be seen as a feature.  Surely you will never be so stupid as to end up dying with your bitcoins disappearing forever.  That's for those dumb bitcoin holders . . .
Title: Re: Bitcoin is funny money
Post by: SoBurntImCharred on May 29, 2021, 05:22:25 PM
I understand the skepticism; again, I was there. This is also not 2011 anymore, though. Please research casa wallets for an example of multisig security.

I would argue that if you have a significant sum allocated, that you would educate your beneficiaries on how to retrieve the coins.

Regarding the example given of potential prison time for not surrendering keys, I suppose we should feel grateful that we haven't faced that scenario? If you were facing that scenario, would you rather have your assets in a bank?

I haven't seen many people arguing that they're smarter than others for investing in Bitcoin, perhaps just that they're more open-minded or even lucky that they stumbled into it. On the contrary, I've seen many argue that they are smarter for not investing in it.
Title: Re: Bitcoin is funny money
Post by: Telecaster on May 29, 2021, 06:12:55 PM
Without turning this post into more of a novel, please consider the amount of crime conducted in US dollars, the despair imposed on lower classes by an economic system that hollows out our economy, the needless wars that we've been involved with for decades at great human and capital cost, the energy requirements of a military industrial complex and banking system that perpetuate the current system, and the benefits of an alternate system that could economically incentive green energy development in any remote region with an internet connection.

The part I don't get is how Bitcoin changes anything.  Let's say everyone adopts Bitcoin tomorrow.  Does that mean there are no more banks?  No more payday loans?  No more loan sharks?  No more motivation for wars? 
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on May 29, 2021, 06:24:47 PM
I understand the skepticism; again, I was there. This is also not 2011 anymore, though. Please research casa wallets for an example of multisig security.

I would argue that if you have a significant sum allocated, that you would educate your beneficiaries on how to retrieve the coins.

Educating them on how to retrieve the coins will inherently cause more people to have access to your coins, and thereby increase the size of your potential attack surface. There's really no way around this.

Quote
Regarding the example given of potential prison time for not surrendering keys, I suppose we should feel grateful that we haven't faced that scenario? If you were facing that scenario, would you rather have your assets in a bank?

I would personally not choose incarceration over paying debts that my local authorities have judged that I owe. So for me it's no real difference. Either they seize the money out of my bank account or I give up my bitcoins to avoid a contempt charge. Either way the money is gone. Only if you'd choose incarceration (or whatever other punishment your authorities would see fit to impose) does bitcoin provide an advantage.
Title: Re: Bitcoin is funny money
Post by: SoBurntImCharred on May 29, 2021, 08:41:04 PM
The part I don't get is how Bitcoin changes anything.  Let's say everyone adopts Bitcoin tomorrow.  Does that mean there are no more banks?  No more payday loans?  No more loan sharks?  No more motivation for wars?

All good questions.

Banks provide a valuable service, but currently have an insane amount of unchecked power. Who was bailed out with taxpayer dollars during the great recession? It wasn't the debtors. What enabled that bailout? What enables the continuous liquidity infusions that are required to fund banks' speculation?

Payday loans and loan sharks. Does their prevalence correlate at all to financial despair among lower classes? Could real wages that are retreating relative to real costs contribute to that? What system contributes to that scenario?

Motivation for wars. This is a big one. What have our wars been about over the last several decades? Is it about spreading democracy to all? Are we worried about WMDs? Are we fighting for women's rights, as recently suggested in Afghanistan? Or, is it to maintain US hegemony and beat back any threats to the dollar as the global reserve currency? Do we have domestic interests that benefit greatly from going to war? If the dollar does lose its status as the global reserve currency, who stands to gain and who stands to lose?
Title: Re: Bitcoin is funny money
Post by: SoBurntImCharred on May 29, 2021, 08:56:28 PM
Educating them on how to retrieve the coins will inherently cause more people to have access to your coins, and thereby increase the size of your potential attack surface. There's really no way around this.
What's the argument here? For a single person, multisig authentication solves this. If worried about heirs, are you saying that you can't trust them during your life, but you want them to be able to access your money after your dead?

I'm sure there is a place for a drawn-out security argument, but I would simply say that the days of writing down a key somewhere on a piece of paper and being fucked if you lose it are over. If you have greater concerns with current security tools, I would suggest you speak with an expert to alleviate any concerns you have, just as you would with any asset.
Quote
I would personally not choose incarceration over paying debts that my local authorities have judged that I owe. So for me it's no real difference. Either they seize the money out of my bank account or I give up my bitcoins to avoid a contempt charge. Either way the money is gone. Only if you'd choose incarceration (or whatever other punishment your authorities would see fit to impose) does bitcoin provide an advantage.
And if you don't have the option of paying to avoid jail? And if you are wrongly accused/convicted? You don't have to value those use cases, but they exist.

Bitcoin may not be for you, but it's far from a tulip. The forum has a clear consensus on Bitcoin, but a dissenting voice is valuable, if for no other reason than to reaffirm your investment strategy.
Title: Re: Bitcoin is funny money
Post by: Telecaster on May 29, 2021, 11:26:56 PM
The part I don't get is how Bitcoin changes anything.  Let's say everyone adopts Bitcoin tomorrow.  Does that mean there are no more banks?  No more payday loans?  No more loan sharks?  No more motivation for wars?

All good questions.

Banks provide a valuable service, but currently have an insane amount of unchecked power. Who was bailed out with taxpayer dollars during the great recession? It wasn't the debtors. What enabled that bailout? What enables the continuous liquidity infusions that are required to fund banks' speculation?

Payday loans and loan sharks. Does their prevalence correlate at all to financial despair among lower classes? Could real wages that are retreating relative to real costs contribute to that? What system contributes to that scenario?

Motivation for wars. This is a big one. What have our wars been about over the last several decades? Is it about spreading democracy to all? Are we worried about WMDs? Are we fighting for women's rights, as recently suggested in Afghanistan? Or, is it to maintain US hegemony and beat back any threats to the dollar as the global reserve currency? Do we have domestic interests that benefit greatly from going to war? If the dollar does lose its status as the global reserve currency, who stands to gain and who stands to lose?

I see lots of questions, I don't see any answers.  Let me rephrase:  Let's say everyone adopts Bitcoin tomorrow.  Does that mean there are no more banks?  No more payday loans?  No more loan sharks?  No more motivation for wars?

You made some interesting claims. How, specifically does Bitcoin fix any of the problems you mentioned?  Again, we'll assume widepread adoption of Bitcoin. For example, if everyone was using Bitcoin exactly how would that mitigate despair among lower classes?
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on May 29, 2021, 11:39:51 PM
Educating them on how to retrieve the coins will inherently cause more people to have access to your coins, and thereby increase the size of your potential attack surface. There's really no way around this.
What's the argument here? For a single person, multisig authentication solves this. If worried about heirs, are you saying that you can't trust them during your life, but you want them to be able to access your money after your dead?

In some sense, yes. It's not that I expect the people named in my will to actively steal my coins, but more that they might fail to properly secure the keys, allowing them to pass into the hands of someone who would steal from me. The more people who have access to your keys, the more chances there are for someone in that chain of custody to mess up. Your security is only as strong as your weakest link.

What would it take to make sure that my coins don't go poof into the ether once I die? If it's just me dying, my wife gets everything. She'll need a way to get into my wallet when the time comes. I trust her, and I think she can make reasonable choices about computer security. What if she dies first? Next in line are my kids. They're not even in elementary school yet, so my sister would take custody of the kids and our money (until they turn 18). So now my sister needs to have a way to access my private keys too. What if my wife and kids and I all die together in a house fire or car crash or other tragic accident? This is reasonably possible and prudent to plan for. Next in line are my parents and in-laws, so now we've got four elderly people, known to leave passwords written on post-it notes in plain sight, who also need to be able to access my crypto wallet in an emergency.

Where to put the copies of the keys to keep them safe but also accessible to all those folks as needed? It would be great if they could all have a copy that they encrypted with a strong, unique password that they commit to memory so that there's no physical artifact that could fall into the wrong hands. That's a fantasy. Nobody's going to remember a password that they made years ago when their relative was writing their will. They'll need to have some instructions written down somewhere. Maybe we find a trusted third party (an estate lawyer or a bank safe deposit box) to give our keys to. Now we need to trust them not to lose the keys.

None of this is a concern with my IRA investments. I've told Vanguard who my beneficiaries are. Upon receiving my death certificate they'll do the right thing. If for some reason they don't do the right thing, we have a legal system that can generally sort it out.
Title: Re: Bitcoin is funny money
Post by: mjr on May 29, 2021, 11:53:58 PM
The forum has a clear consensus on Bitcoin

A clear consensus ????  Rofl.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on June 01, 2021, 07:19:25 AM
Imagine if a genie appeared and offered to tell you about a no-name small-cap stock in a boring industry that is destined return 20% per year for the next 20 years without anyone even noticing it. The catch is that if you ever gloat or promote it on the internet, your whole investment will disappear. Would you take the deal?

Yea, that's how I feel about investment ideas that require social media evangelists.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 09:39:46 AM
Imagine if a genie appeared and offered to tell you about a no-name small-cap stock in a boring industry that is destined return 20% per year for the next 20 years without anyone even noticing it. The catch is that if you ever gloat or promote it on the internet, your whole investment will disappear. Would you take the deal?

Yea, that's how I feel about investment ideas that require social media evangelists.
It doesn't require anything.  The few of us are in here are attempting to correct common misconceptions.  Go figure that on a message board about finance, a revolutionary financial invention would have some fans.

Although yes, as someone who has drank the kool-aid, I freely admit it does feel at times like religious zealotry.  Worshipping at the altar of math and sovereignty.  Have you heard the good news?
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 01, 2021, 10:06:49 AM
Imagine if a genie appeared and offered to tell you about a no-name small-cap stock in a boring industry that is destined return 20% per year for the next 20 years without anyone even noticing it. The catch is that if you ever gloat or promote it on the internet, your whole investment will disappear. Would you take the deal?

Yea, that's how I feel about investment ideas that require social media evangelists.
It doesn't require anything.  The few of us are in here are attempting to correct common misconceptions.  Go figure that on a message board about finance, a revolutionary financial invention would have some fans.

Although yes, as someone who has drank the kool-aid, I freely admit it does feel at times like religious zealotry.  Worshipping at the altar of math and sovereignty.  Have you heard the good news?

Right. But the zealotry of bitcoiners (and crypto enthusiasts, at large) isn't coincidental. As a zero-sum game, it's necessary. The revolutionary thing about cryptocurrency is that it's basically a distributed MLM. And MLM's have a reputation for being cult-like for a reason. Crypto takes this to the next level.

What's amazing reading through this thread is just how cult-like the responses are. There's not been a single articulation of a single concrete benefit of using cryptocurrency (beyond some deeeeeply hand-wavy extreme libertarian technobabble). And the "solutions" that are mentioned are solutions to problems cryptocurrency created in the first place (e.g., "oh, you should research double-x-extreme wallets, noob! It solves the whole leaving coins to your family problem!").

To use an analogy, cryptocurrency is basically like building homes out of oatmeal. Like... you could do it. And there'd be myriad problems doing this. But along the way, people could, for example, feasibly come up with a brick made out of oatmeal to solve the collapsing wall problem. And maybe for some people in countries where starvation is a massive problem, you could argue that it makes some sense to build homes out of oatmeal. But ultimately, it's a pretty ridiculous idea for the majority of people, innovative though it is.
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 01, 2021, 10:08:44 AM
Worshipping at the altar of math and sovereignty.  Have you heard the good news?

Lol no one is denying a) the math or b) sovereignty as a principle

That's the equivalent of me saying that I worship being healthy in a discussion about essential oils.

"Cum hoc ergo propter hoc" Bitcoin uses math, therefore it must be good!
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 10:15:24 AM
There's not been a single articulation of a single concrete benefit of using cryptocurrency (beyond some deeeeeply hand-wavy extreme libertarian technobabble).
::sigh::

1st, separate Bitcoin from everything else.
2nd, state-free money that is immune to seizure or debasement is a benefit in and of itself. 
3rd, you know what the #1 app in El Salvador is right now?  It's a remittance app, run on Bitcoin (https://strike.me/) .  Instead of paying 20% to Western Union, the receiver gets 99+% (not sure the exact number, but higher than 99%).

Maybe have another read of this:

To those that would discount its value due to being mostly unseizable, I would again strongly suggest that you search for Alex Gladstein's commentary, starting with the following: https://bitcoinmagazine.com/culture/check-your-financial-privilege (https://bitcoinmagazine.com/culture/check-your-financial-privilege). From the article:

"The critics cited above are all wealthy citizens of advanced economies, where they benefit from liberal democracy, property rights, free speech, a functioning legal system and relatively stable reserve currencies like the dollar or pound.

In reality, only 13% of our planet’s population is born into the dollar, euro, Japanese yen, British pound, Australian dollar, Canadian dollar or Swiss Franc. The other 87% are born into autocracy or considerably less trustworthy currencies. 4.3 billion people live under authoritarianism, and 1.2 billion people live under double- or triple-digit inflation.

Critics in the dollar bubble miss the bigger global picture: that anyone with access to the internet can now participate in Bitcoin, a new money system with equal rules for all participants, running on a network that does not censor or discriminate, used by individuals who do not need to show a passport or an ID and held by citizens in a way that is hard to confiscate and impossible to debase."
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 10:26:50 AM
Bitcoin uses math, therefore it must be good!
Not that it uses math so it must be good.  But, it uses math to verify with 100% certainty what has happened, and what will happen with the monetary policy, and that certainty is good.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 10:36:48 AM
Bitcoin is not intuitive, and takes a while to have it sink it and the light bulb go off.

For the detractors, I'm guessing there are large gaps in your knowledge in how it works.  I'd recommend taking this free course.
https://learn.saylor.org/course/view.php?id=468

If you still hate it at that point, god bless.  But at least you will have a full understanding of it.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 01, 2021, 10:41:23 AM
::sigh::

1st, separate Bitcoin from everything else.
Hmm?

2nd, state-free money that is immune to seizure or debasement is a benefit in and of itself. 

1. Why is that beneficial?
2. This, imo, fits pretty squarely into extreme libertarian technobabble
3. It's just not even true. Any moderately-size government with the interest to do so could quash any crytptocurrency it wanted with relatively little effort. Ignoring the most obvious and simple attack vectors (like regulating exchanges into oblivion, flatly criminalizing its use, etc.), obtaining enough compute power to execute a 51% attack is relative chump-change for a medium-large-ish government. Especially if you consider multiple governments might cooperate and work together on such a project.

3rd, you know what the #1 app in El Salvador is right now?  It's a remittance app, run on Bitcoin (https://strike.me/) .  Instead of paying 20% to Western Union, the receiver gets 99+% (not sure the exact number, but higher than 99%).

Cool. So like my oatmeal house idea, it's arguably useful as a better "bank" option than the banks in one of the worst-banked countries on the planet. Great.

Maybe have another read of this:
To those that would discount its value due to being mostly unseizable, I would again strongly suggest that you search for Alex Gladstein's commentary, starting with the following: https://bitcoinmagazine.com/culture/check-your-financial-privilege (https://bitcoinmagazine.com/culture/check-your-financial-privilege). From the article:

"The critics cited above are all wealthy citizens of advanced economies, where they benefit from liberal democracy, property rights, free speech, a functioning legal system and relatively stable reserve currencies like the dollar or pound.

In reality, only 13% of our planet’s population is born into the dollar, euro, Japanese yen, British pound, Australian dollar, Canadian dollar or Swiss Franc. The other 87% are born into autocracy or considerably less trustworthy currencies. 4.3 billion people live under authoritarianism, and 1.2 billion people live under double- or triple-digit inflation.

Critics in the dollar bubble miss the bigger global picture: that anyone with access to the internet can now participate in Bitcoin, a new money system with equal rules for all participants, running on a network that does not censor or discriminate, used by individuals who do not need to show a passport or an ID and held by citizens in a way that is hard to confiscate and impossible to debase."

I just don't even know where to begin on this.
- Us critics living in wealthy advanced economies are responding to proponents in wealthy advanced economies telling us about the greatest invention in mankind revolutionizing banking, and we can all get moon lambos if we just invest some money today!
- If it's useful in some place, great. It doesn't make it particularly good for anything else. It also doesn't mean it's an optimal solution in those circumstances—just better than absolute garbage.
- Citing things progressives usually care about (e.g., the global poor), while regurgitating Hayek economic nonsense that have historically only made those problems worse is a pretty funny strategy. This is, as I've stated several times now, just more Ron Swanson-esque über-libertarian silliness. To make matters worse, Bitcoin (et al) have a colossal carbon footprint—something that asymmetrically affects the very global poor crypto-enthusiasts like to exploit for cheap (and incorrect) talking points.
- How many oppressed people have reliable connections to the internet? And what can they do with this internet money when they need to use it? How?
- And once again, censorship, debase, confiscation.... all easily doable by any competent government with a motivation to do so.

Bitcoin is not intuitive, and takes a while to have it sink it and the light bulb go off.

For the detractors, I'm guessing there are large gaps in your knowledge in how it works.  I'd recommend taking this free course.
https://learn.saylor.org/course/view.php?id=468

If you still hate it at that point, god bless.  But at least you will have a full understanding of it.

Baaahahahahaha. This is another lovely cultish talking point. "You're just too stupid to understand the new magic. It's very sophisticated, and if you just were able to understand, believe me—you'd recognize how great it is!" This appeals to a certain class of human, in the same way most MLM's do. "You're too smart to work a 9-5! Be your own boss, and get out of corporate American greed!".

FWIW, I have a Computer Science degree from a reasonably respectable university I won't mention here. I have been a professional software engineer for 15 years. I have written my own little blockchain (back in 2011). I understand this better than your average grifter. I don't even know any experienced software engineers that have positive opinions of cryptocurrencies or blockchain in general. The hype is undue.
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 01, 2021, 10:46:58 AM
Bitcoin is not intuitive, and takes a while to have it sink it and the light bulb go off.

For the detractors, I'm guessing there are large gaps in your knowledge in how it works.  I'd recommend taking this free course.
https://learn.saylor.org/course/view.php?id=468

If you still hate it at that point, god bless.  But at least you will have a full understanding of it.

I know how Bitcoin works, both in theory and in practice. Not only that, I actually even have a personal wallet with BTC and ETH as well (I have even bought stuff with it in the past).

Perhaps the error is in assuming that because I don't agree with you that I don't understand it. Perhaps entertain the idea that I indeed do understand it an maybe you are missing something that I see. I'm not saying I'm absolutely correct; I'm suggesting that you haven't given that option a genuine chance .

I want to re-iterate that this is only a suggestion based on my perception of your responses. It doesn't appear that we have equal knowledge of each others viewpoints. Said another way: I don't think that you could clearly state my position as well as I could state yours.

Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 01, 2021, 10:51:00 AM
Not that it uses math so it must be good.  But, it uses math to verify with 100% certainty what has happened, and what will happen with the monetary policy, and that certainty is good.

This is untrue. You cannot know what will happen. There is no mandatory money policy. Bitcoin is ultimately a computer program. It can be changed via consensus or by a 51% attack. Or by future technologies (e.g., quantum machines, if they ever really come to fruition).

Also a slight nitpick re: "100% what has happened". That's not true either. The whole "proof of X" thing is used to *define* what happened, not necessarily verify what happened. The first one to solve the silly math puzzle ultimately gets to decide what happened, given a double-spending instance, for example.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 10:57:53 AM
StashingAway:  I've lost track of who said what.  If you fully understand it, great.  I still think most people don't, e.g. MCSDfRRU (below)

Mr. Computer Science Degree from a Reasonably Respectable University:
You changed the goal posts.  You said: "There's not been a single articulation of a single concrete benefit of using cryptocurrency (beyond some deeeeeply hand-wavy extreme libertarian technobabble)."  I gave you one, then you said "Cool. So like my oatmeal house idea, it's arguably useful as a better "bank" option than the banks in one of the worst-banked countries on the planet. Great."
I met your criteria.

Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 11:05:47 AM
This is untrue. You cannot know what will happen. There is no mandatory money policy. Bitcoin is ultimately a computer program. It can be changed via consensus or by a 51% attack.
There is a mandatory money policy.  If it changes in the future, we can re-evaluate.  But until that happens, the future monetary policy is known with 100% certainty.

See, this is what I mean by not understanding bitcoin.  A 51% attack can't change the policy.  It can do two things
1 - allow double-spending of their own coins only, not anybody else's
2 - censor transactions by not including them in blocks.  Old blocks would be unchanged.

That's it.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 01, 2021, 11:07:13 AM
If it changes in the future, we can re-evaluate.  [...] future monetary policy is known with 100% certainty.

Homie... Come on.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 11:13:48 AM
If it changes in the future, we can re-evaluate.  [...] future monetary policy is known with 100% certainty.

Homie... Come on.
broseph.  If you want to talk about how things are, great.  Debating a future monetary policy change that's invalidates bitcoin's core value proposition, is so far down the list.
https://en.wikipedia.org/wiki/Reductio_ad_absurdum
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 01, 2021, 11:23:14 AM
Well, I guess my brain is too feeble to understand cryptocurrency and the point you're trying to make... Guess I'm just out of my element here.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 11:36:54 AM
It's not that you or others are feeble or stupid.  There are a lot of intricacies that take a while to fully understand (e.g. the 51% attack or energy usage).  But you have to be open to learning and admitting that maybe you don't fully understand it yet.
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 01, 2021, 11:41:13 AM
3rd, you know what the #1 app in El Salvador is right now?  It's a remittance app, run on Bitcoin (https://strike.me/) .  Instead of paying 20% to Western Union, the receiver gets 99+% (not sure the exact number, but higher than 99%).


Another term for Strike is "trusted third party." 
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 11:54:09 AM
3rd, you know what the #1 app in El Salvador is right now?  It's a remittance app, run on Bitcoin (https://strike.me/) .  Instead of paying 20% to Western Union, the receiver gets 99+% (not sure the exact number, but higher than 99%).
Another term for Strike is "trusted third party."
yeah, FX changes will generally require a 3rd party.  You can send bitcoin to bitcoin for basically free using lightning.  But where strike comes if is that you send dollars->converts to bitcoin->sends bitcoin->converts to local currency (or back to USD).  It's making use of bitcoin the network to send and receive any currency.
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 01, 2021, 12:15:41 PM
It's not that you or others are feeble or stupid.  There are a lot of intricacies that take a while to fully understand (e.g. the 51% attack or energy usage).  But you have to be open to learning and admitting that maybe you don't fully understand it yet.

You're saying that I (we?- only speaking for myself here) don't understand bitcoin. Your proof of this is that I don't find it convincing as a mainstream currency/money/means of trade. Obviously, if I truly understood it, I would be on your side of the aisle.

I admit that I fully don't understand all the minute details of it. Just like every single other thing in the world, including things that I am an expert on. I would postulate that I am more open to being wrong than you are.
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 01, 2021, 12:17:50 PM
StashingAway:  I've lost track of who said what.  If you fully understand it, great.  I still think most people don't, e.g. MCSDfRRU (below)

Fair enough, I can't keep track of responses as well, especially when several are making similar points!
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 12:35:35 PM
It's not that you or others are feeble or stupid.  There are a lot of intricacies that take a while to fully understand (e.g. the 51% attack or energy usage).  But you have to be open to learning and admitting that maybe you don't fully understand it yet.

You're saying that I (we?- only speaking for myself here) don't understand bitcoin. Your proof of this is that I don't find it convincing as a mainstream currency/money/means of trade. Obviously, if I truly understood it, I would be on your side of the aisle.

I admit that I fully don't understand all the minute details of it. Just like every single other thing in the world, including things that I am an expert on. I would postulate that I am more open to being wrong than you are.
For me, it boils down to detractors saying our reasons for wanting Bitcoin are invalid.  That's very different than saying they are valid and understandable, but you disagree.  If you fall into the latter camp, then all is well to me.  But, if you fall into the former, I view it as not understanding why we like it (which I try to explain) - which might well come across as pedantic.

I am more than happy to have discussions about specific topics.  But defending Bitcoin writ large is just too big a topic.  Hence my pointing to the online course.
Title: Re: Bitcoin is funny money
Post by: Vienna4ever on June 01, 2021, 02:16:36 PM
https://www.youtube.com/watch?v=jFp86n7QCf0

So is TechLead wrong about Tether, or is it a real concern?
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 02:55:31 PM
https://www.youtube.com/watch?v=jFp86n7QCf0

So is TechLead wrong about Tether, or is it a real concern?
He is wrong.  While there are some concerns around Tether, called it a fraud is misinformed. 

Tethers are not printed out of anywhere, and they are regulated (see their recent settlement with NYAG).  They are backed by deposits - and here is the crux.  Those initial deposits don't stay as deposits in an account.  They buy things, like government bonds and commercial paper.  It's these "reserves" that get the headlines as they aren't "deposits"

He doesn't understand that Tether is an on-ramp to crypto, or how crypto works in general.  He got spooked and sold.

These are some articles about a different Tether article, but same stuff.
https://bitcoinmagazine.com/markets/debunking-misconceptions-from-the-bit-short-inside-cryptos-doomsday-machine
https://danheld.substack.com/p/dont-fear-tether
https://medium.com/@nic__carter/assessing-bitcoins-liquidity-with-coinlib-data-is-indefensible-3e5fdad51646
Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 01, 2021, 03:28:41 PM
The fraud that most are complaining about are the market manipulations that Tether increased Bitcoin prices with:
https://www.researchgate.net/publication/342185292_Is_Bitcoin_Really_Untethered (https://www.researchgate.net/publication/342185292_Is_Bitcoin_Really_Untethered)

It'll be interesting to see what shakes out when all the investigations and lawsuits surrounding Tether are resolved.
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 01, 2021, 04:15:13 PM
Tethers are not printed out of anywhere, and they are regulated (see their recent settlement with NYAG).  They are backed by deposits - and here is the crux.  Those initial deposits don't stay as deposits in an account.  They buy things, like government bonds and commercial paper.  It's these "reserves" that get the headlines as they aren't "deposits"Tah

That's not quite correct.  In the settlement agreement to the NYAG's lawsuit, Tether agreed that Tether was not backed 1:1 and at times wasn't even close to being backed 1:1.  Yet, Tether was still issuing new Tethers even though they knew they there was no backing.    Not only that, Tether was double counting assets and had some severe banking/liquidity problems which they publicly lied to users about.    Tether lying about backing was one of the specific points of the lawsuit. 

Putting that in the rearview mirror for the moment, as far as I can tell, this is the only recent breakdown Tether has provided of is reserves:

https://tether.to/wp-content/uploads/2021/05/tether-march-31-2021-reserves-breakdown.pdf

That's a pretty thin financial statement.  But digging deeper, right off the bat About 12% of Tether's backing is in the form of loans.   Which is to say Tether is leveraged.   A small amount is in digital tokens.  We know how volatile those are.  And then there is a big basket of stuff like commercial paper.   Commercial paper is backed by a promise to pay it back, which can be perfectly fine for some companies, or risky for others.  One advantage is that is not required to be reported to the SEC.  I believe in most cases commercial paper is callable, which is good if you need your money back.  But the company has to have the money on hand, as well.   There are all kinds of grades for corporate bonds and paper.   There is no indication if what Tether owns is AAA or junk.   

I didn't watch the video so I can't comment on what he was alleging, but there is functionally no transparency when it comes to Tether. 
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 01, 2021, 04:33:54 PM
(https://i0.wp.com/www.thepapertrailnews.com/wp-content/uploads/2016/05/DUMB-and-DUMBER.png)
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 01, 2021, 04:46:00 PM
(https://i0.wp.com/www.thepapertrailnews.com/wp-content/uploads/2016/05/DUMB-and-DUMBER.png)
Now do the USD.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 01, 2021, 06:50:31 PM
Right. And that was from February. They were just investigated again by the NYAG a couple weeks ago. Those findings have not been made public yet. Let’s also not forget, the NYAG is also working on a couple other small cases involving a certain former President. Tether ain’t priority #1.
Title: Re: Bitcoin is funny money
Post by: celerystalks on June 01, 2021, 08:45:02 PM
Bitcoin is not intuitive, and takes a while to have it sink it and the light bulb go off.

For the detractors, I'm guessing there are large gaps in your knowledge in how it works.  I'd recommend taking this free course.
https://learn.saylor.org/course/view.php?id=468

If you still hate it at that point, god bless.  But at least you will have a full understanding of it.

No. No. No. Its not gaps in knowledge. Its a more complete philosophical understanding of what money is.

True detractors can’t be educated into believing in crypto. Because they are more intelligent, know more, and have firmer convictions.

Bitcoin detractors are like Neo in The Matrix. They are able to see the fraud for what it is.

Title: Re: Bitcoin is funny money
Post by: BattlaP on June 02, 2021, 03:52:07 AM
Now do the USD.

Instead of launching non-sequiturs or "what-about"isms, maybe just stick to stanning for bitcoin.

Defending bitcoin is one thing. Defending Tether is another thing entirely. It is, to outside eyes, completely indistinguishable from outright, massive fraud to the tune of tens of billions.

Whenever they are given the chance to demonstrate that it is not fraud, they act exactly as one would if one were committing large-scale fraud and wishing to continue. The logical conclusion is that it is massive fraud.

Whether or not Tether has a definite relationship with the price of bitcoin, and whether ending that particular fraudulent company would in turn crater the price of bitcoin, is more speculative (although I think fairly well founded) but at this point defending Tether and ignoring the clear evidence as to their bad faith is like explaining to us why Madoff was, actually, really on to something.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 02, 2021, 05:18:39 AM
Defending bitcoin is one thing. Defending Tether is another thing entirely.
I would love to not talk about Tether and just focus on bitcoin, alas. 

There is also an east/west divide here.  It's much more popular in the east, where compared to their alternatives, they are thrilled with it.  In the west we go, hmmm, shady (me too).  But to them, that shadiness is the price to pay for not being controlled by the US (other stablecoins can, and have, had interventions).

Tether grew out of a necessity to not interact with fiat rails.  Of course there is going to be a relationship with the growth of tether and the price of bitcoin - it's how money gets in!  You want to buy a large stack of bitcoin?  In the east, you buy Tether and use that to buy your bitcoin when ready.  Correlation not causation.
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 02, 2021, 06:33:45 AM
Some choice excerpts from that course:

  • "Since energy is available and priced on the market, the fact that miners are able to use it cost-effectively is an indicator that it is not wasteful."
  • "To enjoy this article to its fullest, I recommend playing this song then continue reading. If you like this music, please follow my playlist on Spotify."
  • "[Proof of work] is proof of burn, or the validation that energy was burnt."
  • "I suspect [proof of work] will use between 1–10% of the world's energy"
  • "The pressure to find cheap electricity sources will accelerate the effort to build fusion reactors."
  • "We don't want the government actually to stimulate artificially the economy, or through monetary policy"
  • "Bitcoin's computationally costly design gives stronger resistance to ... theft."
  • "Debt financing in turn enables many extremely costly and destructive programs, such as the ... welfare state."
  • "The prospect for the future is accelerating and eventually runaway inflation at home, accompanied by monetary breakdown and economic warfare abroad. This prognosis can only be changed by a drastic alteration of the American and world monetary system: by the return to a free market commodity money such as gold, and by removing government totally from the monetary scene."
  • "I concluded the crypto was at this point in time, somewhere between 10 and a 100 times, better than gold, but over time would be a thousand to a million times better than gold."
  • "Legacy currencies"

Holy Moses!
Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 02, 2021, 06:59:56 AM
Some choice excerpts from that course:

  • "Since energy is available and priced on the market, the fact that miners are able to use it cost-effectively is an indicator that it is not wasteful."
  • "To enjoy this article to its fullest, I recommend playing this song then continue reading. If you like this music, please follow my playlist on Spotify."
  • "[Proof of work] is proof of burn, or the validation that energy was burnt."
  • "I suspect [proof of work] will use between 1–10% of the world's energy"
  • "The pressure to find cheap electricity sources will accelerate the effort to build fusion reactors."
  • "We don't want the government actually to stimulate artificially the economy, or through monetary policy"
  • "Bitcoin's computationally costly design gives stronger resistance to ... theft."
  • "Debt financing in turn enables many extremely costly and destructive programs, such as the ... welfare state."
  • "The prospect for the future is accelerating and eventually runaway inflation at home, accompanied by monetary breakdown and economic warfare abroad. This prognosis can only be changed by a drastic alteration of the American and world monetary system: by the return to a free market commodity money such as gold, and by removing government totally from the monetary scene."
  • "I concluded the crypto was at this point in time, somewhere between 10 and a 100 times, better than gold, but over time would be a thousand to a million times better than gold."
  • "Legacy currencies"

Holy Moses!

(https://img.universitystudent.org/1/4/3450/seems-legit-parents-signature-mom-date-today-meme.jpg)
Title: Re: Bitcoin is funny money
Post by: effigy98 on June 04, 2021, 10:12:17 AM
I don't understand the defense of centralized assets. Humans can turn to corruption pretty easily it seems in this highly competitive world. Diversify assets, and attempt to pick the least corruptible.

Sent from my Pixel 3a using Tapatalk
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 04, 2021, 10:54:40 AM
I don't understand the defense of centralized assets. Humans can turn to corruption pretty easily it seems in this highly competitive world. Diversify assets, and attempt to pick the least corruptible.

Sent from my Pixel 3a using Tapatalk

You mean like a diverse group of 1000s of companies in an index fund that will produce value regardless of what becomes the new form of barter
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 04, 2021, 12:05:17 PM
I don't understand the defense of centralized assets. Humans can turn to corruption pretty easily it seems in this highly competitive world. Diversify assets, and attempt to pick the least corruptible.

I hear the complaint and don't disagree with the sentiment, but it seems that replacing it with crypto has been worse as a proof of concept... it reminds me of a great quote from Winston Churchill:

“Democracy is the worst form of government except all those other forms that have been tried from time to time”

The current system may have flaws, but those flaws are known and have lots of checks that have kept them running for over a century now. It clearly works.

And that leads to a second quote: "better the devil you know than the devil you don't.

Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 04, 2021, 12:12:49 PM
The current system may have flaws, but those flaws are known and have lots of checks that have kept them running for over a century now. It clearly works.
Correction.  50 years since 1971 and coming off the gold standard.

And I'm not sure I agree that it clearly works.  There is a large swath of the population that it clearly doesn't work for.
https://wtfhappenedin1971.com/
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 04, 2021, 12:19:54 PM
The current system may have flaws, but those flaws are known and have lots of checks that have kept them running for over a century now. It clearly works.
Correction.  50 years since 1971 and coming off the gold standard.

And I'm not sure I agree that it clearly works.  There is a large swath of the population that it clearly doesn't work for.
https://wtfhappenedin1971.com/

You didn't reply to the important bit though. Even if the current system has flaws, that doesn't mean that crypto is better. It's a false equivalency.

Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 04, 2021, 12:22:18 PM
The current system may have flaws, but those flaws are known and have lots of checks that have kept them running for over a century now. It clearly works.
Correction.  50 years since 1971 and coming off the gold standard.

And I'm not sure I agree that it clearly works.  There is a large swath of the population that it clearly doesn't work for.
https://wtfhappenedin1971.com/

Bitcoin has been around for more than one fifth of that 50 year time period now.  Is adoption rate and use as a form of currency about the same as the US dollar was in 1984?

If we want to argue about things that clearly don't work for a large swath of the population . . . I'm not sure I'd throw stones from the glass house that bitcoin built me.  Bitcoin is (to date) an utter failure as a currency.
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 04, 2021, 02:48:35 PM
The current system may have flaws, but those flaws are known and have lots of checks that have kept them running for over a century now. It clearly works.
Correction.  50 years since 1971 and coming off the gold standard.

And I'm not sure I agree that it clearly works.  There is a large swath of the population that it clearly doesn't work for.
https://wtfhappenedin1971.com/

This is a post hoc ergo propter hoc fallacy.   Just because one thing came after another it doesn't mean they are related.

Specifically, how are things like wealth inequality related to the unit of account? 

There were other things that the author viewed as negative that are actually extremely positive.  For example, energy use is declining per unit of GDP.  That means our economy is becoming more energy efficient, which means our overall standard of living is increasing (that is, we get greater output at lower energy cost), and all the environmental benefits that go along with that. How is that clearly not working?   That makes literally no sense at all. 

And again, how could that possibly be related to the unit of account?  That whole website was just big mash of random of things that made no sense. 
Title: Re: Bitcoin is funny money
Post by: johnhenry on June 04, 2021, 02:57:01 PM
It's not that you or others are feeble or stupid.  There are a lot of intricacies that take a while to fully understand (e.g. the 51% attack or energy usage).  But you have to be open to learning and admitting that maybe you don't fully understand it yet.

Nope. You absolutely do not have to be open to learning about bitcoin.  Some of us can see if for what it is from a mile away and need not waste our time with its many intricacies, nor the intricacies of all the forks either.  We can just be entertained by the fools and frauds that promote it.

If you spend enough time in the tax/investing section of this forum you will run into all kinds of people who know the intricacies of real money. They give advice on complex situations for which there are not always simple answers.  And you can witness a dialog that displays a better understanding by the OP and other forum members. Understanding that matters in their real lives because it involves real money, real taxes, real law that creates them both.

Why do we need to be open to learning about all of the intricacies of the tax code, but not bitcoin?  Because real money is always a tax credit.  We are "forced" to care about dollars by a government that demands that we pay taxes with them.  Yes, they are just as "made up" as bitcoin is.  But one is made up by a sovereign government with the authority to tax. 

Make no mistake, there ain't nobody worried about being rich "in bitcoin".  They also want to be rich in dollars, or whatever they pay their taxes in.  But for that to happen they need the later, greater fools to buy into bitcoin with real money.

All these bitcoin bros hollerin about buyin the dip sure do always have a suspicious amount of fiat laying around.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 04, 2021, 03:59:43 PM
The current system may have flaws, but those flaws are known and have lots of checks that have kept them running for over a century now. It clearly works.
Correction.  50 years since 1971 and coming off the gold standard.

And I'm not sure I agree that it clearly works.  There is a large swath of the population that it clearly doesn't work for.
https://wtfhappenedin1971.com/

This is a post hoc ergo propter hoc fallacy.   Just because one thing came after another it doesn't mean they are related.

Specifically, how are things like wealth inequality related to the unit of account? 

There were other things that the author viewed as negative that are actually extremely positive.  For example, energy use is declining per unit of GDP.  That means our economy is becoming more energy efficient, which means our overall standard of living is increasing (that is, we get greater output at lower energy cost), and all the environmental benefits that go along with that. How is that clearly not working?   That makes literally no sense at all. 

And again, how could that possibly be related to the unit of account?  That whole website was just big mash of random of things that made no sense.
The point of 1971 was that we left the gold standard and Bretton Woods system and entered the new fiat realm.  This was important, and was a change from the prior system.  There's no semblance of restraint on the system anymore.  It makes you go hmmm.

Wealth inequality is exacerbated by money printing, and by the US being the reserve currency of the world.  How?  The dollar is more expensive than it should be based on our current account due to the demand for dollars around the world.    Since our dollars are comparatively worth more than they should be, we export less and import more, so much so that our domestic industries can't compete and we have to outsource everything.  Normally, that would work itself out with the currency depreciating (i.e. inflation), but we have the whole world hooked on dollars and US debt that the dollar can't find it's proper place based on trade/balance of payments. 

So, for the former middle-class, while your t-shirt at walmart might be cheaper, you are making less money also.  Except for the professional class and those that already have money.  If you can invest, you've been able to stay ahead of the curve.  If you couldn't, sorry, you are SOL.

Everyone here saw what happened in 2008 with the bailouts.  Were they necessary?  Probably.  Does that mean the system is broken?  Yes.  Same with COVID stimulus.  Necessary, yes.  But eventually someone has to pay for it.  And as they always do, the rich will get richer at the expense of everyone else.

Our debt will eventually be a problem (don't know when), and the only ways to fix it are default, austerity or inflation - and I think we all know which one the politicians will choose.  Inflation hits the poor the hardest, as the wealthy have hard assets and are better able to withstand the effects.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 04, 2021, 04:07:33 PM
Nope. You absolutely do not have to be open to learning about bitcoin.  Some of us can see if for what it is from a mile away and need not waste our time with its many intricacies, nor the intricacies of all the forks either.  We can just be entertained by the fools and frauds that promote it.
So you just want an echo chamber where you can pat yourself on the back and say, look at those fools.  Got it.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 04, 2021, 05:03:34 PM
That’s a lot to tackle and I will do my best. I’m going out for the evening so will tomorrow.
Title: Re: Bitcoin is funny money
Post by: BicycleB on June 04, 2021, 07:35:55 PM
There's no semblance of restraint on the system anymore.

I disagree.

One can argue reasonably that the Fed's many detailed, carefully published policy discussions and numerous step by step policy shifts are insufficient to restrain the system, or that they are inevitably doomed to failure one day. But their unusually open, thoroughly discussed and systematically implemented actions are at least a semblance of restraint!

I was stunned when, after reading for a while, I gradually concluded what a careful and surprisingly good job the Fed does. One can disagree with me on that, and argue that I have fallen hook line and sinker for the carefully crafted but ultimately useless semblance of restraint. But it's still a semblance.

Having inflation targets, debating openly on the effect of numerous data to measure inflation, analyzing the implications of numerous theories about inflation, considering the impact of various interventions, actually implementing various interventions - each of these individually is an attempt at restraint, or at least a semblance of it, and cumulatively they represent a remarkable body of work. Perhaps it will fail, but so far it appears to be best in class. That's part of why millions of investors trust its product, the US dollar. Cumulatively the Fed's efforts are either an actual attempt at restraint or a semblance of it.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on June 04, 2021, 08:09:29 PM
There's no semblance of restraint on the system anymore.

I disagree.

One can argue reasonably that the Fed's many detailed, carefully published policy discussions and numerous step by step policy shifts are insufficient to restrain the system, or that they are inevitably doomed to failure one day. But their unusually open, thoroughly discussed and systematically implemented actions are at least a semblance of restraint!

I was stunned when, after reading for a while, I gradually concluded what a careful and surprisingly good job the Fed does. One can disagree with me on that, and argue that I have fallen hook line and sinker for the carefully crafted but ultimately useless semblance of restraint. But it's still a semblance.

Having inflation targets, debating openly on the effect of numerous data to measure inflation, analyzing the implications of numerous theories about inflation, considering the impact of various interventions, actually implementing various interventions - each of these individually is an attempt at restraint, or at least a semblance of it, and cumulatively they represent a remarkable body of work. Perhaps it will fail, but so far it appears to be best in class. That's part of why millions of investors trust its product, the US dollar. Cumulatively the Fed's efforts are either an actual attempt at restraint or a semblance of it.

I agree. The Fed has dodged not one but two Great Depressions in the past 13 years - WHILE maintaining historically low inflation. That's like going to bat and hitting a home run each of their two times at bat. Were the policy responses perfect, in hindsight? No, but still a 9.5/10 performance, and we're lucky for that. The system internet peeps are complaining about and taking great risks to escape is working better than ever.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 05, 2021, 06:13:57 AM
There's no semblance of restraint on the system anymore.

I disagree.

One can argue reasonably that the Fed's many detailed, carefully published policy discussions and numerous step by step policy shifts are insufficient to restrain the system, or that they are inevitably doomed to failure one day. But their unusually open, thoroughly discussed and systematically implemented actions are at least a semblance of restraint!

I was stunned when, after reading for a while, I gradually concluded what a careful and surprisingly good job the Fed does. One can disagree with me on that, and argue that I have fallen hook line and sinker for the carefully crafted but ultimately useless semblance of restraint. But it's still a semblance.

Having inflation targets, debating openly on the effect of numerous data to measure inflation, analyzing the implications of numerous theories about inflation, considering the impact of various interventions, actually implementing various interventions - each of these individually is an attempt at restraint, or at least a semblance of it, and cumulatively they represent a remarkable body of work. Perhaps it will fail, but so far it appears to be best in class. That's part of why millions of investors trust its product, the US dollar. Cumulatively the Fed's efforts are either an actual attempt at restraint or a semblance of it.

I agree. The Fed has dodged not one but two Great Depressions in the past 13 years - WHILE maintaining historically low inflation. That's like going to bat and hitting a home run each of their two times at bat. Were the policy responses perfect, in hindsight? No, but still a 9.5/10 performance, and we're lucky for that. The system internet peeps are complaining about and taking great risks to escape is working better than ever.
"There's no semblance of restraint on the system anymore."  This was also referring to the fiscal side.  Rs and Ds are both guilty, so it's not a political statement.

re 2008: you mean putting out the fire they helped create?  Sure, they cleaned up their mess (as they rightly needed to do).  But it's not like 2008 wasn't a result of warped incentives that the Fed helped create.

re: inflation targeting.  If you take a step back, this is a perverse mandate.  Your money is designed to buy less every year to encourage you to increase consumption.  I understand the reasoning behind it, but it's still kinda fucked up when you think about it.  We are incentivized to think short-term and consume more than we would otherwise (with ensuing environmental effects) Bitcoin advocates talk about low time preference vs high time preference. ( https://medium.com/the-capital/bitcoin-time-preference-how-sound-money-contributes-to-a-prosperous-society-829f49b92c1d and https://www.bitcoin.kn/2019/7/saifedean-ammous-time-preference/) 

covid:  yes, monetary and fiscal authorities in the US performed well, much better than anywhere else, and we should have done what we did.  I'm not an end-the-fed, go back to the gold standard person.  I don't think we can or should use bitcoin as our currency, for the very reason that there are times you need to flood the system with liquidity.  However, if you have X/#dollars before and now you have X/(#dollars + QE + covid), your dollars are worth less.  By having hard assets or investing you can outpace inflation, but the poor cannot.

The Fed hasn't jumped the shark yet, though we have de-facto debt monetization and I'm not convinced we don't see yield curve control at some point in the next decade.  We are at 130% debt to GDP, surpassing even WW2 (108% pre-covid).  This is a problem, though it is unknown when it will become a "real" problem (though Japan is at outlier at 240%).  My contention is that there are a few ways out of a high debt load: amazing growth + holding debt constant, and without amazing growth: default, austerity and inflation.

The US is in a precarious position, monetarily speaking.  Hemingway said you go bankrupt two ways, gradually then suddenly.  We aren't going to go bankrupt and default, but I do think the monetary regime will have issues at some point, and when that happens, it will happen quicker than people expect.
Title: Re: Bitcoin is funny money
Post by: effigy98 on June 05, 2021, 09:55:34 AM
Bitcoin is by far the most optimistic asset that would restore property rights and freedoms. Anyone against that enjoys slavery and oppression, probably indirectly, but you should admit, you like the status quo and don't want an even playing field.

Sent from my Pixel 3a using Tapatalk

Title: Re: Bitcoin is funny money
Post by: Telecaster on June 05, 2021, 10:32:31 AM
Bitcoin is by far the most optimistic asset that would restore property rights and freedoms. Anyone against that enjoys slavery and oppression, probably indirectly, but you should admit, you like the status quo and don't want an even playing field.

Sent from my Pixel 3a using Tapatalk

Sweet Jesus. 
Title: Re: Bitcoin is funny money
Post by: scottish on June 05, 2021, 12:37:27 PM
Bitcoin is by far the most optimistic asset that would restore property rights and freedoms. Anyone against that enjoys slavery and oppression, probably indirectly, but you should admit, you like the status quo and don't want an even playing field.

Sent from my Pixel 3a using Tapatalk

Sweet Jesus.

You forgot global warming, COVID-19 and starving people in the 3rd world.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 05, 2021, 02:53:02 PM
Well peeps, El Salvador is making bitcoin legal tender.

https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html
Title: Re: Bitcoin is funny money
Post by: Eco_eco on June 06, 2021, 12:50:29 PM
Hello

Jumping into this thread with my perspective on bitcoin. In my view it is a new and emergent asset class - we've not had anything like it before. Bitcoin is generated, processed and secured by a network of computers and applied economic theory, which really does sound crazy. However, it is emerged as something like a currency / store of value. You can use it to transact (but most people don't), you can use it like a store of value (like gold or houses), and you can build financial instruments off it.

As it is something brand new its impossible to price - there really is a chance that it will go to $0 and become worthless, or it could become the new global reserve currency, or it might continue as something in-between.

In terms of investing I've treated Bitcoin, and crypto in general, as a repeat of the 1990s. Back in the '90s the internet came along. It also was something brand new which few people really understood. You wanted exposure to DotCom companies, but no-one had an real idea of which would work out well in the long term. The choice of individual companies was basically a gamble, but as a class DotCom stocks have done really well. Accordingly, I'll dollar cost in to a diverse range of crypto projects and see what happens.
Title: Re: Bitcoin is funny money
Post by: scottish on June 06, 2021, 02:28:38 PM
Good news!   El Salvador is planning to adopt Bitcoin as legal tender.    (If this goes ahead), we can see how the great experiment plays out a national scale.

linky:   https://www.ctvnews.ca/sci-tech/el-salvador-president-wants-bitcoin-as-legal-tender-1.5458374 (https://www.ctvnews.ca/sci-tech/el-salvador-president-wants-bitcoin-as-legal-tender-1.5458374)

Title: Re: Bitcoin is funny money
Post by: mjr on June 06, 2021, 04:18:39 PM
I always look to countries like El Salvador to blaze new ways forward in international monetary systems....

Bitcoin is attractive to fraudsters, criminals and people looking to make a quick and easy buck, so naturally ruined countries like El Salvador will want to hop on that train.

Doesn't change the fundamentals of Bitcoin, or of El Salvador.

Find a better example.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 06, 2021, 04:33:33 PM
I always look to countries like El Salvador to blaze new ways forward in international monetary systems....

Bitcoin is attractive to fraudsters, criminals and people looking to make a quick and easy buck, so naturally ruined countries like El Salvador will want to hop on that train.

Doesn't change the fundamentals of Bitcoin, or of El Salvador.

Find a better example.
What arrogance.  25% of El Salvador's GDP is via remittance, with fees costing upwards of 30%.  Removing those fees would materially improve impoverished lives.  And that's just the first order effect.

If you can't see how a country adopting bitcoin maybe, just maybe, means there is actually something to this, than nothing will be satisfactory enough for you. 

Title: Re: Bitcoin is funny money
Post by: Telecaster on June 06, 2021, 09:00:38 PM
What arrogance.  25% of El Salvador's GDP is via remittance, with fees costing upwards of 30%.  Removing those fees would materially improve impoverished lives.  And that's just the first order effect.

If you can't see how a country adopting bitcoin maybe, just maybe, means there is actually something to this, than nothing will be satisfactory enough for you.

I just checked on the cost to send $1000 to El Salvador by Western Union.   The most expensive option was for me to pay by credit card and the receiver to pick up cash at the Western Union office.    The total cost was $63.  If I were to pay cash in-store the cost would be $8.  El Salvador uses the Yankee Dollar, so no exchange fees.  That's either 6.3% or 0.8%, which appears to me to be less than "upwards of 30%." 

By comparison, if you send money via bitcoin you'll have to pay miner's fees which change all the time but are going to be roughly comparable WU one way.  Back in April, they were ten times higher.  So I'm not nearly as confident as you there will be a big savings in this area. 

The other part that might merit some discussion is that the El Salvador government says that are working with a "trusted third party" in order to facilitate payments.  Bitcoin proponents of course are hugely in favor of involving a "trusted third party" in their transactions.  I kid, but the trusted third party required to process Bitcoin payments won't be willing to work for free forever.  They will want their rake at some point, and how much will that cost? 

I would be very surprised if the round-trip cost of sending money via Bitcoin is any cheaper than using conventional methods.  I would not be surprised if it doesn't cost more.  I would be extremely surprised if anyone other than rich people do this. 

I would be most surprised if this restores property rights and freedoms.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 06, 2021, 09:21:27 PM
$50 costs 5-8 at Western Union or 8 at moneygram.  Yeah, not 30%, but also there are costs with getting to a pickup location, if the receiver doesn't live near one. I also don't know what the options are in other countries.  I don't think most people send 1000, much much lower.  You might say why would someone only send $50 if the fees are so high, but they do.

Strike, the #1 app in El Salvador already, uses the lightning network, a bitcoin layer 2 solution (meaning it doesn't process on the main chain).  The fees with that are negligible and are the trusted 3rd party mentioned.  They make a little money on the exchange (usd->bitcoin->usd).
Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 07, 2021, 07:11:25 AM
Strike, the #1 app in El Salvador already, uses the lightning network, a bitcoin layer 2 solution (meaning it doesn't process on the main chain).  The fees with that are negligible and are the trusted 3rd party mentioned.  They make a little money on the exchange (usd->bitcoin->usd).

So they're not really using bitcoin as a way to get away from fiat currency then . . . they're just taking their own US dollars to send other US dollars to people?
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 07, 2021, 09:15:25 AM
Strike, the #1 app in El Salvador already, uses the lightning network, a bitcoin layer 2 solution (meaning it doesn't process on the main chain).  The fees with that are negligible and are the trusted 3rd party mentioned.  They make a little money on the exchange (usd->bitcoin->usd).

So they're not really using bitcoin as a way to get away from fiat currency then . . . they're just taking their own US dollars to send other US dollars to people?
Well, both.  One thing that is misunderstood is bitcoin is an asset and a network.  Strike is making use of the network to move fiat.  People have the option of keeping it in bitcoin or dollars.   70% of the people in ES don't have bank accounts, and for them, they may keep it in bitcoin and go to a bitcoin ATM to get cash. No way to really know what will happen, but they have the option.

This could be successful or a big nothing burger.  But, it's the start, and it begins to set up the legal framework (contracts, bank accounts, law etc...)  It's game theory in action by being first. I doubt ES will be the last.

Truly fascinating to watch it play out.
Title: Re: Bitcoin is funny money
Post by: scottish on June 07, 2021, 03:06:49 PM
Game theory in action?     You see a Nash equilibrium in there somewhere?

I agree it will be interesting to experience (from the outside)!
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 07, 2021, 03:25:36 PM
$50 costs 5-8 at Western Union or 8 at moneygram.  Yeah, not 30%, but also there are costs with getting to a pickup location, if the receiver doesn't live near one. I also don't know what the options are in other countries.  I don't think most people send 1000, much much lower.  You might say why would someone only send $50 if the fees are so high, but they do.

Strike, the #1 app in El Salvador already, uses the lightning network, a bitcoin layer 2 solution (meaning it doesn't process on the main chain).  The fees with that are negligible and are the trusted 3rd party mentioned.  They make a little money on the exchange (usd->bitcoin->usd).

 I used $1000 because that's the maximum amount Strike will allow (IIRC).  But it doesn't matter.  Plug in whatever numbers you like.  My point is you have to get the money out so you can spend it.  If 70% of the population doesn't have bank accounts  going from Strike to your bank account won't work.  The Bitcoin ATM might work, but those typically have high fees. 

Now, there still might be some utility here.   If lots of people are using Strike, then the money could just stay in the Strike account, only taking it out when needed.   In another post, I mentioned M-Pesa which is a way sending money via mobile phone without a bank account.  In countries with dense M-Pesa penetration it is a common method of payment and accepted by merchants and such.  But there is also a large network of M-Pesa agents, where you can make cash deposits or withdrawals to your account.  That's the component that doesn't seem to be in place here. 
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 07, 2021, 03:42:53 PM
Kind of funny to see the cheering on of an authoritarian regime adopting bitcoin.. But probably even funnier is seeing the allegedly unconfiscateable currency get confiscated https://www.wsj.com/articles/u-s-retrieves-millions-paid-to-colonial-pipeline-hackers-11623094399
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 07, 2021, 04:49:15 PM
$50 costs 5-8 at Western Union or 8 at moneygram.  Yeah, not 30%, but also there are costs with getting to a pickup location, if the receiver doesn't live near one. I also don't know what the options are in other countries.  I don't think most people send 1000, much much lower.  You might say why would someone only send $50 if the fees are so high, but they do.

Strike, the #1 app in El Salvador already, uses the lightning network, a bitcoin layer 2 solution (meaning it doesn't process on the main chain).  The fees with that are negligible and are the trusted 3rd party mentioned.  They make a little money on the exchange (usd->bitcoin->usd).

 I used $1000 because that's the maximum amount Strike will allow (IIRC).  But it doesn't matter.  Plug in whatever numbers you like.  My point is you have to get the money out so you can spend it.  If 70% of the population doesn't have bank accounts  going from Strike to your bank account won't work.  The Bitcoin ATM might work, but those typically have high fees. 

Now, there still might be some utility here.   If lots of people are using Strike, then the money could just stay in the Strike account, only taking it out when needed.   In another post, I mentioned M-Pesa which is a way sending money via mobile phone without a bank account.  In countries with dense M-Pesa penetration it is a common method of payment and accepted by merchants and such.  But there is also a large network of M-Pesa agents, where you can make cash deposits or withdrawals to your account.  That's the component that doesn't seem to be in place here.
I think it's much more likely that things just stay in the bitcoin lightning network (doesn't have to stay in strike, strike is just one app interface to lightning).  I'd imagine infrastructure to put cash in and get cash out will be built.  I'm not too familiar with m-pesa other than knowing about it, and how it can show what's possible.

There will be enormous support, one example is Blockstream that will be providing satellite access to the bitcoin network without internet access.  The infrastructure is just starting, and they get an enormous first mover advantage from everyone that will help.
https://twitter.com/Blockstream/status/1401283580312141828
https://blockstream.com/satellite/

Kind of funny to see the cheering on of an authoritarian regime adopting bitcoin.. But probably even funnier is seeing the allegedly unconfiscateable currency get confiscated https://www.wsj.com/articles/u-s-retrieves-millions-paid-to-colonial-pipeline-hackers-11623094399
We are cheering for the ordinary people.  Even sub-par regimes can make good moves.

They put their wallet on a cloud server.  Even criminals can make bad mistakes.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 07, 2021, 04:55:03 PM
We are cheering for the ordinary people.  Even sub-par regimes can make good moves.

They put their wallet on a cloud server.  Even criminals can make bad mistakes.

If cybercriminals capable of extorting a major US corporation for millions succumb to such "bad mistakes", what's that say about grandma's (or "ordinary people" in El Salvador) chances of avoiding such mistakes?

Also: the FBI has purposely not stated how these bitcoins were seized. We have no idea what their alleged "bad mistakes" were.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 07, 2021, 05:36:01 PM
We are cheering for the ordinary people.  Even sub-par regimes can make good moves.

They put their wallet on a cloud server.  Even criminals can make bad mistakes.

If cybercriminals capable of extorting a major US corporation for millions succumb to such "bad mistakes", what's that say about grandma's (or "ordinary people" in El Salvador) chances of avoiding such mistakes?

Also: the FBI has purposely not stated how these bitcoins were seized. We have no idea what their alleged "bad mistakes" were.
We don't but we know what it wasn't.  They didn't break Bitcoin's encryption.  If they did, they certainly wouldn't let it be know and certainly not for only a few million dollars.

They must have left the wallet open and unencrypted, and without multi-sig.  This is like robbing a bank, but dropping your hotel card on the way out, and then you go to breakfast and leave the door unlocked and no one in the room.  Or simply, they left the private key unencrypted in a text file.  Regardless of what exactly happened, they made a mistake somewhere.

Grandma's cell phone would have had better security.  You have to match your security needs to your environment.  There are ways to protect bitcoin if you need to.  If you suspect your bitcoin might be seized, there are appropriate steps to take to ensure it can't be.  Why/how the hackers messed up, we don't know.  It is a bit fishy that a sophisticated group like that can make such a big mistake. 

Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 07, 2021, 05:37:00 PM
I think it's much more likely that things just stay in the bitcoin lightning network (doesn't have to stay in strike, strike is just one app interface to lightning)

As referenced upthread, Strike has its own closed network within the Lightning Network...
No, their nodes are closed (meaning you can't interact with their servers and open a direct channel).  You can send your bitcoin on strike to a wallet outside of strike.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 07, 2021, 08:11:50 PM
Channels are how Bitcoins move within the Lightning Network, right? If you can’t open a channel to any of their nodes, then (assuming you’re not on Strike), the Bitcoins would have to move out of the Lightning Network, unless I’m missing something.
I've never used lightning or strike, so am not fully clear on the details.  But there is just no way strike would lock bitcoin within the app.  I admittedly don't know the details though.

"If a user wants to pay someone (or move their funds to their own wallet), then they can withdraw this cash balance in the form of bitcoin either through Lightning or Bitcoin’s primary network. "
https://www.coindesk.com/strike-launches-bitcoin-lightning-payment-app-in-el-salvador-full-eu-support-is-next
Title: Re: Bitcoin is funny money
Post by: effigy98 on June 07, 2021, 08:23:09 PM
If cybercriminals capable of extorting a major US corporation for millions succumb to such "bad mistakes", what's that say about grandma's...

Grandma is just happy that her CD in the bank account is being inflated away and paying that negative real interest rate. She does not trust stocks, bonds, or cryptos and will probably eventually live in some kind of gross old folks home or tent of some sort if family does not move her into the basement. Hopefully she can just stay where she is until her final days before all her savings is depleted. Eventually you will see the IPhone effect on crypto where even grandma can use it just like what had to happen to the internet before mass adoption.
Title: Re: Bitcoin is funny money
Post by: theolympians on June 08, 2021, 04:30:13 PM
The thing about El Salvador adopting bitcoin as legal tender sounds like a bigger deal than it is. 

You hear about a country adopting bitcoin and think that "hey, wow, they're heading toward to giving up their own currency and going to bitcoin."  Whoa!

But El Salvador doesn't have their own currency anyway;  the official currency of the country is the US dollar.

So a country that *does not even have* a currency of its own is adopting bitcoin as another legal tender option.  OK, that's not *bad* news for bitcoin, but let's not get carried away.

There is also talk about Paraguay doing it, which would be a little more significant since they do have their own currency (though it's not a particularly strong one.).    Also, so far it's just talk, a proposal from one leading member of the Paraguayan legislature who tweeted about his proposal with a photo of himself with red laser eyes.

Maybe Panama is going to join in too (they also use the dollar.)

That's not encouraging, a few third world countries signing on. Basket cases have low thresholds and will sign on to anything. That's why they are basket cases.
Title: Re: Bitcoin is funny money
Post by: theolympians on June 08, 2021, 04:32:46 PM
We are cheering for the ordinary people.  Even sub-par regimes can make good moves.

They put their wallet on a cloud server.  Even criminals can make bad mistakes.

If cybercriminals capable of extorting a major US corporation for millions succumb to such "bad mistakes", what's that say about grandma's (or "ordinary people" in El Salvador) chances of avoiding such mistakes?

Also: the FBI has purposely not stated how these bitcoins were seized. We have no idea what their alleged "bad mistakes" were.

Methinks Bitcoin isn't as secret as we have been told be the salesman. Major economies are not going to let "crypto" undermine their currencies in the long term.
Title: Re: Bitcoin is funny money
Post by: JLee on June 08, 2021, 05:06:21 PM
We are cheering for the ordinary people.  Even sub-par regimes can make good moves.

They put their wallet on a cloud server.  Even criminals can make bad mistakes.

If cybercriminals capable of extorting a major US corporation for millions succumb to such "bad mistakes", what's that say about grandma's (or "ordinary people" in El Salvador) chances of avoiding such mistakes?

Also: the FBI has purposely not stated how these bitcoins were seized. We have no idea what their alleged "bad mistakes" were.
We don't but we know what it wasn't.  They didn't break Bitcoin's encryption.  If they did, they certainly wouldn't let it be know and certainly not for only a few million dollars.

They must have left the wallet open and unencrypted, and without multi-sig. This is like robbing a bank, but dropping your hotel card on the way out, and then you go to breakfast and leave the door unlocked and no one in the room.  Or simply, they left the private key unencrypted in a text file.  Regardless of what exactly happened, they made a mistake somewhere.

Grandma's cell phone would have had better security.  You have to match your security needs to your environment.  There are ways to protect bitcoin if you need to.  If you suspect your bitcoin might be seized, there are appropriate steps to take to ensure it can't be.  Why/how the hackers messed up, we don't know. It is a bit fishy that a sophisticated group like that can make such a big mistake.

LOL.

Or perhaps it's not as easy to have foolproof security as you think it is.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 08, 2021, 05:21:21 PM
We are cheering for the ordinary people.  Even sub-par regimes can make good moves.

They put their wallet on a cloud server.  Even criminals can make bad mistakes.

If cybercriminals capable of extorting a major US corporation for millions succumb to such "bad mistakes", what's that say about grandma's (or "ordinary people" in El Salvador) chances of avoiding such mistakes?

Also: the FBI has purposely not stated how these bitcoins were seized. We have no idea what their alleged "bad mistakes" were.
We don't but we know what it wasn't.  They didn't break Bitcoin's encryption.  If they did, they certainly wouldn't let it be know and certainly not for only a few million dollars.

They must have left the wallet open and unencrypted, and without multi-sig. This is like robbing a bank, but dropping your hotel card on the way out, and then you go to breakfast and leave the door unlocked and no one in the room.  Or simply, they left the private key unencrypted in a text file.  Regardless of what exactly happened, they made a mistake somewhere.

Grandma's cell phone would have had better security.  You have to match your security needs to your environment.  There are ways to protect bitcoin if you need to.  If you suspect your bitcoin might be seized, there are appropriate steps to take to ensure it can't be.  Why/how the hackers messed up, we don't know. It is a bit fishy that a sophisticated group like that can make such a big mistake.

LOL.

Or perhaps it's not as easy to have foolproof security as you think it is.

See, that's the thing.  It actually is.  Any off the shelf hardware wallet would have worked.

The only thing I know is that we don't have all the information.  None of this really makes much sense.  Bitcoin isn't even the best crypto for privacy, they should have used Monero.  Certainly a group of international hackers would have known that.
Title: Bitcoin is funny money
Post by: rmorris50 on June 08, 2021, 06:55:37 PM
If cybercriminals capable of extorting a major US corporation for millions succumb to such "bad mistakes", what's that say about grandma's...

Grandma is just happy that her CD in the bank account is being inflated away and paying that negative real interest rate. She does not trust stocks, bonds, or cryptos and will probably eventually live in some kind of gross old folks home or tent of some sort if family does not move her into the basement. Hopefully she can just stay where she is until her final days before all her savings is depleted. Eventually you will see the IPhone effect on crypto where even grandma can use it just like what had to happen to the internet before mass adoption.
I still have to mail my elderly mother gift cards and checks. The idea of Venmo is too radical and dangerous according to her.


Sent from my iPhone using Tapatalk
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 09, 2021, 06:01:07 AM
Bitcoin is no longer funny money, it is now legal tender.

The prez of ES was on twitter spaces last night, talking with bitcoiners for an hour while the bill was making it's way though congress.  It was surreal and incredible.

It came from El Zonte, bitcoin beach, which bitcoin was the currency of choice and was popular and expanding.  He described it as a hopeful move to inspire innovation, capital, and do something hopeful for the country.  He's about 40 y/o, so young, hopeful, tech-savvy and popular (he has a 90% approval rating via Gallup).  The first mover advantages ES are going to get, and the worldwide attention could really turn around the country (daily murders have been declining also).

Fascinating stuff.  Listening to him basically be interviewed by bitcoiners was humbling.  He gets it and wants the best for his people.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 09, 2021, 07:26:26 AM
He's about 40 y/o, so young, hopeful, tech-savvy and popular (he has a 90% approval rating via Gallup).

Hmm.

Naylib Bukele is an interesting character for sure.  He's a popular strongman who has been militarizing the national police force, has a record of sending the military into the Legislature to ensure that bills he wants passed are passed, and Amnesty International has listed El Salvadore as undergoing 'an explosion of corruption' under his regime during the pandemic.

I'm not sure how much consideration that approval rating should really get either.  For a variety of reasons, authoritarians often end up with unusually high approval ratings.  After all . . . Kim Jong Il has a 100% approval rating (https://www.bbc.com/news/world-asia-26483940 (https://www.bbc.com/news/world-asia-26483940)), Gurbanguly Berdimuhamedov was elected with 97% of the vote, etc.  Heck, even Stalin has a 70% approval rating in Russia today (themoscowtimes.com/2019/04/16/stalins-approval-rating-among-russians-hits-record-high-poll-a65245 (http://themoscowtimes.com/2019/04/16/stalins-approval-rating-among-russians-hits-record-high-poll-a65245)).
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 09, 2021, 07:44:40 AM
He's about 40 y/o, so young, hopeful, tech-savvy and popular (he has a 90% approval rating via Gallup).

Hmm.

Naylib Bukele is an interesting character for sure.  He's a popular strongman who has been militarizing the national police force, has a record of sending the military into the Legislature to ensure that bills he wants passed are passed, and Amnesty International has listed El Salvadore as undergoing 'an explosion of corruption' under his regime during the pandemic.

I'm not sure how much consideration that approval rating should really get either.  For a variety of reasons, authoritarians often end up with unusually high approval ratings.  After all . . . Kim Jong Il has a 100% approval rating (https://www.bbc.com/news/world-asia-26483940 (https://www.bbc.com/news/world-asia-26483940)), Gurbanguly Berdimuhamedov was elected with 97% of the vote, etc.  Heck, even Stalin has a 70% approval rating in Russia today (themoscowtimes.com/2019/04/16/stalins-approval-rating-among-russians-hits-record-high-poll-a65245 (http://themoscowtimes.com/2019/04/16/stalins-approval-rating-among-russians-hits-record-high-poll-a65245)).

but he uses bitcoin so he's the gold standard for future leaders in the free world.  I mean look at all he's doing for the little guy giving them a shot with BTC.(this is by far the dumbest argument made about BTC)  BTC doesn't give the little guy any more shot than they had before

Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 09, 2021, 08:10:30 AM
BTC doesn't give the little guy any more shot than they had before
When 70% of your population doesn't have a bank account it does.

Not once did he talk about price.  The main thing I took away was about changing directions for the country.  To attract talent and capital and to give the people hope.  They obviously need to execute, but if they pull it off, it will absolutely change the course of the country.
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 09, 2021, 08:24:23 AM
BTC doesn't give the little guy any more shot than they had before
When 70% of your population doesn't have a bank account it does.

Not once did he talk about price.  The main thing I took away was about changing directions for the country.  To attract talent and capital and to give the people hope.  They obviously need to execute, but if they pull it off, it will absolutely change the course of the country.

not having an autocrat as a leader would be better than some random hot at the moment digital thingy
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 09, 2021, 08:28:56 AM
When 70% of your population doesn't have a bank account it does.

...or internet access
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 09, 2021, 08:47:52 AM
When 70% of your population doesn't have a bank account it does.
...or internet access
Not true.  Don't know the number, but high cell phone penetration.  Africa is the same way.  Lots of phones, no banking.

You can use also bitcoin with the internet.  Blockstream does it via satellite and they will be in ES.
Title: Re: Bitcoin is funny money
Post by: SoBurntImCharred on June 09, 2021, 09:14:51 AM
The hate in this thread for something that has huge, asymmetric upside for El Salvador is beyond absurd.

The adoption of Bitcoin will certainly be clunky. Perhaps it will totally fail and El Salvador is no worse off than it has been for decades. Or, perhaps El Salvador's reputation as a Bitcoin sanctuary will spur innovation and investment in the country, giving a new generation hope that was previously unimaginable. Seems worth the risk.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on June 09, 2021, 09:26:02 AM
The hate in this thread for something that has huge, asymmetric upside for El Salvador is beyond absurd.

The adoption of Bitcoin will certainly be clunky. Perhaps it will totally fail and El Salvador is no worse off than it has been for decades. Or, perhaps El Salvador's reputation as a Bitcoin sanctuary will spur innovation and investment in the country, giving a new generation hope that was previously unimaginable. Seems worth the risk.

Or the people of El Salvador will get false hopes of techno-salvation from their authoritarian semi-dictator, whose odds of staying in power for life and impoverishing the nation for his own purposes just increased as a result of this meaningless gesture. If the people of El Salvador have trouble getting dollars, why will they suddenly go out and buy Bitcoin (and with what dollars?)? Note that most internet scams involve the weaponization of hope. Dictatorships do that too.
Title: Re: Bitcoin is funny money
Post by: SuperSecretName on June 09, 2021, 09:30:22 AM
OK, I give up.  If anyone has questions, feel free to PM me and I'll be as helpful as possible.

"If you don't believe me or don't get it, I don't have time to try to convince you, sorry" - Satoshi Nakamoto

Signing off colloquially.

Have fun staying poor.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on June 09, 2021, 09:39:04 AM
Have fun staying poor.

There it was. The top is in.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 09, 2021, 09:46:13 AM
IT'S NOT A CULT
Title: Re: Bitcoin is funny money
Post by: simonsez on June 09, 2021, 10:48:46 AM
Have fun staying poor.

There it was. The top is in.
I don't think speculating on crypto is the main channel to avoiding the poorhouse.  Using El Salvador as proof of legitimacy is quite the Potemkin village.

I have no skin in the game and no opposition to crypto being used more and more in the future for various reasons but currently I'm avoiding it as it's not in my IPS and have no current plans to amend it.

Seeing proponents of it resort to ad hominem/elitist spoutings does seem like some evidence of the greater fool theory.  Could be wrong, could be correct but either way I'll be on the sidelines seeing what happens for the foreseeable future.
Title: Re: Bitcoin is funny money
Post by: index on June 09, 2021, 11:51:12 AM
At the end of the day, isn't crypto currency just a store of value?

Other stores of value would be USD, EUR, gold, real estate, bonds, shares of a company's stock, shares of VTI etc.

USD is the intermediary for most of us on the forum because you cannot pay your utility bill in shares of VTI or investment properties. Real estate, bonds, and company shares have the inherent value. Gold has been valued as a commodity for 6000+ years; the USD and EUR are backed by faith and supported by infrastructure and militaries.

Bitcoin and the other crypto currencies show promise but they are much to volatile right now to be used as real currency. Would you accept a job being paid in BTC? Say a company offered you 2 or 3 BTC per year today?

What makes BTC superior as a store of value to VTI?





 
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 09, 2021, 12:44:20 PM
Hard to see how forcing Bitcoin on people who don't want or understand it is good for the little guy. Now if you're in El Salvador and someone owes you money, they have the right to offer to pay you in Bitcoin, and if you refuse the offer the debt is null and void. That's what legal tender means. No longer will someone in El Salvador have the right to say "I don't have or want a Bitcoin wallet, pay your rent/loan/whatever in USD instead." They don't have that choice anymore once this law takes effect.
Title: Re: Bitcoin is funny money
Post by: celerystalks on June 09, 2021, 12:57:35 PM
OK, I give up.  If anyone has questions, feel free to PM me and I'll be as helpful as possible.

"If you don't believe me or don't get it, I don't have time to try to convince you, sorry" - Satoshi Nakamoto

Signing off colloquially.

Have fun staying poor.

buh-bye
Title: Re: Bitcoin is funny money
Post by: theolympians on June 09, 2021, 01:27:00 PM
BTC doesn't give the little guy any more shot than they had before
When 70% of your population doesn't have a bank account it does.

Not once did he talk about price.  The main thing I took away was about changing directions for the country.  To attract talent and capital and to give the people hope.  They obviously need to execute, but if they pull it off, it will absolutely change the course of the country.

This is even more scary. Giving them more "hope" on an untested platform. If he was genuine, the leader would modernize his country's banking industry, bring it into compliance with international norms, and encourage outside investment into his country through advantageous policies.

With an expanded banking system, that 70% would be brought into the modern era and protected by existing structures. As opposed to BTC which has, at this point, unregulated "brokerages". He is putting his population at risk.
Title: Re: Bitcoin is funny money
Post by: theolympians on June 09, 2021, 01:34:38 PM
OK, I give up.  If anyone has questions, feel free to PM me and I'll be as helpful as possible.

"If you don't believe me or don't get it, I don't have time to try to convince you, sorry" - Satoshi Nakamoto

Signing off colloquially.

Have fun staying poor.

I think you are taking it the wrong way. BTC, or crypto, could be the way of the future. As of now, I am not convinced. You might be right. I don't know who Satoshi Nakamoto is as a person (isn't he the mysterious creator of BTC?), but that statement attributed to him doesn't convince me. It reads like a huckster who realizes his con isn't working on his mark.

Some form of crypto (though likely backed by gov'ts) might work in time. Time will tell.

As for the comment about staying poor, that also increases my skepticism, and reinforces my perception of "investors" believing they will get rich quick. This site generally has been about the well trodden path of wealth building. Saving, investing, measured risk, working more, improving skills to make more $ etc.

I have not invested in crypto, and am not poor (there but for the grace of God go I). Crypto may be a method, but it is not the only one, and the path is not well trodden.
Title: Re: Bitcoin is funny money
Post by: theolympians on June 09, 2021, 01:44:59 PM
At the end of the day, isn't crypto currency just a store of value?

Other stores of value would be USD, EUR, gold, real estate, bonds, shares of a company's stock, shares of VTI etc.

USD is the intermediary for most of us on the forum because you cannot pay your utility bill in shares of VTI or investment properties. Real estate, bonds, and company shares have the inherent value. Gold has been valued as a commodity for 6000+ years; the USD and EUR are backed by faith and supported by infrastructure and militaries.

Bitcoin and the other crypto currencies show promise but they are much to volatile right now to be used as real currency. Would you accept a job being paid in BTC? Say a company offered you 2 or 3 BTC per year today?

What makes BTC superior as a store of value to VTI?

I would not take a job paid in crypto as it is too volatile. One week you could paid the equivalent of $1000, the next $500.  Of course you might get $10,000 one week, and $200 the next. Wherein that is a problem for companies-- no business, for very long, could afford to do that (though they might say you will get X dollars in BTC, but then again what is the point of that?)

A "store of value" headline was created by the promoters of crypto, and continues to be promulgated. IMO it is not a store of value as crypto is only worth what someone else will pay for it at any given moment. VTI is backed by stocks in companies that can be measured in an objective sense.

You wrote that USD and EUR is backed by faith and militaries. Well, that is the point of currency. The currency is valued by the gov't and works, at least, within the country's system across the population.
Title: Re: Bitcoin is funny money
Post by: mjr on June 09, 2021, 03:13:27 PM
... and the "store of value" headline was created only after it became clear that BTC was way too volatile to be used for its original purpose - a global currency.
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on June 09, 2021, 04:03:07 PM
Legalize volcanos and tax them for revenue.
Title: Re: Bitcoin is funny money
Post by: celerystalks on June 09, 2021, 04:21:56 PM
Legalize volcanos and tax them for revenue.

Bigot!
Title: Re: Bitcoin is funny money
Post by: Vienna4ever on June 09, 2021, 04:28:24 PM
El Salvador? Didn't the bitcoiners get excited when the banks started offering bitcoin funds?

===Though JPMorgan Chase will reportedly offer a bitcoin fund for wealthy clients, chairman and CEO Jamie Dimon still isn’t personally sold on the cryptocurrency. “I’m not a bitcoin supporter,” Dimon said during The Wall Street Journal CEO Council summit on Tuesday. “I don’t care about bitcoin. I have no interest in it.”  “On the other hand, clients are interested, and I don’t tell clients what to do,” he said.===
 

What Bitcoiners don't understand, is that those investment banks (e.g JP Morgan) only offer Bitcoin funds because their clients are asking for it. It is not an endorsement or a belief that bitcoin is the real deal. What does it matter to JP Morgan? They get to collect money on the commission/fees, whether you win or lose. What is not mentioned also is that they restrict investment to only their richest clients who can afford to lose the money and are expected to know what they are doing. They do NOT offer these bitcoin funds to retail investors (e.g. the rest of us losers) who could potentially sue JP Morgan for bad investment advice or breaching their fiduciary duty.

 
Title: Re: Bitcoin is funny money
Post by: Vienna4ever on June 09, 2021, 04:34:16 PM
stay poor indeed...  Michael Saylor btw has told people to put all their money into bitcoin, and if they don't have the money, to BORROW the money and put it all in Bitcoin! Does that sound like good advice???  It more likely that the "saylor" is gonna go down with the ship!

And just recently at some Miami crypto lovefest, he said, bitcoin is the **most energy efficient asset class** ever invented!! :D Compared to what? His answer? Well Bitcoin has a market of 800 Billion at the moment, he says. And he compares the energy used to make bitcoins to the energy used by Apple or Google and their market caps!!! :D  Really? 

yet another Bitcoiner, Nick Szabo said we left the gold standard in 1971, get this - because gold *WAS EASY TO FAKE* (e.g. gold bars filled with Tungsten) and *HARD TO ASSAY*. And Bitcoin solves this problem!!! Really ? Have you ever heard of gold testing machines? It has never been hard to authenticate gold. The real reason? Because USA was broke and ran too many deficits (LBJ, Nixon, etc) and wanted to keep printing money (to buy votes as it always has done since the beginning of 20th Century) without keeping a strict exchange rate of dollar to gold. Btw - going off the gold standard was to be *temporary* ! Of course, everything temporary ends up permanent.


Title: Re: Bitcoin is funny money
Post by: Telecaster on June 09, 2021, 06:18:04 PM
Have fun staying poor.

I don't really do Twitter, but I gotta say, one of the funniest Twitter moments I can remember was a stream of Bitcoin proponents telling Charlie Munger to have fun staying poor. 

https://twitter.com/search?q=hfsp%20%20munger&src=typed_query
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 09, 2021, 07:15:33 PM
Hard to see how forcing Bitcoin on people who don't want or understand it is good for the little guy. Now if you're in El Salvador and someone owes you money, they have the right to offer to pay you in Bitcoin, and if you refuse the offer the debt is null and void. That's what legal tender means. No longer will someone in El Salvador have the right to say "I don't have or want a Bitcoin wallet, pay your rent/loan/whatever in USD instead." They don't have that choice anymore once this law takes effect.

I don't know how it works in El Salvador, but in the US the seller can dictate the terms of payment.   For example, convenience stores not accepting bills over $100, or these days we're seeing merchants who don't accept cash at all.

In a practical sense (again for the US) what legal tender means is that is the form of currency the government will accept for taxes, and what the currency wages can legal be paid in.  In El Salvador, presumably this means wages and taxes can now be paid in Bitcoin.   And presumably you wouldn't have to pay capital gains on Bitcoin (or be able to deduct capital losses).  But the stickey wicket is that according to news reports, everything will still be denominated in dollars.  You can pay in Bitcoin, but the price will be determined by dollars.     

So when the smoke clears, this doesn't change much of anything because it doesn't solve any of the problems that make Bitcoin unattractive to use as a currency.   It is volatile, transactions are slow and expensive.  There are work arounds for those problems, but the work arounds don't add any advantages over simply just using fiat. 
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 09, 2021, 09:02:14 PM
Legal tender isn't just about taxes and wages, it's (in the US) about "all debts, public and private." My understanding is that "debt" is a key word here: when you owe somebody money for something. If you're shopping in a store you don't owe the store anything. The merchandise belongs to the store until they agree to sell it to you. You might ask to purchase something, but they're free to reject your offer if you want to pay them in a different way than they would like. No debt exists, legal tender doesn't come into play. If you've signed a lease for an apartment a debt does exist. You are occupying that apartment and in exchange you owe the landlord an agreed-upon number of dollars every month until your lease ends and you move out. Legal tender laws do apply here. If you offer ("tender") cash in the amount owed, you have satisfied your end of the bargain regardless of whether the landlord prefers to be paid in some other form.

Where El Salvador is concerned, the BBC article (https://www.bbc.com/news/world-latin-america-57398274) about this new legal tender law indicates that it applies to both goods and services. If true that would be a step beyond US legal tender laws. That article also says merchants can be exempt if they are "unable to provide the technology needed to do the transaction." They don't go into specifics on this. If a shop is in an area with widespread internet service available but they have previously chosen to operate on a cash basis without network access, are they "able" or "unable" to provide the technology?
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 09, 2021, 09:19:14 PM
Legal tender isn't just about taxes and wages, it's (in the US) about "all debts, public and private." My understanding is that "debt" is a key word here: when you owe somebody money for something. If you're shopping in a store you don't owe the store anything. The merchandise belongs to the store until they agree to sell it to you. You might ask to purchase something, but they're free to reject your offer if you want to pay them in a different way than they would like. No debt exists, legal tender doesn't come into play. If you've signed a lease for an apartment a debt does exist. You are occupying that apartment and in exchange you owe the landlord an agreed-upon number of dollars every month until your lease ends and you move out. Legal tender laws do apply here. If you offer ("tender") cash in the amount owed, you have satisfied your end of the bargain regardless of whether the landlord prefers to be paid in some other form.

Gotcha, that makes sense.  Thanks for the clarification. 

Where El Salvador is concerned, the BBC article (https://www.bbc.com/news/world-latin-america-57398274) about this new legal tender law indicates that it applies to both goods and services. If true that would be a step beyond US legal tender laws. That article also says merchants can be exempt if they are "unable to provide the technology needed to do the transaction." They don't go into specifics on this. If a shop is in an area with widespread internet service available but they have previously chosen to operate on a cash basis without network access, are they "able" or "unable" to provide the technology?

I haven't been to El Salvador, but in other developing nations cash rules.  Outside of major tourist centers, credit cards are rarely accepted.  So if you don't take Visa, do you now take Bitcoin? 

There is also seems to be some grey area here.  Do you have to accept Bitcoin directly?  Or can you use a trusted-third party app to mediate the transaction? 

Regardless, it seems to me for this to have any real impact, Bitcoin transactions for the merchant need to be as convenient as cash or credit card. 
Title: Re: Bitcoin is funny money
Post by: bacchi on June 09, 2021, 09:35:29 PM
Legal tender isn't just about taxes and wages, it's (in the US) about "all debts, public and private." My understanding is that "debt" is a key word here: when you owe somebody money for something. If you're shopping in a store you don't owe the store anything. The merchandise belongs to the store until they agree to sell it to you. You might ask to purchase something, but they're free to reject your offer if you want to pay them in a different way than they would like. No debt exists, legal tender doesn't come into play. If you've signed a lease for an apartment a debt does exist. You are occupying that apartment and in exchange you owe the landlord an agreed-upon number of dollars every month until your lease ends and you move out. Legal tender laws do apply here. If you offer ("tender") cash in the amount owed, you have satisfied your end of the bargain regardless of whether the landlord prefers to be paid in some other form.

Gotcha, that makes sense.  Thanks for the clarification. 

A lease (in the US) can specify "no cash" for rent payment. Courts may uphold that lease stipulation, according to state law.

Federal 31 U.S.C. Sec. 5103 doesn't require acceptance of cash.
Title: Re: Bitcoin is funny money
Post by: MilesTeg on June 09, 2021, 10:50:54 PM
Legal tender isn't just about taxes and wages, it's (in the US) about "all debts, public and private." My understanding is that "debt" is a key word here: when you owe somebody money for something. If you're shopping in a store you don't owe the store anything. The merchandise belongs to the store until they agree to sell it to you. You might ask to purchase something, but they're free to reject your offer if you want to pay them in a different way than they would like. No debt exists, legal tender doesn't come into play. If you've signed a lease for an apartment a debt does exist. You are occupying that apartment and in exchange you owe the landlord an agreed-upon number of dollars every month until your lease ends and you move out. Legal tender laws do apply here. If you offer ("tender") cash in the amount owed, you have satisfied your end of the bargain regardless of whether the landlord prefers to be paid in some other form.

Gotcha, that makes sense.  Thanks for the clarification. 

A lease (in the US) can specify "no cash" for rent payment. Courts may uphold that lease stipulation, according to state law.

Federal 31 U.S.C. Sec. 5103 doesn't require acceptance of cash.

A lease agreement may be a gray area about whether they can terminate your lease for not paying in specific ways, in particular because you pay for a month in advance. But, a landlord cannot refuse your payment of USD to satisfy any debt.
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 09, 2021, 11:13:24 PM
^ All this seems like nibbling around the edges.  Many landlords straight up do not accept cash.  You might have to go to court to force them to do so.  You might win, but in a practical sense it is too big of a pain in the ass to force the point.  It is really hard to force someone to take a form of payment that they don't want to take.

That said, I don't think any of us knows how it works in El Salvador.  But given the costs and complexities of accepting Bitcoin for everyday payments, I don't see why it would gain any more acceptance there than it has here. 
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 10, 2021, 07:36:36 AM
https://www.cnbc.com/2021/06/10/millennial-millionaires-have-large-share-of-wealth-in-crypto-cnbc-survey-.html

Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 10, 2021, 07:51:32 AM
https://www.cnbc.com/2021/06/10/millennial-millionaires-have-large-share-of-wealth-in-crypto-cnbc-survey-.html

Well that's fucking horrifying.
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 10, 2021, 08:40:02 AM
https://www.cnbc.com/2021/06/10/millennial-millionaires-have-large-share-of-wealth-in-crypto-cnbc-survey-.html

Well that's fucking horrifying.

my thoughts exactly. but on the flip side how many are only millionaires because of crypto.  Cash in the lottery ticket you won move on to more stable longterm assets.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on June 10, 2021, 08:44:43 AM
https://www.cnbc.com/2021/06/10/millennial-millionaires-have-large-share-of-wealth-in-crypto-cnbc-survey-.html

Well that's fucking horrifying.

my thoughts exactly. but on the flip side how many are only millionaires because of crypto.  Cash in the lottery ticket you won move on to more stable longterm assets.

Yeah I mean they're obviously morons right?  You know better.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 10, 2021, 08:50:38 AM
https://www.cnbc.com/2021/06/10/millennial-millionaires-have-large-share-of-wealth-in-crypto-cnbc-survey-.html

Well that's fucking horrifying.

my thoughts exactly. but on the flip side how many are only millionaires because of crypto.  Cash in the lottery ticket you won move on to more stable longterm assets.

Yeah I mean they're obviously morons right?  You know better.

A young investor who gets lucky after making a bet isn't a moron.  They're lucky.  The problem is the tendency to attribute that luck to intelligence and skill in prognostication.  That often leads them to expect it to happen again / continue to happen.  This is where they determine if they'll end up looking like morons or not.
Title: Re: Bitcoin is funny money
Post by: bacchi on June 10, 2021, 09:13:15 AM
Legal tender isn't just about taxes and wages, it's (in the US) about "all debts, public and private." My understanding is that "debt" is a key word here: when you owe somebody money for something. If you're shopping in a store you don't owe the store anything. The merchandise belongs to the store until they agree to sell it to you. You might ask to purchase something, but they're free to reject your offer if you want to pay them in a different way than they would like. No debt exists, legal tender doesn't come into play. If you've signed a lease for an apartment a debt does exist. You are occupying that apartment and in exchange you owe the landlord an agreed-upon number of dollars every month until your lease ends and you move out. Legal tender laws do apply here. If you offer ("tender") cash in the amount owed, you have satisfied your end of the bargain regardless of whether the landlord prefers to be paid in some other form.

Gotcha, that makes sense.  Thanks for the clarification. 

A lease (in the US) can specify "no cash" for rent payment. Courts may uphold that lease stipulation, according to state law.

Federal 31 U.S.C. Sec. 5103 doesn't require acceptance of cash.

A lease agreement may be a gray area about whether they can terminate your lease for not paying in specific ways, in particular because you pay for a month in advance. But, a landlord cannot refuse your payment of USD to satisfy any debt.

A US landlord/business must accept USD but it doesn't have to be cash. "No cash" is perfectly legal.

Quote from: https://www.federalreserve.gov/faqs/currency_12772.htm
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.


-----
Re: El Salvador -- Street customers aren't going to wait around for the 10+ minutes needed to process a transaction. Imagine a street vendor saying, "Just stand over there and wait. I'll start your food when the bitcoin transaction goes through."
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 10, 2021, 09:36:03 AM
https://www.cnbc.com/2021/06/10/millennial-millionaires-have-large-share-of-wealth-in-crypto-cnbc-survey-.html

Well that's fucking horrifying.

my thoughts exactly. but on the flip side how many are only millionaires because of crypto.  Cash in the lottery ticket you won move on to more stable longterm assets.

Yeah I mean they're obviously morons right?  You know better.

A young investor who gets lucky after making a bet isn't a moron.  They're lucky.  The problem is the tendency to attribute that luck to intelligence and skill in prognostication.  That often leads them to expect it to happen again / continue to happen.  This is where they determine if they'll end up looking like morons or not.

Correct - I recently ran the numbers of the best investor in history - Warren Buffett.  You know the saying any fund can beat the market for 10 years but that doesn't mean they will the next 10 and probably means they wont.  Well I ran it against SCV returns from 1980 thru today - if you remove the decade of the 80s he loses to SCV.  He's a value investor this is an index he should be compared to not the SP500.  Now that 80s decade he did amazingly well but never repeated that performance.

Title: Re: Bitcoin is funny money
Post by: index on June 10, 2021, 09:48:38 AM
Until landlords say rent is 0.021 BTC/month in a lease, bitcoin will just be a go between for a more stable currency. BTC as a whole is worth ~700B; the total gold stock is worth about 102T. BTC has been around 12 years. If you are looking for an alternative store of value, what makes BTC a better investment than gold?
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 10, 2021, 10:23:40 AM
https://www.cnbc.com/2021/06/10/millennial-millionaires-have-large-share-of-wealth-in-crypto-cnbc-survey-.html

Well that's fucking horrifying.

my thoughts exactly. but on the flip side how many are only millionaires because of crypto.  Cash in the lottery ticket you won move on to more stable longterm assets.

Right. At this point "millennials" are between 25-40 years of age. To be a millionaire at this age you're already rather unusual. Consider that this generation has faced systemic economic challenges that have generally led to us accumulating wealth at a slower rate than previous generations, and a millennial millionaire is even more of an outlier. I'm therefore not surprised that a pretty significant fraction of those millionaires are the ones who got lucky betting on an asset that has enjoyed unprecedented returns over the past decade. At this point diversification would be very wise.


A US landlord/business must accept USD but it doesn't have to be cash. "No cash" is perfectly legal.

Quote from: https://www.federalreserve.gov/faqs/currency_12772.htm
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.

Goods and services are not debts. What do you suppose the actual effect of the legal tender law is, if it doesn't compel any private party to accept cash in any circumstance? What does "legal tender for all debts" actually mean if it doesn't mean that creditors are generally required to accept it? As with many rights, you may be free to waive the right to pay in cash as part of a contract such as a lease agreement. I'd still expect that in the absence of language to the contrary in the lease agreement, a landlord would be required by legal tender laws to accept cash. Of course it's also valid to point out that enforcing this right in court would generally not be worth the hassle. Same can be said about many minor rights violations.

Legal tender isn't just about taxes and wages, it's (in the US) about "all debts, public and private." My understanding is that "debt" is a key word here: when you owe somebody money for something. If you're shopping in a store you don't owe the store anything. The merchandise belongs to the store until they agree to sell it to you. You might ask to purchase something, but they're free to reject your offer if you want to pay them in a different way than they would like. No debt exists, legal tender doesn't come into play. If you've signed a lease for an apartment a debt does exist. You are occupying that apartment and in exchange you owe the landlord an agreed-upon number of dollars every month until your lease ends and you move out. Legal tender laws do apply here. If you offer ("tender") cash in the amount owed, you have satisfied your end of the bargain regardless of whether the landlord prefers to be paid in some other form.

Gotcha, that makes sense.  Thanks for the clarification. 

A lease (in the US) can specify "no cash" for rent payment. Courts may uphold that lease stipulation, according to state law.

Federal 31 U.S.C. Sec. 5103 doesn't require acceptance of cash.

Cash is a form of payment.  The US dollar is a currency.  Cash is not legal tender;  the US dollar is.

It's written right on the cash that that particular note is legal tender. That above-cited section of the USC also specifically calls out US coins and federal reserve notes as being legal tender.
Title: Re: Bitcoin is funny money
Post by: bacchi on June 10, 2021, 10:36:05 AM
A US landlord/business must accept USD but it doesn't have to be cash. "No cash" is perfectly legal.

Quote from: https://www.federalreserve.gov/faqs/currency_12772.htm
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.

Goods and services are not debts. What do you suppose the actual effect of the legal tender law is, if it doesn't compel any private party to accept cash in any circumstance? What does "legal tender for all debts" actually mean if it doesn't mean that creditors are generally required to accept it? As with many rights, you may be free to waive the right to pay in cash as part of a contract such as a lease agreement. I'd still expect that in the absence of language to the contrary in the lease agreement, a landlord would be required by legal tender laws to accept cash. Of course it's also valid to point out that enforcing this right in court would generally not be worth the hassle. Same can be said about many minor rights violations.

The "legal tender" portion is about the requirement of a US business to accept USD. It can't accept only Euros or Pesos; it also doesn't have to be in bill or coin form. It can be a check or a card or Venmo, paid to the vendor in USD.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 10, 2021, 10:48:52 AM
The above-cited US code section doesn't say anything about USD (the currency in the abstract), it says that the physical cash and coin objects are legal tender.

Quote
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.
Title: Re: Bitcoin is funny money
Post by: celerystalks on June 10, 2021, 10:55:58 AM
A US landlord/business must accept USD but it doesn't have to be cash. "No cash" is perfectly legal.

Quote from: https://www.federalreserve.gov/faqs/currency_12772.htm
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.

Goods and services are not debts. What do you suppose the actual effect of the legal tender law is, if it doesn't compel any private party to accept cash in any circumstance? What does "legal tender for all debts" actually mean if it doesn't mean that creditors are generally required to accept it? As with many rights, you may be free to waive the right to pay in cash as part of a contract such as a lease agreement. I'd still expect that in the absence of language to the contrary in the lease agreement, a landlord would be required by legal tender laws to accept cash. Of course it's also valid to point out that enforcing this right in court would generally not be worth the hassle. Same can be said about many minor rights violations.

The "legal tender" portion is about the requirement of a US business to accept USD. It can't accept only Euros or Pesos; it also doesn't have to be in bill or coin form. It can be a check or a card or Venmo, paid to the vendor in USD.

Nope. Coins and notes are legal tender in the US. They can be used to pay any public or private debt. This is why periodically a vengeful debtor will order a pallet of pennies to be delivered to a creditor. It satisfies the debt.

Some countries have laws that coins are not legal tender for debts over £5 or something like that. So a creditor could refuse a truckload of pennies.

However some creditors will warn against sending cash through the mail (usually mentioned in utility and mortgage bills) because if it is not received or stolen the debtor will have very little recourse and will still be in debt.

Further the posters who draw the distinction between debts already incurred and goods and services yet to be bought are absolutely right that cash does not need to be accepted for goods and services even though it is legal tender.  Try buying a pack of gum with a $100 bill.  The vendor doesn’t need to sell it to you. They don’t really need a reason but most will still allege that they cant make change. Further, many stores will have a published policy of not accepting bills over a certain amount.  This is because in the US goods on the shelf in a store listed at a price are not considered legally binding offers that create a liability or debt when the buyer accepts them.  They are considered “invitation to treat” which means that the seller will sell at the given price if the buyer makes an acceptable offer regarding the time, place, and manner and form of payment. This is implied when the buyer puts everything in the checkout and uses an acceptable form of payment and is willing and takes immediate delivery of the goods bought. And this is also why you can’t call the grocery store and tell them you accept their offer to sell one pound of peas at $1.29 since you saw it in the Sunday special, and now having formed a contract for your pound of peas you will be by to settle your debt with a $100 bill.

Title: Re: Bitcoin is funny money
Post by: bacchi on June 10, 2021, 11:12:22 AM
The above-cited US code section doesn't say anything about USD the currency, it says that the physical cash and coin objects are legal tender.

Quote
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

Yes, they are legal tender. There's nothing in the law about a requirement though. In other words, they may be used to satisfy a debt but they don't have to be used. This is why we can pay businesses with a hundred other choices (eventually ending up with USD at a business' bank). It's also why, on the flip side, cash payments can be denied.

From the Treasury,

Quote from: https://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx
I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
[...]
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

https://www.usatoday.com/story/news/factcheck/2020/09/16/fact-check-cashless-businesses-banned-only-some-local-state-laws/3330804001/
https://www.politifact.com/factchecks/2020/jul/22/facebook-posts/are-businesses-required-law-accept-cash-depends-wh/
https://blogs.findlaw.com/free_enterprise/2019/08/is-it-legal-for-businesses-to-refuse-to-take-cash.html

Etc.

Yes, you can pay the IRS in pennies but a private business can't be forced to accept pennies even if it is a "debt," and not a "goods and/or services," which is playing semantic games.


If the Federal Reserve and the US Treasury aren't enough proof, I don't know how else to provide it.
Title: Re: Bitcoin is funny money
Post by: Wrenchturner on June 10, 2021, 11:17:50 AM
Young people are buying crypto because they are trying to save.  Saving is not a concept respected by central bankers and fiscal policymakers, so people have to find it somewhere else.  Too many hands on the scales of stocks, bonds, fx. for saving to function in fiat.
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 10, 2021, 11:38:09 AM
Young people are buying crypto because they are trying to save.  Saving is not a concept respected by central bankers and fiscal policymakers, so people have to find it somewhere else.  Too many hands on the scales of stocks, bonds, fx. for saving to function in fiat.

no they are buying it to try to get rich quick - i doubt many of my peer group is buying crypto as a way to save and invest.  They may be saying thats what they are doing but really they want to get rich quick.  many are doing it with large amounts of leverage as well.
Title: Re: Bitcoin is funny money
Post by: mckaylabaloney on June 10, 2021, 11:57:23 AM
Young people are buying crypto because they are trying to save.

Uh, source? I only have anecdotal evidence, but I'm the same age as you and nobody I know who's investing in crypto is trying to "save" under any usual definition of the word. They're trying to get rich as quickly as possible.

Saving is not a concept respected by central bankers and fiscal policymakers, so people have to find it somewhere else.  Too many hands on the scales of stocks, bonds, fx. for saving to function in fiat.

??? I feel like I must misreading this because surely you aren't suggesting that crypto is a better savings method than, say, index funds.
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 10, 2021, 12:10:13 PM
Young people are buying crypto because they are trying to save.

Uh, source? I only have anecdotal evidence, but I'm the same age as you and nobody I know who's investing in crypto is trying to "save" under any usual definition of the word. They're trying to get rich as quickly as possible.


agreed i'm in the same peer group and they all are looking for short cuts. i'm like short cuts exist by picking long term historically outperforming yet slightly more volatile asset classes like SCV.  You can get an edge there but you're just gambling with bitcoin
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 10, 2021, 12:14:04 PM
The personal savings rate is currently the highest it has been in decades. 

https://fred.stlouisfed.org/series/PSAVERT

agreed i'm in the same peer group and they all are looking for short cuts. i'm like short cuts exist by picking long term historically outperforming yet slightly more volatile asset classes like SCV.  You can get an edge there but you're just gambling with bitcoin

What is SCV?
Title: Re: Bitcoin is funny money
Post by: bacchi on June 10, 2021, 12:19:50 PM
The personal savings rate is currently the highest it has been in decades. 

https://fred.stlouisfed.org/series/PSAVERT

agreed i'm in the same peer group and they all are looking for short cuts. i'm like short cuts exist by picking long term historically outperforming yet slightly more volatile asset classes like SCV.  You can get an edge there but you're just gambling with bitcoin

What is SCV?

Small Cap Value.
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on June 10, 2021, 12:46:43 PM
Young people are buying crypto because they are trying to save.  Saving is not a concept respected by central bankers and fiscal policymakers, so people have to find it somewhere else.  Too many hands on the scales of stocks, bonds, fx. for saving to function in fiat.

no they are buying it to try to get rich quick - i doubt many of my peer group is buying crypto as a way to save and invest.  They may be saying thats what they are doing but really they want to get rich quick.  many are doing it with large amounts of leverage as well.

Since June 2019, the US CPI has increased at an annual average of 2.5%. Yes, the yields on safe government bonds are negative right now. I find that a poor excuse for not saving, particularly for young people who should be in more volatile investments than treasuries and AAA bonds.

In terms of "hands on the scale" for stocks and bonds, I certainly hope so. The millions of people employed by the companies I'm invested in should be going to work every day creating value as they have been doing for many lifetimes. They will succeed at creating value because they are motivated by financial gain. If you mean to imply that the illuminati are manipulating prices so that young people have to pay more... um kay... lay off the YouTube maybe?
Title: Re: Bitcoin is funny money
Post by: talltexan on June 10, 2021, 01:17:18 PM
I think there's a selection issue about "millionaire millenials" owning crypto.

People who like crypto will tell you about crypto. People who amass stealth wealth are going to be more...cagey. So it's a process that proportionately will reveal more crypto boosters.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 10, 2021, 02:57:38 PM
The above-cited US code section doesn't say anything about USD the currency, it says that the physical cash and coin objects are legal tender.

Quote
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

Yes, they are legal tender. There's nothing in the law about a requirement though. In other words, they may be used to satisfy a debt but they don't have to be used. This is why we can pay businesses with a hundred other choices (eventually ending up with USD at a business' bank). It's also why, on the flip side, cash payments can be denied.

From the Treasury,

Quote from: https://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx
I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
[...]
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Yes, you already quoted that bit. It specifically talks about businesses being able to refuse cash as payment for goods and services. It is silent on the issue of whether they must accept cash to satisfy debts.

Quote
https://www.usatoday.com/story/news/factcheck/2020/09/16/fact-check-cashless-businesses-banned-only-some-local-state-laws/3330804001/

That article cites the already-linked Treasury page saying cash is not required to be accepted for goods and services, and a page from the Federal Reserve (https://www.federalreserve.gov/faqs/currency_12772.htm) that says essentially the same thing about goods and services while also stating
Quote
Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency [including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks] are legal tender for all debts, public charges, taxes, and dues." This statute means that all U.S. money as identified above is a valid and legal offer of payment for debts when tendered to a creditor.

So, it's valid to offer USD cash and coins to satisfy a debt. Once you make that offer, what is the creditor's obligation? I always understood it to mean that they needed to accept your legal tender and can't just arbitrarily demand you pay in gold bars or something, but I could be wrong! If I am wrong I'm utterly baffled at the point of this statute. If declaring US paper currency to be legal tender doesn't create any new obligations for anyone, why bother writing it down? My layman's understanding of legal interpretation is that courts prefer to interpret every single word of a law as though it has some effect. To have an entire law that does nothing at all seems counter to that. It's not as though offering cash for debts would be illegal in absence of this statute. You're free to offer whatever you like.

Quote
https://www.politifact.com/factchecks/2020/jul/22/facebook-posts/are-businesses-required-law-accept-cash-depends-wh/

Once again, this talks about businesses being free to reject cash as payment for goods and services, while repeating that cash is legal tender for debts.

Quote
https://blogs.findlaw.com/free_enterprise/2019/08/is-it-legal-for-businesses-to-refuse-to-take-cash.html

Ditto.
Title: Re: Bitcoin is funny money
Post by: MilesTeg on June 10, 2021, 06:38:51 PM

A US landlord/business must accept USD but it doesn't have to be cash. "No cash" is perfectly legal.

Quote from: https://www.federalreserve.gov/faqs/currency_12772.htm
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.


I meant cash when I said USD. Sorry for being imprecise.

You are conflating "purchasing goods and services" with "debt". A store in the U.S. can absolutely refuse to accept cash when you attempt to buy a good or service, but no public or private entity can refuse to accept cash for any money already owed (e.g. a debt). If you owe a debt, cash must be accepted to settle that debt.

Going to the supermarket checkout counter does not involve the creation of any debt thus the supermarket is free to set whatever policy it wants. It require any (legal) form of payment it wants. USD, BTC, monopoly money, your labor, whatever it wants.

But, if you, for example, pay the supermarket with a credit card to you incur a debt to the credit card company, and they may not refuse cash in order to settle that debt.

Title: Re: Bitcoin is funny money
Post by: MilesTeg on June 10, 2021, 06:57:47 PM
So, it's valid to offer USD cash and coins to satisfy a debt. Once you make that offer, what is the creditor's obligation? I always understood it to mean that they needed to accept your legal tender and can't just arbitrarily demand you pay in gold bars or something, but I could be wrong! If I am wrong I'm utterly baffled at the point of this statute.

"Legal tender" is specifically defined in law as a form of money that must be accepted to satisfy debts. So the statute that defines US coins and cash as legal tender does indeed state that they must be accepted to settle debts.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 11, 2021, 06:54:59 AM
The more I read about this El Salvador deal, the more clearly it appears to be the scam we all kind of knew it was. From Strike’s CEO, describing how Strike works:

Quote
When I initiate the $1,000 payment, Strike debits my existing USD balance.

Strike then automatically converts my $1,000 to bitcoins ready for use in its infrastructure using its real-time automated risk management and trading infrastructure.

Strike then moves the bitcoins across the Atlantic Ocean where it arrives in one of our many European infrastructure pieces in less than a second and for no cost.

Strike then takes the bitcoins and automatically converts them back into Euros using its real-time automated risk management and trading infrastructure.

Strike then credits the existing user with the Euros to their Strike account.

Source: https://jimmymow.medium.com/announcing-strike-global-2392b908f611

Aka: Give ‘em your USD, they’ll give your counterparty fabricated fake internet dollars (Tethers). What could go wrong? So what it seems might be happening is Bukele’s scheme is to confiscate USD from remittances and force people to accept USDT. 
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on June 11, 2021, 11:23:11 AM
Bookies see a nearly 60% chance of bitcoin sliding to $10,000 this year

https://markets.businessinsider.com/currencies/news/bitcoin-price-bookies-odds-10000-cryptocurrency-betting-oddsmakers-regulation-6-1030516537 (https://markets.businessinsider.com/currencies/news/bitcoin-price-bookies-odds-10000-cryptocurrency-betting-oddsmakers-regulation-6-1030516537)

I don't like crypto, but at those odds I might take the opposite bet. This trade is obviously crowded because it's a way for people to hedge their long bitcoin exposure. HODL? Yea, right.
Title: Re: Bitcoin is funny money
Post by: Vienna4ever on June 14, 2021, 06:34:11 PM
Binance scandal, TechLead summary.

https://www.youtube.com/watch?v=IG8LfZoMd_E


Title: Re: Bitcoin is funny money
Post by: BattlaP on June 17, 2021, 10:22:11 PM
https://tokenist.com/buterin-explains-why-ethereum-2-0-upgrade-wont-arrive-until-late-2022/

To the surprise of absolutely no one, Ethereum pushes back the promise of proof-of-stake yet again
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on June 18, 2021, 02:40:25 AM
https://tokenist.com/buterin-explains-why-ethereum-2-0-upgrade-wont-arrive-until-late-2022/

To the surprise of absolutely no one, Ethereum pushes back the promise of proof-of-stake yet again

If its fake-internet fairy money like everyone on this forum thinks, who cares what they use?  It's all worthless and going to zero right?
Title: Re: Bitcoin is funny money
Post by: boarder42 on June 18, 2021, 03:42:13 AM
https://tokenist.com/buterin-explains-why-ethereum-2-0-upgrade-wont-arrive-until-late-2022/

To the surprise of absolutely no one, Ethereum pushes back the promise of proof-of-stake yet again

If its fake-internet fairy money like everyone on this forum thinks, who cares what they use?  It's all worthless and going to zero right?

I don't think people here think it's fake internet funny money. Just that it's not really a good way to build wealth. Even tulip bulbs are still fire sale.
Title: Re: Bitcoin is funny money
Post by: BattlaP on June 18, 2021, 03:55:12 AM
https://tokenist.com/buterin-explains-why-ethereum-2-0-upgrade-wont-arrive-until-late-2022/

To the surprise of absolutely no one, Ethereum pushes back the promise of proof-of-stake yet again

If its fake-internet fairy money like everyone on this forum thinks, who cares what they use?  It's all worthless and going to zero right?

Weirdly aggressive response.

It's worth listing broken promises and other legitimate complaints, and we care what they use because the claim for has been for years that the proof-of-stake model will improve the pathetic energy usage situation. Specifically, it was hyped in the first quarter of this year as coming in late 2021 in response to bitcoin energy usage hitting the news cycle.
Title: Re: Bitcoin is funny money
Post by: DaKini on June 18, 2021, 11:56:15 AM
Germany currently is planning to roll out law to better track crypto transactions, btw

What really worries me about proof of stake is that it really benefits those who already have a big stash. Aka the early adopters. While i think it will be a good thing for the environment, it - in my eyes - does incentivize speculating even more.  I can’t understand the reasons why anyone would want to switch to pos unless they are already in big time and want to rip off the naive youngsters.

The shifting of money from the crowd to the big fishes (aka pyramid) is so clearly on the table - what am i overlooking?
Title: Re: Bitcoin is funny money
Post by: DaKini on June 21, 2021, 12:15:18 PM
Not so funny for the Chinese miners - they were forced to shut down...
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 21, 2021, 01:04:46 PM
https://tokenist.com/buterin-explains-why-ethereum-2-0-upgrade-wont-arrive-until-late-2022/

To the surprise of absolutely no one, Ethereum pushes back the promise of proof-of-stake yet again

If its fake-internet fairy money like everyone on this forum thinks, who cares what they use?  It's all worthless and going to zero right?

Much of the criticism of Proof of Work is because of the carbon footprint to societal benefit ratio. If you believe the societal benefit is 0 (e.g., it's "fake-internet fairy money"), then you'd especially care that the promise to move away from PoW was broken.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 21, 2021, 01:13:48 PM
Germany currently is planning to roll out law to better track crypto transactions, btw

What really worries me about proof of stake is that it really benefits those who already have a big stash. Aka the early adopters. While i think it will be a good thing for the environment, it - in my eyes - does incentivize speculating even more.  I can’t understand the reasons why anyone would want to switch to pos unless they are already in big time and want to rip off the naive youngsters.

The shifting of money from the crowd to the big fishes (aka pyramid) is so clearly on the table - what am i overlooking?

Preface: I'm not defending any of it. I think the whole blockchain-based cryptocurrency concept is fundamentally broken. But.. I don't know that PoS is significantly more big-fish-centric than PoW. According to this [1] CCN article, ~51% of the hash rate is controlled by just 3 mining pools. This is for Bitcoin, not Ethereum, but as I understand it, Ethereum's mining centralization is similar. PoS advocates argue that PoS actually helps decentralize mining.

[1] https://www.ccn.com/bitmains-mining-pools-now-control-nearly-51-percent-of-the-bitcoin-hashrate/
Title: Re: Bitcoin is funny money
Post by: BattlaP on June 21, 2021, 03:24:38 PM
All "proof-of" models can effectively be renamed "proof-of-capital" because you will always be able to buy a majority controlling stake, with enough actual money, of whatever hurdles you need to jump. Graphics cards, hard-drives, WiFi coverage, capital investment, etc.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 23, 2021, 08:20:28 PM
Annnd $3.6 Billion has been stolen from a South African Bitcoin exchange. As usual, I'm sure all the victims totally deserved it for not jumping through all the necessary hoops to ensure their totally-secure-unseizable-censor-proof-hardest-money money was secure.

https://www.bloomberg.com/news/articles/2021-06-23/s-african-brothers-vanish-and-so-does-3-6-billion-in-bitcoin?srnd=premium-europe

Title: Re: Bitcoin is funny money
Post by: onecoolcat on June 23, 2021, 09:58:52 PM
Annnd $3.6 Billion has been stolen from a South African Bitcoin exchange. As usual, I'm sure all the victims totally deserved it for not jumping through all the necessary hoops to ensure their totally-secure-unseizable-censor-proof-hardest-money money was secure.

https://www.bloomberg.com/news/articles/2021-06-23/s-african-brothers-vanish-and-so-does-3-6-billion-in-bitcoin?srnd=premium-europe

That sucks.  Not your keys; not your coins. 

It's also worth noting that there were red flags all around this exchange as it promised its customers up to 10% a day interest on their Bitcoin.  That is significantly more than Bitconnnnnnnnnnnnnect offered and the writing was on the wall for that one too.
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 23, 2021, 10:44:04 PM
Not your keys; not your coins.

I know that. You know that. There's $3.6 billion worth of people who are just getting that picture now, who are probably wishing this asset was subject to as much government control as all the banks they've dealt with in the past.
Title: Re: Bitcoin is funny money
Post by: firemane on June 24, 2021, 08:10:17 AM
The flaw with “not your keys not your coins” is that hardware wallets are a hassle and you pretty much have to work in IT or be very tech savvy to use them. Try to picture this process for someone who is older or doesn’t work in tech.

For one, you have to check for firmware releases and update the firmware. It’s not like you can throw the wallet and bury it in the yard and go back and get it in 10 years.

If there is something like a coin “split” such as Bitcoin gold you have to move your coins somewhere else to get the coin. The inefficient blockchain can cost as much as $100+  and take several hours to move your coins for Bitcoin or ethereum during network congestion.) and it is stressful because if u fat  finger one digit or accidentally have a copy/paste fail your money can be loss

Another thing is that with any move from the Wallet or to the wallet, the irs considers it a taxable event. So not only do you need to be an it engineer but u also need to be an accountant. Edit: I’m not entirely sure I’m correct on the tax thing, but you would have to track cost basis somehow
Title: Re: Bitcoin is funny money
Post by: onecoolcat on June 29, 2021, 08:37:51 PM
The flaw with “not your keys not your coins” is that hardware wallets are a hassle and you pretty much have to work in IT or be very tech savvy to use them. Try to picture this process for someone who is older or doesn’t work in tech.

For one, you have to check for firmware releases and update the firmware. It’s not like you can throw the wallet and bury it in the yard and go back and get it in 10 years.

If there is something like a coin “split” such as Bitcoin gold you have to move your coins somewhere else to get the coin. The inefficient blockchain can cost as much as $100+  and take several hours to move your coins for Bitcoin or ethereum during network congestion.) and it is stressful because if u fat  finger one digit or accidentally have a copy/paste fail your money can be loss

Another thing is that with any move from the Wallet or to the wallet, the irs considers it a taxable event. So not only do you need to be an it engineer but u also need to be an accountant. Edit: I’m not entirely sure I’m correct on the tax thing, but you would have to track cost basis somehow

Hardware wallets are very simple to setup.  Here is a 5 minute showing how to set it up:  https://www.youtube.com/watch?v=KeRbJUc0Xus

To upgrade firmware its literally opening the wallet and clicking the large button that says "download firmware to latest version".

You don't need to be a rocket scientist to use it.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on June 30, 2021, 06:57:16 AM
Oh, look! The exact wallet from your video has a pretty legit-looking counterfeit in the wild! But you’d have to be an absolute moron to fall for that ol’ gag, and therefore 100% deserve whatever fate befalls you, am I right? https://www.coindesk.com/scammers-are-now-sending-ledger-users-fake-hardware-wallets
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on June 30, 2021, 07:15:08 AM
^^ I wouldn't fall for it - but I'm sure plenty would.  It's not to say that they deserve to lose their crypto, more that the scammer outsmarted them and deserved it more.  There's been cases where people have gone on overseas holidays and on their return discovered that their house had been sold out from under them by scammers and legally they no longer owned (or lived in) their own house.  So I guess we better get rid of houses.
Title: Re: Bitcoin is funny money
Post by: JLee on June 30, 2021, 08:17:03 AM
^^ I wouldn't fall for it - but I'm sure plenty would.  It's not to say that they deserve to lose their crypto, more that the scammer outsmarted them and deserved it more.  There's been cases where people have gone on overseas holidays and on their return discovered that their house had been sold out from under them by scammers and legally they no longer owned (or lived in) their own house.  So I guess we better get rid of houses.

https://www.logicallyfallacious.com/logicalfallacies/False-Equivalence
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on June 30, 2021, 08:21:40 AM
^^ Call it what you like, there are swindlers in just about everything.  If you're not tech-savvy and you generally rely on a lot of 'customer support' and asking how to do things rather than doing your own research, stay away from crypto IMO.  You'll get done.
Title: Re: Bitcoin is funny money
Post by: Telecaster on June 30, 2021, 12:32:30 PM
^^ I wouldn't fall for it - but I'm sure plenty would.  It's not to say that they deserve to lose their crypto, more that the scammer outsmarted them and deserved it more. 

I reject your notion that the thieves are more deserving.   
Title: Re: Bitcoin is funny money
Post by: StashingAway on June 30, 2021, 01:26:49 PM
^^ I wouldn't fall for it - but I'm sure plenty would.  It's not to say that they deserve to lose their crypto, more that the scammer outsmarted them and deserved it more. 

Good God, man. This definitely supports the "crypto is for criminals" worry.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on June 30, 2021, 01:32:31 PM
^^ I wouldn't fall for it - but I'm sure plenty would.  It's not to say that they deserve to lose their crypto, more that the scammer outsmarted them and deserved it more. 

Good God, man. This definitely supports the "crypto is for criminals" worry.

Bitcoin - "Because smart criminals deserve your money more than you do."
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 30, 2021, 02:44:25 PM
Right. It's interesting logic for sure.

You don't need to be a cryptography expert to use bitcoin safely, just use a hardware wallet.
Hardware wallets exist that will steal your coins.
If you pick one of those, you just don't deserve to have bitcoins.
How do you know whether a hardware wallet is secure? Well, you'd probably need to examine the chips, which requires you to either be an expert in cryptography or trust the opinion of someone else who is.
That brings us back to trust in third parties. The goal of bitcoin is to get us away from that, but at some level that's only achievable if you have the expertise to personally verify the security of the full stack of technology you're using to make the transaction.
Title: Re: Bitcoin is funny money
Post by: Rosy on June 30, 2021, 03:03:18 PM
Germany currently is planning to roll out law to better track crypto transactions, btw

What really worries me about proof of stake is that it really benefits those who already have a big stash. Aka the early adopters. While i think it will be a good thing for the environment, it - in my eyes - does incentivize speculating even more.  I can’t understand the reasons why anyone would want to switch to pos unless they are already in big time and want to rip off the naive youngsters.

The shifting of money from the crowd to the big fishes (aka pyramid) is so clearly on the table - what am i overlooking?

Germany just gave its first trading license and permission for custodial service to Coinbase exchange.
Title: Re: Bitcoin is funny money
Post by: Rosy on June 30, 2021, 05:25:34 PM
The flaw with “not your keys not your coins” is that hardware wallets are a hassle and you pretty much have to work in IT or be very tech savvy to use them. Try to picture this process for someone who is older or doesn’t work in tech.

For one, you have to check for firmware releases and update the firmware. It’s not like you can throw the wallet and bury it in the yard and go back and get it in 10 years.

If there is something like a coin “split” such as Bitcoin gold you have to move your coins somewhere else to get the coin. The inefficient blockchain can cost as much as $100+  and take several hours to move your coins for Bitcoin or ethereum during network congestion.) and it is stressful because if u fat  finger one digit or accidentally have a copy/paste fail your money can be loss

Another thing is that with any move from the Wallet or to the wallet, the irs considers it a taxable event. So not only do you need to be an it engineer but u also need to be an accountant. Edit: I’m not entirely sure I’m correct on the tax thing, but you would have to track cost basis somehow

Really?
I'm a boomer and had no trouble figuring it out. Youtube and all those lovely Millennials are my friends./S
Ledger magically arrived on my doorstep all the way from Paris.

Granted, crypto is still terribly clunky and fees can get expensive just like the Internet was in the days of dial-up way before google and smartphones or laptops were even a thing. If you do a little research you discover workarounds to avoid or lower fees.
Besides, isn't that exactly what all those projects, layers, protocols and blockchain coolness is trying to solve?
Speed - Interoperability - all that is improving bit-by-bit:)
I bet in five years we will not even recognize the crypto landscape.

Here is something to cheer you up: https://cryptosrus.com/nydig-ncr-partnership-lets-650-u-s-banks-offer-bitcoin-services/
650 US banks to offer crypto services

Even better - 650,000 ATMs for bitcoin payments
 
Quote
According to reporting by Forbes which broke the news, the partnership is likely to have further phases to it, which could allow 180,000 restaurants and retail chains, as well as more than 650,000 ATMs currently serviced by NCR to be opened up to bitcoin payments if everything proceeds as planned.

CRYPTO TAXES
Tax guide for 2021  https://www.coindesk.com/crypto-tax-2021-guide
Most of the sites I use let me download or print them or give auditor right to a crypto tax service via the miracle mini-computer called my cell phone.
Good to know what impact your actions/moves will have on your taxes.

For a sector that is supposedly so unregulated, the IRS sure didn't miss a beat.
Title: Re: Bitcoin is funny money
Post by: Psychstache on June 30, 2021, 07:54:41 PM
I bet in five years we will not even recognize the crypto landscape.

I agree, but I think we mean different things when we say that.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on June 30, 2021, 08:05:00 PM
I bet in five years we will not even recognize the crypto landscape.

I agree, but I think we mean different things when we say that.

Where do you think Bitcoin will be in five years?  Care to make a friendly bet?
Title: Re: Bitcoin is funny money
Post by: seattlecyclone on June 30, 2021, 08:13:59 PM
I bet in five years we will not even recognize the crypto landscape.

I agree, but I think we mean different things when we say that.

Where do you think Bitcoin will be in five years?  Care to make a friendly bet?

I think it will see no appreciable increase in use for typical commerce. What the price will be, I have no earthly idea.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on June 30, 2021, 08:41:40 PM
I bet in five years we will not even recognize the crypto landscape.

I agree, but I think we mean different things when we say that.

Where do you think Bitcoin will be in five years?  Care to make a friendly bet?

I think it will see no appreciable increase in use for typical commerce. What the price will be, I have no earthly idea.

I think it will see more use in commerce but I do not even believe its real value has anything to do with its use in commerce.  Nevertheless, it will see more use in commerce as layered solutions, e.g. Lightning Network, are more widely used and more nations adopt it as a currency. 
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on June 30, 2021, 09:54:32 PM
Do you guys think we'll ever see a use case for Gold Bullion in typical commerce?  I'm concerned about this..
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on June 30, 2021, 09:59:13 PM
Do you guys think we'll ever see a use case for Gold Bullion in typical commerce?  I'm concerned about this..

Even in a Mad Max scenario of total currency meltdown, bartering with gold bullion would be too risky and too much trouble. Might as well barter with catalytic converters hacked off of old cars. Dried beans are more easily divisible, have inherent value, and would appreciate vs. fiat currencies to keep pace with inflation. 
Title: Re: Bitcoin is funny money
Post by: Telecaster on July 01, 2021, 10:37:50 AM


Here is something to cheer you up: https://cryptosrus.com/nydig-ncr-partnership-lets-650-u-s-banks-offer-bitcoin-services/
650 US banks to offer crypto services

Even better - 650,000 ATMs for bitcoin payments
 
Quote
According to reporting by Forbes which broke the news, the partnership is likely to have further phases to it, which could allow 180,000 restaurants and retail chains, as well as more than 650,000 ATMs currently serviced by NCR to be opened up to bitcoin payments if everything proceeds as planned.



Outstanding news for cryptoenthusiasts!  You can now have THREE third-parties involved in each Bitcoin transaction:  the bank, the holding company, and the payment processor.    Involving third parties in the transaction is the main reason for crypto, right?
Title: Re: Bitcoin is funny money
Post by: effigy98 on July 01, 2021, 11:03:19 AM
This is still a good thing. The more oligarchies that plug into the bitcoin network, the less risk there is because they will pay our politicians to support it. The markets are no longer based on fundamentals, they are politically based now, hence why everything feels like a gamble. You need to play the games that feel the least risky, but if you want yield, you need to gamble now.
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 02, 2021, 05:49:29 AM
This is still a good thing. The more oligarchies that plug into the bitcoin network, the less risk there is because they will pay our politicians to support it. The markets are no longer based on fundamentals, they are politically based now, hence why everything feels like a gamble. You need to play the games that feel the least risky, but if you want yield, you need to gamble now.

Nope
Title: Re: Bitcoin is funny money
Post by: Rosy on July 02, 2021, 10:59:49 AM


Here is something to cheer you up: https://cryptosrus.com/nydig-ncr-partnership-lets-650-u-s-banks-offer-bitcoin-services/
650 US banks to offer crypto services

Even better - 650,000 ATMs for bitcoin payments
 
Quote
According to reporting by Forbes which broke the news, the partnership is likely to have further phases to it, which could allow 180,000 restaurants and retail chains, as well as more than 650,000 ATMs currently serviced by NCR to be opened up to bitcoin payments if everything proceeds as planned.


Outstanding news for cryptoenthusiasts!  You can now have THREE third-parties involved in each Bitcoin transaction:  the bank, the holding company, and the payment processor.    Involving third parties in the transaction is the main reason for crypto, right?

Let's be realistic. What do you expect once the banks became involved?:) This is their opportunity to stay relevant and use the blockchain to finally update their ancient technology. I think the ideology around crypto has already morphed several times over the years.
I vaguely remember when it was all about spending crypto and championing global access to everything for everyone. Seems like that 17yr old who illegally ordered some mushrooms ruined all of that.

I don't see how crypto can stay 'pure' that is only possible through de-fi platforms. We have them now, but they took a long time to develop and are still a work in progress. Yields, interest, borrowing and lending are relatively new - it is still a clunky system.
Aave is a good example of a trustworthy solid operation. Billions flow through it even though it isn't exactly easy to maneuver through it all.

My hope is that there will be room for both - de-fi and ce-fi.

Who knows - maybe these ATMs will become ATMs for the digital dollar and the government is actively sponsoring it?:)  ​
Title: Re: Bitcoin is funny money
Post by: ChpBstrd on July 02, 2021, 11:41:00 AM
This is still a good thing. The more oligarchies that plug into the bitcoin network, the less risk there is because they will pay our politicians to support it. The markets are no longer based on fundamentals, they are politically based now, hence why everything feels like a gamble. You need to play the games that feel the least risky, but if you want yield, you need to gamble now.

Nope

There is a point here though. As millions of people pile into crypto, there comes to be a political price for disparaging crypto. If politician X in a tightly contested primary or race tries to warn us crypto is a scam, that might discourage just enough crypto holding voters or donors to let politician Y win. Thus, not speaking out could become a winning platform, as could actively promoting crypto, because millions of small crypto holders still have big dreams of becoming zillionaires. The tightrope is that when crypto crashes, and millions of middle class people slip down a notch, the politicians have to avoid being held accountable. Fortunately this is easy - we happily accept excuses in addition to what we want to hear.

The irony is that the higher U.S. standard of living (i.e. purchasing power) is supported by the value of the dollar as the world's reserve currency. If you doubt this, I invite you to work in Mexico for Mexican wages, or try your hardest to own a large suburban home and SUV in India without using dollars earned in the U.S. Our biggest export is dollars. We print and export trillions of dollars as measured by the budget deficit and the trade deficit, because people around the world need a stable, universally-accepted currency for savings and transactions. Because people around the world are willing to work so hard for dollars, wealth flows to Americans in the form of import prices, inflation, and taxes that are much lower than they'd otherwise have to be.

If American politicians promoting or at least taking a hands-off approach to crypto caused the world to actually move to crypto as a competitor to the US's reserve currency, then wealth levels in the US would decline to match those in similar places without a reserve currency. The USD would collapse, perhaps over a decade, and U.S. wages would buy the same amount of stuff as South American or Eastern European wages. It would be a depression, with explosive political consequences.

There's a political feedback mechanism actually incentivizing this doomsday scenario for the American middle class. I don't think it will achieve escape velocity, but it's something to watch for.
Title: Re: Bitcoin is funny money
Post by: BicycleB on July 02, 2021, 01:39:08 PM
^That's...oh crap, that's plausible. Isn't it? (Scratches head.)
Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 03, 2021, 10:53:37 AM
I thought this was a pretty decent explanation by Nassim Taleb for why Bitcoin is a Ponzi scheme, using some pretty elementary economics concepts.

https://www.youtube.com/watch?v=XeG0FzPxSh4
Title: Re: Bitcoin is funny money
Post by: effigy98 on July 03, 2021, 03:04:35 PM
"When the people find that they can vote themselves money that will herald the end of the republic."
Benjamin Franklin

Sent from my Pixel 3a using Tapatalk

Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 04, 2021, 05:21:51 AM
Truly stunned that a crypto enthusiast such as yourself would’ve trusted, and not verified, the authenticity of that alleged Benjamin Franklin quote. I’ll lend an assist: it’s fake. https://fakefoundersquotes.tumblr.com/post/89397760173/when-the-people-find-they-can-vote-themselves
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 04, 2021, 02:41:47 PM
Bears, beets, Bitcoin - Dwight K. Schrute
Title: Re: Bitcoin is funny money
Post by: Rosy on July 04, 2021, 04:30:54 PM
I thought this was a pretty decent explanation by Nassim Taleb for why Bitcoin is a Ponzi scheme, using some pretty elementary economics concepts.
https://www.youtube.com/watch?v=XeG0FzPxSh4

I'm beginning to think I need to add some vodka to the crypto koolaid I've been drinking. That video was hard to take.
He was focused on the discussion/assumption that Bitcoin is not a currency and therefore fit into his definition of a ponzi scheme.
That is a false narrative because it does not take into account the Lightening network or bitcoins ability to become more than it currently is.

Bitcoin is at present a digital asset. In fact he did question what bitcoin is and whether it is property but decided that it couldn't be.
I think the world has already declared it a new asset class and in some countries a currency which throws his concept out the window.
For SEC purposes it might be declared a commodity - bitcoin is a chameleon, a hot commodity and still too volatile but it is not a ponzi scheme.

Doesn't he know about the Lightening Layer or any of the plans, changes, possibilities that exist which can change bitcoin as we know it?
Has he considered that one thing can actually be two things - currency and property?

Clearly it has been declared a currency in parts of the world - and that is that - so what is there to argue about? It does make his concept invalid.
This was an attempt to shove a square object into a round box without realizing you could just change the size or use a different box.

I will claim the quote from another MMMr that says, "I frequently don't know what I'm talking about - like now".
I am just following the smart money like the banks, billionaires and institutions who are hoarding bitcoin.

W
Title: Re: Bitcoin is funny money
Post by: scottish on July 05, 2021, 03:18:06 PM
I thought this was a pretty decent explanation by Nassim Taleb for why Bitcoin is a Ponzi scheme, using some pretty elementary economics concepts.
https://www.youtube.com/watch?v=XeG0FzPxSh4

I'm beginning to think I need to add some vodka to the crypto koolaid I've been drinking. That video was hard to take.
He was focused on the discussion/assumption that Bitcoin is not a currency and therefore fit into his definition of a ponzi scheme.
That is a false narrative because it does not take into account the Lightening network or bitcoins ability to become more than it currently is.

Bitcoin is at present a digital asset. In fact he did question what bitcoin is and whether it is property but decided that it couldn't be.
I think the world has already declared it a new asset class and in some countries a currency which throws his concept out the window.
For SEC purposes it might be declared a commodity - bitcoin is a chameleon, a hot commodity and still too volatile but it is not a ponzi scheme.

Doesn't he know about the Lightening Layer or any of the plans, changes, possibilities that exist which can change bitcoin as we know it?
Has he considered that one thing can actually be two things - currency and property?

Clearly it has been declared a currency in parts of the world - and that is that - so what is there to argue about? It does make his concept invalid.
This was an attempt to shove a square object into a round box without realizing you could just change the size or use a different box.

I will claim the quote from another MMMr that says, "I frequently don't know what I'm talking about - like now".
I am just following the smart money like the banks, billionaires and institutions who are hoarding bitcoin.

W

Is bitcoin (or cryptocurrency in general) an asset (i.e. a security) or a currency in your point of view?

Taleb also says that bitcoin is much to volatile to make a good currency...   it doesn't matter what some politician declares, it doesn't change reality.
Title: Re: Bitcoin is funny money
Post by: Telecaster on July 05, 2021, 04:33:19 PM
I'm beginning to think I need to add some vodka to the crypto koolaid I've been drinking. That video was hard to take.
He was focused on the discussion/assumption that Bitcoin is not a currency and therefore fit into his definition of a ponzi scheme.
That is a false narrative because it does not take into account the Lightening network or bitcoins ability to become more than it currently is.

Bitcoin is at present a digital asset. In fact he did question what bitcoin is and whether it is property but decided that it couldn't be.
I think the world has already declared it a new asset class and in some countries a currency which throws his concept out the window.
For SEC purposes it might be declared a commodity - bitcoin is a chameleon, a hot commodity and still too volatile but it is not a ponzi scheme.

Bitcoin is definitely not a Ponzi scheme.  And Taleb says so in the video. I think the confusion is that at one point he says there needs to be a new term and jokingly suggested mega-Ponzi.  But no, Bitcoin is absolutely not a Ponzi scheme. 


Doesn't he know about the Lightening Layer or any of the plans, changes, possibilities that exist which can change bitcoin as we know it?
Has he considered that one thing can actually be two things - currency and property?

Clearly it has been declared a currency in parts of the world - and that is that - so what is there to argue about? It does make his concept invalid.
This was an attempt to shove a square object into a round box without realizing you could just change the size or use a different box.

I will claim the quote from another MMMr that says, "I frequently don't know what I'm talking about - like now".
I am just following the smart money like the banks, billionaires and institutions who are hoarding bitcoin.


A couple thoughts.  One is that whenever problems with Bitcoin are raised, the proponents are quick to point out there is some fix on the horizon.  But why does Bitcoin have so many problems that need to be fixed in the first place?

Next is the discussion as to whether Bitcoin is a currency.  It clearly isn't.   For example, let's say Tesla wants to price a Model X in Bitcoin.  First, they would need to determine how many Bitcoins it costs to build a Model X.  How do you do that?  The way it would normally work is that you figure out how many Bitcoin it takes to make the battery, motors, glass, labor, overhead, profit, etc. etc.  But Bitcoin dumped almost half its value in two months rendering the calculations useless.  What cost two BTC two months ago costs 1 BTC today.  That is a swift path to bankruptcy.   Even the hourly volatility in Bitcoin makes it 100% useless for business purposes.  Shoot, even the 15 minute volatility makes it useless for business purposes.  You can pay in Bitcoin, but Teslas are priced in dollars.  Nobody prices anything in Bitcoin. 

For this reason alone, nobody--repeat nobody--uses Bitcoin as a currency.   Governments can declare it a currency all they want, but if exactly zero people use it as a currency, then it isn't a currency.  The part in your bold that I bolded speaks to that.  People and institutions aren't spending Bitcoin, they are hoarding it.  While some people might claim it is a currency, in a practical sense no one actually treats it like a currency.   Even the true believers don't treat it like a currency.  They treat it like an asset.  Bitcoin is not in the same solar system as a currency. 

Which brings us to Taleb's next point.  Bitcoin doesn't generate interest or pay dividends.  So the future value in that regard is zero.  The only value Bitcoin has is the possibility of selling it to someone for more than you bought it for.   That's it. 
Title: Re: Bitcoin is funny money
Post by: scottish on July 05, 2021, 04:50:09 PM
Quote
But why does Bitcoin have so many problems that need to be fixed in the first place?

Because the block chain design is functionally unable to meet the requirements of a digital currency.
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 06, 2021, 05:25:37 AM
I'm beginning to think I need to add some vodka to the crypto koolaid I've been drinking. That video was hard to take.
He was focused on the discussion/assumption that Bitcoin is not a currency and therefore fit into his definition of a ponzi scheme.
That is a false narrative because it does not take into account the Lightening network or bitcoins ability to become more than it currently is.

Bitcoin is at present a digital asset. In fact he did question what bitcoin is and whether it is property but decided that it couldn't be.
I think the world has already declared it a new asset class and in some countries a currency which throws his concept out the window.
For SEC purposes it might be declared a commodity - bitcoin is a chameleon, a hot commodity and still too volatile but it is not a ponzi scheme.

Bitcoin is definitely not a Ponzi scheme.  And Taleb says so in the video. I think the confusion is that at one point he says there needs to be a new term and jokingly suggested mega-Ponzi.  But no, Bitcoin is absolutely not a Ponzi scheme. 


Doesn't he know about the Lightening Layer or any of the plans, changes, possibilities that exist which can change bitcoin as we know it?
Has he considered that one thing can actually be two things - currency and property?

Clearly it has been declared a currency in parts of the world - and that is that - so what is there to argue about? It does make his concept invalid.
This was an attempt to shove a square object into a round box without realizing you could just change the size or use a different box.

I will claim the quote from another MMMr that says, "I frequently don't know what I'm talking about - like now".
I am just following the smart money like the banks, billionaires and institutions who are hoarding bitcoin.


A couple thoughts.  One is that whenever problems with Bitcoin are raised, the proponents are quick to point out there is some fix on the horizon.  But why does Bitcoin have so many problems that need to be fixed in the first place?

Next is the discussion as to whether Bitcoin is a currency.  It clearly isn't.   For example, let's say Tesla wants to price a Model X in Bitcoin.  First, they would need to determine how many Bitcoins it costs to build a Model X.  How do you do that?  The way it would normally work is that you figure out how many Bitcoin it takes to make the battery, motors, glass, labor, overhead, profit, etc. etc.  But Bitcoin dumped almost half its value in two months rendering the calculations useless.  What cost two BTC two months ago costs 1 BTC today.  That is a swift path to bankruptcy.   Even the hourly volatility in Bitcoin makes it 100% useless for business purposes.  Shoot, even the 15 minute volatility makes it useless for business purposes.  You can pay in Bitcoin, but Teslas are priced in dollars.  Nobody prices anything in Bitcoin. 

For this reason alone, nobody--repeat nobody--uses Bitcoin as a currency.   Governments can declare it a currency all they want, but if exactly zero people use it as a currency, then it isn't a currency.  The part in your bold that I bolded speaks to that.  People and institutions aren't spending Bitcoin, they are hoarding it.  While some people might claim it is a currency, in a practical sense no one actually treats it like a currency.   Even the true believers don't treat it like a currency.  They treat it like an asset.  Bitcoin is not in the same solar system as a currency. 

Which brings us to Taleb's next point.  Bitcoin doesn't generate interest or pay dividends.  So the future value in that regard is zero.  The only value Bitcoin has is the possibility of selling it to someone for more than you bought it for.   That's it.

And this is where people unfamiliar with investing get caught up. They think that's all you do in the stock market. And see crypto as just another thing like stocks. Completely missing the point that stocks are companies that create value and generate revenue.
Title: Re: Bitcoin is funny money
Post by: Rosy on July 07, 2021, 06:36:25 AM
I bet in five years we will not even recognize the crypto landscape.

I agree, but I think we mean different things when we say that.

Where do you think Bitcoin will be in five years?  Care to make a friendly bet?

I think it will see no appreciable increase in use for typical commerce. What the price will be, I have no earthly idea.

I think it will see more use in commerce but I do not even believe its real value has anything to do with its use in commerce.  Nevertheless, it will see more use in commerce as layered solutions, e.g. Lightning Network, are more widely used and more nations adopt it as a currency.

The dominoes are falling ...
https://finance.yahoo.com/news/vietnam-pm-asks-central-bank-133958262.html
Another country doing a 360 from illegal to trade to
Quote
The cryptocurrency pilot program is expected to help the government discover the pros and cons while developing an appropriate management mechanism

Title: Re: Bitcoin is funny money
Post by: GuitarStv on July 07, 2021, 07:37:09 AM
360 would be a full circle (back to where they started).

I think you want to use the term 180.  :P
Title: Re: Bitcoin is funny money
Post by: Rosy on July 07, 2021, 09:43:55 AM
And this is where people unfamiliar with investing get caught up. They think that's all you do in the stock market. And see crypto as just another thing like stocks. Completely missing the point that stocks are companies that create value and generate revenue.

Terribly confusing:) - Time will tell what happens with bitcoin. For now, we can all agree that bitcoin is being bought and stored by the big boys since that is now a publicly acknowledged truth.
I do not like that heretofore they accumulated under the radar while denouncing bitcoin and crypto in public.

The currency question - Truly, the nuances are lost on me, if you call it a currency, declare it legal tender and pay with a cryptocurrency app then in my mind it is a currency. It isn't something I am overly concerned with one way or the other. I don't understand the workings of my engine either but I own and use a car.
You may call it a true currency or call it out as nothing more than an example of a blockchain use case - I'm fine with either definition.

On the stocks - crypto value question
- I agree with your assumption that people like me, unfamiliar with investing, simply assume that since
I can buy crypto indexes on the US Exchange just like any other fund it is a stock. Yet, I purchased a basket of cryptos.
To me that is a crypto stock just like a bio-tech stock or whatever - the nuances simply escape me.

Besides the crypto index fund, I'm also invested in Coinbase, a crypto exchange fund. How does that fit into your definition of crypto being unable to create value or generate revenue? Coinbase is a crypto business with a market cap in the billions that generates revenue.
Heck, the CEO of coinbase met up with Jerome Powell on May 11th to among other things discussed digital currencies, crypto regulation and has had a follow-up meeting online since - sounds promising and monumental.

If I invest in Chevron - I think of it as investing in the oil business...they have machinery, employees and brick, and mortar locations.
Coinbase has a nice big office in San Francisco, computers and employees.
I guess I simply don't get the value distinctions or denial thereof.

I'm fine with the SEC taking its time with crypto regulations, I'd rather see a measured approach, partially because I believe that crushing the tech start-ups within crypto is bad for the US in terms of keeping up with the competition worldwide. There are thousands of them and we need to nourish them so they can one day become the next tech powerhouse that originated in the good ole US of A. We can't afford to fall behind in science and tech any more than we already have.
It is bad enough that China is ready to launch its own digital currency ahead of our own still in planning Fed Coin. 
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 07, 2021, 10:57:45 AM
So your argument for some random thing you can put your money is.  Wait for it.  I don't understand any of it. Seems like you should be in none of it til you have basic understanding.
Title: Re: Bitcoin is funny money
Post by: Psychstache on July 07, 2021, 11:03:07 AM
360 would be a full circle (back to where they started).

I think you want to use the term 180.  :P

https://youtu.be/g751-jjKXC0
Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 07, 2021, 05:38:06 PM
On the stocks - crypto value question
- I agree with your assumption that people like me, unfamiliar with investing, simply assume that since
I can buy crypto indexes on the US Exchange just like any other fund it is a stock. Yet, I purchased a basket of cryptos.
To me that is a crypto stock just like a bio-tech stock or whatever - the nuances simply escape me.

Besides the crypto index fund, I'm also invested in Coinbase, a crypto exchange fund. How does that fit into your definition of crypto being unable to create value or generate revenue? Coinbase is a crypto business with a market cap in the billions that generates revenue.
Heck, the CEO of coinbase met up with Jerome Powell on May 11th to among other things discussed digital currencies, crypto regulation and has had a follow-up meeting online since - sounds promising and monumental.

If I invest in Chevron - I think of it as investing in the oil business...they have machinery, employees and brick, and mortar locations.
Coinbase has a nice big office in San Francisco, computers and employees.
I guess I simply don't get the value distinctions or denial thereof.

I'm fine with the SEC taking its time with crypto regulations, I'd rather see a measured approach, partially because I believe that crushing the tech start-ups within crypto is bad for the US in terms of keeping up with the competition worldwide. There are thousands of them and we need to nourish them so they can one day become the next tech powerhouse that originated in the good ole US of A. We can't afford to fall behind in science and tech any more than we already have.
It is bad enough that China is ready to launch its own digital currency ahead of our own still in planning Fed Coin.

You’re kind of conflating two things: a business selling a thing (in this case Bitcoin and other cryptocurrencies) and the thing itself. Coinbase makes money by selling you Bitcoin for a fee. It may not pay dividends, currently (no idea), but it presumably *could*, since it generates cash flow. Bitcoin (like a commodity, e.g., gold) generates no cash flow. And unlike a commodity, it has no utility, since it’s ultimately a series of bits on a computer network that needs to be maintained (a liability). And since it’s also not a currency—a definition it fails from technical feasibility as well as practical feasibility—it’s price floor is $0.

Re: the “tech innovation” position. I think it’s misguided. And I think the proof is in the pudding. Bitcoin has been around for over 12 years now. There hasn’t been a single viable use-case for Blockchain yet. It’s a fundamentally silly idea useful only for the exact purpose of Bitcoin—a toy pseudo-currency useful only inside a closed system.

And Re: CBDCs—I can assure you, with 100% confidence: if one ever comes to fruition, it will absolutely not use a blockchain. At best, you could argue that Bitcoin and the cryptocurrency enthusiasm has re-ignited interest in rolling out such a concept (which has been studied / attempted since the 1990s). But CBDCs technical overlaps with cryptocurrencies begin and end with the fact that they’re digital and may utilize some form of cryptography.
Title: Re: Bitcoin is funny money
Post by: Juan Ponce de León on July 07, 2021, 08:42:06 PM
On the stocks - crypto value question
- I agree with your assumption that people like me, unfamiliar with investing, simply assume that since
I can buy crypto indexes on the US Exchange just like any other fund it is a stock. Yet, I purchased a basket of cryptos.
To me that is a crypto stock just like a bio-tech stock or whatever - the nuances simply escape me.

Besides the crypto index fund, I'm also invested in Coinbase, a crypto exchange fund. How does that fit into your definition of crypto being unable to create value or generate revenue? Coinbase is a crypto business with a market cap in the billions that generates revenue.
Heck, the CEO of coinbase met up with Jerome Powell on May 11th to among other things discussed digital currencies, crypto regulation and has had a follow-up meeting online since - sounds promising and monumental.

If I invest in Chevron - I think of it as investing in the oil business...they have machinery, employees and brick, and mortar locations.
Coinbase has a nice big office in San Francisco, computers and employees.
I guess I simply don't get the value distinctions or denial thereof.

I'm fine with the SEC taking its time with crypto regulations, I'd rather see a measured approach, partially because I believe that crushing the tech start-ups within crypto is bad for the US in terms of keeping up with the competition worldwide. There are thousands of them and we need to nourish them so they can one day become the next tech powerhouse that originated in the good ole US of A. We can't afford to fall behind in science and tech any more than we already have.
It is bad enough that China is ready to launch its own digital currency ahead of our own still in planning Fed Coin.

You’re kind of conflating two things: a business selling a thing (in this case Bitcoin and other cryptocurrencies) and the thing itself. Coinbase makes money by selling you Bitcoin for a fee. It may not pay dividends, currently (no idea), but it presumably *could*, since it generates cash flow. Bitcoin (like a commodity, e.g., gold) generates no cash flow. And unlike a commodity, it has no utility, since it’s ultimately a series of bits on a computer network that needs to be maintained (a liability). And since it’s also not a currency—a definition it fails from technical feasibility as well as practical feasibility—it’s price floor is $0.

Re: the “tech innovation” position. I think it’s misguided. And I think the proof is in the pudding. Bitcoin has been around for over 12 years now. There hasn’t been a single viable use-case for Blockchain yet. It’s a fundamentally silly idea useful only for the exact purpose of Bitcoin—a toy pseudo-currency useful only inside a closed system.

And Re: CBDCs—I can assure you, with 100% confidence: if one ever comes to fruition, it will absolutely not use a blockchain. At best, you could argue that Bitcoin and the cryptocurrency enthusiasm has re-ignited interest in rolling out such a concept (which has been studied / attempted since the 1990s). But CBDCs technical overlaps with cryptocurrencies begin and end with the fact that they’re digital and may utilize some form of cryptography.

Well that settles it then.  I'll inform all the crypto exchanges of this post and I expect they'll begin winding down operations immediately.  Put a fork in bitcoin - it's done.
Title: Re: Bitcoin is funny money
Post by: Telecaster on July 07, 2021, 09:37:02 PM
On the stocks - crypto value question
- I agree with your assumption that people like me, unfamiliar with investing, simply assume that since
I can buy crypto indexes on the US Exchange just like any other fund it is a stock. Yet, I purchased a basket of cryptos.
To me that is a crypto stock just like a bio-tech stock or whatever - the nuances simply escape me.

There isn't much nuance.  Owning a stock means you are part owner of a company and therefore entitled to a portion of the future earnings of the company.   The company could lose money and go out of business of course.  But capturing the future value is why stocks were invented in the first place.  If you buy an index of stocks, you are capturing the future value of the index.  Over any reasonable length of time, it is a nearly a sure money maker. 

Owning crypto is like owning a painting.  The price might go up.  It might go down.  But the painting doesn't have any future earnings.  It just sits there on the wall.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 07, 2021, 10:48:24 PM
Well that settles it then.  I'll inform all the crypto exchanges of this post and I expect they'll begin winding down operations immediately.  Put a fork in bitcoin - it's done.

Huh? Not sure what you read in my post that lead to this response?

Casinos, MLMs, non-fiduciary financial advisors, and vitamin supplements are all completely valid, money-making businesses. I would urge any friend or family member to avoid patronage at any of these businesses.
Title: Re: Bitcoin is funny money
Post by: Rosy on July 08, 2021, 12:30:49 PM
360 would be a full circle (back to where they started).

I think you want to use the term 180.  :P

https://youtu.be/g751-jjKXC0

180 it is:) - lol-great link, thx.


So your argument for some random thing you can put your money is.  Wait for it.  I don't understand any of it. Seems like you should be in none of it til you have basic understanding.

Hmm, it is amazing what we read into each other's posts.
Title: Re: Bitcoin is funny money
Post by: johnhenry on July 09, 2021, 01:48:27 PM
Well that settles it then.  I'll inform all the crypto exchanges of this post and I expect they'll begin winding down operations immediately.  Put a fork in bitcoin - it's done.

Ha.. the CrypoBros wish this was the way it was.  In Soviet Russia, crypto exchange wind down when they say.

It's the exchanges that repeatedly have to let investors know they'll be "winding down operations immediately".  How many times have we seen exchanges say: "we got "hacked", sorry about your bitcoin balance, bro" and "sorry, legitimate banks in your country must comply with money laundering laws and have therefore stopping doing business with our exchange, so while we can't allow you to exchange your bitcoin for your national currency, you can absolutely leave it invested here and trade for any other crypto."
Title: Re: Bitcoin is funny money
Post by: scottish on July 09, 2021, 05:12:59 PM
It's happened so often it even has a name:    "the rug pull"

https://www.bloomberg.com/news/features/2021-07-08/crypto-scams-rug-pulls-bitcoin-hacks-billions-lost-when-shit-coins-go-to-zero (https://www.bloomberg.com/news/features/2021-07-08/crypto-scams-rug-pulls-bitcoin-hacks-billions-lost-when-shit-coins-go-to-zero)

Quote
Such supposed safeguards aside, people are getting scammed in growing numbers. So far this year, over $2.6 billion has been grabbed, according to Chainalysis, a New York-based blockchain researcher. That figure doesn’t include a giant Ponzi scheme that just came to light in South Africa. Local authorities put the haul at $3.6 billion worth of Bitcoin. Gob-smacking as all of this might sound, these numbers in fact represent a marked decline from 2019, when fraudsters walked away with an estimated $9 billion.

Fortunately it's in decline as Bitcoin becomes mainstream.   :-)
Title: Re: Bitcoin is funny money
Post by: Rosy on July 10, 2021, 05:38:10 AM
Quote
Re: the “tech innovation” position. I think it’s misguided. And I think the proof is in the pudding. Bitcoin has been around for over 12 years now. There hasn’t been a single viable use-case for Blockchain yet. It’s a fundamentally silly idea useful only for the exact purpose of Bitcoin—a toy pseudo-currency useful only inside a closed system.

And Re: CBDCs—I can assure you, with 100% confidence: if one ever comes to fruition, it will absolutely not use a blockchain. At best, you could argue that Bitcoin and the cryptocurrency enthusiasm has re-ignited interest in rolling out such a concept (which has been studied / attempted since the 1990s). But CBDCs technical overlaps with cryptocurrencies begin and end with the fact that they’re digital and may utilize some form of cryptography.

Now I've heard it all - I think I might just hang this one on the fridge. That way I can chuckle every time I walk by.
No point in honoring this with a reply/discussion. No single viable use case for blockchain yet - he he ha ha - oh my:)

On the CBDCs - all I said was that the CEO of coinbase was invited to talks with Jerome Powell about regulation on crypto and discussions about digital currency.
Quote
Heck, the CEO of coinbase met up with Jerome Powell on May 11th to among other things discussed digital currencies, crypto regulation and has had a follow-up meeting online since - sounds promising and monumental.

Whether they will use blockchain is another matter entirely. Like you said I doubt they will, although I wouldn't 100% bet on it.
I presumed that one cannot deny Brian Armstrong's expertise and might (obviously:) welcome his input as they work on eventually rolling out a Fed Coin.

You are also correct in that a US Digital Currency has been a long-time project in the making, that is neither here nor there, the technology and infrastructure for such a feat were not in place yet anyway. However, in the meantime, there are other countries besides China that are close to introducing their own digital currency.
I maintain my original stance that it is critical for the US not to fall behind in tech, whether that is crypto or not is irrelevant.
Giving China a chance to be the first is dangerous territory - China wants only one thing, global dominance, it is a formidable foe.
Title: Re: Bitcoin is funny money
Post by: Psychstache on July 10, 2021, 08:25:49 AM
Quote
Re: the “tech innovation” position. I think it’s misguided. And I think the proof is in the pudding. Bitcoin has been around for over 12 years now. There hasn’t been a single viable use-case for Blockchain yet.
Now I've heard it all - I think I might just hang this one on the fridge. That way I can chuckle every time I walk by.
No point in honoring this with a reply/discussion. No single viable use case for blockchain yet - he he ha ha - oh my:)
Can you give an example of blockchain addressing an unmet need or improving an existing practice?
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 10, 2021, 10:46:26 AM
Quote
Re: the “tech innovation” position. I think it’s misguided. And I think the proof is in the pudding. Bitcoin has been around for over 12 years now. There hasn’t been a single viable use-case for Blockchain yet.
Now I've heard it all - I think I might just hang this one on the fridge. That way I can chuckle every time I walk by.
No point in honoring this with a reply/discussion. No single viable use case for blockchain yet - he he ha ha - oh my:)
Can you give an example of blockchain addressing an unmet need or improving an existing practice?

It was and still is pretty good at hiding dark money transactions.
Title: Re: Bitcoin is funny money
Post by: Rosy on July 10, 2021, 11:57:51 AM
Quote
Re: the “tech innovation” position. I think it’s misguided. And I think the proof is in the pudding. Bitcoin has been around for over 12 years now. There hasn’t been a single viable use-case for Blockchain yet.
Now I've heard it all - I think I might just hang this one on the fridge. That way I can chuckle every time I walk by.
No point in honoring this with a reply/discussion. No single viable use case for blockchain yet - he he ha ha - oh my:)
Can you give an example of blockchain addressing an unmet need or improving an existing practice?

Sure - here is one of the latest:
https://decrypt.co/75680/softbank-owned-line-goes-open-source-to-help-central-banks-mint-cbdcs

From the article:
Quote
LINE PLUS, a South Korean software and tech services corporation owned by Japanese multinational conglomerate SoftBank, has released a blockchain platform to help central banks get their CBDCs off the ground.

Cambodia is an example of a country that has introduced CBDC on a blockchain.

Quote
CBDCs are essentially central bank-backed, state-controlled digital currencies—a far cry from the vision of a stateless monetary system touted by early champions of Bitcoin.
Its new platform supports Know Your Customer (KYC) and Anti-Money Laundering (AML) and has a modular structure, allowing for different features to be added by developers as needed. Line’s blockchain is built on Cosmos SDK, which is an open-source framework for building proof-of-stake blockchains that can natively interoperate with other blockchains.

Microsoft took four years to develop a decentralized ID platform built on the bitcoin blockchain.
The ION PROJECT to protect your privacy.
 https://finance.yahoo.com/news/microsoft-launches-decentralized-identity-platform-223201801.html

From the article:
Quote
Why It Matters: The ION Decentralized Identifier (DID) will utilize the Bitcoin blockchain to authenticate online IDs.
Logging into a variety of online platforms, including social media, or even buying tickets online, could be made simpler by the verification provided by a users’ DID.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 11, 2021, 11:09:34 AM
Can you explain what a blockchain does? Blockchain necessarily has a massive downside when it comes to performance and efficiency. What’s the upside in this trade off? Is that relevant in any of the examples you’ve cited? Do you think the journalists were sloppy with terminology or marketing departments saw an opportunity to ride some hype?
Title: Re: Bitcoin is funny money
Post by: onecoolcat on July 11, 2021, 12:11:11 PM
Can you explain what a blockchain does? Blockchain necessarily has a massive downside when it comes to performance and efficiency. What’s the upside in this trade off? Is that relevant in any of the examples you’ve cited? Do you think the journalists were sloppy with terminology or marketing departments saw an opportunity to ride some hype?

"If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry." - Satoshi Nakamoto
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 11, 2021, 12:12:37 PM
Will it stay truly decentralized?  There are already corporations buying old coal plants and turning them back on to mine Bitcoin.  If it turns into the American food market is that actually decentralized anymore. Is it really worth the pollution?  China already decided it wasn't worth the costs.
Title: Re: Bitcoin is funny money
Post by: Telecaster on July 11, 2021, 12:27:31 PM
"If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry." - Satoshi Nakamoto

Translation:  I don't know the answer to your questions, so I'll just dodge them. 
Title: Re: Bitcoin is funny money
Post by: Rosy on July 11, 2021, 01:25:15 PM
Can you explain what a blockchain does? Blockchain necessarily has a massive downside when it comes to performance and efficiency. What’s the upside in this trade off? Is that relevant in any of the examples you’ve cited? Do you think the journalists were sloppy with terminology or marketing departments saw an opportunity to ride some hype?

Your line of questioning does not compute:). Bait - hook - switch - irrelevant...
Title: Re: Bitcoin is funny money
Post by: onecoolcat on July 11, 2021, 02:28:19 PM
"If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry." - Satoshi Nakamoto

Translation:  I don't know the answer to your questions, so I'll just dodge them.

At this point, if you don't get what a blockchain is or how it is useful then I wouldn't be able to help you; even if I cared to.
Title: Re: Bitcoin is funny money
Post by: Telecaster on July 11, 2021, 03:32:58 PM
"If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry." - Satoshi Nakamoto

Translation:  I don't know the answer to your questions, so I'll just dodge them.

At this point, if you don't get what a blockchain is or how it is useful then I wouldn't be able to help you; even if I cared to.

Translation:  I don't know the answer to your questions, so I'll just dodge them.
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 11, 2021, 04:25:44 PM
"If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry." - Satoshi Nakamoto

Translation:  I don't know the answer to your questions, so I'll just dodge them.

At this point, if you don't get what a blockchain is or how it is useful then I wouldn't be able to help you; even if I cared to.

That's like if people show up here to ask how the shockingly simple math works and instead of helping them understand it we respond with what you said.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 14, 2021, 04:27:19 PM
The creator of Dogecoin has now chimed in on why he's abandoned the crypto world. https://www.cnbc.com/2021/07/14/dogecoin-co-creator-jackson-palmer-criticizes-the-crypto-industry.html
Quote
After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.

Despite claims of “decentralization”, the cryptocurrency industry is controlled by a powerful cartel of wealthy figures who, with time, have evolved to incorporate many of the same institutions tied to the existing centralized financial system they supposedly set out to replace.

The cryptocurrency industry leverages a network of shady business connections, bought influencers and pay-for-play media outlets to perpetuate a cult-like “get rich quick” funnel designed to extract new money from the financially desperate and naive.

Financial exploitation undoubtedly existed before cryptocurrency, but cryptocurrency is almost purpose built to make the funnel of profiteering more efficient for those at the top and less safeguarded for the vulnerable.

Cryptocurrency is like taking the worst parts of today's capitalist system (eg. corruption, fraud, inequality) and using software to technically limit the use of interventions (eg. audits, regulation, taxation) which serve as protections or safety nets for the average person.

Lose your savings account password? Your fault.
Fall victim to a scam? Your fault.
Billionaires manipulating markets? They’re geniuses.

This is the type of dangerous “free for all” capitalism cryptocurrency was unfortunately architected to facilitate since its inception.

But these days even the most modest critique of cryptocurrency will draw smears from the powerful figures in control of the industry and the ire of retail investors who they’ve sold the false promise of one day being a fellow billionaire. Good-faith debate is near impossible.

For these reasons, I simply no longer go out of my way to engage in public discussion regarding cryptocurrency. It doesn't align with my politics or belief system, and I don't have the energy to try and discuss that with those unwilling to engage in a grounded conversation.

I applaud those with the energy to continue asking the hard questions and applying the lens of rigorous skepticism all technology should be subject to. New technology can make the world a better place, but not when decoupled from its inherent politics or societal consequences.

What do you think @onecoolcat? Does the creator of one of the most widely-used cryptocurrencies just not understand cryptocurrency or the blockchain? Maybe you could enlighten him.
Title: Re: Bitcoin is funny money
Post by: DaKini on July 15, 2021, 04:38:17 AM
He just doesn't get it 11!!!1!1

Hey, he created a meme coin in the first place!11!
Title: Re: Bitcoin is funny money
Post by: talltexan on July 15, 2021, 08:49:38 AM
I think this statement fits in perfectly with a career that includes creating a farcical coin to show how vapid the whole space is.

Reading it hasn't made me alter my allocations, tho.
Title: Re: Bitcoin is funny money
Post by: GuitarStv on July 15, 2021, 09:04:37 AM
I think this statement fits in perfectly with a career that includes creating a farcical coin to show how vapid the whole space is.

Reading it hasn't made me alter my allocations, tho.

Yeah but . . . the farcical coin to show how vapid the whole space is did become the 8th most successful cryptocurrency in the world by market cap (https://coinmarketcap.com/ (https://coinmarketcap.com/)).  Kinda proves the point he was going for I guess.
Title: Re: Bitcoin is funny money
Post by: onecoolcat on July 15, 2021, 09:33:18 PM
The creator of Dogecoin has now chimed in on why he's abandoned the crypto world. https://www.cnbc.com/2021/07/14/dogecoin-co-creator-jackson-palmer-criticizes-the-crypto-industry.html
Quote
After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.

Despite claims of “decentralization”, the cryptocurrency industry is controlled by a powerful cartel of wealthy figures who, with time, have evolved to incorporate many of the same institutions tied to the existing centralized financial system they supposedly set out to replace.

The cryptocurrency industry leverages a network of shady business connections, bought influencers and pay-for-play media outlets to perpetuate a cult-like “get rich quick” funnel designed to extract new money from the financially desperate and naive.

Financial exploitation undoubtedly existed before cryptocurrency, but cryptocurrency is almost purpose built to make the funnel of profiteering more efficient for those at the top and less safeguarded for the vulnerable.

Cryptocurrency is like taking the worst parts of today's capitalist system (eg. corruption, fraud, inequality) and using software to technically limit the use of interventions (eg. audits, regulation, taxation) which serve as protections or safety nets for the average person.

Lose your savings account password? Your fault.
Fall victim to a scam? Your fault.
Billionaires manipulating markets? They’re geniuses.

This is the type of dangerous “free for all” capitalism cryptocurrency was unfortunately architected to facilitate since its inception.

But these days even the most modest critique of cryptocurrency will draw smears from the powerful figures in control of the industry and the ire of retail investors who they’ve sold the false promise of one day being a fellow billionaire. Good-faith debate is near impossible.

For these reasons, I simply no longer go out of my way to engage in public discussion regarding cryptocurrency. It doesn't align with my politics or belief system, and I don't have the energy to try and discuss that with those unwilling to engage in a grounded conversation.

I applaud those with the energy to continue asking the hard questions and applying the lens of rigorous skepticism all technology should be subject to. New technology can make the world a better place, but not when decoupled from its inherent politics or societal consequences.

What do you think @onecoolcat? Does the creator of one of the most widely-used cryptocurrencies just not understand cryptocurrency or the blockchain? Maybe you could enlighten him.

If I don't care to enlighten you what makes you think I would care to enlighten him?  Don't buy it.
Title: Re: Bitcoin is funny money
Post by: DaKini on July 19, 2021, 08:11:12 AM
Approaching this territory again:
(https://static1.squarespace.com/static/58c4236c893fc021ade990bc/58c4241b725e25606fa9efb0/592c4dcf3e00be0c6cedb64e/1496075913333/MortalKombat.jpg?format=1500w)

I wonder what this company did, they already turned into a loss if they are still hodling that part of the stash (but i bet they ripped off fresh "investors" cashed out already):
(https://www.evernote.com/l/AAN_PHjzWGZBJY2Hu_wJhDVfMafHBNlgJ3sB/image.png)
Title: Re: Bitcoin is funny money
Post by: Rosy on July 19, 2021, 12:08:35 PM
An average purchase price point of $16K in bitcoin is worth $30K today thus resulting in a profit of $14K for each bitcoin.
That is actually bragworthy or dare I call it a smart investment:).

Microstrategy stock is trading at $505 today - six months after these tweets.
Michael Saylor (MSTR) was an early adopter and bought in at $8K thus the avg price of $16K for MicroStrategy.

Bitcoins price can crash into the twenties and Michael Saylor will still be ahead.
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 19, 2021, 06:40:18 PM
An average purchase price point of $16K in bitcoin is worth $30K today thus resulting in a profit of $14K for each bitcoin.
That is actually bragworthy or dare I call it a smart investment:).

Microstrategy stock is trading at $505 today - six months after these tweets.
Michael Saylor (MSTR) was an early adopter and bought in at $8K thus the avg price of $16K for MicroStrategy.

Bitcoins price can crash into the twenties and Michael Saylor will still be ahead.

Guy sits down at black jack table with 16k wins one hand has 32k. Better return than the above. Dare I call it a smart investment?

Continues playing black jack betting 100 dollars a hand til he has 30k left. Still better than your second scenario. 
Title: Re: Bitcoin is funny money
Post by: DaKini on July 19, 2021, 11:37:10 PM
I specifically meant microstrategies bubble-buy mentioned in the postings image:
295btc for 33,808$ each.
As of writing i googled a price of 29,714$, which makes a loss of about 1,200,000$ currently.
Title: Re: Bitcoin is funny money
Post by: StashingAway on July 20, 2021, 08:04:47 AM
An average purchase price point of $16K in bitcoin is worth $30K today thus resulting in a profit of $14K for each bitcoin.
That is actually bragworthy or dare I call it a smart investment:).

Microstrategy stock is trading at $505 today - six months after these tweets.
Michael Saylor (MSTR) was an early adopter and bought in at $8K thus the avg price of $16K for MicroStrategy.

Bitcoins price can crash into the twenties and Michael Saylor will still be ahead.

Guy sits down at black jack table with 16k wins one hand has 32k. Better return than the above. Dare I call it a smart investment?

Continues playing black jack betting 100 dollars a hand til he has 30k left. Still better than your second scenario.

+1

Rosy, I would recommend reading "A Random Walk Down Wallstreet" by Malkiel. Or perhaps "Thinking fast and slow" by Kahneman. Your arguments that support bitcoin are textbook examples of cognitive bias . I'm serious about reading them- I often check myself based on realizing that I am subject to deep rooted human tendencies that aren't great at rationalizing trends.
Title: Re: Bitcoin is funny money
Post by: talltexan on July 20, 2021, 11:31:00 AM
As far as corporate governance, I don't want to own businesses that put their effort into speculating in currencies. I can buy my own bitcoin.

A good portfolio has businesses that create genuine, lasting corporate value; I couldn't imagine considering any asset allocation without these asset classes. Some good portfolios may also have Bitcoin, although it's not essential.
Title: Re: Bitcoin is funny money
Post by: Rosy on July 20, 2021, 11:50:18 AM
An average purchase price point of $16K in bitcoin is worth $30K today thus resulting in a profit of $14K for each bitcoin.
That is actually bragworthy or dare I call it a smart investment:).

Microstrategy stock is trading at $505 today - six months after these tweets.
Michael Saylor (MSTR) was an early adopter and bought in at $8K thus the avg price of $16K for MicroStrategy.

Bitcoins price can crash into the twenties and Michael Saylor will still be ahead.

Guy sits down at black jack table with 16k wins one hand has 32k. Better return than the above. Dare I call it a smart investment?

Continues playing black jack betting 100 dollars a hand til he has 30k left. Still better than your second scenario.

+1

Rosy, I would recommend reading "A Random Walk Down Wallstreet" by Malkiel. Or perhaps "Thinking fast and slow" by Kahneman. Your arguments that support bitcoin are textbook examples of cognitive bias . I'm serious about reading them- I often check myself based on realizing that I am subject to deep rooted human tendencies that aren't great at rationalizing trends.

Boarder - Michael Saylor's average price point is still $16K due to his earlier buys. His bottom line even now still shows a profit.
Besides, as an experienced investor yourself, you will agree that he neither gained nor lost anything until he sells.

DaKini - if you wish to single out one purchase and compare it to today's prices then sure he lost money on that particular deal.
Based on his average price point however his bottom line still shows a profit today.
Until bitcoin crashes further, well beyond $20K he still has a positive bottom line.

Stashing Away - thx for the recommendation. I do own "A Random Walk down Wallstreet", a great book.
Of course, I am cognitively biased, aren't we all in some fashion?
Wall Street was down 900 points yesterday - Crypto is in the middle of a bloodbath - C19 Delta is rampant.
We all interpret our current reality based on who we are, what we know of the world, and what we care about.   

I just happen to think that crypto will be fine in the long run thanks to all the blockchain innovations. 
Zooming out, looking at the big picture ...
I own crypto as part of my portfolio because I think it has a future.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 20, 2021, 12:49:33 PM
I just happen to think that crypto will be fine in the long run thanks to all the blockchain innovations. 
Zooming out, looking at the big picture ...
I own crypto as part of my portfolio because I think it has a future.

That's all well and good. It'd just be nice if those saying this could coherently articulate what those innovations are and why they'll benefit the future.
Title: Re: Bitcoin is funny money
Post by: boarder42 on July 20, 2021, 12:53:17 PM
I just happen to think that crypto will be fine in the long run thanks to all the blockchain innovations. 
Zooming out, looking at the big picture ...
I own crypto as part of my portfolio because I think it has a future.

That's all well and good. It'd just be nice if those saying this could coherently articulate what those innovations are and why they'll benefit the future.

yep - the only answers i've seen given so far is if you have to have it explained to you then you don't get it.  I should probably start up a new crypto coin with that motto i'll be rich.
Title: Re: Bitcoin is funny money
Post by: the_gastropod on July 22, 2021, 07:02:11 AM
MSNBC aired this interview with Tether’s CTO and general counsel last night. https://m.youtube.com/watch?v=ZBEqyiO35cQ

- they refuse to share any info about the allegedly “A-2” rated commercial paper they’re holding
- refused to answer who rated this commercial paper
- they cannot disclose where the CEO or CFO are
- refused to disclose who they bank with
- seem to proudly state that they hold 24 hours of liquidity
- several blatant lies told: “we have never refused a redemption”. Emails released as part of the NYAG investigation show that they were unable to make redemptions due to liquidity issues several times.

Tough to say whether we’re talking criminal negligence and ineptitude or criminal fraud. Either way, this story doesn’t end well.