cryptocurrency and bitcoin

User232002

Thrugelmir said:

Anything which fluctuates wildly in value on a daily basis can only be viewed as speculation. 

Volatility doesn't preclude something being a good investment.

Malthusian said:

Zola. said:

I don't think it's fair to compare the millions of people who own bitcoin with the typical info wars idiots.

Nor do I. But pointing out that there is a large intersection between them is entirely fair.

A 'large intersection'? Actual arguments have failed, so we've now got to compare Bitcoiners to extreme political ideologies in a perverse attempt to discredit.

Everyone I know in crypto is under 40 and STEM educated. Political views generally are a combination of libertarian ideals from the right (sovereignty of the individual, freedom, efficient government) and welfare state ideas from the left (ie. high tax and spend, meritocratic systems, helping those disadvantaged in society). This isn't a cross section of individuals that fit your typical InfoWars member.

User232002

Linton said:

Since you asked.....

Major issues with Bitcoin...

1) It cannot both be a viable currency and a generator of wealth.  The price of goods in a currency must be stable in the short to medum  term.  Would you want to get paid in bitcoin if the amount of goods you could buy varied up and down significantly from one pay packet to the next?

2) If it was not believed to be a generator of wealth its price would collapse.  It can only continue to exist whilst there are more people wanting to buy it.

3) There is no "right" price for a Bitcoin.  If no-one want to buy it drops to zero.   There are no underlying assets. This is very different to shares in that the company issuing the share has a value for as long as the company is viable.  In the extreme if the price went too low someone could buy it out and sell all its assets.  So the only way a portfolio of shares could become valueless would be if all the companies n the world went bust.  If that happened you would have worse problems than the value of your investments.

4) For all our well being we must have a viable strong  government.  That requires enforceable payment of taxes.  Will this work with bitcoin?

5) To fully govern effectively there must be control of currency.  Governments can simply say that all taxes and payments for Government contracts are in the local currency.  That local currency could be based on blockchain, but it would be very unlikely to be one of the existing crvptos.

So IMHO it has no very long term future.  In the meantime buyers can continue to benefit just like members of a pyramid selling scheme.  But at some point it must collapse.

All answered before in the 'BITCOIN' thread...

1. Its not a currency. Its money.

Heard a week ago that the lightning network is also currently working on a way where you can hold Bitcoin in a wallet pegged to any currency you wish. So you could literally click a button and have the bitcoin value be 'stable' in whatever currency you wanted. I think thats pretty cool and will deal with the 'up and down' argument. That said, if you're clever you'll almost never turn it on.

2. True of all money. Look at gold vs BTC inflows though; old money is losing. Rampant money printing over a decade and gold is basically flat. When all that boomer money gets passed to those digital native millennials, where do you think they are putting it; gold or Bitcoin?

3. Bitcoin isn't trying to be comparable to equities, so this is a strawman argument. Bitcoin is trying to be a better gold, and all these points can be levelled at gold as well.

4. There's always going to be a market for converting between fiat and Bitcoin. I don't see how Bitcoin prevents paying taxes. Also, governments will end up buying Bitcoin (at least one country ahead of the game there).

5. There's a reason why in every state where Bitcoin has been 'banned,' it usually trades at a premium. There are ample stories throughout history that show that superior money always wins out and proclamations by tribes and nation states have not changed the outcome. CBDCs will suffer from even more problems than existing fiat currencies suffer from. They are not a threat.

Linton

darren232002 said:

...

1. Its not a currency. Its money.

Heard a week ago that the lightning network is also currently working on a way where you can hold Bitcoin in a wallet pegged to any currency you wish. So you could literally click a button and have the bitcoin value be 'stable' in whatever currency you wanted. I think thats pretty cool and will deal with the 'up and down' argument. That said, if you're clever you'll almost never turn it on.
........

But "money" is primarily a standardised means of exchange which removes the hassles of bartering for goods.  Is that what crypto currency is?  Some of the adherents certainly believe that it will replace £s and $s.  Is it your view that instead Bitcoin is purely a store of value like gold? You cant buy groceries at Tesco with gold, it needs to be sold for £s.

User232002

Linton said:

darren232002 said:

...

1. Its not a currency. Its money.

Heard a week ago that the lightning network is also currently working on a way where you can hold Bitcoin in a wallet pegged to any currency you wish. So you could literally click a button and have the bitcoin value be 'stable' in whatever currency you wanted. I think thats pretty cool and will deal with the 'up and down' argument. That said, if you're clever you'll almost never turn it on.
........

But "money" is primarily a standardised means of exchange which removes the hassles of bartering for goods.  Is that what crypto currency is?  Some of the adherents certainly believe that it will replace £s and $s.  Is it your view that instead Bitcoin is purely a store of value like gold? You cant buy groceries at Tesco with gold, it needs to be sold for £s.

Money is a medium of exchange and a store of value. Some forms of money are better at one than the other. Gold is seen as a store of value, but it isn't a good medium of exchange as you pointed out. 

Different crypto currencies (just a name btw) have different value propositions, but BTC is primarily aiming for store of value and I think consensus is that its 'won' this category. There are some small value coins that are aiming to be good 'medium of exchange's and they focus on speed and throughput. Things like XLM or XRP where their idea is that the banking system will use them to send value between banks or will be used by millions to buy their coffee. I don't particularly like either XLM or XRP by the way so that's not an endorsement.

I've posted this before but my base case is that BTC takes the monetary premium of gold (70-90% of a $10T market cap) and then the SoV function from other assets like RE. How much this is I have no idea, but its clear that people buy second homes because they don't know what to do with the money and know leaving it in a savings account is awful so certainly some % of RE and equities are used to store value rather than look for a return. When it gets to the point where it is stable and only fluctuates in correlation with how much government fiat currency goes up or down, then it will become a medium of exchange as well. But that's a long way off and nobody clever is using their Bitcoin to buy a coffee or Tesla right now.

tebbins

Bitcoin is, manifestly obviously and categorically, by definition a pyramid scheme. It is mathematically impossible that it is not.
The only way to make profit without "banks" (good luck with that) is some poorer sucker buying yours of you later on.
There is no debate or discussion to be had here, just pure factual observation and common sense.

Edit: *mic drop*

eskbanker

tebbins said:

Bitcoin is, manifestly obviously and categorically, by definition a pyramid scheme. It is mathematically impossible that it is not.
The only way to make profit without "banks" (good luck with that) is some poorer sucker buying yours of you later on.
There is no debate or discussion to be had here, just pure factual observation and common sense.

I suspect that the next few pages will paint a different picture!

User232002

tebbins said:

Bitcoin is, manifestly obviously and categorically, by definition a pyramid scheme. It is mathematically impossible that it is not.
The only way to make profit without "banks" (good luck with that) is some poorer sucker buying yours of you later on.
There is no debate or discussion to be had here, just pure factual observation and common sense.

Edit: *mic drop*

This is an excellent well reasoned take on the current situation. Thanks for posting.

Zola.

It's such a pyramid scheme that even the SEC thinks it's worth having on wall street

https://www.ft.com/content/7bad0235-9fdd-4e0c-8d20-35a6c41696e0

Linton

darren232002 said:

Linton said:

darren232002 said:

...

1. Its not a currency. Its money.

Heard a week ago that the lightning network is also currently working on a way where you can hold Bitcoin in a wallet pegged to any currency you wish. So you could literally click a button and have the bitcoin value be 'stable' in whatever currency you wanted. I think thats pretty cool and will deal with the 'up and down' argument. That said, if you're clever you'll almost never turn it on.
........

But "money" is primarily a standardised means of exchange which removes the hassles of bartering for goods.  Is that what crypto currency is?  Some of the adherents certainly believe that it will replace £s and $s.  Is it your view that instead Bitcoin is purely a store of value like gold? You cant buy groceries at Tesco with gold, it needs to be sold for £s.

Money is a medium of exchange and a store of value. Some forms of money are better at one than the other. Gold is seen as a store of value, but it isn't a good medium of exchange as you pointed out. 

Different crypto currencies (just a name btw) have different value propositions, but BTC is primarily aiming for store of value and I think consensus is that its 'won' this category. There are some small value coins that are aiming to be good 'medium of exchange's and they focus on speed and throughput. Things like XLM or XRP where their idea is that the banking system will use them to send value between banks or will be used by millions to buy their coffee. I don't particularly like either XLM or XRP by the way so that's not an endorsement.

.......

OK making progress.  Your aims for BTC are rather less ambitious than those of other people and perhaps rather more realistic

Let's consider BTC as a store of value.  One of the key features of Gold, which for some people outweighs all its disadvantages, such as volatility,  is that it is difficult to destroy and will survive the worst disasters barring the end of the world.  It is really the one thing that could be exchangeable for the basics of life in the event of a global apocalypse. Can BTC?  What happens if the power or just the communications networks go down?  Are your BTCs of any value? Would you be able to you sell them for a tin of beans?

Out of interest, how do you bequeath your Bitcoins to your favourite grand-daughter? Perhaps it's easy, I dont know.  No problem with gold.

As to whether BTC has won the "store of value prize", dont you think that after only 13 years it is possibly a little early to make that judgement?  Come back in 50, 100 years and we will see.  Gold has millennia of history and is deeply embedded in cultures across the world.

I dont own any gold, but I am finding it difficult to see why BTC has any advantages as a store of value.

adamp87

I have crypto currencies but it isn’t without its challenging. Some comments above are correct, it is essentially used currently to store wealth on the promise the returns will be greater than the other options (I.e stocks)

I can’t ever see the U.K. or Us government for example using it mainstream. Maybe some smaller countries but that brings more challenges. The fact Rishi has been looking into a U.K. own coin shows they see some benefit but want to be in control of it, like cash.

I don’t know where it’s future lies, arguably I’d say most people involved now are to make money, not so much about the ideals and mentality behind the coin itself.


I’d say only risk what you can afford to lose,