BITCOIN

Zola.

IvanOpinion said:

Section62 said:

Makes me wonder when someone else will come along claiming Bitcoin can cure cancer.  Although I've got a feeling if I put those words into google I'll find someone has put forward that idea already.....

Waves hand Not bitcoin, but one of the companies I work for is looking at ways the block chain can be leveraged to make it easier to mine data in relation to determining patterns in relation to the treatment of cancer.  I see huge value and understand blockchain technology but, as it stands at the minute, crypto currency is far too early in its evolution to be of mainstream use.

Curious to know how a blockchain could provide value here? The entire purpose of "blockchain technology", which was created in bitcoin is to record indisputable and cash final payments. Nothing else.

Mine data? Please tell me what you mean by that?! 

lozzy1965

Wow, you guys have gone big with the arguments now!  Wars, the Roman Empire, long term debt, the Gold Standard.  The trouble is I still find myself saying, "Yes, Bitcoin/crypto is the answer.... Oh wait, no it's not.... Yes it is... etc etc."
I sound like the kind of person who should be scammed, if only I didn't have that healthy dose of scepticism in me all the time
I guess that just means it is early days for the tech.

User232002

Notepad_Phil said:

I was heavily involved in software engineering so my mention of tainted software was more of a throwaway warning. Code can always potentially be tampered with - it might be very difficult but it's not impossible, and no I'm not talking about 51% attacks or other such unsubtle methods.

You were "heavily involved in software engineering," yet you think a Bitcoin blockchain explorer website can somehow do, well I don't know what, but something... bad? You don't need to download any software at all to view blockchain transactions, so I have no idea what you are babblering on about... Not to mention that the Bitcoin code (if you were to download it) is open source, has a $1T bounty on its head and the space is filled with people at the bleeding edge of computer science.

Seriously, bore off with your appeals to authority; you have no idea what you are talking about and you are well out of your depth.

Notepad_Phil said:

Self-custody is great until it's not - be it forgetting or losing the slip of paper with your 12 words on, or however else you've lost access to it. I wonder what the percentage of bitcoins in lost wallets is at now?

Really? You're going to continue to argue a point based on the subset of people that (1) suffer from dementia, (2) have non trivial liquid assets, (3) can retain their faculties enough to reason through macro economic issues and come to independent decisions on asset investment, but (4) can't remember, nor write down or otherwise retain, 12 words? I imagine such a subset is an empty set, but if it is not then you'll be pleased to hear that there are 3rd party custody options out there for such people.

If adult humans truly lack the capacity to retain 12 words over a medium to long term time horizon then the human race has bigger issues than its financial system. 

Notepad_Phil said:

It was you who was talking of bitcoin perpetuity, so I'm not sure how you can complain about my mention of 1000 years.

Because, as everyone always does here, you twisted the point I made in to a point you wanted to argue about. I said that the emission schedule of Bitcoin is known in perpetuity. This is a true statement as its dictated by code. Contrary to your assertion, I don't really know nor care whether Bitcoin will be in actual use in 1000 years or not. In fact, I'd be quite disappointed if the human race hasn't thought of something better by that point.

But making any investment with a 1000 year time horizon is just incredibly incredibly stupid. As is believing in gold in the present day because it happened to be the best approximate solution to a problem the human race had a few thousand years ago.

User232002

Section62 said:

However, to follow through on your 'regular people' argument - these 'regular people' borrow fantastic sums to buy a roof over their head. Arguably its insane that people are willing to spend so much on a property, but neither would most people be able to buy a property outright 'within their means' if prices were a factor of 10 cheaper.  What is the intrinsic difference between borrowing £100k to buy a house, or £100Bn to buy a railway?

People finance mortgages on the basis that their disposable income can cover the cost of a mortgage payment at the current time and prices. The debt is sustainable. However, as you pointed out, governments don't do this;

Section62 said:

Few global governments would be able to spend £100Bn+ building (say) a railway wholly within their annual disposable income 

Governments finance debt by promising that the growth from the infrastructure spend will result in increased receipts which will enable them to pay the debt. Growth has been trending down for years in developed economies.

If you want to compare this to traditional mortgage finance, its a person on £20k/yr getting a £1M mortgage and promising that they will get a better job and eventually pay it back. And we are in a world of stagnant wage growth.

Section62 said:

Form a political party, get yourself elected on a platform of austerity, live your dream.

Why do you insist on assuming that if I don't want A then I must clearly want B? The answer to unrestricted QE is not austerity. There is nuance and middle ground in sensible monetary policy. Can we borrow to finance a new STEM focused university campus with low tuition fees? Yes. Can we borrow to cut 20 minutes off peoples commute time from Birmingham to London? Probably not.

bugbyte_2

Consider the following chart


Our National Debt is lower than at most points in the last three hundred years. By raising debt to invest in itself the UK has been at the top of, and maintained a position in the top 6, economically developed countries in the world (currently no 5).

The UK can do this because the £ is a reserve currency, meaning it can borrow at ridiculously low interest rates, and further more it can borrow off itself - The Gov issues guilts which are then brought by the Bank of England, which is owned by us. So effectively, we are borrowing from ourselves, so not actually a problem. Reserve currency governments have always used inflation to inflate away debt and this will happen again now. It is also fair to say that average wage growth tracks inflation over the long term so again, inflation is not necessarily an issue.  

IMHO separating the ability to control money - i.e. Bitcoin - from the state would mean none of the above could happen, and therefore right now after Covid the country would be royally stuffed. 

As regards HS2 its not about getting the London 20 min earlier its about capacity but you knew that.

Section62

darren232002 said:

Section62 said:

What is the intrinsic difference between borrowing £100k to buy a house, or £100Bn to buy a railway?

People finance mortgages on the basis that their disposable income can cover the cost of a mortgage payment at the current time and prices. The debt is sustainable. However, as you pointed out, governments don't do this;

Two different things.  1) Whether governmental borrowing is sustainable 2) Whether governments should be restricted or 'banned' from borrowing (aka 'living within their means').

The latter allows expenditure on things that couldn't be paid for in full 'today'.  If governments had to borrow in Bitcoin then their flexibility to finance projects/emergency expenditure would be curtailed.

Borrowing - sustainably - to fund large capital expenditure is not 'bad' in itself - hence the comparison with mortgages which most people consider to be an acceptable form of personal debt.

darren232002 said:

Section62 said:

Few global governments would be able to spend £100Bn+ building (say) a railway wholly within their annual disposable income 

Governments finance debt by promising that the growth from the infrastructure spend will result in increased receipts which will enable them to pay the debt. Growth has been trending down for years in developed economies.

If you want to compare this to traditional mortgage finance, its a person on £20k/yr getting a £1M mortgage and promising that they will get a better job and eventually pay it back. And we are in a world of stagnant wage growth.

Not really.  Because the person will be expected to pay back the money within a fraction of a lifetime - 25 years or something like that.  Hence the risk of them not getting that 'better job', or worse becoming ill an unable to work at all, is quite high.  (Most) nations are going to be around a lot longer than that.

We are though drifting slightly away from the point.  Which is that governmental borrowing is not wholly bad. If you forced governments to borrow only via Bitcoin it is inevitable bad stuff is going to happen.

darren232002 said:

Section62 said:

Form a political party, get yourself elected on a platform of austerity, live your dream.

Why do you insist on assuming that if I don't want A then I must clearly want B? The answer to unrestricted QE is not austerity. There is nuance and middle ground in sensible monetary policy. Can we borrow to finance a new STEM focused university campus with low tuition fees? Yes. Can we borrow to cut 20 minutes off peoples commute time from Birmingham to London? Probably not.

Why are you assuming I'm talking about you ?  I thought we we having a theoretical discussion here?

I completely agree about sensible monetary policy - that's one of the reasons why I see the flaw in the argument that borrowing in Bitcoin would help - but on the other hand, if you think a nuanced argument can be made for the middle ground then I'd love to see how you would sell the idea of reducing the NHS budget by 0.1%.

eskbanker

bugbyte_2 said:

Consider the following chart


Our National Debt is lower than at most points in the last three hundred years.

That chart doesn't include the Covid-era spike - the figure for the year to March 2021 was over 100% and it seems unlikely to have reduced since then....

https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicspending/bulletins/ukgovernmentdebtanddeficitforeurostatmaast/june2021

Notepad_Phil

darren232002 said:

Notepad_Phil said:

I was heavily involved in software engineering so my mention of tainted software was more of a throwaway warning. Code can always potentially be tampered with - it might be very difficult but it's not impossible, and no I'm not talking about 51% attacks or other such unsubtle methods.

You were "heavily involved in software engineering," yet you think a Bitcoin blockchain explorer website can somehow do, well I don't know what, but something... bad? You don't need to download any software at all to view blockchain transactions, so I have no idea what you are babblering on about... Not to mention that the Bitcoin code (if you were to download it) is open source, has a $1T bounty on its head and the space is filled with people at the bleeding edge of computer science.

You really haven't thought about the many potential routes of attack have you - maybe it's time to DYOR.

darren232002 said:

Notepad_Phil said:

Self-custody is great until it's not - be it forgetting or losing the slip of paper with your 12 words on, or however else you've lost access to it. I wonder what the percentage of bitcoins in lost wallets is at now?

Really? You're going to continue to argue a point based on the subset of people that (1) suffer from dementia, (2) have non trivial liquid assets, (3) can retain their faculties enough to reason through macro economic issues and come to independent decisions on asset investment, but (4) can't remember, nor write down or otherwise retain, 12 words? I imagine such a subset is an empty set, but if it is not then you'll be pleased to hear that there are 3rd party custody options out there for such people.

If adult humans truly lack the capacity to retain 12 words over a medium to long term time horizon then the human race has bigger issues than its financial system.

It was your point that self custody was possible by memorising 12 words. I was just countering with potential issues with the method that you seemed to think was a definite plus over other systems. But as it's so easy and would entail an empty set I look forward to the lack of reports of newly lost bitcoins going forward.

darren232002 said:

Notepad_Phil said:

It was you who was talking of bitcoin perpetuity, so I'm not sure how you can complain about my mention of 1000 years.

Because, as everyone always does here, you twisted the point I made in to a point you wanted to argue about. I said that the emission schedule of Bitcoin is known in perpetuity. This is a true statement as its dictated by code. Contrary to your assertion, I don't really know nor care whether Bitcoin will be in actual use in 1000 years or not. In fact, I'd be quite disappointed if the human race hasn't thought of something better by that point.

Except you didn't say that, you said "The emission and availability of Bitcoin is known in perpetuity. It is unknown for gold.". The emission schedule is certainly written in the code, but availability in perpetuity requires systems to be running in perpetuity, which is a lot more time than 1000 years. You seemed to think that was a plus point of Bitcoin, now you don't.

darren232002 said:

But making any investment with a 1000 year time horizon is just incredibly incredibly stupid. As is believing in gold in the present day because it happened to be the best approximate solution to a problem the human race had a few thousand years ago.

You  seem to have mistaken me with someone who loves gold. Gold helps to make some nice jewellery, but it's not something that I would consider as fit for investing, but then many other things aren't either.

p.s. I only got involved in this thread when I happened to go in and one of the last posts was suggesting that governments should have to rely on borrowing via Bitcoin (which to me seemed very similar to the gold standard and hence a very bad idea). I might be back if they ever reply to that.

bugbyte_2

The argument that people don't forget their security keys doesn't really hold out when 20% of Bitcoin is currently unrecoverable.

https://www.investopedia.com/news/20-all-btc-lost-unrecoverable-study-shows/

Personally I would write it down somewhere then it would be safe (ooh, 12 words!)

Malthusian

Just to provide some contrast for that GDP graph, if I was a country, my debt-to-GDP ratio would be roughly 500%.

Clearly this means I must be bankrupt. Unlike the guy with a minimum wage job and a crippling pile of payday loans and credit cards, whose debt-to-GDP ratio might only be around 20% at the point he had to apply for debt relief or go without food.

lozzy1965 said:

I guess that just means it is early days for the tech.

Nope. Bitcoin was invented 12 years ago. By contrast, we nuked Hiroshima and Nagasaki a few years after inventing the atomic bomb. Social networking was invented with the launch of Friends Reunited in 2000, and five years later Myspace was sold for half a billion dollars. Crypto is an old, boring, clapped-out solution in search of a problem that it hasn't found despite 12 years of desperate searching by bros who believe that finding the problem will allow them to cash out and retire on their catamarans.