Merged: Bitcoin - Part 3

[dudalb]

God, bitcoin is becoming just like a religion..true believers just ignore facts and reality.
It's a libertarian fantasy that some people managed to use as a scam.

[psionl0]

Originally Posted by wareyin

handwaving =/= debunking.

A well argued case is not handwaving.

[psionl0]

Originally Posted by dudalb

God, bitcoin is becoming just like a religion..true believers just ignore facts and reality.
It's a libertarian fantasy that some people managed to use as a scam.

This must be one of those "content free posts" that Chanakya was referring to.

[The Don]

Originally Posted by dudalb

God, bitcoin is becoming just like a religion..true believers just ignore facts and reality.
It's a libertarian fantasy that some people managed to use as a scam.

I simply don't understand it, but Bitcoin (and to a lesser extent other cryptocurrencies) seem to have significant resilience in their value. It could all be a bubble and/or a scam but if it is, it does seem to be a persistent one.

Perhaps there are enough actual uses for Bitcoin to allow its value to be supported. Some of those uses may not be strictly legal, but other do appear to be so.

Despite risking missing out on huge returns by going long (or short depending on your view) on Bitcoin, I'm not willing to risk my hard-earned because I simply do not understand the market at all. Others might say that the stock market is exactly the same and that I'm fooling myself by thinking that the value of some (many ? most ?) stocks is underpinned by sound financial reasoning.

[Samson]

Warren Buffet said he gets in enough trouble with markets he thinks he understands without attempting a market he does not understand.

[psionl0]

Originally Posted by The Don

I simply don't understand it, but Bitcoin (and to a lesser extent other cryptocurrencies) seem to have significant resilience in their value. It could all be a bubble and/or a scam but if it is, it does seem to be a persistent one.

It is more like a series of bubbles rather than just one bubble. The cycles seem to last 1 to 3 years.

There is no reason to believe that another big bubble isn't on the cards. Of course, you wouldn't want to stake your "hard earned" on this prospect but if your investment budget includes "rough chances" then cryptos might well be part of the mix.

[wareyin]

Originally Posted by psionl0

A well argued case is not handwaving.

That's correct. It's a shame you've only presented snarky one-liners rather than a well argued case, but there we are.

[wareyin]

Originally Posted by The Don

Perhaps there are enough actual uses for Bitcoin to allow its value to be supported. Some of those uses may not be strictly legal, but other do appear to be so.

Perhaps you can explain what legal uses there are for bitcoin, particularly practical ones that aren't already performed better by banks?

[psionl0]

Originally Posted by wareyin

That's correct. It's a shame you've only presented snarky one-liners rather than a well argued case, but there we are.

When you can explain how a country like El Salvador using bitcoin as a currency doesn't constitute a "legitimate" use of bitcoin or what relationship a 400 year old fad that lasted only a few months has to do with bitcoin then we may be able to move beyond the one liners.

[wareyin]

Originally Posted by psionl0

When you can explain how a country like El Salvador using bitcoin as a currency doesn't constitute a "legitimate" use of bitcoin or what relationship a 400 year old fad that lasted only a few months has to do with bitcoin then we may be able to move beyond the one liners.

That's the El Salvador that because of using bitcoin as currency is in free fall economically, and is looking like they might have to have China buy off their debt? Yeah, that's totally a great example of a legitimate use for bitcoin: going bankrupt because you bought it.


The relationship a 400 year old fad that lasted only a few months has to bitcoin is...just blindingly obvious. Paying for something of no real value because you think you can sell it to the next guy for more real value. Financial bubble. Once people realize that they got caught up in a fad and bitcoin has no actual value or utility, a bunch of people lose a bunch of money.

[The Don]

Originally Posted by wareyin

Perhaps you can explain what legal uses there are for bitcoin, particularly practical ones that aren't already performed better by banks?

AIUI (but IUI poorly ) the fees associated with international transfers, especially in multiple currencies, involving Bitcoin may be lower than with conventional bank-based transfers. I know that the bank took a significant chunk of my father's social security payment in fees and exchange rate relative to the spot rate converting it from Dollars to Pounds.

Bitcoin can be an easily used hedge against one's own currency (though obviously Bitcoin itself is very volatile). For example, well over 80% of Mrs Don and my net worth is denominated in GBP. If the pound were to collapse we'd be in poor shape. OTOH it's difficult for a UK resident to have significant holdings in denominated in other currencies - especially after Brexit.

That said, I have no current intention of using Bitcoin. Its value is far too volatile and I don't understand what underpins that value, using it seems opaque and complicated (though that may simply be because I haven't learned enough about it) and the sorts of people who are most vocally advocating for its use in the media aren't the sorts of people I would trust to help me make financial decisions.

[Dr.Sid]

Using bitcoin is not why it's famous. It's famous because people made huge returns in the past.
IMHO it's not useful tool .. but neither it is useless nonsense, much less scam. It's a game.

[Suddenly]

Originally Posted by wareyin

Perhaps you can explain what legal uses there are for bitcoin, particularly practical ones that aren't already performed better by banks?

Just because someone wants to avoid the banks because of privacy issues or whatnot doesn't mean they are doing anything illegal. They can pay taxes, etc. on all of that but just don't trust the banks and government to not get up in their business.

That case for bitcoin seems obvious. That if we removed the speculation from bitcoin that these uses would probably cause bitcoin's value to drop to more like $10 likewise. It's an interesting idea and niche tool that has been hijacked by speculators.

The problem isn't finding the use case for bitcoin as much as it is that this should be a far more esoteric and obscure issue than it is. It's a different issue when the thing is $10.

[psionl0]

Originally Posted by wareyin

That's the El Salvador that because of using bitcoin as currency is in free fall economically, and is looking like they might have to have China buy off their debt? Yeah, that's totally a great example of a legitimate use for bitcoin: going bankrupt because you bought it.

I didn't say it was a good idea but you asked for examples of a "non-criminal utility for bitcoin". Are you going to argue that those hundreds of thousands of El Salvadorians using bitcoin are criminals?

Originally Posted by wareyin

The relationship a 400 year old fad that lasted only a few months has to bitcoin is...just blindingly obvious. Paying for something of no real value because you think you can sell it to the next guy for more real value. Financial bubble. Once people realize that they got caught up in a fad and bitcoin has no actual value or utility, a bunch of people lose a bunch of money.

The tulip bubble ran once and never again. OTOH bitcoin bubbles keep coming one after another, have been doing so for more than a decade and there is no suggestion that the bubbles will ever end. You would have to be extremely desperate to suggest that they have any similarity to each other at all.

[Mike!]

I have a strong urge to trademark the name, "PhantomCash" for some reason.

[Dr.Sid]

Originally Posted by Mike!

I have a strong urge to trademark the name, "PhantomCash" for some reason.

That's not fair really. Bitcoin is much better protected and saved than typical cash records in a bank. It's better decentralized, it's more open, it cannot be modified by individual, it does not depend on any organization.
Obviously, exchanges are another thing entirely ..

[wareyin]

Originally Posted by psionl0

I didn't say it was a good idea but you asked for examples of a "non-criminal utility for bitcoin". Are you going to argue that those hundreds of thousands of El Salvadorians using bitcoin are criminals?

I'll argue that it was criminal to force them to do so, as the predicted and predictable outcome was bitcoin losing its value and their "money" becoming worthless. And most El Salvadorians agree: "Just 17% said the Bitcoin rollout had been a success, while 66% said it was a failure. And 77% want Bukele to stop using public funds to buy Bitcoin."

Originally Posted by psionl0

The tulip bubble ran once and never again. OTOH bitcoin bubbles keep coming one after another, have been doing so for more than a decade and there is no suggestion that the bubbles will ever end. You would have to be extremely desperate to suggest that they have any similarity to each other at all.

So because the first bubble only ran once, these cyclical bubbles aren't bubbles? Do you read what you type?

[psionl0]

Originally Posted by wareyin

So because the first bubble only ran once, these cyclical bubbles aren't bubbles? Do you read what you type?

You obviously don't. I never said that "bubbles aren't bubbles".

Face it, there is no similarity between bitcoin and the tulip mania whatsoever.

[wareyin]

Originally Posted by psionl0

You obviously don't. I never said that "bubbles aren't bubbles".

Face it, there is no similarity between bitcoin and the tulip mania whatsoever.

Except the fact that tulip mania and bitcoin are both bubbles? And the fact that a bunch of people bought Tulips for vastly more than they were worth in the hopes of selling them for even more to the next person who came along, just like bitcoin? And the fact that both bubbles have burst, causing people who spent money on worthless things on the advice of those who make claims like "if you hold bitcoin long enough you are guaranteed to make money" to actually lose money?

[Samson]

What is novel about crypto is an abstract thing that cogent argument can see it near infinity or zero.
I am trying to think of an analogy, and maybe brand in marketing is it.
G

[novaphile]

Originally Posted by wareyin

handwaving =/= debunking.

Dagnabit! I was going to say that!

[psionl0]

Originally Posted by wareyin

Except the fact that tulip mania and bitcoin are both bubbles? And the fact that a bunch of people bought Tulips for vastly more than they were worth in the hopes of selling them for even more to the next person who came along, just like bitcoin? And the fact that both bubbles have burst, causing people who spent money on worthless things on the advice of those who make claims like "if you hold bitcoin long enough you are guaranteed to make money" to actually lose money?

A single bubble vs a decade long series of price cycles? Chalk and cheese.

I know you are too emotionally invested in this analogy to see the facts but you have been proven wrong on every count.

[Solitaire]

Originally Posted by The Don

I simply don't understand it, but Bitcoin (and to a lesser extent other
cryptocurrencies) seem to have significant resilience in their value.
It could all be a bubble and/or a scam but if it is, it does seem to
be a persistent one.

Perhaps there are enough actual uses for Bitcoin to allow its value
to be supported. Some of those uses may not be strictly legal, but
other do appear to be so.

Despite risking missing out on huge returns by going long (or short
depending on your view) on Bitcoin, I'm not willing to risk my hard-earned
because I simply do not understand the market at all. Others might say that
the stock market is exactly the same and that I'm fooling myself by thinking
that the value of some (many ? most ?) stocks is underpinned by sound
financial reasoning.

Actual uses of bitcoin do not support its price - only speculation does.

Suppose a bitcoin will do in a transaction. You purchase a bitcoin,
transfer it to a business to buy an item, the business which needs
money to pay its expenses, sells the bitcoin back into the market
place. The purchase of the bitcoin shrinks the supply of bitcoins
and raises its price a little bit or a few hours, then when the bitcoin
gets sold again the price falls back down and the supply increases
a little bit.

A speculator, who buys a bitcoin will often hold on to it for much longer,
years at a time. This will reduce the supply of bitcoins causing the price
to rise. As long as speculators have the funds to keep buying the price
will go up.

Inflation, on the other hand, has steadly eaten away at free cash.
I suspect in the next year or two some 20% of the world's firms
will collapse, because they cannot meet their expenses. If this
ripples into the general economy, some speculators will need
money, and they have only one place to go.

But again, I cannot psychically read speculators minds, so how
deep or how long the drop in the price of bitcoin I cannot predict.

[Mike!]

Originally Posted by Solitaire

Actual uses of bitcoin do not support its price - only speculation does.

Suppose a bitcoin will do in a transaction. You purchase a bitcoin,
transfer it to a business to buy an item, the business which needs
money to pay its expenses, sells the bitcoin back into the market
place. The purchase of the bitcoin shrinks the supply of bitcoins
and raises its price a little bit or a few hours, then when the bitcoin
gets sold again the price falls back down and the supply increases
a little bit.

A speculator, who buys a bitcoin will often hold on to it for much longer,
years at a time. This will reduce the supply of bitcoins causing the price
to rise. As long as speculators have the funds to keep buying the price
will go up.

Inflation, on the other hand, has steadly eaten away at free cash.
I suspect in the next year or two some 20% of the world's firms
will collapse, because they cannot meet their expenses. If this
ripples into the general economy, some speculators will need
money, and they have only one place to go.

But again, I cannot psychically read speculators minds, so how
deep or how long the drop in the price of bitcoin I cannot predict.

This assumes there is a finite supply of PhantomCash bitcoins.
But there isn't.
My, extremely limited, understanding is, bitcoins can be created out of thin air if you have the computing power to create, harvest, mine, conger, 'blockchains', whatever the **** those are. Yeah, it's Christmas time, who else spoke of manufacturing chains? Some Dickens character, if I recall... Ended well for them too.
So, there is, for all intents, an unlimited supply of bitcoins available.
Brings this fictional exchange to mind...

Originally Posted by Douglas Adams

“If," ["the management consultant"] said tersely, “we could for a moment move on to the subject of fiscal policy. . .”
“Fiscal policy!" whooped Ford Prefect. “Fiscal policy!"
The management consultant gave him a look that only a lungfish could have copied.
“Fiscal policy. . .” he repeated, “that is what I said.”
“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn't grow on trees you know.”
“If you would allow me to continue.. .”
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.
“But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut."

https://www.goodreads.com/quotes/685...we-could-for-a

[Dr.Sid]

The amount is bitcoin itself is capped, and we are nearing the cap.

https://www.investopedia.com/tech/wh...-million-mined

But you are right in the sense that new cryptos can be created any day. Convince people to invest into random new crypto is not that easy though.

[Mike!]

Originally Posted by Dr.Sid

The amount is bitcoin itself is capped, and we are nearing the cap.

https://www.investopedia.com/tech/wh...-million-mined

But you are right in the sense that new cryptos can be created any day. Convince people to invest into random new crypto is not that easy though.

I was unaware anyone had placed a hat on the PhantomCash cryptobuck.

Wow, spell check didn't flag "cryptobuck", is there already such a thing?

[Roger Ramjets]

Originally Posted by Dr.Sid

The amount is bitcoin itself is capped, and we are nearing the cap.

Not really.

From your link...

Quote:

The total number of bitcoins issued is not expected to reach 21 million. That's because the Bitcoin network uses bit-shift operators—arithmetic operators that round some decimal points down to the closest smallest integer...

With the number of new bitcoins issued per block decreasing by half approximately every four years, the final bitcoin is not expected to be generated until the year 2140.

All that really happens is that they become more and more expensive to mine, driving the 'value' up. That's the genius behind it. The 'cap' sounds like a good thing to libertarian types, but in fact it is a pyramid scheme with the potential for virtually unlimited growth (at least until all the money in the World is sucked into it). 2140 is a long way off. Bitcoin will implode when speculators loose interest in it, long before the last one is mined.

Quote:

But you are right in the sense that new cryptos can be created any day. Convince people to invest into random new crypto is not that easy though.

And getting harder all the time. Eventually crypto will die like all other fads - the only question is when? You will know the end is near when 'Satoshi Nakamoto' starts cashing out.

[psionl0]

Originally Posted by Roger Ramjets

Not really.

Yes, really. Of the maximum possible 21M BTC, 19,230,225 BTC have already been mined and 1,769,275 BTC have yet to be mined over the next 80 years. https://buybitcoinworldwide.com/how-...ins-are-there/

The rest of your CT is not worthy of comment.

[psionl0]

Originally Posted by Mike!

I have a strong urge to trademark the name, "PhantomCash" for some reason.

If that is because bitcoin only exists in computers then you might consider that this is also true for most of fiat currency. Only a small fraction of fiat money exists in the form of notes and coins.

[a_unique_person]

Originally Posted by psionl0

Yes, really. Of the maximum possible 21M BTC, 19,230,225 BTC have already been mined and 1,769,275 BTC have yet to be mined over the next 80 years. https://buybitcoinworldwide.com/how-...ins-are-there/



The rest of your CT is not worthy of comment.

Of the rate of coins being issued drops then it becomes a lottery for the miners and much more risky as an investment.

[Dr.Sid]

Originally Posted by a_unique_person

Of the rate of coins being issued drops then it becomes a lottery for the miners and much more risky as an investment.

Just join into bigger farms ..

[Solitaire]

Originally Posted by Mike!

This assumes there is a finite supply of PhantomCash bitcoins. But there isn't.

My, extremely limited, understanding is, bitcoins can be created out of
thin air if you have the computing power to create, harvest, mine, conger,
'blockchains', whatever the **** those are. Yeah, it's Christmas time, who
else spoke of manufacturing chains? Some Dickens character, if I recall...
Ended well for them too.

So, there is, for all intents, an unlimited supply of bitcoins available.
Brings this fictional exchange to mind...

Actually, the supply of Bitcoins has a limit.
But the number of cryptocurrencies have no limit,
as anyone can start their own cryptocurrency.


Think of it this way. A guy purchases a large ledger with many long pages
and he holds a contest, inviting artists to producing drawings of a cat. The
guy judges the pictures and then writes down the twenty five names of the
artists with the best cat drawings. The next day it'll be horse drawings and
the names get written on the next page and so on for the next fifteen years.

The twist, the artist can sell their slot in the ledger for money or other item.
For a small fee the guy crosses out the the name of the artist on the line and
writes down the name of the purchaser. The purchaser can, in future, sell that
slot to someone else and the process repeats itself. (Note: the purchaser does
not get the drawings. Those get burned at the end of the day to contribute to
global warming.)


Similarly, a block of data, about one megabyte, gets sent to bitcoin miners
they mathematically hash it with a similarly sized random number and output
another file that gets sent back and judged. Actually miners try many millions
of random numbers very quickly in an attempt to get the best fit.) A judging
algorithm will look at each block and find the one with the greatest leading
zeros, or ones, or any particular pattern and then award the bitcoin to the
miner with the best fit. (Again no useful work like contributing to the
knowledge of mankind occurs.)

Early adopters, interested in the novelty of cryptocurrency payed miners
and ledger keepers for rights to own a bitcoin early on. And this activity
attracted speculators, who drove the price up, and via a feedback loop
drew in even more speculators. And that's how we got where we are today.

Originally Posted by Dr.Sid

Just join into bigger farms ..

Well, it costs money to hash bitcoins, you need energy, internet connections,
hardware, personnel, space. If you don't get a big enough return, you either
don't mine bitcoin or you go broke.

[jrhowell]

What we really need is curecancercoin where instead of mining by finding hashes with multiple leading zeros coins are won by solving protein folding or other medically useful tasks.

[psionl0]

Originally Posted by a_unique_person

Of the rate of coins being issued drops then it becomes a lottery for the miners and much more risky as an investment.

No, it is still one block every 10 minutes. The question is whether you get enough bitcoins from a block to justify the expenditure on energy and computing equipment.

[marting]

Originally Posted by psionl0

No, it is still one block every 10 minutes. The question is whether you get enough bitcoins from a block to justify the expenditure on energy and computing equipment.

Fortunately, it's self adjusting. At least for people trading BTC. Not so much for the miners because they often have highly leveraged operations and can't pay their debts if too leveraged while the price is low. But that's a problem for miners, not hodlers. And investors in miners understand the leverage risk/reward and take the risks knowingly. They are also, because of the enormous amounts of capital involved, the group most incented, in a traditional investment sense, in doing what they can to expand BTC's market.

Michael Saylor recently said he considered crypto coins, outside of BTC, as worth zero in large part because the money spent mining (proof of work) is real. OTOH, given his ownership of just BTC, one might suspect a bias.

[Gord_in_Toronto]

Shark Tank's KEVIN O'LEARY says, FTX Paid him $15 Million to be a FTX Spokesmen on CNBC Live today. (Dec 8, 2022)

YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.

I AGREE

More or less; "I'm sorry. I'm a idiot. I was taken. We all screwed up."

All money he lost was only his own. He did not invest anyone else's.

Worth a listen, IMHO. He sees that because of the use of blockchain the FTX fraud will be uncovered. He's still a very strong believer in the technology.

"FTX collapse does not change the potential for what crypto can be."

[Gord_in_Toronto]

Dupe Post

[psionl0]

Originally Posted by marting

Michael Saylor recently said he considered crypto coins, outside of BTC, as worth zero in large part because the money spent mining (proof of work) is real. OTOH, given his ownership of just BTC, one might suspect a bias.

More likely ignorance. Most people would realize that the price of bitcoin depends on the market and not on how difficult it is to mine. The mining difficulty is a function of the bitcoin price and not the other way around.

[Samson]

Bitcoin will get much easier to mine.
The price is in structural collapse like the whole hoaxy mac hoax face

[jeremyp]

Originally Posted by psionl0

When you can explain how a country like El Salvador using bitcoin as a currency doesn't constitute a "legitimate" use of bitcoin or what relationship a 400 year old fad that lasted only a few months has to do with bitcoin then we may be able to move beyond the one liners.

Is Bitcoin better for El Salvador's purposes than just using USD?