Cryptocurrency
Due to the wisdom present in this forum I was wondering if anyone here is involved in any cryptocurrencies?
Besides the really cool name does anyone have inside knowledge or future predictions about cryptocurrencies?
I ask because many people I know are ranting and raving about them but I remain skeptical.
Related media:
Radio 4 - http://www.bbc.co.uk/programmes/b0952svj
Buy the dip logic -
Besides the really cool name does anyone have inside knowledge or future predictions about cryptocurrencies?
I ask because many people I know are ranting and raving about them but I remain skeptical.
Related media:
Radio 4 - http://www.bbc.co.uk/programmes/b0952svj
Buy the dip logic -
Comments (449)
Usually, the logic is to sell when everyone else is buying and buy when everyone else is selling.
I am also a bit hesitant primarily because of the legal domain, or lack thereof, and while data protection regulations are in the process of being implemented vis-a-vis block-chain database security [in Australia, we are soon to legislate anti-money laundering laws], can we ensure integrity from any data manipulation particularly as it becomes privately managed? This is a serious problem relating to international organised crime.
There're always dips because there're so many different 'currencies'
Is it all the rage where you are as well?
The second problem is speed. We're moving to financial markets and consumer services that offer instant payments. Any distributed ledger is going to be slow in comparison.
The third is the theoretical vulnerability when one party can resolve 50% or more of the blockchain, which makes it possible to insert incorrect data.
There's a few others but I don't consider those unresovable.
Was hoping someone could prove my scepticism justifiable
Do you own any cryptocurrencies?
Bit Coin or Ethereum are just like any other currency but it's value is the same the world over. As I understand it, the currency exchange market isn't necessary when using Cryptocurrency. So if I were to travel with my BitCoin Visa card from the USA to Mexico, I won't need to exchange my dollars into Pesos which cuts out the middle man, along with not being bound by Federal laws here in the states.
Every time I question how it can remain legal as it feels like it is subverting the Federal law, I am told that it would be like the USA trying to manage the Euro or the Peso, it cannot be done because it is an international currency.
"It is just the choice of payment which has changed from conventional fund transfer methods to bitcoin due to the ease of transactions, pseudonymity and transparency"
* Invented by NSA in 1996. Satoshi's 2009 paper is strictly for the tourists. You probably don't believe me. Here's the paper. http://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsamint.htm
* Bitcoin security fails if there's centralization of miners, but the top three Chinese miners now control over 50% of the hashing capacity of the network.
* It's a huge pain in the ass to actually fund an account on an exchange and actually buy cryptos and then secure your wallet. There is no way this is going to scale to the public until some of these issues are solved.
* It's not going to bring down the bankers. The bankers will control the space like they've controlled money for thousands of years.
* There's plenty of opportunity to make money. If you missed bitcoin don't worry, there are plenty of altcoins out there. Bitcoin itself has terrible scaling and organizational and centralization problems that will probably kill it at some point.
That said, it's very interesting. Blockchain solves the problem of establishing end-to-end trust on decentralized, distributed ledgers. It's a fantastic technical achievement that will change the world.
Did you try Gemini? They couldn't verify my ID (same problem you're having) but they emailed me and said I can link a bank account. Coinbase is absolutely hopeless. It's amazing that Coinbase is the supposedly well-funded big dog in the space. No support, the entire system locked up for two days when bitcoin hit 10k. Imagine everyone trying to get their money out during a crash. Coinbase won't last. Bad management IMO.
Plenty of profits to be made in the coming years. This is the Internet in like 1986 when research labs were still developing the underlying protocols. The idea that the public can bet on engineering experiments is nuts. The real money will be made when actual companies provide actual services to the public. Think Amazon, Google, Facebook. Nobody ever heard of them in 1995 when the Internet first hit public awareness.
Who would have thought that cryptocurrency could significantly contribute to global warming by consuming vast amounts of power? The growth curve is such that, if it continues, Bitcoin will absorb all the world's power production in a few years.
Depends on how precise about it you want to be. Programs like Cryptolocker became popular around 2012, when hackers started mass producing ready-for-use hacking suites like Nanocore and the Burp suites. But Cryptolocker is really no different (except in complexity and range) from most ransomware programs, and ransomware dates back to 1989, the PC Cyborg Trojan from J. Popp, which forced programs to lock and show a new license agreement fee which had to be agreed to to unlock them, looking legit enough, and sent the money directly to Popp.
Yes the exchanges and wallets are the weak point in the system. The core protocol is cryptographically secure (unless the NSA already has a backdoor, which I regard as highly likely) but the exchanges and wallets are a target for every hacker in the world.
Here's a guy who lost $155k worth of bitcoin (probably worth a lot more at today's price) over the unsecured WiFi in a restaurant. What a brave new world we live in.
Thanks for the tip. I'll check them out.
ps -- CEX has a much higher price for bitcoin than the other exchanges. Also there are some Reddit complaints about it being difficult to get your USD out. Best to check around before committing too much money to these guys. Or any exchange for that matter. All the exchanges are awful at the moment. It's a problem.
Gonna try again with CodeBase tonight. Had an issue yesterday where the photos of my ID weren't high enough quality so they were rejected, and that placed a 24 hour block before I could try again. Hopefully I'll have more luck this time.
And also easy losses of money.
Trading of fictive commodities without much underlying value is always a zero-sum game.
There could be a lot of real, down-to-earth value to algo mining, if it was applied to other domains of research. Cryptocurrencies that allow smart contracts writing, like Ethereum, also technically empowers those that can write them to somewhat organise a self-containted legal system, creating settings where the funds are only accessible on certain dates, past a minimum balance, if only a number of the currency ownership group agrees to the spending, and only to be spent on certain things. The ability of the miner to determine the range of use of the currency is, in a way, a sort of value.
Anyone who would want to set up regulations on their funds without having to pay banking or wiring fees. It doesn't specifically helps an industrial domain, it just empowers you to do what you ask your bank to do. More or less.
Right, except that it's very risky. If your Bitcoins get stolen, that's it, you're finished - they're not backed by anything.
The only case where it makes sense really is for illegal activities. Drugs, arms trading, etc.
It's OK, I won't do that.
I have yet to meet a man who says he will do that.
That's the crazy thing. How is the price going up if nobody can actually manage to buy it? It's possible that there's a lot of price manipulation by the insiders at the exchanges. Nobody knows. It's a mystery though. Every exchange is collapsing under the weight of the transaction volume, yet the price keeps going up.
"It's about trust" he said. "No other currency can be trusted like Bitcoin can, America can just print as many American dollars as it pleases. Everyone can just use bitcoin, we have no need for other currencies. Fractional lending. Visa! They're all bad!".
I tried to explain the hurtles facing bitcoin (authentication times, power consumption, possible unforeseen digital vulnerabilities) and the realities of currency (especially what makes the American dollar so secure/the global reserve currency) but nothing would land and he just kept coming back to the idea that every other form of currency is a bull-shit lie put on by corrupt governments and banks.
With this kind of widespread radical distrust of government and radical faith in bitcoin, ironically, it might actually be able to get that high one day. (that would mean all 21 million bitcoins once they're mined, would be worth around 1 trillion dollars altogether).
This is actually not true. Bitcoin is not as anonymous as people think Every transaction is tracked forever. For example that NiceHash $62M theft, those bitcoin are sitting in a wallet whose ID everyone knows. If the thief tried to convert it to cash, they'd be found out. You need to give your real-world identification to the exchanges in order to open an account.
It turns out that there are cryptos that are completely anonymous. The biggest one is called Monero. It's built on a version of the blockchain that's designed for true anonymity. They mix up each transaction with others so that you can't trace the coins back to any particular account. As I understand it, discerning criminals use Monero now, not bitcoin.
Market crazes (& speculative bubbles) are always marked by people dogmatically sticking to one idea, and greedily chasing it, thinking that they too can earn. They are generally unable to provide even one single rational idea behind their actions.
Funnily enough, in this thread, some reputable atheists are doing exactly this, backed by absolutely no rationale or reason, except that the price is going up, and they want in. They are behaving much like the crazed cultists who strap bombs to their chest and blow themselves up thinking that it's the will of God.
Generally, market crazes are created. Those with money can buy strategically placed media assets to inseminate such ideas in people. They can also create the necessary fluctuations in price. And people bite the bait because of their greed (or fear). However, once created and on the way, like now, they're entirely irrational and uncontrollable. So one has to be careful when they cash out.
Quoting VagabondSpectre
It will never reach that high. By New Years' Eve or Christmas, it will have tanked, that's my prediction. Until then, it may reach 20-30K. Or it may tank sooner. The reason I'm saying that is that most people want to cash out for the holidays ;) - they don't want to be playing stocks on Christmas Eve.
So large criminal organisations sifting through millions upon millions of dollars cannot get fake identification, or steal other people's identification, etc.? They cannot make the money lost by transferring it through a network of different accounts, before re-directing all of it to one main account?
There was a story in the last few days that if Bitcoin's growth were to continue at this exponential rate, it would be using ALL the world's energy resources by 2022. So who would have thought that a completely imaginary digital invention, that has no physical counterpart aside from digital code, would have an enormous carbon footprint?
https://www.wired.com/story/bitcoin-mining-guzzles-energyand-its-carbon-footprint-just-keeps-growing/
Yeah, but I have a bulletproof plan. I'll only buy into the currencies that increase in value.
Yeah, I was referring to that report, but I edited my post because I couldn't find it.
They all do >:O
And it's all growing exponentially. Now there's a Black Swan event that nobody would have thought of a year ago.
I guess their big consumption is of electricity, so if anything fails it will be the electricity providers not being capable to keep up with demand, therefore raising prices to lower demand. And if they raise prices... what will happen? Bitcoin miners will have to depend on higher bitcoin prices to maintain the economics of their operations. If the market tanks, they'd be screwed. Are there any publically traded bitcoin miners? Anyone know?
If Bitcoin prices don't fall, I don't think electricity providers will be allowed by the governments of the world not to provide to consumers because they have to provide to Bitcoin miners instead who are more profitable. So then the question is will electricity providers be able to keep up with the demand?
https://www.marketwatch.com/investing/stock/gbtc
In the past month, Bitcoin rose 130% and GBTC 100%. So quite close. If I were to risk investing in either, it would certainly be through an investment fund.
This is such an accurate perspective on those investing in Cryptocurrency. Which is why I asked what the USA dollar was backed by because it USED to be backed by Gold bullion but that is no longer the case and as you suggest, we can keep printing it as we need it but eventually it will become worthless on the world stage.
It's backed by the might of the US government ;) - the dollar that is.
The Federal Reserve is like a fiduciary decision maker when it comes to printing money; they're only supposed to print dollars as the wealth of the economy grows. The whole reason the FED doesn't take direct orders from the federal government is precisely because nobody trusts a king who manages their own finances (if "the king" is backed by a bank who has their own reserves then everyone feels confident when lending and dealing with said king because the they act like a guiding force against bad financial decision making and will/can actually pony-up should things go sour). If the American government really was allowed to print their own fiat they would never have any budget deficits, and the American dollar would have long since hyper-inflated.
What Aug says is also true. The American government (it's ability to sanction and otherwise fuck up it's opponents) and military is like an on-going threat of reprisal for any entity that could damage or destroy the value of the American dollar and the strength of the American economy. The American dollar may be fiat, but it is physically and speculatively held in place with brick, mortar, and mortars. The fact that it's the global reserve currency means every other nation of note lives or dies by the success of the dollar along with the American economy, even nations like China, Russia, and North Korea. We're too interdependent on the dollar for it to fail unless we're prepared to deal with global recession and decades of setback regarding technological (and therefore medicinal, environmental, and economic) progress.
Invest in Moroccan solar energy projects instead! (not sure if this kind of thing is even viable)
http://www.invest.gov.ma/?Id=24&lang=en&RefCat=2&Ref=145
We're at about the right time to short-sell gbtc I think >:)
Down 7% on the hour. Fun to watch.
This whole thread is a clear sign of a very large bubble. Because this is a Philosophy Forum.
When you have ads about apps Trading bitcoin coming up if you play some silly smartphone game, you know that loonie time is here. This is the time "when taxidrivers are giving stock tips"-moment. Classical moment when it very likely bursts.
Enjoy the moment with popcorn.
And anyway, this bubble bursting isn't so serious as the housing market: people need a home to live, but they don't have to use cryptocurrencies.
At least yet. Perhaps when money as something physical is taken out of circulation.
So, something plainly has to give.
Bitcoin's already dead IMO. It may go to a million US first, but it's going to zero. It has unsolvable scaling problem, electricity usage being one of them. The centralization of miners is another. Their network's already congested and inefficient. Transaction costs are rising and settlement times are lengthening. Their protocol is designed to get worse the more people use it.
To put bitcoin's performance in perspective, the bitcoin network can handle up to 7 transactions per second. By comparison, Visa handles a constant stream of several thousand transactions per second and up to 50K/sec at peak, using orders of magnitude less electricity per transaction. Many delusional bitcoin enthusiasts think bitcoin's going to replace the world's financial system. This is not going to happen.
Some other crypto might. And there is a technical revolution based on blockchain and other distributed ledger technologies that may end up being bigger than the Internet. But bitcoin itself is already over. If someone gets in at $15k and out at $20k more power to them. But someone's gong to be that last fool.
I doubt it'll break $20K. Pixie dust will only sell to the extent that people believe in pixie dust and crucially also believe that other people believe in it. The current boost has been driven by positive mainstream news headlines that suggested there was money to be made in BTC and blogs all over the internet that suggested the same (probably self-servingly in most cases). But at this point with the media already turning to mostly bubble talk it's a case for any investor with their eyes even half open of "I know the guy is naked but just how blind is the rest of the crowd?"
(I don't think that has much to do with its intrinsic worth as a currency tool btw as any intrinsic worth it has from that perspective is still going to be closer to $1 per unit than even $100).
Edit: There's a workaround to avoid transfer fees. Damn. If only I'd seen this sooner.
That's not the case. It's a great way to standardise structured products for instance and sell them to interested parties. Value of the crypto currency could then be related to the underlyings - or you could just use the block chain technology and not the crypto currency itself and still handle "cash" normally.
I also read about Lightning Network, which is apparently is producing software that customers can run along the Bitcoin network and which will speed up transactions, the test runs have worked.
I saw a video where they pointed out that shorting bitcoin futures is a perfectly sensible hedging tactic for bitcoin miners. It costs a lot in electricity to mine bitcoin, and if the price drops you're essentially losing money just running the computers. By buying short contracts (bets the price will go down) they can stabilize their mining business by protecting it against drops in the price of bitcoin. I thought that was interesting. It's basically what the wheat and soybean farmers have been doing for decades.
Quoting Cavacava
This actually concerns me. If you have a communication protocol that is so slow and clunky that it needs an auxiliary protocol for it to work, there's something wrong with the design. If the Lightning network is secure, why do we need the underlying bitcoin layer at all? Maybe it makes sense to scrap bitcoin and build the next generation cryptocurrency directly on some variant of the Lightning network.
I'm trying to learn more about the Lightning network to see if my impression is correct. On the other hand if Lightning actually works and scales up, it could solve a lot of the bitcoin scalability issues.
Heh, I didn't mean to sound like a preachy douche, but after years of conspiracy theorists telling me that the American government owes $1.50 for every $1.00 the Zionist owned Federal Reserve "lends" them, I've been eager to put my research to work.
IIRC the idea of a state incorporating private banks into national services in this manner began with the bank of England. Wiki notes:
Quoting wiki
The Federal Reserve doesn't print actual money though, it lends digital credit to it's member banks and charges them variable interest rates (which makes the member banks more financially secured, and influences the interest rates they charge as a regulatory force). So rather than the FED banks lending to the American government in the way the BoE lent to the King, they lend to banks who lend to the public in order to positively influence overall stability. Without the FED, banks at large might start drastically altering interest rates in response to perceived economic crises, which can create a genuine crisis in and of itself.
Apparently there are over 10 trillion US dollars in existence, but most of them are digital. Only about 1.2 trillion in US cash physically exists. If more US cash is to be printed, the US treasury will be the ones to actually print it, but they too have more than a fiduciary responsibility to ensure economic stability. Even if they went wild and printed a trillion in cash for the US government it would only inflate the currency by about 10%.
Crypto-fanatics rightly understand that faith and trust is the bedrock of any currency, even gold, but they don't seem to understand what makes institutions and foreign governments actually have faith and trust in the American dollar.
I was serious in my Thanks and I hope you took it that way as that is how it was intended. I feel a great deal of comfort in surrounding myself with people that are smarter than I, in fields I know a little to none of, than faking that I know something. I am here to learn and I appreciate you taking the time to explain it to me.
Quoting VagabondSpectre
I wish the banks were not as large as they are. I have been named in 4 class action lawsuits with Wells Fargo and when they charged the loan to my ranch, I was a victim of predatory lending. My husband and I filled out our paperwork, came into sign the final copy and between the time I filled out the paperwork and the final copy prepared, I was marked as being a Latino and so was then charged an increase in mortgage rate for 10 years. I get one letter from the Department of Justice asking two questions and in answering them I would be paid the difference between a normal loan and a Latino loan, in the amount of $9k to $13k. Two questions: Have you been the owner of the said address for the last 5 years or more. Yes. Question: Are you Latino? Ummm, well my file has been handled as a Latino, I have been screwed over by Wells Fargo like the Latinos, so no I am not Latino but I have been handled as one.
After months of debate with Wells Fargo and DOJ, the bottom line was, that even though I DID NOT mark myself as Latino, the final paperwork I signed said I was Latino and that was the final determination. So I said okay than pay my rightful claim as a Latino and the DOJ said I could not be included in the class action because I was not Latino and I would need to sue Wells Fargo on my own. After a year of this pursuit I stopped banging my head on the wall.
The next letter I get from Wells saying I am a participant in the latest class action, I am walking into my branch and asking for a Punch card because surely after your 6th Class action lawsuit you should at least get a toaster, right?
Does that mean that if we are going to invest in BitCoin as opposed to Ethereum we should do it by next 12.18.17?
Bitcoin FUTURES will be traded. These will be "cash-settled" futures, meaning that no bitcoin are harmed in the making of this motion picture. No bitcoin are ever bought or sold. Rather, you're placing bets on what the price will be. The futures are not backed by bitcoin. The CME and CBOE will decide on their official reference price for the day and the futures contracts will settle with respect to that price.
Nobody has any idea what the futures trading will do to the price of bitcoin. Some say the influence of big money and professional traders will stabilize the price of bitcoin. Others say that the wild fluctuations in bitcoin may bring down some of the smaller futures trading companies and crash the economy. Nobody has any idea what's going to happen.
One of the interesting factors is that the CME and CBOE trade during business hours five days a week, while bitcoin trades 24/7/365. If bitcoin has a big price move over a given weekend, there would in theory be huge arbitrage opportunities on Monday morning.
I'd say just wait it out for a week and see what happens. Or jump in and enjoy the ride.
Standard thing in any derivatives market. In any commodities market the majority of people aren't there Trading in order to actually buy/sell the actual commodity.
I think the bitcoin mania is just a sign that this bull market is quite old now.
Could you break this up for me in more detail please? Sorry, but I'm not fully up to speed with all the technology behind it.
I gave up on Coinbase and I'm stuck for days in Gemini's approval process. I'm going to try Cex next. So in the end I'll have to give my personal info to all the exchanges out there and see who finally accepts me. And the exchanges are so insecure that it's just a matter of time till everyone's personal info is hacked.
This system is totally not ready for prime time. The bitcoin bulls say the "herd" is about to show up and boost the price, but there is no way Jill and Joe Public are getting into this thing any time soon. Learning how to use bitcoin and secure your wallet is seriously complicated right now.
So if the public can't get in and can't figure it out, who is moving the prices? Is it two guys in a room trading back and forth before they dump? It's not completely out of the question.
In other news ...
CBOE Bitcoin Futures Site Immediately Crashes.
To be accurate, that headline's a little over the top. They basically had some standard hiccups for a new popular website but they seem to be up and running. The world hasn't ended yet.
If I had the money to lose I would be jumping in but my conservative underpinnings keep the dollar earned in my pocket. However my Indian who is only mining might be gently surprised. (Y)
I'm pretty sure the electricity cost is going to be more than the amount earned from mining.
;) He is away at college
Geez I hope so. :-O
Or do you think the Powers that Be will simply co-opt and crush it, like they've done with everything else?
Can you explain what value the distributed ledger technologies have in clear terms? I've been asking many people this, and so far nobody has given a very clear and satisfying answer.
Also, I'm not investing a dime until these things are secure against quantum computer brute force attacks.
The key concept is distributed trust. Consider our conversation. How do you know that I'm me from day to day, and how do I know that you're you? We both store a public handle and a secret password in a centralized database managed by the operators of this website. In other words we rely on a trusted third-party intermediary.
Using blockchain technology, we would not need a trusted third party. I could cryptographically sign my post and publish it to the blockchain. Everyone on the network gets a copy and verifies that my signature is valid. The network's consensus protocol allows the network to collectively decide that my post is valid. There is no need for a centralized database. There go web forums, Craigslist, and Reddit. You don't need them because you no longer need third-party centralized databases.
This is why some people think cryptocurrencies are a threat to the banks. If I want to send you money over the Internet I have to do it via an electronic exchange through my bank. We need a trusted intermediary. But I can send you a bitcoin directly, with no need for a bank. The entire network sees that (1) I own sufficient bitcoins to be able to send you one; and (2) I'm the one sending it; and (3) I'm not sending the same coin to two different people. Everyone on the network comes to consensus that I have transferred ownership of one bitcoin from me to you.
Of course the problem comes when we want to exchange bitcoin for dollars. The banks control that aspect of it. But in the future, perhaps some cryptocurrency (most likely not bitcoin) is accepted worldwide as an actual currency. Then the banks are toast. And the banks are not happy about this prospect.
Some other use cases. In a real estate transaction we must pay a title company to verify that we own the asset that we are claiming to sell. On the blockchain, the ownership history of a piece of land is certified without the need for title companies. Likewise escrow. Two or more parties can put assets into escrow and the funds can be released automatically when certain criteria are met. This is the concepty of smart contracts. Each blockchain transaction consists not only of an asset, but also a little computer program that can be executed by the network. The cryptocurrency Etherium (#2 in market cap after bitcoin) is the underlying network for many such experimental ventures. Title companies and escrow agencies are toast. No longer needed.
Corporations. There's an idea called the distributed autonomous organization, or DAO. You could run a company in which assets and decision making are on the blockchain. There's no need for central authority.
How about starving artists? If you're a kid with a guitar and a voice and some songs you wrote, you can languish in obscurity or you can sign with a mega music label. Using blockchain, you can distribute your music and receive micropayments from your fans. Goodbye music industry.
Micropayments may well be the solution to the problem of how to compensate content providers. Traditional newspapers are dying because we can all read them for free. Yet professional reporting costs money. The ecosystem of bloggers in their pajamas depends on actual professional journalists going out and digging up stories. How can the journalists get paid? Blockchain might be the answer. The newspapers will die yet journalism will thrive.
Voting. Someone's doing it. https://followmyvote.com/
Sports gambling. XWIN is doing it. https://cointelegraph.com/news/ico-explores-completely-uncharted-waters-of-sports-betting
What is Amazon? They're a centralized database of buyers and sellers. Same as eBay. With blockchain, why do we need a centralized database? We don't. I don't think Amazon's going out of business anytime soon, but long term we have to ask ourselves why we need centralized databases anymore.
In short, everywhere modern society requires a trusted intermediary to maintain a centralized authoritative database, the blockchain can replace that intermediary. The blockchain lets you prove who you are and what you own without the need for any central authority. That's disintermediation on a massive scale.
Quoting Benkei
Interesting point. A crypto called IOTA claims to be quantum safe. Meaning that even if there are practical quantum computers, IOTA's cryptographic protocol is still secure. IOTA is a very interesting example of a crypto that's not a blockchain. They use a data structure called a directed acyclic graph. They are targeted to the application of the Internet of Things (your lightbulbs will talk to your refrigerator while the CIA and the Chinese hackers listen in. Awful idea but it's inevitable). They can scale to high transaction volumes. They don't have miners, which is a big improvement over bitcoin.
There are a lot of other interesting experiments going on. As I say, the price movement in bitcoin is a distraction. If someone made millions, good for them. Meanwhile the really important developments in the distributed ledger space are going on elsewhere.
For the hell of it I went back to Coinbase today and re-uploaded my documents. They wanted the front and back of my driver's license. I uploaded photos and they said they could not verify me. I did this about three times, each time without success.
Just now I got an email that I'm approved at Coinbase. I went to the site, successfully added my credit card, and bought ten bucks worth of bitcoin. I'm not trying to get rich or ride the frenzy. I'm only trying to learn the mechanics of wallets and using cryptos. Buy a little, sell a little, see if I can actually get my USD out of the system, learn how it all works.
I started this process a few days before Thanksgiving. So it took me three weeks to get US dollars into the bitcoin system. And bitcoin is complicated. Even an educated consumer is going to find themselves in a thicket of technical jargon. This thing is in no way ready for prime time.
So if the public can't get in and the price keeps going up, who's making the price go up? I saw a Youtube video that said that the top 96% of the entire wealth of the bitcoin blockchain is held by 3% of the wallet addresses. That's striking if true. It means that this truly is a massive pump-and-dump, an artificial inflation of the price by insiders. Basically two guys in a room selling each other the same pencil back and forth to push up the price of pencils. Old stock market trick.
It isn't. I can't find the article at the moment but I read in a university paper it won't be. They made a change or will make a change as a result but not sure about the details anymore. Some Russian scientists managed to make something that cannot be decrypted provided less than a third of users are fraudulent (double spending), it falls apart above that.
Probably. Also, I don't see how people could cash out easily with market caps at levels we're currently seeing. I can sell a couple of million in Dutch bonds without affecting price but I doubt there's a lot of liquidity in bitcoin-currency pairs. Would be interesting to test what the maximum size of a bitcoin-currency trade could be without affecting the exchange rate of a bitcoin.
I was reading about Sirin Labs a Swiss-Israeli tech company that wants to develop a open source Blockchain mobile phone. It issued virtual tokens, ICOs, initial coin offerings to support it effort, its target was $75m and it raised $118m in 24 hours from 5600 investors. It plans to keep its offering open for the next 12 days.
So if I understand this correctly, instead of appealing to individual investors, Sirin issued these virtual token coins in exchange for cash. Unlike shares of stock, these coins can be purchased or sold by anyone interested by using a Blockchain network as a means of conveyance. The attractive part is that you can potentially trade these coins at any time, or you can hold on to the originals, and if company is successful the value of the coins could rise significantly.
This gets around investor control. It has no guarantees attached and unlike stock, there is no owner of an ICO token. There are also no current regulating body. But if you are familiar with the company, the people involved or the proposed product it might be an attractive way to invest, to retain some solvency, without having to buy or sell stock, warrants or whatever, and pay broker fees.
Why would the banks be toast?
And don't forget that nation states and governments have had the monopoly on legal tender for quite a while now. And then there is the interest the tax office has on any kind of transactions. Hence if you would have a widely accepted "cryptocurrency", then likely it's watered down so that it's easy for the authorities to check the transfers. Because what will regulators see with cryptocurrencies? Money laundering and tax evasion.
And anyway, likely bitcoin Tulip-mania level bubble bursting will decrease the hype around cryptocurrencies.
Quoting ssu
Identities are always revealed when trying to exchange crypto for any standard currency. To mask the identity, you'd need to purchase directly with crypto for the most part (and also receive your payments in crypto, not in USD you convert later to crypto).
The thing is, I don't see anything that nations can do to stop crypto. To begin with, politicians are too dumb to even understand what is really happening. And even if they did, it quickly turns into a game theory situation. Those nations which don't outlaw crypto will have a significant advantage in the form of cost-reduction based on the blockchain technology. By automating all transactions that previously were based on some form of human input, billions will be saved.
The other thing is that crypto isn't centralised at all. There is no "one player" who you can take down, and down goes the crypto. It's much like guerrilla warfare - the enemy is everywhere. It's the kind of technology that once started nobody can really control.
I think it's a clear fact already that digital currency of the crypto kind is superior to our paper fiat currency though. It does make all transactions easier and significantly cheaper. So perhaps in the future, we'll be approaching a situation where everything is exchanged in crypto, not in fiat currencies - so this exchange of Bitcoin/USD becomes irrelevant.
Quoting ssu
I do think Bitcoin will collapse in value, but the underlying blockchain technology will very likely revolutionise the way we do business. This paper was very interesting.
Couldn't agree more. That is the counterargument. The evil banksters who have run the world since the beginning of civilization will continue to do so. I tend to agree with that side of the question.
But the crypto argument is strong too. A crypto is just a computer program and some people who are willing to run it. The government can't outlaw that. Programs are speech in the sense of the first amendment. I believe [not really up on this] that there have been court rulings to that effect.
Of course governments can bust the miners and the exchanges. Those are the weak points in the system where the cryptos meet the real world.
The battle between the cryptos and the governments/banks is just beginning. Anything could happen.
Quoting Agustino
Try Coinbase again. If they finally let me in perhaps they have their technical problems fixed.
I agree with the strategy of waiting for the big crash to get into phase two. Right now I'm just trying to learn the mechanics. It's all fairly mysterious actually.
Quoting Cavacava
Yes, the venture capitalists are another industry about to get disintermediated. ICO's are how you fund your company now. Put up a white paper, grab a copy of some crypto code (it's all open source), send out a press release and you can collect millions through your ICO.
Of course scams abound in the ICO space. You can just take the money and run, and some ICOs have done that.
Here's another ICO I just heard about. Overstock is going to issue an ICO to raise some revenue. The author of this article thinks it's going to fail.
https://seekingalpha.com/article/4124362-overstock-tzero-ico-destined-fail
Quoting Benkei
There are no actual bitcoin millionaires, unless they sold a million dollars worth of bitcoin and got their million USD back from the exchange. On Reddit there are hundreds of complaints about the difficulty of actually getting your money out of an exchange. I think a lot of the "millionaires" holding bitcoin are in for a big surprise.
On the day everyone tries to get out, the exchanges will crash. Many people will never get their money back. It's going to be really bad.
Quoting Benkei
[Referring to whether IOTA is quantum-safe].
I believe you. That makes sense. On the other hand I'm not sure I believe real world implementations of quantum computers will be around any time soon. I'm a skeptic on that front.
I still like the fact that IOTA has no blockchain and no miners. Blockchains don't scale and miners inevitably centralize. I'm drawn to non-blockchain cryptos. Another really cool one is Hashgraph. They claim to be able to potentially handle millions of transactions a second. Fairly complex design I haven't been able to understand yet. https://hashgraph.com/
Quoting Michael
Michael, Thanks for that info and inspiration. Your experience of getting approved at cex motivated me to keep at it. The exchanges are overwhelmed these days. Makes you wonder what it will be like when everyone tries to get out ...
My next step as you say is to move the coins to gdax and learn how to transfer them to another exchange. I want some IOTA. I really like the non-blockchain solutions.
How will they manage that? The only way they'll succeed is if they become the miners. Or in collaboration with the government, they change the USD to a blockchain system of their own making. Either way, I think the blockchain technology will win.
In the beginning, we traded goods for goods - you gave me your tomatoes, and I gave you my potatoes. Then to make trade easier, we introduced gold coins - and their worth was given by their weight in gold. But as trade expanded, gold coins became too heavy to carry around. So we introduced paper currency backed by gold. For every dollar out there, there was gold to back it up - that was its intrinsic value. Then in order to expand trade even further, we realised that currency doesn't actually need an intrinsic value, so we ditched the gold standard, and we arrived at the fiat currencies we have today, which are just a means of exchanging value. Money still maintained a physical aspect though, in order to prevent double-spend. The blockchain technology is just the next evolution from that - now we ditch the physical aspect completely, since money is a fictive commodity anyway, merely useful to facilitate exchanges and trade. And with the blockchain technology, we can avoid double-spend too and automate all other aspects of trade that we couldn't until today. Because trade no longer requires trust, it can massively expand once again.
Quoting fishfry
I think the government can absolutely outlaw blockchain technologies. Not that this would do anything, because not all governments will outlaw it.
Quoting fishfry
Why do you think they're weak? I don't think they're weak at all. If China bans miners, US miners will take over, and so on. Because power is distributed through the whole network, and does not rely on any one person or group to keep it going. So to really bust them, there must be a coalition of governments looking to do that. And I don't think that if some governments seek to do that, others won't seek to do the opposite.
Quoting fishfry
It's not available for my region ;)
And anyway, I heard some bad things about Coinbase. They limit people's ability to buy and sell, etc. Kraken seems really good, if it wasn't DDoS'd all the time. Bitstamp is very good for those in the EU.
What I'm not sure on yet, is how one can profit from blockchain technologies - it obviously will be able to help you in your own particular industry (through smart contracts, etc. etc.), but how do you profit from the technology itself, apart from becoming a miner, or opening your own currency?
The United States isn't the only government, and not everywhere has something like the First Amendment.
Agustino, I am watching what my two Indians are doing with BitCoin and Ethereum how the systems will work with a little skin in the game. My eldest Indian has invested $100.00 in BitCoin while my younger Indian has been mining and nothing but "mining" in Ethereum.
In the last month we have gotten two calls from our younger Indian telling his older brother to sell and sell now. But before days end, he called and said if he didn't sell tell him to hold off. That sounds more like a day trader who has the time and desire, to closely monitor the movements. I keep giving the sage advice my parents did of taking out your original investment and only work the profit, never the initial investment.
All this happening while NicK who does IT for a living is kicking himself for not buying into BitCoin when it first began because we would no longer have to be working the ranch but rather investing in our "Next" which is a Bed and Breakfast deep in the woods of Northern Arizona. What can we say? Other than damn...would have, could have, should have...
I think it is quite appropriate and it appeals to the Wild West attitude in me, when they call those who want to only invest their time and energy for a little piece of the gold, miners. It is really cool to see what the Pioneers of this new way of exchanging monies are having to navigate and I must say, it is very okay with me to let the "NEXT" generation take the lead on this one.
Alright, I'm calling that one. ;) 2026 or possibly sooner. Remember, it's only an engineering problem now so it's pretty close.
I was under the impression the Q-Wave* had disproved all claims regarding quantum computing as the Grail of computer ingeneering?
* Sorry, D-wave.
Yeah, I have skipped over profiting by buying it and trading it, but that seems more of a "consumer" approach. In becoming a miner or creating your own digital currency, you take a "producer" approach and are liable to access much higher profits if you were successful. You also retain much more control. Only that with something like this technology - apart from starting your own currency or becoming a miner for an existing one - I don't see many alternatives, at least as of yet. But it may be possible that it's just because I'm not sufficiently technically literate in the surrounding matters.
How is the mining of Ethereum going? I've heard there are people who have really big "farms" to mine for these currencies, so how is it possible for anyone to compete with them?
As an interesting sidenote, they say they make 20 BTC/day, meaning approximately 7200/year. At current prices that translates to :-O - $135 MILLION per year! I think they must have huge profit margins too, since it's a computer business not a people business (people are very expensive).
Quoting ArguingWAristotleTiff
I would agree with that advice, or at the very least I would say to keep everything invested, but not in just one asset/trade. I've done a bit of stock trading with small sums of money while in University, but that didn't go as well as - *gasp* - sports betting >:O I remember that I struggled to even keep up with inflation and avoid losing with my stocks. Sports betting went much better for me - I guess it was because I also happened to have the right mentors around for the betting.
Quoting ArguingWAristotleTiff
Many people are doing that, but what's the point? Nobody knew back in 2010 that Bitcoin would grow so much. And until recently, even my own knowledge about it came more from hearsay than anything solid - I've only started reading into it and understanding all the factors at play much more recently. So without being intimately familiar with the technology back then it's almost impossible that you could have rationally made the decision to invest a sizeable sum of money in it.
Quoting ArguingWAristotleTiff
It's not their "energy", it's the computer's X-)
I'll be watching. Actually everything I know about the subject I learned from Scott Aronson's blog and his periodic debunkings of D-Wave. My understanding is that qbits are hopelessly unstable. I'll keep an eye out for news.
Quoting ArguingWAristotleTiff
May I ask, who are these Indians? Is this part of a conversation I missed? I understand that you can mine Etherium with GPUs and that ASICs don't give an advantage, making GPUs the only practical choice for hobbyist miners.
Quoting Agustino
I have no doubt that future money will be based on blockchain or some distributed ledger technology. The question is, will it be issued by government(s) or will it live outside government?
Miners are being arrested in Venuzuela for "terrorism," the theory being that since bitcoin can be used for terrorism, if you mine bitcoin you're aiding and abetting terrorism. It's nonsense but that's how politicians work. They don't subscribe to notions of sound argument. They subscribe to notions of raw power. They're the government and whatever it is that's new and revolutionary, they'll control it.
I think what may happen is that blockchain services not associated with money -- blockchain discussion forums, blockchain Amazon, blockchain games, etc. -- will be fine. But governments the world over take a dim view of people trying to replace government-controlled money, and that's where they'll bring down the hammer.
Quoting Michael
Right, that's another point for the government side. Can a government outlaw certain computer programs? Probably. And they certainly have the technical means to know who's connecting to which Internet services.
Quoting Agustino
Mining and exchanges are the two points of contact where the blockchain meets the real world. That's how the government will move to suppress and control cryptos. It's already happening. The IRS got a court ruling that Coinbase has to give up the names and info of 14,000 of its largest customers. The SEC has ruled that some ICOs are securities. Venezuela's going after the miners.
>:O oh dear... She's referring to her sons I think, though I don't know why she calls them Indians :-O . I guess Tiff will have to explain this herself.
I think governments may very well convert the USD or their currencies to a blockchain technology based on the distributed ledger.
Quoting fishfry
Well yeah, that's not surprising, governments and those in power always seek control.
Quoting fishfry
Yeah they do. The only question is if they can manage to control something like Bitcoin without incurring serious losses themselves. That they want to control it is one thing, whether this will be possible is another. The example of Venezuela and other North-Korean-like countries, don't carry much weight here. The question is if the big and powerful nations can do anything. For example, if America bans mining, won't Russia and China promote it, and earn billions of dollars for themselves out of it, while America is losing? So yes, maintaining control is important for politicians, but maintaining power is even more important. If they lose power for control, their nation will become much like North Korea is today - lots of control, but very weak.
So those two goals, power and control, often pull in different directions.
Quoting fishfry
Right, of course the governments will obtain information that they need to assess taxes, etc. These are relatively unimportant though. The real question is if they can control the actual technology itself.
Balloons can get very big. The skin of these balloons is as thick as the participant's greed and stupidity. The more thick the bigger the balloon can get.
But no one's stupidity is thick enough to sustain an ever larger balloon.
The stupidity was not buying a Bitcoin a year ago and making about 14 000$ of profits.
Alas, stupidity knows little bounds.
Their mining operation involves finding new Cunningham chains, which are particular sequences of prime numbers about which there are many open questions. In other words they're putting their consensus algorithm to mathematical use, rather than wasting their computing power on brute-force attacks on meaningless cryptographic puzzles like bitcoin does.
Primecoins are an answer to one of the criticisms of bitcoin, which is that mining is a huge waste of electricity and computing power. But if you can have the miners do useful computations as their "proof of work," as it's called, then the economics make more sense.
I can see how this might evolve. Perhaps we can use that computing power on SETI, or protein folding, or some kind of distributed AI. That latter is a little speculative but the blockchain is actually a distributed programming environment so in principle there's no reason you couldn't make the Internet into a giant AI using a blockchain.
Maybe the singularity is closer than I thought. This might be it.
I don't think it's a question of stupidity and intelligence. People often take practical matters to be matters of someone being more intelligent than someone else. For example, we often think of Bill Gates, say, as being more intelligent than most other people. But while intelligence can help, it's by no means the critical factor in such decisions.
The critical factor is access to knowledge. I have a very high IQ, but I didn't have access to the right knowledge with regards to Bitcoin 1 year ago. Why not? Becuase I was busy working on growing my business, learning marketing, learning design, perfecting my development skills, studying philosophy, etc. And more importantly than all of those, because I didn't have the right people - people with relevant knowledge - around me. So I could have been 100x smarter than the person who happened to be working in a Bitcoin-related startup because he happened to be around the right people who were involved with it in University, say. But that person would have made the dough, and I wouldn't have.
None of us can see the future, and that's largely because we don't know what knowledge will be relevant to the future. To know that Bitcoin would be relevant I need to (1) hear about Bitcoin, and more importantly (2) devote the time required to study Bitcoin and understand what repercussions it would have. If I just hear that there's this new currency around that some people are interested in, etc. etc. I'm not gonna do anything about that usually, because my attention gets devoted to other things. In other words, it doesn't strike me as sufficiently important at first glance for me to start devoting the necessary resources to really see that it's important and relevant.
Like if someone were to say eating grass cures cancer. I would probably not even bother to investigate whether that's true, and just reject it out of hand. Why? Because our current medical understanding would offer no mechanism through which eating grass could achieve the effect. So I would discard it, even though empirically it may actually be true.
That IS cool because it's one of my biggest gripes.
The part time mining of Ethereum at college on one GPU is up to about $20.00, not much but for a student who has invested nothing (I realize there is energy used that the school is providing {however with tuition of $52K a year I am not getting all that worked up about it/or waiting for the school to say something} but his degree requires him to have a GPU) and the education he is getting along the way is amazing.
Conversely, I think my other Indian who just invested $100 cash bought in at $420.00 and is now worth $700? I could be totally off but I think that is what they were saying last night.
Here is the really cool thing- NicK keeps getting caught with clients wanting to know about Cryptocurrency but even though he does IT from sunrise to sunset, he has less than half the knowledge than our youngest Indian who is the miner. NicK charges $150.00 an hour with a two hour minimum and cannot waste these clients money, letting them pick his brain about Cryptocurrency. One client in particular is VERY hungry and wants to get in on this but doesn't know how and since NicK hasn't actually done it but our youngest Indian has, he has offered to go out and educate NicK's client on what he knows. We will see where that goes as most people over the age of 45 don't really get the math that the youngers do. From a public speaking perspective I told him to go in with an hour set, the first 30 minutes explain how it works and then let the client pick his brain for the last 30.
Since the client is over 45 yrs old I imagine his eyes are going to glaze over about 15 minutes in and from then on he is going to realize that it might just be time to let another invest for him and watch what happens to the initial investment. By the second call I took from my Indian at college telling his older brother to sell, I asked why is his little brother not making those moves for his older brother?
8-) You see where I am going with this by now and it will be interesting to see what happens. On our way home last night with our Christmas tree in tow, I suggested to our youngest Indian to take over his older brothers money, charge whatever you need to make back in fees if there are any and then you choose a % of the profit made on that trade. He said okay like 1%? I said 5%? And NicK of course was the highest at 10% but remember he has been the sole bread winner for almost 20 yrs now so his perspective is not always as generous as the rest of us.
Quoting Agustino
Personally I cannot allow myself to gamble as I would go to the poor house if I did. As it turns out, my youngest has been investing in other cryptocurrencies and stratifying his investing. Since he is a student his income is none, so cash is hard to come by but apparently Granny had a gift of $100 for him and he invested in something. When I told him some of the delays and necessary information given that I have read on this thread, he nodded in agreement. :-O I was like no, folks from the forum are having to submit Drivers Licenses or photo id and more, much more involved and he just kept nodding. I said are you kidding me? He said no. He and his brother had to both do that as well, did I not wonder why he needed his SS#? Well yeah but you were at school and I thought you needed it for.........shit that one slipped right by Mom.
Quoting Agustino
I know but it still bites! >:O And I am not going to throw in the towel and say "It is what it is" >:O
Quoting Agustino
That is true my friend but if there is an ancillary artery to be found on any new idea, I can usually ferret it out and just like the stock market today, there are LOTS of people in this world that would just let someone else "worry about it" whether that is a 401k or a Cryptocurrency investment. Just an idea....
Agustino had it right, my Indians are my offspring. There was a time when people didn't advertise they had kids on the Internet (think WAY back in the day) and since they were both boys and our family is a LOT like a tribe, I just began to refer to them as my Indians. Both over the age of 18 now probably makes it unnecessary but now it sticks and so they are my Indians. (L)
Just out of curiosity, why was this?
Oh? I still don't use real birthdate >:O (unless it's an official, business related thing). But I think I'm just paranoid. Looking around, many people give just about everything, including their address online :-O - and someone can obtain your rough address (city) from your IP anyway - so basically every website you visit. Moderators here may be able to access those details anyway.
I remember hearing similarly naive discussions about the social media and it's positive effects couple of years ago.
Especially that a) governments are too old fashioned and dumb to understand it and b) as social media is so decentralized they cannot control it and hence c) with the social media and new media, freedom will ensure and nation states cannot influence the discourse as they could do earlier.
Now we see quite well what bullshit that is and just how easy it is for intelligence services to prosper with the "social media".
Yeah? But you are. You are a citizen of some country, and if you get income, you have to report it to the government or otherwise you are avoiding taxes. Wouldn't matter if you made a fortune in barter trade and never would have taken actual money. The worth of the barter trade can be measured quite easily. And if it's a too big hassle to go at the user, you simply go after any merchant vendor accepting any cryptocurrency. After that it isn't so cryptic anymore.
How do you think so? I think a 50$ note is quite easy for making transactions. You don't even have to have a wallet for the "infrastructure" to use it. That's a relatively low cost for transactions.
It's obvious that you are looking at this only from the view of the consumer and how he or she uses money.
I don't think you fathom the relevance of any payment system being legal tender, being a medium of payment recognized by a legal system. That's just one link of money to the sovereign states.
As if consumers would rule the World.
The above would be similar to saying that in a democracy the voters in all their combined knowledge will choose the best possible candidate to be their President. Hence all countries will become democracies and the most capable people from every country will be chosen to lead them.
I think for the United States the role of the US dollar is quite an existential one, so I'm not thinking that now a Tulip-based cryptocurrency will take it's position.
Just to think of another payment system called barter trade. That's even more difficult to check. But if lets say you are a famous artist and we use barter trade, you give me one of your paintings and I give you a Gulfstream V aircraft, I would assume that the tax officials would be interested about the barter.
And you know what?
If I would be a conspiracy theorist, I would think that the whole Bitcoin bubble has been produced by the banks to get rid of this new payment system that partly comes to compete with them.
When this historical bubble bursts, the trust in cryptocurrencies will be shaken. Also, when you have basically bubbles in many markets, some Bitcoin bubble bursting would be the perfect culprit to blame first a market downturn and then for an economic downturn. People want culprits.
(I'm not a conspiracy theorist and I don't believe it, but once the bubble has burst, I will guarantee somebody will make the accusation of the evil banks being behind it)
I read that people are putting mining rigs in their cars and parking them at electric vehicle charging stations! Anywhere there's free or cheap electricity, mining is a win. Bootleg mining may be the biggest social trend of 2018. There are coins you can mine on your laptop. Why not plug in at work? Of course colleges are perfect. Free electricity and smart kids. Well there are plenty worse things kids could be doing at college.
Quoting charleton
When everyone else is being irrational, it's irrational to be rational. You have to balance what you know is true, against the money to be made simply by joining the crowd. In fact this type of "investing" psychology has been promoted by the world's central banks, which have been printing money and inflating bubbles in every asset class. Every few years there's another bubble, a lot of people make a lot of money, some get out in time, the rest lose their money in the crash. Then a few years later it happens again. And this is not an accident, this is the deliberate policy of the central banks. Or worse, it's a consequence of the central banks and they don't even know it. These great banking geniuses keep blowing up the world.
Is it rational to stand aside and feel superior? Or is it perfectly rational, depending on your situation, to plunge in and hope to be just smart enough to get out in time?
That reminds me of the great story about Isaac Newton and the South Sea bubble. He was eminent and rich by then, and everyone in London was making tons of money. Newton (according to one article I read) got in early, made money, and got out. Then it kept going up so he got back in, eventually losing today's equivalent of millions of dollars in the crash.
He said, "I can calculate the motion of heavenly bodies, but not the madness of people."
Quoting ssu
Oh yes there is no question that there are credible theories. The NSA published a paper in 1996 describing electronic money that predicted many of bitcoin's features. The SHA-256 encryption algorithm used in bitcoin was invented and released by the NSA. Now what are the odds the NSA would release a crypto algorithm to the public without already having a backdoor? After all the NSA owns the state of the art in cryptographic number theory. What they know is probably decades ahead of the academic cryptographers.
I'd say it's around 30% likely that Satoshi Nakamoto is the NSA.
Another very plausible theory is that it's the Chinese. The top few Chinese miners already control well over half the hashing power of the bitcoin network. That means they can get together and mount a 51% attack and double-spend bitcoins at will. Maybe one day China will collect everyone's money then just take it.
Quoting ssu
Yes yes! This is part two of the above conspiracy theories. There's a humongous bubble, the public loses a fortune. Everyone's angry and "the government must do something." People will demand strong government regulation and control of cryptocurrencies ... which is the government's evil plan all along.
I view this as a likely scenario. If bitcoin goes to $40k or $100k amid a massive public hysteria, the crash will be terrible. The exchanges will lock up, nobody will be able to get their money out. The public will demand government regulation. And the government will be only too happy to oblige.
So many theories.
But Bitcoin isn't instant; it's ridiculously slow and I understand Litecoin and Ehterium are faster, but it's still slow compared to instant payments (coming to you in 2018 if you live in Europe).
What do you mean by BitCoin isn't instant? The acquisition of the coin, the use of the coin or the cash out of the coin?
I thought the use of the coin is instant and the value of the coin is time stamped locking in the value of the coin, the moment it was used.
I wouldn't bet on it going to those levels.
And why? I've used some markers in my life to make the decision that some bubble is going to burst. First time I did it in 2000 when people that never ever had had the slightest interest in investing started investing in IT-funds (and asking me about it as they knew I did have an investment portfolio). One of my friend who did invest in an IT-fund a small amount has kept the fund as a reminder never to invest anymore in mutual funds. The next time when that bubble marker went off was when a financial advisor in the fall of 2007 confessed that he didn't see any stocks or markets to invest in. Never before that and never afterwards has any advisor said to me that.
And what's the marker here? This exact thread. Now I've known a lot of people here from the old PF times, and I know that they are interested in philosophy and perhaps current topics. But not investing or currencies. The whole existence of this thread on a Philosophy Forum tells me that the hype is on. And reading the views here just reassures me.
In the end it's something interesting. The Bitcoin bubble is something quite historical as it is the Tulip-bubble of our age. Now Benkei could confirm that even today tulip bulbs are worth something in the Netherlands... and that rarer types of Tulips are likely more expensive than more ordinary ones. So basically a new payment system for our digitalized World is obviously worth something, but not worth in my view to go into a speculative bubble that basically is now behaving as a Ponzi scheme ...with people already knowing it is one. Because one of the most stupid things is to think that if you spot a Ponzi scheme, you can still invest in it and then make a profit before it collapses.
Why it is similar to Tulip mania and not the "ordinary" housing-bubble is that there is no reason why Bitcoin would have touched $20k, or go to $40k or $100k. It's a huge disadvantage for any currency to rise so much in price. Actual currencies ought to be somewhat stable. What kind of currency would cost nearly $20k? It's an awfull currency to use, if it would be an actual currency.
Any payment done with bitcoin takes a while to be processed and it takes too long compared to the possibility for instant payments that we'll have soon. If I'm paying with my NFC debit card currently I can walk away because the vendor trusts my bank and his bank. If I'd pay with a bitcoin we'd have to wait for 10 to 60 minutes to ascertain he received the bitcoin. Next year, with regular payments both the vendor and I don't have to trust the bank for the payment as it will be immediately added to his account (he'll still need to trust his bank he can withdraw though). For international payments, of course, it would definitely be an improvement just not locally.
Quoting ssu
I think that's part of why it's considered a financial instrument in most countries.
That makes sense but I am left with the question of how the vendor would know you were using a bitcoin backed Visa card?
He doesn't care as VISA guarantees the settlement of the payment.
Then why would VISA guarantee such a bubble prone currency?
I suspect the balance of bitcoin transferred on the debit card gets a haircut that they feel comfortable with to cover any market risk they might run in addition to limits in the size of transactions.
EDIT: VISA doesn't transfer a bitcoin, it immediately enters into a bitcoin-USD trade and settles the USD in the account of the vendor. So it actually doesn't run any risk on price fluctuations of the bitcoin. It does run a settlement risk should the bubble burst, in which case their bitcoin-USD trade might not settle successfully.
Maybe.
Do you think it is every worth considering the moral content of taking wealth out of the economy without working for it?
Certainly there will be room for cryptocurrencies within the landscape of modern economies, but their volatility limits certain practical applications. The idea that cryptocurrencies will replace government-backed currencies is laughable. In fact, unless I am mistaken, that was the raison d'ĂȘtre of bitcoins creation.
But you do agree a government backed crypto currency is s possibility?
The idea of mining in the sense of being rewarded for performing pointless computing activity merely for the sake of affirming the consensus of the block-chain seems fishy to me - especially given the increasingly non-consensual centralisation of computational resource.
Wouldn't it be better to perform GPU work for a big-pharma block-chain where 'proof-of-work' involved performing calculations for drug-discovery, that after independent empirical confirmation rewarded the miner with actual currency?
Sure, if it's regulated and stabilized, but that seems anathema to what cryptocurrencies supposedly represent. It would be better to adjust my statement as, the idea that non-government-backed crypto-currencies will replace government-backed currencies is laughable.
When I read this, and then this:
Quoting ssu
I know that you don't know what you're talking about - meaning that you don't understand the fundamentals at all. The rest of your post is really a reasoning by analogy, as if crypto was anything like social media. But before anything, let me explain to you how I know that you're speaking nonsense above, regarding the 20k.
You can buy anything as small as 0.0001 BTCs. That's $2/unit at a price of $20K/BTC. Does that seem like a lot for a currency to you? Of course not. What's really relevant isn't the price per unit, as much as how much the currency should be worth to allow for a certain daily trading volume.
There's $5 trillion that changes hands everyday in Forex. There will be a total of 21 million BTCs on the market, and no more. If BTC is to become a major currency, how much should 1 BTC be worth to allow the necessary daily trade volumes to happen? At the moment, there's about $300 billion worth of BTCs on the market. That's nowhere near enough.
On another note, you seem to think I'm some kind of finance idiot who doesn't know that this is currently a bubble. So...
Have you read this post?
What about this one?
Quoting Agustino
Quoting ssu
Nope - social media was the exact opposite of this. In fact, with social media I said from the very beginning that it will be a goldmine for the government. You have a centrally controlled platform (for example Facebook) - all government has to do is go to Facebook and request access to any of their data and they will pretty much get it. So it's a way for the government to have access to databases containing almost everyone's personal information.
That's not the same in this case. There is no centralised authority in the case of crypto-currencies.
But yes, governments are old-fashioned and cannot deal well with social media very well even now. Just look what happened with the last US election.
And I never claimed freedom would ensure either with regards to crypto, or social media. So that's just strawmanning.
Quoting ssu
Well, of course, they will be able to track if I pay my taxes, was that what you were thinking about? :s
Bitcoin isn't anonymous. I think you also didn't know that. The owner of a certain wallet cannot be known, but when you cash out of that wallet, then your identity IS known. That's why many of the hackers who have stolen Bitcoins cannot get them out of their wallets currently.
So I most certainly wasn't referring to that.
Quoting ssu
Why don't you short this then?
Quoting ssu
That's not true, there are people interested in finance here, just not as many. I'm one of them, I would guess Benkei is also one of them, and so on so forth.
______________
Now there are problems with Bitcoin. As Maw said, one big problem is the volatility. You cannot adequately trade with a currency that drastically changes in value from day to day - well, you can, but you need to structure contracts accordingly, which represent significant additional costs. The idea is that as more people start using Bitcoin, it will stabilise at certain values.
Another problem is what happens to Bitcoins that are lost? If you lose your private key, you lose access to the wallet, with no possibility to get it back. So if you're the one who has the key, for example, and you die, and nobody else knows about it, then those Bitcoins are essentially off the market forever. So that 21 million Bitcoins, will, over time, decrease. This means that there will be an inflationary pressure on the currency at all times, and we may even reach a stage where not enough Bitcoins are available to adequately trade (in very long term future I imagine)
Even in the best of times it can take at least ten minutes to confirm a transaction because the system creates a new block of transactions only once every ten minutes or so. And the more subsequent blocks that are validated, the more statistically likely it is that an earlier block is valid. For a large transaction it's recommended to wait for at least six more blocks. So the actual transaction time is about an hour.
But the recent huge increase in transactions is overwhelming the network, and the miners can't keep up. In order for the miners to even bother to put your transaction into the next block, you have to bribe them with a transaction fee. I've seen it reported that it costs $20 to spend $100 lately, and the settlement times can be several hours or more. Bitcoin has totally failed as a currency. Its enthusiasts don't care, they say it's not a currency, it's a "store of value." I don't believe that either but that's what some people think.
Quoting ssu
I'll take the other side of that proposition. What's going on is deep, important, and philosophical.
When Descartes receives a letter from his friend, he might well ask: How do I know an evil demon working at the French post office hasn't altered the contents of this letter?
Today we have an answer: The contents of the letter are cryptographically secure.
There is a revolution in human affairs about to take place. The revolution is about trust. End-to-end trust between and among strangers on the Internet, without the need for intermediaries.
Crypto is about certainty. About what is, and how we can know what is. Crypto-ontology and crypto-epistemology if you like. I hope some of the younger philosophers are looking at this.
As an example of what I mean, there are proposals for prediction markets on the blockchain. That's like a gambling parlor on political events. Will Trump make it through his first term? Will Brexit actually happen? There are prediction markets right now run by companies, but on the blockchain you don't need a company, just a decentralized blockchain network.
Now, how does a prediction market pay off? That is, how do they know for sure whether Trump is still president or whether Brexit has happened? In a centralized system, the people running the betting pool determine what's true. On a blockchain-based prediction market, the users say what's true and the system determines crypto-consensus. The blockchain determines truth.
There's a crytpo already doing this, called Auger. Great name for this concept. https://en.wikipedia.org/wiki/Augur
This is why I say the blockchain revolution is philosophically deep. Social revolutions are always the subject of philosophy. And this particular revolution is about trust and disintermediation. That's philosophy.
What do you think?
Quoting ssu
Of course, but look past bitcoin.
Bitcoin's a proof-of-concept engineering experiment that's taught us a lot about how to build these kinds of networks. It's a tragedy that the public is allowed to bet on early-stage engineering experiments. That introduces distortion and inefficiency into the design process. If bitcoin was a project in an engineering lab it would be shut down and the designers would get to work on the next iteration of the idea.
But that's how the world is so we have to accept it.
The price rise of bitcoin makes no rational sense. But it's not tulips, because tulips were not the leading edge of a huge social revolution. Bitcoin is. That's my belief. Of course if one doesn't believe blockchain is going to profoundly change the world, then my thesis makes no sense and bitcoin is tulips. But I don't think so. Bitcoin stands in for the revolution to come. The public senses that. Or they're a bunch of greedy fools. Bit of both.
Quoting Benkei
Yes and it's worth noting that the businesses that claim to "accept bitcoin" actually don't. Their customers want to pay in bitcoin so businesses accept bitcoin as a service. They immediately exchange bitcoin for the local legal currency and write off the transaction costs. Nobody actually accepts bitcoin for anything. As a currency the idea has already failed. But my thesis is that the failure of bitcoin is irrelevant to the coming blockchain revolution. Am I drinking too much blockchain Kool-Aid? I don't think so. Global trust without intermediaries. This is going to be big.
Quoting charleton
Interesting point of view.
If you buy a house and a few years later it's worth more money because the central bank blew up a housing bubble, and you happen to sell your house for a profit, do you give the money to charity or what? It's the same house, four walls and a roof. Provides shelter for a family. Its value hasn't changed at all. Is it immoral to pocket your profit?
How about stocks, bonds, jewelry? Are they morally compromised too? If you see the Fed about to print money so you buy stocks and the price of the stocks goes up, is that a problem? I am not clear about your moral orientation in asking this question but I'm curious to know. It's not like dealing weapons or dope. You're just buying low and selling high by paying attention to the world. Is that immoral?
Even in the case of a speculative frenzy you are definitely "working for it." If you buy in you are making a judgment about mass psychology. You base your judgment on following the news, reading history, thinking, studying. If you are right AND you are smart enough to get out in time, you make money. How is that different than making money by being good at your day job?
These are good questions, I'd agree! Not sure I know the answers myself. Marx predicted the conditions of late-stage capitalism and he was right about a lot of things But Marxist governments have been a disaster for the people forced to live under them.
Quoting Maw
Yes that was the techno-libertarian reason for bitcoin, but it's the wrong reason! The crypto revolution is about much more. Cryptos-as-money can fail yet cryptos can still transform society. The crypto revolution is not primarily about money. IMO of course. The banks might still control the money. They are thousand-year incumbents after all, not that easy to dethrone. The disintermediation revolution is still huge. It's not necessarily about destroying the bankers. They're doing a pretty good job of that by themselves.
Yeah the market-based transaction fee was thought out to be there even when mining stops actually producing new bitcoins, so that the miners still do the work.
Quoting fishfry
I agree with what you're saying except that I think much the opposite from you. Crypto ELIMINATES the need for trust, meaning people no longer need to trust each other to do transactions together. This will make getting out of line more difficult than ever, especially if we ever move over completely to crypto. You may be able to trick and get around people, but you cannot get around machines.
So this is moving into the direction of a distopian society where the individual is at the mercy of society - meaning stronger social structures than ever before. So I am much opposed to all this, but I still don't think the technology can be stopped.
Quoting charleton
Yes, it's a good thing. If I don't take it out of there, others will. Then they spend it on useless crap, at least I'm a good money manager and will put it to good work. Even Engels loved playing the stock market and he was a Communist. I too am much against speculation, but while it's legal, I will do everything possible to profit from it, why not?
Quoting fishfry
Agreed.
I think some cryptos are already doing this. There's lots of variation among them. The interesting thing is in trying to predict the big winners. I think Ethereum might be one, I think it's definitely an improvement over Bitcoin, though Bitcoin does have better brand recognition atm.
Yes, you have located the source of all inequality and immorality in the economic system, well done.
It is more healthy for our economy to incentivise work and wealth creation. Cryto-currency is the apogee of immorality in this respect. It does not create wealth, it is a mechanism for theft of wealth.
It's you who is lacking in the fundamentals of economics money. But good that you admit Maw making the obsevation that such volatility isn't good for any currency. Of course I made the observation too...
Far more better to talk about just a new payment system, not currency.
I've just once in my life used a "hedge" at the market. In early 2008 I invested in a Bear-fund, meaning that it went higher if the markets went lower, but even if it paid then and performed well for, the timing even then was pretty hair raising... some time later I would have made serious losses. Betting on when a bubble bursts is a dumb gamble.
Yes I agree with your dystopian vision. This reminds me of the Chinese social credit system. Just like you have a credit score, Chinese citizens will have a social score. Everything you ever did, what your neighbors say about you and so forth. Pretty scary. The blockchain is the perfect technology for such a system. It wouldn't even have to be imposed by the government. We'll impose it on ourselves.
The future will either be a techno-libertarian paradise or the cryptofascist prison of our nightmares. The eternal struggle between good and evil ... on the blockchain. I think you're right. It's dystopian and it's more likely to happen than not.
So it was during the IT bubble too. With all tech bubbles ever, have they been information technology or car making in the early 1900's, the underlying technology has been important. After all, aren't we here strangers discussing topics all because of the IT revolution? Yet the hype and the investment frenzy has created quite similar patterns and bubbles.
Quoting fishfry
How do the people running a betting pool determine what's true? The only thing is that if they profess at least some normal capability in their profession, they will make money all the time.
I think already in the 1970's cryptography went quite a lot ahead with public key-enscription ( DiffieâHellman key exchange) and asymmetric key algorithms. But cryptography isn't my strongest points. But have seen bubbles and crashes since I started investing from 1990 onwards. Remember the time when the P/E ratios of over 100 in the Japanese stock market were told to be so basically because of Japanese culture, so bubbles aren't anything new.
The technology might be important ...for some things just as the automobile has been for us, but the speculative bubble is a different thing. Far more about social behaviour and the way bubbles are created in the financial system than anything about the object of the hype.
And Augur?
Well, will likely just show how important what we call "Black Swans" are in forcasting. And here the irony is that when some open and decentralized forcasting system (that minimizes the risk of an individual forecaster getting it wrong) still gets something totally wrong or misses it, it will claim the event to be a Black Swan.
The truth is that "Black Swans" or fat tails or whatever you call them are integral part of basically the underlying logic connected to forcasting.
Right, until you show how this is the case, it's merely an empty assertion. And for beginners, I have no clue what the hell you're talking about with "economics money" :s . I showed how you were misunderstanding Bitcoin and the crypto technology when I said you don't know what you're talking about. So please, put some effort, otherwise it's a waste of time for both of us.
Quoting ssu
"more better" doesn't exist in the English language.
Quoting ssu
The truth is that this observation in this thread originated neither with you nor with Maw, I just picked Maw since he happened to be the last one who clearly made it, and I can't remember who made it earlier. With regards to yourself, no, I didn't see this observation clearly made in your posts, I saw that you were more concerned about the high price per unit of Bitcoin, unaware that Bitcoin can trade in smaller units than 1 BTC. You would have been right if Bitcoin couldn't trade at lower values, but that's not the case - you're just misunderstanding it, and you don't know enough about it.
Quoting ssu
Why? All you have to know is that it will burst - these aren't options that you're buying where if your timing is slightly off, you're screwed. So you short it, and then you wait. So long as you were right that it is a bubble, then it will eventually pay off, regardless of your timing.
Quoting ssu
This, by itself, isn't a hedge. It's a bet.
Let's start with things like the functions of money and why it's important for any government to have control of that money as legal tender. Being a "payment system" is just one function of money.
Quoting Agustino
Look.
If you have a currency, you don't start it with one unit being in the tens of thousands, not even if you can divide it into a billion or whatever. The high price just tells how hugely the "currency" has gone up in price. The only reason a currency basically would rise up like that is when there's hyperinflation.
Quoting Agustino
What you have said, quite puzzlingly, is:
[quote="Agustino]I don't see anything that nations can do to stop crypto. To begin with, politicians are too dumb to even understand what is really happening.
I think it's a clear fact already that digital currency of the crypto kind is superior to our paper fiat currency though. It does make all transactions easier and significantly cheaper. So perhaps in the future, we'll be approaching a situation where everything is exchanged in crypto, not in fiat currencies - so this exchange of Bitcoin/USD becomes irrelevant.[/quote]
But then you state...
Well, what I have had tried to explain is that a) it's a bubble and b) the technology is useful and likely will be used, just like tech that was underlying the IT-bubble. Where we disagree is in the ability of governments to control a cryptocurrency and in the role of currencies that are legal tender have.
To begin with, I think we have entirely different visions of what "controlling" crypto means. To you, it seems to me at least, that controlling crypto means following all transactions and knowing who made them, and what value was exchanged through crypto - such that governments can effectively tax people, keep track of who has what, and prevent tax evasion and money laundering.
To me controlling crypto doesn't mean that. It means being able to stop the propagation of crypto through society - to prevent it from becoming the accepted payment system (as you call it). In addition, it means that government is able to control what the crypto permits and what it doesn't permit once it does become the accepted payment system.
Quoting ssu
I think I've outlined the last part (why it's important) above, when I discussed tax evasion, money laundering, and the like. As for the functions of money, the only functions I see when quickly thinking about it is regulating inflation, and having a recognised exchange/payment system.
Yes, exactly! [s]There was a video that I saw awhile ago, which I can't find :([/s] . Finally I found it... @StreetlightX watch this video, it's the POMO stuff that you love. So take this as a Christmas gift >:O
So crypto would be a way to create a SYSTEM which is no longer controllable by any one person or group once created - rather it controls what is possible or impossible for people. That's what I mean when I say that it cannot be controlled by the government.
This is quite a typical response from gusty. I'd not let him bait you!
Where did I misquote?
While bitcoin is not by any means a traditional corporate entity with earning statements and a board of directors, it could be seen as an equity in its own ecosystem whose value derives from the size and health of that community. What is clear is that if bitcoin is equity, it represents a radically different corporate form than has ever created before. It appears to be one of the first examples of what sociologist and organizational development specialist Frederic Laloux describes as a "teal organization": an organization with fluid hierarchy that is adaptive and rules-based where authority is decentralized and distributed among members. That such an organizational form would arise around a distributed ledger is perhaps not surprising but it does, nevertheless, represent a radical new experiment in human organization.
(My emphasis).
https://seekingalpha.com/article/4133095-bitcoin-birth-worlds-first-teal-equity
Laloux's book is called Reinventing Organizations: A Guide for Creating Organizations Inspired by the Next Stage of Human Consciousness.
Not tulips. The dawn of a revolution in human affairs that goes far, far beyond the daily price action of bitcoin.
It's a buyer's market... Or maybe wait and see.
Not true. The Tunisian dinar has 0.001 units. Other countries had such units until relatively recently.
Quoting Agustino
I'd go on the limb and say it's bull trap time...
Enjoy one of the really classic bubbles of our time. Right before our eyes.
.com
Y2K
Housing
Crypto
Student Loan
Medical
Already in 2013 was assumed that the creator(s) of Bitcoin had roughly about 1 million Bitcoin wealth. (See article The Well Deserved Fortune of Satoshi Nakamoto, Bitcoin creator, Visionary and Genius) Several articles I've read have assumed this to be true. Ironically this makes the "currency" one of the most concentrated in the World with a central bank-type player which can intervene in the market and move it how it wants.
But what is totally obvious that now the currency has been on the hype-phase, that cannot be denied.
The futures are cash-settled. No bitcoins trade hands in the futures market. The futures are simply bets on the price of bitcoin.
It's perfectly normal futures are bought and margin is settled in USD but at the end of the contract there's a promise to deliver bitcoin. Just like any other commodities future.
"Bitcoin futures are financially-settled and therefore do not involve the exchange of bitcoin."
http://www.cmegroup.com/education/cme-bitcoin-futures-frequently-asked-questions.html
See paragraph #8. I do take your point about normal futures, soybeans and such, but evidently the CME and CBOE bitcoin futures don't work that way.
Quoting Hanover
Coming soon to a bankrupt empire near you.
You're right. #8 could still be interpreted as just related to the trading of futures but paragraph 9 is even clearer on this in the settlement box.
Better place this question in a trading forum, wouldn't you think more professional advises or lures there?
Woot Woot!
One thing for sure, these people are unimaginably rich in real money, not just BC.
Millions of people will lose lots of money and the people who manage BC are going to be the ones who rake it in.
$81.32, actually. ÂŁ60 in real money.
Have you converted your holdings back into cash and successfully moved it back into your bank account? You might be surprised at how difficult that is. Now imagine everyone wanting to get out at once.
Also, what were your total fees? To get in with cash, buy some btc. move it to a wallet, move it back from the wallet to an exchange, sell it, and move the cash back to your bank account? Probably 20% or more.
And no, I haven't sold yet. No point for just ÂŁ60. I'm going to hold long term and see what happens.
Yes that's pretty much what's going to happen. The current phase is going to crash terribly and a lot of people are going to get hurt. It's not just the cryptos themselves, but the exchanges where you trade fiat for cryptos. There are a lot of shady and undercapitalized companies out there handling people's money. There's no regulation. When the crash comes, a lot of people are never going to get their money out.
This will be interesting to watch. I do believe blockchain technology will change the world in ways we can't even begin to imagine. But the current mania is going to end badly.
I think it's opening door for future trading system. Good idea. Paper money buys nothing. I do welcome that, but couldn't risk yet. lol
Why Ripple over XRP?
Quoting Ian
>:O
I'm trying to communicate that you ought to be honest with me, and not try to pull my leg.
@Ian How many different exchanges are you on? It seems that for each coin, you have to sign up on some obscure exchange that wants your ID and personal info. How do you manage the mechanics and also the security of dealing with many exchanges? Or did you find one exchange that has a lot of coins?
It's too hard to see but it is up to $1070.00 this morning. (Y)
I wanted to take out my original investment but NicK is saying let it ride...
Hell yeah there is that! I am so excited about this new form of currency, a new form of anything to bring our world closer and every one's value is the same.
NicK was telling me about the Myans using sticks with notches in it for currency so how far out could block chain currency be?
Ps. I realize that this will come as a shock but I really do wish we as a world could all be one happy family~ sheps said I have a Utopian view on life and a romantic view on fire arms. Where is that sheps anyway?
I thought one has profits only when one cashes out, sells the investment and makes in this case capital gains.
Seems like speculation has gotten to PF members.
Telling.
I still thinks this is a bubble, but enjoy the ride!!!
Is it any different to owning shares (or really anything that isn't cold hard cash)?
From a trading perspective not so much. An obvious difference though is that share prices try to reflect the value of the company where it's usually clear that labour adds value. It is not clear what the value 1 Bitcoin = 12.000 USD reflects. A cryptocurrency price point appears to me as a pure supply and demand equillibrium without any relationship to economic activity at this point. Even for currency exchange rates, you'll see the underlying real economy of the different countries play an important role in setting those rates next to supply and demand.
What I meant is that if owning X amount of some cryptocurrency which can be sold for ÂŁ100 doesn't count as having ÂŁ100, then surely owning X amount of some company's shares (or even something like land) which can be sold for ÂŁ100 doesn't count as having ÂŁ100. I can't use either to pay my rent or buy food (which I assume is the sort of thing @ssu was referring to).
Yes, I meant to agree with that with my first sentence.
Quoting Michael
ssu is correct. You cannot count as profit transactions which are not yet complete. Even as a business, I may have a $1 million contract, that doesn't count as revenue (and profit) until the dough actually is transferred into my bank account.
The reason why having a 50% increase in BTC or the like don't count as profits is because the transaction isn't finished - you haven't cashed out. In fact, you may be unable to cash out for whatever reason - exchange doesn't work, your Bitcoins get stolen, there's not enough liquidity to cash out your entire position, etc. So, for example, the Bitcoin founder has 1 million Bitcoins. Their value is around 14 billion USD. You reckon he should count that as profit? Of course not, because he cannot cash out such a large position - there's not enough volume to support it.
So I can't count it as profit, but I can count it towards my wealth? That's just splitting hairs. I was worth ÂŁX before I bought, I'm now worth ÂŁX + ÂŁY.
Yes, assets you own do count towards your net worth.
Quoting Michael
Yes, your net worth is now X+Y. But that doesn't mean you've made a profit. Just that for one reason or another, the market value of the assets you own has increased.
Also, please don't forget that net worth is not the same as wealth. Someone can have a very high net worth and still be poor. Financial liquidity (and cash flow) are a much more important measure of wealth. Say you have no cash, but you own a house worth $30 million. You can't buy that Bugatti Veyron since you have no cash. Getting a loan of that size, or selling the house, will take quite a bit of time (probably more than 1 month) - so can you say that you are wealthy if you can't act as soon as you want? You won't even be able to buy yourself food with no cash flow or liquidity.
Companies are expected to mark-to-market any financial instruments they hold. You can only do that if the market is sufficiently liquid, otherwise you'd mark-to-model. You have an unrealised profit. Once you sell, it becomes realised profit.
It's an important difference because if I want to value a company, I'm not interested in the cost price of financial instruments (e.g. what the company paid for it) so it's important to take into account the actual market value. At the same time, it is also clear that unrealised profit is "locked up"; it can't be paid out as dividends or used to invest or buy something else.
Quoting Benkei
Actually, owning shares is very different.
You are then an owner of a company. Companies usually pay dividend, hence typically shares provide an income stream, a return to investment. To own cash/currency/gold etc. for the intention to make a profit (by selling them later at a higher price) is simply speculation.
Yep. And individuals don't have to mark-to-market their wealth. Corporations can have this sometimes ugly feature to do, that is that if their stock holdings take a dive, they have to report a loss (or vice versa) even if they don't sell.
This feature was one important factor in the financial crisis. Once the mark-to-market accounting standards were eased, the stock market bounced back.
You're correct, which is why I said from "a trading perspective" as it seemed that was what Michael was talking about.
Why?
Well,
When there's an stock market crash, the collapse of stock prices has a real effect on the economic situation of companies even if they otherwise wouldn't have to sell their stock.
The effects of Mark-to-Market accounting is explained from 13min 20s forward.
Now I'm not totally agreeing on what with the speaker, but he does make a good point.
That was in the old days of sound monetary policy. As David Stockman notes, that was the time of President Dwight Eisenhower and Fed Chairman William McChesney Martin.
Today, stock prices represent buybacks funded by cheap interest rates driven by massive QE by the world's central banks.
That's one of the arguments made by crypto enthusiasts. That it's the stock market that's the real bubble backed by nothing but speculation. You have to admit they have a point.
Quoting ArguingWAristotleTiff
That GDAX board sure is addictive! I don't trust the exchanges with serious money. But I have a little play money in there and the past few nights I spend way to much time watching the green and orange candlesticks fight it out on the Litecoin chart on GDAX.
You know, if we could see all this from twenty years in the future, a lot of things would be completely obvious. And the clues were here all the time. But in the present we can't see what's true and what will last.
Perhaps this is the start of a philosophical view. What things last? What things pass? If we think from that point of view, can we figure out how to intelligently deploy our assets in the crypto revolution to come?
I think the current wild west environment is fun to watch but nothing I'd recommend that anyone spend any serious money in. One week it's bitcoin then it's bcash then it's ripple and now it's ethereum. If anyone could figure out what the hysterical dumb crowd is going to do ahead of everyone else, you could surf that wave and make money.
But who can predict the actions of the raving crowd? "I can calculate the motions of the heavens, but not the madness of people." -- Isaac Newton, after losing his fortune in the South Sea Island bubble of 1720.
This is true up to a point and less true for stocks than bonds. Investors look for yield, even at inflated stock prices due to QE. company value and expected earnings is still used to calculate yield.
I've watched this and it really isn't informative. His explanation of mark-to-market is a bit of a misrepresentation. He doesn't really offer a solution or talk about the alternative and it tends towards a single cause fallacy, while at the same time he already highlights several issues that are co-causes. When talking about these sort of things, I think we should be talking about contributing factors and not causes.
First, excess cash is a contributing factor and QE and low interest rates created this. I've personally (as was the president of the Dutch central bank) been an opponent of QE. I'm also an opponent of price stability monetary policy (it doesn't reduce crises as it claimed it would) so interest rate driven policies all reek to me.
Second, modern corporate capitalism, especially in the US, is all about short term gain and after the repeal of the glass-steagall act they started pursuing short term profits with money that should've stayed off limits (e.g. deposits). Simply put, you shouldn't gamble with other people's savings. In a way, this created a larger pool of cash as well - contributing factor.
Third, complexity. Bankers didn't know what they were buying and selling any more. Once you don't understand the underlying economics of the product any more, the product is unhinged from the real economy and it becomes a pure supply-demand equillibrium based on sentiment.
Fourth, the alternative seems to be historical cost accounting. But permanent changes in market value of assets need to be accounted for with historical cost accounting as well (impairments and write downs for instance). So it doesn't really avoid the problem, it just realises a bit slower. So mark-to-market is faster but I do not think it's realistic to think 2008 would've enfolded very differently if we were doing historical cost accounting. (On a side note; I'm personally a proponent of mark-to-market modelling as it's relatively easy to check the veracity of accounts and their development and the relative performance of a particular company compared to others).
Fifth, in 2008 only about 31% of bank assets were marked-to-market and these were assets held for trading. Assets held to maturity are a second category and are accounted for at historical cost and not marked-to-market. Most loans and many bonds are and were held to maturity. The third category has assets available for sale and they are marked-to-market as well but with an important difference. Any unrealised profits or losses are accounted for in the OCI account (other comprehensive income) and unrealised losses do not reduce the bank's income or regulatory capital requirements (exemption for held-for-sale-loans but that's a small percentage).
Sixth, illiquid assets need not be marked-to-market, that's only for FASB level 1 liquidity. Level 3 is mark-to-model. FASB released guidance in 2008 on this and stressed that companies did not have to use prices from forced or distressed sales to value illiquid assets.
In other words, I think Brian Wesbury doesn't really know what he's talking about and is probably a banking shill.
So addictive! When I go to bed at night it is usually just about to hit it's high for the 12 hr period and then when I wake up it drops down and levels out to new base trading price for that day.
As far as what is to come? Good Heavens. My eldest Indian has almost .5 of an Ethereum coin. He bought in when it's high was $420.00 for the first .25 of the coin and then bought the second .25 coin at $1,200.00 (ouch!). My youngest Indian is back at college mining away with 2 towers in the room, sending 17 hr print jobs to their 2 3D printers in the two person dorm room, in addition to the lap tops they use for class.
NicK woke up with an awesome idea of using the block chain application, for government voting that could be in the form of an app and bounced it off my youngest and he said "yep, it's one of the sample applications of block chain's possibility". Bless NicK's heart but I think this is for our off springs generation to create, explore, implement, support and standardize. I was inspired to hear my youngest Indian say that had he invested X$ at the time he bought in at $460.00, he would likely be able to pay his annual tuition at school, at the end of this semester. I keep reigning them in reminding them both, along with myself, that never invest what you cannot loose.
It's really hard though when I see it go up to $1,300.00 and not SELL at least the profit margin on my original $960.00 buy in price. Do you have a digital wallet?
Russian Government Advances Plan to Test Blockchain Technology-Based Local Voting Systems.
For the plunge to stop I think the changing of accounting rules had an effect. It surely is one of the factors. But there are naturally others, of course, ...that the World didn't end, that the international monetary system didn't collapse (just came close to collapsing) and that when prices went low enough, the bubble had burst and it was time to go in the other direction.
Umm...created what exactly? Speculative bubbles traditionally happen because of loose monetary markets.
Has it been something else, truly? Perhaps in the age when owners were the innovators themselves who started the companies.
A lot of markets have been "unhinged" from reality for a long time.
Banks are quite different: car manufacturers can compete with a lot things, banks with just the interest rate. This makes banking all about scale. And notice that banking is an industry where sitting idly on the bench and not going along with others into a bubble frenzy isn't a winning strategy: likely you will be bought by a competitor or likely the CEO will be fired as you aren't giving similar profits as your competitors are. You aren't performing well enough.
I've seen this with my own eyes during the IT-bubble. I remember a finance conference here in Finland in 1999 (or so) where a mutual fund manager that had not gone into the IT craze, came on the stage and told how he still believed that traditional industry stocks was the place to be and had to try to tell why he wasn't investing in Information Technology. Well, he was nearly laughed out of the stage. Few years later the mutual fund was the top performer and stayed there for a long time.
You can be right, but then there is the timing just when are you going to be right.
And anyway, I still believe this is going to a classic bubble with cryptocurrencies. No matter how useful and important they will be later. Events in South Korea aren't at all normal. Perhaps the correct adjective would be tulip-like or "tulipy"?
Of course I can be wrong...
That had a lot to do with the perception at the top, who apparently don't know the ins-and-outs of accounting rules. The change was unnecessary and the law was window dressing for a problem that didn't exist but in the minds of banking CEOs. I recall some guy from Oxford or Harvard publishing a lot about this and how they were solving something that didn't require a solution. So I agree the change had an effect but for the wrong reasons. It wasn't an actual problem as the FASB repeatedly communicated this themselves. To then have a TED talk suggest how terrible fair value accounting is, is just something I have to discount for the reasons I enumerated above.
Quoting ssu
Not necessarily but that's the most easily comparable feature. For instance, I selected the ability to do high prepayments on my mortgage - up to 20% of the loan without a penalty fee. Most mortgages have 10% at most. I can also change banks if I sell my house (e.g. pay off the entire loan and get a new one with a new house with a different bank). That has become standard but when I closed my mortgage it wasn't. So if you're interested and have time to make the comparisons, there are good reasons to ignore interest to a point (those two options cost me 20 bps).
Quoting ssu
Probably.
So far, it's about as boringly regular and predictable a bubble there could be. The chart I posted earlier (when we were around "delusion / new paradigm!") :
The actual price graph now (1 yr period):
Notice any similarities? :-|
Probably the same if you look at the graph in the first year of its introduction, too.
As I've stated earlier, this thread itself is in my view a marker that there is huge "bubble-size" interest in the topic as this is a philosophy forum. Name how many other threads there have been on investing and currency speculation in something here. It's simply rare (although I remember a discussion on currencies earlier here). I noticed the similar thing on another site where the topic of interest is history and politics also there a thread went up on bitcoin/cryptocurrencies. Members of that site also don't talk about investments/investing either. It simply cannot be argued that people wouldn't have heard of bitcoin and the events in South Korea obviously show that this is the mania phase. When you get ads about trading Bitcoin on your smartphone (when playing some stupid game), this surely isn't the time when the public is totally unaware of the investment.
So is there any bedrock to state when something is "too" expensive?
Things like stocks or real estate do have some indicators when prices are "too" high or low. With stocks I would be allways sceptical about P/E ratios of more than 100. That means that owning the stock it will take 100 years to your money back by dividend. Historical you seldom see these kinds of P/E ratios (but you actually do see them today). Yet P/E ratios of more than 100 can be very persistent, just look at Amazon. With real estate prices a marker for me is when a) prices go rapidly up without there being inflation and b) prices start approaching similar levels as the World's most expensive real estate, those of Manhattan, center of Paris etc. Some backwater place like Helsinki simply cannot be as expensive as 5th Avenue in Manhattan.
Cryptocurrency values is harder. To put it diplomatically, the huge upswings and downswings tell that pricing them is in it's infancy. Actual currencies are priced totally differently and there a huge rise in the price compared to other currencies is a terrible thing that countries want to avoid at all costs. For example the Swiss franc has experiences of this nasty event when foreigners have bought into the small countries currency as to get into a "safe haven".
Just follow the bubble curve. Bitcoin is pixie dust. It's worth whatever people expect it to be worth. Personally, I expect it to fatefully follow the burst trajectory as per above and fall below 3,000USD within a short period.
I suppose that can explain something (a lot?) about the underlying fundamental value but on the face of it, it feels to me it discounts the fact that ultimately bitcoin is intended as a means of exchange too much. If I take the paper to the extreme and end up with only hodlers, you won't have any transactions, no price information and therefore the value cannot be determined.
I see some people making consistently accurate predictions on price movements for bitcoin - both the rises and falls. That indicates there's more to it than simple market sentiment and herd mentality. I'm curious what.
I haven't seen anything more accurate than simply tracing the bubble curve above, which I've been using as a predictive mechanism since the price took off in December. If there are micro-movements being reliably predicted then that does suggest something else at play. I've seen no evidence of that though. What people are you referring to?
I've said 6-7K sometime before Christmas, but purely on a technical, non-fundamental kind of analysis. My guess would be these guys also use a technical analysis, I doubt they're looking into fundamentals for something as volatile as BTC.
The problem with it though, is that the exchanges suck so much that it's virtually untradable.
Nouriel Roubini, who predicted the 2007 Financial Recession, is also expecting bitcoin to drop to $5K shortly.
Also note that he ultimately thinks the thing will fail. Not necessarily cryptocurrencies but bitcoin itself.
Of course, with these things you can be wrong, but...
Enough said!
I thought this was funny.
ECB on their own TIPS system
Particularly:
[quote=Mersch]TIPS is 10 seconds, 0.2 cents. DLT transactions are at best 30 euros and take at least one hour[/quote]
Uhmmm... Ripple is 4 seconds, 0.16415 eurocents (including fees).
I waited with BitStamp 2 months >:O - in fact, even after contacting support 2 times, they still haven't approved me, so I just closed the damn account.
Yeah, I thought the same. Also, gives a lot of options for trading. Bitstamp was also one of the few reputable ones that accepted people from non-Western countries. But it's obvious that they will discriminate and approve Western accounts before looking at others, since mine wasn't approved for close to 2 months, even after sending them all documents and contacting support twice.
Yeah, most likely. I also uploaded driver's license, but I made sure I scanned it at 600dpi. That they run a discriminatory practice isn't a problem to me, just that they ought to be upfront about it - we only accept customers from these countries.
Here's the thing. They don't have enough employees to check everyone, they don't want to hire more, and thus they have limited resources. They focus resources on most valuable customers (statistically). Probably, statistics indicate that customers from certain countries spend more than others - they will get those approved first.
My dad decided to join me with the experiment. We'll have 200 EUR to burn, which is enough to test the system, trade costs, liquidity, settlement times etc. etc.
Also, anybody else read about the Tether token and probable swindle involved?
Hey, if you start up something, I'd love to invest in whatever you are able to create.
I haven't been approved by Gemini for some reason. Taking a long time.
I asked about Tether and the response was it is just another Token regardless of what they say about the conversion time.
I meant I'm still not set up with Bitstamp unfortunately. The thing I'm trying to set up myself might utilise blockchain technology (but not necessarily) and you can buy shares if it ever comes that far. In fact, I can't wait until I can finally discuss the idea openly as it's pretty awesome in its simplicity (but very difficult technical implementation).
It seems as though there is a shortage of gaming cards on the market necessary to do other things than mine for crypto currency! My son in college is setting up a Computer Lab for VR and they are waiting on Dell to build their VR systems but are waiting on.....wait for it.... gaming cards.
Go figure
Bitcoin less than half what it was a year ago. I think the craze time (17000$ or so) was a canary in the coal mine moment, even if the crash hasn't been abrupt in the general economy.
Quoting Benkei
How did it go, Benkei?
That sounds like you haven't much time to play the piano either (if I remember correctly, you had a piano).
Supposedly a local (to me) pizza place accepts bitcoin as payment . . . As long as you're willing to pay almost $12 for a slice.
Or that scams, kidnappings or other illegal activities use cryptocurrencies. It's just like with the 500 euro note: seldom accepted anywhere and hugely popular with criminals. Luckily inflation hasn't made this note to be common for ordinary payments.
Anyway, it starts to difficult to use cash nowdays for anything other than minor transactions.
Cryptocurrency is going (imo) to change the world.
Big business, big banks and money manipulating governments are going to fall.
Cryptocurrency will empower the individual like never before. It will change mankind like electricity, internet or agriculture.
https://youtu.be/l1si5ZWLgy0
Still in its infant stage, but you wait and see.
Soon banks will be like newsagents. Still around but nobody cares.
Who's in and where do you think it's going?
I'm in, money wise, and almost an ideological convert, I think.
After reading about reserve currency cycles (& with corresponding concern about the sheer amount of US currency being printed since 2008, but especially in the past year) converted a sizable percentage of my modest savings to bitcoin at the end of last month. Crypto's notoriously volatile and I know not to make too much of a sharp valuation-shift in a short time-window but the rapid appreciation of the investment was still dizzying enough for someone who has never made money on anything to lead me, effervescent, to try to talk some old friends into getting some. Basically I just wanted to share the excitement. One friend I talked to said he was interested, but had never heard it explained in a way that he was satisfied he understood it enough to invest it in. And I realized I couldn't explain it well enough, because I don't understand it well enough either. I've spent the past couple weeks trying to learn about it and make sense of (1) its structure and, just as importantly, (2) why that structure is meaningful. I logged on tonight hoping there would be a thread open to talk about this stuff.
Here's a challenge: if you had a 15 minute pitch to explain what bitcoin is and why that makes it valuable, what would you say? (If pressed, I will give my scribbly sketch first, but I am curious to hear someone else's take and build off of - & with - it)
Great minds. :cool: I jumped in in July. I don't know if I'd want to write 15 minutes worth of spiel about Bitcoin, but there's a couple of important things about it. First of all, it's based on an important technology that has a multitude of use cases, i.e. the blockchain. Secondly, it's a currency that can be transmitted securely, quickly, cheaply, and globally. Thirdly, it's a store of value, a digital gold, and a great potential hedge against inflation. Fourthly, it's the granddaddy of a whole tribe of so-called altcoins, including a world computer called Ethereum on which the nascent field of decentralized finance is largely based through the use of smart (i.e. self-executing) contracts built on its protocol that remove the need for financial middlemen, such as banks. This in itself is huge. Loads more to say, but for now...
(BTW if you want some resources or advice, PM me as I'm a little ahead of you and have been diving right in.)
Agree very much with all of what you've said (& am going to take you up on that PM offer shortly, I need some help with wallets)
I do think this is one of the rare cases where philosophy dovetails quite nicely with worldly concerns & wanted to put out there some of the things I've been scribbling on notepads during my downtime. I think you're wise not to spiel, but I can't help myself:
Alongside the technical bitcoin stuff, I want to understand what money is and why it has value. I feel like the core thing is:
I Money has value because people will accept it as payment
&
II People will accept it as payment, because they know other people will accept it as payment in turn.
Which leads to: why would people think other people would accept it?
I feel like the answer to that is
I It's scarce
&
II (building of off I) it's hard to simulate (fake)
So: metal is a prime early candidate. It's rare. It's near-impossible to fake. & those conditions hold wherever you go. (Plus, to dust off the musty marxist terminology, rare metals had little use-value compared to other bearers of value) Of course, if you go ahead and colonize argentina & pump metal into the market, that can throw a wrench in things.
The obvious problem is how cumbersome it is. Plus, how easily you can be dispossesed if you're tromping around a world as violent as the metal-currency world was.
Enter Banknotes, redeemable for a certain portion of gold (from what I understand they used to be redeemable only if you were the original depositor, only later became redeemable to whoever holds the notes). The circulation of gold ('s value), without actually circulating gold, allows for dramatic changes in how credit works & we're off to the races.
With the introduction of redeemable notes, you're also introducing trust in institutions. Accepting a banknote means you have faith that there is a stable institution that you can go to that will give you gold for your paper.. You're implicitly showing faith that there are certain institutions that will remain stable within the flux of history.
Trust in institutional stability gets its foot-in-the-door there. As it establishes itself, it becomes central in the shift to fiat. The value of fiat currency is entirely tied to faith in the state & because of that is totally linked to how that state fares on the world-stage. Which is ok early on in the life-cycle of a reserve currency; less palatable when interest rates drop to zero and there is no way to pump up the economy besides redistribution (which won't happen without bloodshed) or mass-printing of paper money. In the broad scope of things, holding fiat feels kind of like betting on a state-combatant in a historical struggle. That's fine when your lifespan is snuggly nestled in an era where your chosen combatant is at his prime; less so when he's wheezing and rambling about the good old days and trying to sell you DVDs of his best fights.
Ok, that's my scribbles for 'Context for Bitcoin's Significance'. To anyone who's read this far: thank you & I'm sorry.
Hey, congrats on your gains. Sentiment has been very bullish lately, so hopefully you got in at a good time. Personally, I've been "in" since late 2016 and I can assure you that the volatility can be absolutely face-ripping. In March we saw roughly a 50% drop in a day. If you hold onto your investment for over a year there's tax advantages to that, i.e. you'll get to keep more of your profit.
I actually didn't buy my first bitcoin with the intention of holding onto it or treating it as an investment. Bitcoin was simply the best way to move money around the poker sites given all the onerous bank restrictions on sending money to them. It's definitely the favored currency on those sites as well now: Censorship-resistant, decentralized, borderless. When you hold your own bitcoin in your own wallet that bitcoin is truly yours - it's not being held onto by a bank or a company that gives you an IOU. It's yours and no one else can access it, not even governments. What else falls into that category? You can send it anywhere you want at any time you want and no one can censor or reverse it. It's truly unique.
This thread is back! Again people who basically are into Philosophy have become interested in talking about Bitcoin/Cryptocurrencies. Last discussions were 2-3 years ago. Interesting actually, that this is the only investment that has been talked about here.
This thread is the perfect "canary in the coal mine" indicator: Just look at when people have written on this thread and what where the bitcoin price has been then.
(bit old graph, now I guess over 17 000 USD so back again where it was years ago..when this thread was active)
Hence best time to buy bitcoin when at least for a year nobody has written on this thread. :razz:
Fixed it for ya.
Tell you, this thread is an indicator! Notice that the 2019 upturn didn't yet get people to write on this thread. But now..
:lol:
:100: and expect fireworks before the end of the year if BTC breaks its all-time high. It will be all over the news and a new round of retail mania will ensue. It's already available to buy on PayPal in the US along with a few other cryptos and a quarter of a billion worth has been snatched up within weeks.
https://cryptobriefing.com/paypal-reaches-85-binance-us-volume-first-month/
I suppose there's two ways to look at that graph. One is a (fair) assessment ala: 'here we go again.' The other is that if you were a long term holder pre 2017 and held on, then the brutal crash following the bubble, in the long run, didn't sink your investment. You seem likely to end up ahead despite the 2018 (and covid-2020) crash.
I agree entirely that the best time to invest in bitcoin is when it isn't being talked about. I didn't invest anticipating a bull run like this, and its a happy accident my investment coincided with this sort of rapid appreciation. I wish I had come to the decision to invest earlier on, because my rationale didn't involve thinking it would spike again like this. I anticipate this to go up up up, generate interest (media coverage etc), attract a lot of FOMO investors looking to get-rich-quick, and then crash again - BUT peak at a higher point, then crash to a level higher than what it leveled out at last time.
The only good rationale for investing in bitcoin is learning and appreciating the value of the technology - trying to buy on the dips and sell on the peaks to get-rich-overnight might work occasionally, but is more likely to fuck you up.
Thanks! I'm excited for the gains but trying my best not to too closely follow the change in valuation (reasoning that if I get too excited about the rise, I'll get too worried about the drop, trying to keep even keel.). I really like your story because you don't hear enough from those who adopted bitcoin because it's useful - because it works.
Yeah, people who get into it for the money are the first ones to leave on the dip. In my experience they buy high and sell low. I remember in March when things were looking terrible with COVID and BTC had dropped 50% in a day looking at the price and telling myself that I was 100% ready to go down with the ship on this one.
I think in order to be a good, patient investor you need something beyond the monetary reward. Bitcoin is a vision. I think the greatest thinker in this space is a guy named Andreas Antonopolous - check him out on youtube he's got a bunch of introductory material on bitcoin and ethereum. Personally I've done pretty poorly with altcoins because I'm mostly just in it for the gains and when things go too far south I'm out.
As for wallets if you're serious then check out a hardware wallet like the Nano Ledger X (I have the Nano Ledger S which is the earlier model). These store your funds offline and you're not trusting someone else to keep them safe. Not your keys, not your coins.
Do note the lower part of the graph showing the volume of trades. Now the transactions are over the 30bn range, however before 2018 the transactions don't even show in the graph. This tells it was then peanuts compared to now and then simply a small group people used / saved bitcoins.
Quoting csalisbury
And hasn't the internet and tech stocks also been profitable? Yes and no. Yes if you have picked the few winners, yet many mutual funds investing in tech stocks got a real beating first at the turn of the Milennium and then during the financial crisis. Knowing to pick netflix and not pets.com is trickier than it looks at hindsight.
Anyway, this is a very treacherous time to invest in general. An investment advisor said to me that he wouldn't be surprised if he would see a 50% drop in the stock market. We have the lowest interest rates ever in recorded history, central banks printing money in the trillions and stock market that is basically in the same level as pre-corona times acting as nothing has happened.
And then you have gold very high also. Which isn't actually good sign for the economy.
Gold is generally positively correlated with Bitcoin. It's similarly seen as a hedge against inflation. A massive economic crash would hurt everything of course but the Fed has signaled it will keep printing money to prop up Wall St. and Biden is likely to push congress for more stimulus. So, the monetary and fiscal direction in the US, in particular, currently favors this form of investment.
You can't know anything for sure but you can use macro analysis to give yourself an advantage. It's just another way of saying the game is not one simply of luck (and I think ssu is acknowledging that anyway. I'm just adding a refinement to his take.)
Generally good advice. You'd have to be more specific though. I reckon stocks are the weakest link here as per ssu's warning, so I'm staying clear. And gold is to me just a similar (but inferior) store of value to Bitcoin, so though I had some, I dumped it (and I'm glad I did as it dumped soon after that). I don't know shit about bonds and I have a share in some property and some cash. Does that work?
About bonds.
Remember that we are at historically low interest rates meaning that there's in the longer term no other way than up. Interest rate cycle is historically very long. Last peak happened in the early 80's when there were inflation fears in the US and from there the rates have gone down up until now. Many have anticipated that a turnaround might happen. Basically your bonds give you the interest they promise (if you hold them until they mature), yet the selling price of the bond goes up if interest rates go down and down if interest rates go up.
Real estate is rather good, if you think people want to live there also twenty or thirty years from now. At least here in Finland an old apartment in the center of the Capital has risen far more than inflation for, oh, I guess at least 120 years (Helsinki city center hasn't become a slum). So it has been a "no-brainer". However if you have real estate in a dying urban area, you might lose your investment or take a heavy loss. And if you have good tenants, they will likely pay more in rent that with these interest rates you pay interest to the bank for a loan. Yet I think people tell far too many horror stories of tenants turning up to be drug addicts and tearing down your apartment.
And it seems that if/when there is a real estate bubble that bursts, it's likely that the price level comes back at least in one decade (and of course, you still get the rent). Usually. Of course it can take longer, just like in Japan:
Quoting Benkei
That is a smart move. In fact, if you do even a small investment, that gives you incentive to follow what is happening in the markets.
Another I've always found interesting but never tried is investing via crowd funding. There are platforms that allow you to evaluate the underlying business case and pick something you know something about so you can make a real assessment.
Oh, I didn't know that, but having looked into it, I get it now.
Cheers. I might take you up on that at some point. I don't have much spare for investments right now, but delving into finance, I'm starting to realize how easy it is for people who do to suck all the money out of the system, especially in this kind of low-interest rate, weak fiat, environment.
It's actually a reason why investing into bond funds might create large losses.
Quoting Benkei
Very interesting to know! It's actually a very interesting world for investing, and basically where a lot of the actual money lies around compared to the stock market. One medium-to-large size insurance company would influence the stock market if they would put all of their assets into the stock market.
(even if the numbers are old, the ratio is shown well:)
I have to then ask you this Benkei: Was one reason why some Euro zone countries could actually dig a hole for themselves was that prior to the first Greek crisis the markets assumed that there wasn't much risk in investing in Greek bonds than in German (or Dutch) ones when all were in the Euro-zone? And then "suddenly" the markets noticed that there's a big difference in buying Greek bonds compared to Dutch ones. Is my thinking correct?
I'd be interested in learning more about government bonds. I don't own any. What's their importance for the macro picture? What should newer investors know about either buying them or the bond market in general?
That's a bit vague. What sort of things are you wondering about?
Quoting BitconnectCarlos
It's important to know the difference between the coupon rate (the interest being paid) which is always at least 0%, and yield, which is your actual rate of return, which can be negative. Although I'm not sure about the US, in the EU it's nearly impossible for retail clients to buy bonds in the primary market, whereas it's quite common to buy shares with an initial public offering of a company. So the primary market is opaque and ruled by large institutional players, although I'm sure the banks that underwrite do plenty of riskless-principle trades with affluent retail clients.
But the most interesting thing about bonds is that they can be collateralised, meaning some of the default risk can be recovered, improving the recovery rate and therefore potential losses. Especially poorer countries will offer collateral to get the coupon down and avoid paying too high interest. The interests are still decent usually and relatively safe when compared to corporates.
Also, check your local tax rules. The coupon or buying at a discount may trigger capital gains tax.
And in relation to that, you might consider a fixed income ETF instead which probably avoids the capital gains tax. But these are always actively managed, so relatively expensive when compared to other ETFs, because it needs to be rebalanced regularly when bonds mature.
I'm probably forgetting a thousand things.
Right.
Bitcoin, functionally, is a gold-type asset. It seems, more and more, like prudent, cautious, institutional money agrees with you: the economy is in a dicey place. Bitcoin's gone up a good bit since this thread was last active, mostly because of institutional hoovering-up of what's available on exchanges. But on a macroscale that might be a bad sign.
This might be so.
In fact that stocks are going up, gold is going up, bitcoin is going up, all seem to be a sign of one thing:
Asset price inflantion
And that may be the result of the Zombification of the economy where huge quantities are put to support financial institutions, large corporations (air lines etc.) and now even consumers.
Strange times indeed...
For everyone thinking how cool it has been making a quick buck out of bitcoin, bitcoin is now using more electricity than the entire Netherlands combined.
Some more perspective: you can power 100,000 visa transactions with the energy used for one bitcoin transaction.
Yes, this is true of some bitcoin but not all bitcoin. In fact there are coins you can invest in that do not use the same electricity draw.
Examples of "Proof of stake coins are Ethereum, Algorand and I believe Crypto is getting ready to do the same.
Like all investments, you or I, the investors, need to do our due diligence. Don't put in what you cannot stand to lose. There are stable coins that do not make astronomical profits but if tied to the United States dollar will make 8% -12% profit if you simply lock it up for 3 months, 6 months, whatever you choose which you cannot make in a traditional savings account in addition to interest being paid out daily.
https://youtu.be/-C19r0UsYws
This is definitely one of the major weak points of bitcoin. One thing that sometimes gets floated by apologists is - ok, yes, it's a lot of energy - but what's the cumulative energy cost of sustaining/maintaining the US Dollar as a reserve currency? There's a strong argument to be made that those processes also use more electricity than the entire Netherlands. Viscerally it doesn't feel strong enough to justify bitcoin's energy usage, but I also don't think it's all hot air. Visa's transactions use less energy, yes, but Visa is piggybacking on the existence of a secure reserve currency.
That doesn't speak well for bitcoin at all. Despite the huge system surrounding it, and the multitude of use cases supported by the existing system, VISA still uses less energy.
Interest is paid in crypto and thanks to positive market direction of the crypto I'm accepting, my RoI is 2.5% after a week. Biggest possible loss in my setup is 10% (if the crypto becomes valueless).
Or you can get up to 30% (or more) apr on a Bitcoin carry trade. Short a quarterly future and buy an equivalent amount of the underlying. Only risk is custody, which you're taking anyway.
Nothing in crypto doesn't have the potential for a 4 digit apr, only talking about guaranteed returns here. Still, I understand you on BTC. What's the platform you're using anyhow?
Oh nice I use Nexo too. I haven't heard of anyone having problems with Nexo, but you always gotta be on your toes because custodial risk is definitely a thing and we have seen crypto exchanges go under.
I take it you own NEXO token to get those 8% rates?
Centralized exchanges are great tools and I do use them, but if you've got a bit of ETH go and install metamask and there'll be a whole other world of financial applications you can interact with without losing custody of your crypto.
:cool:
The management of the US dollar didn't double the price of GPUs right before I was planning on buying a new computer or getting one of the new Xbox/Sony consoles though. Damn crypto bubble is making even old video cards sell at 2x MSRP. Don't these people care about the real victims, those of use with copies of Cyberpunk 2077 collecting dust on our shelves because our hardware can't run it?
Thankfully, I actually have very little time for games so I'm content moving through a backlog stretching into the PlayStation 2 era that my crappy budget video card can still emulate fine.
Yet I think the chip shortage is more because of the pandemic problems on our wonderful globalized supply system than the "everything bubble".
Edit: I'll look into metamask. I actually wanted to train programming smart contracts in solidity using etherium but I have different priorities at my current job unfortunately.
Oh there is a thing where bitcoin 'miners' are buying up video cards, I heard a piece on bloomberg or the economist or one of those. As crazy as it sounds, he's right - bitcoin is at least partially responsible for him not being able to play cyberpunk.
Well done. :up: Don't spend it all on MAGA hats. :monkey:
I cashed in on Space Force hats. $400USD on eBay
Somehow I don't buy the "hyperinflation immediately" -idea, so I guess that we will have again a similar roller coaster ride in the financial markets as we had in last year.
Interesting design, more Space Fart than Space Force, but if the cap fits as they say. :party:
This thread's activity probably isn't a good index for tracking bitcoin's value. The thread was last active, save a handful of posts, around 6 months ago before it went up all that much. It was silent during most of the steepest rises.
I know this is a joke, but the resource consumption of cryptocurrency and NFTs is a real concern. The amount of processing power uses a lot of energy and causes a lot of pollution, for something that's arguably not very different in principle from collecting bottle caps or postage stamps (in that there is zero actual value being generated).
Quoting Noble Dust
See above. It's arguably the most destructive way to play pretend.
When philosophers (or should we be more precise people who are interested in philosophy) are talking about investments, that is a sign for me. Basically this thread is active when the prices are high. A time to buy is when this thread hasn't been active for 6 months.
Yet I do respect especially the collective intelligence and understanding of what things are important. Cryptocurrencies aren't a fad or rubbish, they are something genuinely important. Just as, well, all those things that you had in the tech bubble in the turn of the Millennium. After 20 years those things have become really the norm. Even Amazon has made a profit now! Yet investing back then in Pets.com wasn't the greatest investment of all time. Who knows, bitcoin might be. Or not.
Sorry, but after experiencing few economic bubbles in my time gives me the chills of how things are now.
It's simply creepy.
(But I got finally my new computer from Asia. Whopee!)
I'm very aware of the environmental impact of crypto. The reality is that anything involving computing power affects the environment, including this forum (and yes, the surge in crypto is affecting it in a much larger way). I'm certainly not convinced that crypto is the future, but I'm also not convinced otherwise. With that in mind, there are cryptocurrencies that are taking environmental issues into consideration. The future is unwritten and uncertain. Today's crypto-blows to the environment may be balanced by tomorrow's crypto-bandages. Or not. Who's to say? The market is so volatile.
So anyway, back to me; should I mint an NFT or nah?
I guess the question is: what are they important for, exactly. Sure the technology is interesting, and it's certainly useful if you want untraceable transactions. That's not purely a positive though.
Apart from that, I get the feeling lots of the conversation about cryptocurrency misunderstands how money works and sounds a lot like Americans talking about how they need their guns in case the government suddenly turns tyrannical.
Quoting Noble Dust
That seems like a cop-out. Yes writing on this forum has an environmental impact, and this has to be assessed against the individual and social value of the activity. What's the individual or social value of NFTs?
Quoting Noble Dust
Err, what? Polluting the environment is ok because "the future will happen"?
Quoting Noble Dust
What is your reason for wanting to do so?
Blockchain has its uses and there's certainly a few interesting applications out there. The intrinsic value of cryptocurrencies at this time seems low. Black market transactions, people who are principled against centralised government power, a store for value.
The idea that decentralised verification of the transaction resolves the necessity of trust in middlemen is replaced by people wanting ease of use like a regular exchange or bank. So we end up with custodians and exchanges that we again need to trust and the unauditable transaction trail of most cryptos makes it impossible to recover losses when something happens. For now, cryptos aren't going to fulfil the role of an alternative currency as envisaged but are just another asset class.
I'm also wondering just why there is a need for an "alternative" currency.
I don't really see the connection. Monetary policy affects bitcoin just as well, regardless of the "alternative" label. It's after all a big part of the reason it's market value is so high.
A different currency isn't the same as a different monetary system.
The "monetary policy" in Bitcoin is a) do governments allow it or not and b) do those using it believe in it's value or not. There's no government able to tax it's citizens behind it or any physical aspects that metals have. Bit off from what monetary policy currently is.
In many countries buying and selling isn't so easy as in Western countries. Holding foreign currency can be limited and the banking system a joke. There having bitcoin can be truly helpful in the role of medium of change. Yet it's extremely lousy as a unit of account as it goes up and down in price like a delirious rabbit. It's basically more of a medium of speculation than "store of value", but then again this is the time of the "everything bubble" where all "stores of value" are going up and down.
It's really an interesting discussion if bitcoin is truly a "safe haven" investment or not. The real risk with any so-called "safe havens", be it gold, the swiss franc or bitcoin is that IF there's a bursting of this bubble, all financial vehicles go down simply because people need to take cash from where ever they have them. The wonderful aspect of a margin call or as others call the phenomenon, asset deflation. Governments going after bitcoin is a typical thing in Third World countries, where the government has little control of the economy and desperately want's income. It could possibly happen here too, but then a lot has to happen before that.
Far more likely "threat" to Bitcoin is that it is replaced by a more "acceptable" cryptocurrency by those in power, which is then taken to use by the masses. I don't think that the majority of people have cryptocurrencies of today. Just like they can control the internet today, even if earlier people viewed the net as this bastion of freedom.
Those have nothing to do with "monetary policy" the way I understand it. And governments cannot practically suppress currencies without some very draconian measures (which would also work against bitcoin) anyways.
Quoting ssu
That seems pretty much strictly negative from a social point of view.
Quoting ssu
Sure. But then people have been pretty creative with that before bitcoin as well. You can use cigarrettes as currency if you have to.
Quoting ssu
I'd argue it's not an investment in the traditional sense at all. It's purely speculative with no commodification attached.
Quoting ssu
At least gold would still be useable, and the swiss franc might still pay your taxes. But to be sure I'm not saying that speculating with Bitcoin is a terrible, no good idea on an individual level. I'm not an expert on investment or speculation strategies. I question the wisdom of elevating such speculation as a virtuous or subversive act.
Quoting ssu
Possible, but bitcoin is already pretty well established. Though the chinese government will certainly be able to do something like this.
Quoting Benkei
So long as you don't conduct your entire business in bitcoin, it'll be tied to the monetary system of the rest of the world. With global financial capitalism, there's basically no way to have an unaffected currency unless you also want to run an entirely separate economy (which arguably is what happens in black market economies running on bitcoin).
Quoting Benkei
Not directly, but the effects will travel through the interconnected real economy to the EU regardless.
Quoting Benkei
For what purpose, exactly? It's not like anyone can stop you from using whatever you want as currency. Bitcoin is more sophisticated than trading postage stamps, but it's not in principle different as far as I can tell.
Ok, explain the mechanism to me how monetary policy in the US affects the price of buying milk in the Netherlands. If you can say this with such conviction you certainly have this figured out.
Quoting Echarmion
You can't divide post stamps to reflect the exact value you need to pay for something else. They're physical too. There's not enough of them to go around, they can be easily counterfeited. Etc.
There isn't one precise mechanism, but e.g. a loose money policy leads to more money going into speculative investments like futures, which affect global pricing / supply and demand. So if feed prices go up due to futures, the cost of producing milk goes up globally, affecting milk prices in the Netherlands.
Quoting Benkei
That's true, cryptocurrency is much more sophisticated. I just wonder whether it's worth the negative side effects.
OK, good, we've established you don't know what you're talking about. I can stop investing time in this.
You could educate me. I haven't argued in bad faith here. If I'm wrong, I'd like to find out.
Quoting EcharmionThose measures start from what is legal tender.
Quoting Echarmion
Oh you would prefer 18th Century style dealings where your employer would pay your salary with his own currency, which you can use in your employers shops?
There's many negative aspects to private currencies also, you know.
Quoting Echarmion Well, the structure how it uses a peer-to-peer network and blockchain might be things on the plus side to it.
Quoting Echarmion
Likely it's the Western Central banks that may look at this.
A note to another conversation here:
Quoting BenkeiQuoting EcharmionQuoting BenkeiQuoting Echarmion
Ok, perhaps here it's good to remind you that money in your country is a foreign currency in other countries. And this is how US monetary policy can indeed effect the price of milk in the Netherlands. And this is why actually the "demise of the Dollar" thanks to reckless spending isn't at all a clear cut case as the US is part of the global economy...and everything effects everything.
Let's take the hypothetical scenario that Joe and Kamala amp up the spending spree and print ten trillion dollars and the markets don't take it so well and finally truly panic. The Central banks are at each others throats so they let the dollar fall. So assume that the US dollar then collapses in one day to 1/3 of the price before of roughly in parity with the euro.
Now what do you think will happen?
Suddenly US milk is 1/3 cheaper in Netherlands and hence it's a great trade to export milk from the US to the Netherlands: many Dutch people will likely prefer to pay less for their milk and opt for the cheaper US milk. Also every goddam exporter in the Euro-area to the US (also those Dutch dairy product exporters) suddenly has this obstacle at the next day that the prices of their products just tripled in the US. Even worse for the Euro-area, the Chinese Yuan is pegged to the dollar and hence the Chinese would be crushing Euro-area exporters.
The simple outcome would be that the Dutch, alongside every Euro country, would have their export sector demanding ease with the "strict" monetary policy and for the ECB to devalue the Euro. Meanwhile in the US a Big Mac will likely cost what it cost yesterday before the dollar collapse as it takes time for inflation to happen and the US isn't your average run-of-the-mill Third World country.
This isn't far fetched as during the financial crises Switzerland suddenly found itself as a "safe haven" currency having it's franc roughly revaluing +20% towards the dollar and the euro. They had to go to negative interest rates (that people have to pay them for holding Swiss francs) and increase their monetary base, because the +20% jump in the Swiss franc was killing the important export market in a situation when the global market was already in a recession.
Yeah, I can see where you're coming from. I understand it more as trying to impact the real economy by regulating the flow of money, but it's difficult to really pin down the difference between money and currency, because we always think of money in terms of a specific currency.
Quoting ssu
Arguably, yes. Though I find it hard to treat bitcoing as "being suppressed" given it's popularity.
Quoting ssu
I think we have a misunderstanding here, I dont see the connection to what I wanted to say. I just wanted to say that being able to avoid taxes is not necessarily a good thing.
Quoting ssu
I agree. The technology is interesting and may have important future applications.
Quoting ssu
Given the recent competence of western governments, I wouldn't be too worried.
Quoting ssu
Sure, that's another scenario where a "currency barrier" doesn't stop the effects of a crisis. My point was that while something like bitcoin is in and of itself immune to inflation, it's not decoupled from the monetary system as a whole, which today is global and, as you say, everything affects everything.
Quoting ssu
Interesting. Did this have anything to do with the swiss economy / banking sector or was it merely the perception that the swiss franc was "safe" because of the reputation of the swiss banking sector?
Congrats on the computer!
I'm still bullish on pets.com. It's a long game. On the dark web, we holders of the pets.com/bitcoin/sega/crystal pepsi ETF have invented marvelous new financial instruments that work even for non-existent assets. It's very heidegerrean - we play cards while the nothing noths, and always-already profit.
Hyperinflation is basically the universal distrust in a currency being a store of value: people may need to use it, but know it's basically worthless. That the supply of a cryptocurrency is limited isn't a reason why the trust in the currency being a store of value couldn't be shaken too. Simply put it, both with a fiat currency and a cryptocurrency there has to be people who think it's worth it's price as payment and willing to trade or exchange it to something else.
Quoting Echarmion
The Swiss franc has had this role of being a "safe haven" currency, but naturally as the country is small there aren't so many Swiss franc going around.
As the Chairman of the Swiss National Bank puts it:
So basically what the Swiss are doing now is printing money and then buying financial assets with those francs...in order for the franc not to appreciate too much and make a problem. Which is crazy, but then a lot of things are indeed crazy now.
Here's a short video telling the incredible story of what the Swiss Central Bank is doing now. From last year (starts at 1min25s):
Central banks turning into hedge funds isn't something that is going to end well in my view.
Thanks!
A friend of mine hired me to write music for a series of short films which he plans to mint as NFTs. I love working with him, so it was a no-brainer. If they sell, I'll be paid in ETH. This inevitably led me to researching the NFT world. At first I was philosophically against everything about it, but I suddenly (out of nowhere) came up with my own concept for an NFT that I really love.
If so how are you faring?
Current vibes.
If I'm true to my word, I'll have to postpone my buying of cryptocurrencies as not six months, but just two months went with inactivity on this thread. Seriously thinking of investing in bitcoin, but....hell I just hate passwords! Yet as this is a quite progressive site with forward looking people and bitcoin has built a nice base after the highs two months ago, it looks to be an OK investment. Looks like a fair time to start. Not a great time to invest as there's no a) pandemic outbreak, b) major war or c) financial crisis which make people panic. In a panic with all this debt around, everything goes down.
So I'm not so sure if in a situation where all stock indexes are all time high, when gold is close to all time high and the leverage used in unreal, there could be that deflationary correction that everybody is talking about when all that investment with debt panics and sells the best assets. Even if inflation has picked up. Thinking more of divesting partly out of stocks now.
My take is if the fed scares investors and there's a stock market correction, btc will break support and crash. If not, it'll likely grind up again. Long term it's a good investment as long as it keeps doing what it always has, but I'd rather wait for a bit more certainly.
Of course, nobody knows what tomorrow brings.
Crypto markets looking shaky, indecisive right now. Stablecoins yields quite generous though. excellent apys and fairly safe investment. I'm surprised this doesn't receive a little more attention.
Quoting TheQuestion
At the time I thought Monero was going to be all that;, but, Elon Musk started tweeting about Dogecoin more.
I'm sure the mountain is insurmountable.
As far as I can see, all the digital currencies are just pyramid schemes. The coins have no intrinsic value, so when the bottom drops out, and it will, you'll left with a hand full of turd. Do you think you are one of the few who will be able to jump in and jump back out at just the right time to make a fortune? If so, you're are probably wrong.
There's a somewhat "philosophical" debate about it.
Link to the Forums thread about the cryptocurrencies
The logic is simple if you can burn $500 at a casino why not just buy shiba for that price and set the stop/gain and forget it.
If it tanks oh well you can get that money back with a single paycheck.
If a miracle happens like DogeCoin did in 2020 where it peaked at 70 cents. Or not even that much say 5 cents. You still walk away with a fat wallet.
Then yes is a waste of time. To me at least, but like I said this is more of an investment of chance then strategy.
I am counting on a repeat of DogeCoin.
It seems that you can't go wrong with Shiba, as long as Mark Cuban or Elon Musk tweet about it.
Major companies are starting to accept cryptocurrency like TESLA and Microsoft and PayPal
If these big Companies werenât accepting cryptocurrency I would be skeptical but these businesses are validating my optimism.
Now if these platforms like InstaCart, Doordash and Uber. Start accepting crypto then weâre solid.
10 Major Companies That Accept Bitcoin
https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/10-major-companies-accept-bitcoin-190340692.html
For sure, that is why I lurk around Reddit a lot but I wouldnât use WSB as a reliable source of info. But I do check it out in case I notice a feeding frenzy forming.
Trying to relive the GME again LOL!
When everyone was in lockdown it revitalize the crypto industry. Many may not see the connection but 2020 was the year of crowdsourcing platforms like DoorDash, InstaCart and Postmates.
During shutdown there was a surge of customers using Crypto to purchase there groceries and fast food delivery online. Because people couldnât go out.
Now that there is a realization that there is a profit to be made in the crowdsourcing platform sector you have to make the connections with crypto. And how crowdsourcing affects it.
Where ever there is online transactions and e-commerce there is a potential for crypto to grow.
You also have to keep in mind there are a lot of companies accepting crypto now.
Microsoft
AT&T
Burger King
KFC
OverStock
Subway
Pizza Hut
Just to name a few. More than 15,000 companies are accept crypto as a valid means of currency.
As for the energy consumption and how it would effect the environment I wouldnât worry to much about it. An Antmatter S9 mining rig can cost a crypto miner on average of 15 cents to 25 cents per day per device. And the expense incurred from the energy bill will discourage them to over mine and over consume energy.
The ones who will mine excessively will be those who can find a way to operate the equipment off the grid by utilizing clean energy tech. like using a solar panel array or wind turbines. It would be a necessity to utilize clean energy tech to maximize profit.
So yes I do believe cryptocurrency is here to stay for the long run.
I am not sophisticated with how banking, finance, and currencies work, but here's how it seems to me. The value of the US dollar can fluctuate based on what other people are willing to exchange it for in other currencies. I guess Bitcoin is something similar, the difference being that the dollar at bottom is supported by the treasury of the US government. Bitcoin is supported by.... nothing as far as I can see. It's like Tinkerbell. If we just believe, everything will be ok.
Even if Bitcoin is somehow ok, given it's the oldest and best established, what about all the other cryptocurrencies? How many are needed. What does one provide that the others don't. It's like putting all my money in Betamax. What happens to my money when VHS wins the race for supremacy? That's an old guy reference, so I don't know if you'll get it.
One event I heard about really made me more skeptical about the whole thing - a guy put 200 million dollars into Bitcoin and then forgot his password. His money just disappeared. No recourse. No "did you forget your password."
Mining a bitcoin is done on a computer.
The process that the computer needs to do to mine a bitcoin keeps getting longer.
The process can be done quicker the more computers you have.
The process can be done quicker the harder you run each computer.
Running lots of computers very hard is the quickest way to get bitcoins.
Running lots of computers very hard uses a lot of electricity.
Is bitcoin mining payment for services, by which I mean, is the mining part of the work required to make the system run which is paid for by the system? It just seems pretty screwy. It is my understanding that mining costs per bitcoin will continue to increase. Who keeps the system running when mining is no longer profitable?
A bitcoin is brought into existence when a particular computer calculation is completed. There's a "list" of these that all of the computers "mining" bitcoins are working through. Mining a bitcoin is running these calculations.
But, how does the ledger system know that a bitcoin was mined?
Quoting ssu
OK!!!
Now nobody has commented on this thread for over 7 months. That's half a year ago. And then when the last time it was actively debated, cryptocurrencies were on the all time high (again showing the clear marker of this thread as the peak of bitcoin price was reached in November last year).
So this would be the time to buy cryptocurrencies I guess.
Anyone enthusiastic about bitcoin? Now at the lows of last summer.
From a year ago. So obviously people here aren't stupid (hence I'm not saying that):
Quoting Baden
Yes, sentiment is super bearish, which indicates to me most sellers have sold or been liquidated. Caveats are to buy quality, the bottom may not be in, and the bounce may not be immediate. But for educated investors looking long term it looks like a good time. Ethereum is what I'd be looking at with the merge supposedly imminent.
Disclaimer: Not financial advice. Never base financial decisions on what some internet rando says + most cryptocurrencies will go to zero.
Oh darn! You remembered, we were all just thinking about bringing on a class suite against you. :joke:
Larry David is a nice pick. Or the 14 million $ color changing Qr-code by coinbase. Just like Pets.com superbowl commercial, it tells something. For those making it a narrative on the foolishness and greed of people, the Super-Bowl commercials are always remembered and will be put into the narrative...at least for the time when it looks like there isn't a tomorrow (and the perfect time for these kind of stories). And those links actually have been made when it was happening, by no other than Wired magazine:
So the guy who handled the Enron mess says this... :smirk:
Is it a trend that some the Super Bowl adds are for some new upstart companies a canary in the coal mine indicator (just notice what companies Super Bowl add is from my last comment above)?
Yet is the demise of FTX the bottom of the hype? Bitcoin is still more expensive than when this thread was started. And perhaps the hype is at least now over. Or then I'm wrong again and let's say the value of cryptocurrencies will go down another 75% or more. Likely people will want to forget it and hence the actual technology might really get into normal life.
There are several technical measurements that say now is a relatively good time to buy. But generally it's a matter of common sense. If you believe in the technology, you buy fear and sell greed and be prepared to wait for the market cycle to work its way out. And we are currently well into fear mode. But if you don't understand the tech enough to believe in it, I'd stay out of this market altogether because yes, everything could go down significantly more. e.g. Since its inception, ETH has gone from $10>>1400>>80>>4500>>1100 now. And that's the second least volatile coin. For the vast majority of the others , it's more like 1>>1000>>0.1.
Quoting ssu
The Super Bowl would have been a pretty good time to sell. But crypto as a whole is these days mostly just higher beta on U.S. stocks, which as you know follow rates/Fed balance sheet/liquidity. When the S and P bottoms that's likely crypto's bottom too. The tech isn't going anywhere.
And I'm not going to be angry at you if (when?) the meager investment is -75% of the current price. :wink:
Disclaimer: I am not a financial adviser. :wink:
But, yes, if anyone's ever going to buy, it should be in a deep bear market or the start of a bull. Best of luck anyhow. :victory: I bought some ETH recently so I'm with ya.
So seems you are in the microfinancing (or is it people-to-people financing). The Benkei Bank. :smile:
Why not just use a normal investment rather than the cryptocurrency scam? Apparently the standard index funds have an annual return of around 10%.
Index funds may really not be the great investment now, just as @Benkei noted.
What to Expect From Crypto in a Recession
Cryptocurrencies are far more volatile than normal stock, and unlike normal stock have no real underlying value. It's all just a confidence scam.
FIAT currency is the real confidence scam.
The underlying value of cryptocurrency is that it is a scarce, independent means of exchanging value, much like gold and other precious metals. In fact, you'll find that a lot of people who invest in gold also invest in cryptocurrency for many of the same reasons.
With financial repression looming on the horizon, and irresponsible economic policies running rampant, I'd say there are very good reasons to invest in both. For one, it's a lot easier to pay for things with cryptocurrency as opposed to gold. I'd stick with Bitcoin though.
When it's legal tender, backed by the government, it's not a confidence scam.
Quoting Tzeentch
I'd stick with pound sterling.
Bitcoin is down 72% on the dollar from this time last year.
All cryptocurrency is a big hype period. It's all a confidence scam. It has no actual value.
What makes one cryptocurrency worth what it is, or worth more than some other cryptocurrency? It's all make believe.
What can you do with Bitcoin? It's just a speculative vehicle that people buy with real money in the hopes that they can sell it for even more real money, and which is ridiculously volatile, often with no rhyme or reason as to why it's perceived value changes.
I think it's foolish to think of cryptocurrencies as being a "better" currency, or a good investment. I think you need to be more honest and accept that it's just a get rich quick scheme that some get lucky with.
It's value is controlled by whoever controls the printing press.
Scarcity is perhaps the most important characteristic of money, and fiat currency does not check that box.
Quoting Michael
The fact is that that is exactly what it is not. The hordes of people with zero market understanding who voluntarily jumped on the crypto bandwagon and treated it like it was a way to "get rich quick" have no one but themselves to blame. Investing isn't for everyone, and it certainly isn't for the ignorant.
It has nothing to do with the inherent value of cryptocurrency - an independent, scarce means of exchanging value.
There's a lot of incestuous lending going around in the background which creates all sorts of counterparty risk without any level of transparancy or oversight. It does seem so far, on average, European crypto institutions are not as leveraged or risk taking as their US counterparts.
Buffet: "If you were to say ... for a 1% share of all the farmland in America, pay our group $25 billion, I'd write you a check this afternoon," Buffett said. "[For] $25 billion I now own 1% of the farmland. [If you offer me 1% of all the housing in the country and you want another $25 billion, I'll write you a check, it's very simple. Now Well, if you told me you own all the bitcoin in the world and you offered it to me for $25, I wouldn't take it because what would I do with it? I would have to sell it back to you one way or another. It's not going to do anything. The apartments will produce rent and the farms will produce food,"
Assets, to have value, have to contribute something to someone. And there is only one currency accepted.
Munger: "In my life, I try to avoid things that are stupid and evil and make me look bad compared to someone else, and bitcoin does all three," [Munger said.] "First, it's stupid because it's likely to go to zero. It's evil because it undermines the Federal Reserve System... and third, it makes us look foolish compared to China's communist leader. He was smart enough enough to ban bitcoin in China."
There are few institutions more evil and less preoccupied with the welfare of the ordinary person than the Federal Reserve.
Undermining it is exactly the point; undermining people's dependence on state currencies the quantity and thus value of which is controlled by the state. Politcians and politicized government institutions like the Federal Reserve have time and again proven not to be able to wield power responsibly. Moreover, states are already flirting with totalitarian levels of surveillance and control over people's financial behavior, state-owned digital currencies being the latest iteration of that.
Undermining that is not evil - it's essential freedom. No wonder the CCP banned it - freedom is the last thing they want their citizens to have.
Despite the fact that Federal Reserve or CCP are evil institutions and probably they are not specially the ones who should speak about economical ethics, I personally think that cryptos still lack of security, transparency and effectiveness.
We don't know what the future holds and maybe the tables can be turned. Nevertheless, we should be cautious in terms of investing big money in cryptocurrencies.
Before one invests into anything, one should have a thorough understanding of what it is and what it derives its value from.
A lot of laypeople jumped on the crypto bandwagon knowing practically nothing and throwing all caution to the wind, and predictably got burned. In my opinion, that is primarily their own fault.
Now that the hype is over, cryptocurrency will probably stabilize around a more honest price that more accurately reflects its true value. My view is that as long as cryptocurrency is an effective means of maintaining financial independence, it will retain its value.
I believe when/if financial repression becomes more widespread, its value will go up. However, there is a risk that if cryptocurrency continually undermines governmental drives for more control over citizens' wallets, governments will try to find ways to ban it like China did. If that happens it may swiftly crash.
Quoting javi2541997
What has happened is that a convincing story based on reality and genuine facts was successfully sold to people desperately looking for the new thing to invest causing a classic mania with all the side effects of it. I could refer also to the dot.com bubble. All that tech is quite in use today, quite real, but not every tech investment, tech fund and especially tech start up made wonderful results. And it was crazy before the bubble burst.
It may simply be that without the role of legal tender cryptocurrencies stay as this small alternative speculative investment while the technology behind them is adapted to use.
:up:
One of the craziest moments related to this investment was an "international" meeting which took place in Madrid. European and Spanish institutions such as The National Securities Market Commission warned about the risks associated with cryptos and ask the organisers to please don't let teenagers to go there. They didn't care and many people believed in whatever they listened in the meeting.
Well, a few months later, cryptos plummeted and one of the main responsibles of the meeting kill himself. Now, some courts are collapsed with hundreds of claims for compensation when those citizens were already advised of the dangers of this investment...
Craziness... Cryptocurrency is dangerous to the people.
True, true. Then there's something different about crypto. Does it bypass some regulations? It must otherwise it's just a geeky way of doing regular business.
Yes, the main cause is substitute the money and banking system as we know nowadays. Nonetheless, it is used just for speculative conspiracies and opaque businesses.
It's a money laundering scheme. How fascinating.
I'd say that's not necessarily a ground-breaking difference, but it certainly is convenient in today's day and age. On top of that, being able to make purchases online without any kind of bank involved means there's a high level of anonymity.
But all in all there's nothing "special" about cryptocurrency, other than that it was hyped at some point and a lot of gullible people lost money.
Well, actually gold and other precious metals you can barter / pay directly and make a physical transaction with ease. And keep the possession of the metal out from the knowledge of the tax collector. A good "investment" to give to the next of kin if there is an inheritance tax in the country.
It appears that a lack of regulation inevitably leads to disaster in markets of this type. Or do you think some entities are just more upstanding than others? And if so, how would you identity them?
:up:
That's not an unfair comment, but it depends to a degree what you mean by "disaster". The FTX, LUNA and 3AC debacles could be characterised that way, but those who invested responsibly in things they understood, followed best practices, and kept an eye on the market, most likely made money. And the overall market (though volatile) continues to expand at an impressive pace, so there are dangers and opportunities there. What's desirable imo is a reasonable regulatory framework that curbs the worst excesses of the market but still leaves room for the freedom to take risks in pursuit of returns, i.e. for personal responsibility.
Quoting frank
Absolutely. And they can be identified by research and paying attention. LUNA was an algorithmic stablecoin and so prone to collapse like every one of its type before. Anyone paying close attention knew this and therefore knew at least some of the risks involved, which became more and more apparent closer to the time of its collapse. Similarly, warnings were plentiful before FTX went bankrupt.
As for cryptocurrencies themselves, the difference between a random memecoin and an, e.g. Layer 1 cryptocurrency is huge. The Ethereum foundation, for example, are good actors with a well-established product in the Ethereum network, which has clear battle-tested functionality, very obvious practical long-term uses, and a deflationary cryptocurrency, Ether, that despite the recent crash is up 2000% since the lows of March 2020. Dogecoin is an inflationary memecoin--disparaged as a joke even by its founder--that was popularized by one dude, Elon Musk, and has multiplied massively in value, but has a future largely dependent on whether or not he feels like clowning around with it again. No prizes for spotting the more reliable entity there.
Itâs a long read which I wonât try to summarise, other than to note that all of the investors in FTX got their funds back, which was announced in May this year. Which, I think, tends to throw the very long sentence that SBF received into some question. Lewis doesnât say it outright, but he seems to suggest it. He says in conclusion âI think the truth is closer to âyoung person with an intellectually defensible but socially unacceptable moral code makes a huge mistake in trying to live by itâ than âcriminal on the loose in the financial system.â â And the fact that none of the investors lost their money - although they did fail to realise Bitcoin gains they might have made - makes me feel a bit uneasy about it.
Wow! Okay. I'm gonna say it outright that you are mistaken and -- Jesus Christ!
The damage to the financial industry is much more than getting their money back. Are you really saying "No harm done"?
Not at all. But reading that article - as I said, a long read - one of the points that Lewis made was that it might have been possible for FTX to have recovered the supposedly missing funds by itself:
It's nuanced tale, of competing judgements about what SBF was really up to. Lewis doesn't try to absolve him of guilt, but he does call into question whether SBF was conniving or delusional.
(Incidentally, Caroline Ellison has just now been sentenced to two years for her role in the scheme.)
Yes, two years ago (when the thread was forgotten for a while) Bitcoin price was a little bit above one third of what it is now. So to comment on Cryptocurrencies thread was likely to come, and thanks to @Wayfarer, he even remembered this thread!
What I'm more baffled about is what SBF's role was at Alameda Research. How come the CEO gets away with this shit - she's the one presumably running the company! Is that just because she put SBF out to dry? And if SBF was just a shareholder then he again fucked up by trying to direct the company, which wasn't his role as a shareholder.
And Michael Lewis has a tendency to withhold pertinent facts. How many of those billions were paid out from the FTX holdings SBF and Ellison forfeited? Not clear to me. If they were funded from the FTX holdings then "depositors" had a loss, they just managed to cover it with other gains.
A "CEO" is not and admin... as much as I can understand Anglo-Saxon companies structures...
Running the company does not equal to manage it in and out of court.
I think it's something that was forgotten in the ideological fervour of liberalism, that free markets have to have institutions to keep them trustworthy and operational. Otherwise simple theft is so easy.
From the histories, it seems SBF took some distance from Alameda Research and started working for FTX and put Ellison and another trader in charge as CO-CEOs. Ellison ended up as CEO later when the other co-CEO left. Before the meltdown, SBF apparently told everyone to take out personal loans against the company. There were 5 billion in personal loans on the balance sheet. It's not clear during what time they were entered into and whether SBF was CEO at the time or the two co-CEO's or just Ellison. In any case, who lends 5 billion without collateral? Only a criminally liable idiot when it goes south.
Alameda Research had special privileges allowing it to directly use customer deposits. SBF probably thought that the insane 65 billion USD line of credit from FTX to Alameda Research made that ok. This credit line (again INSANELY high) was never disclosed to investors, FTX clients or auditors.
Some people would also deposit money directly into the account of Alameda Research, they would skim money of it for expenses and only then forward it to FTX.
It was FTX who transferred the 8 billion USD in deposits to Alameda Research. That does seem to be mostly on SBF's shoulders then. It's not clear what the basis for the transfer was. Was it a loan? Some kind of asset swap? Or really as dumb as a straight transfer? (It couldn't be the credit line, because pulling that would be done by Alameda).
But Ellison didn't return the money as she should have.
As far as I'm concerned, the whole thing stinks to high heaven. The fact the credit line was hidden, the ridiculous amount of personal loans, the absence of appropriate hedges (they were all traders for crying out loud!) and even not hiring risk managers and giving them appropriate tools is really on the company leadership.
As far as I'm concerned Ellison got off way too lightly.
It is quite blurred all the transfers, and it is not really clear why they asked for personal loans and then the company transferred that amount to Alameda Research. It seems to me that the deposits were not arranged with good faith or intentions. After reading the summary twice, it reminds me a bit of a fiduciary role. Some people put money on FTX or Alamde Research to do some purposes, but it turned out to be a complex, structured relationship where the loans and deposits went to and fro without a clear path to follow.Â
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I can't say whether this is a criminal felony or not. From a civil perspective, it is clear to me that they arranged the money with opaque and obscure intentions, and this is opposed to the law.
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I now understand why "trusts" are forbidden in my country. They create infinite transfers very difficult to follow. It can only apply to inheritance here.
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The official ruling mafia defends their monopoly on expropriation, called "taxation". Lions also fight other lions trying to feed on prey in their territory. They won't allow it, because in their case, the expropriation is called "stealing".
Quoting ssu
A market authority is usually necessary but it does not need to be the government.
For example, in darknet markets, there is always a third-party adjudicator holding the third signature in the 2-of-3 multi-signature escrow contract.
In an atomic swap, for example, there is not even a need for a human adjudicator. The two interlocking smart contracts will automatically prevent both parties from defrauding each other.
If ownership of an asset can be represented by a digital token, such as goods in a bonded warehouse or just money, then any such assets can be swapped without third-party involvement.
We are only at the very beginning of tokenizing commercial traffic. In my opinion, just 0.1% of the possibilities have currently been implemented already. It will completely change the world of commerce.
And unfortunately we do need that thing called "taxation". Also the ruling mafia also defends their monopoly legal tender. Which cryptocurrencies aren't, but currencies of sovereign states are.
Of course it could be different.
Think about the following situation: You work for your employer, FU Employee Corp. Now when the payday comes and you get your salary, your employers pays your salary by their own money, FU Dollars. You then can use the FU Dollars in a local shop that your employer FU Employee Corp owns, where they happily accept FU Dollars. And naturally FU Dollar aren't accepted anywhere else, hence it isn't convertible. Need housing? Sure thing, your employer has these small shacks that you can rent, which also can be paid FU Dollars again. Everything so convenient!
Sounds enjoyable? Well, that was actually reality during the time of true liberal policies of the 19th Century. You can guess what happened to all those FU Dollars that you had earned by years of hard work when the Corporation goes bankrupt.
Hence there were also some reasons just why legal tender was monopolized.
Quoting Tarskian
Do you think that is a great solution? Just like a previous chairman of NASDAQ and the board of "National Association of Securities Dealers" (nowdays called FINRA), which the latter acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets.
His name was Bernie Madoff.
Yessir, All you need is self-regulation from the smartest!!! No government needed!
Quoting Tarskian
Method how your payment is done different from the various roles a market and it's actors have.
Certainly not to the extent that it exists in the West. For example, personal income taxation was introduced only in 1913 while the human race has been around for almost 300 000 years. Governments outside the West may also have it on the books but until this day they still do not collect it and they probably never will.
Quoting ssu
Bitcoin is now already legal tender in El Salvador. We are also rapidly making geopolitical progress with the Russian Federation:
Getting the Russian Federation on our side is a significant breakthrough because now the system is also backed by an arsenal of thousands of nuclear weapons. The next step, is getting China onboard in matters of cryptocurrency. That will be hard, but I suspect that Russia will sooner or later manage to convince them.
Quoting ssu
Legal tender where exactly?
Along the Russian-Chinese axis, the entire Global South is now rallying and making their preferred geopolitical choice.
In this new multipolar world order, it is the cryptocurrencies, especially Bitcoin, that will eventually reign supreme.
In the new multipolar world order, international trade and commerce will be increasingly de-dollarized. Along with the enormous debt, this process will lead to hyperinflation in the dollar and the euro. Hence, the end result of our efforts is that we will successfully bankrupt and utterly destroy these fiat currencies. i.e. the American dollar and the European euro. When everything will have been said and done, they won't be legal tender anywhere on earth. The final goal is the complete and utter eradication of the American dollar and European Euro. It is clearly a lenghty process, but it is inevitable that we will geopolitically achieve our goal.
This process is called hyperbitcoinization:
Hyperbitcoinization is why Bitcoin maximalists do not care much about the exchange rate or about measuring its value in dollars or in euros, as we seek to destroy the dollar and the euro:
Having to deliver 15 sacks of grain you harvested is effectively income tax. It existed quite a bit longer, at least since the Egyptians.
The Egyptian tax collector would measure the farmer's land and compute taxes based on that information. He would not ask the farmer if he somehow made some more money in other ways and try to get half of that too.
I find the practice of demanding people to fill out a tax return form to be particularly detestable. Why on earth would I give that kind of information to someone else?
Seriously, I don't want to live in a country where the ruling mafia asks me how much money I have made last year and then demands that I give them half.
Yes, they were very equitable back then until they weren't and the farmers starved. Maybe read a history book or something. But in any case, you're not refusing the point that income tax has existed for millenia.
Quoting Tarskian
Back in the day when people weren't paying lawyers and accountants tons of money to avoid paying taxes, tax forms weren't really a thing. Something to do with the inherent greed of many who do want government services like the enforcement of contracts, basic utilities ans safety but don't want to pay for it. If only the system wasn't so shit that the government needed this information to be able to tax people.
Quoting Tarskian
Good luck in those failed states when you get sick.
The Egyptian tax on a farmer's harvest is not the same as modern personal income tax. The farmer did not have to give any information to facilitate the collection of that tax.
Quoting Benkei
Dubai, for example, does not have personal income tax. Why would it be a "failed state"?
Furthermore, I haven't lived in the West since 2005. I have never had to deal with personal income tax ever since.
The West is only an attractive place for people who want to live off welfare benefits. That is the only kind of immigrant that the West attracts. Anybody with any serious level of money is better off elsewhere.
The skid row image above is the future of the West. I'd rather spend my days at the beach in Thailand, Vietnam, and other fantastic locations in SE Asia, in the company of beautiful locals:
Seriously, the West is a despicable environment.
You're a funny man and obviously have no idea how taxes worked in Egypt. Look it up, because you're miles off. Farmers had to give information about their harvest and livestock.
The three countries you mention have huge issues with modern slavery or human trafficking and are not favoured destination because immigrants travel for handouts but because they tend to flee for safety and economic opportunity. The economic immigrant abusing social benefits is just a racist canard.
Also, nice false analogy showing a picture of poverty and a rich bitch on the beach.
We were talking about the taxes at the time of the Pharaohs. They were necessarily simple.
Quoting Benkei
"huge issues", "modern slavery", "human trafficking" ... blah blah ... woke bullshit.
Every country has its problems. That is not a reason to import any of the hated woke nonsense from the West. Seriously, these people don't need this kind of word salads. They are not victims. They do not need your help. They are absolutely fine and there is nothing that they can learn from your propaganda.
I love SE Asia and I hate the West.
That is why I live in SE Asia.
I'd rather die than ever going back.
Quoting Benkei
The locals are generally not rich (though some are) but they are definitely beautiful.
In the US, I assume. But for example in @Benkei's country it was introduced earlier. Yet first income tax was introduced in Ancient Egypt and in China and England had it's introduction in 1188 ( each layperson in England and Wales be taxed one tenth of their personal income and moveable property), so the idea isn't actually so new.
Quoting Tarskian
Thanks for the correction, I forgot El Salvador.
Quoting Tarskian
:roll: Somehow I would refer to these two countries as being examples of liberalism and respecting the free market.
Quoting Tarskian
Hmm. But who owns the bitcoins? I think the people from the West. A lot more people (as I) prefer gold in the role of preserving value, something far more older than fiat currencies.
Quoting Tarskian
The death of the sovereign states is in my view highly exaggerated and basically false. And they (sovereign states) do love their central banks, just as Russia and China do. So perhaps you taking over the World along the other people holding the 19+ million Bitcoins is a bit of an exaggeration too.
In fact when the fiat system collapses, it won't be such a catastrophic event that society collapses. Not at all! It something similar to let's so the COVID pandemic. Something before can be describe as really scare, yet something that in the end just ....sucks.
How many actually think of the last time the US dollar defaulted as a default? I was just a baby, so I don't remember it. But many will argue that the US dollar has never defaulted. Oh no, Nixon just disregarded the useless ancient relic of a metal.
So am I.
I cannot comment on "liberalism" because that term has no precise definition.
Quoting ssu
The people who mine them or somehow buy them. It is the same question as "who owns all the gold?". Same answer.
Quoting ssu
I do not believe in the death of the sovereign states. I only believe in the death of the dollar (and the euro). That is the ultimate goal of hyperbitcoinization. We want to destroy that shit. I do not even believe in the death of all fiat currencies. I don't care about that because they do not represent an oppressive system of sanctions, confiscations, expropriations, and financial censorship. The dollar system has to die because we are seeking to kill it.
Quoting ssu
Yes, for all I care, let them keep their Ruble and Yuan, if they so desire. They do not try to dominate the world with their local paper fiat scrip.
Quoting ssu
Agreed. The fiat system has already collapsed in Venezuela, Zimbabwe, Lebanon, Argentina,Turkey, and countless other countries. It is a temporary annoyance, but anybody with half a brain has figured out how to deal with it.
Quoting ssu
The dollar cannot "default". How can the dollar even "default"? If they do not have enough dollars, the Fed simply prints some more. The dollar can only hyper-inflate, i.e. become worthless. That is what we want to achieve. That shit has to go, now already.
You ought to think about this a bit more:
Quoting Tarskian
You can hold on to the technical fig leaves, but hyperinflation is similar to default, even if the government "respects" it's obligations. And let's remember: if it happens immediately, it's hyperinflation and people understand it. Yet if it just takes a little bit more time, everything is just fine and people don't worry about it.
And why talk about the possibility of hyperinflation as an achievement? You think the US will be better afterwards? And in the end there's many ways the US can do this. The most obvious is just to continue as normal and hope the market's won't revolt.
You see, I do not want KYC (Know Your Customer), because it allows the ruling mafia to target bank accounts based on nationality and other criteria. It allows them to single you out.
KYC is what allows them to expropriate your account balance, prevent incoming and outgoing payments, prevent you to open bank accounts, and wholesale attack you through financial censorship. I want an end to the financial bullying.
The US (and EU) force other countries to implement KYC:
If these countries do not implement KYC or not sufficiently, through the FATF, the USA (and EU) starts bullying them by restricting their access to the global financial network. This system needs to be destroyed. We must kill it because the bullying has to stop.
That is why the complete destruction and wholesale eradication of the fiat bankstering system is a global necessity.
The USA will be better afterwards because it will no longer be able to bully other countries. Seriously, no more KYC. This page gives an overview of cryptocurrency-related services that resolutely reject KYC:
I do not want to disclose any personal information that will help the ruling mafia to single me out and bully me. KYC needs to be destroyed completely. That is why the fiat banks must die, now already.