Author Topic: Cryptocurrency VS Banks  (Read 11789 times)

alena30

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Cryptocurrency VS Banks
« on: September 28, 2017, 04:31:23 AM »
This is an issue rising everywhere just wanna know what are the opinions, someone calling it a fraud, someone calling it a bubble this confusion has to lead me to a trouble, all of us know if cryptocurrency makes a move upward then there is only one sector which gonna get affected, so is all this mess for centralised banks when the economy want to turn digital and doesn't want to be dependent on the govt for buying, trading etc.

Linea_Norway

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Re: Cryptocurrency VS Banks
« Reply #1 on: September 28, 2017, 04:41:26 AM »
Posting to follow.

I thought Bitcoin was a currency that was invented to go outside the normal economy. Ideal for black market transactions. As I first heard about Bitcoin when it already had gone up exponentially in value, I suppose there is no point in buying it, because it will probably be a bursting bubble soon.

Now I have understood that also some normal countries are starting with crypto valuta (Japan, Sweden), as an alternative to their normal currency. I suppose these currencies will be used for white transactions. I don't know how this will work and how banks will work in the future. I hope someone here can shine a light on it.

Linea_Norway

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Re: Cryptocurrency VS Banks
« Reply #2 on: September 28, 2017, 06:33:53 AM »
My bank how recently included a place to add your bitcoins and other cryptocurrencies, so that you can view them in your normal overview page. So they are somehow starting to treat them as something real.

talltexan

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Re: Cryptocurrency VS Banks
« Reply #3 on: September 28, 2017, 07:42:37 AM »
Banks make most of their money off of loaning out other peoples' capital.  Cryptos such as bitcoins cannot effectively be loaned in large commercial quantities, since there is no government mechanism or court to act as a backstop to recoup the coins from a debtor that is unwilling to repay them.  Add to that the uncertainty related to which bitcoin or crypto is to be repaid after a fork, it becomes clear that cryptos are a real mess.  I don't ever see them being widely adopted as currency or money in the real capital markets.

I think banks are speaking out a against cryptos out of self interest -- If someone has decided to speculate wildly, the banks have got products galore (and the brokers to sell them) in which their clients can do this.  But there is no money to be made when their clients/customers choose to speculate on bitcoin or other crypto.

A loan in Bitcoin is still a contract, subject to enforcement. An entity receiving loans in Bitcoin is monetizing its reputation, and will see that reputation degrade if it stiffs lenders, who are prudent if they can verify the quality of that reputation.

Eric

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Re: Cryptocurrency VS Banks
« Reply #4 on: September 29, 2017, 01:02:24 PM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

powskier

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Re: Cryptocurrency VS Banks
« Reply #5 on: September 30, 2017, 12:22:43 AM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

Same as gold then. A store of value.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #6 on: September 30, 2017, 12:31:09 AM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

Same as gold then. A store of value.

Except gold has been a store of value for several thousand years and is reasonably stable price-wise. Bitcoin is a monumentally terrible store of value. If you'd put ten thousand dollars into Bitcoin at the end of August, you'd be down a grand and a half at this point. And that's before we get to the fact that while it's liquid, it's possible that at any point it will become impossible to access if your government decides to ban its use.

powskier

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Re: Cryptocurrency VS Banks
« Reply #7 on: September 30, 2017, 12:38:20 AM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

Same as gold then. A store of value.

Except gold has been a store of value for several thousand years and is reasonably stable price-wise. Bitcoin is a monumentally terrible store of value. If you'd put ten thousand dollars into Bitcoin at the end of August, you'd be down a grand and a half at this point. And that's before we get to the fact that while it's liquid, it's possible that at any point it will become impossible to access if your government decides to ban its use.

And if you'd bought Bitcoin 7 years ago, you'd be sitting pretty. I am not going to go dig up gold charts and point out that we could cherry pick different time periods to prove either point.
If the government decided that tomorrow it needed all the gold for top secret project X it could in theory do that also.

All I am saying is that many investors are using cryptocurrency as a way of storing value. Whether crypto or gold is of value or not is a whole other debate.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #8 on: September 30, 2017, 12:46:19 AM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

Same as gold then. A store of value.

Except gold has been a store of value for several thousand years and is reasonably stable price-wise. Bitcoin is a monumentally terrible store of value. If you'd put ten thousand dollars into Bitcoin at the end of August, you'd be down a grand and a half at this point. And that's before we get to the fact that while it's liquid, it's possible that at any point it will become impossible to access if your government decides to ban its use.

And if you'd bought Bitcoin 7 years ago, you'd be sitting pretty. I am not going to go dig up gold charts and point out that we could cherry pick different time periods to prove either point.
If the government decided that tomorrow it needed all the gold for top secret project X it could in theory do that also.

All I am saying is that many investors are using cryptocurrency as a way of storing value. Whether crypto or gold is of value or not is a whole other debate.

There's no point in pulling up those charts, because bitcoin is too volatile by several orders of magnitude to be a useful store of value. Hell, a significant number of people involved in cryptocurrencies have a philosophical problem with a currency even being used as a store of value in the first place. Gold is a store of value because it's got a long, long, LONG history of being used that way. Bitcoin is a poor store of value because it's less than a decade old, it's cartoonishly volatile, and there's significant rumblings to the effect that it's a speculative bubble.

effigy98

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Re: Cryptocurrency VS Banks
« Reply #9 on: October 02, 2017, 02:05:00 PM »
it's possible that at any point it will become impossible to access if your government decides to ban its use.

So a single country has the power to go to every miners home, turn off their electricity (even solar/geo/wind) and disable everyones internet connection? Because that is what it would take to "BAN" bitcoin.

Andreas talks about this often. Here is an example:
https://www.youtube.com/watch?v=LIQkuF_I5Xo

Also you can lookup venezuela and bitcoin. They have tried to "ban" bitcoin even with significant punishments since they want to steal from everyone printing their way out of debt, but a large portion of the population is using it anyway as it is one of the few ways people can feed their families and protect their wealth.
« Last Edit: October 02, 2017, 02:21:03 PM by effigy98 »

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #10 on: October 03, 2017, 12:51:45 AM »
it's possible that at any point it will become impossible to access if your government decides to ban its use.

So a single country has the power to go to every miners home, turn off their electricity (even solar/geo/wind) and disable everyones internet connection? Because that is what it would take to "BAN" bitcoin.

Andreas talks about this often. Here is an example:
https://www.youtube.com/watch?v=LIQkuF_I5Xo

Also you can lookup venezuela and bitcoin. They have tried to "ban" bitcoin even with significant punishments since they want to steal from everyone printing their way out of debt, but a large portion of the population is using it anyway as it is one of the few ways people can feed their families and protect their wealth.

Doing what you describe would be overkill on a ridiculous scale.

All the US government would need to do in order to kill Bitcoin activity in the US (and across a sizeable chunk of the rest of the world) would be to announce severe criminal penalties for anyone found offering goods or services for bitcoin, offering a conversion service between bitcoin and the US dollar, or anyone knowingly assisting someone in doing it. Immediately, conversion services would have a brutally difficult time trading, individual bitcoin owners would find it near-impossible to cash out, and banks around the world would shut the accounts of anyone trading in bitcoin.

People in the US often don't have a real idea of the scope and reach of American law. European banks with a single corporate office in the US have a total ban on opening accounts for Cubans entirely because they have to in order to engage with the US in any way. Sarbanes-Oxley requirements went more or less across the world as banks worked to make sure they didn't get shut out from the US market. Hell, even when the US government itself transferred money to Iran as part of the deal agreed under the Obama administration, it had to be airlifted in as physical cash because banks around the world will not accept a transfer to Iran thanks to American laws. And that was for a transfer being initiated by the US government. If the US were to announce tomorrow that bitcoin is now legally equivalent to Cuban, North Korean, Syrian, Sudanese or Iranian currencies, it would become close to impossible - and legally very risky - for anyone in the US, or anyone with any dealings with the US, to cash out any kind of bitcoin position or to buy anything except drugs and guns with it.

effigy98

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Re: Cryptocurrency VS Banks
« Reply #11 on: October 03, 2017, 02:12:07 PM »
Unless you live in Japan, or any other more progressive country, or you VPN into those countries and do your exchange. It is worldwide, I understand your point that USA is the center of the universe, but it's like banning gold. Did everyone in the world give it back to the US government when that happened?

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #12 on: October 03, 2017, 03:24:52 PM »
Unless you live in Japan, or any other more progressive country, or you VPN into those countries and do your exchange. It is worldwide, I understand your point that USA is the center of the universe, but it's like banning gold. Did everyone in the world give it back to the US government when that happened?

Wait, what? The US government banned gold???????

talltexan

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Re: Cryptocurrency VS Banks
« Reply #13 on: October 04, 2017, 02:19:25 PM »
Unless you live in Japan, or any other more progressive country, or you VPN into those countries and do your exchange. It is worldwide, I understand your point that USA is the center of the universe, but it's like banning gold. Did everyone in the world give it back to the US government when that happened?

Wait, what? The US government banned gold???????

I had this exact reaction when someone told me this three years ago. Went to the internet, and with very little difficulty found a narrative of what FDR did to get the US off of the gold standard during the great depression, and...

it was basically as you say! Families were allowed to keep some small amount, but had to turn the rest into the Federal Treasury to be paid something like $20/oz. Then--when it had all been collected--Roosevelt said the price was now $36/oz, effectively denying that 80% return to private citizens, who were not allowed to trade it privately. The good news was that this inflation kick-started the economy (by making jobs easier to hire for), but the bad news was that it was...basically theft.

Tonyahu

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Re: Cryptocurrency VS Banks
« Reply #14 on: October 04, 2017, 04:17:23 PM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

You can spend Bitcoin directly for products and services from many places both physical and on-line.

SnufferBottle

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Re: Cryptocurrency VS Banks
« Reply #15 on: October 04, 2017, 11:37:04 PM »
I don't consider cyrptocurrency to be an investment. It's literally pure speculation, especially on all these new forms that are popping up.

Personally I'd rather not have to worry about the trends affecting the price of my particular cryptocurrency. I'd rather use the existing banks give me cheap mortgages, continue acquiring properties, and ski off into the sunset in 5 years.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #16 on: October 05, 2017, 03:20:39 AM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

You can spend Bitcoin directly for products and services from many places both physical and on-line.

Where can I buy something in a physical location using Bitcoin?

Roger D

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Re: Cryptocurrency VS Banks
« Reply #17 on: October 05, 2017, 05:36:09 AM »
Where can I buy something in a physical location using Bitcoin?

Lots of places! For starters, here is a list of 93 Bitcoin-accepting restaurants in the USA.

You can even use Bitcoin to buy coffee in Starbucks if you're prepared to use their app.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #18 on: October 05, 2017, 05:40:26 AM »
Where can I buy something in a physical location using Bitcoin?

Lots of places! For starters, here is a list of 93 Bitcoin-accepting restaurants in the USA.

You can even use Bitcoin to buy coffee in Starbucks if you're prepared to use their app.

So I can buy a meal in approximately 0.015% of restaurants in a country five thousand kilometres from where I live and work. Or I can buy a coffee, except I already make my own because it's about 3% of the price.

Roger D

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Re: Cryptocurrency VS Banks
« Reply #19 on: October 05, 2017, 05:47:50 AM »
Where can I buy something in a physical location using Bitcoin?

Lots of places! For starters, here is a list of 93 Bitcoin-accepting restaurants in the USA.

You can even use Bitcoin to buy coffee in Starbucks if you're prepared to use their app.

So I can buy a meal in approximately 0.015% of restaurants in a country five thousand kilometres from where I live and work. Or I can buy a coffee, except I already make my own because it's about 3% of the price.

You asked for "something" in "a physical location", and I posted examples of that.

If you have specific things that you would like to buy with Bitcoin near a specific location, you could post a request with more details.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #20 on: October 05, 2017, 06:17:10 AM »
I wasn't aware that I was precluded from being unimpressed by a list of available locations where I can directly spend Bitcoin.

Strictly speaking, though, that Starbucks one doesn't really count: the process involves preloading your card with a certain amount of Bitcoins which is immediately converted to dollars. So you're buying dollars rather than coffee, then buying coffee using the dollars you've just bought.

Where would I buy a bicycle in Bristol using bitcoin? Or some builder's supplies for my brownstone in Baton Rouge?

I'm in Europe, and as far as I'm aware, the only place I can spend Bitcoin directly is in a single coffeeshop in Prague. Prague is several hundred kilometres away from me. I can't use Bitcoin to buy train tickets to get there, or to pay for hotels on the route, without having to convert it to euro or koruna.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #21 on: October 05, 2017, 06:19:13 AM »
In case it wasn't clear: my initial question regarding where I might spend Bitcoin wasn't borne of a desire to go do just that. It was an expression of doubt that Bitcoin is useful as a medium of exchange.

maizeman

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Re: Cryptocurrency VS Banks
« Reply #22 on: October 05, 2017, 06:55:22 AM »
Unless you live in Japan, or any other more progressive country, or you VPN into those countries and do your exchange. It is worldwide, I understand your point that USA is the center of the universe, but it's like banning gold. Did everyone in the world give it back to the US government when that happened?

Wait, what? The US government banned gold???????

Yup. The best google term to use might be "Executive Order 6102." Basically private citizens were not able to own "monetary" gold (could still have jewelry) for four decades of the last century. From 1934-1974.

Roger D

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Re: Cryptocurrency VS Banks
« Reply #23 on: October 06, 2017, 03:13:03 AM »
Where would I buy a bicycle in Bristol using bitcoin?

That's a good example, which illustrates the current limited possibility for Bitcoin purchases. Assuming you mean Bristol Tennessee, there's no local bike shop that accepts Bitcoin. The closest such bicycle shop is Revolution Bicycles in Columbus, Ohio. But you can use Bitcoin to buy your Amtrak train ticket to get to Ohio :)

Another alternative for people who live in Bristol is to order a bicycle online from Overstock, who heavily promote Bitcoin. Overstock will also deliver the building supplies you wanted in Baton Rouge.

I'm in Europe, and as far as I'm aware, the only place I can spend Bitcoin directly is in a single coffeeshop in Prague.

Simply not true. I'm in the UK. Not only do I have a Bitcoin-accepting bicycle shop in Runcorn, not far from where I live, but my local CEX consumer electronics store accepts Bitcoin as does every CEX in the UK.

Zoom in on this map to see thousands of places in Europe where you can spend Bitcoin directly:
http://www.coinmap.org/#/world/48.20271029/7.05322266/6

In the first few years after credit cards became available, there were only a few places that accepted them. But that did not preclude their eventual ubiquity.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #24 on: October 06, 2017, 04:43:12 AM »
Where would I buy a bicycle in Bristol using bitcoin?

That's a good example, which illustrates the current limited possibility for Bitcoin purchases. Assuming you mean Bristol Tennessee, there's no local bike shop that accepts Bitcoin. The closest such bicycle shop is Revolution Bicycles in Columbus, Ohio. But you can use Bitcoin to buy your Amtrak train ticket to get to Ohio :)

Another alternative for people who live in Bristol is to order a bicycle online from Overstock, who heavily promote Bitcoin. Overstock will also deliver the building supplies you wanted in Baton Rouge.

I'm in Europe, and as far as I'm aware, the only place I can spend Bitcoin directly is in a single coffeeshop in Prague.

Simply not true. I'm in the UK. Not only do I have a Bitcoin-accepting bicycle shop in Runcorn, not far from where I live, but my local CEX consumer electronics store accepts Bitcoin as does every CEX in the UK.

Zoom in on this map to see thousands of places in Europe where you can spend Bitcoin directly:
http://www.coinmap.org/#/world/48.20271029/7.05322266/6

In the first few years after credit cards became available, there were only a few places that accepted them. But that did not preclude their eventual ubiquity.

Consider me corrected: I can use Bitcoin directly with 512 businesses in the United Kingdom, of which a few dozen are CEX locations. This means I can use Bitcoin at almost as many locations as Starbucks reward cards. The fact that credit cards started from a small base is meaningless: just about everything does, and the vast majority never get much bigger. The point I was making wasn't that being small makes it impossible to be large in the future: it was that growth to the scale required to be a properly functioning currency remains extremely unlikely given what we know right now. Of the 512 places listed as accepting Bitcoin in your link, how many do you think have actually processed a transaction in Bitcoin? How many have processed transactions for more than one customer in bitcoin?

Credit cards have been going for 67 years; it's very risky to assume that Bitcoin is the next step after that.

runbikerun

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Re: Cryptocurrency VS Banks
« Reply #25 on: October 06, 2017, 04:50:44 AM »
Having read more, it appears as though credit cards are almost the exact opposite of what you want in an example supporting cryptocurrencies. People tried and failed on multiple occasions to get the idea off the ground, until in 1958 Bank of America got involved. They launched specifically in Fresno only, because nearly half the town banked with them, and mailed free credit cards to their entire customer base, instantly creating an incentive for merchants to accept the card.

In other words, the first successful iteration of the modern credit card was a success because it was tightly geographically located and designed to be as close to universal as possible from day one.

Roger D

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Re: Cryptocurrency VS Banks
« Reply #26 on: October 07, 2017, 05:56:49 AM »
This artist, Tatiana Moroz, has her Bitcoin barcode emblazoned on her guitar. A fan, watching one of her videos, can send her a tip by pointing their phone at the screen and typing a PIN and an amount.

Neither Tatiana nor her fans fret about how many bicycle shops in Bristol accept Bitcoin.


runbikerun

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Re: Cryptocurrency VS Banks
« Reply #27 on: October 07, 2017, 07:24:36 AM »
Tatiana Moroz having a Bitcoin-linked QR code on her guitar is not particularly convincing evidence for the case that Bitcoin will achieve widespread usability as a currency. Particularly since she seems to be more notable as a Bitcoin activist than as a musician: Googling her gives a couple of official pages, followed immediately by several pieces from cryptocurrency websites. The fact that a Bitcoin enthusiast accepts Bitcoin is neither here nor there.

Kleric

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Re: Cryptocurrency VS Banks
« Reply #28 on: October 08, 2017, 03:12:05 AM »
Hey folks, first time poster long time lurker.

Interesting topic. Bitcoin has been gaining traction for years and although it's been around almost a decade it's still relatively new. As for more places you can use it on the brick and mortar side, out here in Las Vegas the casinos and as it would appear, certain gentleman's clubs are now accepting it. As far as crytocurrency goes, I would consider bitcoin the gold and litecoin the silver as the block chains are identical albeit bitcoin has a finite amount of coins (21 million- should be exhausted by 2140) that can be mined versus Litecoin which supposedly has four times that supply available for mining.

Cryptos aside, the thing that has me paying attention is Ethereum. Not because of the currency itself or the convoluted gas, gwei, and gas limit prices in which to send it, but the ability for the ether network to directly interface with smart contracts. Smart contracts are what banks and many other businesses are interested in pursuing. JP Morgan Chase is already investing money in developing its own block chain for smart contracts with folks over at block ledger for just about everything financial. Among these I hear that mortgages are of particular interest seeing currently they require tons of paperwork to be stored all over the place both at the bank, with the client, title companies, etc. Anything written to the block chain is absolute and cannot be changed or modified and they auto-execute given their parameters to do so. Companies are now looking at this to prevent voter fraud, a form of receiving news from more reputable sources (if that's possible), gambling platforms, P2P contract agreements, the list goes on. Also we can't forget the capabilities of ERC20 tokens which is an entirely different subject all together and how they essentially work inside of DAPPS on top of ether. Occasionally credit cards are involved in this especially when it comes to something like marijuana dispensaries for example which are cash only businesses. This allows merchants to not have to hold obscene amounts of cash all the time and actually hold money in an account by using USD>crypto token>back to USD in an account for that particular card. It also allows customers to pay with credit/debit card instead of cash only which is far more convenient. Again, just an example but tokens will be used within applications typically used for payment from customers for that particular platform. 

So as far as cryptos go, block chain technology at least on the ethereum side is going to literally change how we do things globally. It's a big part of fintech and appears to be what all the big players in the corporate world are betting their money on, literally. I would even be willing to go as far as saying it will be worth more than bitcoin at some point. As for the 100's of other coins out there, many swear by them (monero is developing quite the fan base for it's anonymity and coin mixing capabilities) but honestly I'm following smart contracts in this particular space. That's not to say I don't also own a hardware wallet with various coins inside. I have zero intention on using coins to actually purchase anything except when an ICO with a nice white paper may rear its head. But that's pretty rare seeing most are pump and dumps.

« Last Edit: October 10, 2017, 02:07:44 AM by Kleric »

Sjalabais

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Re: Cryptocurrency VS Banks
« Reply #29 on: December 17, 2017, 09:40:54 AM »
Ethereum is what a friend's friend recommended to me last week, when it was worth 400. If my Google-Fu isn't letting me down*, it is worth about 600 right now. From where I am sitting, it looks like a wild pyramide scheme, but I'll join with some small change - just registered at Kraken.com earlier today, waiting to get verified.

This guy I talked to just started a company guiding investors, big banks and others in the cryptocurrency world, and he is killing it. I am not sure there's a rational angle on the whole thing, but it seems that right now, big investors are piling in in such a way that it is hard not to make money on that.

*I think I am doing it wrong, but I could hardly find any topics discussing cryptocurrencies at MM. It certainly isn't the most sensible investment in a risk perspective, but the prospects of earning a slab on the side are ridiculous...

maizeman

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Re: Cryptocurrency VS Banks
« Reply #30 on: December 17, 2017, 10:02:58 AM »
The forum search is pretty unreliable. Google works much better:

http://lmgtfy.com/?q=site%3Aforum.mrmoneymustache.com+bitcoin

There are several quite active threads at the moment, although honestly they all seem to converge back to the same two debates:

1) Are cryptocurrencies a potentially useful set of technologies which are currently experiencing a price bubble, or are they nothing by a bubble/ponzi scheme/what have you.

2) Whether or not high transaction fees, longer and longer waits for transactions to confirm, and reduced use to actually pay for things in bitcoin itself makes it more likely some other currency is going to displace it as the default cyptocurrency.

Sjalabais

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Re: Cryptocurrency VS Banks
« Reply #31 on: December 18, 2017, 02:31:53 PM »
Thanks for the update! Easy to see how the discussions gravitate towards the two big topics. The absolute mainstream economist view on Bitcoin has become a bit damning, but I don't think BC is the main and most advantageous crypto anymore anyway:
https://www.economist.com/news/finance-and-economics/21731827-getting-out-such-illiquid-asset-can-be-harder-getting-bitcoins

Cache_Stash

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Re: Cryptocurrency VS Banks
« Reply #32 on: December 18, 2017, 04:42:12 PM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

Subway Sandwich shops Accept Bitcoin.  That ought to tell you more of the story.

Cache_Stash

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Re: Cryptocurrency VS Banks
« Reply #33 on: December 18, 2017, 04:43:46 PM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

You can spend Bitcoin directly for products and services from many places both physical and on-line.

Where can I buy something in a physical location using Bitcoin?

Subway

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Re: Cryptocurrency VS Banks
« Reply #34 on: December 18, 2017, 09:48:33 PM »
Ethereum is what a friend's friend recommended to me last week, when it was worth 400. If my Google-Fu isn't letting me down*, it is worth about 600 right now. From where I am sitting, it looks like a wild pyramide scheme, but I'll join with some small change - just registered at Kraken.com earlier today, waiting to get verified.

This guy I talked to just started a company guiding investors, big banks and others in the cryptocurrency world, and he is killing it. I am not sure there's a rational angle on the whole thing, but it seems that right now, big investors are piling in in such a way that it is hard not to make money on that.

*I think I am doing it wrong, but I could hardly find any topics discussing cryptocurrencies at MM. It certainly isn't the most sensible investment in a risk perspective, but the prospects of earning a slab on the side are ridiculous...

Just highlighting all of the things that sound like you are throwing money into something you don't understand or even believe in...  Read quotes from the tech bubble. Many of them sound pretty similar. I'm not trying to pick on you, just pointing out you are getting ahead of yourself. Don't jump in because the price went up in the past. Research, try to stay unbiased, and determine if you think it will be valuable in the future.

Quote from: Kleric
So as far as cryptos go, block chain technology at least on the ethereum side is going to literally change how we do things globally.

JP Morgan Chase is creating their own, not using Ethereum. Vanguad has also announced they are looking at using blockchain technology for sharing information with index providers. Blockchain will likely change how we do things.

Bitcoin, ethereum, ect. don't have a patent on blockchain technology. The fact that blockchain technology is expanding outside of crypto-currencies shouldn't be construed as a good thing for crypto-currencies. JP Morgan is also the worst example if you are searching for a company that is pro-bitcoin. Jamie Dimon, the CEO of JPMChase, loves blockchain technology, but he thinks so little of cryptocurrencies that he publicly scolded his own daughter for buying bitcoin.

Sjalabais

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Re: Cryptocurrency VS Banks
« Reply #35 on: December 19, 2017, 11:29:14 AM »
@Indexer, you are absolutely right. The thing is, I have read about phenomenon like this forever, also studying the original tech bubble when it happened. Despite the whole concept of herd-think-bubbles being thoroughly displeasing and irrational, people make real money off it. I've never joined any of these gambles before, except for some forex speculation, and I just want to try it. What I am thinking of doing is investing maybe 1000$ in Ethereum, taking it out again at triple value, so I have my investment back and the rest is just toy money. If the whole shenanigan implodes, well, there's a lesson in there and I just lost one grand.

OurTown

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Re: Cryptocurrency VS Banks
« Reply #36 on: December 19, 2017, 11:41:54 AM »
You guys are going to lose your shirts on this.

ooeei

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Re: Cryptocurrency VS Banks
« Reply #37 on: December 19, 2017, 11:50:39 AM »
@Indexer, you are absolutely right. The thing is, I have read about phenomenon like this forever, also studying the original tech bubble when it happened. Despite the whole concept of herd-think-bubbles being thoroughly displeasing and irrational, people make real money off it. I've never joined any of these gambles before, except for some forex speculation, and I just want to try it. What I am thinking of doing is investing maybe 1000$ in Ethereum, taking it out again at triple value, so I have my investment back and the rest is just toy money. If the whole shenanigan implodes, well, there's a lesson in there and I just lost one grand.

I need to quote this for people talking about how this is nothing like a bubble.

There are shitloads of people "investing" in it for exactly these reasons.

robartsd

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Re: Cryptocurrency VS Banks
« Reply #38 on: December 19, 2017, 12:31:44 PM »
Good points about gold's value across the world while privately held gold bullion was illegal in the US. Of course gold as a store of value has existed several times longer than any government; cryptocurrencies are still new so it is entirely possible that a US ban would effectively kill them - but official recognition from major world countires (like Japan) certainly helps the argument that a US ban could be overcome.

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Re: Cryptocurrency VS Banks
« Reply #39 on: December 20, 2017, 09:13:07 AM »
Where can I buy something in a physical location using Bitcoin?

Lots of places! For starters, here is a list of 93 Bitcoin-accepting restaurants in the USA.

You can even use Bitcoin to buy coffee in Starbucks if you're prepared to use their app.



So I can buy a meal in approximately 0.015% of restaurants in a country five thousand kilometres from where I live and work. Or I can buy a coffee, except I already make my own because it's about 3% of the price.

jmbullion also accepts bitcoin for gold and silver purchases.

Nate79

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Re: Cryptocurrency VS Banks
« Reply #40 on: December 20, 2017, 07:30:53 PM »
I have a hard time seeing how central banks would care one way or another.  It's not like government backed currency is going to cease to exist.

How do you spend bitcoin?
Step 1 - convert it to money

Subway Sandwich shops Accept Bitcoin.  That ought to tell you more of the story.
No they don't.

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robartsd

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Re: Cryptocurrency VS Banks
« Reply #41 on: December 21, 2017, 09:05:22 AM »
Subway Sandwich shops Accept Bitcoin.  That ought to tell you more of the story.
No they don't.

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My guess is that a particular Subway Sandwich shop owner near Cache Stash is bullish enough on cryptocurrency to accept Bitcoin.

Nate79

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Re: Cryptocurrency VS Banks
« Reply #42 on: December 21, 2017, 06:16:22 PM »
Subway Sandwich shops Accept Bitcoin.  That ought to tell you more of the story.
No they don't.

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My guess is that a particular Subway Sandwich shop owner near Cache Stash is bullish enough on cryptocurrency to accept Bitcoin.
Yes, I read on another forum that it was potentially one store where the owner personally maybe took bitcoin. And the store probably doesn't even exist anymore as it appears to be closed. There is so much b.s. surrounding the potential use of bitcoin it's hilarious. Fan boys hype it up grasping at every little thing when most turns out to be b.s.

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maizeman

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Re: Cryptocurrency VS Banks
« Reply #43 on: December 21, 2017, 06:37:08 PM »
Subway Sandwich shops Accept Bitcoin.  That ought to tell you more of the story.
No they don't.

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My guess is that a particular Subway Sandwich shop owner near Cache Stash is bullish enough on cryptocurrency to accept Bitcoin.
Yes, I read on another forum that it was potentially one store where the owner personally maybe took bitcoin. And the store probably doesn't even exist anymore as it appears to be closed. There is so much b.s. surrounding the potential use of bitcoin it's hilarious. Fan boys hype it up grasping at every little thing when most turns out to be b.s.

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In the last two weeks, bitcoin, without much fanfare, has become essentially useless to actually conduct business or make purchases. Average transaction fees jumped up to more than $20/payment and stayed there, consistently, for days until this week. This week, one Tuesday the average transaction fee was $32. Wednesday is was $42/transaction. Today it's at $55/transaction.

There are $5.2M in unclaimed transaction fees in the mempool which miners cannot get at because they cannot process transactions fast enough.

At those prices no one is buying subway sandwiches or starbucks with bitcoin. No one is buying $60 video games on steam. No one is buying thousand dollar pieces of furniture on overstock.com. No one is sending remittances to their families overseas (even in countries locked behind capital controls).

And at these prices probably very few people are even bothering to move their bitcoins off of the exchanges on which they were purchased, so even the security and anticounterfitting aspects of bitcoin have become largely moot.

I like the idea of cryptocurrencies a lot. I think they can make the world a better and more convenient place. But BTC isn't a cryptocurrency right now.

Sjalabais

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Re: Cryptocurrency VS Banks
« Reply #44 on: December 22, 2017, 01:35:00 AM »
@maizeman, that os some very interesting insight! Is transaction cost a result of scarcity, too? Is that a thing with all cryptocurrencies?

maizeman

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Re: Cryptocurrency VS Banks
« Reply #45 on: December 22, 2017, 07:50:04 AM »
Most 1st and 2nd generation cryptocurrencies do have a ceiling on the number transactions they can process per unit time. In some cases 2nd gen cryptocurrencies, like Ethereum, that limit can actually change over time in response to market forces, and IOTA (which is arguably a 3rd gen currency) claims to be able to process unlimited transactions, although this has not been extensively stress tested yet, are there are some conceptual arguments about how well it will scale.

But anyway, the important thing to understand is that in the various versions of bitcoin currently floating around the limit on transactions per unit time is hard coded into the algorithm so supply is fixed.

If there is more demand from people trying to send bitcoin to new accounts than the number of available transactions, people have to bid against each other so that only the people willing to pay the most for their transactions will actually have them completed. It became clear some time ago that demand for bitcoin transactions was continuing to grow and would soon consistently exceed the fixed supply. Bitcoin cash addressed this by deciding to raise the hard limit on the number of transactions per unit time 8x (increasing supply). The original bitcoin said that they instead wanted to develop a new service called "lightening" which would decrease how many actual transactions people had to make (reducing demand). But lightening isn't around yet, and demand has kept growing and growing, which has continuing to drive up the price you have to bid to actually get your transaction processed.

Sjalabais

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Re: Cryptocurrency VS Banks
« Reply #46 on: December 22, 2017, 09:56:10 AM »
Thanks a lot for the explanation!

Roger D

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Re: Cryptocurrency VS Banks
« Reply #47 on: December 23, 2017, 02:31:08 AM »
Subway Sandwich shops Accept Bitcoin.
I thought it was only Subway stores in Russia. But if it's Subway stores in the US, UK or Canada, I'm super impressed.

Nate79

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Re: Cryptocurrency VS Banks
« Reply #48 on: December 24, 2017, 02:22:42 PM »
Subway Sandwich shops Accept Bitcoin.
I thought it was only Subway stores in Russia. But if it's Subway stores in the US, UK or Canada, I'm super impressed.
No, Subway doesn't take bitcoin. Just like the other 99.999999% of stores. Finding a store that takes bitcoin is like finding a unicorn.

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