Merged: Bitcoin - Part 3

[arthwollipot]

Originally Posted by lomiller

Only if they sell their bitcoin, which a true believer would never do...

I've been hodling mine for years now and all it's done is lose 60% of its value.

[Gord_in_Toronto]

What the Hell. I'll just drop this in here for information.

This Researcher Says Bitcoin’s Elliptic Curve Could Have a Secret Backdoor

[Gord_in_Toronto]

Originally Posted by psionl0

Who needs facts when you can just make them up?

Does not even deserve a laughing dog.

[Dr.Sid]

Originally Posted by lomiller

Only if they sell their bitcoin, which a true believer would never do...

If you got millions of dollars in bitcoin, and you need a car .. you buy a car ..

[FatherLukeduke]

Originally Posted by psionl0

Of course not. Speculation always produces winners and losers. But we don't know how many of each nor the sums of money involved. And we have absolutely no information whatsoever about how many people are publicizing their gains or losses.

We don't know the distribution of wins and losses, but as bitcoin trading is (at best) zero sum then we know the amounts are the same.

I'm going to speculate that the number of winners is smaller than the losers, with whales and early adopters redistributing money from the millions who piled in with their stimulus checks before the crash.

[Samson]

Originally Posted by FatherLukeduke

We don't know the distribution of wins and losses, but as bitcoin trading is (at best) zero sum then we know the amounts are the same.

I'm going to speculate that the number of winners is smaller than the losers, with whales and early adopters redistributing money from the millions who piled in with their stimulus checks before the crash.

A good study is twins Cameron and Tyler Winkelvoss.

[psionl0]

Originally Posted by wareyin

Given that it's human nature to not publicize a loss, do you really think we need evidence that we don't hear from the Bitcoin losers as much as we do from the Bitcoin winners?

It seems plausible that losers would be less likely to discuss their investments than winners (unless they want to complain about the "bad advice" they received). OTOH it also seems plausible that big time winners would be less likely to want to have their names published (as with lotto winners).

Many an innocent person has been convicted in court by an argument that seemed plausible but was not backed by evidence. So if you are going to rely on assertions like these then yes, you need evidence. This is doubly so if you are going to claim that the losers "slink away".

[psionl0]

Originally Posted by FatherLukeduke

We don't know the distribution of wins and losses, but as bitcoin trading is (at best) zero sum then we know the amounts are the same.

I'm going to speculate that the number of winners is smaller than the losers, with whales and early adopters redistributing money from the millions who piled in with their stimulus checks before the crash.

You have failed to consider realized vs unrealized gains/losses. There is no good reason to believe that paper profits equal paper losses. Otherwise, this would be true of every commodity that was ever traded.

[wareyin]

Originally Posted by psionl0

It seems plausible that losers would be less likely to discuss their investments than winners (unless they want to complain about the "bad advice" they received). OTOH it also seems plausible that big time winners would be less likely to want to have their names published (as with lotto winners).

And yet, we aren't lacking for "big time" bitcoin winners who are bragging about it...

Originally Posted by psionl0

Many an innocent person has been convicted in court by an argument that seemed plausible but was not backed by evidence. So if you are going to rely on assertions like these then yes, you need evidence. This is doubly so if you are going to claim that the losers "slink away".

That's an amusing stance to take, given the plausible-ish opening sentence used to dismiss (without evidence) what you don't wish to be true.

[psionl0]

Originally Posted by wareyin

And yet, we aren't lacking for "big time" bitcoin winners who are bragging about it...

Who?

Originally Posted by wareyin

That's an amusing stance to take, given the plausible-ish opening sentence used to dismiss (without evidence) what you don't wish to be true.

Failing to say "YOU ARE ABSOLUTELY AND UNEQUIVOCALLY RIGHT!!!!!!!!!!!!" is not the same as dismissing something without evidence nor wishing that it weren't true.

[wareyin]

Originally Posted by psionl0

Who?

I tell you what, you make a list of every bitcoin proponent who has openly declared how much money they've lost, and a list of every bitcoin proponent who claims to have made money and/or sold bitcoin as a way to make money. Compare which side has more people on it, and also compare the amount people admit to having lost vs the amount people claim to have made. If you still think that bitcoin proponents are this unique group of people who do not share such basic human tendencies, you can submit your evidence.

Originally Posted by psionl0

Failing to say "YOU ARE ABSOLUTELY AND UNEQUIVOCALLY RIGHT!!!!!!!!!!!!" is not the same as dismissing something without evidence nor wishing that it weren't true.

Demanding evidence that people will talk more about winning money than losing is a weasel worded dismissal.

[Gord_in_Toronto]

The results of the following Google search may be edifying to some:

lost money on bitcoin

Sample result:

More Than Half of Bitcoin Investors Are in the Red, Study Says


You're welcome.

[psionl0]

Originally Posted by wareyin

Demanding evidence that people will talk more about winning money than losing is a weasel worded dismissal.

Getting all offended when somebody doesn't accept your word as Gospel doesn't mean that you don't have the burden of proof.

As has been stated frequently in the past, "that which is asserted without evidence can be dismissed without evidence".

[psionl0]

Originally Posted by Gord_in_Toronto

The results of the following Google search may be edifying to some:

lost money on bitcoin

All that sample of size one proves is that this is a loser who didn't "slink away".

Originally Posted by Gord_in_Toronto

Sample result:

More Than Half of Bitcoin Investors Are in the Red, Study Says

"To turn a long-term profit, you have to ride out gut-wrenching short-term losses". Who'd have thunk?

[FatherLukeduke]

Originally Posted by psionl0

You have failed to consider realized vs unrealized gains/losses.

I'm not sure what there is to consider? Eventually gains and losses will be realised and the net effect will be the same. No wealth is created by bitcoin trading, it is just redistributed. We are just not sure how it is being redistributed - the suspicion is that a few whales have benefited at the expensive of a mass of minnows, but I haven't seen any definitive evidence.

Quote:

There is no good reason to believe that paper profits equal paper losses.

How is this relevant?

Quote:

Otherwise, this would be true of every commodity that was ever traded.

Well commodity futures trading is also zero sum. For every long bet there is an equal short bet - again it is redistributing wealth, not creating it. The idea of trading is to set an efficient price.

However unlike bitcoin, the production of commodities adds wealth to the world. If a new technology is discovered that means grain yields go up by 10% then net wealth is increased. World GPD increases, people have more food etc. There is nothing analogous to that in bitcoin.

[psionl0]

Originally Posted by FatherLukeduke

Eventually gains and losses will be realised and the net effect will be the same.

But not at the same time. And it is not necessarily zero sum for a single commodity. Those who hold on to fiat currencies are the eventual losers to inflation and this means added wealth to those who invest in non-depreciating assets such as bitcoin.

Originally Posted by FatherLukeduke

However unlike bitcoin, the production of commodities adds wealth to the world. If a new technology is discovered that means grain yields go up by 10% then net wealth is increased. World GPD increases, people have more food etc. There is nothing analogous to that in bitcoin.

Consumables are a different kettle of fish to commodities which are invariably bought for one reason: to sell at (hopefully) a higher price.

You seem to think that bitcoin trading follows different rules to other commodities but this is not the case.

[FatherLukeduke]

Originally Posted by psionl0

But not at the same time. And it is not necessarily zero sum for a single commodity.

How can it not be zero sum for bitcoin?

Quote:

Those who hold on to fiat currencies are the eventual losers to inflation and this means added wealth to those who invest in non-depreciating assets such as bitcoin.

Except bitcoin is priced in dollars (or whatever your local fiat is). If I buy a bitcoin for $20,000 dollars today then sell it in a year for $20,000 dollars I'm going to be subject to the same reduction in purchasing power in that $20k as if I'd stuffed it under my bed. I thought we were discussing trading bitcoin as a commodity, but you now appear to be conflating it with currencies.

Quote:

Consumables are a different kettle of fish to commodities which are invariably bought for one reason: to sell at (hopefully) a higher price.

I'm really not sure what you are getting at. Nearly all the world's traded commodities, from natural gas to grain are ultimately consumable.

Quote:

You seem to think that bitcoin trading follows different rules to other commodities but this is not the case.

Where did I say that? Commodities futures trading is also zero sum - however it serves a purpose in that it sets an efficient price for products that are useful - we eat them, make useful goods and convert them to useable energy. Unlike bitcoin, which has (at best) marginal utility and the trading is purely gambling and speculation without any other net benefit.

[wareyin]

Originally Posted by psionl0

Getting all offended when somebody doesn't accept your word as Gospel doesn't mean that you don't have the burden of proof.

As has been stated frequently in the past, "that which is asserted without evidence can be dismissed without evidence".

I always forget how some people on the net like to claim they have no idea how humans act.

Look up Loss Aversion.

[psionl0]

Originally Posted by FatherLukeduke

If I buy a bitcoin for $20,000 dollars today then sell it in a year for $20,000 dollars I'm going to be subject to the same reduction in purchasing power in that $20k as if I'd stuffed it under my bed.

Are you really unable to distinguish between short term and long term trading?

Originally Posted by FatherLukeduke

Unlike bitcoin, which has (at best) marginal utility and the trading is purely gambling and speculation without any other net benefit.

* SIGH * How often do I see it claimed on this forum that bitcoin has no designed use whatsoever?

[jeremyp]

Originally Posted by psionl0

Are you really unable to distinguish between short term and long term trading?


* SIGH * How often do I see it claimed on this forum that bitcoin has no designed use whatsoever?

Not very often. I've often asked the crypto-bros here "what utility does it have that is legal and not served better by fiat currencies" which is not the same question as asking if it has a designed use.

Clearly Bitcoin has a designed use, which is to replace fiat currencies (if we take the inventor's statements at face value). What we sceptics are arguing is that it is a bad design.

[psionl0]

Originally Posted by jeremyp

Clearly Bitcoin has a designed use, which is to replace fiat currencies (if we take the inventor's statements at face value).

BZZZT! Wrong.

The 2008 GFC may have been a motivation for designing a crypto currency in the first place but that is not a "designed" use. It is the ability to transfer large sums of cryptos around the world in minimal time at low cost and without being blocked by hostile dictators that gives cryptos their value.

This is only the 12,447th time I have had to point this out.

[jeremyp]

Originally Posted by psionl0

BZZZT! Wrong.

You need to read this: Bitcoin: A Peer-to-Peer Electronic Cash System

It was written by some guy called Satoshi Nakamoto. I understand he had something to do with the design of Bitcoin.

Quote:

The 2008 GFC may have been a motivation for designing a crypto currency in the first place but that is not a "designed" use.

I don't recall saying it was.

Quote:

It is the ability to transfer large sums of cryptos around the world in minimal time at low cost and without being blocked by hostile dictators that gives cryptos their value.

I would dispute the low cost aspect of Bitcoin and what you are saying is that it is good to evade government currency controls i.e. this is an illegal activity.

So I ask again, what can you use Bitcoin for that is legal and for which fiat currencies are not better?

ETA: I forgot to mention why Bitcoin is a bad design. The main problems with Bitcoin are:

- it is monumentally inefficient: proof of work is horrifically wasteful

- it does not scale: it currently handles only a tiny fraction of the amount of transactions that fiat currencies can handle

- Bitcoin is inherently deflationary.

- it's impossible to reverse a fraudulent transaction

[FatherLukeduke]

Originally Posted by psionl0

Are you really unable to distinguish between short term and long term trading?

It is an arbitrary distinction. It doesn't matter how many are holding for 5 years and how many 5 days, the net effect is the same. It's a zero sum game, no matter how much you wave your hands about. In fact it's possibly a negative sum game, as trading involves miners' fees which they will partly use to pay their electricity bills. But whatever, let's just call it zero sum for now.

Quote:

* SIGH * How often do I see it claimed on this forum that bitcoin has no designed use whatsoever?

Just to remind you we are discussing bitcoin as a commodity and specifically talking about trading it. I pointed out that "the trading is purely gambling and speculation without any other net benefit." - which is true. Unlike useful products like steel, grain copper etc, where the trading sets an an efficient price.

Bitcoin itself may have some marginal utility in bypassing capital controls or sanctions. Though given the highly traceable nature of it, I wonder how useful that really is. We will see. I personally can't get excited about that and anyway the same function could be done by any number of tokens.

[psionl0]

Originally Posted by FatherLukeduke

It's a zero sum game, no matter how much you wave your hands about.

This is just so much nonsense. You act as if bitcoin is an island unto itself and totally unaffected by trades in other commodities.

In the real world, the values of commodities fluctuate relative to one another and value can be transferred from one commodity to another (one commodity price goes up and another commodity price goes down). And since many commodities are produced and consumed at varying rates, there is no way to conclude that it is a zero sum game either for an individual commodity or the whole market of commodities and not in the short term nor the long term.

[jeremyp]

Originally Posted by psionl0

This is just so much nonsense. You act as if bitcoin is an island unto itself and totally unaffected by trades in other commodities.


In the real world, the values of commodities fluctuate relative to one another and value can be transferred from one commodity to another (one commodity price goes up and another commodity price goes down). And since many commodities are produced and consumed at varying rates, there is no way to conclude that it is a zero sum game either for an individual commodity or the whole market of commodities and not in the short term nor the long term.

Is Bitcoin traded directly for legal commodities? Or do you turn it into fiat currency first and then use the fiat currency to buy the commodity?

Trading in Bitcoin is a zero sum game because after a trade, the amount of Bitcoin is the same and the amount of fiat currency is the same. Nothing of value has been created. and nor will it ever.

[psionl0]

Originally Posted by jeremyp

Is Bitcoin traded directly for legal commodities? Or do you turn it into fiat currency first and then use the fiat currency to buy the commodity?

Trading in Bitcoin is a zero sum game because after a trade, the amount of Bitcoin is the same and the amount of fiat currency is the same. Nothing of value has been created. and nor will it ever.

Way to not have a clue what somebody is saying.

[FatherLukeduke]

Originally Posted by psionl0

This is just so much nonsense.

OK....

Quote:

In the real world, the values of commodities fluctuate relative to one another and value can be transferred from one commodity to another (one commodity price goes up and another commodity price goes down). And since many commodities are produced and consumed at varying rates, there is no way to conclude that it is a zero sum game either for an individual commodity or the whole market of commodities and not in the short term nor the long term.

Well, this is all incredibly vague and hand wavy. Can you take me through the mechanisms of how someone buying some bitcoin with their dogecoin (or dirty fiat) on cyrpto.com somehow effects the price of crude oil, steel, grain, copper or whatever? Or vice versa? You are saying they do, but not providing any evidence.

"since many commodities are produced and consumed at varying rates" - bitcoin isn't ever consumed and the generation of new coins isn't analogous to the production of actual real world commodities, as these require labour and add value to the economy. A bitcoin has value, but it doesn't add any.

Bitcoin trading can only ever be zero sum - it redistributes wealth, but in itself adds nothing.

[psionl0]

Originally Posted by FatherLukeduke

Well, this is all incredibly vague and hand wavy. Can you take me through the mechanisms of how someone buying some bitcoin with their dogecoin (or dirty fiat) on cyrpto.com somehow effects the price of crude oil, steel, grain, copper or whatever? Or vice versa? You are saying they do, but not providing any evidence.

This is just a simple application of the price mechanism. I refuse to believe that you can't see how somebody choosing to buy some bitcoin instead of "crude oil, steel, grain, copper or whatever" (or vice versa) would affect the relative price of bitcoin vs "crude oil, steel, grain, copper or whatever". You are just sticking your fingers in your ears and saying "LA LA LA LA LA".

Originally Posted by FatherLukeduke

"since many commodities are produced and consumed at varying rates" - bitcoin isn't ever consumed and the generation of new coins isn't analogous to the production of actual real world commodities, as these require labour and add value to the economy.

Ah, the old "bitcoin is different and not subject to the laws of supply and demand" argument.

[arthwollipot]

Originally Posted by FatherLukeduke

Well, this is all incredibly vague and hand wavy.

In the field of crypto? No way.

[psionl0]

Originally Posted by arthwollipot

In the field of crypto? No way.

I see you have put me on ignore. (Can't have you acknowledging that I addressed this "argument" - can we).

[arthwollipot]

Originally Posted by psionl0

I see you have put me on ignore. (Can't have you acknowledging that I addressed this "argument" - can we).

I don't have you on ignore, I'm just not as invested in this discussion as you are and am presently limiting my participation to irreverent quips.

[Dr. Keith]

Originally Posted by arthwollipot

I don't have you on ignore, I'm just not as invested in this discussion as you are and am presently limiting my participation to irreverent quips.

Proper level of investment.

[psionl0]

Originally Posted by arthwollipot

I don't have you on ignore, I'm just not as invested in this discussion as you are and am presently limiting my participation to irreverent irrelevant quips.

ftfy.

[arthwollipot]

Some say potato...

[psionl0]

Originally Posted by arthwollipot

Some say potato...

And some stick their fingers in their ears and say "LA LA LA LA LA".

[Samson]

I will stick my neck out and say bitcoin will get to about 4k, and not move for years.
I hope someone else will forecast, it is kinda lonely on this thread.

[jeremyp]

Originally Posted by psionl0

Way to not have a clue what somebody is saying.

Please tell me in your own words what your understanding is of the term "zero sum". I don't believe you you know judging from your comments here.

[FatherLukeduke]

Originally Posted by psionl0

This is just a simple application of the price mechanism. I refuse to believe that you can't see how somebody choosing to buy some bitcoin instead of "crude oil, steel, grain, copper or whatever" (or vice versa) would affect the relative price of bitcoin vs "crude oil, steel, grain, copper or whatever".

Wait...so you're just saying someone could sell some bitcoin and buy some oil futures. That's it? That's the mechanism? Oh, OK.

Your argument basically is that the world economy is non-zero and bitcoin trading is a part of the world economy therefore bitcoin trading is non-zero? Pretty weak stuff. Bitcoin trading in itself is zero sum - it just redistributes wealth, it doesn't create it. If you think it creates wealth, then please demonstrate with an example.

Quote:

You are just sticking your fingers in your ears and saying "LA LA LA LA LA".

Well, one of us is

Quote:

Ah, the old "bitcoin is different and not subject to the laws of supply and demand" argument.

You have a rude habit of putting arguments in other people's mouths. I simply did not say this. In fact I didn't even say anything like this, you just made it up out of whole cloth.

[psionl0]

Originally Posted by FatherLukeduke

Wait...so you're just saying someone could sell some bitcoin and buy some oil futures. That's it? That's the mechanism? Oh, OK.

Feigning ignorance (in an attempt to show that the arguer is posting nonsense) is not a good strategy. You run the risk of showing that you really are stupid and that your own arguments are nonsense.

I am not about to give you an entire lesson on economics. Suffice to say that there is no such thing as a "zero sum game" because no trade exists in isolation. Demand for one commodity affects demand for other commodities and the net effect may be positive or negative. If you remember what bitcoin is useful for then you might know the reason that there is a demand for it in the first place.

I might add that the crypto market is minuscule in the financial market which is riddled with trades in derivatives and derivatives of derivative which dwarfs any trade in commodities and consumables. The only reason for the existence of this is to enrich wealthy speculators.

[Dr. Keith]

Originally Posted by Samson

I will stick my neck out and say bitcoin will get to about 4k, and not move for years.
I hope someone else will forecast, it is kinda lonely on this thread.

I tend to agree that it will find a plateau and hover there. I just don’t know why $4k is any more plausible than $4. Or $40k, if you want to be optimistic.

For any other commodity this is less of a mystery, be it oil or frozen orange juice concentrate.