Bitcoin

thegentleway

A_Lert said:

Cryptocurrency has become a speculative bubble. It's an extremely high risk "investment". There's no inherent value to Bitcoin, it's just A Thing that has finite supply and can be traded.

As mentioned, while Bitcoin itself isn't a scam, there are lots of scams around it so you need to be very careful.

You’re in good company. At least eight Nobel Memorial Prize in Economic Sciences have described Bitcoin, along with other cryptocurrencies, has been described as an economic bubble...

EdGasketTheSecond

barnstar2077 said:

Thinking a bit about the practical side of Bitcoin a couple of questions / scenarios come to mind that I would appreciate any input on.

Some Bitcoin enthusiasts would like to see it, or some form of crypto currency, become the new world currency, free from the meddling of potentially corrupt governments (obviously all large institutions, including governments, are corrupt to some degree, but that is perhaps a discussion for another time :  ) 

At the moment, if there is a large economic decline then governments can always print more money to inject into the economy, including the undertaking of large projects that create jobs that help to turn peoples outlook around (which in turn makes them spend money, therefore improving the economy.)  If Bitcoin, or some other form of independent online currency were to take over how would economies recover from recessions?

Secondly, when you invest in shares, funds etc (even gold!) you have the choice at any point to cement your profits or losses.  So, say Bitcoin is the only currency available and I need money to buy a new house, how do I know that the amount of money that I need will be there when the time comes?  At the moment I could simply sell up and convert my Bitcoin to sterling or dollars etc.  No matter what you are saving for, whether it be a new car, house, or for retirement you need to be able to get off the train at a stop of your choosing,

Bitcoin will never be the new global currency; banks and governments won't allow it. There will be a digital currency but it will be government controlled and probably unlimited like fiat currency. If we are lucky, they may be forced to tether it fractionally to gold so that it least has some meaningful value. Bitcoin will always be on the fringe and eventually forgotten about.

thegentleway

barnstar2077 said:

Thinking a bit about the practical side of Bitcoin a couple of questions / scenarios come to mind that I would appreciate any input on.

Some Bitcoin enthusiasts would like to see it, or some form of crypto currency, become the new world currency, free from the meddling of potentially corrupt governments (obviously all large institutions, including governments, are corrupt to some degree, but that is perhaps a discussion for another time :  ) 

At the moment, if there is a large economic decline then governments can always print more money to inject into the economy, including the undertaking of large projects that create jobs that help to turn peoples outlook around (which in turn makes them spend money, therefore improving the economy.)  If Bitcoin, or some other form of independent online currency were to take over how would economies recover from recessions?

Secondly, when you invest in shares, funds etc (even gold!) you have the choice at any point to cement your profits or losses.  So, say Bitcoin is the only currency available and I need money to buy a new house, how do I know that the amount of money that I need will be there when the time comes?  At the moment I could simply sell up and convert my Bitcoin to sterling or dollars etc.  No matter what you are saving for, whether it be a new car, house, or for retirement you need to be able to get off the train at a stop of your choosing,

Economies recover from recession without economic stimulus; printing money just speeds up the recovery.

Can’t help on the second point though. I get blockchain and that bitcoin are hard to earn, limited in supply and easy to verify but it’s a payment system rather than a currency. Money needs to be a store of value and a unit of account, which like you rightly point out bitcoin isn’t.

Reaper

Governments will not allow crypto currencies to succeed long term because that means losing control of the key tools to manage their economies. To hand that power over to a currency run by nobody, or worse Facebook, is unthinkable. At best they will remain a commodity just like any other. Actually a poor commodity as they aren't backed by anything physical so can't claim to have any intrinsic value beyond scarcity and sentiment.

Long term I expect state backed digital currencies to be the winners (China and India for example are working on them), but in many ways these will be the opposite of everything bitcoin stands for. Issued by a central bank, not anonymous, and possibly not even using the blockchain.

EdGasketTheSecond

Don't forget the FedCoin. They will use it to distribute stimulus aka helicopter money, so that everyone signs up to it.

thegentleway

Reaper said:

Governments will not allow crypto currencies to succeed long term because that means losing control of the key tools to manage their economies. To hand that power over to a currency run by nobody, or worse Facebook, is unthinkable. At best they will remain a commodity just like any other.

The majority of countries do not make the usage of bitcoin itself illegal.

Some governments are also clearly willing to hand over control over interest rates and money printing: e.g. the 19 governments who joined the euro and handed those powers over to the ECB.

Another_Saver

thegentleway said:

Reaper said:

Governments will not allow crypto currencies to succeed long term because that means losing control of the key tools to manage their economies. To hand that power over to a currency run by nobody, or worse Facebook, is unthinkable. At best they will remain a commodity just like any other.

The majority of countries do not make the usage of bitcoin itself illegal.

Some governments are also clearly willing to hand over control over interest rates and money printing: e.g. the 19 governments who joined the euro and handed those powers over to the ECB.

Which operates by consensus and veto. That is not a valid argument, all countries are unions.

thegentleway

Another_Saver said:

thegentleway said:

Reaper said:

Governments will not allow crypto currencies to succeed long term because that means losing control of the key tools to manage their economies. To hand that power over to a currency run by nobody, or worse Facebook, is unthinkable. At best they will remain a commodity just like any other.

The majority of countries do not make the usage of bitcoin itself illegal.

Some governments are also clearly willing to hand over control over interest rates and money printing: e.g. the 19 governments who joined the euro and handed those powers over to the ECB.

Which operates by consensus and veto. That is not a valid argument, all countries are unions.

The US (not in euro zone) can print as much dollar as they want and set interest rates. France (in the euro zone) cannot do this with euro and interest rates. It’s a pretty obvious draw back of having a shared currency. 

Another_Saver

thegentleway said:

Another_Saver said:

thegentleway said:

Reaper said:

Governments will not allow crypto currencies to succeed long term because that means losing control of the key tools to manage their economies. To hand that power over to a currency run by nobody, or worse Facebook, is unthinkable. At best they will remain a commodity just like any other.

The majority of countries do not make the usage of bitcoin itself illegal.

Some governments are also clearly willing to hand over control over interest rates and money printing: e.g. the 19 governments who joined the euro and handed those powers over to the ECB.

Which operates by consensus and veto. That is not a valid argument, all countries are unions.

The US (not in euro zone) can print as much dollar as they want and set interest rates. France (in the euro zone) cannot do this with euro and interest rates. It’s a pretty obvious draw back of having a shared currency. 

You could not be further from my point. The US is literally a union of 50 states all under the Fed, Germany is a union of East and West and before that a conglomeration of principalities under the holy Roman empire and Prussia, the UK is a union of 4 countries. Every currency zone is a voluntary union.

thegentleway

Another_Saver said:

thegentleway said:

Another_Saver said:

thegentleway said:

Reaper said:

Governments will not allow crypto currencies to succeed long term because that means losing control of the key tools to manage their economies. To hand that power over to a currency run by nobody, or worse Facebook, is unthinkable. At best they will remain a commodity just like any other.

The majority of countries do not make the usage of bitcoin itself illegal.

Some governments are also clearly willing to hand over control over interest rates and money printing: e.g. the 19 governments who joined the euro and handed those powers over to the ECB.

Which operates by consensus and veto. That is not a valid argument, all countries are unions.

The US (not in euro zone) can print as much dollar as they want and set interest rates. France (in the euro zone) cannot do this with euro and interest rates. It’s a pretty obvious draw back of having a shared currency. 

You could not be further from my point. The US is literally a union of 50 states all under the Fed, Germany is a union of East and West and before that a conglomeration of principalities under the holy Roman empire and Prussia, the UK is a union of 4 countries. Every currency zone is a voluntary union.

Yes and it’s a great point. Why does it invalidate my recent example of 19 governments choosing to give up the power to print their own currency and set their own interest rate?