BITCOIN

[Deleted User]

Scottex99 said:

Do you understand that the way BTC was created and runs that it literally cannot be a ponzi?

I agree that Bitcoin isn't a ponzi scheme. It would be more accurate to call it a speculative bubble. Those who got in first are desperate to keep pushing it to new investors to push the value of their investment up, but at some point in the future it will stop finding new investors and the entire thing will collapse in value.

There's a paradox at the centre of Bitcoin because its long-term value is supposedly its capacity to act as a currency. For a currency to be viable, its price needs to be stable. Yet the reason most people have invested in Bitcoin in the last few years is precisely that its value isn't stable and because they've been sold on the promise of quick riches. It's tailor-made to collapse for that reason.

Of course people can't see that now because we're still knee deep in the bubble but in future I expect we'll look back at this and see it was obvious.

Scottex99

From the small sample size here where do you see people desperately pushing it to new investors? I bought BTC for less than $4k, I've bought it at $60k too. At no point have I thought oh I better go and shill to some forum or my friends to keep the price up. The ascent will be inevitable anyway, imo. "Bitcoin has no top because fiat has no bottom".

I'm not suggesting you go back and read 150 pages of debates/arguments but trust me when I say this currency thing has been covered 10 times already. If Satoshi could go back to 2009 he'd probably call it Digital Assets or something similar. A tiny fraction of people who hold and use BTC, expect to use it as a currency, ever. Yes you can buy stuff quickly using the lightning network but why would you when most expect the price to keep rising. Other than other coins, the only thing I ever bought with BTC was some degen crypto calendar that probably cost me $30 at the time and is now more like $300.

There's already stablecoins with huge market caps for daily use which are a straight swap for normal money in crypto platforms and would help you hedge the volatility of BTC and ETH if you wanted to.

You can expect what you want. I expect the opposite, that it's clear this is the future of money/finance in one form or the other and you'll be shaking your head wondering how you missed it when you come back here

silvercue

Seems opinions are divided around here!

Aegis

silvercue said:

Seems opinions are divided around here!

Indeed.  I am genuinely very open to investment opportunities, but I need to see where the value comes from, and just trading assets for an ever-increasing real return is just impossible from everything I know about investing. Obviously anyone can buy whatever they want with their money, but I'm still not convinced that this is anything other than a mania, and every time I ask for a way to calculate the "correct" value for each coin I get hugely conflicting responses, ranging from nothing (my guess) to millions of dollars per BTC (though such people are usually quick to add that this only works for BTC rather than any other crypto assets).

silvercue

Understood.  And I think it is wise to only buy into assets you trust. 

But then Gold has no real value other than the value we attribute to it.  There are similarities to be drawn there, yet gold has not collapsed (yet).  

Aegis

silvercue said:

Understood.  And I think it is wise to only buy into assets you trust. 

But then Gold has no real value other than the value we attribute to it.  There are similarities to be drawn there, yet gold has not collapsed (yet).  

I agree, and as I have said elsewhere I don't invest in gold either, despite the fact that it has the long term price stability that offers a non-correlated inflation resistance in a portfolio that might otherwise only hold equities and bonds.  Basically I won't invest in anything that doesn't generate a cash flow somehow, which means I won't hold commodities of any sort, including crypto-assets.

I suppose the one thing you could say about gold is that it does have uses in both industry and jewellery, so there is some demand for it beyond the simple storage, but I agree that the vast majority of demand just comes from the fact that it is seen as a store of value.  In other words, it has value because people think it has value.  To me, that's not a good enough reason to invest in an asset.

User232002

Notepad_Phil said:

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

www.blockchain.com/explorer / www.etherscan.io / Bitcoin source code

These were the 3 sources I mentioned in the previous discussion. If you think there is anything at all in these 3 sources that would lead to a computer vulnerability you could somewhat easily make between a couple million up to a couple hundred million dollars. 

You are completely clueless and have no idea what you are talking about.

Notepad_Phil said:

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.

My argument wasn't that there will no more lost Bitcoins. You raised a point about senile people not being able to remember 12 words which is preposterous as if that matters.

FYI, the article posted on this thread even conceded that the current amount of lost Bitcoin does not affect the operation of the network.

Notepad_Phil said:

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.

I didn't see this omission as being a big thing, but yes; I believe there will be a copy of the Bitcoin source code and the architecture to run it in 1000 years if people wished to do so. Thus, it will be available. No, I don't imagine it will be used then. I've already said that I would hope we have something better by then.

Again, this is a silly strawman point. Only an idiot is thinking about something happening in 1000 years when making investment decisions today for rather bloody obvious reasons.

Notepad_Phil said:

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.

As much as I give gold a hard time, its outperformed the S&P500 since 2000 so it seems perfectly fit for investing. It hasn't performed particularly well since 2011 (ish).

User232002

Section62 said:

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.

Only one poster suggested that governments borrow in Bitcoin and he hasn't returned, so please stop presenting this as an argument. My argument is not that governments should not be allowed to borrow - it is that they should 'live within their means.' Some borrowing is fine and the general theory that borrowing can increase tax receipts and pay for itself is sound. However, the question is one of degree and my assertion is that we are way past the point of sustainability.

Section62 said:

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.

Regarding the first paragraph, these factors shift the dial but don't change the overall picture. Our government has tax receipts of £800BN. That's gross revenue though, so how much of that do we think is 'disposable' (for lack of a better word) income? Lets go with £100BN, which at 12.5% of revenue seems ridiculously generous. The governments current debt is £2.7TN which, if we assessed this on the same basis as a mortgage, would be 27:1. With some fairly generous assumptions...

The idea of debt to GDP as a ratio is a bit silly, because GDP isn't income. Regardless, you can see that the situation isn't exactly sustainable with these approximate numbers. Nation states are a pretty recent historical phenomenon btw and not nearly as permanent as people would like to believe.

Regarding the last paragraph, thats not the point I've been arguing against. I accept government debt can be a good thing. Borrowing money after WWII and rebuilding the country, creating universities etc created growth and a golden age - but thats not happening in our modern time.

Section62 said:

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%.

Fair point, but by 'me' I meant the argument I was presenting. 

Again, nobody invested in this thread is suggesting governments borrow in BTC - that's ludicrous. Some time ago I suggested that fiat will exist in parallel with BTC and if a government borrows fiat currency it will cause BTC to appreciate against that currency by a reciprocal amount. So BTC operates as a reserve asset outside of nation state control, but nations are still free to inflate their currency if they believe it serves them.

Regarding the last bit, its impossible because of incentives; I accept that. The money printer has been turned on and its never being turned off again because people will just vote someone in that will turn it back on. The natural continuation of this doesnt end well for fiat currency obviously.

User232002

silvercue said:

I avoid everything on ERC20 due to the insane fees.  I will be jumping on board Sundaeswap when it goes Live (soon) on Cardano network..

The opportunities for passive income from Crypto are incredible right now.   The problem is in the UK they have decided to tax stake rewards, yield profits and other "earn" profits as Income and not Capital Gains.  Frustrating.  

Yeah, I was reading the IRS documents about this a couple of days ago - thing is though I just have no idea how they are even going to attempt to enforce this kind of stuff. 

IRS suggests that you are liable for tax on the asset when it comes under your control (which is ambiguous to start with) but for an auto compounding pool are they suggesting that you calculate the price every few seconds that you are credited with a fraction of a token? Seems really bizarre and basically impossible to do.

Not to mention that I've been airdropped a bunch of tokens that have some value (according to an exchange) but that I can't actually sell because they are scam tokens and will clean your wallet out as soon as you authorise them. So are we saying that we could airdrop everyone 1BN 'HMRC' tokens, buy one token for say $1 on an exchange giving those tokens airdropped a theoretical value and now everyone is liable for taxes on $1BN? Makes no sense. They really are so far behind, but likewise I'm not liable for UK tax thank god.

Would also echo the aversion to ADA as I've said previously.

Scottex99

 

Yeah, I was reading the IRS documents about this a couple of days ago - thing is though I just have no idea how they are even going to attempt to enforce this kind of stuff. 

IRS suggests that you are liable for tax on the asset when it comes under your control (which is ambiguous to start with) but for an auto compounding pool are they suggesting that you calculate the price every few seconds that you are credited with a fraction of a token? Seems really bizarre and basically impossible to do.

Not to mention that I've been airdropped a bunch of tokens that have some value (according to an exchange) but that I can't actually sell because they are scam tokens and will clean your wallet out as soon as you authorise them. So are we saying that we could airdrop everyone 1BN 'HMRC' tokens, buy one token for say $1 on an exchange giving those tokens airdropped a theoretical value and now everyone is liable for taxes on $1BN? Makes no sense. They really are so far behind, but likewise I'm not liable for UK tax thank god.

Would also echo the aversion to ADA as I've said previously.

Oops I accidentally traded one of those scam airdrops and lost access to all those coins in my wallet. That definitely isn't me moving them to those new wallets and I definitely don't control them, that must be the scammer.

But yes I'm not paying tax on those coins anymore as they are now lost!

I dont actually have any answers to potential tax issues but save to say HMRC will be at least 5 years behind the curve on just simple spot holdings along nevermind any DeFI shenanigans