BITCOIN

Frequentlyhere

Thanks for chipping in @FeralHog, I'm glad it's not just me.

It's a bizarre and quite unsatisfying whack-a-mole game this. A totally outrageous set of claims is made out of line with all known reality, refuted quite simply, and then you receive a response where both your refutation and the original claim are altered. But then multiplied over several points so that it would take hours just to defuse the most patently ludicrous scenarios.

I'm also just not a fan of the incredulous tone. It's one thing having 'out there' views, but I'm finding it wearing for these being expressed as not only an opinion, but an inevitable truth that should be obvious (obvious!) to anyone with eyes. I mean of course the $ is going to collapse under the weight of impossible to control inflation, of course!

I found it quite interesting initially, but frankly it's just not worth it. It's been interesting @darren232002 but I'll leave it there for now. We'll no doubt reconvene at some point.

Malthusian

hallmark said:

One of the problems for Bitcoin believers is simply it's been too successful, and everytime it has been it's supporters immediately revise their expectations upwards (as we saw when BTC was close to $70,000 and people instantly began talking about it going to $1,000,000)

Indeed. No point in buying Bitcoins at $70,000 in the hope that they'll rocket to $100,000, a mere 42% return that conventional mainstream positive-sum investments could deliver in a good five year period (NB: good period, not all periods). People don't buy lottery tickets so they can fantasise about matching four numbers.

I suspect in 2009 even the most ardent fans would have settled happily for BTC doubling in value every year for the next 13 years.

In 2009 a lot of Bitcoin's fans at the time would have recognised that BTC doubling in value every year would be a big problem for Bitcoin. Remember that its original fans in 2009 envisioned it as an alternative to fiat currency. If BTC doubled in value every year that would represent rampant deflation, and prevent its adoption as a currency, for the same reason that deflation of a fiat currency is fatal for an economy. Because everyone would hodl their BTC waiting for number go up instead of using it to buy and sell. (Except those who didn't have the option of waiting for it to go up because they had bills to settle that could only be paid in BTC, i.e. Silk Road traders.)
It is safe to assume that Bitcoin's 2009 holders didn't really appreciate the possibility of it rocketing in value once it had gained public attention.  If they had they wouldn't have lost so many coins on discarded hard drives or given them away for pizza. At the time, BTC parity with the dollar was an unimaginably distant future goal. One which would probably have given the developers enough money to buy a new car, not retire to the Bahamas.

DannyCarey

Malthusian said:

hallmark said:

One of the problems for Bitcoin believers is simply it's been too successful, and everytime it has been it's supporters immediately revise their expectations upwards (as we saw when BTC was close to $70,000 and people instantly began talking about it going to $1,000,000)

Indeed. No point in buying Bitcoins at $70,000 in the hope that they'll rocket to $100,000, a mere 42% return that conventional mainstream positive-sum investments could deliver in a good five year period (NB: good period, not all periods). People don't buy lottery tickets so they can fantasise about matching four numbers.

I suspect in 2009 even the most ardent fans would have settled happily for BTC doubling in value every year for the next 13 years.

In 2009 a lot of Bitcoin's fans at the time would have recognised that BTC doubling in value every year would be a big problem for Bitcoin. Remember that its original fans in 2009 envisioned it as an alternative to fiat currency. If BTC doubled in value every year that would represent rampant deflation, and prevent its adoption as a currency, for the same reason that deflation of a fiat currency is fatal for an economy. Because everyone would hodl their BTC waiting for number go up instead of using it to buy and sell. (Except those who didn't have the option of waiting for it to go up because they had bills to settle that could only be paid in BTC, i.e. Silk Road traders.)
It is safe to assume that Bitcoin's 2009 holders didn't really appreciate the possibility of it rocketing in value once it had gained public attention.  If they had they wouldn't have lost so many coins on discarded hard drives or given them away for pizza. At the time, BTC parity with the dollar was an unimaginably distant future goal. One which would probably have given the developers enough money to buy a new car, not retire to the Bahamas.

https://twitter.com/DrBitcoinMD/status/1165004233663496197?t=cZukWFx_Uq__h_BNAW1IZg&s=19

Malthusian

Hal Finney's putative price of $10 million per Bitcoin relied on the assumption that worldwide wealth ~= $200 trillion, bitcoins ~= 20 million, therefore if Bitcoin was adopted as the only mechanism of payment available (Finney used the word "dominant" but his maths says "only"), each Bitcoin would be worth $10 million.
There are a number of practical problems with this idea, but the most obvious is one that Finney could be forgiven for overlooking. He died in 2014 so didn't live to see the ICO boom. For the total price of all Bitcoin to correspond to the total value of the world's wealth, not only do all fiat currencies have to dump to zero, but all competing cryptocurrencies have to dump to zero as well. 
There is also no economic justification for the idea that total value of money supply = total value of world's wealth in the first place. But Finney was a video game developer, not an economist, so it would be unfair to pull apart his spitballing 13 years later.
Finney is your classic example of an early experimenter. He was there at the very early stages when Bitcoin was valued at less than a cent, and lived to see it hit 4 figures, and yet he didn't get rich. He exhausted most of his stock of Bitcoin on his treatment for his terminal illness. He wasn't buying up and mining every BTC he could get his hands on in the expectation it would go to $10 mil in his lifetime. 
This is just a new angle on a problem we've been going over since 2014. In order to rocket in value Bitcoin has to reach mass adoption as a currency. For it to see mass adoption as a currency it has to stop rocketing in value. The latest attempts to handwave away this problem have just ended in tears, again.

bugbyte_2

@ Frequentlyhere, I get exactly where you are coming from. Several months ago we debated on here how it is impossible to reason with someone who will go over every single point infinitely in massively long rambling posts that slip in central precepts to their arguments that if just stated would be insane. They win by default because just no one is that bothered, and you would have to be a special type of person to need to 'win' any argument on the internet.

But to fact check some points from above:

Yes governments print money. However, Bitcoin literally blinked into existence by 'printing' itself, and continues to 'print' itself to this day.

Yes printing money is inflationary and leads to a higher debt to GDP ratio. But as MSE is a UK site, this ratio is currently 98% (Sept 2022) - not 130% +. You may note that 98% is less than half the ratio found in the late 40's, early 50's, just before the 'white heat of technology boom' which meant my parents generation had the greatest increase in living standards ever. Not at all bad really.

Have governments inflated debt away before? Of course they have, and they will do so again in the future. Yes the value of your £ goes down but only if you do not do something about it, like buying inflation proof assets.

And anyway, who owns that debt? Our government (who we 'own') sells debt to the Bank of England (who we also own) - Approximately a third of the UK National Debt is owned by the British government due to the Bank of England's quantitative easing programme, so approximately a third of the cost of servicing the debt is paid by the government to itself. Oh the fun of being a reserve currency. 

And finally - Here is a list of countries with very low Debt to GDP ratio. Of the 20 countries listed, most of them (bits of China, Russia, Middle East countries) I definitely would not like to live in due to human rights violations / lack of freedom and the rest are so small they are not comparable, and will probably be under water very soon anyway. 
  

Frequentlyhere

Indeed, @bugbyte_2.  Looking back to the first pages of this thread, the ever-changing "obvious truths" are that much more apparent. 

April 2021, just 18 months ago.

darren232002 said:

Buying Bitcoin will probably be the best investment of your life. Most people saying that Bitcoin isnt an investment and that it is gambling have very little idea why BTC is valuable. Look around, its not conspiracy theorists and rednecks buying Bitcoin, its rocket scientists, CEO's, institutions and computer programmers/STEM graduates. These guys know the way the world is going. JP Morgan in 2017 said BTC is a ponzi, in 2021 they are advising their clients to put a % of their portfolio in it and predicting prices in the $140k range. Citigroup threw out a $300k+ price prediction. These aren't idiots - they are the institutions you trust to manage your 'investments.' 

Lastly, if you know anything at all about the crypto space right now, you would know its possible to get 10% APY interest on stable coins very easily for gods sake. That is, coins denominated in USD. You deposit $10k now, you'll have $11k next year. No exposure to volatility and all denominated in USD. The only risk you have is (1) GBP/USD risk and (2) counter-party risk, which is almost negligible if you stick to the big providers. With a bit of work and knowledge, you can find 30% interest. I've been personally getting 100%+ APY interest paid and compounded daily for the last 3 months in one of the safest projects out there.

I'm not really interested in having a long discussion with people that are still babbling about ponzi's, tulips, intrinsic value or hexadecimal numbers in cyberspace. If you don't get it, I don't have time to explain it to you. But I would strongly encourage people to look in to this space because it will be the greatest wealth creation event of my generation. Its literally the internet version 2.0.

So, yes,  $140k bitcoin, $300k bitcoin. Not hearing so much of that these days.

You can "for gods sake" just earn 10% yield on stablecoins. Of course.

"Stick to the big providers" for "negligible counter party risk". That's worked out so well.

Bit of work and knowledge, you can find "30% interest"  - I wonder where he got that from, Celsius?

"Its literally the internet version 2.0" - A ridiculous statement which he was then politely challenged on and responded scornfully about semantics despite him expressing it as a literal fact.

This was all only 18 months ago, hardly back in the aeons of time.

Aside from Darren's comments specifically, reading back reminds me of just how and why I and many others (R/buttcoin at 145k members now) grew to really detest the crypto space.

You come curious to learn about whether crypto is actually a good thing to invest in or generally 'do'  ask a question or two, and fairly shortly end up being told to HFSP (that features in the very next post in the thread I think).

You ask what activites actually generate 30% yield as nothing can for no risk, and you're now " a boomer" for some reason.

Ask any awkward question? Well, you clearly need to do some research in vague unspecified areas.

To be fair, i think the space has changed a lot currently, the buttcoin crew have almost gone too far in gaining retribution. There are some very sad tales of people losing a lot of money in this space, and they don't all deserve mockery. 

On the other hand, how quickly would the "HFSP" attitude return if we see another boom for some reason? 

Frequentlyhere

Oh man, sorry, but this is just too entertaining.

darren232002 said:

Did you hear me say that I'm currently getting 100%+ APY on some of my money in crypto? Paid and compounded whenever I want (hourly if I choose). I think that counts as generating wealth.

I can loan out my crypto in decentralised finance protocols and those networks will pay me 80% of the profits they make from using my capital. Your bank currently has access to essentially free money from the central bank, charges people 3% (mortgages), 7-10% (personal loans) or 20%+ (CCs) and yet gives you 0.1% interest... All that profit the banks make - crypto is going to eat it all.

You might have thought that the very briefest inspection of the idea of being paid 100% interest off the back of lending your capital to a third party using it for 3% mortgages and 10% loans might raise a few red flags, no? 

But apparently not.

Adyinvestment

Unfortunately, this thread has for some time become quite toxic.

I very much doubt it will ever be a meaningful discussion of the thread title.

Frequentlyhere

On the contrary, I think it's quite useful in answering the question to look back and observe the revolving door of pro-bitcoin arguments.

From the sceptics side, it's also pretty noticeable that, in stark contrast, the arguments have remained largely consistent. I'm not particularly cherry picking the below.

November 2020:

BananaRepublic said:

Bitcoin is gambling. It has no intrinsic value and noone knows what it will do tomorrow, or next year. As far as I can see it is supported by a large group of speculators who use it as an investment rather than a means to buy goods. Doubtless there are also some criminals who like the anonymous nature of Bitcoin, but they are not the core Bitcoin owners.

On a related but important issue, Bitcoin has two severe flaws. The first is that mining, or the creation of new currency, consumes massive amounts of energy. The second is that because it uses a distributed leger, a transaction, or the buying and selling of Bitcoin, consumes huge amounts of energy. Basically it is totally impractical for real world use, and is an ecological disaster. So, if you want to become rich, or poor, and at the same time screw the planet, go ahead and invest gamble. See here for details:

https://www.bbc.co.uk/news/technology-48853230

It is a shame that Bitcoin unlike Ethereum couldn't at least have resolved the worst environmental aspects to it, especially in current circumstances.

Adyinvestment

  Facepalm