Author Topic: What do you think of adding a low% of crypto allocation  (Read 31373 times)

lemonlyman

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Re: What do you think of adding a low% of crypto allocation
« Reply #250 on: October 21, 2021, 09:42:11 AM »
I don't have access to that paper and won't pay for it so I can't respond to it. Could be right, but I don't know who that person is or why an essay written a year ago is an authority today. There are literally smart contracts already being used today. Businesses building blockchain platforms for hosting ledgers, sharing information, and doing cross border payments is not a ponzi scheme.

lemonlyman

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Re: What do you think of adding a low% of crypto allocation
« Reply #251 on: October 21, 2021, 09:50:29 AM »
Crypto isn't just for currencies; blockchain technology will be used for many things in the future because it can be used to create protected, distributed general ledgers. Currencies, stable coins, medical records, wills, physical asset records, all kinds of things.

Blockchain technology certainly has uses.  The only use I've seen anyone touting though, and the entire raison d'etre for cryptocurrency is it's use as a store of value.  What crypto ETF is investing in blockchain technology as opposed to it's use as a currency?  I haven't been able to find one.

You can search for blockchain etf. There are a good bit now. BLOK, Global X BLockchain, FTEC. I don't hold any because I haven't researched what they hold and why, but it's on my to do list because I do think applications are exploding.

BicycleB

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Re: What do you think of adding a low% of crypto allocation
« Reply #252 on: October 21, 2021, 10:00:13 AM »

Also, for what it’s worth, the Google answer I get when I click occ’s link is this:
Quote
On the other hand, Bitcoin is deflationary, meaning buying power increases over time. If you put your private key under your mattress for 20 years (assuming Bitcoin is still around in 20 years), it will buy you more then than it will today.

Smartassery kinda backfired there eh?

Sure looks like it.

PS. Hmm, that's a rather (ahem) deflating answer for the assertion that Bitcoin isn't deflationary.
« Last Edit: October 21, 2021, 10:06:42 AM by BicycleB »

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #253 on: October 21, 2021, 10:33:04 AM »

Also, for what it’s worth, the Google answer I get when I click occ’s link is this:
Quote
On the other hand, Bitcoin is deflationary, meaning buying power increases over time. If you put your private key under your mattress for 20 years (assuming Bitcoin is still around in 20 years), it will buy you more then than it will today.

Smartassery kinda backfired there eh?

Sure looks like it.

PS. Hmm, that's a rather (ahem) deflating answer for the assertion that Bitcoin isn't deflationary.

The first rule of bike club is you don't tempt the fates by talking about deflation.  That leads to flats and flats are the path to the dark side.

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #254 on: October 21, 2021, 10:43:31 AM »
I don't have access to that paper and won't pay for it so I can't respond to it. Could be right, but I don't know who that person is or why an essay written a year ago is an authority today.

Ahh, bummer. That's odd, I was able to view without paying. Maybe try this link? (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3476678 and then click on "View PDF"). Not to appeal to authority, but the author is a Professor of Law at London School of Economics. Regardless, I'll not quite do it justice, but I'll attempt to summarize here:

The raison d'être for the blockchain is to solve the double-spending problem. While this is an impressive technological feat, it does not necessarily follow that this solves any real-world problems. It's important to remember two things:

1. that the double-spending problem only arises in distributed systems lacking a trusted record keeper or authority. If such a record keeper or authority existed, they could accomplish the same feat orders of magnitude more efficiently. Remember, the solution to the double spending problem is by design inefficient. It was designed to be wasteful to make it prohibitively costly for bad actors to act badly. and
2. that as far as crypto-assets are concerned, the legal system and courts themselves are mandatory central authorities that are the final arbiters of assigning owners to assets.

Therefore, any blockchain-based system of property ownership is a redundancy and must be kept in-sync somehow with the legal centralized legal system. The article then thoroughly goes into why this is not only impossible for myriad of reasons, but also explains why doing so would just be unnecessary and offer no benefits, while being significantly costly.

There are literally smart contracts already being used today. Businesses building blockchain platforms for hosting ledgers, sharing information, and doing cross border payments is not a ponzi scheme.

There are psychics with paying customers, plenty of people devoting lots of time and money to astrology, and countless MLM businesses making significant money. It doesn't make these things good ideas or worth pursuing.

I will grant you, one of the actual use-cases for blockchain technology today is regulatory arbitrage. Whether that's a good thing or not is up for debate. But blockchain tech does currently allow this. Once laws catch up, this loophole mostly closes, though.

One of the reasons talking about this is so difficult, is that enthusiasts tend to weasel out of criticism by shifting goal posts. This is another example. From an investment context, Bitcoin is absolutely a Ponzi scheme. That it can be used to skirt regulation is irrelevant from the investment context.
« Last Edit: October 21, 2021, 01:20:13 PM by the_gastropod »

Rosy

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Re: What do you think of adding a low% of crypto allocation
« Reply #255 on: October 21, 2021, 11:07:56 AM »
Sure, technically it's not a shrinking money supply.

But it is a shrinking supply. People lose their keys, die, send bitcoins to invalid addresses, etc. Those coins are as good as gone. Satoshi’s own 1 Million+ BTC have remained untouched for a decade—and I think it’s likely they never will be moved again.

Deflation was a deliberate design choice in Bitcoin. It was fundamentally inspired by Austrian economics. It’s an odd argument to simultaneously be pro-Bitcoin and deny its deflationary design. Almost like someone doesn’t understand the basics, and repeatedly weasels out of any serious discussion by slinging mud and linking to other cultish crypto propaganda.

Also, for what it’s worth, the Google answer I get when I click occ’s link is this:
Quote
On the other hand, Bitcoin is deflationary, meaning buying power increases over time. If you put your private key under your mattress for 20 years (assuming Bitcoin is still around in 20 years), it will buy you more then than it will today.

Smartassery kinda backfired there eh?

Naw - it's more like google knows "our" bias -
here is my top result
Quote
Bitcoin is not deflationary in the formal sense of the term. Its supply will continue to increase on a curve that should account for lost coins and a growing population over the next century.
Stop Calling Bitcoin Deflationary. | by Conner Brown | The ...
medium.com/the-bitcoin-times/stop-calling-bitcoin-deflationary-84462cb90345
medium.com/the-bitcoin-times/stop-calling-bitcoin-deflationary-84462cb90345

If crypto enthusiasts really wanted to be jackassery they can easily point to the current news:
One Billion US $ Trades were made on the first day of the Bitcoin Futures ETF on Oct 19, 2021
The highest natural volume for an ETF ever in the history of Wallstreet.

One billion US dollars undeniably reflects a mind-blowing interest in the futures of a digital asset.
The SEC just approved two more Futures ETFs - one of them for Ethereum.
Or maybe Wallstreet just likes to bet and the wealthy have more cash than they know what to do with.

The Grayscale Trust has also filed for SEC approval - converting their trust into a real ETF, not Futures.
We know that the SEC, Gary Gensler, is not keen on promoting the sale of real bitcoin.
They know that the retail investors will see the first real ETF as a stamp of approval for bitcoin.

Crypto isn't just for currencies; blockchain technology will be used for many things in the future because it can be used to create protected, distributed general ledgers. Currencies, stable coins, medical records, wills, physical asset records, all kinds of things.

Blockchain technology certainly has uses.  The only use I've seen anyone touting though, and the entire raison d'etre for cryptocurrency is it's use as a store of value.  What crypto ETF is investing in blockchain technology as opposed to it's use as a currency?  I haven't been able to find one.

I'm invested in a couple, like the BLOK ETF which is all about blockchain technology. Glad to see the acknowledgment of tech like blockchain and I agree that the current narrative is that bitcoin - not crypto et al - is a store of value or digital gold.

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #256 on: October 21, 2021, 11:15:03 AM »
Smartassery kinda backfired there eh?

Naw - it's more like google knows "our" bias -



Quote from: Rosy
If crypto enthusiasts really wanted to be jackassery they can easily point to the current news:
One Billion US $ Trades were made on the first day of the Bitcoin Futures ETF on Oct 19, 2021
The highest natural volume for an ETF ever in the history of Wallstreet.

One billion US dollars undeniably reflects a mind-blowing interest in the futures of a digital asset.
The SEC just approved two more Futures ETFs - one of them for Ethereum.
Or maybe Wallstreet just likes to bet and the wealthy have more cash than they know what to do with.

Always comes back to NUMBER GO UPPPPPP!!!!

I just watched LuLaRich on Amazon Prime (highly recommended), and it's kinda funny. The execs of the LuLaRoe MLM cited the rapidly increasing number of LuLaRoe associates to demonstrate the success of the organization. Similarly, that uhh... enthusiasm... is certainly profitable for some Bitcoin participants. These numbers don't make me any more likely to participate, myself, though

Relatedly, 100,000+ people have had their eyes scanned to get this rad new Worldcoin cryptocurrency. You in? Everybody's doing it! https://www.ft.com/content/0f873676-26c8-4b57-b369-23a2b30f11a5
« Last Edit: October 21, 2021, 11:43:40 AM by the_gastropod »

Telecaster

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Re: What do you think of adding a low% of crypto allocation
« Reply #257 on: October 21, 2021, 11:18:30 AM »

I will assume you meant this Connor Brown article: https://medium.com/the-bitcoin-times/stop-calling-bitcoin-deflationary-84462cb90345

He makes some interesting points, but does not successfully address the key mechanism by which I am suggesting that BTC would have a deflationary effect. He mentions the concern, but mis-states the mechanism by which "critics" say BTC would have a deflationary effect; therefore, he doesn't address my actual concern, which as I understand it is most economists' main concern about any fixed money supply relative to a growing economy.

I thought you made a good summation, but there are even more problems than that.  First, is that his definition of deflation isn't necessarily correct.  In fact, it isn't correct.
 Famously, one of the first pubic Bitcoin transactions was a guy who paid 10,000 Bitcoin for a pizza.  Now, that same 10,000 Bitcoin will buy you a chain of pizza restaurants.     From a consumer perspective that 100% meets the definition of deflation.  Saying that is not deflation is absurd. The reason why deflation is bad for the economy is that consumers believe that goods and services will become cheaper in the future and so delay spending money.   This puts downward pressure on prices and wages, and so people delay even more, rinse lather repeat.  To be clear, usually a depression causes deflation, not the other way around.  But once you are in the deflationary spiral it is hard to get out. 

His section on wages was even worse, if possible.  He missed some basic economic principles regarding wages and prices.

talltexan

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Re: What do you think of adding a low% of crypto allocation
« Reply #258 on: October 21, 2021, 11:37:08 AM »
I think having a system for withdrawing balance from crypto- over time can reduce the risk if it turns into a Ponzi scheme.

But I also see how problematic it would be for a person who sincerely believes this to be the future.

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #259 on: October 21, 2021, 12:17:18 PM »
Crypto isn't just for currencies; blockchain technology will be used for many things in the future because it can be used to create protected, distributed general ledgers. Currencies, stable coins, medical records, wills, physical asset records, all kinds of things.

Blockchain technology certainly has uses.  The only use I've seen anyone touting though, and the entire raison d'etre for cryptocurrency is it's use as a store of value.  What crypto ETF is investing in blockchain technology as opposed to it's use as a currency?  I haven't been able to find one.

I'm invested in a couple, like the BLOK ETF which is all about blockchain technology. Glad to see the acknowledgment of tech like blockchain and I agree that the current narrative is that bitcoin - not crypto et al - is a store of value or digital gold.

BLOCK ETF, top 10 holdings:
HUT 8 MNG CORP NEW COM    6.17% - Cryptocurrency miner (bitcoin and ethereum)
MARATHON DIGITAL HOLDINGS INC COM   6.02% - Bitcoin miner
MICROSTRATEGY INC   5.91% - Bitcoin speculator
COINBASE GLOBAL INC   4.68% - Cryptocurrency exchange platform
HIVE BLOCKCHAIN TECHNOLOGIES   4.33% - Cryptocurrency miner
SILVERGATE CAP CORP   4.11% - Cryptocurrency speculator
SQUARE INC   3.98% - Cryptocurrency speculator and point of sale provider for crypto currency
PAYPAL HLDGS INC   3.81% - Allows people to pay for things with bitcoin, ethereum, bitcoin cash, and litecoin
NVIDIA CORPORATION    3.51% - Builds graphics cards used by cryptocurrency miners
SBI HOLDINGS INC   3.23% - Bank that started a cryptocurrency fund


I'm seeing a lot to do with cryptocurrency, but little to nothing to do with 'blockchain technology'.  Which of the holdings in this fund are related to all the non-'currency' technology?
« Last Edit: October 21, 2021, 01:02:46 PM by GuitarStv »

lemonlyman

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Re: What do you think of adding a low% of crypto allocation
« Reply #260 on: October 21, 2021, 12:28:44 PM »
One of the reasons talking about this is so difficult, is that enthusiasts tend to weasel out of criticism by shifting goal posts. This is another example. From an investment context, Bitcoin is absolutely a Ponzi scheme. That it can be used to skirt regulation is irrelevant from the investment context.

Even in an investment context, it's still not a ponzi scheme. A speculative asset doesn't meet the definition of a ponzi scheme. There's not a consistent level of cash going to people at the top of the pyramid. They either hold their coins or sell them. That's completely different than an asset going to zero value. Ponzi schemes also require someone actively running and operating the scheme. I don't believe Satoshi's activity is very equivalent to Ponzi or Madoff.

I think that link will work. I'll read that essay sometime. Thanks.

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #261 on: October 21, 2021, 01:19:07 PM »
Even in an investment context, it's still not a ponzi scheme. A speculative asset doesn't meet the definition of a ponzi scheme. There's not a consistent level of cash going to people at the top of the pyramid.

Miners. Miners get a consistent stream of cash that they remove from the system.

Quote from: lemonlyman
Ponzi schemes also require someone actively running and operating the scheme. I don't believe Satoshi's activity is very equivalent to Ponzi or Madoff.

It's certainly more sophisticated, I'll grant you that. But miners run and operate and profit from the scheme, do they not? Does the operator necessarily need to be one person? Is a distributed Ponzi any better than a centralized one?

Telecaster

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Re: What do you think of adding a low% of crypto allocation
« Reply #262 on: October 21, 2021, 07:25:53 PM »
Even in an investment context, it's still not a ponzi scheme. A speculative asset doesn't meet the definition of a ponzi scheme. There's not a consistent level of cash going to people at the top of the pyramid.

Miners. Miners get a consistent stream of cash that they remove from the system.

Quote from: lemonlyman
Ponzi schemes also require someone actively running and operating the scheme. I don't believe Satoshi's activity is very equivalent to Ponzi or Madoff.



It's certainly more sophisticated, I'll grant you that. But miners run and operate and profit from the scheme, do they not? Does the operator necessarily need to be one person? Is a distributed Ponzi any better than a centralized one?

I hate to be a pedantic, but that never stopped me before  ;)    A Ponzi scheme is a specific type of fraud, where early investors are paid off by later investors, until there aren't enough investors to continue and the whole thing collapses.   Bitcoin is not that.   When a miner sells a bitcoin, the buyer gets exactly what she is expecting:  one bitcoin.  There's no fraud in that transaction.

I think it most correct to think of bitcoin as a speculative asset. 

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #263 on: October 21, 2021, 07:29:55 PM »
Even in an investment context, it's still not a ponzi scheme. A speculative asset doesn't meet the definition of a ponzi scheme. There's not a consistent level of cash going to people at the top of the pyramid.

Miners. Miners get a consistent stream of cash that they remove from the system.

Quote from: lemonlyman
Ponzi schemes also require someone actively running and operating the scheme. I don't believe Satoshi's activity is very equivalent to Ponzi or Madoff.



It's certainly more sophisticated, I'll grant you that. But miners run and operate and profit from the scheme, do they not? Does the operator necessarily need to be one person? Is a distributed Ponzi any better than a centralized one?

I hate to be a pedantic, but that never stopped me before  ;)    A Ponzi scheme is a specific type of fraud, where early investors are paid off by later investors, until there aren't enough investors to continue and the whole thing collapses.   Bitcoin is not that.   When a miner sells a bitcoin, the buyer gets exactly what she is expecting:  one bitcoin.  There's no fraud in that transaction.

I think it most correct to think of bitcoin as a speculative asset.

I've got some copper engravings of Lincoln for sale for 10k a piece. Probably be more valuable an asset it 10 years than a Bitcoin.

Juan Ponce de León

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Re: What do you think of adding a low% of crypto allocation
« Reply #264 on: October 21, 2021, 08:03:39 PM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #265 on: October 21, 2021, 08:58:21 PM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

People who bought yesterday are in the red.  Also, people who short Bitcoin lost money.  Ban Bitcoin.

waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #266 on: October 21, 2021, 09:56:34 PM »
Ponzi schemes are a very specific thing, and bitcoin (or other cryptocurrencies) are not that. You can make a very strong argument for "speculative bubble" (ie, bunch of people bidding the price of something of limited value up with each other) but it's not a ponzi.

Now, the effect when you finally don't have any new investors entering is similar, of course. If there's not new money going in, the upward spiral/returns vanish in both cases.

-W

Rosy

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Re: What do you think of adding a low% of crypto allocation
« Reply #267 on: October 21, 2021, 10:01:24 PM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

People who bought yesterday are in the red.  Also, people who short Bitcoin lost money.  Ban Bitcoin.

People who sold yesterday - red lambo ....:)

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #268 on: October 22, 2021, 03:12:58 AM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #269 on: October 22, 2021, 07:53:00 AM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

Are we also not counting the millions (billions?) of dollars in wasted environmental damage?  Last I was reading, bitcoin mining is using comperable power to that of the entire country of Poland (178.92 TWh) each year . . . with a carbon footprint equivalent to the entire country of Bangladesh (84.99 Mt CO2) . . . and generating equivalent electronic waste to that of the the entire country of the Netherlands (24.37 kt).
  - https://digiconomist.net/bitcoin-energy-consumption/

Just because people who buy and sell bitcoin pretend these issues don't exist doesn't mean that there isn't a significant cost associated with them.
« Last Edit: October 22, 2021, 07:56:52 AM by GuitarStv »

MustacheAndaHalf

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Re: What do you think of adding a low% of crypto allocation
« Reply #270 on: October 22, 2021, 09:19:16 AM »
The amount of Bitcoin in every wallet / account is public knowledge.  If they lie about how much Bitcoin is present in one of their accounts, they will be proved wrong within minutes of saying it.

This is not true, though, right? All of these transactions go through Chivo, which is not transparent. It's allowing Bukele to make up wildly ridiculous stats about the success (https://twitter.com/nayibbukele/status/1442624279028408321), like there are more transactions in ES on Chivo than Visa handles worldwide. That seems rather unlikely.

To ChpBstrd's point, much of this is deeply suspicious. A lawyer prosecuted for falsifying a will helped create the company running Chivo Wallet. The notary who attested to the legality of Chivo SA de CV, created with public resources by the Government, was accused of documentary falsification in 2020 [1]. President Bukele’s Chief of Staff, Marta Carolina Recinos de Bernal, is on the US State Department’s Engel List of corrupt officials. She’s also a director of Chivo SA [2].

It really is depressing seeing a bunch of crypto enthusiasts—who claim to be wholly against corruption—cheer on this naked pillaging of some of the most impoverished people on Earth all because "number go up" on their pet Ponzi scheme.

[1] https://www.revistafactum.com/abogada-chivo/
[2] https://www.elsalvador.com/noticias/nacional/funcionaria-bukele-lista-engel-directora-empresa-detras-chivo/877437/2021/
Oh, no!  You're quite right, thanks for the correction.  I assumed they put accounts on the blockchain.

But they created a new wallet in a matter of months and put everyone's Bitcoin in that system.  Was the launch their first large scale test?

The accounts can't be verified in some hidden system that does not use the blockchain.  The wallets may or may not have Bitcoin in them, since there's no external way to verify it without moving Bitcoin out of the wallets (and paying a fee to get the transfer registered on Bitcoin's blockchain).

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #271 on: October 22, 2021, 10:23:35 AM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

Are we also not counting the millions (billions?) of dollars in wasted environmental damage?  Last I was reading, bitcoin mining is using comperable power to that of the entire country of Poland (178.92 TWh) each year . . . with a carbon footprint equivalent to the entire country of Bangladesh (84.99 Mt CO2) . . . and generating equivalent electronic waste to that of the the entire country of the Netherlands (24.37 kt).
  - https://digiconomist.net/bitcoin-energy-consumption/

Just because people who buy and sell bitcoin pretend these issues don't exist doesn't mean that there isn't a significant cost associated with them.
There is no question that Bitcoin consumes energy and harms the environment. And, if you completely reject the idea of Bitcoin having any useful purpose then, obviously, you have to conclude it's pure waste. But that doesn't mean it is - that's just your opinion.

If you can imagine that Bitcoin could be a useful store of value, how does it compare to the conventional alternatives ?
What environmental damage results from extracting, transporting, processing, storing and securing the many thousands of tons of gold just stacked up in vaults ?

the_gastropod

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Re: What do you think of adding a low% of crypto allocation
« Reply #272 on: October 22, 2021, 11:17:57 AM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

Are we also not counting the millions (billions?) of dollars in wasted environmental damage?  Last I was reading, bitcoin mining is using comperable power to that of the entire country of Poland (178.92 TWh) each year . . . with a carbon footprint equivalent to the entire country of Bangladesh (84.99 Mt CO2) . . . and generating equivalent electronic waste to that of the the entire country of the Netherlands (24.37 kt).
  - https://digiconomist.net/bitcoin-energy-consumption/

Just because people who buy and sell bitcoin pretend these issues don't exist doesn't mean that there isn't a significant cost associated with them.
There is no question that Bitcoin consumes energy and harms the environment. And, if you completely reject the idea of Bitcoin having any useful purpose then, obviously, you have to conclude it's pure waste. But that doesn't mean it is - that's just your opinion.

If you can imagine that Bitcoin could be a useful store of value, how does it compare to the conventional alternatives ?
What environmental damage results from extracting, transporting, processing, storing and securing the many thousands of tons of gold just stacked up in vaults ?

Instead of just posing the question, and (I guess?) assuming that it must be more: why don't you look into it, and tell us! (Hot tip: look up these values on your own, not from BITCOIN.ORG or some other crypto website)

talltexan

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Re: What do you think of adding a low% of crypto allocation
« Reply #273 on: October 22, 2021, 11:57:50 AM »
Ponzi schemes are a very specific thing, and bitcoin (or other cryptocurrencies) are not that. You can make a very strong argument for "speculative bubble" (ie, bunch of people bidding the price of something of limited value up with each other) but it's not a ponzi.

Now, the effect when you finally don't have any new investors entering is similar, of course. If there's not new money going in, the upward spiral/returns vanish in both cases.

-W

If the allegations about Tether are true, how is it different from a Ponzi scheme?

waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #274 on: October 22, 2021, 12:12:45 PM »
Ponzi schemes are a very specific thing, and bitcoin (or other cryptocurrencies) are not that. You can make a very strong argument for "speculative bubble" (ie, bunch of people bidding the price of something of limited value up with each other) but it's not a ponzi.

Now, the effect when you finally don't have any new investors entering is similar, of course. If there's not new money going in, the upward spiral/returns vanish in both cases.

-W

If the allegations about Tether are true, how is it different from a Ponzi scheme?

I agree that Tether is probably 100% fraud. But that doesn't make the entire bitcoin ecosystem fraudulent, at least in theory.

-W
« Last Edit: October 22, 2021, 05:20:50 PM by waltworks »

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #275 on: October 22, 2021, 12:31:46 PM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

Are we also not counting the millions (billions?) of dollars in wasted environmental damage?  Last I was reading, bitcoin mining is using comperable power to that of the entire country of Poland (178.92 TWh) each year . . . with a carbon footprint equivalent to the entire country of Bangladesh (84.99 Mt CO2) . . . and generating equivalent electronic waste to that of the the entire country of the Netherlands (24.37 kt).
  - https://digiconomist.net/bitcoin-energy-consumption/

Just because people who buy and sell bitcoin pretend these issues don't exist doesn't mean that there isn't a significant cost associated with them.
There is no question that Bitcoin consumes energy and harms the environment. And, if you completely reject the idea of Bitcoin having any useful purpose then, obviously, you have to conclude it's pure waste. But that doesn't mean it is - that's just your opinion.

If you can imagine that Bitcoin could be a useful store of value, how does it compare to the conventional alternatives ?
What environmental damage results from extracting, transporting, processing, storing and securing the many thousands of tons of gold just stacked up in vaults ?

Instead of just posing the question, and (I guess?) assuming that it must be more: why don't you look into it, and tell us! (Hot tip: look up these values on your own, not from BITCOIN.ORG or some other crypto website)


It's kind of a tricky question to answer.  Bitcoin is a failure as a currency, so it doesn't seem fair to compare it to currencies and banking systems.  It's closest to a store of value like gold, silver, or beanie babies.

As of the publication of this 2018 study (https://www.nature.com/articles/s41893-018-0152-7.epdf?referrer_access_token=4WFhbLVH943fe3mcf8oZANRgN0jAjWel9jnR3ZoTv0NdJEcpPQZqiP9V_5sRM6OFeEt1maRlkYa2rAMRc-x1aVbfFmAZSeIy1BUabgBXZ5z6UQfH0t8xSV-r-npyxYVvgn4cGz5vnYe41OneS4y9iDEq9qg_P_yvZnh3zShMKtDW2Q4oj7ea5KOxnmJf-j_pUXVLuKqBdId1DeooWHyXBGTsaKAeh50jbelu7OUy1zXIkZZVtyhwK389Tt_6m7EusXgJedPs47tRpklbfG1lrE7zSz3Bqp6kqnD7z10SVdY%3D&tracking_referrer=blogs.discovermagazine.com), the worldwide energy costs of gold are equivalent to that of bitcoin.

This is still an apples to oranges comparison though, as the market capitalization of gold is 17x higher than bitcoin (https://ca.finance.yahoo.com/news/bitcoin-vs-gold-debate-reignited-125947770.html) . . . and gold has real world uses (jewelry, electronics, etc.).

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #276 on: October 22, 2021, 01:54:24 PM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

Are we also not counting the millions (billions?) of dollars in wasted environmental damage?  Last I was reading, bitcoin mining is using comperable power to that of the entire country of Poland (178.92 TWh) each year . . . with a carbon footprint equivalent to the entire country of Bangladesh (84.99 Mt CO2) . . . and generating equivalent electronic waste to that of the the entire country of the Netherlands (24.37 kt).
  - https://digiconomist.net/bitcoin-energy-consumption/

Just because people who buy and sell bitcoin pretend these issues don't exist doesn't mean that there isn't a significant cost associated with them.
There is no question that Bitcoin consumes energy and harms the environment. And, if you completely reject the idea of Bitcoin having any useful purpose then, obviously, you have to conclude it's pure waste. But that doesn't mean it is - that's just your opinion.

If you can imagine that Bitcoin could be a useful store of value, how does it compare to the conventional alternatives ?
What environmental damage results from extracting, transporting, processing, storing and securing the many thousands of tons of gold just stacked up in vaults ?

Instead of just posing the question, and (I guess?) assuming that it must be more: why don't you look into it, and tell us! (Hot tip: look up these values on your own, not from BITCOIN.ORG or some other crypto website)


It's kind of a tricky question to answer.  Bitcoin is a failure as a currency, so it doesn't seem fair to compare it to currencies and banking systems.  It's closest to a store of value like gold, silver, or beanie babies.

As of the publication of this 2018 study (https://www.nature.com/articles/s41893-018-0152-7.epdf?referrer_access_token=4WFhbLVH943fe3mcf8oZANRgN0jAjWel9jnR3ZoTv0NdJEcpPQZqiP9V_5sRM6OFeEt1maRlkYa2rAMRc-x1aVbfFmAZSeIy1BUabgBXZ5z6UQfH0t8xSV-r-npyxYVvgn4cGz5vnYe41OneS4y9iDEq9qg_P_yvZnh3zShMKtDW2Q4oj7ea5KOxnmJf-j_pUXVLuKqBdId1DeooWHyXBGTsaKAeh50jbelu7OUy1zXIkZZVtyhwK389Tt_6m7EusXgJedPs47tRpklbfG1lrE7zSz3Bqp6kqnD7z10SVdY%3D&tracking_referrer=blogs.discovermagazine.com), the worldwide energy costs of gold are equivalent to that of bitcoin.

This is still an apples to oranges comparison though, as the market capitalization of gold is 17x higher than bitcoin (https://ca.finance.yahoo.com/news/bitcoin-vs-gold-debate-reignited-125947770.html) . . . and gold has real world uses (jewelry, electronics, etc.).

I congratulate you on finding what seems to be a fairly well-balanced article ! Most out there seem to be ridiculously skewed one way or the other by the author's obvious agenda.

Apples and oranges ?
I don't think the current market capitalisation is relevant - the figures in the report are based on $ value of production.
I don't think jewellery and electronics are relevant - we're talking about it's use as a store of value.

What is probably more relevant is that the article is based on 2018 prices.

Overall, it seems like a reasonable article though and, at least, gives the energy considerations some perspective.

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #277 on: October 22, 2021, 02:15:03 PM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

Are we also not counting the millions (billions?) of dollars in wasted environmental damage?  Last I was reading, bitcoin mining is using comperable power to that of the entire country of Poland (178.92 TWh) each year . . . with a carbon footprint equivalent to the entire country of Bangladesh (84.99 Mt CO2) . . . and generating equivalent electronic waste to that of the the entire country of the Netherlands (24.37 kt).
  - https://digiconomist.net/bitcoin-energy-consumption/

Just because people who buy and sell bitcoin pretend these issues don't exist doesn't mean that there isn't a significant cost associated with them.
There is no question that Bitcoin consumes energy and harms the environment. And, if you completely reject the idea of Bitcoin having any useful purpose then, obviously, you have to conclude it's pure waste. But that doesn't mean it is - that's just your opinion.

If you can imagine that Bitcoin could be a useful store of value, how does it compare to the conventional alternatives ?
What environmental damage results from extracting, transporting, processing, storing and securing the many thousands of tons of gold just stacked up in vaults ?

Instead of just posing the question, and (I guess?) assuming that it must be more: why don't you look into it, and tell us! (Hot tip: look up these values on your own, not from BITCOIN.ORG or some other crypto website)


It's kind of a tricky question to answer.  Bitcoin is a failure as a currency, so it doesn't seem fair to compare it to currencies and banking systems.  It's closest to a store of value like gold, silver, or beanie babies.

As of the publication of this 2018 study (https://www.nature.com/articles/s41893-018-0152-7.epdf?referrer_access_token=4WFhbLVH943fe3mcf8oZANRgN0jAjWel9jnR3ZoTv0NdJEcpPQZqiP9V_5sRM6OFeEt1maRlkYa2rAMRc-x1aVbfFmAZSeIy1BUabgBXZ5z6UQfH0t8xSV-r-npyxYVvgn4cGz5vnYe41OneS4y9iDEq9qg_P_yvZnh3zShMKtDW2Q4oj7ea5KOxnmJf-j_pUXVLuKqBdId1DeooWHyXBGTsaKAeh50jbelu7OUy1zXIkZZVtyhwK389Tt_6m7EusXgJedPs47tRpklbfG1lrE7zSz3Bqp6kqnD7z10SVdY%3D&tracking_referrer=blogs.discovermagazine.com), the worldwide energy costs of gold are equivalent to that of bitcoin.

This is still an apples to oranges comparison though, as the market capitalization of gold is 17x higher than bitcoin (https://ca.finance.yahoo.com/news/bitcoin-vs-gold-debate-reignited-125947770.html) . . . and gold has real world uses (jewelry, electronics, etc.).

I congratulate you on finding what seems to be a fairly well-balanced article ! Most out there seem to be ridiculously skewed one way or the other by the author's obvious agenda.

Apples and oranges ?
I don't think the current market capitalisation is relevant - the figures in the report are based on $ value of production.
I don't think jewellery and electronics are relevant - we're talking about it's use as a store of value.

What is probably more relevant is that the article is based on 2018 prices.

Overall, it seems like a reasonable article though and, at least, gives the energy considerations some perspective.

It is not irrelevant that it has uses besides a store of value it's actually extremely relevant and why it was prized so much was our natural instincts as humans to be drawn to shiny things like back 8n the day when shiny meant a water source. So it was used in prized jewelry which helped it maintain it's long term store of value then was utilized in electronics. One could assume gold is a store of value only because of our very deep animalistic instincts that made it so prized.

Bitcoin is for all purposes today no more than a collectable and we'll see how long it's prized as that.

Further gold was in fact used as currency for a long time in trade prior to it becoming stock piled bc of the very reasons stated here about why btc isn't a currency and can't be bc we know more today than we did then about how economics work.
« Last Edit: October 22, 2021, 02:17:48 PM by boarder42 »

Telecaster

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Re: What do you think of adding a low% of crypto allocation
« Reply #278 on: October 22, 2021, 02:27:31 PM »
3. I think it's unlikely that Bitcoin would become a global currency in the 22nd century, but for the sake of argument let's suppose that it does. After the last Bitcoin is mined early next century it would become a truly deflationary currency. But economists in the future keep proclaiming that this currency doesn't work, undermining public confidence. So the Bitcoin community might decide to expand the supply above 21 million by restarting mining operations, solving the problem. And yes, they can do this despite its decentralized nature. For example, right now Bitcoin is being upgraded with the Taproot project which includes security and functionality upgrades agreed upon by the community near unanimously. An unpopular modification to the algorithm (such as expanding the supply above 21 million) could cause an uproar and lead to a hard fork into 2 currencies: the original version versus the modified version. In that case there would be 2 competing currencies and economists would get to observe in real-time whether the inflationary version is superior to the deflationary one.

One thing that is missed is that the money supply needs to expand at about the same rate as the economy, not the population.   That was a lesson learned when the US (and other countries) on the gold standard, but that lesson has been forgotten in recent times.  Back in the day, the US was on the gold standard which limited money supply and caused economic problems for some groups, but facilitated trade with England which benefited others.   So there were contentious factions arguing for each side.   William Jennings Bryan's 1900 Cross of Gold Speech is considered an American political classic. 

The Wizard of Oz, which is best known as a children's book, was actually political commentary on monetary policy.   The Yellow Brick Road was the gold standard, the silver slippers (ruby slippers in the movie) were the silver standard.  The wicked witch of the east and west were the big banks and industrialists on the coasts who were screwing the American people (Dorothy).  The scarecrow represented the farmers who were too dumb to avoid the debt trap, the tin man represented the broken down industrial workers who lacked heart to side with the farmers, and the Cowardly lion was the political class who weren't willing to do anything about it.   But as the story progressed,  the scarecrow was actually smart, the tin man had a heart, and the lion turned out to be brave. 

Point is, we already know what living with a deflationary currency is like.  In 1873, the US dropped the bimetallic standard and went to the gold standard.   The resulting deflation caused the Long Depression, which as the name suggests, was the longest depression in US history.   Worse, the country kept sinking back into depression.    The US was in the middle of one of the subsequent recessions in 1900 when L. Frank Baum wrote the book and Bryan made his speech blasting the gold standard.  Getting away from a deflating currency was a central political issue of the day.   We don't need to run the experiment again. 

Rosy

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Re: What do you think of adding a low% of crypto allocation
« Reply #279 on: October 22, 2021, 03:42:59 PM »
The amount of Bitcoin in every wallet / account is public knowledge.  If they lie about how much Bitcoin is present in one of their accounts, they will be proved wrong within minutes of saying it.

This is not true, though, right? All of these transactions go through Chivo, which is not transparent. It's allowing Bukele to make up wildly ridiculous stats about the success (https://twitter.com/nayibbukele/status/1442624279028408321), like there are more transactions in ES on Chivo than Visa handles worldwide. That seems rather unlikely.

To ChpBstrd's point, much of this is deeply suspicious. A lawyer prosecuted for falsifying a will helped create the company running Chivo Wallet. The notary who attested to the legality of Chivo SA de CV, created with public resources by the Government, was accused of documentary falsification in 2020 [1]. President Bukele’s Chief of Staff, Marta Carolina Recinos de Bernal, is on the US State Department’s Engel List of corrupt officials. She’s also a director of Chivo SA [2].

It really is depressing seeing a bunch of crypto enthusiasts—who claim to be wholly against corruption—cheer on this naked pillaging of some of the most impoverished people on Earth all because "number go up" on their pet Ponzi scheme.

[1] https://www.revistafactum.com/abogada-chivo/
[2] https://www.elsalvador.com/noticias/nacional/funcionaria-bukele-lista-engel-directora-empresa-detras-chivo/877437/2021/
Oh, no!  You're quite right, thanks for the correction.  I assumed they put accounts on the blockchain.

But they created a new wallet in a matter of months and put everyone's Bitcoin in that system.  Was the launch their first large scale test?

The accounts can't be verified in some hidden system that does not use the blockchain.  The wallets may or may not have Bitcoin in them, since there's no external way to verify it without moving Bitcoin out of the wallets (and paying a fee to get the transfer registered on Bitcoin's blockchain).

Since Chivo runs on the bitcoin lightning network - why would it not be recorded on the bitcoin blockchain? The transaction itself does not happen on the blockchain but it is recorded on the bitcoin ledger.
Here is the first thing I came across:

Quote
Is Chivo a lightning wallet?
“Just like every other participant on Bitcoin's Lightning Network, Chivo runs a Lightning node. Since Chivo is a custodial wallet, all Lightning payments that Chivo users send to and from other Lightning wallets will transfer liquidity to and from Chivo's node.” ... The Chivo node “ranks 83rd among public Lightning nodes.”Sep 24, 2021

OK, now that I've looked a little deeper. It looks like Chivo bypasses the lightning network unless you specifically choose it under payment option in the Chivo wallet, they do provide the QR code for the lightning option in-app. Chivo seems to be a private network, a proprietary app using lightning. It will make it difficult to discover irregularities if there are any.

Either way, it is a private, closed system rather than open-sourced.
Three months for development was definitely ambitious but all in all, it appears to work well enough at this point. Whether the stats given by Bukele are spot on will be difficult to confirm without full transparency. Since when are government stats the absolute truth? All govts want to look good.

Inferring criminal intent is a big accusation and condemnation. The fact that you can use any bitcoin wallet like Moon (not just Chivo) and that you have the lightning network option right in your Chivo app speaks against it.   
US$ transactions are still the norm and anyone who wants to avoid the volatility of bitcoin can immediately switch from bitcoin to US $.
But hey, for all we know this is a South/Central American Syndicate setting up the scam of the century. There were two Venezuelans and five different companies involved in the app creation. That makes it even more impressive, with hyper coordination and given a deadline of three months.     

El Salvador is under such tight scrutiny at present, their every move is questioned. Not to mention the new loan discussions with the IMF.

After all, they are a sovereign government and if they choose to veer from the 'true path' of bitcoin (enthusiasts who want open source, no privacy, financial transactions) then they can. Maybe they are only concerned about the benefit for their own country.
Maybe they have developed more than we think and are already planning to integrate with other South and Central American countries. 
I still think that is a very gutsy move made more difficult by the lack of tech, pressure from the IMF, poor odds of success, and the realities of a third-world country.

Nothing but a clever criminal bitcoin scam?
Or an opportunist with a vision who wants to build a better country?

Too much rumor, bias, and skewed perspective from all sides, not to mention harsh judgment or idealistic hopium.
Time will tell - gangster or hero? 
t

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #280 on: October 22, 2021, 03:52:14 PM »
Since Chivo runs on the bitcoin lightning network - why would it not be recorded on the bitcoin blockchain? The transaction itself does not happen on the blockchain but it is recorded on the bitcoin ledger.

The purpose of the Lightning network is to perform Bitcoin transactions without the cost, slowness, security, and protection of being recorded in the blockchain ledger.  Only when a payment channel on the lightning network is closed are transactions recorded, and the costs for using the Lightning network climb significantly if this is done often.

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #281 on: October 22, 2021, 04:10:53 PM »
Bitcoin is not a 'zero sum game'.  The market cap has gone from nothing to over a trillion dollars.  Tell me who has lost money on that, you'd have to be really trying.  When Bitcoin hit its latest all time high the other day, there was no reason for anyone on earth to have 'lost money' on bitcoin, unless you managed to trade your way into loss with paper hands.  The average realized price of bitcoin holders is currently ~23k.

This isn’t even really up for debate. Bitcoin, as a matter of fact is a *negative-sum* game. The only way to make money is by new entrants paying you more money for your Bitcoin than you paid when you entered. Miners, meanwhile, suck money out of the system, ensuring that, on average, Bitcoin investors will have a negative expected return. That, thus far, NUMBER GO UP, is not a refutation at all of the claim that it’s a negative-sum-game.

Are we also not counting the millions (billions?) of dollars in wasted environmental damage?  Last I was reading, bitcoin mining is using comperable power to that of the entire country of Poland (178.92 TWh) each year . . . with a carbon footprint equivalent to the entire country of Bangladesh (84.99 Mt CO2) . . . and generating equivalent electronic waste to that of the the entire country of the Netherlands (24.37 kt).
  - https://digiconomist.net/bitcoin-energy-consumption/

Just because people who buy and sell bitcoin pretend these issues don't exist doesn't mean that there isn't a significant cost associated with them.
There is no question that Bitcoin consumes energy and harms the environment. And, if you completely reject the idea of Bitcoin having any useful purpose then, obviously, you have to conclude it's pure waste. But that doesn't mean it is - that's just your opinion.

If you can imagine that Bitcoin could be a useful store of value, how does it compare to the conventional alternatives ?
What environmental damage results from extracting, transporting, processing, storing and securing the many thousands of tons of gold just stacked up in vaults ?

Instead of just posing the question, and (I guess?) assuming that it must be more: why don't you look into it, and tell us! (Hot tip: look up these values on your own, not from BITCOIN.ORG or some other crypto website)


It's kind of a tricky question to answer.  Bitcoin is a failure as a currency, so it doesn't seem fair to compare it to currencies and banking systems.  It's closest to a store of value like gold, silver, or beanie babies.

As of the publication of this 2018 study (https://www.nature.com/articles/s41893-018-0152-7.epdf?referrer_access_token=4WFhbLVH943fe3mcf8oZANRgN0jAjWel9jnR3ZoTv0NdJEcpPQZqiP9V_5sRM6OFeEt1maRlkYa2rAMRc-x1aVbfFmAZSeIy1BUabgBXZ5z6UQfH0t8xSV-r-npyxYVvgn4cGz5vnYe41OneS4y9iDEq9qg_P_yvZnh3zShMKtDW2Q4oj7ea5KOxnmJf-j_pUXVLuKqBdId1DeooWHyXBGTsaKAeh50jbelu7OUy1zXIkZZVtyhwK389Tt_6m7EusXgJedPs47tRpklbfG1lrE7zSz3Bqp6kqnD7z10SVdY%3D&tracking_referrer=blogs.discovermagazine.com), the worldwide energy costs of gold are equivalent to that of bitcoin.

This is still an apples to oranges comparison though, as the market capitalization of gold is 17x higher than bitcoin (https://ca.finance.yahoo.com/news/bitcoin-vs-gold-debate-reignited-125947770.html) . . . and gold has real world uses (jewelry, electronics, etc.).

I congratulate you on finding what seems to be a fairly well-balanced article ! Most out there seem to be ridiculously skewed one way or the other by the author's obvious agenda.

Apples and oranges ?
I don't think the current market capitalisation is relevant - the figures in the report are based on $ value of production.
I don't think jewellery and electronics are relevant - we're talking about it's use as a store of value.

What is probably more relevant is that the article is based on 2018 prices.

Overall, it seems like a reasonable article though and, at least, gives the energy considerations some perspective.

It is not irrelevant that it has uses besides a store of value it's actually extremely relevant and why it was prized so much was our natural instincts as humans to be drawn to shiny things like back 8n the day when shiny meant a water source. So it was used in prized jewelry which helped it maintain it's long term store of value then was utilized in electronics. One could assume gold is a store of value only because of our very deep animalistic instincts that made it so prized.

Bitcoin is for all purposes today no more than a collectable and we'll see how long it's prized as that.

Further gold was in fact used as currency for a long time in trade prior to it becoming stock piled bc of the very reasons stated here about why btc isn't a currency and can't be bc we know more today than we did then about how economics work.
We've discussed this point before  - the price of gold on the market has very little to do with any intrinsic value in terms of jewellery and electronics - it's as good as irrelevant.
I agree with your history lesson, that's why gold is where it is, but that history is history.

I won't go into the currency thing here - I need to catch up on the recent discussions on that.

Rosy

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Re: What do you think of adding a low% of crypto allocation
« Reply #282 on: October 22, 2021, 04:56:45 PM »
Since Chivo runs on the bitcoin lightning network - why would it not be recorded on the bitcoin blockchain? The transaction itself does not happen on the blockchain but it is recorded on the bitcoin ledger.

The purpose of the Lightning network is to perform Bitcoin transactions without the cost, slowness, security, and protection of being recorded in the blockchain ledger.  Only when a payment channel on the lightning network is closed are transactions recorded, and the costs for using the Lightning network climb significantly if this is done often.

Yes, of course, I know that, but the assertion that was made is that Chivo is not on the blockchain at all and the answer from what I found is that it depends. (which is what I outlined below the quote)

GuitarStv

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Re: What do you think of adding a low% of crypto allocation
« Reply #283 on: October 22, 2021, 05:34:31 PM »
Since Chivo runs on the bitcoin lightning network - why would it not be recorded on the bitcoin blockchain? The transaction itself does not happen on the blockchain but it is recorded on the bitcoin ledger.

The purpose of the Lightning network is to perform Bitcoin transactions without the cost, slowness, security, and protection of being recorded in the blockchain ledger.  Only when a payment channel on the lightning network is closed are transactions recorded, and the costs for using the Lightning network climb significantly if this is done often.

Yes, of course, I know that, but the assertion that was made is that Chivo is not on the blockchain at all and the answer from what I found is that it depends. (which is what I outlined below the quote)

It doesn't depend.  Neither the lightning network nor Chivo are on blockchain.  You need to close your lightning payment channel or move your earnings out of Chivo to get your bitcoin recorded in the ledger.

MustacheAndaHalf

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Re: What do you think of adding a low% of crypto allocation
« Reply #284 on: October 22, 2021, 09:23:50 PM »
Since Chivo runs on the bitcoin lightning network - why would it not be recorded on the bitcoin blockchain? The transaction itself does not happen on the blockchain but it is recorded on the bitcoin ledger.

The purpose of the Lightning network is to perform Bitcoin transactions without the cost, slowness, security, and protection of being recorded in the blockchain ledger.  Only when a payment channel on the lightning network is closed are transactions recorded, and the costs for using the Lightning network climb significantly if this is done often.
Yes, of course, I know that, but the assertion that was made is that Chivo is not on the blockchain at all and the answer from what I found is that it depends. (which is what I outlined below the quote)
El Salvador's population is 6.5 million.  What percentage of Bitcoin deposits into accounts of El Salvadorians have happened on Bitcoin's blockchain?

The question isn't about what Chivo could do, it's about transparency of giving Bitcoin to citizens of El Salvador.  If all of those transactions were on the blockchain, they would be visible and fully transparent.  Of course, in the past 30 days, Bitcoin transactions have averaged $3.50 each, which is significant compared to the amount of money being given to each person in El Salvador.

I think the best answer we'll get is if reporters try and reach out to a number of people, and walk them through getting their Bitcoin accounts and seeing what happens.  Then we'll have an idea if people's allegations of having their accounts already claimed is significant or not.

Foolishly aiming towards the thread topic, acceptance by a government - however awkward - does suggest greater acceptance of Bitcoin.  Combined with new Bitcoin futures ETFs, maybe that's an indication to invest a very small percentage in it.

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #285 on: October 23, 2021, 07:53:38 AM »
Returning to the bitcoin is deflationary 'problem' . . .

At what point would that 'problem' become a real problem ?

When/if BTC is widely accepted by retailers ?
When/if BTC is widely used by the general pop. for everyday transactions ?
When/if BTC is widely used by the general pop. to store wealth ?
When/if BTC is locally recognised as legal tender alongside a fiat currency ?
When/if BTC is globally recognised as legal tender alongside fiat currencies ?
When/if BTC starts to replace some fiat currencies ?
When/if BTC replaces all fiat currencies ?
Other ?

It seems to me that BTC would need to be broadly dominant for it's deflationary nature to start negatively impacting national economies in the ways described. But I'm no economist . . .


What about the problems associated with inflationary fiat currencies ? It's far from a perfect solution.
It seems pretty clear that inflation tends to take money from the poor and hand it to the asset-rich.
Are we not concerned about potential hyper-inflation / fiat-devaluation resulting from the rampant money-printing in recent years ?
Inflation can get away from you - runaway inflation causes horrific damage to economies. Inflation is all well and good - until it isn't.
What's the outlook for Joe Average's meagre savings over the next few years ?

BicycleB

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Re: What do you think of adding a low% of crypto allocation
« Reply #286 on: October 23, 2021, 02:13:04 PM »
3. I think it's unlikely that Bitcoin would become a global currency in the 22nd century, but for the sake of argument let's suppose that it does. After the last Bitcoin is mined early next century it would become a truly deflationary currency. But economists in the future keep proclaiming that this currency doesn't work, undermining public confidence. So the Bitcoin community might decide to expand the supply above 21 million by restarting mining operations, solving the problem. And yes, they can do this despite its decentralized nature. For example, right now Bitcoin is being upgraded with the Taproot project which includes security and functionality upgrades agreed upon by the community near unanimously. An unpopular modification to the algorithm (such as expanding the supply above 21 million) could cause an uproar and lead to a hard fork into 2 currencies: the original version versus the modified version. In that case there would be 2 competing currencies and economists would get to observe in real-time whether the inflationary version is superior to the deflationary one.

One thing that is missed is that the money supply needs to expand at about the same rate as the economy, not the population.   That was a lesson learned when the US (and other countries) on the gold standard, but that lesson has been forgotten in recent times.  Back in the day, the US was on the gold standard which limited money supply and caused economic problems for some groups, but facilitated trade with England which benefited others.   So there were contentious factions arguing for each side.   William Jennings Bryan's 1900 Cross of Gold Speech is considered an American political classic. 

The Wizard of Oz, which is best known as a children's book, was actually political commentary on monetary policy.   The Yellow Brick Road was the gold standard, the silver slippers (ruby slippers in the movie) were the silver standard.  The wicked witch of the east and west were the big banks and industrialists on the coasts who were screwing the American people (Dorothy).  The scarecrow represented the farmers who were too dumb to avoid the debt trap, the tin man represented the broken down industrial workers who lacked heart to side with the farmers, and the Cowardly lion was the political class who weren't willing to do anything about it.   But as the story progressed,  the scarecrow was actually smart, the tin man had a heart, and the lion turned out to be brave. 

Point is, we already know what living with a deflationary currency is like.  In 1873, the US dropped the bimetallic standard and went to the gold standard.   The resulting deflation caused the Long Depression, which as the name suggests, was the longest depression in US history.   Worse, the country kept sinking back into depression.    The US was in the middle of one of the subsequent recessions in 1900 when L. Frank Baum wrote the book and Bryan made his speech blasting the gold standard.  Getting away from a deflating currency was a central political issue of the day.   We don't need to run the experiment again.

Great post, @Telecaster!

Telecaster

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Re: What do you think of adding a low% of crypto allocation
« Reply #287 on: October 24, 2021, 01:18:30 PM »
It seems to me that BTC would need to be broadly dominant for it's deflationary nature to start negatively impacting national economies in the ways described. But I'm no economist . . .

Agree completely.  My claim is that Bitcoin is unsuitable as currency in the first place, so can never become a reserve currency.  Quick anecdote.  The Chivo app had a feature that would freeze the Bitcoin price for one minute to give the user time to complete the transaction.  However, one minute was enough time for users to search exchanges for arbitrage opportunities.  So if one minute is too long for Bitcoin pricing, what if you have a complex product like a dishwasher say where components ordered in advance and wages have to be paid before the product is sold?  How could you possibly calculate your costs or potential profit? 

On the consumer side, lets say I want to buy a car on credit and pay a fix amount of Bitcoin each month.   I will have no idea how much the car will wind up costing or even how expensive my next payment would be. 

Bitcoin proponents say that as Bitcoin becomes more widely adopted as a currency the the price will stabilize.  Two problems with that, first is the chicken and the egg.  It can't become more widely adopted until the prices stabilize and prices can't stabilize until it becomes more widely adopted.   Second problem is that it needs to be really stable.  Like fluctuating no more than a few percent a year.  Unless there is some entity in charge of keeping it stable I don't see how that is even possible.   

Quote
What about the problems associated with inflationary fiat currencies ? It's far from a perfect solution.
It seems pretty clear that inflation tends to take money from the poor and hand it to the asset-rich.
Are we not concerned about potential hyper-inflation / fiat-devaluation resulting from the rampant money-printing in recent years ?
Inflation can get away from you - runaway inflation causes horrific damage to economies. Inflation is all well and good - until it isn't.
What's the outlook for Joe Average's meagre savings over the next few years ?

All fair points.


waltworks

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Re: What do you think of adding a low% of crypto allocation
« Reply #288 on: October 24, 2021, 01:31:42 PM »
If bitcoin became really stable over a period of many years, tons of people holding only for gainz would sell it and crash the price, though.

So it's a chicken and egg problem twice - it can't become stable until it's not sexy for speculation, and it will crash if it's not sexy for speculation anymore, hence not being stable.

-W

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #289 on: October 24, 2021, 03:53:27 PM »
If bitcoin became really stable over a period of many years, tons of people holding only for gainz would sell it and crash the price, though.

So it's a chicken and egg problem twice - it can't become stable until it's not sexy for speculation, and it will crash if it's not sexy for speculation anymore, hence not being stable.

-W

Nope.it only goes up

BicycleB

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Re: What do you think of adding a low% of crypto allocation
« Reply #290 on: October 24, 2021, 04:20:25 PM »
Sometimes I think of BTC (and crypto in general) like this:
1. No, won't be currency. Not broadly, not really really.
2. Will have some value over time but current price is probably above that value
3. Probably won't be stable in price but if it does, will take a long time to get there
4. Might end up having store-of-value utility even if prices are unstable

And:
5. Yes, is in a speculative bubble
6. Might be nowhere near the end of the speculative bubble
7. The limit on price might be social, not logical
8. A fair approximation of the upper price limit might be things like:
a. How many dollars are people willing to "invest" (store) in risk assets, minus the valuation of the stock market, during an optimistic period
b. When nearly all, not just some, of markets' speculative energy is in BTC
c. When speculative valuation on crypto is higher than the total value of the stock market
d. When valuation of crypto is larger than the stock market
e. (Some of these overlap) When total valuation of risk "assets" (say, stocks + crypto) is much higher than stocks alone have ever been.

8c, 8d, and 8e may well put the global financial system at risk of a BTC-triggered meltdown. So in a way, I'm rooting for a BTC crash before they happen.

It's hard to measure the items in 8, but my guess that if these thoughts are true, the upper limit on BTC is far higher than today. Like BTC at US$250,000 or $500,000. Maybe $1 million.

There's a part of me that then says "Well, then it's not too late to buy. Take the ride!" Haven't done it though.

Re the thread topic, if the upper limit of valuation is far higher than today, a small % crypto could have a big positive impact on returns - if you can get yourself out before the Last Big Crash. Sometimes I think the way to go is reset rarely, like maybe once a year instead of once a quarter, and set some share-of-risk-market boundaries for when to sell.
« Last Edit: October 24, 2021, 04:47:13 PM by BicycleB »

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #291 on: October 24, 2021, 06:08:09 PM »
Sometimes I think of BTC (and crypto in general) like this:
1. No, won't be currency. Not broadly, not really really.
2. Will have some value over time but current price is probably above that value
3. Probably won't be stable in price but if it does, will take a long time to get there
4. Might end up having store-of-value utility even if prices are unstable

And:
5. Yes, is in a speculative bubble
6. Might be nowhere near the end of the speculative bubble
7. The limit on price might be social, not logical
8. A fair approximation of the upper price limit might be things like:
a. How many dollars are people willing to "invest" (store) in risk assets, minus the valuation of the stock market, during an optimistic period
b. When nearly all, not just some, of markets' speculative energy is in BTC
c. When speculative valuation on crypto is higher than the total value of the stock market
d. When valuation of crypto is larger than the stock market
e. (Some of these overlap) When total valuation of risk "assets" (say, stocks + crypto) is much higher than stocks alone have ever been.

8c, 8d, and 8e may well put the global financial system at risk of a BTC-triggered meltdown. So in a way, I'm rooting for a BTC crash before they happen.

It's hard to measure the items in 8, but my guess that if these thoughts are true, the upper limit on BTC is far higher than today. Like BTC at US$250,000 or $500,000. Maybe $1 million.

There's a part of me that then says "Well, then it's not too late to buy. Take the ride!" Haven't done it though.

Re the thread topic, if the upper limit of valuation is far higher than today, a small % crypto could have a big positive impact on returns - if you can get yourself out before the Last Big Crash. Sometimes I think the way to go is reset rarely, like maybe once a year instead of once a quarter, and set some share-of-risk-market boundaries for when to sell.

The majority of people here supporting this are of the get rich quicker mindset.

Even in a forum with a simple equation for wealth accumulation you have people believing in this thing.

Take rosy for example. Hit a 6 figure number years ahead of schedule. Not by following the logic. But bc they bought a lottery ticket. Built in belief. Not a single person in any crypto thread has articulated it's value.  Other than it goes up. So I don't want to miss it. Austin take rosy. Proclaiming it's value as a currency and yet doesn't understand modern economics or admittedly how currency functions

I'm all about using inventive ways to get richer faster to shorten the timeline. Anyone can look at my history of posts and journals here to see that. But at some point you have to know when to fold em.  And these staunch advocates of a meer collectible can't see past their own greed.


onecoolcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #292 on: October 24, 2021, 10:34:55 PM »
Sometimes I think of BTC (and crypto in general) like this:
1. No, won't be currency. Not broadly, not really really.
2. Will have some value over time but current price is probably above that value
3. Probably won't be stable in price but if it does, will take a long time to get there
4. Might end up having store-of-value utility even if prices are unstable

And:
5. Yes, is in a speculative bubble
6. Might be nowhere near the end of the speculative bubble
7. The limit on price might be social, not logical
8. A fair approximation of the upper price limit might be things like:
a. How many dollars are people willing to "invest" (store) in risk assets, minus the valuation of the stock market, during an optimistic period
b. When nearly all, not just some, of markets' speculative energy is in BTC
c. When speculative valuation on crypto is higher than the total value of the stock market
d. When valuation of crypto is larger than the stock market
e. (Some of these overlap) When total valuation of risk "assets" (say, stocks + crypto) is much higher than stocks alone have ever been.

8c, 8d, and 8e may well put the global financial system at risk of a BTC-triggered meltdown. So in a way, I'm rooting for a BTC crash before they happen.

It's hard to measure the items in 8, but my guess that if these thoughts are true, the upper limit on BTC is far higher than today. Like BTC at US$250,000 or $500,000. Maybe $1 million.

There's a part of me that then says "Well, then it's not too late to buy. Take the ride!" Haven't done it though.

Re the thread topic, if the upper limit of valuation is far higher than today, a small % crypto could have a big positive impact on returns - if you can get yourself out before the Last Big Crash. Sometimes I think the way to go is reset rarely, like maybe once a year instead of once a quarter, and set some share-of-risk-market boundaries for when to sell.

The majority of people here supporting this are of the get rich quicker mindset.

Even in a forum with a simple equation for wealth accumulation you have people believing in this thing.

Take rosy for example. Hit a 6 figure number years ahead of schedule. Not by following the logic. But bc they bought a lottery ticket. Built in belief. Not a single person in any crypto thread has articulated it's value.  Other than it goes up. So I don't want to miss it. Austin take rosy. Proclaiming it's value as a currency and yet doesn't understand modern economics or admittedly how currency functions

I'm all about using inventive ways to get richer faster to shorten the timeline. Anyone can look at my history of posts and journals here to see that. But at some point you have to know when to fold em.  And these staunch advocates of a meer collectible can't see past their own greed.

Resentment is not a good look on you.

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #293 on: October 25, 2021, 04:28:56 AM »
Sometimes I think of BTC (and crypto in general) like this:
1. No, won't be currency. Not broadly, not really really.
2. Will have some value over time but current price is probably above that value
3. Probably won't be stable in price but if it does, will take a long time to get there
4. Might end up having store-of-value utility even if prices are unstable

And:
5. Yes, is in a speculative bubble
6. Might be nowhere near the end of the speculative bubble
7. The limit on price might be social, not logical
8. A fair approximation of the upper price limit might be things like:
a. How many dollars are people willing to "invest" (store) in risk assets, minus the valuation of the stock market, during an optimistic period
b. When nearly all, not just some, of markets' speculative energy is in BTC
c. When speculative valuation on crypto is higher than the total value of the stock market
d. When valuation of crypto is larger than the stock market
e. (Some of these overlap) When total valuation of risk "assets" (say, stocks + crypto) is much higher than stocks alone have ever been.

8c, 8d, and 8e may well put the global financial system at risk of a BTC-triggered meltdown. So in a way, I'm rooting for a BTC crash before they happen.

It's hard to measure the items in 8, but my guess that if these thoughts are true, the upper limit on BTC is far higher than today. Like BTC at US$250,000 or $500,000. Maybe $1 million.

There's a part of me that then says "Well, then it's not too late to buy. Take the ride!" Haven't done it though.

Re the thread topic, if the upper limit of valuation is far higher than today, a small % crypto could have a big positive impact on returns - if you can get yourself out before the Last Big Crash. Sometimes I think the way to go is reset rarely, like maybe once a year instead of once a quarter, and set some share-of-risk-market boundaries for when to sell.

The majority of people here supporting this are of the get rich quicker mindset.

Even in a forum with a simple equation for wealth accumulation you have people believing in this thing.

Take rosy for example. Hit a 6 figure number years ahead of schedule. Not by following the logic. But bc they bought a lottery ticket. Built in belief. Not a single person in any crypto thread has articulated it's value.  Other than it goes up. So I don't want to miss it. Austin take rosy. Proclaiming it's value as a currency and yet doesn't understand modern economics or admittedly how currency functions

I'm all about using inventive ways to get richer faster to shorten the timeline. Anyone can look at my history of posts and journals here to see that. But at some point you have to know when to fold em.  And these staunch advocates of a meer collectible can't see past their own greed.

Resentment is not a good look on you.

Not sure where you came up with that thought I'm Fi. I have no resentment about this.

Malcat

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Re: What do you think of adding a low% of crypto allocation
« Reply #294 on: October 25, 2021, 05:20:58 AM »
The majority of people here supporting this are of the get rich quicker mindset.

Even in a forum with a simple equation for wealth accumulation you have people believing in this thing.

Take rosy for example. Hit a 6 figure number years ahead of schedule. Not by following the logic. But bc they bought a lottery ticket. Built in belief. Not a single person in any crypto thread has articulated it's value.  Other than it goes up. So I don't want to miss it. Austin take rosy. Proclaiming it's value as a currency and yet doesn't understand modern economics or admittedly how currency functions

I'm all about using inventive ways to get richer faster to shorten the timeline. Anyone can look at my history of posts and journals here to see that. But at some point you have to know when to fold em.  And these staunch advocates of a meer collectible can't see past their own greed.

Resentment is not a good look on you.

How did you read resentment from that post? I don't see it.

MustacheAndaHalf

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Re: What do you think of adding a low% of crypto allocation
« Reply #295 on: October 25, 2021, 06:16:50 AM »
The uncertainty is what keeps BTC rising.  If everyone knew for certain the limits of what Bitcoin will do in the future, there would be certainty in Bitcoin's price.  I think it's the lack of certainty is what makes the price hard to define (which is also like the dot-com bubble, trying to define which websites would flourish on the internet).

I guess the case "for" Bitcoin is as a cheaper means of cross-border transactions.  Maybe subscriptions are handled by "smart contracts", so everyone can see the cost and how to end the subscription.  All speculation - which is what the "for" case has to be, at this point.  Most people don't do anything in Bitcoin in their daily lives.

Most crypto investors are probably relying on the price always going up.  Once you see that for a few years, it's easy to believe rationalizations that will let you participate in the easy money.  The hardest thing for the "pro" camp to consider is that Bitcoin might crash to zero.  If all of BTC's uses are done better elsewhere, why would BTC hold it's value?  There's a chance that happens, which is why I limit my crypto investment to a tiny percentage of net worth.  (But if I was young and in need of a lottery ticket, maybe I'd allocate much more).  While putting money in crypto, keep in mind it might crash and not recover, so diversify.

talltexan

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Re: What do you think of adding a low% of crypto allocation
« Reply #296 on: October 25, 2021, 06:36:34 AM »
Sometimes I think of BTC (and crypto in general) like this:
1. No, won't be currency. Not broadly, not really really.
2. Will have some value over time but current price is probably above that value
3. Probably won't be stable in price but if it does, will take a long time to get there
4. Might end up having store-of-value utility even if prices are unstable

And:
5. Yes, is in a speculative bubble
6. Might be nowhere near the end of the speculative bubble
7. The limit on price might be social, not logical
8. A fair approximation of the upper price limit might be things like:
a. How many dollars are people willing to "invest" (store) in risk assets, minus the valuation of the stock market, during an optimistic period
b. When nearly all, not just some, of markets' speculative energy is in BTC
c. When speculative valuation on crypto is higher than the total value of the stock market
d. When valuation of crypto is larger than the stock market
e. (Some of these overlap) When total valuation of risk "assets" (say, stocks + crypto) is much higher than stocks alone have ever been.

8c, 8d, and 8e may well put the global financial system at risk of a BTC-triggered meltdown. So in a way, I'm rooting for a BTC crash before they happen.

It's hard to measure the items in 8, but my guess that if these thoughts are true, the upper limit on BTC is far higher than today. Like BTC at US$250,000 or $500,000. Maybe $1 million.

There's a part of me that then says "Well, then it's not too late to buy. Take the ride!" Haven't done it though.

Re the thread topic, if the upper limit of valuation is far higher than today, a small % crypto could have a big positive impact on returns - if you can get yourself out before the Last Big Crash. Sometimes I think the way to go is reset rarely, like maybe once a year instead of once a quarter, and set some share-of-risk-market boundaries for when to sell.

The majority of people here supporting this are of the get rich quicker mindset.

Even in a forum with a simple equation for wealth accumulation you have people believing in this thing.

Take rosy for example. Hit a 6 figure number years ahead of schedule. Not by following the logic. But bc they bought a lottery ticket. Built in belief. Not a single person in any crypto thread has articulated it's value.  Other than it goes up. So I don't want to miss it. Austin take rosy. Proclaiming it's value as a currency and yet doesn't understand modern economics or admittedly how currency functions

I'm all about using inventive ways to get richer faster to shorten the timeline. Anyone can look at my history of posts and journals here to see that. But at some point you have to know when to fold em.  And these staunch advocates of a meer collectible can't see past their own greed.

Resentment is not a good look on you.

Rather than resentment, I read a deep philosophical theme here:

If we support the lifestyle of the FIRE movement, do we have a moral obligation to use our voices to speak toward replicable methods of achieving it over time. Because the traditional stock market, index fund route seems replicable over time (roughly a century of data), we feel comfortable growing our movement through investing using this method. And--because of the relatively short time frame and high volatility--we are much less secure in enouraging others to use crypto positions to reach FIRE.

LateStarter

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Re: What do you think of adding a low% of crypto allocation
« Reply #297 on: October 25, 2021, 11:40:13 AM »
Sometimes I think of BTC (and crypto in general) like this:
1. No, won't be currency. Not broadly, not really really.
2. Will have some value over time but current price is probably above that value
3. Probably won't be stable in price but if it does, will take a long time to get there
4. Might end up having store-of-value utility even if prices are unstable

And:
5. Yes, is in a speculative bubble
6. Might be nowhere near the end of the speculative bubble
7. The limit on price might be social, not logical
8. A fair approximation of the upper price limit might be things like:
a. How many dollars are people willing to "invest" (store) in risk assets, minus the valuation of the stock market, during an optimistic period
b. When nearly all, not just some, of markets' speculative energy is in BTC
c. When speculative valuation on crypto is higher than the total value of the stock market
d. When valuation of crypto is larger than the stock market
e. (Some of these overlap) When total valuation of risk "assets" (say, stocks + crypto) is much higher than stocks alone have ever been.

8c, 8d, and 8e may well put the global financial system at risk of a BTC-triggered meltdown. So in a way, I'm rooting for a BTC crash before they happen.

It's hard to measure the items in 8, but my guess that if these thoughts are true, the upper limit on BTC is far higher than today. Like BTC at US$250,000 or $500,000. Maybe $1 million.

There's a part of me that then says "Well, then it's not too late to buy. Take the ride!" Haven't done it though.

Re the thread topic, if the upper limit of valuation is far higher than today, a small % crypto could have a big positive impact on returns - if you can get yourself out before the Last Big Crash. Sometimes I think the way to go is reset rarely, like maybe once a year instead of once a quarter, and set some share-of-risk-market boundaries for when to sell.

The majority of people here supporting this are of the get rich quicker mindset.

Even in a forum with a simple equation for wealth accumulation you have people believing in this thing.

Take rosy for example. Hit a 6 figure number years ahead of schedule. Not by following the logic. But bc they bought a lottery ticket. Built in belief. Not a single person in any crypto thread has articulated it's value.  Other than it goes up. So I don't want to miss it. Austin take rosy. Proclaiming it's value as a currency and yet doesn't understand modern economics or admittedly how currency functions

I'm all about using inventive ways to get richer faster to shorten the timeline. Anyone can look at my history of posts and journals here to see that. But at some point you have to know when to fold em.  And these staunch advocates of a meer collectible can't see past their own greed.

Resentment is not a good look on you.

Rather than resentment, I read a deep philosophical theme here:

If we support the lifestyle of the FIRE movement, do we have a moral obligation to use our voices to speak toward replicable methods of achieving it over time. Because the traditional stock market, index fund route seems replicable over time (roughly a century of data), we feel comfortable growing our movement through investing using this method. And--because of the relatively short time frame and high volatility--we are much less secure in enouraging others to use crypto positions to reach FIRE.

I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

If philosophy is what you're looking for, consider:
The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.
Bertrand Russell

bacchi

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Re: What do you think of adding a low% of crypto allocation
« Reply #298 on: October 25, 2021, 12:01:38 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

boarder42

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Re: What do you think of adding a low% of crypto allocation
« Reply #299 on: October 25, 2021, 12:07:42 PM »
I read it as "I have decreed that Bitcoin is nothing but a pump/dump, speculative scam, etc. and anyone that disagrees with me is simply a greedy fool trying to get rich quick, especially dim-witted Rosy."

It's just personal attacks on a group and an individual, ie. a clear contravention of forum rules 2 and 4.

Only you used the phrases "greedy fool" and "dim-witted" in this thread.

A personal attack isn't simply disagreeing with someone's opinion, even if that opinion is strongly held.

also i've never cited it as a pump and dump spectulative scam.  Beanie babies and tulip bulbs still have value and sell on the open market.